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International Commercial Arbitration: A Preferred Alternative Dispute Resolution Mechanism
Arbitration is a legal procedure that encourages the settlement of personal conflicts, especially in international business dealings. It was first acknowledged in India in the late 1800s, and in 1908 it was expanded to other regions of British India. 1996 the Arbitration and Conciliation Act 1996 was passed, addressing both internal and foreign arbitration. Parties can avoid litigation in national courts by using international commercial arbitration as an alternative dispute resolution process for private parties involved in cross-border business transactions. It facilitates the settlement of conflicts between foreign parties resulting from internal business agreements.
The appellant in Marriott International Inc. against Ansal Hotels Limited attempted to challenge a single judge's ruling. The appellant argued that because each contract was a separate arrangement to provide services, it was not feasible to pursue relief on several grounds of action in a single petition. The appellant used section 9 of the Arbitration and Conciliation Act during the arbitration procedures, which were held in Kuala Lumpur, Malaysia. Respondent number one, claiming that the contract termination was unlawful, entered into agreements with ITC Hotels Ltd. and dissolved contracts, proposing negotiations. Due to the appellant's lack of a strong first argument supporting the issuance of temporary relief, the single-judge bench denied the petition.
The appellant contended that the UNCITRAL model law, which oversees international commercial arbitration in India, serves as the foundation for Indian arbitration law. Regardless of the arbitration's location, the Arbitration and Conciliation Act governs all matters about India. The court's declaration that interim relief may be granted by courts is a crucial step toward strengthening arbitration procedures. Section 151 of the Code of Civil Procedure, however, prohibits the court from using its inherent authority when the case is properly handled and there is insufficient jurisdiction. The court further declared that any arbitration conducted by legislation, an agreement, or the norms or laws of certain associations shall be governed by Sections 2(2) and 2 (5) of the Act.
The petitioners have several complaints against the respondents, including breaking commitments by signing agreements with ITC and ending agreements abruptly without informing the petitioners. They contend that termination of the contract by letter dated 4.3.1999 with immediate effect is unlawful and that the MARRIOTT Operating Agreement requires at least 90 days' notice for contract termination. Additionally, the respondents dispute the Act's apparent embargo, which specifies that Kuala Lumpur, Malaysia, would serve as the arbitration's site and that the court lacks jurisdiction to consider this petition.
The petitioners' lack of familiarity with Indian hotels' needs and the proposals they make seem pointless given Indian circumstances and requirements are another grievance voiced by the responses. As the agreement expired on 13.1.1999 and the petition was submitted in April 1999, the petitioners have not yet shown a case for the provision of interim relief, nor are they eligible for any. Section 14 (1) of the Specific Relief Act, 1963 states that contracts with minute or numerous details that depend on individual qualifications or parties' violations cannot be expressly enforced. The petitioners do not have a compelling first argument supporting their request for temporary relief, and the balance of convenience does not favor them. At the national and international levels, alternative dispute resolution (ADR) is growing quickly and provides simpler approaches to conflict settlement. ADR services are becoming more and more common, as seen by the expansion of the "arbitration clause" in most contracts. Using ADR procedures effectively can aid in closing the gaps that stand in the way of justice. It is essential to educate staff members on the benefits of alternative dispute resolution (ADR) and to help them apply it ethically and successfully.
To draw in international investment, a fast-growing economy needs a reliable, stable dispute resolution process. Due to the overwhelming backlog of cases that Indian courts are now handling, business players both domestically and internationally have strongly preferred using arbitration to resolve disputes. Courts and lawmakers in India have aligned Indian arbitration law with global best practices, and there's a good chance that Indian arbitration law will soon adopt these global best practices as well. The most popular method for settling business disputes in international trade is international commercial arbitration. It serves the same purpose as state court litigation, culminating in an award—a legally enforceable judgment.
- International commercial arbitration is preferred for resolving cross-border business disputes due to its efficiency and enforceability.
- The Arbitration and Conciliation Act 1996, based on UNCITRAL model law, governs arbitration in India, providing a robust legal framework for both domestic and international cases.
- Courts in India can grant interim relief during arbitration proceedings, strengthening the arbitration process despite limitations on their inherent authority.
