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CS Professional · Arbitration, Mediation and Conciliation · Commercial Transactions

Tessera Pte Ltd (Singapore) and Jaipur Gems Ltd agree to an arbitration seated in New Delhi. The contract designates Singapore law as governing the substance of the dispute and says nothing more. The arbitral tribunal must decide the dispute. Under section 28(1)(b), how should the designation be read?

The designation is read as directly referring to Singapore's substantive law, not its conflict of laws rules, unless the parties express otherwise. This applies because the arbitration is an international commercial arbitration seated in India, where the tribunal follows the rules of law the parties designated.

  1. AAs referring to Singapore's conflict of laws rules
  2. BAs referring directly to Singapore's substantive law, unless otherwise expressedCorrect
  3. CAs void, because Indian substantive law must apply to any arbitration seated in India
  4. DAs leaving the tribunal free to choose any law it considers appropriate

Explanation

For an international commercial arbitration seated in India, the tribunal applies the rules of law designated by the parties. A designation of a country's law is construed, unless otherwise expressed, as its substantive law and not its conflict of laws rules. The Indian-law rule applies only to arbitrations other than international commercial ones.

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