International Law of Arbitration: formula sheet

Key formulas

Two-test definition (Section 2(1)(f))

International commercial arbitration = commercial legal relationship (under Indian law) + at least one foreign-linked party

Both tests must be met. The relationship may be contractual or not.

Foreign-linked party

Foreign national or habitual resident individual | body corporate incorporated abroad | association or body of individuals with central management and control abroad | foreign Government

Four categories only. Companies are tested by place of incorporation.

Application of Part I (Section 2(2))

Part I applies where the place of arbitration is in India

Proviso: unless parties agree otherwise, Sections 9, 27 and 37(1)(a), 37(3) also apply to an ICA seated abroad where the award is enforceable under Part II.

Court in an ICA (Section 2(1)(e)(ii))

Court = High Court exercising ordinary original civil jurisdiction (or, in other cases, a High Court with appellate jurisdiction over subordinate courts)

For non-international arbitration it is the principal Civil Court of original jurisdiction in a district, or the High Court with original jurisdiction.

Nature of award (Section 2(7))

Award made under Part I = domestic award

This holds even when the arbitration is international commercial and seated in India.

Law on substance (Section 28(1))

Domestic, seat in India: substantive law of India. ICA, seat in India: rules of law chosen by the parties; failing that, rules the tribunal considers appropriate

Section 28(3): the tribunal must always take into account contract terms and trade usages.

Domestic arbitration seated in India

Section 28(1)(a): tribunal applies the substantive law for the time being in force in India

No party choice of foreign law for the merits. Applies where the place of arbitration is in India and the arbitration is not international commercial.

International commercial arbitration: party choice

Section 28(1)(b)(i): tribunal decides in accordance with the rules of law designated by the parties

Parties may designate rules of law, not only a national law.

Designation of a country's law

Section 28(1)(b)(ii): designation = substantive law of that country, NOT its conflict of laws rules, unless otherwise expressed

No renvoi by default. Parties can override by saying so expressly.

No designation

Section 28(1)(b)(iii): tribunal applies the rules of law it considers appropriate given all the circumstances

This is the tribunal's own choice, based on the facts of the dispute.

Ex aequo et bono

Section 28(2): only if the parties have expressly authorised it

Applies to both amiable compositeur and ex aequo et bono. Silence or implication is not enough.

Contract terms and trade usages

Section 28(3): in all cases, take into account the terms of the contract and trade usages applicable to the transaction

Applies to domestic and international cases alike.

Seat

Seat = legal place of arbitration → decides supervisory courts and procedural law

Part I of the Act applies where the place of arbitration is in India (section 2(2)).

Venue

Venue = where hearings are physically held

Does not by itself decide the seat. Check the clause and surrounding facts.

Substantive law, domestic arbitration seated in India

Tribunal applies the substantive law for the time being in force in India

Section 28(1)(a), for arbitration other than international commercial arbitration.

Substantive law, international commercial arbitration seated in India

Rules of law designated by parties; if none, rules the tribunal considers appropriate

Section 28(1)(b). A designated country's law means its substantive law, not conflict rules, unless otherwise expressed.

Contract terms and usages

Tribunal must take into account contract terms and trade usages in all cases

Section 28(3).

Foreign seat, limited Part I

Foreign-seated international commercial arbitration: sections 9, 27, 37(1)(a) and 37(3) apply, subject to contrary agreement

Proviso to section 2(2). The award is enforced under Part II.

Law of arbitration agreement

Chosen by the parties; otherwise decided on the clause, the facts and case law

Section 48(1)(a) is only a ground to refuse enforcement of a foreign award: agreement invalid under the law the parties chose or, failing indication, the law of the country where the award was made. It is not a general default rule.

Foreign award (Section 44)

Commercial dispute + award on or after 11 Oct 1960 + written agreement under the Convention + notified reciprocating territory

All elements must be present. A non-commercial dispute or an unnotified territory takes the award outside Chapter I.

Documents with the application (Section 47)

Authenticated award + original or certified agreement + evidence that it is a foreign award

Add a certified English translation if any document is in a foreign language.

Refusal on proof by the resisting party (Section 48(1))

Refusal only if the party resisting proves a ground in (a) to (e)

Grounds: incapacity or invalid agreement; no notice or unable to present case; beyond submission; composition or procedure; not binding, set aside or suspended.

