ADR- Alternative Dispute

Resolution Mechanism

PROF. RAJINDER KAUR

Dispute
 Choice of Forum
First option -Formal Method is Litigation
Second Option- ADR
The parties cannot choose between the alternative of
jurisdiction the court where they are interested to file
the case in case of first option. The parties will
approach the court for any kind of dispute between
the parties
Choice of forum is an key element of second
option there where Parties can choose the forum in
commercial dispute Though this option is available
even in domestic commercial disputes
Reliance Infra gets Rs 94 crore from Goa govt against
arbitration award of Rs 350 crore

The matter went into arbitration when Goa state utility

delayed payments to Reliance Infrastructure for power
supplied from its 48 MW-Goa Power Plant in Sancoale.
The state government had entered into a power purchase
agreement (PPA) with Reliance Infra on January 10,
1997, to commission and operate an open cycle electricity
generation station of 39.8 MW at Sancoale, Goa. The
station was to be operated by the company on Naphtha,
subject to the parties consensually agreeing to the use of
any alternate fuel. During the term of the PPA, several
disputes arose between the parties regarding the
computation and payment of invoices raised by the
company
The arbitration tribunal, on February 16, 2018, had
ordered the Goa government to pay Rs 350 crore,
including interest, in favour of Reliance
Infrastructure.
 Reliance Infrastructure Ltd won a major arbitration award of Rs 1,250
crore against government-owned Damodar Valley Corporation (DVC).

Anil Ambani-lead Reliance Infrastructure was the E & C

contractor of DVC's 2 x 600 MW Raghunathpur thermal
power project in West Bengal with a contract value of Rs
3,750 crore.
After emerging the lowest bidder, the company was
issued a letter of acceptance on December 11, 2007. Units
one and two were to be commissioned in 35 and 38
months respectively.
During execution, Reliance Infrastructure faced various
impediments like non-availability of land, hindrances at
the project site on account of local agitations,
unavailability of inputs from DVC like water and coal.
 Reliance Infrastructure Ltd won a major arbitration award of Rs 1,250
crore against government-owned Damodar Valley Corporation (DVC).

 Despite such handicaps, the company completed the project.

Unit one was commissioned on May 15, 2015 and unit 2 was
commissioned on February 23, 2016.The company also raised
several claims on DVC in respect of delays and hindrances
faced by it in the execution of the project. However, DVC
sought to levy liquidated damages upon the company for
failure to adhere to the contractual schedule.
 Reliance Infrastructure invoked arbitration and a three-
member arbitral tribunal comprising of Presiding Arbitrator
Justice Ganendra Naryan Ray, a former judge of Supreme
Court of India, and co-arbitrators Justices Ronojit Kumar
Mitra, former Judge of Calcutta High Court, and Indrajit
Chatterjee, also a former judge of Calcutta High Court, was
formed.
 Reliance Infrastructure Ltd won a major arbitration award of Rs 1,250
crore against government-owned Damodar Valley Corporation (DVC).

The arbitral tribunal over 107 sittings dwelt on the

rival claims of the parties. The tribunal directed DVC
to pay Rs 896 crore and return the bank guarantees
of Rs 354 crore within four weeks or pay additional
interest at the rate of 15 per cent per annum for any
delay in payment beyond four weeks.
 Choice of Forum

Choice of Forum
Once you have gone for arbitration it does not mean
the court is completely
 Even incase parties fail to appoint an arbitrator
within 30 days then party/ies can approach court for
the appointment of arbitrator.
 Limitation of litigation

Jurisdiction issues (forum shopping)

Litigation is usually much more expensive, time
consuming, psychologically taxing,
Time consuming years can go by before a final judicial
decision is made.
Litigation is generally a public affair, open to the press,
which may be eager to hang out the dirty linen of any
business caught up in a court fight.
Limited Expertise- Further, in highly complex
commercial disputes, litigation subjects businesses to the
limited expertise typical of many juries and judges.
Forum shopping is defined as the practice of
choosing a country in which to bring a legal case
through the Courts on the basis of which country’s
laws are the most favourable. In some instances
there is a choice of jurisdiction. It was in arbitration
but we are applying in domestic cases.
Forum shopping in IP related matters has been a
common practice not only in India but even in the
US. For instance in the US, it has been reported that
more than 40% of patent suits are filed in a Federal
Court in East Texas. Similarly, in Germany there is a
German Patent Court with technically trained Judges
that resolves all patent cases brought in Germany
Discouraged
Alternative Dispute Resolution ("ADR") refers to any
means of settling disputes outside of the courtroom.
ADR typically includes Negotiation, Conciliation,
Mediation and Arbitration.
Some use the word Additional Dispute Resolution
 Negotiation

