Assignment of International Commercial Arbitration

University law college, Quetta
Name: Ahsan Ullah
Roll no: 549
Semester: 7th (A)
Submitted to:Adv Salman Sanjrani
Assignment:
INTERNATIONAL COMMERCIAL ARBITRATION
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ARBITRATION:
Arbitration is a method of resolving disputes outside of court, where
parties present their arguments to a neutral third party or panel who makes a
binding decision. It’s often chosen for its efficiency and privacy compared to
traditional litigation.
1.Process: In arbitration, disputing parties agree to submit their conflict to one or

more arbitrators, who act as judges in the case. The arbitrators review the evidence
and arguments presented by both sides and then render a decision, which is usually
binding.
2.Agreement: Arbitration typically occurs when parties have a contractual

agreement that includes an arbitration clause. This clause outlines that any disputes
arising from the contract will be resolved through arbitration rather than litigation.
3.Neutral Arbitrator(s): Arbitrators are chosen by mutual agreement of the

parties or through a predetermined process outlined in the arbitration clause. They
are typically experts in the relevant field or have legal expertise.
4:Informal Procedure: Unlike court proceedings, arbitration is usually less

formal. Parties may not need to adhere to strict rules of evidence or procedure,
which can make the process quicker and more flexible.
5.Confidentiality: Arbitration proceedings are generally confidential, meaning

that the details of the dispute and the arbitrator’s decision are not made public. This
can be advantageous for businesses or individuals who prefer to keep their disputes
private.
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6.Finality:In most cases, arbitration awards are final and binding, with limited
avenues for appeal. This finality can provide closure to the dispute and allow the
parties to move forward more quickly than through prolonged litigation.
7.Enforcement: Arbitration awards can typically be enforced through the courts

if one party refuses to comply with the decision. This enforcement mechanism
helps ensure that parties abide by the arbitrator’s ruling.
Overall, arbitration offers a streamlined alternative to traditional litigation for

resolving disputes, offering benefits such as efficiency, confidentiality, and
finality.
International Commercial Arbitration:

International Commercial Arbitration is a method used to resolve disputes between
parties engaged in commercial activities across different countries. It involves an
impartial third party, known as an arbitrator or arbitral tribunal, who makes a
binding decision on the dispute. Here's a detailed breakdown of the process and
steps involved:
Agreement:
It starts with the parties agreeing to resolve their disputes through arbitration,
typically specified in their contract. This agreement often includes details such as
the rules governing the arbitration, the number of arbitrators, the place of
arbitration, and the language to be used.
1.Voluntary Agreement: The parties involved in an international commercial
contract voluntarily agree to resolve any disputes arising from their relationship
through arbitration rather than through traditional court litigation. This agreement
is typically included as a clause in their contract, known as an arbitration clause or
arbitration agreement.
2.Scope: The arbitration agreement specifies the scope of disputes that are subject
to arbitration. It may cover all disputes arising from the contract or may be limited
to specific types of disputes, such as those related to interpretation, performance, or
breach of contract.
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3.Formulation: The agreement outlines essential details related to the arbitration
process, including the rules governing the arbitration, the number of arbitrators
(one or three), the method for appointing arbitrators, the place of arbitration
(venue), and the language to be used in the proceedings.
4.Choice of Arbitration Rules: Parties may choose to adopt institutional

arbitration rules provided by organizations like the International Chamber of
Commerce (ICC), the American Arbitration Association (AAA), or the United
Nations Commission on International Trade Law (UNCITRAL). Alternatively,
they can opt for ad hoc arbitration, where the parties have greater flexibility in
designing the arbitration process.
5.Designation of Arbitral Institution: In some cases, the parties may

designate a specific arbitral institution to administer the arbitration proceedings
and provide support services, such as case management and appointment of
arbitrators.
6.Mandatory vs. Optional Arbitration: Some contracts may make arbitration

mandatory for all disputes, while others may give parties the option to choose
arbitration or litigation. Mandatory arbitration clauses are often favored in
international contracts due to their efficiency and enforceability.
7.Validity and Enforceability: The arbitration agreement must be valid and

