UNIT 3

UNCITRAL MODEL LAWON INTERNATIONAL COMMERCIAL

ARBITRATION (1985) WITH 2006 AMENDMENTS.

CHAPTER 1

Article 1- Scope of Application

 This law applies to international commercial arbitration
 It is subject to any agreement between the State of the arbitral seat and any other
state..
 This model law is applicable in the State of the arbitral seat unless otherwise specified
or agreed upon by the parties.
 When is an arbitration considered to be international?
1. When at the time of the conclusion of the arbitration agreement, the parties to the
agreement had their places of business in different States.
2. Any place where a substantial part of the commercial relationship is to be
performed or any place to which the subject matter of the dispute is most closely
connected.

OR
When the parties have “expressly” agreed that the subject matter of the arb
agreement pertains to more than 1 country.
 If at all a party has multiple places of business, the place of business which is the
closest to the arbitration agreement shall be considered.
 Further, if a party does not have a place of business, then the habitual residence of
such a party shall be taken into consideration.

Article 2- Definitions and Rules of Interpretation

1. Arbitration- any arbitration which may or may not be administered by a permanent
arbitral institution.
2. Arbitral Tribunal- could be a sole arbitrator or a panel of arbitrators.
3. Court- body/organ of the judicial system of a State.
  If under this model law, if any provision except Art 28, provides that certain issues
are left to the parties to resolve, then such a right extends to the appointment or
authorization of a third party including the institution by the parties involved to
determine the issue in question.
 If any provisions of this model law provides that the parties agree to an arb agreement
or may agree to such an agreement, if such agreement has its own arbitration rules,
then those rules shall apply.

Article 3- Receipt of Written Communication

 If the written communication is delivered to addressee either
(a) Personally; or
(b) At his place of business; or
(c) At his habitual residence;
Then, such a communication would be deemed to have been received.
 After making reasonable enquiry if neither of the above mentioned could be found,
the written communication sent to the addressee’s last known place of business,
habitual residence or mailing address by registered letter or any other means which
acts as a proof for such an attempt to deliver the communication, shall be deemed to
have been received.
 The communication is deemed to have received on the day of delivery.
 This provision does not extend to the communication in court proceedings.

Article 4- Waiver of Right to Object

 When a party to arbitration is aware that any provision under this law or any
provisions under the arbitration agreement between the parties has not been complied
with yet decided to proceed with the arbitration, such a party is deemed to have
waived their right to object to such non-compliance.
 Provided that such a party does not raise any objection to such non-compliance
without undue delay or within a time frame if provided under the agreement, such
right is considered to be waived.

Article 5- Extent of Court Intervention

  Court shall not interfere in matters governed by this law unless such intervention is
provided for under this model law.

Article 6- Court or Other Authorities for certain functions of Arbitration Assistance and
Supervision
 The States enacting this law shall specify to the court(s) or other competent
authorities to perform certain functions as encompassed in Articles 11, 14, 16 and 34.

CHAPTER-2
Article 7- Definition and Form of Arb Agreement
 It is an agreement between the parties stating that they submit to arbitration for all
or certain disputes which have arisen or which may arise in future in respect of a
defined legal relationship irrespective of whether it is contractual or not.
 It could either be in the form of a separate agreement or as an arbitration clause in a
contract.
 The arb agreement shall be in writing and shall be either contained in a document
signed by the parties or it shall be though exchange of letters, telex, telegrams or other
means of telecommunication which provide a record of such agreement as a proof.
 It can also be through the exchange of statements of claim and defence wherein the
existence of such an agreement is not disputed by either party.

Article 8-Arbitration and Substantive Claim Before Court

 If a matter brought before a court is such that the subject matter of the same pertains
to an arbitration tribunal, then the court may refer the same to arbitration of the party
makes a request to do so.
 Such a request shall be entertained either prior or at the time the party submits his first
statement on the substance of the dispute and not anytime beyond the same.
 When such referral is made to the arbitral tribunal, it may continue its proceedings
and make an award as well even if the issue is pending before the court.

Article 9- Arbitration Agreement and Interim Measures

  Either before or at the time of the arbitral proceedings, it is an unacceptable practice
for a party to approach the court for an interim measure of protection and the court
should not grant the same.