Negotiation: In negotiation, there is no impartial

third party to assist the parties in their negotiation,
so the parties work together to come to a
compromise. The parties may choose to be
represented by their attorneys during negotiations.
Used in our daily life- mutually adjusting
pre-litigation mediation
Unitech and Telenor case
 Unitech & Telenor Dispute

 Unitech major realty and Telenor, Norway-based Telecom

Company entered into joint venture Uninor to participate into
2G auction. The Supreme Court in 2012 cancelled 122
licenses, which included 22 of joint ventures that is, Uninor’s.
After the cancellation of licenses, Telenor wanted to recover
the investment from India which amounted to $3 billion. Both
companies moved with the cross-petition to the CLB to
protect their individual interest in the joint venture. The CLB
returned their cross-petitions and asked to resubmit the same
after rectifying the errors on 13 March 2012. The CLB further
suggested that ‘Parties should sit together and work out on
settlement by way of compensation.’ After 18 months of mud-
slinging by the Companies, the matter was finally settled out
the case was withdrawn. Immediately, after the news of
settlement hit the market, the share price of Unitech rose by
14 per cent
 Mediation

In mediation, an impartial person called a

"mediator" helps the parties try to reach a mutually
acceptable resolution of the dispute. The mediator
does not decide the dispute but helps the parties
communicate so they can try to settle the dispute
themselves. Mediation leaves control of the outcome
with the parties. 
Mediation may be particularly useful when parties
have a relationship they want to preserve. So when
family members, neighbors, or business partners
have a dispute.
 PEDR is a conflict management strategy

The American Bar Association Section of Dispute

Resolution has developed Planned Early Dispute
Resolution (PEDR) in 2011 with the objective to promote
the ADR mechanism over the traditional approach of
adversarial litigation. They have turned with the user
manual where every business can tailor their PEDR
system according to their needs. While the business
houses are developing their PEDR system, they can take
into consideration policy to prevent disputes, early-stage
assessment, working out the best and worst possibilities
of the dispute, cost of litigation and the time frame for
dispute in court.
California Association of Realtors (CAR) is a Real Estate
Mediation Center for Consumers including home buyers,
sellers and other interrelated people provides for pre-
litigation mediation even before the arbitration or
moving to the Courts.
The corporate houses like Chevron had adopted an ADR
mechanism through mediation where a single dispute
cost $25,000; if the same was done with the help of
external counsel/advocate it would have cost the
company around $700,000 and for the same dispute
going to court the cost would be $2.5 million along with
the time period of 3 to 5 years.
AT&T Global Information Solutions, General Electric
Company, DuPont and several others
Court Annexed Mediation Private Mediation
Court refers the dispute Appointing a mediator
The court records the terms of Settlement Agreement enforceable as a
settlement contract
Enforceable as Judgement Breach of Contract
Jurisdiction will be again as agreed by
parties
Court referred or Court Annexed Mediation
Section 442 of companies Act, 2013 promotes
mediation and negotiation in corporate disputes. In
the light of the same provision, the Ministry of
Corporate Affairs has enacted the rules relating to
mediation and conciliation in 2016 to put into
operation the statutory provision
Section 442 of Companies Act, 2013:The matter which is
pending before the Central Government or National
Company Law tribunal or in Appellate authority. The
parties to the dispute at any time during the proceedings
of the case before Central Government or National
Company Law tribunal or in Appellate authority can
request along with the requisite fee to refer the matter to
mediation and Conciliation Panel. The time period
mentioned to dispose of the matter is 3 months from the
date the matter has been referred.
The party who is aggrieved by the recommendation of
panel may file their grievances to the Central
Government or National Company Law tribunal or in
Appellate authority
 Arbitration

In arbitration, a neutral person called an "arbitrator"

