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CS Professional · Arbitration, Mediation and Conciliation · Commercial Transactions

Kapoor Steels Pvt Ltd and Rao Fabricators LLP, both Indian entities, have a supply contract with arbitration seated in Pune. The dispute is not an international commercial arbitration. The contract is silent on governing law. How must the tribunal decide the dispute?

The tribunal must apply the substantive law for the time being in force in India. Where the seat is in India and the arbitration is not international commercial, the tribunal has no freedom to choose other rules of law, and silence of the contract does not change this.

  1. AApply whatever rules of law it considers appropriate in the circumstances
  2. BApply the substantive law for the time being in force in IndiaCorrect
  3. CDecide as amiable compositeur since the parties are commercial entities
  4. DApply the law of the country with the closest trade connection

Explanation

For a domestic arbitration seated in India, the tribunal must decide in accordance with the substantive law for the time being in force in India. Choosing rules it considers appropriate is the fallback only for international commercial arbitration where no law is designated.

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