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CS Professional · Arbitration, Mediation and Conciliation · Conceptual Framework of International Commercial Arbitration

Ganga Steel Ltd (India) and Mekong Metals Co (a company incorporated in Vietnam) have an ad hoc arbitration seated in Bengaluru with no choice of governing law in their contract. Which statement is correct about how the tribunal decides the substance?

The tribunal applies the rules of law it considers appropriate in light of all circumstances, since the parties designated none, and it must take into account the contract's terms and applicable trade usages. It cannot act as amiable compositeur without express authorisation.

  1. AIt must apply Indian substantive law in all cases
  2. BIt must refer the choice of law to the High Court
  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 as amiable compositeur by default

Explanation

Seat in India and a foreign body corporate make it international commercial arbitration. With no designation, section 28(1)(b)(iii) lets the tribunal apply the rules of law it considers appropriate. Section 28(3) requires it to consider contract terms and trade usages. Amiable compositeur needs express authorisation under section 28(2).

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