LLM Dissertation in Law

LLM Dissertation in Law (CPDR/ICDR)

Chapter 1: Introduction

1.1 Background

With the increase in overseas trades and investment, the essentiality of International Commercial Arbitration has gained significant importance in the global world due to its effectiveness.

Arbitration has a significant role to play in resolving disputes amongst parties in international or domestic terms. Likewise, Alternative Dispute Resolution is also known as external dispute resolution which has significant characteristics in countries like India.

However, its effectiveness and procedure are distinct from International Commercial Arbitration.

It incorporates dispute resolution techniques and process which act as a way to formulate an agreement for the disagreeing parties through litigation.

With the assistance of a third party, settlement of disputes can be formulated with such technique. In addition, ADR has gained significant acceptance amongst both the legal profession as well as the general public in present times despite historical resistance.

Based on the European Mediation directive, 2008, the attendance of mediation is mandatory for resolving disputes as well as to come to a settlement[1].

Furthermore, the integration of ADR is increasing specifically to resolve post-acquisition disputes.

The significance of ADR and its popularity can be explained in terms of low costs than litigation, increasing caseload of traditional courts as well as the preference of confidentiality[2].

As in the process of Alternative Dispute Resolution parties can select individuals who can settle the disputes, its presence is increasing as mediation in a global world. Its existence in India was felt before the Arbitration Act 1940.

In addition, the Arbitration and Conciliation Act, 1996 has been also formulated for harmonization based on UNCITRAL Model.

As per the section 89 (1) of CPC, parties can resolve disputes outside the court in relation to possible settlement.

Furthermore, with the criticality and slower process of judicial activities, the thrust for Alternative Dispute Resolution mechanisms has become popular in India.

On the other hand, International Commercial Arbitration has also gained significant popularity in India based on its distinct characteristics. International Commercial Arbitration has become favorable in recent times as parties can resolve a dispute based on the international commercial transaction by litigating in own courts.

The reasons behind choosing International Commercial Arbitration is its significance for reducing inequalities, ease of enforcement as well as when the state is a party[3].

Few critiques stated that International Commercial Arbitration can reduce inequalities while settling disputes.

It is possible that arbitration takes place in the home country which can be favorable for one party; however, there can be also a possibility that the arbitration can be put forwarded in the third country eliminating the odds.

In addition, there is significant evidence that several arbitration organizations would administer arbitration through world easing up the procedure of litigation for both the parties.

As the competition among arbitration organization is relatively high, they can offer the entire procedure based on the conveniences of the parties. Based on when the state is a party, there are specific concerns about the partiality of the courts[4].

The state has several reasons that influence decisions in its own courts for making comfortable the process of litigation.

This, in turn, states that there the bilateral investment treaties are much more increased in recent years for arbitration forums to conduct outside the host state.

The major characteristic of International Commercial Arbitration is the comparative ease of enforcement.

This characteristic is certainly distinct from the enforcement of a judgment from a foreign court enhancing the viability of the International Commercial Arbitration[5].

The ease of enforcement of the award is much more than the enforcement of a judgment from a court. In addition, around 135 states are the party to the New York Convention based on the Recognition and Enforcement of Foreign Arbitral Awards.

However, from one point of view, this transaction can be good for one party but the other party might face difficulties while litigating in an unfamiliar procedure. Litigating in a foreign court can be critical for the other party from residing in the foreign country.

The other party would face difficulties of litigating in a foreign language as well as may not be familiar with the language of the contract or the lawyer used by the familiar party.

In addition, as the other party is from a foreign county the complete expense entails to the party which is different in case of the other party[6].

In addition, the key characteristics of International Commercial Arbitration are consent, non-governmental decision makers and final and binding award.

The principle under Indian law states that arbitration with a seat in India however integrated foreign party would be also regarded as an International Commercial Arbitration which is subjected to Part I of the Act of Section 2 (I) (f).

On the other hand, in case of International Commercial Arbitration is held outside India then Part I of the Act would not be considered based on viability which states that the parties need to be subjected to the Part II of the act. In addition, the amendment act has deleted the word ‘company’ and only refers to the association or body of individuals based on the principles of International Commercial Arbitration[7].

The various forms of Arbitration are distinct from litigation and cannot be considered as alternative dispute resolution as the parties involved in the dispute has the right to choose the arbitrator based on the type of arbitration.

Based on the New York Convention, India is signatory as it facilitates enforcement of international arbitral awards.

There are distinct categories of arbitration based on its viability. Domestic arbitration is where the dispute arose is completely in the home country or the parties are subject to specific jurisdiction in the home country.

This form of arbitration is governed completely by domestic law based on the subject matter of the contract. On the other hand, international arbitration constitutes at least one party is a resident of India or the subject matter of dispute is based on abroad[8].

However, the applicability of law would be based on foreign or India law in relation to the terms of the contract and the rules of conflict of laws. Foreign arbitration is conducted outside India where the outcome award is enforced as a foreign award and ad hoc arbitration are the involvement of parties without the recourse to an institution. It can be foreign, domestic or international arbitration.

Furthermore, Institutional arbitration is conducted by the rules laid down by an arbitral organization based on the provisions of the Arbitration and Conciliation Act[9].

Specialised arbitration is conducted by the arbitral institutions which frame distinct rules based on the type of disputes. Statutory Arbitration is conducted in accordance with certain special Acts based on the disputes.

The history of International Commercial Arbitration initiated in the business year 1923. There are significant negotiations still going on by the UNCITRAL which can lead to new enhancements Domestic arbitration was the first system of arbitration for settling disputes based on family nature, labor relations or commercial enterprises[10].

In addition, past disputes were almost domestic in nature and the system of arbitration reflected the nature of a particular society.

The growth of International Commercial Arbitration initiated in Continental Europe in the business year 1920 and remained static till 1950. However, two major difficulties were established. The first difficulty was an agreement to arbitrate every dispute that can arise in future terms with a contract was not valid[11].

In addition, the agreements were difficult to arbitrate as one party is formed foreign which stated the basis of domestic arbitration agreement only. The second difficulty was in relation to the enforcement and recognition of foreign arbitral awards.

For two decades, the means of arbitration was steady however based on quantitative terms there was a small amount of arbitration between commercial firms from different countries which did not extend its viability in the rest of the world. From 1950 to the present, the New York convention has been a turning point that proves the conditions for recognition[12].

In addition, the tendency towards uniform rules based on International Commercial Arbitration has continued to grow.

The European Convention on International Commercial Arbitration in 1961 was adopted as the first instrument for International Commercial Arbitration by making slight changes with the integration of the New York Convention.

In addition, the rules of procedure were also framed that governed the arbitration. Later, the UNCITRAL Arbitration rules were also adopted by the United Nations Commission based on International Trade Law in 1976.

Later, in 1985, the UNCITRAL Arbitration rules were followed in the Model Law[13]. This law was drafted to govern only International Commercial Arbitration where it gives assistance to the arbitral process as well as permits the parties to conduct the arbitration as per their wish.

It can be institutional or ad hoc. The Model Law is being used in several developing countries and is being used by 39 countries around the world.

Based on Article 18 of the Model law, each party would be treated with equality and they would be given opportunity to present their own case as well as are free to agree on the procedure to be followed.

1.2 Research problem

Based on the research hypothesis, very limited information has been offered by past research studies which limit the analysis of International Commercial Arbitration in India. As the paper would analyze the effectiveness of International Commercial Arbitration specifically in the pharmaceutical industry, the limited information is critical in relation to the paper.

As International Commercial Arbitration is limiting the role of national courts, its impact is evident in the literature[14].

In addition, based on such research gap this paper would highlight the areas about the effectiveness of International Commercial Arbitration in India as a remedy for resolving commercial obligation.

Based on such intention, the researcher would significantly analyze each area of arbitration in India for analyzing the essentiality of International Commercial Arbitration by fulfilling the research gaps.

As past research studies forecasted a generic view of International Commercial Arbitration, this paper would highlight the area based on the pharmaceutical industry in India by offering a new direction of resolving disputes and obligation.

1.3 Research Aim and Questions

Aim and objectives of the research:

  • To analyze distinct laws based on arbitration in India as well as abroad;
  • To examine the significance of commercial arbitration in India;
  • To assess the lack of International Commercial Arbitration;
  • To analyze the status of arbitration in India;
  • To investigate the contribution of International Commercial Arbitration to attain justice in India.

Provisional research question:

  • How did the shift from municipal courts to commercial arbitration occur in India in dealing with cases based on a commercial obligation in India?
  • What is the viability of International Commercial Arbitration upon court system in India towards the pharmaceutical industry in India?
  • What are the impacts of International Commercial Arbitration in the Pharmaceutical industry in India?

Research questions:

[1] Alford, R. P. (2013). The convergence of international trade and investment arbitration. Santa Clara J. Int’l L., 12, 35.

 

[2] Ali, S., & Ginsburg, T. (2013). International Commercial Arbitration in Asia.

 

[3] Aragaki, H. (2017). Arbitration Reform in India: Challenges and Opportunities

[4] Aust, A. (2013). Modern treaty law and practice. Cambridge University Press.

 

[5] Bagde, U. S. (2013). Laws against caste discrimination and their rampant violations in Indian scenario. Journal of Law and Conflict Resolution, 5(2), 33-40.

[6] Baker, E., Mellors, B., Chalmers, S., & Lavers, A. (2013). FIDIC contracts: Law and practice. Informa Law from Routledge.

[7] Baldia, S. (2013). The transaction cost problem in international intellectual property exchange and innovation markets. Nw. J. Int’l L. & Bus., 34, 1.

[8] Bantekas, I. (2015). An introduction to international arbitration. Cambridge University Press.

