ARBITRATION IN INDIA

Introduction

?Arbitration and Conciliation Act, 1996 is an?Act to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation and for matters connected therewith or incidental thereto.?The Indian Arbitration and Conciliation Act, 1996 is based on the Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law (UNCITRAL) in 1985. Previous statutory provisions on arbitration were contained in three different enactments, namely, the Arbitration Act, 1940, the Arbitration (Protocol and Convention) Act, 1937 and the Foreign Awards (Recognition and Enforcement) Act, 1961. The Arbitration and Conciliation Act, 1996 has repealed the Arbitration Act, 1940 and also the Acts of 1937 and 1961.

This Act is enacted to settle disputes in respect of legal relationship whether contractual or not without going through the legal and complicated Civil Court procedures. The award by arbitrator is enforced under the Code of Civil procedures in the same manner as if it were a decree of the Court. This Act has also provisions for enforcement of certain foreign awards.?Undoubtedly, arbitration is a speedy and effective remedy to resolve disputes between the parties by experts in technical, commercial or like fields, selected by parties' own choice as far as possible, or otherwise, with the intervention of court. The word “commercial” as such has not been defined anywhere in the Arbitration and Conciliation. References have been made to “international commercial arbitration” and has been dealt specifically under s.2(1)(f)[1] of the Act.

Meaning of commercial:

?

In ordinary parlance, ‘commercial’ means: 1. Of, engaged in or concerned with, commerce; 2. Having profit as a primary aim rather than artistic etc. Value;[2].

?In?Black’s Law Dictionary,?‘commercial is defined as: is occupied with business commerce. The term ‘commercial’ should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not.

?International commercial arbitration??[s.2(1)(f)]:

?Section.2(1)(f)[3] of Indian Arbitration and Conciliation Act, 1996 deals with international commercial arbitration. The definition of international commercial arbitration in s.2(1)(f)[4] has two elements, one physical and the other conceptual. The physical element is that one party should be foreigner, namely either a foreign national or resident, or a foreign body corporate, or a company, an association or body of individuals whose central management or control is in foreign hands or a government of some foreign country.

?The conceptual element is that the legal relationship between parties, contractual or otherwise, must be such as is considered “commercial” under Indian laws.??

?The model law is designed to establish a special regime for international cases. It is in these cases that the present disparity between national laws creates difficulties and adversely affects the functioning of the arbitral process. Furthermore, in these cases more flexible and liberal rules are needed in order to overcome local constraints and peculiarities. Finally, in these cases, the interest of a state in maintaining its traditional concepts and familiar rules is less strong than in a strictly domestic setting. However, despite this design and legislative self-restraint, any State is free to take the model law, whether immediately or at a later stage, as a model for legislation on domestic arbitration and thus, avoid a dichotomy within its arbitration law.

?When there was a proposal was there to remove the footnote, the view taken was that the footnote should be retained, though possibly with certain modifications. It was realized that no generally acceptable definition had been found to date and that any definition would entail certain risks. It was felt that the footnote, despite its uncertain legal effect, could provide useful guidance in interpretation, at least to the drafters of any national enactment of the model law.

?Forum Non Conveniens?in the context of international commercial arbitration:

?According to the doctrine, or principles of?forum non conveniens,?a court can in exercise of its inherent power decline to exercise jurisdiction in a case brought before it, on the basis that a court in another jurisdiction is the more appropriate venue for the trial of the matter. In a standard case, the jurisdiction will be a foreign jurisdiction; but a court in a federation might also decline jurisdiction in favour of another jurisdiction within the federation. The relief that is normally sought in this case by the party arguing?forum non conveniens?is an order for a permanent stay on proceedings. By parallel reasoning, the court may assume jurisdiction in a case and restrain a party from litigating the matter in a foreign jurisdiction, on the basis that the other jurisdiction would be in a less appropriate venue. Such injunctions are usually referred to as anti-suit injunctions. In principle, the?forum non conveniens?rules governing be similar. The rationales for the doctrine have been variously stated.it functions to avoid the time and expense of dual proceedings dealing with the same dispute and the possibility of inconsistent results, and to avoid costly exercises in comparative law. The doctrine permits a court to resist imposition upon its jurisdiction in a case where there is little if any connection between the case and the forum, in the interests of convenience, judicial economy and justice.

