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Wednesday, June 13, 2018

INDIAN SCENARIO: ARBITRATION AS DISPUTE RESOLUTION [Part 3]

GAURI SHRIKHANDE
ARMY INSTITUTE OF LAW, MOHALI
(First Published on Volume 01 Issue 03, November 2016)

Read similar articles here

[Picture Courtesy: Pexels.com]

INTERNATIONAL ENFORCEMENT
It is often easier to enforce arbitration awards in a foreign country than court judgments. Under the New York Convention 1958, an award issued in a contracting state can generally be freely enforced in any other contracting state, only subject to certain, limited defenses. Only foreign arbitration awards are enforced pursuant to the New York Convention.
An arbitral decision is foreign where the award was made in a state other than the state of recognition or where foreign procedural law was used. In most cases, these disputes are settled with no public record of their existence as the loser complies voluntarily,although in 2014 UNCITRAL promulgated a rule for public disclosure of investor-state disputes.
Virtually every significant commercial country in the world is a party to the Convention while relatively few countries have a comprehensive network for cross-border enforcement of judgments their courts. Additionally, the awards not limited to damages. Whereas typically only monetary judgments by national courts are enforceable in the cross-border context, it is theoretically possible (although unusual in practice) to obtain an enforceable order for specific performance in an arbitration proceeding under the New York Convention.
Article V of the New York Convention provides an exhaustive list of grounds on which enforcement can be challenged. These are generally narrowly construed to uphold the pro-enforcement bias of the Convention.

GOVERNMENT DISPUTES

Certain international conventions exist in relation to the enforcement of awards against states.
·         The Washington Convention 1965 relates to settlement of investment disputes between states and citizens of other countries. The Convention created the International Centre for Settlement of Investment Disputes (or ICSID). Compared to other arbitration institutions, relatively few awards have been rendered under ICSID.
·         The Algiers Declaration of 1981 established the Iran-US Claims Tribunal to adjudicate claims of American corporations and individuals in relation to expropriated property during the Islamic revolution in Iran in 1979. The tribunal has not been a notable success, and has even been held by an English court to be void under its own governing law. 

CONCLUDING REMARKS

The Arbitration and Conciliation Act, 1996 governs arbitration, whether domestic or international commercial arbitrations, and is in compliance with Model Arbitration Law framed by the UNCITRAL. In all the cases of domestic arbitration and also where the seat of arbitral tribunal is in India in case of the international commercial arbitration, the doctrine of res judicata, which is a codified principle under Section 11 of the Code of Civil Procedure 1908, would apply. Its application to arbitration bars the further reference to arbitration on the same dispute. Where all the disputes referred to arbitration are decided, then no second award can be made again on the ground that an arbitration agreement to refer the dispute to arbitration still exists between the parties. The same is not permissible where all the disputes have been decided as the arbitration agreement merges with the final award. However, where some of the matters were not raised earlier, the doctrine of constructive res judicata would have no application, as the law governing arbitration is based upon a mutual contract between the parties to refer the dispute to arbitration, the same cannot be barred by the doctrine of constructive res judicata. The doctrine of res judicata also has no application to the interim awards made by the arbitral tribunal, but have application only to the final award.

PART 1 & 2 AVAILABLE IN ARCHIVES

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