hears arguments and evidence from each side and then
decides the outcome of the dispute. Arbitration is less
formal than a trial, and the rules of evidence are often
relaxed. Arbitration may be either "binding" or
"nonbinding."
Binding arbitration means that the parties waive their
right to a trial and agree to accept the arbitrator's
decision as final. Generally, there is no right to appeal an
arbitrator's decision.
Non-binding arbitration means that the parties are free
to request a trial if they do not accept the arbitrator's
decision
 WIN -Win situation
 Save Time
A dispute often can be settled or decided much sooner with ADR; often in a matter of months,
even weeks, while bringing a lawsuit to trial can take a year or more.
 Save Money
When cases are resolved earlier through ADR, the parties may save some of the money they
would have spent on attorney fees, court costs, experts' fees, and other litigation expenses.
 Increase Control Over the Process and the Outcome
In ADR, parties typically play a greater role in shaping both the process and its outcome. In
most ADR processes, parties have more opportunity to tell their side of the story than they do at
trial. Some ADR processes, such as mediation, allow the parties to fashion creative resolutions
that are not available in a trial. Other ADR processes, such as arbitration, allow the parties to
choose an expert in a particular field to decide the dispute.
 Preserve Relationships
ADR can be a less adversarial and hostile way to resolve a dispute. For example, an experienced
mediator can help the parties effectively communicate their needs and point of view to the other
side. This can be an important advantage where the parties have a relationship to preserve.
 Increase Satisfaction
In a trial, there is typically a winner and a loser. The loser is not likely to be happy, and even the
winner may not be completely satisfied with the outcome. ADR can help the parties find win-
win solutions and achieve their real goals. This, along with all of ADR's other potential
advantages, may increase the parties' overall satisfaction with both the dispute resolution
process and the outcome.
Med-Arb or Arb-Med: This form of ADR in one in
which the arbiter starts as a mediator, but, if the
mediation fail, the arbiter will impose a binding
decision. Med-arb is a mixture of mediation and
arbitration that pulls from the benefits of the two
 The Keeneye Case
The case concerned the validity of a share transfer agreement and was
brought to arbitration under the Xi’an Arbitration Commission (XAC)
rules in the People’s Republic of China. The XAC Rules contained a
clause granting the arbitrators broad authority to act as conciliators
(or mediators) and propose settlement agreements. During an
adjournment in arbitration proceedings, a member of the tribunal
contacted a lawyer for the respondent and invited him and a friend of
the respondent, Zeng, to a meeting.
Over dinner at the Shangri-La Hotel, the secretary-general of the XAC
conveyed that the tribunal took the respondent’s position and
regarded the share transfer agreement to be valid, but that the tribunal
wanted the respondent to consider compensating the claimant by a
certain amount to settle the dispute. Zeng agreed to convey the
tribunal’s view to the respondent. Though the respondent was satisfied
that the tribunal took its view of the share transfer agreement, it
ultimately disagreed with the proposed compensation. The arbitration
resumed, and much to the respondent’s surprise given the information
relayed after the Shangri-La meeting the tribunal issued an award
favourable to the claimant that the share transfer agreement was not
valid.
The respondent first appealed the award to the Xi’an
Intermediate People’s Court on grounds of bias,
pointing to the informal dinner meeting at the
Shangri-La. The claimant contended that the
meeting amounted to a mediation under the XAC
rules. The court agreed with the claimant, and
finding no apparent bias, upheld the award. But,
when the claimant proceeded to enforce the award in
Hong Kong, the respondent again challenged the
enforcement.
In the end, the Hong Kong Court of Appeal set aside
the lower court’s decision on the grounds that there
was no finding of apparent bias, and that the
respondent had effectively waived its opportunity to
object to the proceedings when it did not do so
before arbitration had commence. Nevertheless, the
main takeaway from Keeneye continued to
reverberate when it comes multi-tiered dispute
resolution  proceedings, proceed with caution.
 Three type of Negotiated Agreement

 Best Alternative to Negotiated Agreement (BATNA)

It is the best possible outcome both the party come up with or
has in mind. Its suitable situation as each party thinks about
their most favorable scenario looks like.
 Most Likely Alternative to Negotiated Agreement
(MLATNA)
For a successful negotiation the result always lies in the middle,
mediator after considering both the parties comes up with
most likely outcome. Here result is not always in the middle
but little left or right of the center depending on negotiation
situation.
 Worst Alternative to Negotiated Agreement
(WATNA)
It the worst possible outcome a party has in their mind for what
could happen during negotiation.
Problem is with Enforcement
 Enforceability of Mediation agreement

The United Nations Convention on International

Settlement Agreements Resulting from Mediation, 2018
is revolutionary step towards providing an effective and
less costly, less technical method to resolve international
commercial disputes.
To some extent, it has removed the jurisdictional
restrictions laid down by the Geneva Convention and
New York Convention on the Recognition and
Enforcement of Foreign Arbitral Award and provided a
new platform to the parties to enter into agreement to
contribute to the development of harmonious
international economic relations. (for the enforcement of
award it is essential that both the parties are signatory to
the New York convention)
 Enforceability is the prime aim of Convention