?Commercial Arbitration:

?The diversity of commercial activities has resulted in the growth of various systems of arbitration which do not make use of the ordinary legal procedure. Such systems have been evolved to deal with disputes which arise within particular trades. An agreement providing for arbitration by ‘commercial men’ is ordinarily called a commercial arbitration. It is not a special kind of arbitration governed by any special rule. Nor is it different from similar proceedings in arbitration.

?The position and duties of an arbitrator in commercial arbitration have undergone significant changes. Courts have gone very far in ignoring the technicalities and irregularities on the part of such arbitrators unless there is some substantial error behind them. Mere technical objections based on irregularities and defects in form and procedure are not encouraged[5].?But this does not mean that commercial men are entitled to ignore the fundamental principles of justice and fair play.

?It is now a well settled principle applied to all arbitrations including commercial arbitration that the arbitrator is bound to give effect to all legal defences including a defence of any statute of limitation[6].

?In commercial arbitrations the arbitrators are bound to decide the questions if raised under the arbitration clause as to frustration, limitation and other defences. The arbitrators are also competent to decide questions of law, existence of customs or usage in particular trade which is not contrary to public policy or contrary to the terms of the contract.

?The rapid world-wide development of trade and commerce has given rise to complexities of various types, nature, and magnitude and State policies. Various chambers of commerce, both national and international, have been established in large numbers to provide machinery for arbitration available to the members and non-members alike.

?Some of the chambers which provide for court of arbitration in commercial contracts are London Chamber of Commerce, American Arbitration association, International chamber of commerce etc. In India, the Indian Council of Arbitration, Federation of Indian Chambers of Commerce and Industry, East India Cotton Association, Bengal Chamber of commercial and Industry, Cotton textile Export Promotion Council are some of the specialised organisations dealing commercial arbitration in both national and international fields. In UK, both on the domestic and international fronts commercial arbitration is conducted by specialised arbitration bodies like the Institute of Arbitrators, the London Court of Arbitration, the London Maritime Arbitrators Association.

?In commercial arbitrations which are conducted under the rules of the tribunal or arbitration framed by various trade associations-a two-tier system of arbitration is usually provided under which an appeal lies from the award of the arbitrator or the umpire to an Appeal Board constituted to the rules of the associations. In such cases the award of the Appeal Board is final award according to the agreement of the parties which incorporates the rules of the trade associations.?

?As far as our Indian practice is concerned, an appeal shall lie firstly before the same Arbitral Tribunal as per Code of Arbitral Practice and Procedures of the Disputes Settlement Trust and after that only an appeal shall lie before any court for (a) Granting or refusing to grant any interim measure under Sec 9[7] and Sec 17[8] setting aside or refusing to set aside an arbitral award under Sec 34[9].?No second appeal shall lie before any court except the Supreme Court, from an order passed in appeal under Sec 37[10].

?Here are some of the general principles that are followed in a commercial arbitration agreement:

?Scott v. Avery?clause: in contracts involving parties of different countries such as export transactions, foreign element and plant installation contracts, the arbitration clause should provide a machinery suitable to the international character of the transaction for facilitating the execution of award that may be made. This clause provides that no action shall be brought until an award has been made and such provision is very common in commercial contracts. This type of a clause is named after the case?Scott v. Avery[11].?This clause is a condition precedent to the determination of liability of a party to a contract. Repudiation of contract does not affect this clause. A party successfully pleading?Svott v. Avery?clause?as a defence in the suit cannot subsequently challenge the jurisdiction of an arbitrator when the matter in the suit is remitted to arbitration. There are two exceptions in which this clause may not be pleaded as a defence to a suit. First, where the conduct of the defendant is such that it disentitles him from relying on such clause. Secondly, where the agreement to arbitrate has ceased to exist.

?In?Viney v. Bignold[12] under an insurance policy there was a clause which provided that any dispute arising in the adjustment of a loss should be submitted to arbitration and the award should be conclusive evidence of the amount of the loss. It was further provided that the insured should not be entitled to commence any proceeding until the amount of the loss is determined by an arbitration award. In an action by the insured the arbitration clause was held to be good defence to the action.

