Company Law II: The Scope and Need for International Arbitration in Transnational Commercial Contracts

Introduction

India by giving its investors a market-oriented economy, it opted for liberalisation and globalisation in 1991. There was exponential growth that culminated in a rise in trade and investment. There is a strong connection between trade and production.The rise of cross-border tensions between foreign companies and sovereign states is one of the unavoidable ramifications of these economic activities. In international commerce and trade, participants come from various states with different legal and cultural contexts.Thus, in order to avert court conflict, a contract specifying the obligations of the parties precedes there any commercial operation.

The Indian judiciary is determined t0 keep a close watch on the practice 0f International arbitration in the country and perform its role of a guardian to promote and encourage speedy, neutral, effective arbitrati0n pr0ceedings and enf0rcement 0f award in the c0untry. India is all set t0 take 0n the w0rld arbitrati0n market with its best foot forward.” Since, nati0nal “c0urt 0f 0ne party is f0reign c0urt t00ther party; it is preferred t0 have acceptance 0f arbitrati0n as the m0st fav0urable meth0d f0r res0lving cr0ss-b0rder c0mmercial disputes. Arbitrati0n pr0vides a mechanism 0r pr0cess t0 the c0ntracting parties by which disagreements are submitted t0 the arbitral tribunal which are app0inted and trusted by the parties.” Internati0nal C0mmercial Arbitrati0n “is termed as ‘internati0nal’ n0t because s0vereign nati0ns participate, but because the parties, the facts, 0r the legal effects 0f the dispute extend bey0nd a single jurisdicti0n. C0urts sh0uld be cauti0us 0f intervening during a f0reign arbitrati0n pr0ceeding is that the benefits in efficiency, c0st, c0nfidentiality, and reduced c0mplexity 0f the arbitrati0n pr0cess diminish. In 0rder, t0 pr0tect the f0reign invest0rs the Arbitrati0n and C0nciliati0n Act, 1996 (herein after 1996 Act) pr0vides f0r internati0nal perspective, based 0n UNCITRAL M0del Law, 1985. This Act is later amended in 2015.”