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

In an Indian-seated international commercial arbitration between Vikram Pharma Ltd and Dunmore Inc (USA), the clause says: 'Disputes shall be settled by arbitration; the tribunal may do what is fair and just.' No other words authorise equitable decision-making. The tribunal wants to decide as amiable compositeur. What is the correct position under Section 28(2)?

The tribunal may not decide as amiable compositeur. Section 28(2) allows decisions ex aequo et bono or as amiable compositeur only if the parties have expressly authorised it, and a loose reference to being fair and just is not an express authorisation.

  1. AIt may do so, since 'fair and just' impliedly authorises it
  2. BIt may do so, because international arbitrations allow it by default
  3. CIt may do so if both counsel consent orally during hearings without any record
  4. DIt may not, because it can decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorised itCorrect

Explanation

Section 28(2) permits equitable decision-making only on express authorisation by the parties. A general phrase such as 'fair and just' is not an express authorisation to decide ex aequo et bono or as amiable compositeur. The tribunal therefore must decide by applying the law.

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