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

Seated in New Delhi, an international commercial arbitration between Veda Pharma Pvt Ltd and a German supplier has a contract that names no governing law for the substance of the dispute. What must the tribunal do?

The tribunal applies the rules of law it considers appropriate in light of all circumstances surrounding the dispute. Under section 28(1)(b)(iii), where parties made no designation in an India-seated international commercial arbitration, the tribunal chooses; it is neither automatically Indian law nor a court's decision.

  1. AApply Indian substantive law automatically
  2. BApply the law of the supplier's country
  3. CApply the rules of law it considers appropriate given all the circumstances surrounding the disputeCorrect
  4. DRefer the question to the Court to designate the law

Explanation

Section 28(1)(b)(iii) provides that, failing a designation by the parties, the tribunal applies the rules of law it considers appropriate given all the circumstances surrounding the dispute. Indian substantive law is mandatory only for non-international arbitrations seated in India.

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