CHAPTER-3
Article 10- No. of Arbitrators
 The parties have the freedom to choose the no. of arbitrators.
 However, if the parties fail to determine the no. of arbitrators, then the same shall be
deemed to be “3”.

Article 11- Appointment of Arbitrators

 Merely on the basis of one’s nationality, a person cannot be precluded from being an
arbitrator unless the parties agree otherwise.
 Parties are free to agree on the manner of appointment of arbitrator(s).
 However, of the parties fail to agree on such a procedure, then:
1. In case of an arbitration with 3 arbitrators:-
 Each party shall appoint an arbitrator each and the 2 arbitrators so appointed
shall appoint the 3rd arbitrator.
 If either part fails to appoint 1 arbitrator within 30 days of receipt of such
request from the other party
OR
If the 2 arbitrators so appointed fail to agree on the 3rd arbitrator within 30
days of their appointment,

Then the 3rd arbitrator shall be appointed by the court or other authority as
recognized under Art. 6 upon request of either party.
2. In case of a sole arbitrator:-
 If the parties fail to appoint an arbitrator, then upon request of either part,
court or other authority mentioned under Art. 6 shall go ahead with such
appointment.
  If the parties agree upon a procedure but:
(a) One party fails to act as per the procedure so agreed; OR
(b) Either the parties or the 2 arbitrators so appointed are unable to reach a conclusion
as required under the procedure; OR
(c) Even when a third party is asked to intervene and they fail to perform their
functions as entrusted to them under the procedure so agreed;
And If, the agreement of procedure between the parties does not provide for any other
alternate mean to secure appointment, then, the court or any other authority under
Art. 6 shall take necessary measures.
 When such appointment is taken up by the court or other authority, there lies no
appeal. And while appointing arbitrators, such court/authority shall consider the
following points:
(a) The qualification required for the arbitrator as per the agreement of the parties;
and
(b) Ensure that the arbitrator is independent and impartial;
(c) For a sole arbitrator or a third arbitrator, his nationality must not be the same
as that of the parties.

Article 12- Grounds for Challenge

 From the time of appointment and throughout the arbitral , the arbitrator shall disclose
without delay to the parties at any such time when there is a situation creating
justifiable doubts concerning his impartiality or independence.
 An arbitrator can be challenged when:
1. There is justifiable doubts concerning his impartiality or independence; and/or
2. Justifiable doubt regarding his qualification.

Article 13- Challenge Procedure

 Parties are free to agree upon a procedure to challenge the arbitrator.
 If the parties fail to agree upon a procedure, then any party can challenge the
arbitrator. This shall be done by sending a written statement with reasons for
challenge to the arbitral tribunal either:
(a) 15 days after becoming aware of the constitution of the arbitral tribunal; or
 (b) 15 days after being aware of justifiable doubts concerning impartiality or
independence.
 If the other party/parties agree to the challenge or if the arbitrator withdraws from the
office, the arbitral tribunal will not proceed with the dispute.
 Even if both parties agree upon a procedure or if one party raises the challenge and
are unable to succeed with the same even after following the 15 days protocol, then
within 30 days from the time of receipt of the notice of rejection, the challenging
party may request the court under Art 6 to decide the challenge and this is not subject
to appeal.
 If the challenge pending before the court, the arbitral tribunal including the challenged
arbitrator may proceed with the proceedings and make an award.

Article 14- Failure or Impossibility to Act

 Any party may request for the termination of the mandate of the arbitrator for any of
the following reasons:
1. When the arbitrator becomes dejure or defacto unable to perform his functions; or
2. For other reasons fails to act without undue delay; or
3. If he withdraws from the office; or
4. If the parties agree upon his termination; or
5. If a controversy exists in any of the above mentioned reasons.
 This request is not subject to appeal.
 Even if the arbitrator withdraws from the office or if the parties agree to the mandate
of his termination, this does not imply that the ground for such termination is valid.

Article 15- Appointment of Substitute Arbitrator

 When the mandate of the arbitrator is terminated under Art. 13 or 14 or his
withdrawal from office for any other reason or if the parties agree to termination or
any other case of termination, a substitute arbitrator is to be appointed as per the rules
of procedure of the appointment of arbitrator.

