International commercial arbitration – Legal Recognition
The legal base of international commercial arbitration in India can be historically traced to –
(1) The Protocol on Arbitration Clauses 1923 (Geneva Protocol).
(2) The International Convention on the Execution of Foreign Arbitral Awards 1927 (Geneva Convention).
(3) The Arbitration (Protocol and Convention) Act, 1937.
(4) The International Convention on the Recognition and Enforcement of Arbitral Awards, 1958 (New York Convention).
(5) The Foreign Awards (Recognition and Enforcement) Act, 1961.
(6) UNCITRAL Model Law on International Commercial Arbitration.
(7) UNCITRAL Arbitration Rules.
(8) The Arbitration and Conciliation Act, 1996.
Besides, there are some other international rules of different organisations which govern international commercial arbitration.
a) Geneva Protocol and the Geneva Convention—-
Article 13 of the Covenant of the League of Nations provided that whenever there would be any dispute between the Members of the League of Nations, the same should be submitted to arbitration or judicial settlement. This was done in order to prevent a future war among Member-States.
b) New York Convention of 1958 and Foreign Awards (Recognition and Enforcement) —
The procedure for settlement of international commercial disputes through arbitration was regulated by the Geneva Protocol of Arbitration Clauses 1923 and the Geneva Convention of 1927. However, certain defects cropped up in the practical implementation of the same in various countries. A draft convention was prepared by the International Chamber of Commerce to remedy all those defects. Finally, a new International Convention on the Recognition and Enforcement of Arbitral Awards was adopted at New York on 10th June 1958. The Government of India also ratified the convention.
c) UNCITRAL Arbitration Rules and UNCITRAL Model Law—-
With the motive of harmonising and unifying the law relating to international trade, the United Nations Commission on International Trade Law was set up in December 1966. The UNCITRAL adopted the UNCITRAL Arbitration Rules on 28th April 1976 and the General Assembly adopted the same on 15th December 1976. The rules are designed for worldwide use in commercial arbitration. With that said, these are intended to be acceptable to the capitalist, socialist, developed and developing countries. They are also intended to be used in common and civil law jurisdictions.
Let’s take a look at the objectives of the UNCITRAL model law –
a) Firstly, the liberalisation of international commercial arbitration by limiting the role of national courts. This will encourage the parties the much needed, freedom of choice to determine their disputes.
b) Secondly, the establishment of a certain defined core of mandatory provisions to ensure fairness and due process.
c) Thirdly, provision of a framework for conducting international commercial arbitrations.
d) Fourthly, the laying down of some other provisions to aid the enforceability of awards and other related matters.
The UNCITRAL Model Law on International Commercial Arbitration is divided into eight parts –
a) General Provisions (Article 1-6)
b) Arbitration Agreement (Article 7-9)
c) The composition of Arbitral Tribunal (Article 10-15)
d) Jurisdiction of Arbitral Tribunal (Article 16-17)
e) Conduct of Arbitral Proceedings (Article 18-27)
f) Making of Award and Termination of Proceedings (Article 28-33)
g) Recourse against Awards (Article 34)
h) Recognition and Enforcement of Awards (Article 35-36)
d) Arbitration and Conciliation Act, 1996 —-
The Arbitration and Conciliation Act, 1996 is the legislation that is used in India with regards to Arbitration and Conciliation proceedings. Part 1 of the Act includes “international commercial arbitration.” The said part mentions that the Act will apply to both domestic and international commercial arbitration. Further, Part 2 deals with the enforcement of certain foreign awards, part 3 with conciliation and part 4 with supplementary provisions.
Other International Rules and Organisations —-
First, ICC Rules of Arbitration. ICC stands for International Chamber of Commerce.
Second, LCIA Rules. LCIA stands for The London Court of International Arbitration Rules (LCIA Rules).
Third, WIPO Arbitration Rules. WIPO stands for World Intellectual Property Organisation.
Fourth, IBA Rules on the taking of evidence in International Commercial Arbitration.
Fifth, ICSID Rules. ICSID stands for The International Centre for the Settlement of Investment Disputes (ICSID).
Sixth, AAA International Arbitration Rules. AAA stands for American Arbitration Association.
There are many conventions/protocols/model laws which deal with arbitration and give legal status to this ADR mechanism. As we can see, mostly all the conventions/protocols are a product of the 20th century aimed at promoting world trade and international peace and security. In India, we have the legislation known as Arbitration and Conciliation Act, 1996 which enables arbitration and conciliation to take place. Besides this, mediation is another booming ADR mechanism that is being encouraged in India.