?Equity clause:?amiable composition.?It is settled law that an arbitrator shall act in accordance with law to decide a dispute. If the arbitration agreement is silent as to the matter in which decision of the arbitrator is sought, it is the duty of the arbitrator to decide the dispute according to equity and good conscience. He may not in such case follow the strict rule of law. It is often provided in arbitration clause that “the arbitrator shall be entitled to act as?amiable compositeur”.?Provision of such term in arbitration agreement is called “equity clause” or ‘amiable composition clause’.[13] This type of clause poses certain questions before the court. First, what does this clause mean? Secondly, what does this clause require the arbitrator to do? Thirdly, does this clause co-exist with substantive contract which is legally enforceable?

?Centrocon clause:?the Centrocon arbitration clause provides that a claim must be made in writing and the claimant’s arbitrator appointed within a specified time of final discharge and where this provision is not complied with, the claims shall be deemed to be waived and absolutely barred. The construction of such clause is not unreasonable, because it is mutual in its effect working equally against claims by shipowners or charterers and ought to be accepted by businessmen because of its advantages in providing of arbitration and litigation and in facilitating the obtaining of material evidence. In Centrocon arbitration clause the effective appointment of arbitrator is not made till he is told about the desirability of the claimant to appoint him as arbitrator in a particular matter and he has indicated his willingness to act in that matter[14]. This type of clause in a contract is not held to be ouster of jurisdiction of court[15].

?Commercial under Indian laws:

?There is no definition as such for the term “commercial” under the Arbitration and Conciliation Act, 1996. Moreover the Preamble itself shows that the entire Act 1996 is based on the Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law (UNCITRAL) in 1985.

?Section 28[16] of the Act deals with the rules applicable to substance of disputes. Section 28[17]?of the Arbitration and Conciliation Act, 1996 provides rules which are applicable to the substance of disputes. It specifies the law or the rules of law according to which the arbitral tribunal shall decide the dispute submitted for arbitration.

?In the usual course of the process, the rules, which the parties to the dispute designate, are applicable to the substance of the dispute, the parties may also empower the arbitral tribunal to decide the cases in their good conscience without adhering to any strict laws or rules of law. The ambit of the specification of rules which may be applicable to the substance of disputes is very wide owing to the fact that the legislation uses the words law or rules of law which include transnational laws or rules of international conventions, etc.?

??The expression ‘commercial’ should be construed broadly having regard to the manifold activities which are integral part of international trade to-day. As pointed out by the Supreme Court in?Koch Navigation Inc. v. Hindustan Petroleum Co. Ltd[18],?liberal construction is to be given to any expression or phrase used in the Act which, however, must be consistent with its literal and grammatical sense, since the Act is calculated and designed to subserve the cause of facilitating international trade and promotion thereof by providing for speedy settlement of disputes arising in such trade through arbitration.

?In?Fatechand Himmatlal v. State of Maharashtra[19],?Supreme Court observed that any service or activity which in the modern complexities of business would be considered to be a lubricant for the wheels of commerce is ‘commercial’.

?In?KamaniEngg. Corp. Ltd v. Societe De Traction Et. D’Electricity Sociate Anonyme[20],?it was observed: “it is difficult to find the exact meaning of the phrase “matters considered as commercial under the law in force in India”. Neither side has been able to point out any particular law wherein the phrases “commercial” or “matters commercial” have been defined. The intent of the Legislature while using the above phrase was that in matters of commercial contracts foreign arbitrations and awards should be recognised and enforced. Having regard to the purpose of the Act, widest meaning must be given to the word “commercial”. The contract in this case was on the face of it only a contract for technical assistance; it did not involve the defendants into any business of the plaintiffs; it was not in any sense participation in profits between the parties; by this contract, the defendants refused to be involved into any business of the plaintiffs and or any contracts of the plaintiffs; they have scrupulously kept themselves out of any commercial relations with the plaintiffs. Accordingly, it was held that contract was more or like a retainer or contract that was made between a solicitor, a counsel and an advocate on the one hand and a client on the other. Such a contract cannot be described as commercial.

?In?Josef Meisaner GMBR & Co. v. Kanoria Chemicals & Industries Ltd[21].,?it was held that the agreement for supply of technical ‘know-how’ and expertise by Meisner to Kanoria in exchange for payment of a ‘fee’ by Kanoria to Meisner did not contain any element of transactions between merchants and traders as understood in Indian law.