[9] Basedow, J. (2015). EU law in international arbitration: Referrals to the European Court of Justice.

 

[10] Bassler, W. G. (2013). The symbiotic relationship between international arbitration and national courts. Disp. Resol. Int’l, 7, 101.

[11] Bedi, N., Bedi, P. M. S., & Sooch, B. S. (2013). Patenting and R&D in Indian pharmaceutical industry: post-TRIPS scenario

[12] Berkowitz, D., Moenius, J., & Pistor, K. (2006). Trade, law, and product complexity. the Review of Economics and Statistics88(2), 363-373.

[13] Böckstiegel, K. H., Kröll, S. M., & Nacimiento, P. (2015). Arbitration in Germany. The Model Law in Practice (Rezensent: Otto Sandrock)193.

[14] Born, G. B. (2015). International arbitration: cases and materials. Wolters Kluwer Law & Business.

  • What is the contribution and role of commercial arbitration specifically in the Indian pharmaceutical industry?
  • How does the International Commercial Arbitration serve the best interests of the pharmaceutical industry in India?
  • Do the companies of the pharmaceutical industry avoid Indian courts for settling international commercial disputes?
  • Do the companies of the pharmaceutical industry avoid the seats of arbitration in India in relation to International Commercial Arbitration?
  • What are the necessities for the seats of arbitration to be elsewhere other than India in order to serve the interests of the pharmaceutical industry in India and at what level?
  • What are the impacts of institutional arbitrations with the seat of arbitration outside India?
  • What can be the Indian court’s response for Arbitral awards recognized and enforced from outside India for disputes based on economic interest and Indian culture?

1.4 Research Hypothesis

The arbitration laws in India are significant and well-prepared legislation that assists to resolve disputes specifically in commercial obligation.

However, based on the pharmaceutical industry in India, the arbitration laws are not well structured that results in the poor administration to resolve disputes in relation to commercial obligation.

The hypothesis is well supported by the New York Convention, Arbitration, and Conciliation Act of 1996, Model Law of 1985 as well as other international conventions that state International Commercial Arbitration is highly required in India for settling disputes based on international trade as well as commercial dispute specifically in the pharmaceutical industry in India.

This paper highlights the topic by providing significant evidence about International Commercial Arbitration that can act as a remedy to resolve commercial obligation in India specifically in the pharmaceutical industry.

In addition, it would also highlight the role and contribution of commercial arbitration in India for analyzing the effectiveness of the hypothesis extensively.

1.5 Structure of the Research

Chapter 1Introduction
Chapter 2International Commercial Arbitration
Chapter 3Indian Arbitration system
Chapter 4Arbitration system for Indian Industry
Chapter 5Arbitration system in other countries
Chapter 6Discussion and conclusion

 

 

 

CHAPTER 2: International Commercial Arbitration

2.1 Introduction

With the increase in international investment and trade, the rise in cross-border commercial disputes is accompanied. The need for a significant dispute resolution mechanism has become evident in present years.

In order to mitigate such disputes, the initiation of international arbitration is extensive for resolving cross-border international commercial disputes as well as for enhancing business relationships amongst partied.

With the increase in open-ended economic politics as well as overseas commercial transactions, the need for International Commercial Arbitration has emerged for resolving disputes.

In addition based on international terms, international arbitration has gained significant acceptance in the global world due to its adaptive and flexible nature in relation to the needs of the parties for resolving overseas disputes.

Through arbitration, an advantage of judicial neutrality can be attained. However, International Commercial Arbitration has significant issues based on its applicability although it is a mean of consensual disputes resolution which produces an enforceable ruling as well as legal bindings.

2.2 General meaning of Arbitration in International Commercial Arbitration

In general terms, International Commercial Arbitration is a way of resolving disputes based on international commercial contracts. It can be used as an alternative to litigation but it is significantly different form Alternative Dispute Resolution[1].

As Alternative Dispute Resolution integrates mediation, conciliation and engineer’s assessment, the viability to resolve a dispute is limited. On the other hand, International Commercial Arbitration is much more effective and efficacious as it dominates the other method of dispute resolution.

One can try a resolution of the dispute at first but if the methods are unsuccessful it would lead to arbitration. Hence, the viability and effectiveness of International Commercial Arbitration are relatively high due to its flexible and adaptive nature.

The complete procedure of International Commercial Arbitration lies upon the terms previously agreed upon by the parties without considering any other procedural rules or national legislation.

In addition, in present times most of the contracts depict that in case of any disputes arise in future it would be handled through arbitration rather than litigation.[2] This enables parties to depict the governing law, forum as well as procedural rules during the time of the contract.

In general words, the term arbitration refers to the disputes of two traders over the quality or price of goods delivered would be resolved by a third party based on trust.

On the other hand, based on an international level, the formal steps for settling a dispute among the parties can be termed as International Commercial Arbitration.

Arbitration can be either ad hoc or institutional in nature.

The type of arbitration would be dictated by the terms of the contract. In case of institutional arbitration, the parties’ needs to ebb agreed upon to have an arbitral institution administer for resolving the dispute[3].

In case, the parties have their own set of rules for the arbitration, then it can be called for ad hoc arbitration.

In addition, ad hoc arbitration is independently conducted by the parties and they are responsible to decide the forum, the procedure to be followed as well as a number of arbitrators required and another relevant aspect of administering the arbitration.

The distinct law is applied in the arbitration that incorporates procedural rules, national and international laws as well as substantive and procedural laws relevant to the arbitral institution.

The arbitral awards carried in past were based on persuasive authority however not binding. Furthermore, with the number of disputes cases arising each day the caseload are increasingly becoming a burden to the judiciary.

This reinforces the need for arbitration apart from the judiciary through a convenient and faster approach. Based on commercial filed, International Commercial Arbitration has gained and contributed extensive support[4].

The concepts such as consumerism and liberalization have made drastic changes in trades and this concept is reinforcing transnational, multilateral and bilateral treaties and policies that impact across the frontiers.

In this term, the effectiveness of arbitration in International Commercial Arbitration has become an excellent means to settle commercial disputes.

The reasons behind people choosing International Commercial Arbitration to resolve disputes can be categorized into two major section arbitration in general and international arbitrations specifically.

Arbitration, in general, facilitates the parties to choose an individual with significant knowledge and expertise to judge the dispute[5].

It is evident from several research studies that judges in courts acquire less degree of expertise compared to the lawyers who represent the parties that may serve as an arbitrator.

For instance, in construction arbitration, there may be architects or engineers and lawyers serving as an arbitrator. In distinct trades, the minimum period of experience required for an arbitrator is distinct where arbitrators are conducted by a trade association.

In addition, states that have restrictive arbitration laws do not have the freedom to choose arbitrators on their own and the lawyers are only permitted to act as arbitrators.

The arbitrators are chosen based on specific disputes. The arbitration from the initiation to the conclusion would be remained by the tribunals that are composed of sole or panel of three.

The continuity of the procedure facilitates the arbitrators to make them familiar with the matter of dispute.

In contrary, a distinct aspect of the dispute would be handled by distinct judges that reduce the viability of resolving as they are not familiar with the entire dispute. Based on the needs of the dispute, arbitration can be adapted due to its flexibility[6].

Based on the Model law, each party has the opportunity to present his case and both the parties would be treated equally as well as they would decide the complete procedure to be followed.

In International Commercial Arbitration, the flexibility of procedure is essential to both the parties as well as their lawyers based on their distinct expectations. In addition, it can be an added advantage to domestic arbitrations as well[7].

Arbitration called upon based on a significant procedure needs to not be the same as other arbitration; it must be based on the type of dispute and relevancy to the terms of the contract.

In relation to merits, arbitration is not subject to appeal. In addition, the loss in legal security by the parties due to errors in the application of the law by the tribunal cannot be rectified.

Arbitration offers a final decision by reducing the time as well as costs extensively.

The arbitration is much faster and cheaper than other litigation methods conducted in the courts and it has been a debatable argument in favor of arbitration.

2.3 Different forms of Arbitration

Mainly there are four types of arbitration that are being used by several countries to settle their disputes[8].

Ad hoc arbitration, Contractual arbitration, domestic or international arbitration, statutory arbitration and institutional arbitration are the most commonly used categories of arbitration.

In arbitration, the parties refer their disputes to the arbitrator in order to take significant decisions to resolve it.

Nonetheless, arbitration is relatively different from litigation as the parties to eth dispute can choose their arbitrator as per their wish based on the type of arbitration.

Ad hoc arbitration refers to a type or form of arbitration where the procedures are set by the parties in dispute by themselves or through arbitral tribunal during the absence of an agreement[9].

In addition, ad hoc arbitration cannot be administered by any arbitral institution. It is completely dependent on the parties to set their own ground rules including governing law, the appointment of arbitrators, the procedure of its conduct as well as a number of arbitrators.

In case any one of the parties does not agree upon the appointment of an arbitrator then the decision would be made by the Chief Justice of the High Court. In addition, the parties are not mandated to follow or abide by the rules of arbitral institutions[10].

The parties have the right to stipulate their own arbitral clauses but need to be bound by them. In contrary, the parties are free to adopt the rules of any specific arbitral institution as per their wish and they are not banned towards such act even without referring or submitting their disputes to the referred arbitral institution.

The major advantage of ad hoc arbitration is its flexible nature for the entire arbitration procedure which would be highly dependent on the will of the parties for cooperation[11].

It is relatively cost-effective in nature as it lowers the administration cost which is relatively high in institutional arbitration In addition; this type of arbitration is highly benefitted to people who are not economically sound.

In ad hoc arbitration, the parties have the access to choose the seat of arbitration which is unlike in case of institutional arbitration.

In relation to institutional arbitration, parties can directly refer to the particular institution such as WIPO or FICCI for resolving the disputes amongst the parties.

