As quoted by Justice V. N. Khare, Former Chief Justice of India, in his speech at the 30th Annual General Meeting, Indian Council of Arbitration, January 6, 2004;
“an Institutional Arbitration is one in which a specialized institution with a permanent character intervenes and assumes the functions of aiding and administering the arbitral process, as provided by the rules of that institution”.
Institutional Arbitration has been proved advantageous as it not only diminishes the efforts of the parties in formatting the arbitration procedure for resolving the dispute but also limits the ambiguity in relation to the arbitration process. Another advantage of Institutional Arbitration is the appointment of arbitrator. Institutional Arbitration facilitates the appointment of arbitrator from its panel of arbitrators who at all times shall remain independent and impartial1. As observed by Justice Mr. M.Y. Eqbal, Chief Justice of Madras High Court in one of his judgment2 that “Institutional Arbitration has been defined to be an arbitration conducted by an arbitral institution in accordance with the rules of the institution”.
With the liberalization of the economic policies and opening of the doors for foreign investment, it may not be out of question to apprehend the rising of disputes in such international contracts. The Hon’ble Supreme Court in a recent decision in Vodafone International Holdings B.V. vs. Union of India and another, SLP(C) No.26529 of 2010, dated 20.01.2012 observed that “every strategic foreign direct investment coming to India, as an investment destination should be seen in a holistic manner”. For that reason, it cannot be overlooked that for the economic growth of the country, wherein foreign companies are involved, mechanism of resolving disputes by way of Institutional Arbitration is very much apposite.
Since International Commercial Arbitration involves parties from different nationalities who are unable to reach consensus on the issues like appointment of arbitrator or procedure to be followed to resolve the dispute and differences amicably, Institutional Arbitration can be considered as the suitable forum for resolving such disputes as it facilitates established and internationally accepted arbitration rules and procedures in relation to the appointment of arbitrator and also provides support and supervision in passing of a rational award.
ARBITRATION INSTITUTION “SIAC” AND INDIA
One of such arbitral institution has been established in Singapore, SINGAPORE INTERNATIONAL ARBITRATION CENTRE (SIAC), which has been globally recognized as one of the Premier International Arbitration Institution3 wherein a wide variety of complex arbitrations were filed, including major telecommunications and infrastructure disputes, financial derivatives arbitration, energy, insurance, IT and joint venture disputes, share sale and purchase shipping and commodity disputes.
There has been an impetus increase in the number of cases filed at the SIAC by the Indian Nationals. A remarkable 49 cases in the year 20124 highlights the increasing involvement of India in taking recourse to institutional arbitration as a mechanism for resolution of disputes as it provides a neutral, efficient and reliable dispute resolution system.
SIAC RULES 2013
The SIAC has announced new rules titled “SIAC Rules 2013” along with the Practice Notes for the better administration of cases filed with them that came into force on April 1, 2013. The SIAC Rules 2013 reflects significant refurbishment of the SIAC Rules 2010.
A Court of Arbitration was established5 with the motive to manage the substantial burden of caseload on the institution. The corporate and business development functions of the Centre will continue to be overseen by the Board of Directors.6 The Court of Arbitration was delegated with the powers of appointment of the arbitrator7, determining whether the arbitral proceedings can be conducted in accordance with the Expedited Procedure8, determining the challenge made by the parties to arbitrator’s impartiality and independence9 and determining the competence of the institution to administer arbitration10.
The Registrar11 of the Court of Arbitration is delegated with the power to determine the substantial compliance of the rules of institution in relation to the Notice of Arbitration12 and to extend or shorten any time limit prescribed for the arbitral proceedings13.
An entirely new rule which has been introduced is the finality given to the decisions of the President of the Court of Arbitration and the Registrar of the Court of Arbitration. The decision of the abovementioned authority shall be final and binding upon the parties and also the parties shall be taken to have waived any right to appeal or review in respect of any decision of the abovementioned authority to any state court or other judicial authority14.
A new rule which upholds the principle of party autonomy and granting the parties right to appoint their legal representative in the arbitral proceedings has been introduced wherein “Any party may be represented by legal practitioners or any other representatives15.
Another significant rule which has been introduced is in relation to witness interviews stating that “it shall be permissible for any party or its representatives to interview any witness or potential witness (that may be presented by that party) prior to his appearance at any hearing”, thereby reflecting the practice and expectation of the parties in international arbitral proceedings.
On the basis of the above discussion and in the light of the recent updation of the SIAC Rules, it is reflected that Indian Nationals are actively involved in SIAC as not only the part of the institution but also rely on the institution’s practice and rules to the extent that Indian Nationals are second highest in filing cases in SIAC in the year 2012. This goes to show that India has considerably adapted itself to the system of Institutional Arbitration and has commendably relied on SIAC Rules in resolving disputes.