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In the case of CalCo and IndCo, while disputes arose between them, CalCo filed a request for arbitration with ICC claiming various defaults and damages due to breaching contracts before attempting to resolve disputes inter alia.
When IndCo filed suit in Mumbai High Court seeking inter alia with CalCo before the arbitration proceeding to be done and argued the contract was invalid or incapable of being performed the claimant filed a claim with California Federal Court to compel arbitration proceedings. IndCo responded saying that American court should wait until Mumbai court decides on the case and the contract has violated US antitrust laws. IndCo was still on the argument that the case is not arbitrable. According to the ‘arbitrational clause’ that both IndCo and CalCo agreed upon, each party has to appoint one arbitrator and the third one shall be appointed by Indian Chamber of Commerce, but this was not considered by ICC.
Even though ICC tribunal decided that the case has close connection with Indian law and hence the contract is valid and awarded the claimant $ 2,000,000, the primary claims of IndCo that it is not arbitrable as according to their clause that an arbitration can be done only when both parties are unable to solve by negotiation, and secondly the appointment of arbitrators is not according to what both parties had agreed upon can be considered to be valid but this was not so considered by ICC.
According to Article 10 of ICC (2008), “In the absence of such a joint nomination and where all parties are unable to agree to a method for the constitution of the Arbitral Tribunal, the Court may appoint each member of the Arbitral Tribunal and shall designate one of them to act as chairman. In such case, the Court shall be at liberty to choose any person it regards as suitable to act as arbitrator, applying Article 9 when it considers this appropriate” (p. 9).
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‘(Collins English Dictionary, 2011)’2. However, in business contexts, litigation is defined as an action or charge brought in a court of law in order to enforce a particular and specific right. Litigation is also defined as a process by which the case is taken to a court.
While engaging in business within a country is based on the laws of the country in which the business is conducted, when borders are to be crossed the nation under which the law is enforced becomes a more difficult prospect. The New York Convention of 1959, made under the authority of the United Nations, put into place structures through which contracts and consequential disputes could be addressed and through which an agreement to honour arbitration was put into place.
Partiality to any party will reduce the credibility of these international bodies, and such example can be seen on the establishment of Dispute Settlement Body for the World Trade Organization. The same principle applies to conflicts of private entities such as corporations in settling disputes.
Some of these transactions will take place at issues of important cases concerning involvement related to non-signatories as well as parent and sister companies including its subsidiaries being intrinsic to the corporate veil while adhering to follow convention laws that are used to enforce agreements that may pertain to awards stemming from an official ruling or outcome being consistent in International negotiations, investments, and practices.
rbitration determine the extent and nature of the national courts powers regarding the arbitral process. This relationship crystallizes the scope of the effectiveness and independence of arbitration from the national courts.5 This chapter will deal with the role of Saudi courts at the beginning of and during the arbitral process.
As a result, this has created a negative effect whereby foreign investors are reluctant to invest in Saudi Arabia. In addition, other Middle Eastern countries have gained the trust and confidence of foreign investors, so there is a need to assess the prevailing arbitration laws in the Kingdom.
Recent surveys found that organizations across all divisions refer as many business disputes to international arbitration as they do to litigation or court processes (Price water house Coopers and Queen Mary and University of London 2008, p.8). International arbitration in international businesses is always based on the agreement amongst parties that whenever a dispute arises on any matter in the business contract, the parties must submit the dispute to a tribunal appointed to arbitrate on the matter rather than resort to litigation.
About 120 nations have consented to the” New York Convention “which compels contracting nations to implement arbitration awards and accords subject to limited and specified exemptions.
UK is a party to the” New York Convention on the