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CS Professional · Arbitration, Mediation and Conciliation · Arbitration: Introduction, Agreements and its Institutions

Himalaya Hydro Ltd (Indian company) and Nordic Turbines AS (incorporated in Norway) agree to arbitration seated in Delhi under an institution's rules. They designate Norwegian law as applicable to the substance and say nothing about conflict of laws rules. The tribunal wonders how to treat the designation. What does section 28 require?

The tribunal should treat the designation as directly referring to Norway's substantive law. Section 28(1)(b)(ii) says that in an international commercial arbitration seated in India, a designation of a country's law is read, unless otherwise expressed, as its substantive law and not its conflict of laws rules.

  1. AApply Norway's conflict of laws rules first, as the designation is read indirectly
  2. BTreat the designation as referring directly to Norway's substantive law, unless otherwise expressedCorrect
  3. CIgnore the designation and apply Indian substantive law
  4. DApply whatever rules the institution's council considers appropriate

Explanation

The arbitration is international commercial (one party is a foreign body corporate) and the place is India. Section 28(1)(b)(ii) says a designation of a country's law is construed, unless otherwise expressed, as directly referring to its substantive law and not its conflict of laws rules. Indian law under 28(1)(a) applies only to non-international arbitrations.

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