The primary aim of the Convention is to make

enforceable those agreements that have been settled by
parties in the realm of International Commercial
Mediation. Such a remedy in law was previously missing,
which is of the biggest factors towards people avoiding to
opt for Mediation as their dispute resolution mechanism.
Prior to this Convention, there was no provision, which
gave the parties an opportunity to enforce their
settlement agreements, arrived through Mediation in a
situation of breach of agreement. Therefore, if a settled
mediated agreement were to be enforced in case of its
breach, the only remedy that the aggrieved party would
have would be to opt for Litigation or for Arbitration to
have the agreement enforced.
Roche v. - Delhi High Court - 10 years - In 2014 the matter was referred to
Cipla (Single Bench) approx. mediation
- Appeal to division Feb 2007– - In 2017 out of court settlement by
bench of Delhi High 2017 parties
Court - Matter
- SLP in Supreme was settled
Court out of
court
Bayer AG - Controller of patents 2011–2014 No chance of mediation
and - Intellectual Property approximatel
NatcoPhar Appellate Board y three and a
ma Ltd. - Bombay High Court half years
Merck Sharp - Delhi High Court 2013–2015, - In 2014, matter was referred to mediation
& Dohme Co. approximately
two and a half
years
Sun - Supreme Court 2004-2017 In 2017, matter was
Pharmaceutic Pending referred to
al and Fatima arbitration
Organics Ltd.
Novartis - Madras High Court - Matter Matter was not referred
- Indian Intellectual Property initiated with to mediation
Appellate Board filing of patent
- Supreme Court in 1997–2013
affected by
transition
period
 International Commercial Arbitration

When is an arbitration “international”?

Separate treatment of domestic and international
arbitration in some jurisdictions makes it necessary
to make this determination.
“It is necessary to verify in each specific case (on the
basis of the applicable law) whether the transaction
is international or not.”
 International Commercial Arbitration

What is “commercial”?
“To explain the term ‘commercial’, it will be
sufficient here to specify that it refers to transactions
entered into between parties in the course of their
business activities. This leaves consumer contracts
outside of the scope of the subject, as well as other
aspects of private law, such as family or inheritance
law”
International arbitration circumvents the traditional
judicial systems, eliminating the fundamental bias
that may occur either in favor or against a domestic
or foreign party. More importantly, many foreign
countries will recognize and enforce foreign arbitral
awards but not foreign judgments rendered by a
domestic court of a foreign jurisdiction
 Court Arbitration Mediation
/Conciliation

Parties have no choice of Parties can choose seat of Parties can directly
jurisdiction arbitration participate and resolve
the dispute
Parties have no choice of Parties can choose law It is not an adjudicatory
law process so law
requirement is not there
Parties have no choice of Parties can choose Parties are free to choose
procedure procedure the process of settlement

Parties have no choice of Parties can choose Language is no bar

language language

Parties cannot choose Parties can appoint / Mutual settlement- no

Judge remove arbitrator person as judge

Parties can challenge the Arbitral award can be Decision is binding if the
decision on merits by challenged only on parties come to a mutual
filing an appeal specific grounds and not settlement
merits
 UNICTRAL Model Law on International
Commercial Arbitration
This Law applies to international commercial** arbitration, subject to
any agreement in force between this State and any other State or
States.
An arbitration is international if:
(a) the parties to an arbitration agreement have, at the time of the
conclusion of that agreement, their places of business in different
States; or
(b) one of the following places is situated outside the State in which
the parties have their places of business:
(i) the place of arbitration if determined in, or pursuant to, the
arbitration agreement;
(ii) any place where a substantial part of the obligations of the
commercial relationship is to be performed or the place with which the
subject-matter of the dispute is most closely connected; or
(c) the parties have expressly agreed that the subject-matter of the
\arbitration agreement relates to more than one country.
For the purposes of paragraph (3) of this article:
(a) if a party has more than one place of business, the
place of business is that which has the closest
relationship to the arbitration agreement;
(b) if a party does not have a place of business,
reference is to be made to his habitual residence.
Chapter General provisions
Chapter II. Arbitration agreement
Chapter III. Composition of arbitral tribunal
Chapter IV. Jurisdiction of arbitral tribunal
Chapter V. Conduct of arbitral proceedings
Chapter VI. Making of award and
termination of proceedings
Chapter VII. Recourse against award Chapter
Chapter VIII. Recognition and enforcement
of awards
 Enforcement of foreign Award

India is a signatory to the Convention on the

Recognition and Enforcement of Foreign Arbitral
Awards, 1958 (“New York Convention”) as well as the
Geneva Convention on the Execution of Foreign
Arbitral Awards, 1927 (“Geneva Convention”).
If a party receives a binding award from a country
which is a signatory to the New York Convention or
the Geneva Convention and the award is made in a
territory which has been notified as a convention
country by India, the award would then be
enforceable in India.
The key to a successful arbitration is the
enforceability of the award. The majority of arbitral
awards are honored, without resistance, by the losing
party
Both the 1923 Geneva Protocol on Arbitration
Clauses (Geneva Protocol) and the 1927
Geneva Convention on the Execution of
Foreign Arbitral Awards (Geneva
Convention) marked the beginnings of an
attempt to unify and liberalize international
commercial arbitration
 Geneva Convention