In addition, these kinds of institutions have their own structure of arbitral rules that could be significantly applied to the proceedings conducted by them.

Nonetheless, the disputes are arbitered by arbitrators and not the institutions only when the arbitral rules are laid down by the institutions would be applied[12].

In most cases, the contract between the two parties must contain an arbitration clause which should designate a specific institution as the arbitration administrator.

The major advantage of institutional arbitration is the parties need not have to waste any time for formulating any procedures and rules as it would have pre-established rules in an effective manner.

In addition, the arbitrators in the institutions are highly expertise in their relevant field by maintaining the confidentiality of information as well as are well experienced to scrutinize awards[13].

On the other hand, contractual arbitration is based on globalization in the economy due to the increase in business and trade. Due to such increase, the frequency of disputes between the parties also increases which needs to be resolved extensively[14].

As court procedures are relatively lengthy and expensive, contractual arbitration offers speedier and less expensive procedures by the insertion of the arbitral clause as per the part of the contract.

This, in turn, results in smooth functioning during the times of disputes in future where the parties would refer to the contract and the disputes would be relatively resolved by some designated arbitrators appointed by the parties.

Statutory arbitration is based on the parties that are imposed by the dispute by the law of land and it is mandatory for the parties to comply with it.

This kind of arbitration is significantly distinct from other forms of arbitration. Other kinds of arbitration allow parties to decide their arbitrators based on the subject matter whereas in statutory arbitration the parties are mandated to comply with the law of the land.

Domestic arbitration occurs within the home country or all the parties are situated in the home country resolving the disputes[15].

On the other hand, in the case of international arbitration consideration of parties form different States is required to initiate this method.

In addition, in international arbitration, a transaction is required involving a transaction either taking place in two or more States or in the State other than the place of arbitration.

In general, the commonly used arbitration procedures are Institutional Arbitrations and Ad hoc arbitrations due to its effectiveness and viability for resolving disputes.

2.4 Benefits of Arbitration

Literature suggests that the advantages of arbitration in international commercial arbitration are considerable.

A research study states the reason behind choosing international arbitration by the parties for resolving disputes[16].

The findings of the research study stated the two most essential reasons. The first reason was the ease of attaining reinforcement subjected to the New York convention treaty which holds 156 countries as parties.

The second reason was the ability to stay out of the court of other party or the neutrality of the forum. Based on the New York Convention, courts are only needed to enforce an award except there are critical problems or procedural irregularities that contradict the integrity of the entire process.

In addition, an arbitration award is significantly easier to enforce internationally compared to the judgment of the national court. It is evident that the New York Convention is valued for its pro-enforcement bias.

Most of the courts would find very narrow based on allowable grounds of non-enforcement. This, in turn, would lead to the enforcement of a higher number of awards[17].

Additional benefits of arbitration incorporate the ability to keep the resulting award as well as proceedings confidential.

In addition, a confidentiality agreement is provided by some institutional rules as well as it can be expanded based on the agreement of the parties that requires to bound those parties in the agreement such as experts, witness.

There are several companies that need confidential procedures in order to restrict the disclosure of information to the public for running their business operations smoothly.

They also want to eliminate the negative outcome of critical disputes to be revealed in the public. Hence, the confidentiality of information is significant in the case of arbitration.

In addition, parties prefer choosing their own arbitrators for the disputed case with specific subject matter expertise.

Through arbitration, there is a less scope of discovery which in turn results in the shorter process compared to the full-scale litigation conducted in the courts or shorter than US-style litigation process[18].

The other attractive aspect of arbitration is the lack of opportunity for multiple appeals based on the decisions of merits which is likely to be critical in relation to courts. In addition, people in business are much more inclined to solve the dispute in the shorter process so that they can carry

[1] Brekoulakis, S. L. (2013). International Arbitration Scholarship and the Concept of Arbitration Law. Fordham Int’l LJ, 36, 745.

[2] Carbonneau, T. E., & Butler, W. E. (2013). International litigation and arbitration. West Academic Publishing.

[3] Carr, I., & Sundaram, J. (2016). International Trade Law Statutes and Conventions 2016-2018. Routledge.

 

[4] Chappell, D., & Dunn, M. H. (2015). The architect in practice. John Wiley & Sons.

[5] Chatterjee, C., & Srinivasan, V. (2013). Ethical issues in health care sector in India. IIMB Management Review25(1), 49-62.

[6] Cordero-Moss, G. (Ed.). (2013). International Commercial Arbitration: different forms and their features. Cambridge University Press. Dewan, G. (2014). Overview of Legal Research in India. Austl. L. Libr., 22, 200.

[7] Cremades, B. M., & Madalena, I. (2008). Parallel proceedings in international arbitration. Arbitration International24(4), 507-540.

[8] Cuniberti, G. (2013). The international market for contracts: the most attractive contract laws. Nw. J. Int’l L. & Bus., 34, 455.

[9] Eidenmüller, H. (Ed.). (2013). Regulatory Competition in Contract Law and Dispute Resolution. Bloomsbury Publishing.

[10] Ferguson, L. (2013). Arbitration in financial dispute resolution: the final step to reconstructing the default (s) and exception (s)?. Journal of Social Welfare and Family Law, 35(1), 115-138.

[11] Fiadjoe, A. (2013). Alternative dispute resolution: a developing world perspective. Routledge-Cavendish.

[12] Fietta, S., & Upcher, J. (2013). Public International Law, Investment Treaties and Commercial Arbitration: An Emerging System of Complementarity?. Arbitration International, 29(2), 187-222.

[13] FROM, O. (2015). in inTERnATionAL ARBiTRATion.

[14] Gaillard, E. (2015). Sociology of international arbitration. Arbitration International31(1), 1-17.

[15] Garnett, R. (2015). Australia’s International and Domestic Arbitration Framework. In Arbitration and Dispute Resolution in the Resources Sector (pp. 7-21). Springer, Cham.

[16] Gent, S. E. (2013). The Politics of International Arbitration and Adjudication. Penn St. JL & Int’l Aff., 2, 66.

[17] Gilson, R. J., Sabel, C. F., & Scott, R. E. (2013). Contract and innovation: the limited role of generalist courts in the evolution of novel contractual forms. NYUL Rev., 88, 170.

[18] Hamilton, J. L. (2006). U.S. Patent No. 7,123,974. Washington, DC: U.S. Patent and Trademark Office.

on their business operations successfully without wasting useless time. This is also a significant advantage of arbitration.

The most significant aspect that has been analyzed from the past is that the process of arbitration is less expensive compared to litigation.

However, several companies in today’s world do not support such an assumption and do not believe the existence of such an advantage.

As the number of commercial arbitrations has increased in the global world as well as the higher amount of money are at stake, several parties have initiated to incorporate litigation tactics in the arbitration[1].

This in turn critically increases the adversarial nature, costs as well as create delays in the entire process of arbitration.

Apart from that, it is evident that several parties prefer the process of arbitration than litigation irrespective of cost as arbitration have significant benefits that can enhance the entire process leading to an appropriate solution for the disputes.

2.5 Key Characteristics of International Commercial Arbitration

The key characteristics of International Commercial Arbitration are consent, non-governmental decision makers and final and binding award.

The consent of the parties offers the reinforcement of the power of the arbitrators in order to make a decision based on the dispute.

In addition, the consent of the parties critically limits the power of the arbitrators with fewer exceptions[2].

This states that an arbitrator can make decisions for the issues based on the scope of the agreement of parties.

It is also mandatory that the arbitrators must apply the laws, rules, and procedures that are chosen by the parties.

In general, parties state their concerns based on any future dispute towards arbitration in an agreement which becomes the clause for the commercial contract between the two parties.

However, if any parties do not have any arbitration clause in the contract then they can enter into an agreement for arbitration during the time of the dispute. It is also termed as a submission agreement.

The non-governmental decision maker is also a primary characteristic of arbitration. An arbitrator does not fit in any government hierarchy which states that provided less insight towards public interest and public policies.

They are normal private citizens whose motto is to resolve the dispute as chosen by the parties.

This is their primary responsibility which is the distinct characteristics of an arbitrator compared to the judges in the court. In addition, unlike judges, arbitrators are very much thoughtful for the parties and in general very understanding in the process of interaction with the parties[3].

As arbitrators are selected by the parties, they prefer to be selected again. Hence, it is highly relevant and essential for arbitrators to be perceived as reasonable, considerate, fair-minded as well as even-tempered.

The final and binding award is the major reason behind parties choosing an arbitrator to resolve a dispute which is the primary result of arbitration.

In addition, these results cannot be claimed to a higher level court which signifies the effectiveness of arbitration.

However, there are few uncertain opportunities where parties can appeal in few jurisdictions which reveal that a party can only challenge an award in case a defect is present in the process[4].

Furthermore, there is also a possibility that a party can strive to leave the award in the court of the country based on the seat of arbitration or the place of arbitration.

In contrary, based on most laws in arbitration, a party can only vacate the award in the court if the arbitrators increase their powers beyond limits and present a case that was not given to them or a defect in the complete process.

However, in any case, it would be very narrow.

It is highly mandatory for the losing party to voluntarily comply based on the terms of the award as soon as the arbitrators render the award.

In case it does not happen, then the winning party would strive to attain the award enforced and recognized by the court in the jurisdiction of the losing party where the party has assets.

However, the losing party can again appeal to the court for challenging the award but it would highly on narrow grounds. In addition, mistakes of facts or mistakes of laws by arbitrators can be a ground for non-enforcement and the award cannot be challenged just based on merits[5].

This, in turn, would state that the award would be enforced. When the award of a party is recognized based on the enforcing jurisdiction, it is highly considered to make the same legal effect like the judgment of a court.

