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International Commercial Arbitration in India

With the development of globalization, advancement systems and fast progression in universal business connections, it is progressively appropriate to have an adaptable and brisk technique for settling questions. Mediation is a favoured procedure of dispute resolution generally opted by parties, wherein parties deliberately consent to present their case to a neutral third party and consent to be limited by his/her choice.

Section 2(1)(f) of The Arbitration and Conciliation Act, 1996, characterizes an International Commercial Arbitration as an arbitration in relation to the questions emerging out of lawful connections, regardless of whether bound by a contract or not, considered as commercial under the Indian laws and where in any one party is:

  1. A person who is a national of, or constantly inhabitant in, any nation other than India; or
  2. A body corporate which is a part of any nation other than India;
  3. An organization or an affiliation or an assemblage of people whose focal administration and control is practiced in any nation other than India;
  4. The Government of any foreign nation

The extent of this area was elucidated upon by the Supreme Court on account of TDM Infrastructure Pvt. Ltd. v. UE Development India Pvt. Ltd, where disregarding the fact that the organization having a foreign control, the Supreme Court inferred that, "an organization registered in India does have an Indian nationality in lieu of the end goal of this Act."

Some of the reasons why the Arbitration is preferred over traditional justice mechanism to resolve a dispute are listed below:

  1. The procedure being quick and speedy:

The procedure required to be followed in an ordinary court proceeding are lengthy and time taking with little relevance. With high flexibility in the arbitration procedure the parties to the dispute can easily solve their dispute within less time.

  1. Enforcement of Arbitral award

Compared to the enforcement or judgement of an ordinary court, it is much less complex and easy to enforce an arbitral award as it in a form of agreement or contract.

  1. Neutrality of Arbitrator

The third party, i.e., the arbitrator is usually a neutral and impartial party that promotes the principals of natural justice. The arbitrator also has the best interest of both the parties in mind while deciding upon a case.

  1. Flexible for technical issues:

Some disputes are technical in nature and require an experts view to reach to a final conclusion. Due to arbitration being a flexible process it allows party to appoint an arbitrator who is adept to deal with the technicality of the issue and decide accordingly. Such issues may sometime prove to be beyond the comprehensive power of an ordinary lawyer or judge in general.

  1. Cost- effective

The court proceedings are long drawn and require expenses that both the parties have to incur. The cost of hiring a competent lawyer, court fees, travel expenses make the process extremely expensive. The arbitration on the other hand is cheaper process that quickly resolves an issue with much less time.

6. confidentiality and privacy:

The arbitration procedure is much more private and confidential in contrast to normal court proceeding where all the documents and evidences are public. 

  • what do you mean by international commercial arbitration
  • scope of sec 2 (1)(f)
  • reasons why the International Commercial Arbitration is preferred

BY : Kopal Bansal

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