to enforce an award in a contracting nation when the award

was rendered in a different contracting nation (china-1987)
Article 1(d) required that "the award ... become final in the
country in which it has been made. "final" meant was left to
the discretion of the nation in which the arbitration took
place Some nations required court approval from the
rendering nation for an award to be considered final.
As a result, a party attempting to enforce an award would
have to compel the local courts to grant leave to enforce the
award, then go to the country in which the award was to be
executed and seek court approval there.
Discretion is given to court to refuse the award on ground
public policy
Onus of proof is on party to prove the award is against public
policy
 New York Convention

The central objective of the New York Convention is

to facilitate enforcement of foreign arbitral awards
by subjecting the enforcement to a limited number of
conditions. Under Article V of the Convention, the
grounds for refusal to enforce an arbitral award are
restricted to a narrow list
Refusal ground by Court mentioned clearly as it was
not in Geneva convention.
Onus of proof is not on party Court will decide the
word public policy.
Article V(1) of the New York Convention prescribes grounds that
need to be proven by a party to successfully resist enforcement of
the award. It provides that enforcement of the award may be
refused if :
a party to the arbitration agreement was under some incapacity;
the arbitration agreement was invalid;
the procedure before the arbitral tribunal was affected by
procedural unfairness;
the award deals with issues falling outside the scope of the
submission to arbitration;
the composition of the arbitral authority or the arbitral procedure
was not in accordance with the agreement of the parties or, absent
such an agreement, the law of the arbitral seat;
the award has not yet become binding on the parties; or
the award has been set aside in the country where it was made.
 Types of Arbitration

 In Institutional arbitration is one where a specialised

institution is appointed and takes on the role of administering
the arbitration process/case management. Each institution
has its own set of rules which provides a framework (such as
timelines for the filing of documents or procedures for making
applications etc) for the arbitration and its own form of
administration to assist in the process. Common institutions
include the Hong Kong International Arbitration Centre
(HKIAC) and the International Chamber of Commerce (ICC)
 The obvious advantage of institutional arbitration is the
administrative assistance given by the institution. For
example, the HKIAC now offers tribunal secretary services to
the parties. The availability of established rules also helps
move the arbitration forward in a timely manner. The
institution will usually charge a percentage of the disputed
sum as their fee – which can sometimes be substantial in large
disputes.
 An ad hoc arbitration is one that is not administered by an
institution. Parties will determine between themselves all
aspects of the arbitration, such as the appointment of
arbitrator, applicable rules and timetable for filing various
documents.
 Without the administering institution, parties in ad hoc
arbitrations are free to agree to use the procedure of their
choice. In cases where no procedural rules are agreed, the
arbitral tribunal will administer the arbitration in the way it
thinks fit.
 An ad hoc arbitration can also be turned into an institutional
arbitration. If parties feel they require the assistance of a
specialised institution to run the case at some point, they may
by agreement make such an appointment.
 Domestic Arbitration
“Domestic Arbitration” denotes arbitration which takes place in
India, when the subject matter of the contract, the merits of the
dispute and the procedure for arbitration are all governed by
Indian law or when the cause of action for the dispute has arisen
wholly in India or where the parties are otherwise subject to
Indian jurisdiction.
 International Arbitration
International Arbitration” has a foreign ingredient. Arbitration
becomes “International” when at least one of the parties involved
is resident or domiciled, outside India or the subject matter of
the dispute is abroad. The law applicable to an arbitration
proceedings may be the Indian law or a foreign law, depending
on the terms of the contract in this regard and the rules of
conflict of laws.
 Foreign Arbitration
“Foreign arbitration” is an arbitration conducted in a place outside
India, where the resulting award is sought to be enforced as a
"foreign award".
Statutory Arbitrations are arbitrations conducted
in accordance with the provisions of certain special
Acts which provide for arbitration in respect of
disputes arising on matters covered by those Acts.
There are about 24 such Central Acts. Among them
are the Cantonments Act, 1924, the Indian Electricity
Act, 1910, and the Forward Contracts Regulation Act,
1956. Many State Acts also provide for arbitration in
respect of disputes covered by those Acts, including
Acts relating to co-operative societies. The provisions
of the Arbitration Act, 1940 generally apply to those
arbitrations unless they are inconsistent with the
particular provisions of those Acts, in which case the
provisions of those Acts will apply
Specialized arbitration is arbitration conducted
under the auspices of arbitral institutions which might
have framed special rules to meet the specific
requirements for the conduct of arbitration in respect of
disputes of particular types, such as, disputes as to
commodities, construction or specific areas of
technology. Some trade associations concerned with
specific commodities or Chambers of Commerce also
specify that arbitration under their rules will be
conducted only between members of that organisation.
Dispute Review Boards (DRB) have been utilized by the
construction industry for many years. DRB is generally
comprised of three neutral individuals who are selected
by the Parties to the construction contract, usually the
project owner (Owner) and the prime or general
contractor (GC).
The first DRB in the United States was utilized in the
construction of the Eisenhower Tunnel in Colorado.
A more recent use of the DRB process is the “Big
Dig” Project in Boston, Massachusetts where 49
different specialized DRBs were utilized. Many state
highway departments regularly utilize DRBs for their
road construction projects.
 Institutional Arbitrations - Example