?The Supreme Court in?Atiabari Tea Co. Ltd. v. State of Assam[22] held: Trade and commerce do not mean merely traffic in goods, i.e., exchange of commodities for money or other commodities. In the complexities of modern conditions, in their wide sweep are included carriage of persons and goods by road, rail, air, waterways, contracts, banking, insurance, transactions in the stock exchange and forward markets, communication of information, supply of energy, postal and telegraphic services and many more activities- too numerous to be exhaustively enumerated which may be called commercial intercourse... every sequence in the series of operations which constitutes commerce is an act of trade or commerce and burdens or impediments imposed on any such steps are restrictions on the freedom of trade, commerce and intercourse....Articles 302[23], 303[24], 304[25] and 305[26], make it abundantly clear that the freedom contemplated was freedom of trade, commerce and intercourse in all their varied aspects inclusive of all activities which constitute commercial intercourse...”

?In?Indian Organic Chemicals Ltd v. Chemtex Fibres Inc.[27], the plaintiff wanted to establish in India facilities for manufacture of 6,100m.t. of plastic staple fibre per annum, etc. The defendant No.1 was to supply machinery. The technical know-how was supplied by the defendant No. 2 who was also to approve the machinery supplied. Defendant No.3 stood as a guarantor for proper performance by the defendants Nos. 1 and 2. Three arguments were entered into between the parties. the Bombay High Court held that there must be some legal provision in the agreement which specifies or indicates or provides for recognition of legal relationship as commercial. An agreement must be commercial as not normally understood but by virtue of provisions of law of force in India. The view was disapproved by the division bench of the Bombay High Court in?European Crain and Shipping Ltd. v. Bombay extractions(P) Ltd[28]., where it was held that mere use of the word ‘under’ preceding the words ‘ the law in force in India’ would not necessarily mean that one has to find a statutory provision or a provision of law which specifically deals with the subject of particular legal relationship being commercial in nature. The division bench held that it was not necessary that there should be a statutory provision enumerating such legal relationship for determining whether the relationship is commercial or not. It was finally held- “we have no doubt that the contract in the instant case which was for the sale and purchase of a commodity, was clearly a contract which brought about legal relationship which was commercial in nature under the Indian law.”?

?The Supreme Court in?R.M.Investments& trading Co.P.Ltd v. Boeing Co[29] observed that while construing the expression of ‘commercial relationship’, guidance can also be taken from UNCITRAL Model law:

?“the term “commercial” should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not. Relationships of commercial nature include, but are not limited to the following transactions: any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other forms of industrial or business co-operation; carriage of goods or passengers by air, sea, rail or road”.

?The Supreme Court in?Sudaram Finance Ltd. Vs. NEPC India Ltd[30]., has observed that the provisions of the 1996 Act have to be interpreted being uninfluenced by the principles underlying the 1940 Act and in order to get help in construing the provisions of the said Act, it is more relevant to refer to the UNCITRAL Model Law rather than the 1940 Act.

?Commercial in the UNCITRAL Model Law Countries:

?The UN Commission on International Trade Law (UNCITRAL) adopted the UNCITRAL Arbitration Rules on April 28, 1976. Where the parties to contract have agreed in writing that disputes in relation to the contract shall be referred to arbitration under the UNCITRAL arbitration rules, then such disputes shall be settled in accordance with those rules subject to such modification as the parties may agree in writing. These rules are designed for world-wide use in commercial arbitration.

?The Model Law describes “commercial” in a footnote:

?QUOTE

?“the term “commercial” should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not. Relationships of commercial nature include, but are not limited to the following transactions: any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other forms of industrial or business co-operation; carriage of goods or passengers by air, sea, rail or road”

?UNQUOTE

?Despite its presence in a footnote, this definition is an integral part of the Model Law. The drafters of Model Law wanted to produce an inclusive and open-ended description of the term commercial. The intention was to have a definition which can be used, in particular, by states which do not have a distinctive body of commercial law so that the Model Law would be applicable to all aspects of international business. The footnote while not giving a clear cut definition, provides guidance for an autonomous interpretation of the term “commercial”; it does not refer, as does the 1958 New York Convention [article 1(3)], to what the existing national law regards as commercial.