In addition, it would be enforced like the judgment made in that jurisdiction.

2.6 History of International Commercial Arbitration

2.6.1 Convention and protocols

  1. 1899 and 1907 Convention

This is known as Hague conventions which are the set of series of international declarations and treaties which were negotiated between two international peace conferences in the Netherlands.

These were the 1st most formal statements based on the laws of war in relation to the secular international law. This was framed along with the Geneva Conventions[6].

However, due to the initiation of World War I, the third conference did not take place. The major effort was provided towards the formation of a binding international court for settling the international disputes mandated in arbitration.

Later after the failure of such convention, a voluntary forum of arbitration was established by Persia, US, China, UK, France, and Russia. It was known as the Permanent Court of Arbitration.

  1. Geneva Protocol and Geneva Convention

The Geneva Convention incorporates three protocols and four treaties that formulated the standards of international law based on humanitarian treatment in war. It denotes the agreements of 1949 negotiated after World War II.

The conventions offered basic rights of wartime prisoners, protections for sick and wounded as well as established protections for the civilians. It was ratified in the business year 1949.

The 1923 Geneva Protocol based on Arbitration clauses that were adopted by the League of Nations eliminated the difficulties for non- domestic arbitration agreements[7].

The protocol significantly assisted in relation to the number of stated that engaged and became a party to it as well as its contents. Nonetheless, the protocol offers the procedure incorporating the constitution of the arbitral tribunal that needs t to be governed by the desire of the parties as well as the law of the country at the place of arbitration.

The content of the Geneva Protocol is integrated into the New York Convention into Articles II and V (d) of 1958 with minor changes.

  1. New York Convention

As the 1927 protocol stated that the party looking for reinforcement of the award needs to establish the conditions for recognition which must be fulfilled.

In order to do it is highly require recognizing the award in the country of arbitration. This, in turn, reduced the need for double exequatur of the Convention.

It was a significant problem. Hence, in order to resolve such issue, the ICC revise the draft of 1927 convention and merged with the 1923 protocol into a  single convention and submitted to United Nations.

It resulted in 1958 Convention which is also known as the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Article V (1) are based on limitation to violations of the rules in arbitration for protecting the integrity of parties.

Article V (2) protects the integrity of law in the enforcing country[8].

The Convention stated that the agreement of arbitration needs to be considered as prima facie worthy of credit. In addition, the draft prepared by the ICC envisioned an international where the control would not be subjected to the national court.

After the 1958 diplomatic conference, the enhancement in arbitration continued. Around 135 countries have approved the convention.

  1. Inter-American Convention

The Inter-American Convention which is also known as the Panama Convention initiated in the business year 1975 is one of the most essential multilateral agreements which is unknown to several communities.

This multilateral agreement reinforces the conduct of international commercial arbitration as we as enforcement of arbitral awards[9].

To date, 19 countries have ratified the convention. The most significant fact about Inter-American Convention is the issue of enforcement and its relationship with The New York convention towards International commercial arbitration.

Both the conventions have similar issues and are ratified and designed by a number of states in America.

  1. European Convention

In the business year 1961, after the implementation of the New York Convention the adoption of European Convention on International Commercial Arbitration was initiated three years later.

It’s as significantly noteworthy as the title stated ‘International Commercial Arbitration’ which was the 1st international instrument which gained extensive curiosity.

A few changes were made in the attitude towards arbitration based on international commercial disputes.

The rules would be framed by the nation-State however in case of involvement of international economic matters; the rules must recognize the special requirements[10].

  1. ICSID Convention

The International Center for Settlement of Investment Disputes or ICSID convention was established for settling disputes between Nationals and Stated of other States.

The convention entered into force in the year 1966 which was ratified by 20 countries. In addition by 2006, 143 countries have signed and ratified the convention for becoming Contracting states.

The convention was established by the International Bank of Reconstruction and Development which was duly submitted to the World Bank for ratification.

The provisions of this convention are to facilitate arbitration and conciliation of investment disputes between nationals of other contracting states and contracting states.

  1. Bilateral Investment Treaties

It commenced in the 1950s by a number of countries for negotiating through bilateral investment treaties with other countries.

Both UNCTAD and ICSID have several treaties online; however, the list is not completed. Each of the conventions is unique; however, their provisions are to facilitate arbitration for two contracting states that have invested in other contracting State which resulted in dispute amongst them based on investment.

In general, Bilateral Investment Treaties can be held between two States those are party to the Washington Convention which states that an investor can select ICSID arbitration.

In addition, BIT would fulfill the need in ICSID Article 25 for arbitration in the consent of the host state. The definition investor and investment are relatively important for BIT[11].

  1. UNCITRAL Model 

After the adoption of the United Nations Commission on International Trade Law in the business year 1976, the acceptable rules of procedures overwhelmed by the UNCITRAL Arbitration Rules.

The rules specify for the use of ad hoc civil law or common law arbitrations received significant acceptance from the AALCC or Asian-African Legal Consultative Committee in the same year.

Based on the United States and the Soviet Union, the rules were acceptable in developing countries which state the call for arbitration during any disputes. Ad hoc arbitrations were increasingly used by arbitral organizations by making appropriate changes.

In the business year 1982, UNCITRAL issued its guidelines for managing arbitration under the UNCITRAL Arbitration Rules[12].

It significantly incorporated the details of changes that can be made in the Rules for the use of institutions. It indeed gave freedom to the parties to proceed with the arbitration as the rules written under UNCITRAL Arbitration Rules were for ad hoc arbitrations.

In addition, the Rules stated that in case parties cannot derogate, the provision would prevail.

  1. Model Law

Later in 1985, the UNCITRAL Arbitration Rules were integrated into the Model Law. It offers parties to conduct the process of arbitration as per their wish as well as assist the entire arbitral process.

The arbitration can be ad hoc or institution based on the subject matter. Based on the Article 18, each party would be treated equally and must have the opportunities to present their own case.

In addition, the parties are free to conduct the arbitration based on their procedure. Canada was the first country to adopt Model Law and at present, it has set its foot in 39 countries[13].

The Model Law was drafted only for governing international commercial arbitration and a separate law can be enacted based on domestic arbitration.

At present, the Commission is considering to integrate several measures to Model Law in order to increase its effectiveness for resolving disputes.

 

 

CHAPTER 3: Indian Arbitration system

3.1 Introduction

In today’s global world, the increase in trade and investment in business has led to the increase in overseas commercial disputes. In order to resolve such dispute and enhance business relationships based on international terms, the requirement for an effective mechanism namely ‘international arbitration’ has emerged.

In India, economic policies, as well as overseas commercial transaction, is acting as a catalyst due to the increase in international commercial disputes.

This, in turn, shifted the focus from international communities to international arbitration regime of India.

There were several cases where the Indian judiciary made controversial decisions specifically the cases that integrated foreign party.

This has raised concern amongst the international community for the development of arbitration laws in India. In addition, the Indian judiciary systems have been always criticised due to its interference in international arbitrations as well as the application of domestic laws in international seated organizations.

However, at present, the development of international commercial arbitration is being observed in India that enables India to adopt international practices.

3.2 Development of international commercial arbitration in India

The latest developments in the process of arbitration based on recent court decisions depict the assistance of the judiciary for adopting international practices in order to resolve commercial disputes[14].

In addition, courts have implemented a pro-arbitration strategy as well as series of rulings by the Indian Supreme Court and the High court in order to change the complete scenario towards arbitration landscape.

Initiating from the business year 2012 to 2018, the Indian Supreme Court has offered several landmark rulings for pro-arbitration approach including the elimination of judiciary power for interfering with arbitrations which are seated outside, reinforcing a seat-centric Indian arbitration law, scope of foreign and domestic seated arbitration as well as agreement to settle disputes based on arbitration.

In addition to easing up the operations in India as well as in foreign countries, the Indian government has made amendments to the arbitration law which is amended to Arbitration and Conciliation Bill, 2018.

It has been introduced to the Parliament and is expected to promulgate the Arbitration and Conciliation (Amendment) Ordinance, 2015.

By the business year 2015, the amendment Bill of 2015 was passed by Rajya Sabha and Lok Sabha with fewer changes[15]. The Amendment Act was applicable to the proceedings of arbitration.

In the business year 2018, the Arbitration and Conciliation were introduced and several other amendments are expected in a few months.

Based on International Commercial Arbitration in India, Section 2 (1) (f) of the Act states that it is a legal relationship that needs to be considered commercial where either one of the parties is from foreign country or the association or body of individuals whose company is in foreign country or the control is in foreign hands. Hence, based on Indian law an arbitration involving a foreign arty but a seat in India would be considered as International Commercial Arbitration subjected to pat I of the Act. In case the International Commercial Arbitration is held outside India then instead of Part I of the Act, Part II of the Act would be subjected on the parties[16]. Nonetheless, the Amendment Act developed also states that if a company is incorporated in India then its management or control of operations is irrelevant and it cannot be determined as International Commercial Arbitration. The Supreme Court has also excluded its application through the Act by stating foreign body corporate cannot have any control if the companies are registered in India. Hence in case, a company have dual nationality and one based on registration in India and other based on foreign country, based on the scope of the Act, such companies cannot be considered as a foreign corporation. Hence, it can be stated that the development of International Commercial Arbitration is speeding up in India but the decisions are controversial in nature.