Indian Council of Arbitration(ICA)

International Chamber of Commerce(ICC)
London Court of International Arbitration (LCIA)
Singapore International Arbitration Centre (SIAC)
 Indian Council of Arbitration(ICA)

Indian Council of Arbitration, India’s premier

arbitral institution, is a registered society under the
Societies Registration Act, 1860, operating on a not-
for-profit basis with its head office in New Delhi and
ten branches in a pan-India network.
The ICA was established in 1965 as a specialized
arbitral body at the national level under the
initiatives of the Government of India and apex
business organizations such as FICCI, etc.
ICA is not only the leading arbitral institution in
India, it is one of the most important arbitration
centers in the Asia Pacific, handling more than 200
domestic and international arbitration cases each
year. It also provides the commercial world with
unrivalled and time-tested Maritime Arbitration
services and imparts education and training in
alternative dispute resolution mechanisms.
In particular, the ICC Expedited Procedure provides
final awards for lower valued cases within six months
of the case management conference, which has
enhanced the ICC Court’s ability to handle cases in a
timely and cost-efficient manner.
the introduction of delay measures resulted in a
decrease in the number of late awards from 54% in
2016 to 38% in 2018.
 Model Clause of ICA

The Indian Council of Arbitration recommends to all

parties desirous of making reference to arbitration by the
Indian Council of Arbitration, the use of the following
arbitration clause in writing in their contracts:
"Any dispute or difference whatsoever arising between
the parties out of or relating to the construction,
meaning, scope operation or effect of this contract or the
validity or the breach thereof shall be settled by
arbitration in accordance with the Rules of Arbitration of
the Indian Council of Arbitration and the award made in
pursuance thereof shall be binding on the parties."
 International Chamber of Commerce

International Chamber of Commerce is the

largest, most representative business organization in
the world. Its over 45 million members in over 100
countries have interests spanning every sector of
private enterprise. ICC has three main activities: rule
setting, dispute resolution, and policy advocacy.
Because its member companies and associations are
themselves engaged in international business, ICC
has unrivalled authority in making rules that govern
the conduct of business across borders.
 International Chamber of Commerce(ICC)

 ICC's administered dispute resolution services help solve

difficulties in international business. ICC Arbitration is a
private procedure that leads to a binding and enforceable
decision.
 The International Court of Arbitration of the International
Chamber of Commerce steers ICC Arbitration and has
received over 24,000 cases since its inception in 1923. Over
the past decade, the court's workload has considerably
expanded.
 The court's membership has also grown and covers 85
countries and territories. With representatives in North
America, Latin and Central America, Africa and the Middle
East and Asia, the ICC Court has significantly increased its
training activities on all continents and in all major languages
used in international trade.
The top five countries with parties represented in
cases are the United States (210), France (139),
Brazil (117), Spain (110), and Germany (95). New
arrivals to the top 10 countries’ ranking for 2018
included Turkey and the United Arab Emirates. The
United Arab Emirates represented the eighth-highest
number of parties in 2018 with 69. Meanwhile,
Turkey climbed into the 2018 top 10 for the first time
with 62 parties.
 Model clause

Link- https
://iccwbo.org/dispute-resolution-services/arbitration/
arbitration-clause
/
Suggested Language “All disputes arising out of or in
connection with the present contract shall be
submitted to the International Court of Arbitration of
the International Chamber of Commerce and shall be
finally settled under the Rules of Arbitration of the
International Chamber of Commerce by one or more
arbitrators appointed in accordance with the said
Rules.”
The parties may also wish to stipulate in the
arbitration clause:
the law governing the contract;
the number of arbitrators;
the place of arbitration; and/or
the language of the arbitration.
London Court of International Arbitration (LCIA)

The LCIA is one of the world’s leading international

institutions for commercial dispute resolution. The
LCIA provides efficient, flexible and impartial
administration of arbitration and other ADR
proceedings, regardless of location, and under any
system of law. The international nature of the LCIA’s
services is reflected in the fact that, typically, over
80% of parties in pending LCIA cases are not of
English nationality.
 Model clause for future disputes