enforceable under the applicable law. Factors such as capacity of the parties,
clarity of terms, and compliance with formal requirements influence the
enforceability of the arbitration agreement.
Overall, the agreement aspect of international commercial arbitration plays a
crucial role in determining the framework and procedures for resolving disputes
between parties engaged in cross-border business transactions.
Arbitral Tribunal:
The parties select arbitrators or a tribunal to hear their dispute. Arbitrators are
usually experts in the subject matter of the dispute and are chosen for their
neutrality and impartiality.
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1. Composition: The Arbitral Tribunal, comprising one or more arbitrators,
resolves the dispute.
2. Appointment: Arbitrators are chosen based on expertise and impartiality,
following agreed-upon procedures.
3. Role: They manage proceedings, make procedural rulings, admit evidence, and
issue the final decision (arbitral award).
4. Powers: They have authority to determine applicable law, issue interim
measures, and maintain confidentiality.
5. Impartiality: Arbitrators must be impartial and independent throughout the
process, disclosing any conflicts of interest.
6. Confidentiality: Proceedings are typically private, ensuring confidentiality and
encouraging open discussion.
Procedural Rules: The arbitration proceeds according to agreed-upon procedural

rules, which can be from various institutions like the International Chamber of
Commerce (ICC), the London Court of International Arbitration (LCIA), or ad hoc
rules.
1.Framework: Procedural rules provide the framework for how the arbitration
process will be conducted, including timelines, document exchange, and hearing
procedures.
2.Selection: Parties may choose institutional rules provided by organizations like

the ICC, LCIA, or UNCITRAL, or opt for ad hoc rules tailored to their specific
needs.
3.Key Elements: Procedural rules typically cover important aspects such as

initiating arbitration, appointment of arbitrators, submission of pleadings and
evidence, conduct of hearings, and issuance of the final award.
4.Flexibility: These rules offer flexibility to adapt to the unique circumstances of

each case while ensuring fairness and efficiency in the resolution process.
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5.Enforcement: Compliance with procedural rules is essential for maintaining the
integrity of the arbitration process and ensuring the enforceability of the final
arbitral award.
Evidence and Hearings:

The parties present their evidence and arguments during hearings, similar to court
proceedings. The arbitrators evaluate the evidence and arguments presented by
both sides.
Decision:
After considering the evidence and arguments, the arbitrators render a final and
binding decision, known as an arbitral award. This decision is enforceable in courts
under international conventions, such as the New York Convention.
Enforcement:
If a party fails to comply with the arbitral award voluntarily, the successful party
may seek enforcement of the award through the courts in jurisdictions where the
losing party has assets.
Confidentiality and Flexibility:

Arbitration offers confidentiality and flexibility, which can be advantageous for
parties seeking to maintain privacy or resolve disputes efficiently without the
delays associated with traditional court litigation.
I wind up with this last sentence that the International commercial arbitration
provides a private, efficient, and enforceable means of resolving cross-border
commercial disputes.
Case law Related to International Commercial Arbitration:
“Methanex v. United States” arbitration:
In this case, Methanex Corporation, a Canadian company, initiated arbitration
against the United States under Chapter 11 of the North American Free Trade
Agreement (NAFTA). Methanex claimed that a California ban on the gasoline
additive MTBE (Methyl Tertiary Butyl Ether) violated NAFTA’s provisions
protecting foreign investment.
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Brief Explanation:
Methanex argued that the MTBE ban expropriated its investment in the United
States and violated NAFTA’s protections for fair and equitable treatment. The
arbitration tribunal found in favor of the United States, stating that the California
ban was a legitimate regulatory measure aimed at protecting public health and the
environment, rather than a targeted action against Methanex specifically. The case
highlighted the balance between regulatory measures and investor rights in
international investment arbitration

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University law college, Quetta

Name: Ahsan Ullah

Roll no: 549

Semester: 7th (A)

Submitted to:Adv Salman Sanjrani

1.Process: In arbitration, disputing parties agree to submit their conflict to one or

2.Agreement: Arbitration typically occurs when parties have a contractual

3.Neutral Arbitrator(s): Arbitrators are chosen by mutual agreement of the

4:Informal Procedure: Unlike court proceedings, arbitration is usually less

5.Confidentiality: Arbitration proceedings are generally confidential, meaning

7.Enforcement: Arbitration awards can typically be enforced through the courts

Overall, arbitration offers a streamlined alternative to traditional litigation for

International Commercial Arbitration:

4.Choice of Arbitration Rules: Parties may choose to adopt institutional

5.Designation of Arbitral Institution: In some cases, the parties may

6.Mandatory vs. Optional Arbitration: Some contracts may make arbitration

7.Validity and Enforceability: The arbitration agreement must be valid and

Procedural Rules: The arbitration proceeds according to agreed-upon procedural

2.Selection: Parties may choose institutional rules provided by organizations like

3.Key Elements: Procedural rules typically cover important aspects such as

4.Flexibility: These rules offer flexibility to adapt to the unique circumstances of

Evidence and Hearings:

Confidentiality and Flexibility:

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