3.3 Arbitration system in India

3.3.1 Arbitration laws in India

  1. International Commercial Arbitration in India – Finality, and Enforcement

The market of India has opened in the early 1990 and is a large and diverse country; it has embraced bad and good of the process of globalization. In addition, the large population is contributing towards significant pressure on Indian Institutions as well as resources incorporating judicial system extensively. In this case, the mechanism of arbitration has played a significant role to resolve a commercial dispute. India analyzed such success of the regime and facilitates the arbitration regime known as the Arbitration and Conciliation Act of 1996 that was significantly based upon the UNCITRAL Model Law[17]. Furthermore, India is a signatory to the New York Convention as well as on Recognition and enforcement of arbitral awards. Later after the increase in commercial disputes and internationalization, India put forwarded few amendments in the Arbitration and Conciliation Act in the year 2015. This amendment was significantly needed in India as it was at crossroads as Indian courts were playing a minimum role for enforcing, making and challenging awards.

Based on the theory the system was perfect however in the practical field it affected the viability of arbitration extensively. After analyzing such criticality, the Indian government made the final amendment in the business year 2018 which is still in progress. It has been analyzed that there is no mandatory legal regime that administers International Commercial Arbitration. It is the signatory and permissive range of conventions that a nation follows. India is a signatory for the Geneva Convention, The New York Convention 1958 as well as the UNCITRAL Model Law 1985[18]. In addition, India pro-arbitration attitude of the nation was significant to implement and enforce the International Commercial Arbitration in India.

  1. Indian Arbitration and Conciliation Act, 1996

In order to address the raising concerns as well as to encourage arbitration as time efficient and cost efficient mechanism for settling commercial disputes in both international and national regime, India adopted Arbitration and Conciliation Act 1996 Act modeled on the Model Law as a new legislation[19]. The Act was framed in such a way that would assist to resolve a commercial dispute with faster and efficient manner for resolving the criticality in the judicial system that inordinate backlog and delays of cases. The Arbitration and Conciliation Act 1996 has three essential parts. Part I Act was subjected to domestic arbitrations as well as International Commercial Arbitration when the seats are in India. Part II of the Act was subjected to foreign awards and their enforcement based on the New York Convention. Part II of the Act subjects is based on a statutory embodiment of conciliation provisions.

  1. Recourse against Arbitral Awards

The recourse to the court against an arbitral award can be made through an application for setting aside the award in relation to sub-section (2) as well as sub-section (3) base on commercial arbitration in India and the Arbitration and Conciliation Act. The arbitral award can be set aside by the court if the application furnished by the party proves that arbitral award does not fall in terms of submission to arbitration or the party is under incapacity or the arbitral procedure was not in accordance based on the agreement of the parties[20]. In addition, if the court finds that the arbitral award has a conflict with the public policy of India or the subject matter is incapable for a settlement based on the disputes, the arbitral award can be set aside by the court. It is mandatory to avoid any doubt that an award is in conflict towards the public policy in India in case the making of the award is biased by corruption or fraud of section 75 or section 81.

In addition, the application of setting aside cannot be made after 3 months after the party making the application has the arbitral award. In case the party appeals within 3 months then the application would be entertained for a further period of 30 days by the court[21]. Based on subsection (1), after receiving the application requested by the party, the court can adjourn the proceedings for a period of time for giving an opportunity to resume the arbitral tribunal proceedings.

[1] Hanotiau, B. (2014). The law applicable to arbitrability. SAcLJ, 26, 874.

[2] He, L. L., & Sappideen, R. (2013). Investor-state arbitration under bilateral trade and investment agreements: Finding rhythm in inconsistent drumbeats. J. World Trade, 47, 215.

[3] Hobér, K. (2011). International commercial arbitration in Sweden. Oxford university press.

[4] Hoda, A., & Rai, D. K. (2014). Trade and investment barriers affecting international production networks in India (No. 281). Working Paper.

[5] Horner, R. (2013). Strategic decoupling, recoupling and global production networks: India’s pharmaceutical industry. Journal of Economic Geography14(6), 1117-1140.

[6] Inbavijayan, V., & Jayakumar, K. (2013). Arbitration and Investments-Initial Focus. Indian J. Arb. L.2, 33.

[7] Inbavijayan, V., & Jayakumar, K. (2013). Arbitration and Investments-Initial Focus. Indian J. Arb. L., 2, 33.

[8] Jones, D. (2013). Investor-State Arbitration in Times of Crisis. National Law School of India Review, 27-61.

[9] Karton, J. D. H. (2011). Culture of international arbitration and the evolution of contract law (Doctoral dissertation, University of Cambridge).

[10] Kaufmann-Kohler, G., & Rigozzi, A. (2015). International arbitration: law and practice in Switzerland. Oxford University Press.

[11] Kjos, H. E. (2013). Applicable Law in Investor-State Arbitration(p. 343). Oxford University Press.

[12] Koremenos, B., & Betz, T. (2013). The design of dispute settlement procedures in international agreements. Interdisciplinary Perspectives on International Law and International Relations: The State of the Art, 371-93.

[13] Kumar, A., Upadhyay, R., Jegadeesh, A., & Chheda, Y. (2017). Interpretation and Application of the New York Convention in India. In Recognition and Enforcement of Foreign Arbitral Awards (pp. 445-476). Springer, Cham.

[14] Kumar, S. P. (2013). The Indus Waters Kishenganga Arbitration (Pakistan v. India). National Law University, Jodhpur.

[15] Latha, S., & Thilagaraj, R. (2013). Restorative justice in India. Asian Journal of Criminology8(4), 309-319.

[16] Lessig, L. (2013). Foreword:“Institutional corruption” defined. The Journal of Law, Medicine & Ethics41(3), 553-555.

[17] Lew, J. (Ed.). (2013). Contemporary problems in international arbitration. Springer Science & Business Media.

[18] Matsushita, M., Schoenbaum, T. J., Mavroidis, P. C., & Hahn, M. (2015). The World Trade Organization: law, practice, and policy. Oxford University Press.

[19] Mazumdar, M. (2013). An overview of the Indian pharmaceutical sector. In Performance of Pharmaceutical Companies in India (pp. 17-44). Physica, Heidelberg.

[20] Mistelis, L. A. (2013). Award as an investment: The value of an arbitral award or the cost of non-enforcement. ICSID review, 28(1), 64-87.

[21] Moses, M. L. (2017). The principles and practice of International Commercial Arbitration. Cambridge University Press.

  1. Meaning and scope of “Public Policy” according to the 1996 Act

Public policy under section 34 of the Arbitration and Conciliation Act 1996 is the ground for setting aside an arbitral award. The provision reflects the UNCITRAL Model Law based on International Commercial Arbitration. In addition, section 48 of the Act depicts that in case an opposition rises against the public policy of India, the foreign arbitral award can be set aside. Public policy has been represented as an interpretation founded on the present needs of the community or the principle of judicial legislation[1]. The court legislates judicially when it performs the function undoubtedly. It is highly related to enhancing the goals of the society and this kind of legislation is implicitly delivered to them. The public policy remains desirable when the parties make a contract and enter into it but when it adversely affects public interest; the court would refuse to enforce the contract. Public policy is mandated as a ground to set aside an arbitral award. The integration of Saw Pipes was also restated by the Supreme Court which integrates each fundamental principles required for governing of justice and enforcement of the law in the country. In addition, based on the public policy an award can be set aside in case it contradicts the fundamental policy of India law that is whimsical or arbitrary opposed for being objective, fair and reasonable[2]. The award can be also set aside if it contradicts the interest of India affecting other international relations of India or it contradicts to morality and justice or patently illegal or immoral contract. Based on the scope of public policy if these conditions arise then it contravenes the law of India or the provisions of the Act which would lead to setting aside of arbitral awards.

3.4 Adequacy of Indian legal system for resolving disputes (international trade and commerce) in India

The adequacy of Indian legal system is significant for resolving disputes specifically for international trade and commerce. However, with the increase in trade and investment the shift from court system is evident in literature resulting in International Commercial Arbitration in India. The respect of the court system in India is significant as depicted form the reports submitted by the committees and Law Commission of India. These committees are constituted to analyze the loopholes in the law and suggest significant mitigation technique to eliminate the loopholes[3]. In the business year 1986, the Law of Commission of India analyze the inordinate legal technicalities, delays as well as excessive costs of judicial decision. In addition, the backlog of pending cases was common in law courts which resulted in significant strategies to resolve such issue.

The adequacy of Indian legal system for resolving disputes imitated with the mechanism of alternative dispute resolution process for settling the commercial disputes with consensual process within parties. In addition, the process integrates negotiations, arbitration, mediation or conciliation to reduce the gap between the parties. In the year 1989, Supreme court of India initiated the first alternative dispute resolution process with the Courts of Law[4]. Nonetheless, this system was relatively adequate as it offered less formalistic, flexible, speedy and cheap adjunction through the Court of law for resolving disputes. Later after the rise in international disputes amongst parties due to trade and investment the difficulties increased that raised to the initiation of Arbitration Act 1940. However, it faced criticism due to infirmities, lacunae, and shortcomings which was related to the recognition and enforcement of an arbitral award. In order to mitigate the difficulties, international conventions were incorporated and ratified by India such as the New York Convention and the Geneva Convention. This, in turn, changed the course of arbitration in India formulating international conventions dealing with the enforcement of arbitral awards from foreign.

The liberalization gate opened by India in the year 1990 reformed economic status. After the initiation of international trade and commerce, the role of WTO and GATT increased which was significant for goods, investments, trading and intellectual properties. This, in turn, increased disputes in international terms that require quick and amicable settlement strategies for resolving disputes. In this scenario, a significant question raised about the adequacy of arbitration system in India as well as Indian law system[5]. In addition, a huge number of international investors showed interest towards investing in India which required disputes settlement based on investment needs to solve abroad. This was critical in the Arbitration Act 1940. Hence, in order to increase the volume of trade and investment in India as well as build a commercial relationship with the rest of the world a new legislation policy has been framed which is The Arbitration and Conciliation Act, 1996 This Act was modeled with the UNCITRAL Model Law, 1985[6].  Hence, it can be stated that the Indian law system is enhancing their trade and commerce policies in order to offer a smooth flow of business by resolving the disputes extensively.