 Future disputes

"Any dispute arising out of or in connection with this contract,

including any question regarding its existence, validity or termination,
shall be referred to and finally resolved by arbitration under the LCIA
Rules, which Rules are deemed to be incorporated by reference into
this clause.
The number of arbitrators shall be [one/three].
The seat, or legal place, of arbitration shall be [City and/or Country].
The language to be used in the arbitral proceedings shall be [    ].
The governing law of the contract shall be the substantive law of [    ]."
 Existing Dispute

 If a dispute has arisen, but there is no agreement between the parties to

arbitrate, or if the parties wish to vary a dispute resolution clause to provide
for LCIA arbitration, the following clause is recommended. Words/spaces
in square brackets should be deleted/completed as appropriate.
"A dispute having arisen between the parties concerning [    ], the parties
hereby agree that the dispute shall be referred to and finally resolved by
arbitration under the LCIA Rules.
The number of arbitrators shall be [one/three].
The seat, or legal place, of arbitration shall be [City and/or Country].
The language to be used in the arbitral proceedings shall be [    ].
The governing law of the contract [is/shall be] the substantive law of [    ]. "
 Singapore International Arbitration Centre (SIAC)

 Established in 1991 as an independent, not-for-profit

organisation, SIAC has a proven track record in providing
neutral arbitration services to the global business community.
SIAC arbitration awards have been enforced by the courts of
Australia, China, Hong Kong SAR, India, Indonesia, Jordan,
Thailand, UK, USA, and Vietnam.
 80% of SIAC’s caseload is international in nature. 42% of the
new cases filed in 2016 did not involve Singaporean parties.
 The SIAC Rules are efficient, cost-effective and flexible, and
incorporate features from civil and common law legal
systems.
 SIAC‘s administration fees are competitive in comparison
with all the major international arbitral institutions
Any dispute arising out of or in connection with this contract, including any question
regarding its existence, validity or termination, shall be referred to and finally
resolved by arbitration administered by the Singapore International Arbitration
Centre (“SIAC”) in accordance with the Arbitration Rules of the Singapore
International Arbitration Centre ("SIAC Rules") for the time being in force, which
rules are deemed to be incorporated by reference in this clause.
The seat of the arbitration shall be [Singapore].*
The Tribunal shall consist of _________________** arbitrator(s).
The language of the arbitration shall be ________________.
APPLICABLE LAW
Parties should also include an applicable law clause. The following is recommended:
This contract is governed by the laws of _________________.***
______________________________________________
* Parties should specify the seat of arbitration of their choice. If the parties wish to
select an alternative seat to Singapore, please replace “[Singapore]” with the city
and country of choice (e.g., “[City, Country]”).
** State an odd number. Either state one, or state three.
*** State the country or jurisdiction.
 The Singapore Arb-Med-Arb Clause

Any dispute arising out of or in connection with this

contract, including any question regarding its
existence, validity or termination, shall be referred to
and finally resolved by arbitration administered by
the Singapore International Arbitration Centre
(“SIAC”) in accordance with the Arbitration Rules of
the Singapore International Arbitration Centre
(“SIAC Rules”) for the time being in force, which
rules are deemed to be incorporated by reference in
this clause.
The seat of the arbitration shall be [Singapore].*
The Tribunal shall consist of _________________**
arbitrator(s).
The language of the arbitration shall be ________________.

The parties further agree that following the commencement of

arbitration, they will attempt in good faith to resolve the Dispute
through mediation at the Singapore International Mediation
Centre (“SIMC”), in accordance with the SIAC-SIMC Arb-Med-
Arb Protocol for the time being in force. Any settlement reached
in the course of the mediation shall be referred to the arbitral
tribunal appointed by SIAC and may be made a consent award
on agreed terms.
____________________________________________
__
* Parties should specify the seat of arbitration of their choice. If
the parties wish to select an alternative seat to Singapore,
please replace “[Singapore]” with the city and country of choice
(e.g., “[City, Country]”).
** State an odd number. Either state one, or state three.
 Mediation in B2C contracts- ODR

Automated and assisted negotiation

Negotiation is a mode of dispute resolution which
parties have the same bargaining power. In Assisted
negotiated which also called mediated negotiation or
technologically facilitated negotiation, parties strive
to solve their dispute through direct negotiation. It is
assisted negotiation because its process is with the
assistance of IT software which aims to improve their
ability to communicate and solve their dispute.
Cybersettle is the earliest automated negotiation
provider
 Ebay Case study