CHAPTER-4
Article 16- Competence of Arbitral Tribunal to Rule on its Jurisdiction
  Arbitral tribunal may rule on its own jurisdiction (including any objections wrt the
existence or validity of the arbitration agreement).
 The tribunal shall consider the arbitration clause in a contract as a separate agreement
and merely because the tribunal declares the entire contract null and void does not
invalidate the arbitration clause contained within it.
 A party can raise an objection/plea against the jurisdiction of the tribunal before or at
the time of submission of the statement of defense.
 In case of a plea regarding the tribunal exceeding its scope of authority, then please
shall be raised without undue delay, as soon as such matter is raised during the arbitral
proceedings.
 The tribunal may accept a plea later provided that the delay is justified.
 Tribunal may rule on such please either as a Preliminary Question or in award on
merits.
 In a situation where the tribunals rules such matter stating that the tribunal has
jurisdiction as a preliminary question, then within 30 days of receiving such notice,
any party may request the court to decide upon the same with no appeal.
 Even when such request is pending before the tribunal may continue with the
proceedings and make an award.

Article 17- Power of Arbitral Tribunal to Order Interim Measures

 If the parties request, the tribunal may order nay party to take interim measure of
protection as the tribunal may consider necessary wrt the subject matter of the dispute.
 Tribunal may require any party to provide appropriate security with such measure.

CHAPTER-5
Article18- Equal Treatment of Parties
 Parties to be treated equally and given full opportunity to present their caise.

Article 19- Determination of Rules of Procedure

 Parties shall agree upon a procedure of rules for the tribunal to follow subject to the
provisions of this law.
 When such agreement is not reached, the tribunal may decide upon appropriate rules
of procedure.
  Power of tribunal includes- determination of admissibility, relevance, materiality
and weight of evidence.

Article 20- Place of Arbitration

 Parties have the freedom to agree upon the place of arbitration.
 If such agreement is not reached, then tribunal shall decide upon a place keeping in
mind the circumstances and convenience of the parties.
 Tribunal may meet at any place is considers appropriate for consultation among
members, hearing witnesses, experts or the parties, or for inspection of
goods/documents/property, unless the parties agree otherwise.

Article 21- Commencement of Arbitral Proceedings

 Tribunal shall commence on the date on which the request for the dispute is received
by the Respondent.

Article 22- Language

 Parties are free to decide the language(s) to be used in the proceedings,
 On failure to reach an agreement, tribunal shall determine the same.
 The agreement or determination is not just for the language to be used in the
proceedings but also extends to written statements of the parties unless otherwise
agreed.
 Tribunal may order any document to be accompanied by a translation of the same in
the language so agreed upon or determined.

Article 23- Statements of Claim & Defence

 A time period is agreed by the parties or the tribunal decides the same within which,
Claimant shall state:
(a) Facts supporting his claim; &
(b) Point of issue; &
(c) Remedy or relief sought
 The Respondent shall state his defense to these particulars stated by the Claimant
unless otherwise the parties have agreed to elements to be contained in such
statements.
  Parties may accompany their statements with all documents they consider relevant or
reference to those documents or other evidence.
 Either party may amend or supplement their statements during the proceeding unless
either the parties agree otherwise or if the tribunal considers it inappropriate in the
light of such amendment creating delay in making such changes.

Article 24- Hearings and Written Proceedings

 Tribunal shall decide whether to hold oral hearing for presentation of
evidence/arguments or whether the proceedings shall be conducted on the basis of
documents and other materials.
 Tribunal shall hold the hearings at appropriate stage of the proceedings unless the
parties agree that no hearings shall be held.
 Parties to be given sufficient notice of any hearing or meeting for the purpose of
inspection of goods/property/documents.
 All statements/documents/other info supplied to the tribunal shall be communicated to
the other party.
 If the tribunal relies on any expert report or evidentiary documents while making its
decision, the same shall be communicated to the parties.