Severability proviso (Section 48(1)(c))

Part on matters submitted may be enforced if separable from the rest

An excess of scope does not always defeat the whole award.

Refusal where the Court finds a ground (Section 48(2))

Not arbitrable under Indian law OR contrary to public policy of India

The text says enforcement may also be refused if the Court finds these. Unlike Section 48(1), it does not place the burden of proof on the resisting party.

Public policy (Explanation 1 to Section 48)

Fraud or corruption, or violation of section 75 or 81; or contravention of fundamental policy of Indian law; or conflict with most basic notions of morality or justice

Only these three. Explanation 2 says the fundamental policy test does not entail a review on the merits.

Adjournment and security (Section 48(3))

Set-aside application pending at the seat: court may adjourn and order suitable security

Security is ordered on the application of the party seeking enforcement.

Effect of enforcement (Sections 49 and 46)

Award enforceable = deemed decree of the Court; binding for all purposes

It can be relied on by way of defence, set-off or otherwise.

Definition of foreign award (Geneva)

Commercial matter + award made after 28 July 1924 + Protocol (Second Schedule) applies + parties under jurisdiction of different notified Powers (Third Schedule Convention) + made in a notified territory

Section 53. All parts must be present. Notification by the Central Government is essential.

Finality under section 53

Award not final if proceedings to contest its validity are pending in the country where it was made

Links to section 57(1)(d).

Conditions for enforcement

Section 57(1): (a) valid submission; (b) arbitrable under Indian law; (c) tribunal as agreed and per procedural law; (d) award final; (e) not contrary to public policy or law of India

All five must be met. Final means not open to opposition or appeal and no validity proceedings pending.

Public policy of India

Conflict only if: fraud or corruption (or violation of section 75 or 81) affected the award; or contravention of fundamental policy of Indian law; or conflict with most basic notions of morality or justice

Explanation 1 to section 57(1). Explanation 2: the fundamental policy test does not allow a review on the merits.

Mandatory refusal

Section 57(2): refuse if (a) award annulled in country of making; (b) party not given notice in sufficient time to present its case, or, being under a legal incapacity, not properly represented; (c) award outside the terms of the submission

Applies even if section 57(1) is satisfied. Proviso to (c): if the award has not covered all differences submitted, the Court may, if it thinks fit, postpone enforcement or grant it subject to a guarantee.

Discretionary ground

Section 57(3): another ground to contest validity under the law governing the arbitration procedure, proved by the resisting party: Court may refuse enforcement or adjourn to let the party seek annulment

The grounds in 57(1)(a), 57(1)(c), 57(2)(b) and 57(2)(c) are excluded from this sub-section.

Effect of enforcement

Section 58: award deemed a decree of the Court. Section 55: binding, can be relied on as defence, set-off or otherwise

Both apply where the award is enforceable under the Chapter. The corresponding New York provisions are section 49 (deemed decree) and section 46 (binding).

New York contrast

Section 47: applicant produces the authenticated award, the agreement and evidence that it is a foreign award. Section 48: enforcement may be refused only if the resisting party furnishes proof of a listed ground

New York is a refusal-based test, and the resisting party carries the burden on the section 48 grounds. Geneva is a conditions-based test under section 57, with mandatory refusal grounds.

Model Law influence

UNCITRAL Model Law (template) → enacted with changes → Arbitration and Conciliation Act, 1996

The Model Law is not binding. The Act is the law that applies in India.

Institutional rules form part of the agreement

Section 2(8): agreement of parties includes any arbitration rules referred to in that agreement

A clause choosing ICC, LCIA, SIAC or ICA rules brings those rules in.

Party freedom to authorise an institution

Section 2(6): freedom to determine an issue includes the right to authorise any person, including an institution, to determine it (except section 28)

Substance of the dispute under section 28 cannot be handed to an institution this way.

Applicability of Part I

Section 2(2): Part I applies where the place of arbitration is in India

Sections 9, 27 and 37(1)(a), 37(3) also apply to international commercial arbitration seated abroad, unless parties agree otherwise.

Law applicable to substance, seat in India

Section 28(1)(a): not international commercial arbitration → substantive law in force in India; 28(1)(b): international commercial arbitration → rules of law designated by parties

If parties designate no law, the tribunal applies the rules of law it considers appropriate.