EBay was founded in 1995 to be the example of one

of the most successful online marketplaces
encompassing different types of electronic
transactions like Business to Consumer (B2C) and
Consumer to Consumer (C2C). EBay bought PayPal
in 2002
 Ebay Case study

The main aim of this centre was to resolve low value

disputes range from US$70 to US$100 and every
costumer of eBay or PayPal could file his complain in this
centre.
At first ebay launched the dispute resolution mechanism
for “fraud alerts” only. But over the time it expand its
service to other dispute including: “item not received”,
“item not as described” and “unpaid items”. There are
other dispute resolution platforms also for specific items
in eBay too. Vehicle Purchase Protection and Business
equipment purchase protection have specific dispute
settlement process which cover items in specific range of
value.
 Ebay Case study

In the first step, eBay ask the buyer the type of his
complaint which should be among the recognized
types of disputes by eBay.
Second step eBay asks him to suggest his wished
solution for the dispute.
In the next step the system urge the parties to
communicate with each other directly through
messaging facilities of the website.
If the parties cannot sort out their dispute through
negotiation, then they will be directed to the
Resolution Services team within customer support.
The Resolution Service team assesses the complaint and
decide who is right.
The system also has outlined some policies and
directions for disputes such as opening the case
within 30 days of the date of delivery or the payment
should have been paid one time and not through
instalment.
The compensation amount of dispute would be limited to
the purchased price of item only and there will be no
payment for any other damages.
For example if due to deficiency. for instance if an
electric item exchanged in the eBay cause a fire in a
house, buyer’s compensation is only limited to the
purchase price of item and eBay does not pay for
consequential damages. Therefore buyer must resort to
litigation for redressal amount.
 ebay

It is estimated that eBay solves 60 million dispute

annually by this mechanism and 90 percent of these
disputes resolve by electronically facilitating a
discussion between buyer and seller and without
help of any employee.
eBay found that consumers who went through its
internal adjudication were significantly more likely
to shop at the website in the future than customers
who did not go through any dispute process or who
went through an outside dispute resolution
mechanism
 PayPal

PayPal introduces the ways that a buyer complaint is

resolved
Dispute/ claim
Buyer through the PayPal dispute resolution centre
contacts directly to the seller and Parties try to negotiate
the dispute. When a buyer file a claim, PayPal centre will
send an email to seller and notify him from the claim.
PayPal will hold the transaction amount and will not
transfer it. In case if the parties can not solve their dispute
within 20 days then dispute will become a claim and can be
submitted to PayPal by either parties
In this stage PayPal will decide how to solve the problem.
There are three categories of disputes that can be
submitted as claim including: “item not received” (INR),
“significantly not as described” (SNAD), “unauthorized
transactions”. The later one means the buyer account
may be hacked or someone did a transaction without his
consent.
When a claim is filed, the seller has 10 days to respond to
claim. If seller denied responding the claim will be closed
on favour of buyer and the amount will be paid back to
him. If the seller respond to the claim then PayPal will
assess the claim and conclude it. Usually PayPal takes 20
days to decide but may takes up to 30 days in more
complicated claims. The outcome is limited to the price
of item only. Seller can file an appeal in response to the
outcome as well.
Bank reversal (ACH) return:
In case of unauthorized use of the bank account, the
buyer may file a complaint to their bank. So PayPal
will receive a request from the bank or the buyer to
return the amount. The seller will have the chance to
respond the bank reversal.
 Cybersettle

 Cyber settle is an international online company which utilized

digitalized technology for negotiation. They are utilizing
neutral mediators to arrive at quick and just solutions. the
process is entirely online and the main focus is on negotiating
monetary disputes. In the initial step the aggrieved party log
onto the website and determine a deadline for settlement of
dispute which usually is between 30 to 60 days. The system
emails to other party and inform him about the proposed
settlement offer. This person can accept or decline the email.
If he accept the email, he also logs onto the website and
submits his desired demand. Then the computer compares the
offer and demand and inform the parties if their proposals be
in a close range or reach to each other. These proposals are so
confidential and except in case of an agreement, the website
never discloses them
The trend is there to have arbitration clause, the
corporate house can foresee  for laying down the
mandatory negotiation and conciliation clause. The
lawyers can help to draft that provision categorically
and unambiguously. Before moving into litigation, the
corporate house can assess the outcome of dispute in
the form of money, time and above all market
reputation  
 Neutral evaluation

In neutral evaluation, each party gets a chance to

present the case to a neutral person called an
"evaluator." The evaluator then gives an opinion on
the strengths and weaknesses of each party's
evidence and arguments and about how the dispute
could be resolved. The evaluator is often an expert in
the subject matter of the dispute. Although the
evaluator's opinion is not binding, the parties
typically use it as a basis for trying to negotiate a
resolution of the dispute.