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CS Professional · Arbitration, Mediation and Conciliation · Commercial Transactions

Himalaya Pharma Ltd (India) and Nordic Labs AB (Sweden) are parties to an international commercial arbitration seated in New Delhi. Their contract designates 'the law of Sweden' as governing the substance, with no further statement. Which proposition is correct on how the tribunal treats this designation?

The designation is construed as the substantive law of Sweden, not its conflict of laws rules, unless the parties expressed otherwise. Because the parties designated a law in an international commercial arbitration seated in India, the tribunal must follow it rather than choose rules itself.

  1. AIt is construed as referring to the substantive law of Sweden and not its conflict of laws rules, unless otherwise expressedCorrect
  2. BIt is construed as including Swedish conflict of laws rules, which may then lead to Indian law
  3. CIt is ignored, and the tribunal applies the rules of law it considers appropriate
  4. DIt is ignored because the place of arbitration is in India, so Indian substantive law applies

Explanation

In international commercial arbitration with the place in India, the tribunal decides per the rules of law designated by the parties. A designation of a country's law or legal system is construed as directly referring to its substantive law and not its conflict of laws rules, unless otherwise expressed. The appropriate-rules route applies only when there is no designation.

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