Background
Indian companies and companies that do business in India increasingly turn to private arbitration in order to resolve their business disputes.[1] The reasons for this are many. One stated cause is the backlog of cases in the Indian court system – by some accounts, around 32 million cases were pending as of 2011.[2] Further encouraging the use of international arbitral forums, the September 2012 Indian Supreme Court decision in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services confirmed that Indian courts generally will not have jurisdiction to interfere with arbitral awards rendered outside of India.[3]
While there are domestic arbitral forums available in India, the most popular arbitration forums for Indian companies have proven to be the Singapore International Arbitration Centre (“SIAC”) and the London Court of International Arbitration (“LCIA”). According to a recent study regarding the selection of arbitral forums, Ernst & Young found that for Indian companies seeking an arbitral forum outside India, 60 percent of respondents preferred SIAC.[4] For those seeking an arbitral forum within India, 34 percent of respondents preferred the Indian arm of LCIA.[5] The International Chamber of Commerce (“ICC”) has also become a popular arbitral forum.[6]
In addition to those three forums, there are several other major players in the international dispute resolution scene: The International Centre for Dispute Resolution (“ICDR”), an arm of the AAA; the China International Economic and Trade Arbitration Commission (“CIETAC”), the Hong Kong International Arbitration Centre (“HKIAC”), the United Nations Commission on International Trade Law (“UNCITRAL”), and the World Bank International Centre for Settlement of Investment Disputes (“ICSID”). For the adjudication of intellectual property disputes only, the World Intellectual Property Organization (“WIPO”) is also an option.
Importantly, we have seen an increase in the recognition by these entities that they operate in a competitive environment. This competition is good for the “consumers” of the arbitral forums — businesses seeking to save costs and resolve disputes quickly. We have compiled a summary chart with a comparison of the rules governing each of these international arbitration organizations with a focus on the criteria that are most important to parties seeking a fair and efficient resolution of business disputes. In particular, we have seen the greatest change and flexibility in the following areas: interim measures (including the availability of provisional relief); the timing of awards (much quicker); and discovery (generally more limited but more flexible). As just one example, in 2012, the ICC amended Article 29 and Appendix V of its rules to permit appointment of an emergency arbitrator to grant urgent relief, if required, before the tribunal has been constituted.[7]
A Comparison Of Major International Arbitration Forums
Each international arbitration forum has its own set of rules, unless the parties have agreed to different rules in the arbitration agreement. Below is a side-by-side comparison of the rules of these forums that are typically of the greatest concern to international litigants (double-click to enlarge):
Conclusion
As the establishment of the Delhi High Court’s arbitration center demonstrates,[17] arbitration is considered to be a valid and viable option for the resolution of business disputes involving Indian entities or individuals. The general trend among international arbitral forums is to provide for limited discovery only, and to provide an opportunity for expedited (or at least somewhat faster) adjudication. Both of these efficiencies can result in much lower overall litigation costs and can provide an efficient means to a decision that is enforceable in India and other major international jurisdictions.
[2] Id.
[3] Under Bharat, Indian courts may still refuse to enforce a foreign award under Article 48 of the Indian Arbitration and Conciliation Act (1996), the language of which is identical to Article V of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. (Civil Appeal No. 7019 of 2005). Article 48 provides that a court need not enforce a foreign for reasons such as a failure to provide notice to the opposing parties of the arbitral proceedings, an invalid arbitration agreement, the relief granted not being permissible under the laws of the relevant jurisdiction, etc.
[4] Ernst & Young, Changing face of arbitration in India: A study by Fraud Investigation & Dispute Services 3 (2011).
[5] Id.
[6] Raja, supra note 1.
[7] CIETAC and HKIAC have also recently amended their rules (in 2012 and 2013, respectively) to expand options for interim relief.
[8] International Centre for Dispute Resolution, International Dispute Resolution Procedures (Including Mediation and Arbitration Rules) (2009), available at www.adr.org/icdr (last visited Oct. 9, 2013).
[9] International Chamber of Commerce, Rules of the Court of Arbitration (2012), available at www.iccwbo.org (last visited Oct. 9, 2013).
[10] London Court of International Arbitration, Arbitration Rules (1998), available at www.lcia.org (last visited Oct. 9, 2013).
[11] China International Economic and Trade Arbitration Commission, Arbitration Rules (2012), available at www.cietac.org (last visited Oct. 9, 2013).
[12] Hong Kong International Arbitration Centre, Administered Arbitration Rules (2013), available at www.hkiac.org (last visited Oct. 9, 2013).
[13] Singapore International Arbitration Centre, Rules (2010), available at www.siac.org.sg (last visited Oct. 9, 2013).
[14] United Nations Commission on International Trade Law, UNCITRAL Arbitration Rules, available at www.uncitral.org (last visited Oct. 9, 2013).
[15] International Centre for Settlement of Investment Disputes, Rules of Procedure for Arbitration Proceedings (2006), available at www.icsid.worldbank.org (last visited Oct. 9, 2013).
[16] While each of these forums permit at least some documentary discovery, depositions are more difficult to obtain in an arbitral forum than in a court.
[17] Raja, supra note 1.
Published October 18, 2013.