3.5 Reason for a shift from municipal court to arbitration in International commercial disputes decisions

The shift from municipal court to international commercial arbitration for resolving disputes is significant. Due to the increasing growth in trades and commerce, critical problems in municipal court have raised. The municipal court system in India has been overburdened which is significantly based on the adversarial model of common law as well as it is disastrous, cumbersome and expensive. In addition, still, there are certain areas in India where litigation is arising every day which critically increases the overload of cases for municipal courts. Furthermore, as the population of India is relatively higher it becomes inadequate for municipal courts to meet the challenges to a large number of backlog cases. In addition, the time taken for the disposal of cases is critically high[7]. The delay in Indian legal system is the major flaw and municipal courts have its contribution in it as well. In addition, the average time consumed by the municipal courts in India for deciding cases varies from five to fifteen years that critically hamper the significance of resolving the dispute.

With the initiation of trade and commerce, the criticality in municipal courts and enforcement of award has been a critical issue since ages in India. The shift from municipal courts to international commercial arbitration has been evident due to its effectiveness in every possible area[8]. The concept of speedy justice by municipal courts has been always a debatable argument in literature, although there are significant constitutional guarantees. Due to non-disposal of the cases in time, around 0.18 million under trials based on commercial disputes are in jail and the government spent Rs 3,610 million per year to settle this cases. Hence, it can be stated that the vitality of international commercial arbitration is significant and viable compared to the law system of municipal courts.

Furthermore, there are several reasons for pendency in municipal courts which adversely affects the flow of business operations. Specifically, after liberalization of the commercial disputes cases are gaining importance for resolving disputes at a limited time to maintain a harmonious business relationship as well as cost-effective measures. However, the municipal court system is failing to maintain such procedure due to lack of transparency and responsiveness in administration. In addition, the inadequate strength of judge has been a critical issue for several backlog cases[9].  Hence, the inadequacy of municipal courts to make crucial decisions at right time in a cost-effective mechanism is critical towards resolving disputes based on international trades and commerce. For such instances, the shift from municipal courts to international commercial arbitration took place enhancing the business relationship and quicker judgments for resolving disputes amongst parties in India.

3.6 Review of Arbitral awards by National courts in India

  1. The scope of Judicial Intervention Broadened

The scope of judicial intervention has expanded significantly with the 2015 amendments. It was held in the Arbitration and Conciliation Act, 1966 that aims to segregate judicial intervention from the arbitral regime[10]. The goal of these amendments was to enhance the sanctity of the arbitral regime as a mechanism to relieve the burden of the Indian judiciary. However, the increase in judiciary intervention has critically affected the arbitral proceedings which state that the scope of judicial intervention has dissolved. The scope of judicial intervention is to segregate the overburden of cases from the arbitral regime. The excessive interference of Indian judicial has eliminated the cause. In addition, the judicial intervention has been limited in the arbitral regime by minimizing its role in the proceedings which in turn assist to deliver justice appropriately. The major issues that have been analyzed in Arbitration and Conciliation Act 1996 are the copious judicial intervention in the arbitration procedure that critically reduces the viability of arbitration as well as the whole aim of segregation[11]. However, after the amendment, the arbitral tribunal has gained significant powers which in turn critically reduced the role of the judicial system in maintaining its effectiveness. On the other hand, the scope of Indian judicial intervention increased in the case of SBP & Co to make the parties come by mutual consent with the assistance of Chief Justice. In addition, the court restricts by protecting the parties from the defective arbitration agreement. However, if in such way the intervention increases then it would result in poor administering and would not fulfill the aim of the amendments and arbitration.

  1. Judicial Intervention on the grounds of error of fact or law

As the scope of judicial intervention is broadened, the exposition of error of law or error of fact has been critical. The purpose of judicial intervention on such ground is to analyze the findings of an administrative tribunal. In general, a court would not evaluate the evidence presented in the tribunal proceedings[12]. This, in turn, leads to the distinct conclusion from the tribunals by weighing the evidence by itself. In such scenario, there is a huge possibility that the court may find the fact presented by the tribunal irrelevant and upset the fact which states that the tribunal has committed an error of law. Hence, it is highly required by the court to make any judicial intervention based on the error of law or fact by examining three factors. The 1st is to analyze the difference between primary fact and ultimate fact. The 2nd is when the court is reviewing the primary facts and the 3rd is when the court is reviewing the ultimate facts. It is essential for judicial intervention to integrate these three issues in order to make significant judgment decisions[13].

  1. The standard of Review entailed by the principle of “Competence-Competence”

The principle competence to competence empowers an arbitration tribunal to administer in its own jurisdiction. It is confirmed in the Article 16 (1) of schedule 1 in the Arbitration Act 1996. In addition, it is also assisted by the Article 16 (1) which is based on separability principle that treats an arbitration clause in a fundamental contract as distinct from the contract. This, in turn, allows the jurisdiction to survive termination or invalidity of the contract[14]. In addition, these principles offer primary responsibility to the tribunal based on analyzing its jurisdiction. However, courts are not excluded from the proceedings for a genuine and tactical reason. The parties often challenge the scope and validity of arbitration agreements in judicial proceedings. Furthermore, it is required to intervene by the court towards the jurisdiction questions in order to protect the parties from a defective arbitration agreement.

 

 

CHAPTER 4: Arbitration system for Indian Industry

4.1 Introduction

The arbitration system in India has become significantly popular specifically in terms of large commercial contracts. A significant number of arbitrations in India based on construction and infrastructure contracts specifically with government entities have been increased. In addition, arbitrations are performed to import-export transactions as well as admiralty law. Several legislative laws and regulations are framed for conducting the arbitration in Indian industry. Furthermore, the application of ad hoc arbitration for resolving dispute cases based on commercial contracts has been evident. However, the pharmaceutical industry in India has critical issues based on national courts system which requires the significant involvement of commercial arbitrations. The integration of commercial arbitration in the pharmaceutical industry would significantly assist to resolve commercial obligations to contracts offering smooth flow in business operations and conduct.

4.2 Pharmaceutical Sector in India

The Indian Pharmaceutical industry ranks third in the world based on volume and fourteenth in relation to value. As per the Department of Pharmaceuticals, the total turnover of the pharmaceuticals industry in India in the business year 2017 was the US $21.04 billion. In addition, Ahmadabad, Hyderabad, Bangalore, and Mumbai are the primary pharmaceuticals hub in India. With the Patent Act, in 1970, the government of India initiated and motivated the growth of drug manufacturing in India[15]. Prior to the Patent Act, the multinational companies showed a lower interest in the Indian market due to lack of patent protection. In addition, when the multinationals streamed out, the Indian companies initiated a reverse engineering process by attaining Indian market share through manufacturing drugs at lower cost. This was the significant rise of Indian pharmaceutical industry which gained worldwide attention. Despite that, the biopharmaceutical industry in India also gained 17% growth in the market with revenue of $3 billion or Rs. 137 billion in the fiscal year 2016-2017 compared to the previous financial year[16]. In addition, biopharmaceutical has assisted the particular industry towards growth with higher profitability margin.

The intellectual property in India had a drastic change in 1st January 2005 that enacted an amendment to the patent law of India. It reinstated patents of the product for the 1st time since the business year 1972.  This legislation was ratified on the deadline set on the TRIPS or Trade-Related Aspects of Intellectual Property Rights agreement by the WTO for 20 years of the period. Based on this new law, India would be able to consider patents filed after 1st January 1995 as well as new patents. This critically enhanced the pharmaceutical industry in India leading to several numbers of contracts and legal cases. In addition, this new patent legislation in the domestic market resulted in appropriate segmentation. The multinational companies emphasized towards the firm that attains 12% of the market by attaining the new patent protection rights[17]. This integration of international firms in India raised critical situations based on contracts in Indian firms which require significant judgments to resolve the disputes.

4.3 Role and issue of Indian legal system/national court in commercial arbitration

  1. Role of the National Court at the Beginning of the Arbitration

Before the establishment of the arbitration, the involvement of national courts initiates when a party challenges the agreement of the arbitration. When one party have the intention to avoid the agreement to arbitrate or when a party requires urgent protection that cannot be awaited for the tribunal, the involvement of national court becomes essential. However, it is the duty of the national courts to uphold the agreement for arbitration. It is highly required by the national court to deal complying with the New York Convention for arbitration only if there is a valid agreement of arbitration. The national law of India states the limited extent of national courts in the existence of a valid arbitration agreement prior to the arbitral tribunal. The national court fills the gap until the establishment of a tribunal for protecting the status quo[18]. In addition based on the Passing of interim orders of Section 9 of the Act, it allows UNCITRAL Model Law by omission for granting interim relief by the court before the establishment of the tribunal. Furthermore, the national court has a significant role in case arbitration rules do not enable arbitrators to grant interim relief of protection. Several research studies stated that the intervention of national courts in arbitration at these stages is essential for the arbitration proceedings. However, in case the national courts have to pre-empt the decision or postpone the request of the tribunal, its effectiveness might decrease.

At the beginning of the arbitration, the involvement of national courts assist with the challenges and appointments based on arbitrators[19]. As reflected by the UNCITRAL Model Law as well as Indian legal system, in case the mechanism of arbitration does not work between the parties, the national courts need to establish a significant tribunal to take over for the parties in disputes. Based on the Arbitration and Conciliation Act 1996, the intervention or assistance of national court has been limited and can only have authority in making reference in a pending suit of Section 8 of the Act.

