A recent decision of the Supreme Court of India in Venture Global Engineering (which reiterated its earlier decision in Bhatia International) has resulted in wide discussions on whether it is advantageous for a party to an international contract, to specifically exclude application of Part-1 of the Arbitration & Conciliation Act, 1996.
Part-I of the Act contains provisions including issues like what constitutes an arbitration agreement; the composition of the arbitral tribunal; jurisdiction; arbitral proceedings; making of an arbitral award; termination of proceedings; ground for challenging an award etc.
Part-11 deals with the enforcement of foreign awards made in countries which are parties to the New York Convention and/or Geneva Convention.
Till the Bhatia case, the view expressed by many Indian High Courts was that Part-I of the Act will apply only to domestic awards and international commercial arbitration held in India. This perception now stands changed due to the SC ruling.
Since both the above named cases were initiated by foreign parties who had argued in favour of the application of Part-I and since the SC’s ruling has gone in their favour.
Considering the facts involved in the above mentioned cases, it may not be always advantageous to exclude the application of Part-I of the Act. The advantage or disadvantage will depend on which side of the fence you are at the relevant time.
Part-I of the Act contains provisions including issues like what constitutes an arbitration agreement; the composition of the arbitral tribunal; jurisdiction; arbitral proceedings; making of an arbitral award; termination of proceedings; ground for challenging an award etc.
Part-11 deals with the enforcement of foreign awards made in countries which are parties to the New York Convention and/or Geneva Convention.
Till the Bhatia case, the view expressed by many Indian High Courts was that Part-I of the Act will apply only to domestic awards and international commercial arbitration held in India. This perception now stands changed due to the SC ruling.
Since both the above named cases were initiated by foreign parties who had argued in favour of the application of Part-I and since the SC’s ruling has gone in their favour.
Considering the facts involved in the above mentioned cases, it may not be always advantageous to exclude the application of Part-I of the Act. The advantage or disadvantage will depend on which side of the fence you are at the relevant time.
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