?Some countries which adopted the Model law has incorporated the text of the footnote into a section of the law (for eg: Canada, England Cyprus etc);other jurisdictions simply reproduced the text in a schedule( Australia, Bahrain, Bermuda etc). India has adopted for an expressly Indian characterisation of commercial disputes while other countries have for various reasons not included the definition when adopting the Model Law. The decision of the drafters of the Model law to include an open-ended definition of “commercial” is well justified, especially when read together with reference to international proceedings. The intention is to have a scope of arbitration which is flexible enough to meet the needs of the international business community and which will facilitate the widest possible application of the Model Law. The drafters managed to avoid doctrinal traps and to focus on the nature of the transaction rather than the persons involved.

?While a number of jurisdictions, which have not enacted the Model Law, make references to commercial arbitration or commercial transactions, almost none appears to define “commercial” in the context of arbitration. This silence is often deemed an implied reference to the concept of commercial law and commercial transactions as developed in the national (domestic) law.

?“Commercial” in International Conventions

?International conventions also refer to the commercial nature of transactions. They do not necessarily limit their scope to commercial disputes. Most of them, however, operate only for commercial transactions.

?The New York Convention 1958 allows for a distinction to be made between commercial and non-commercial arbitration. This is reflected in Article 1(3), which contains what is known as the commercial reservation:

?QUOTE

??“when signing, ratifying or acceding to this Convention...any State may...declare that it will apply the Convention only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the national law of the State making such declaration”

?UNQUOTE

?The New York Convention suggests that “commercial” should be characterised on the basis of national law.

?The European Convention on International Commercial Arbitration did not contain a specific definition of commercial. It adopted a general definition with a reference to Article I(1)(a):

?QUOTE

?“To arbitration agreements concluded for the purpose of settling disputes arising from international trade.”

?UNQUOTE

?The 1987 Amman Arab Convention on Commercial Arbitration also contains no clear definition of commercial transactions. Article 2 provides only that the convention will apply

?QUOTE

?“...to commercial disputes between natural or legal persons of any nationality, linked by commercial transactions with one of the contradicting States or one of its nationals, or which have their main headquarters in one of these States.”

?UNQUOTE

?When the ambit of a “commercial transaction” is to be ascertained, regard should be given to the international character of a convention and the need to promote uniformity. Accordingly, only an autonomous and comparative interpretations and characterisation is appropriate.

?India is a party to the following conventions:

?

·????????????????????the Geneva Protocol on Arbitration Clauses of 1923

·????????????????????the Geneva Convention on the Execution of Foreign Arbitral Awards, 1927; and

·????????????????????the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards. It became a party to the 1958 Convention on 10th June, 1958 and ratified it on 13th July, 1961.?

?

There are no bilateral Conventions between India and any other country concerning arbitration.

____

[1] “International commercial arbitration” means an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India and where at least one of the parties is-?

(i)????????????An individual who is a national of, or habitually resident in, any country other than India; or

(ii)??????????A body corporate which is in corporate in any on n try other than India; or

(iii)?????????A company or an association or a body of individuals whose central management and control is exercised in any country other than India; or

(iv)????????The Government of a foreign country;

[2] The Concise Oxford Dictionary

[3] international commercial arbitration” means an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India and where at least one of the parties is—

(i)????????????????an individual who is a national of, or habitually resident in, any country other than India; or

(ii)??????????????a body corporate which is incorporated in any country other than India; or

(iii)????????????a company or an association or a body of individuals whose central management and control is exercised in any country other than India; or

(iv)????????????the Government of a foreign country;

[4] Supra N 3

[5] Olympia Oil and Coke Co. v. MacAndrew Moreland Co.Ltd?All ER Rep 1093

[6] RamduttRamkissendas v. F.D.Sassoon& Company?AIR 1929 PC 103

?

[7] Interim measures, etc. by Court.—A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a court—

(i)????????????for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings; or

(ii)??????????for an interim measure of protection in respect of any of the following matters, namely:—

(a)??????????the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;

(b)?????????securing the amount in dispute in the arbitration;

(c)??????????the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;

(d)?????????interim injunction or the appointment of a receiver;

(e)?????????such other interim measure of protection as may appear to the court to be just and convenient, and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it.

[8] Interim measures ordered by arbitral tribunal.—

(1)??????????Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order a party to take any interim measure of protection as the arbitral tribunal may consider necessary in respect of the subject-matter of the dispute.

(2)??????????The arbitral tribunal may require a party to provide appropriate security in connection with a measure ordered under sub-section (1).

[9] Application for setting aside arbitral award. —

(1)??????????Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).