Model Law vs Rules

Model Law = statute for states; UNCITRAL Rules = procedural rules chosen by parties

Useful for a one-line distinction in answers.

Quick revision

• International commercial arbitration needs a commercial dispute under Indian law and at least one foreign party under Section 2(1)(f).
• Foreign party types: foreign national or resident individual, foreign body corporate, association with central management and control abroad, or a foreign Government.
• Part I applies where the place of arbitration is in India; the proviso to Section 2(2) extends certain sections to foreign-seated international commercial arbitration unless parties agree otherwise.
• Section 28(1)(a): in domestic arbitration seated in India, apply Indian substantive law.
• Section 28(1)(b): in international commercial arbitration, apply the rules of law the parties designate; a country's law means its substantive law, not its conflict rules.
• If parties designate no law, the tribunal applies the rules of law it considers appropriate.
• Section 28(2): ex aequo et bono or amiable compositeur only if parties expressly authorise it.
• Section 28(3): in all cases the tribunal must take into account the contract terms and applicable trade usages.
• Section 48(1): enforcement refused only if the resisting party proves a listed ground, such as incapacity, no proper notice, excess of submission, wrong composition or procedure, or award not binding or set aside.
• Section 48(2): court may refuse if the subject matter is not arbitrable under Indian law or enforcement is against public policy.
• Public policy is limited to fraud or corruption (or breach of Section 75 or 81), fundamental policy of Indian law, and basic notions of morality or justice; no review on merits.
• Once the court is satisfied, a foreign award is deemed a decree of that court (Sections 49 and 58).

Common mistakes

• Treating the seat as part of the definition of international commercial arbitration. Fix: Section 2(1)(f) tests the nature of the relationship and the parties only. The seat decides whether Part I applies, not whether the arbitration is international.
• Requiring both parties to be foreign. Fix: The text says 'at least one of the parties'. One foreign-linked party is enough.
• Saying parties can choose foreign law in a domestic arbitration seated in India Fix: Remember the split. Section 28(1)(a) fixes Indian substantive law for non-international cases. Party choice of rules of law appears only in clause (b).
• Confusing substantive law with procedural law Fix: Section 28 governs the merits only. Procedure is handled by other provisions and by party agreement. Write one line distinguishing them.
• Treating venue and seat as the same thing. Fix: State that the seat is the legal home and the venue is only the hearing location. Then check the clause to see which one is fixed.
• Assuming the law of the contract automatically governs the arbitration agreement. Fix: Treat the arbitration agreement as a separate question. Look for an express choice and read the clause and facts. Use section 48(1)(a) only when testing a foreign award at the enforcement stage.
• Saying the applicant must prove the award is valid beyond the documents. Fix: Section 48(1) puts the burden of proof on the party resisting enforcement. The applicant only needs Section 47 documents.
• Treating Section 48 as a merits appeal. Fix: Explanation 2 says the fundamental policy test does not entail a review on the merits. The court checks the grounds only.
• Treating Chapter I and Chapter II as the same thing and quoting section 48 for a Geneva award. Fix: Section 48 belongs to Chapter I (New York). For Geneva, use sections 53, 55, 57 and 58. Decide the chapter first by checking which definition (section 44 or section 53) the award meets.
• Saying a Geneva award is enforceable whenever it is binding. Fix: Geneva requires the award to be final under section 57(1)(d). It is not final if open to opposition or appeal, or if validity proceedings are pending.

Exam tips

• Quote Section 2(1)(f) with its four clauses and name the exact clause that matches the facts.
• In case questions, always write both tests, commercial and foreign-linked party, before concluding.
• Mention that the 2015 amendment removed 'a company or' from clause (iii), and that companies are tested by incorporation under clause (ii).
• Keep seat and nature separate. Close with the effect of the seat using Section 2(2) and its proviso.
• If the question asks for a comparison with domestic arbitration, use points: definition, Court under Section 2(1)(e), and law on substance under Section 28(1).
• Start every answer by stating the seat and whether the arbitration is international commercial. Marks usually depend on this classification.
• Quote the sub-section numbers: 28(1)(a), 28(1)(b)(i) to (iii), 28(2), 28(3). Examiners look for them.
• Write the phrase 'substantive law and not conflict of laws rules' whenever a country's law is designated.