  1. Role of the National Court during the Arbitration

During the arbitration, the role of national court comes in several forms and it is rarely dealt with in arbitration heads. In addition, this integrates court’s to make procedural orders which cannot be enforced or ordered by any arbitrators or in case the orders are passes to maintain the status quo. Specifically, in the Indian legal system, these measures are relatively helpful. The national court also passes orders for taking evidence as well as protecting them in order to protect the integrity of the arbitration[20]. Specifically, in these cases the role of the national court is significant and this kind of intervention is appropriate and acceptable when the tribunal refuses or cannot take the measures required as well as the intervention of national court has the agreement of the tribunal. In addition, the national court also can appoint arbitrators for parties at full liberty to resolve disputes by appointing three arbitrators based on Section 11 of the Act.

  1. Role of the National Court at the End of the Arbitration

During the end of the arbitration, after an award has been rendered the national court can be involved in two distinct arrangements. The 1st is at the place of arbitration specifically when a party challenges an award and wants to set aside the awards as well as when the party lodges an appeal in front of the national courts against the award number based on applicable arbitral regime or law. The 2nd is at the place of enforcement in case the successful party claims the

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[18] Trakman, L. E., & Musayelyan, D. (2015). The repudiation of investor–state arbitration and subsequent treaty practice: the resurgence of qualified investor–state arbitration. ICSID Review-Foreign Investment Law Journal31(1), 194-218.

[19] Trusz, J. A. (2012). Full Disclosure: Conflicts of Interest Arising from Third-Party Funding in International Commercial Arbitration. Geo. LJ, 101, 1649.

[20] Vadi, V., & Gruszczynski, L. (2013). Standards of review in international investment law and arbitration: multilevel governance and the commonweal. Journal of International Economic Law, 16(3), 613-633.

enforcement and recognition of the award. Based on Section 34 of the Act, 1996 the arbitral tribunal needs to have the reason unless the agreed parties want to dispense with reasons. Documents that do not contain any reasons signed by the arbitrators as well as making adjunction cannot be termed as an award. Within 30 days the party needs to appoint his arbitrator or else it would go in the hand of the national court and fail in relation to challenging the award[1].

  1. Jurisdiction of the Indian Court in Foreign Seated Arbitration

The arbitral tribunal must be ruled on own jurisdiction including the objection in relation to the validity or existence of the arbitration agreement. The arbitral tribunal can only be challenged in the national court after the arbitration proceedings are over and the award has been made. In addition, when the arbitration seat is held outside India, the national court can exclusively use their jurisdiction for analyzing the significance of arbitral awards made in India even if the actual law of agreement has been formulated outside India. Based on Part 1 of the Arbitration and Conciliation Act, 1996 offers effect to UNCITRAL Model Law and can give power to the national court to grant interim relief in case the seat of international commercial arbitration seated outside India[2]. In addition, if the parties decide to perform the arbitral proceedings outside India, however, the seat of arbitration is held outside India that administers the jurisdiction then the national court of India cannot grant interim relief to the relevant parties. Hence, it is significant that the parties follow national court process in the country where the arbitration is taking place to ease up the procedure for the parties in disputes specifically in the case of international commercial arbitration.

  1. The issue of Indian national court

Every coin has two sides, apart from the significant advantages of integrating national court in commercial arbitration, certain criticality and issues also rise along with it. The issues of the national court have been critical and one of the major reasons behind the problems rose with international commercial arbitration. The jurisdiction issues have been a major part including the Separability and the Kompetenz Kompetenz doctrines which have been a significant aspect for commercial arbitration.  However, with the involvement of national court in the process of arbitral tribunals, a critical consequence might occur. The principles and intervention of the national court in arbitration are desirable to a certain extent. However, when the national court has been asked to deal with the dispute cases, it leads to the cancellation of the arbitration contract. In addition, a national court would use unsurprising and inevitable approach for analyzing the disputes amongst the parties based on own national law and procedures[3]. Furthermore, there can also be a significant influence of the parochial, political, legal, economic as well as cultural system. In this instance, the effectiveness of arbitration reduces as well as may lead to severe consequences amongst the parties. As the national court would not consider every aspect and evidence offered by the arbitrators, it may reduce the viability of the process extensively. In addition, it can be stated that the view and judgments of national courts might differ from the arbitrators that may reduce the integrity of the process of commercial arbitration.

4.4 Arbitration system for Pharmaceutical industries

The arbitration system in India is regulated by the Arbitration and Conciliation Act, 1996. The Act is based on the UNCITRAL Model Law 1985 on International commercial arbitration. After the amendment in 2015, the applicability of provisions based on interim ordered by national courts or arbitral tribunal can be applied to the international commercial arbitration specifically in the pharmaceutical industry even if the place of arbitration is seated outside India. In addition, in the case of the pharmaceutical industry after the Patent Act the power of the court for referring and arbitrators to the parties’ only if the valid agreement does not exist. In case, the court passes an interim prior to the beginning of the arbitral tribunals, within 90 days the proceedings need to be commenced specified by the court[4]. In addition, in case the arbitral tribunal offers similar remedies to the parties of the pharmaceutical industry like the court, then the court would not accept the application. Public policy must be the ground for the pharmaceutical industry for challenging an award. It needs to integrate awards that conflict with the notions of justice and morality or contravention of the Indian law based on fundamental policy.

In addition, in case a pharmaceutical company challenges an arbitral award, it has a time period of 12 months for the arbitral tribunal which cannot be extended. Within six months if the arbitral tribunal makes an award, they will receive additional fees from the party. Furthermore, the award needs to be made and disposed of within one year[5]. Hence, the arbitration system in India specifically in pharmaceutical industry based on the amendments of 2015 form the Arbitration and Conciliation Act has made quick enforcement of contracts as well as easy recovery of claims based on monetary terms. In addition, it has reduced the pending cases of companies in disputes form pharmaceutical industry in courts while fastening up the process of arbitration.

 

 

 

CHAPTER 5: Arbitration system in other countries

5.1 Introduction

Arbitration system based on international arbitration is made between individuals or companies in different states specifically by integrating a provision in relation to future disputes in an agreement or contract. The concept of arbitration is being widely accepted in the global world due to its effectiveness and significance for settling disputes outside the court. In addition, the predominant rules for arbitration are based on UNCITRAL Arbitration Rules and the New York Convention. The New York Convention has been ratified by more than 150 countries around the world and was drafted by the United Nations. The feasibility and viability of arbitration in different countries have been significant for resolving commercial obligations and act as a remedy. At present, the institution of arbitration has been established in distinct countries based on the requirement for solving commercial disputes amongst parties. Arbitration enables parties to avoid local court procedures by reducing time as well as expenses for solving disputes. There are several major institutions of arbitration in other countries that assist to set out rules as well as appoint arbitrators. In addition based on the Indian pharmaceutical industry, the need for seats for arbitration in other countries is significant.

5.2 Institution of Arbitration in Other countries

The institution of arbitration in other countries including Singapore, United States, France, Canada as well as the United Kingdom have been a major international institution for setting out rules as well as for appointing arbitrators[6]. These institutions have the significant credibility to enhance the process of arbitration for resolving disputes as well as to act as a remedy for commercial obligations between parties in international terms. As these rulemaking bodies has significant power towards enforcement and setting out rules, their effectiveness for enhancing the process of arbitration in India has been significant. Based on the International chamber of commerce or ICC, headquartered in Paris, France is an institution that assists to resolve commercial disputes in international terms. In addition, the International Court of Arbitration is an essential segment of ICC as the court integrates more than a hundred members from more than 90 countries. Its significance based on acting as a remedy for resolving commercial disputes in India is its effectiveness for solving cases through arbitration in an efficient manner[7]. The increasing number of cases including Indian international commercial disputes is brought in front of the international court of arbitration for effective proceedings and outcomes since the business year 1999.

Based on the institution SIAC or Singapore International Arbitration center, the process of arbitrations is followed under the UNCITRAL Arbitration Rules as well as its own rules of arbitration. In addition, SIAC is a not-for-profit organization. The institution was established in the business year 1991 which is located at Maxwell Chambers. Its effectiveness in Indian business industry and commercial disputes is significant as SIAC arbitration awards are being enforced in several jurisdictions integrating Vietnam, India, China, Australia and others amongst the signatories of New York convention[8]. It offers efficient and competitive case management services to the parties form the global world that increases the viability of Indian commercial disputes and its effective mitigation.

Based on AAA or American Arbitration Association is a non-profit organization that offers dispute resolutions services to organizations and individuals to settle outside the court in order to resolve disputes. It is one of the significant institutions that administer arbitral proceedings efficiently. It is headquartered in New York City and has other regional offices as well. In addition, the ICDR or International Centre for Dispute resolution established by AAA in the year 1996 for resolving conflicts based on international proceedings under the rules of the institution. The integration of ICDR in Indian commercial arbitration proceedings can be a significant aspect for resolving conflicts between parties or organizations. As AAA has a significant process for resolving disputes from filing to closing, its viability increases significantly. In addition, as it offers services to the US and abroad through the IDCR, its significance to resolve disputes in commercial and international terms can be essential[9].

The British Columbia International Commercial Arbitration Centre (BCICAC) is one of the finest institution expertise in commercial disputes through arbitration. It is based in Canada and is a not-for-profit organization. The institution was established in the year 1986 with the assistance of the governments of Canada and British Columbia. It offers cost effective and efficient resolution of commercial disputes in international terms. In addition, it is the wish of the party for choosing arbitration or mediation for resolving the dispute. It also offers resources and guidelines, rules of procedures as well as assistance on proceedings to be held based on the requirement of the parties. Hence, based on India integrating with BCICAC can be an added advantage as it offers significant remedied of commercial disputes in international terms.