(2)??????????An arbitral award may be set aside by the Court only if—

(a)??????????the party making the application furnishes proof that—

(i)????????????a party was under some incapacity, or

(ii)??????????the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or

(iii)?????????the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

(iv)????????the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or

(v)??????????the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or

(b)?????????the Court finds that—

(i)????????????the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or

(ii)??????????the arbitral award is in conflict with the public policy of India.

Explanation. —Without prejudice to the generality of sub-clause (ii) it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81.

(3)??????????An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal: Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.

(4)??????????On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.

[10] Appealable orders.—

(1)??????????An appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:—

(a)??????????granting or refusing to grant any measure under section 9;

(b)?????????setting aside or refusing to set aside an arbitral award under section 34.

(2)??????????An appeal shall also lie to a Court from an order granting of the arbitral tribunal.—

(a)??????????accepting the plea referred in sub-section (2) or sub-section (3) of section 16; or

(b)?????????granting or refusing to grant an interim measure under section 17.

(3)??????????No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.

[11] (1856) 5 HL Cas 811

[12] (1887) 20 QBD 172

[13] Article 33 of the UNCITRAL Arbitration Rules provided for such clause

[14] Tradax Export S.A. v. Volkswagenwerk A.G.[1969] 2 QB 599

[15] Atlantic Shipping & Trading Co. Ltd. V. Louis Dreyfus & Co.?[1922] AC 250

[16] Rules applicable to substance of dispute.—

(1)??????????Where the place of arbitration is situate in India,—?

(a)??????????in an arbitration other than an international commercial arbitration, the arbitral tribunal shall decide the dispute submitted to arbitration in accordance with the substantive law for the time being in force in India;

(b)?????????in international commercial arbitration,—

(i)????????????the arbitral tribunal shall decide the dispute in accordance with the rules of law designated by the parties as applicable to the substance of the dispute;

(ii)??????????any designation by the parties of the law or legal system of a given country shall be construed, unless otherwise expressed, as directly referring to the substantive law of that country and not to its conflict of laws rules;

(iii)?????????failing any designation of the law under clause (a) by the parties, the arbitral tribunal shall apply the rules of law it considers to be appropriate given all the circumstances surrounding the dispute.

(2)??????????The arbitral tribunal shall decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorised it to do so.

(3)??????????In all cases, the arbitral tribunal shall decide in accordance with the terms of the contract and shall take into account the usages of the trade applicable to the transaction.

[17] Supra N 16

[18] AIR 1989 SC 2198

[19] AIR 1977 SC 1825

[20] AIR 1965 Bom 114

[21] AIR 1986 Cal 45

[22] AIR 1961 SC 232

[23] Power of Parliament to impose restrictions on trade, commerce and intercourse Parliament may by law impose such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest

[24] Restrictions on the legislative powers of the Union and of the States with regard to trade and commerce

(1)??????????Notwithstanding anything in Article 302, neither Parliament nor the Legislature of a State shall have power to make any law giving, or authorising the giving of, any preference to one State over another, or making, or authorising the making of, any discrimination between one State and another, by virtue of any entry relating to trade and commerce in any of the Lists in the Seventh Schedule

(2)??????????Nothing in clause (1) shall prevent Parliament from making any law giving, or authorising the giving of, any preference or making, or authorising the making of, any discrimination if it is declared by such law that it is necessary to do so for the purpose of dealing with a situation arising from scarcity of goods in any part of the territory of India

[25] Restrictions on trade, commerce and intercourse among States Notwithstanding anything in Article 301 or Article 303, the Legislature of a State may by law

(a)??????????impose on goods imported from other States or the Union territories any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced; and

(b)?????????impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest: Provided that no Bill or amendment for the purposes of clause shall be introduced or moved in the Legislature of a State without the previous sanction of the President

[26] Saving of existing laws and laws providing for State monopolies Nothing in Articles 301 and 303 shall affect the provisions of any existing law except in so far as the President may be order otherwise direct; and nothing in Article 301 shall affect the operation of any law made before the commencement of the Constitution (Fourth Amendment) Act, 1955 , in so far as it relates to, or prevent Parliament or the Legislature of a State from making any law relating to, any such matter as is referred to in sub clause (ii) of clause (6) of Article 19

[27] AIR 1978 Bom 106

[28] AIR1983Bom 36

[29] AIR 1994 SCN 1136

[30] (1999) 2 SCC 479