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CS Professional · Arbitration, Mediation and Conciliation · International Law of Arbitration

Kapoor Pharma Pvt Ltd (India) and Nordic AB (Sweden) have a supply contract, seat in Delhi, with no choice of governing law. Under Section 28, which approach must the tribunal take?

The tribunal applies the rules of law it considers appropriate given all circumstances surrounding the dispute. Section 28(1)(b)(iii) gives this power in an international commercial arbitration seated in India where parties designated no law. Automatic application of Indian substantive law is limited to domestic arbitrations.

  1. AApply Indian substantive law as the seat is in India
  2. BApply Swedish law as the foreign party's home law
  3. CApply the rules of law it considers appropriate given all circumstances surrounding the disputeCorrect
  4. DRefer the question of governing law to the High Court

Explanation

Section 28(1)(b)(iii) provides that, failing designation by the parties, the tribunal applies the rules of law it considers appropriate given all the circumstances. Indian substantive law applies automatically only in arbitrations other than international commercial ones under 28(1)(a). This one is international because Nordic AB is a foreign body corporate.

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