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

In a Chennai-seated international commercial arbitration, Arjun Exports Ltd and a Dubai buyer chose English law. The tribunal, citing fairness, wants to decide ex aequo et bono, though the agreement is silent on it. What is the position?

The tribunal cannot decide ex aequo et bono. Section 28(2) permits this only where the parties have expressly authorised it, and silence or the tribunal's own view of fairness is not enough, so it must apply the chosen English law.

  1. APermitted, since fairness is a trade usage
  2. BPermitted if both parties remain silent after being notified
  3. CPermitted if the tribunal considers it appropriate in the circumstances
  4. DNot permitted unless the parties have expressly authorised itCorrect

Explanation

Section 28(2) allows the tribunal to decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorised it. Silence is not express authorisation, so the tribunal must apply the designated law.

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