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

Bharat Turbines Ltd (India) and Altmann GmbH (Germany) have an arbitration seated in Mumbai. Their contract says nothing about the governing law. Which rule governs how the tribunal picks the law for the substance of the dispute?

In an international commercial arbitration seated in India with no designated governing law, the tribunal applies the rules of law it considers appropriate given all the circumstances surrounding the dispute. Indian law is not automatically imposed, and nationality of a party does not decide the law.

  1. AThe tribunal must apply Indian substantive law because the seat is in India
  2. BThe tribunal must apply German law because one party is German
  3. CThe tribunal applies the rules of law it considers appropriate given all the circumstances surrounding the disputeCorrect
  4. DThe tribunal must ask the Mumbai High Court to name the applicable law

Explanation

The arbitration is international commercial (a foreign body corporate is a party) and the place of arbitration is in India. Where the parties designate no law, section 28(1)(b)(iii) lets the tribunal apply the rules of law it considers appropriate given all the circumstances. Option A applies the rule for domestic arbitrations, which is wrong here.

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