Article 25- Default of a Party

 If without showing sufficient cause:-
(a) Claimant does not communicate his claims or Respondent fails communicate his
defence in accordance with Art. 23(1), tribunal shall terminate the proceedings.
(b) Any party that fails to appear for the hearing or fails to produce documentary
evidence, tribunal shall proceed to make an award on the evidence already placed
before it.

Article 26- Expert appointed by Arbitral Tribunal

 Arbitral tribunal may appoint 1 or more experts to report to the tribunal on specific
issues.
 For this purpose, tribunal may require a party to produce all relevant
info/document/goods/property to the expert(s) for inspection.
  If any party requests or If the tribunal considers it necessary, the expert(s) after
submitting oral or written report, may take part in the hearing and the parties can put
forth question before the expert(s) and present expert witnesses to testify on the points
of issue.

Article 27- Court Assistance in Taking Evidence

 The tribunal or a party with an approval of the tribunal may request a court in the state
where the arbitration takes place, to assist in taking evidence.
 Such court shall then act upon its competence and act as per its rule on taking
evidence.

CHAPTER-6
Article 28- Rules Applicable to Substance of Dispute

 Tribunal to decide the dispute as per the rules agreed upon by the parties wrt to the
substance of dispute.

  Any designation of the law or legal system of a given State shall be construed as
directly referring to the substantive law of the State and not its conflict of law rules.

 If the parties fail to provide such designation, tribunal hall apply the law determined
by conflict of law rules which it considered to be appropriate.

 ex aequo et bono or amiable compositeur meaning- from equity and conscience or

according to the right and good

 The tribunal shall decide ex aequo et bono or as amiable compositeur if the parties
have expressly agreed to the same.

 In all cases tribunal shall decide in consonance with the terms of the contract and shall
also consider the usage of trade applicable to the transaction.

Article 29- Decision Making by Panel of Arbitrators

 When the tribunal has more than 1 arbitrator during proceedings, the decision of the
majority of all its members shall be considered.
  However, the question wrt procedure shall be decided by the Presiding arbitrator if
authorized by the parties or all members of the tribunal.

Article 30- Settlement

 During the proceedings if the parties settle the dispute, then the tribunal shall
terminate the proceedings.

 If the parties request and the tribunal does not object the same, the tribunal may
record the settlement in the form of an arbitral award on the merits of the case.

 Such an award shall be in accordance with Art 31 and shall specify that it is an award.
This award has the same status as any other award made on merits.
Article 31- Form and Content of Award

 Award shall be in writing and signed by the arbitrator(s).

 In case of tribunal with more than 1 arbitrator, signature of majority of the members
of tribunal shall suffice.

 If any member does not sign, reasons for the same shall be provided.

 Award shall state the reasons upon which it is bases unless the parties decide that no
reasons need to be provided or if the parties have settled the dispute under Art 30.

 Award shall specify its date and place of arbitration which was determined either by
the parties or the court and it shall be deemed to have been made at such place.

 Once the award is made, a copy of the same signed by the arbitrator(s) or majority
members of the tribunal shall be sent to the parties.

Article 32- Termination of Proceedings

 Proceedings is terminated either by final award or by an order of the tribunal.

 Tribunal shall issue an order for termination of proceedings when:

(a) The claimant withdraws his claim- unless the respondent objects the same and the
tribunal recognizes a legitimate interest on his part in obtaining a final settlement
of the dispute; or
(b) If the parties agree upon such termination; or
 (c) If the tribunal is of the opinion that continuance of the proceedings has for any
other reason become unnecessary or impossible.
 Mandate of the tribunal terminates upon the termination of the proceedings.

Article 33- Correction and Interpretation of Award; Additional Award

 Either within a period decided by the parties or within 30 days of receipt of award:

(a) A party with the notice of the other party, may request the tribunal to correct any
error in computation in the award or typographical or clerical error;
(b) If agreed by the parties, a party with notice to the other party may request the
tribunal to give an interpretation of a specific point or part of award;
If the tribunal believes that such a request is justified it shall entertain the same within
30 days of receipt of request.

 The tribunal can also correct any error in the award on its own initiative within 30
days of the date of the award.

 In case of an additional award as to claims presented to the tribunal but omitted from
the award, a party with notice to the other party may request the tribunal to make an
additional award within 30 days of receipt of award, unless the parties agree
otherwise.

