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CS Professional · Arbitration, Mediation and Conciliation · International Law of Arbitration

A Mumbai-seated international commercial arbitration between Indus Steel Ltd (India) and Nordic AB (Sweden) has a contract that designates no law for the substance of the dispute. Parties have also not authorised amiable compositeur. Which statement is correct about how the tribunal decides?

With no designated law, the tribunal applies the rules of law it considers appropriate given all the circumstances, while taking into account the contract terms and applicable trade usages. It cannot decide as amiable compositeur without express authorisation, and Indian substantive law is not compulsory in an international case.

  1. AIt must apply Indian substantive law because the seat is in India
  2. BIt must apply Swedish law because the claimant is Swedish
  3. CIt applies the rules of law it considers appropriate given all the circumstances, and must take into account the contract terms and applicable trade usagesCorrect
  4. DIt may decide ex aequo et bono as the parties did not object

Explanation

Section 28(1)(b)(iii) lets the tribunal apply the rules of law it considers appropriate in all the circumstances when no law is designated, and section 28(3) requires regard to the contract terms and trade usages in all cases. Indian substantive law is mandated only for non-international arbitrations seated in India, and ex aequo et bono needs express authorisation, not mere silence.

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