Even though the courts in India have consistently held that the Arbitrator is the final judge relating to finding of facts and relating to the interpretation of the terms of the contract. It is also have been a standard view that while exercising the powers under S.34 of the Arbitration and Conciliation Act,1996, the courts are discharging their duties as supervising courts as provided under the Act and they are not sitting on an appeal over the Arbitration award.
One of the frequently encountered issue in arbitration proceedings is missing out of a claim and parties seeking remedy by way of an amendment to the award or by way of an additional award. Normally the scope of correction of the award under S.33 of Arbitration and Conciliation Act,1996 is limited to errors and if both the parties agree, an interpretation of an issue.
Drafting of Arbitration clauses require expertise to avoid unnecessary litigations relating to interpretation of those clauses when disputes arise between parties. While drafting domestic Arbitration clauses it is necessary to include the place/seat of Arbitration, number of Arbitrators, Qualifications of Arbitrators (if any), procedure to appoint Arbitrators, language of Arbitration and Arbitral Institution etc.,
All over the world, the supervising courts refrain themselves from interfering in an Arbitration award, for any other reason except those specified in the procedural law. Most of the Arbitration laws are similar to UNCITRAL Model law and hence the grounds are same. Courts also consistently have held that the verdict of an arbitrator with respect to facts of the case, is final.
Arbitration, even though is a private dispute resolution mechanism, the arbitration system provides for supervising courts to avoid any major miscarriage of justice. Even though Arbitrator is the final fact finding authority and his decisions on questions of fact are final and binding on the parties, it is essential that there must be a reasoned determination by the arbitrator.
In India law relating to enforcement of a Foreign award is quiet well settled but still many Indian parties, don’t want to miss the opportunity to resist enforcement of a foreign award against them.
It is well settled in law that if parties choose a seat in an International Arbitration clause it will amount to choosing the procedural law applicable to the arbitration proceedings. In the same way, if the procedural law is specified in the Arbitration clause then the country to which the procedural law belongs to will be the seat of Arbitration.
From the year 2012 India has recognized Hong Kong as a recognized seat of Arbitration under New York Convention on Recognition and Enforcement of Foreign Arbitral Awards. Since then the Hong Kong seat has become a very important seat, for Parties from India, since Parties from China are comfortable with Hong Kong Seat than a seat in India.
Seat of Arbitration is one the most important concepts in the field of international Arbitration. Any party to an International Arbitration proceeding will be able to achieve its objectives only if the final award is enforceable in the country where it is required to be enforced.
Globally arbitration is becoming popular for various reasons and as per a recent survey by ASSOCHAM, in India about 90% of the commercial contracts have arbitration clauses these days.
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