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In this post, SUMIT RAI briefly addresses some of the most important submissions made by the parties arguing in favour of confirming the Bhatia International ratio during the widely followed five-member constitutional bench review by the Indian Supreme Court.

As reported earlier, a five judge constitutional bench of the Indian Supreme Court has started hearing arguments in the widely followed review of the Bhatia International ratio. I review here, some of the most important arguments made in favour of confirming the ratio.

This decision of a three member bench of the Supreme Court had allowed for application of Part I of the Arbitration & Conciliation Act, 1996 (“Indian Act”) to arbitration seated outside India. Before moving on with the post, let me lay some background for those not initiated with the controversy, so that you follow the issues in contention in the present review: Read the rest of this entry



In this post, PANAGIOTIS CHALKIAS discusses the new trend of institutional rules providing for emergency arbitrator prior to the appointment of the arbitral tribunal.

After the recent amendments to the Rules of Arbitration of the International Chamber of Commerce, it has become clear that a new trend has been established with respect to interim measures requested prior to the constitution of the arbitral tribunal. This trend has already been espoused by a number of arbitral institutions, including AAA (ICDR), CPR, SCC, SIAC, ACICA, and P.R.I.M.E. Finance . The revised version of the Swiss Rules of International Arbitration will also include new provisions on Emergency Relief. These recent developments beg the question of the utility of such mechanism, whether demonstrated in the course or in the end of international arbitration proceedings.

Starting first with the number of emergency arbitrator requests – the arbitral institutions receive only modest numbers of such requests (see reports of SIAC, SCC , and AAA). And when such requests have been made, they have been seldom granted. One possible reason behind this rare use is the overcoming burden of proving not only the urgency of the application (as defined in article 26.2 of the UNCITRAL Arbitration Rules) in the sense of conventional interim measures requests. There needs also to be an “emergency” in the sense that the requested interim measures cannot await until the constitution of the arbitral tribunal. Thus, the period has been shortened from the time needed to deliver a final award to the time it takes to empanel the arbitrator(s). Read the rest of this entry

Making a Favourable National Law on Arbitration: How Difficult can it be?

In this post, PANAGIOTIS CHALKIAS reflects on some elements that have considerable influence on success of an arbitration legislation; and why courts shall always play a defining role.

This post ponders over a rather basic question that everyone involved in international commercial arbitration must find intriguing. This question concerns not only governments and legislators but also judges, lawyers, in-house counsels and broadly all dispute resolution practitioners. The purpose of this post is not to provide an exhaustive list of factors pertaining to the enactment and application of a national arbitration statute. I intend to highlight what I think are the three essential elements to take into consideration.

An easy and quick answer to my question would be that the adoption of the UNCITRAL Model Law on International Commercial Arbitration suffices (as of 2011, 66 countries have endorsed this Model Law in their legislation). However, one should ask if this suggested pattern for law-makers is enough to show a favourable preference towards arbitration. Read the rest of this entry

Indian Supreme Court to Reconsider Bhatia International

In this post, SUMIT RAI reports on the recent reference to a five-member bench of the Indian Supreme Court to reconsider the ratio in Bhatia International and Satyam Computers; skeptically adding that a solution to the impasse may not be reached anytime soon.

A three-member bench of the Indian Supreme Court, chaired by the Chief Justice, has referred the Bhatia International ratio for reconsideration to a five-member constitutional bench on 1st November 2011. The Supreme Court has also invited anyone interested in being heard on the issue to file an intervention. The matter is to be placed before the five-member bench on 10th January 2012.

The reference was made in the case of Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. In early 2008, Justice Katju (now retired) while sitting in a division bench had expressed his reservation on the correctness of the Bhatia ratio and the apex court’s decision in Satyam Computers following that ratio. He had particularly expressed doubts over the interpretation given to section 2(2) of the Indian Arbitration Act (1996). Following this, the case was placed before a three-member bench, which has now referred it to a five-member bench. Read the rest of this entry

Stolt-Nielsen: Who Exceeded Powers – Court or the Tribunal?

In this post, MARIJA SOBAT revisits the United States Supreme Court’s rationale in Stolt Nielsen and questions whether it had the authority to conduct the extensive review of the award, as it did.

In Stolt-Nielsen the United States Supreme Court granted a certiorari to decide whether imposing class arbitration on parties whose arbitration clause is silent on that issue is consistent with the Federal Arbitration Act (FAA). A brief background to the facts of the case can be found here and here. The Tribunal’s decision that the arbitration clause allowed for class arbitration was vacated by the District Court under the ground of “manifest disregard” of the law. The Court of Appeals overruled District Court’s decision and the Supreme Court granted a certiorari concluding that the question presented before the Court is ripe for review.

The Court found that the arbitration panel exceeded its powers by imposing its own policy instead of “identifying and applying a rule of decision derived from the FAA or either maritime or New York law.” The Court observed, “Rather than inquiring whether the FAA, maritime law, or New York law contains a “default rule” under which an arbitration clause is construed as allowing class arbitration in the absence of express consent, the panel proceeded as if it had the authority of a common-law court to develop what it viewed as the best rule to be applied in such situation.” Read the rest of this entry