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

Tata Hydro Ltd (India) and Nordic Turbines AB (Sweden) sign a contract providing that disputes will be resolved by arbitration under the rules of a named arbitral institution. Tata Hydro argues that the arbitration cannot fall under Part I of the Arbitration and Conciliation Act, 1996 because it is an 'institutional' arbitration. Under the Act's definition of 'arbitration', what is the correct position?

The Act defines arbitration as any arbitration, whether or not administered by a permanent arbitral institution. Institutional and ad hoc arbitrations are therefore both covered, and choosing institutional rules does not take the arbitration outside the Act's definition.

  1. AOnly ad hoc arbitrations are covered by the definition
  2. BThe definition covers any arbitration, whether or not administered by a permanent arbitral institutionCorrect
  3. CInstitutional arbitrations are covered only if the institution is Indian
  4. DInstitutional arbitrations are covered only if the award is domestic

Explanation

Section 2(1)(a) defines 'arbitration' as any arbitration whether or not administered by permanent arbitral institution. So institutional and ad hoc arbitrations are both arbitrations under the Act. The claim that institutional arbitration is outside the Act is therefore wrong.

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