 If the tribunal deems it fit, it may even extend the period within which it shall make
such correction(s) or additional award.

 Art. 31 extends to correction/interpretation of the award or to an additional award.

CHAPTER-7
Article 34- Application for Setting Aside as Exclusive Recourse Against Arbitral Award
 Recourse to court against an arbitral award shall be made only upon an application for
setting aside the same has been made.
 A court under Art 6 may set aside the award only if:
1. If the party making such application furnishes proof that:-
(a) A party to the arbitration agreement was under some incapacity
OR
The said agreement is not valid under the law to which the parties are subject
to
 OR
Failing any indication under the law of the State where the arbitration takes
place; or
(b) The party making the application is aggrieved as he/she-
Was not given proper notice to appoint an arbitrator or of the arbitral
proceedings;
OR
Was not given an opportunity to present his/her case; or
(c) The dispute does fall within the terms of the submission to arbitration
OR
Contains matters beyond the scope of submission to arbitration;
In such a case it is pertinent to note that, if the matters which are contained in the
submissions can be separated from those which are not, then the award shall be set
aside only to the extent of the submissions not included and the remaining award shall
be valid; or
(d) Composition of the tribunal or the arbitral procedure deviated from the
agreement of the parties. However, if such agreement between the parties
conflicts with this model law or was not entered into keeping this model law in
minds, then this provision is not a ground to set aside the award; or
2. If the court finds that:-
(a) Subject matter of the dispute is not capable of settlement through arbitration
under the law of the State where this arbitration takes place; or
(b) The award conflicts with the public policy of the State where arbitration takes
place.
 Application for setting aside shall be made within 3 months from the date of award.
 In case a request for correction or interpretation has been made prior to this
application, then within 3 months from the date of disposal of such request by the
tribunal, an application to set aside the award shall be made.
 If the party requests to suspend the setting aside proceedings, the court may do is if it
thinks it is necessary and the tribunal may resume its proceedings or take any action
as it deems fit which in the tribunal’s opinion will eliminate the grounds for setting
aside.
CHAPTER 8-
Article 35- Recognition & Enforcement
 An arbitral award is binding irrespective of the country it is made in.
 Upon an application to a competent court in writing, the award shall be enforced
subject to Art 35 & 36.
 Party applying for enforcement shall supply duly authenticated original award or a
duly certified copy along with the original arbitration agreement or a duly certified
copy of the same.
 In case the Award and/or the agreement was not made in the language of the State of
arbitration then a translation of the same shall be produced in the language of the
State.

Article36- Grounds for Refusing Recognition & Enforcement

 Recognition or enforcement of an arbitral award can be refused on the following
grounds:
1. If the party against whom the enforcement is sought furnishes to the competent
court the following as proof:-
(a) A party to the arbitration agreement was under some incapacity or the said
agreement is not valid under the law to which the parties are subject to or
failing any indication thereon under the law of the country where the award
was made: OR
(b) The party against whom the award is invoked was not given proper notice of
appointment of arbitrator or of the proceedings or was not able to present his
case; OR
(c) The dispute does fall within the terms of the submission to arbitration or it
contains decisions on matters which is beyond the scope of such submission.
In such a case it is pertinent to note that, if the matters which are contained in the
submissions can be separated from those which are not, then the award shall be set
aside only to the extent of the submissions not included and the remaining award shall
be valid; or
(d) Composition of the tribunal or the arbitral procedure deviated from the
agreement of the parties or filing such agreement it was not in consonance
with the law of the country where the arbitration took place; OR
 (e) The award is not yet binding upon the parties or it has been set aside or
suspended by a court of the country in which the award was made or under the
law of the country according to which the award was made;
OR

2. If the court finds that:

(a) Subject matter of the dispute is not capable of settlement through arbitration
under the law of the State where this arbitration takes place; or
(b) The recognition/enforcement of award conflicts with the public policy of the
State where arbitration takes place.
 If an application for setting aside or suspension has been made, the court where the
recognition of the award is sought shall adjourn its decision if it deems fit.
 On the application made for recognition/enforcement by one party, the court may also
order the other party to provide appropriate security.