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

Kaveri Auto Pvt Ltd (Chennai) and Brandt GmbH (Germany) agreed that 'arbitration shall be conducted under the rules of XYZ Arbitration Centre'. The Act's wording lets the parties agree on procedure. How does the Act treat the institutional rules referred to in their agreement?

Under the Act, whenever Part I refers to the parties' agreement, that agreement includes any arbitration rules referred to in it. Institutional rules incorporated by reference therefore become part of the parties' agreement without court approval, though they remain subject to the Act's non-derogable provisions.

  1. AThey are ignored unless the Court approves them
  2. BThey apply only to fees and not to any other matter
  3. CThey form part of the agreement of the parties wherever the Act refers to an agreementCorrect
  4. DThey override mandatory provisions of the Act automatically

Explanation

Section 2(8) says that where Part I refers to an agreement of the parties, that agreement includes any arbitration rules referred to in it. The institutional rules are thus treated as part of the parties' agreement. They do not need court approval, and being part of the agreement does not allow them to override non-derogable provisions.

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