UNCITRAL Model Laws & Rules on Arbitration & Conciliation
United Nations Commission on International Trade Law, established in 1966 is related to International Commercial Arbitration and Conciliation, International Sale of Goods (CISG), international security and so on and so forth.
Focusing on the Arbitration aspect of the law, it has been brought into effect to guide all nations across the globe to improve their arbitral framework. The Model law encompasses all steps in Arbitration: formation of the arbitration agreement, the composition, and jurisdiction of the arbitral tribunal and the extent of court intervention in the recognition and enforcement of the arbitral award. The law highlights that most nations have concurrent views about major aspects of international commercial arbitration having diverse legal systems. The UNCITRAL Model Law has synchronized the common law and civil law provisions on Arbitration.
The Model Law empowers the parties to choose the rules of law that will be applicable regarding the substance/facts of the dispute and henceforth, they do not have to choose a specific legal system of any country. Generally, recognized principles and phrases make the Model law more convenient and versatile. The UNCITRAL Model serves as a good framework for domestic arbitration as it incorporates all the relevant and key provisions which make sure that the arbitration process runs smoothly. The Model Law recognizes five main principles that govern international commercial arbitration. They are:
Arbitration allows parties substantial control over the process that will be used to resolve their conflicts. Arbitration provides an unbiased platform where both parties believe that they will get a fair hearing. Additionally, the parties have the flexibility to alter the dispute resolution process to their needs and requirements and choose an arbitrational well-versed with the field of law in which subject- matter of the dispute lies.
The arbitration clause in a contract is independent, that is it survives even in the termination or invalidity of the main contract. This ‘staying alive’ feature of the Arbitration clause is referred to as the principle of separability. According to the Arbitration and Conciliation Act,1996, having been modeled on UNCITRAL Model Law, an arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.
It is necessary that the arbitration tribunal has the competence to rule on its own jurisdiction and make decisions about the outlines of its own jurisdiction. The benefit of this principle is that it enables the arbitrators to rule on their own jurisdiction as is widely recognized by various international conventions on statutes on international arbitration.
Each jurisdiction has the power to regulate people and events within its borders, while no jurisdiction is capable of controlling people and events outside its borders. However, territoriality alone is insufficient to determine the applicability of the law when there are people and events spanning various jurisdictions.
In international transactions, it is necessary to ensure that the decision resolving the dispute is enforceable in all the countries affected by the transaction, preferably in all countries where the losing party has its assets so that they can be attached to satisfy the credit of the winning party.