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

Meera Textiles Ltd and Hartley Mills Ltd, both Indian companies, arbitrate in Chennai under a contract that is silent on governing law. Which statement is correct under Section 28(1)?

The tribunal decides according to the substantive law for the time being in force in India. The arbitration is domestic, as both parties are Indian companies and the seat is Chennai, so Section 28(1)(a) applies and the tribunal has no freedom to pick other rules.

  1. AThe tribunal decides in accordance with the substantive law for the time being in force in IndiaCorrect
  2. BThe tribunal applies the rules of law it considers appropriate in the circumstances
  3. CThe tribunal must apply the law of the country with the closest connection under conflict rules
  4. DThe tribunal decides ex aequo et bono by default

Explanation

Both parties are Indian, so the arbitration is not international commercial. With the place in India, clause (a) requires the tribunal to decide per the substantive law in force in India. The discretion to choose appropriate rules applies only to international commercial arbitration.

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