Skip to content

CS Professional · Arbitration, Mediation and Conciliation · Commercial Transactions

Sterling Components Inc, a US company, and Rao Industries Ltd, an Indian company, agree to arbitration seated in Mumbai. They designate 'the law of England' as applicable to the substance of the dispute and say nothing more. Under section 28, how is this designation construed?

The designation is read as directly referring to England's substantive law, not its conflict of laws rules, unless the parties expressed otherwise. This arbitration is international commercial, so the parties' chosen law governs the substance of the dispute.

  1. AAs referring to English conflict of laws rules, unless excluded
  2. BAs directly referring to the substantive law of England, not its conflict of laws rules, unless otherwise expressedCorrect
  3. CAs invalid, because Indian substantive law must apply to a Mumbai-seated arbitration
  4. DAs leaving the tribunal free to ignore it and pick appropriate rules

Explanation

Section 28(1)(b)(ii) says a designation of the law of a given country is construed, unless otherwise expressed, as referring to its substantive law and not its conflict of laws rules. The arbitration is international commercial (US party incorporated abroad), so party designation is honoured under 28(1)(b)(i).

Did you get it right without looking?

One question tells you little. A timed set on Commercial Transactions shows your real accuracy, how long you take and where you lose marks.

Practise Commercial TransactionsFree diagnostic mock

More Commercial Transactions questions