Based on the London Court of International Arbitration or LCIA based in London, United Kingdom is an institution that offers services for international arbitration. In addition, it has been well known for its dispute resolution proceedings for every party and is one of the leading global forums irrespective of their system or location of law. Other than arbitration which is the significant provision of formal arbitral tribunals, they also conduct mediation as an alternative form of dispute resolution. Hence, its effectiveness in Indian commercial disputes is relevant as specifically in the pharmaceutical industry most of the investments are made in international terms which require integrating the effectiveness of such institution in international terms[10].

There are several other institutions in different countries facilitating arbitration for resolving disputes. But the effectiveness of these five is the topmost based on international arbitration. Hence, there is a huge need for a seat of arbitration in other countries specifically for Indian pharmaceutical industry in order to maintain its effectiveness and viability in resolving commercial disputes at international terms as well as enforcement of the arbitration award which has been described in the next section.

5.3 Need for Seat of Arbitration in other countries (Singapore, USA, Canada, etc.) for the Indian Pharmaceutical Industry

The need for a seat of arbitration in other countries including Singapore, Canada, USA, UK, France and other is significant specifically for the Indian Pharmaceutical Industry in order to yield their effectiveness and resolve commercial disputes in an effective manner. As it is evident, that the institutions in other countries are significant to conduct arbitral proceedings, it is desired to have a seat of arbitration in other countries to resolve disputes with ease. In addition, the amount of data entailed in the clauses of arbitration varies significantly from contract to contract. There are several contracts where the parties in the arbitration clauses specify the rules to be applied, the location of hearings, number of arbitrators based on the expertise, seat of arbitration as well as the language of arbitration proceedings. The degree of conviction that is appropriately included in the arbitration clauses offers effective handling of disputes which significantly needs to be encouraged. The other clauses are simply specified disputes to arbitration. The most essential characteristics of arbitration are the identification of the seta of arbitration which opposes the location of the proceedings and hearings to take place. In addition, the identification of the seat in arbitration analyses the law administering the arbitration procedure and significantly the rights and process relating to the enforcement of the arbitration award[11].

Several institutional rules, as well as arbitration statues, consider the difference between the venue of the hearings taking place and the seat of the arbitration. For instance, based on Article 14 of ICC Arbitration Rules or International Chamber of Commerce as well as the Article 16 of the LCIA or the London Court of International Arbitration Rules recognizes the difference between the seat of the arbitration and venue of hearing of the arbitration. In addition, it is not significant that the venue of arbitration taking place and the seat of arbitration has to be the same during the course of arbitration in distinct countries[12]. There can be possibilities that the chosen seat of arbitration would be distinct and remain unaffected even if the venue of hearing would be different. Hence, based on the Indian Pharmaceutical industry it is highly required to attain seta in distinct countries in order to make the process of arbitration effective based on the rules and procedure. Furthermore, attaining seat of the arbitration in other countries is essential for India for resolving commercial disputes in the pharmaceutical industry as it would assist to analyze the law of the procedure based on the adoption of the arbitration and intervention and involvement as required. In this case, the intervention of the court would be based on jurisdiction over seats. Hence, it is highly relevant to attain a seat in other countries for resolving commercial disputes in the Pharmaceutical industry of India in international terms. For instance, if a party set out the effect of a contract administered by English law and as the parties has agreed to the ICC arbitration with its seat India. This is the major advantage of having seats outside India[13].

In addition, the seats also analyse the extent to which the local court can integrate itself in the arbitral tribunal process. It can have critical implications as well. There are several countries that restrict party autonomy for choosing arbitrators. In addition, these countries impose conditions allows the courts to intervene against the eligibility of the arbitrators in the process agreed upon by the parties based on the arbitration contract. However, there are also several countries that offer freedom to the parties to choose their own procedural arbitrators and the courts offer interim reliefs including interlocutory awards[14]. Hence, in such scenario, it is highly required by India to have seats in other countries to ease up the process of arbitration specifically for the pharmaceutical industry. In addition, the seat of the arbitration significantly determines the degree to which arbitral awards would be challenged. Also, the local courts are significant parts of the process as they hear appeals based on arbitral awards. The law of the seat would also determine the extent to which the availability of judicial review can e attained for the parties. Hence, it is significant for India to have seats in other countries in order to administer by which an award is recognized final. As the cases of the pharmaceutical industry are increasing in international terms as well as increasing investments, the need for seats in other countries is essential for India.

In addition, before selecting the seats for arbitration it is highly required for India specifically in the pharmaceutical industry to analyze the details of arbitration clause as well as the local arbitration law based on the operation of seats. This would assist to analyze whether the courts in where the seat operated are arbitration friendly or not based on which relevant decision and drafting of the details can be formulated[15]. In addition, it is also desired that before choosing the seat in other countries significant implications of the contractual relationship needs to be analyzed as well as the type of commercial disputes in the pharmaceutical industry and the assets which the party wants to enforce its award against. Maintaining such standardization can assist India to have seats in other countries by easing up the process of arbitration as well as resolving commercial disputes in the pharmaceutical industry extensively.

CHAPTER 6: Discussion and conclusion

6.1 Introduction

International commercial arbitration is a significant aspect for resolving commercial disputes between individuals or organizations based on contracts or agreements. The shift from municipal courts to commercial arbitration in India has acted as a remedy for dealing with the cases on the commercial obligation. In addition, the arbitral rules based on the New York convention and the Arbitration and Conciliation Act, 1996 have significantly enhanced the process of arbitration in India limiting the intervention courts in proceedings. The impact of International Commercial arbitration has been positive in the pharmaceutical industry in India as its effectiveness for resolving commercial disputes is evident from the literature. However, there are significant countries and institutions that have a distinct form of proceedings and laws for arbitration which certainly requires India to have seats in other countries for enhancing the arbitration process in the pharmaceutical industry. The contribution of commercial arbitration in the Indian pharmaceutical industry has been significantly analyzed by analyzing the system of arbitration in India which significantly enhances its effectiveness for solving commercial disputes.

6.2 Discussion

International commercial arbitration significantly serves the best interests of the Indian pharmaceutical industry as it reduces time and costs compared to the proceedings in courts[16]. As commercial arbitration are conducted outside the court and the arbitrators, as well as the place ad rules of arbitration, are specified by the client, the effectiveness of resolving disputes in commercial cases is merely considerable. It is evident from the research that commercial dispute settlements in courts are critical as the judges do not consider the complete aspect of the case based on evidence as well as the increase in time and cost is significant in a court settlement. This is the reason behind pharmaceutical companies choosing international commercial arbitration for settling disputes outside of court by choosing their own arbitrators and proceedings rules. In addition, the overload of cases is a significant issue in courts which critically indicates the best choice of settling commercial disputes through international arbitration[17]. The UNCITRAL Arbitration Rules are integrated into the arbitration clause of India which enhances its viability for solving international commercial disputes. The amendments made in 2015 in the arbitration rules of India are also significant for resolving the commercial disputes in the pharmaceutical industry merely.

It is required to have the seats of arbitration in other countries including Singapore, Canada, and the UK, USA as well as France and also other countries for settling commercial disputes specifically for the pharmaceutical industry. The seats of arbitration decide the jurisdiction based on which the proceedings and laws are applied as well as the grants of interim relief and enforcement of awards are also an added advantage for having seats in other countries[18]. This, in turn, can assist to reinforce Indian culture as well as economic interest. The intervention of courts in India is limited and they are only permitted to intervene in case a party challenges the award. However, the response of Indian courts towards arbitral awards and enforcement outside India is limited. There are several consequences that have been discussed when institutional arbitrations are seated outside India as the rules and procedure for the arbitral tribunal would be followed strictly within the jurisdiction. In addition, several countries have distinct applicability of arbitration clauses based on the venue of hearing and seats of arbitration which can be a potential benefit for having a seat of arbitration outside India.

With the integration of Model Law 1985, New York convention as well as Arbitration and Conciliation Act of 1996, the commercial disputes in India are resolved merely without the involvement of courts. Based on pharmaceutical industry as the commercialization and investment in foreign countries shave increase extensively, commercial arbitration assists significantly to resolve disputes at international terms[19]. In addition, the cost effectiveness and time-saving procedure of arbitration assist the parties to resolve the dispute at ease while maintaining their business relationship as well as continuing their business operations extensively. With the integration of international commercial arbitration, the international trade and commerce dispute specifically in the pharmaceutical industry are significantly resolved in India. In addition, the effectiveness of international commercial arbitration is accepted in a global world in different countries due to its flexible nature.

6.3 Conclusion

Conclusively after analyzing the entire system of Indian international commercial arbitration as well as the several other concepts based on solving commercial disputes, it can be stated that international commercial arbitration is the significant remedy for solving commercial obligation of the pharmaceutical industry in India. In addition, the process of arbitration is held outside the court where the parties can choose their own arbitrators, proceeding rules as well as the location of arbitration for conducting the arbitral tribunal. The intervention of the national court is significant in a few aspects due to its effectiveness when a party challenges an award. However, the excessive intervention of courts can lead to disrupting the entire process of arbitration. In addition, the arbitration clauses initiated by India are significant for resolving commercial disputes in the pharmaceutical industry. The pharmaceutical industry in India has critical issues based on national courts system which requires the significant involvement of commercial arbitrations. The integration of commercial arbitration in the pharmaceutical industry would significantly assist to resolve commercial obligations to contracts offering smooth flow in business operations and conduct. Furthermore, it is significant to have seats in other countries as well in order to maintain standardization in the process. As the proceedings law and governing rules are based on the jurisdiction here the seta is located, it is highly required by India to have a seat in other countries. This would allow fair judgments and simple resolution of disputes through international commercial arbitration. Hence, it is significant that international commercial arbitration is a significant remedy for commercial obligation in India specifically in the pharmaceutical industry compared to other dispute resolution method.

 

 

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