INTRODUCTION TO INTERNATIONAL

ARBITRATION
Dr. Shirish Kulkarni

International Arbitration Symbiosis Law School, Pune

 CONTENTS

I. CONCEPT AND 3. SCOPE OF

NATURE INTERNATIONAL
ARBITRATION 5. LEGAL
RESEARCH &
PRACTICE
2. HISTORICAL AND
4. ESSENCE &
GLOBAL
PRINCIPLES
PERSPECTIVE
 I. CONCEPT & NATURE OF INTERNATIONAL
ARBITRATION
What is Arbitration?
• The World Intellectual Property Organization (WIPO) defines arbitration as “a
procedure in which a dispute is submitted, by agreement of the parties, to one
or more arbitrators who make a binding decision on the dispute. In choosing
arbitration, the parties opt for a private dispute resolution procedure instead
of going to court.” (Source - https://www.wipo.int/amc/en/arbitration/what-is
FgG
arb.html#:~:text=Arbitration%20is%20a%20procedure%20in,instead%20of%20
going%20to%20court.)
• Black’s Law Dictionary defines arbitration as “the investigation and
determination of a matter or matters of difference between contending
parties, by one or more unofficial persons, chosen by the parties, and called
“arbitrators,” or “referees.”” (Source - https://thelawdictionary.org/arbitration/)
 I. CONCEPT & NATURE OF INTERNATIONAL ARBITRATION

What is Arbitration?
• As per Gary B. Born, “arbitration is – and only is – a process by which parties
consensually submit a dispute to a non-governmental decision-maker, selected by or
for the parties, who renders a binding decision finally resolving that dispute in
accordance with neutral, adjudicative procedures affording the parties an opportunity
to be heard.”
FgG
• According to Alan Redfern, “arbitration is a legal process in which parties to a dispute
agree to refer that dispute to a tribunal of one or more independent and impartial
arbitrators chosen by on or behalf of the parties. The task of that tribunal is to give
equal consideration to the claims and defences of the parties and to arrive at a
decision on the dispute. That decision is given in writing in the form of a binding
award which the parties are obliged to perform without delay which can be enforced
through courts.”
 I. CONCEPT & NATURE OF INTERNATIONAL
ARBITRATION
What is International Arbitration?
• When arbitration is employed between actors/business entities/investors
from different countries.
• Blackaby and Partasides state that the term “‘international’ is used to
mark the difference between arbitrations that are purely ‘national’ or
‘domestic’ and those that in some way transcend national boundaries,
hence are ‘international’ or ‘transnational’”5
• Therefore, in sum, international arbitration is a method of resolving disputes
between parties from different countries through a neutral process outside
of national court systems.
Source: Alan REDFERN, MARTIN HUNTER, NIGEL BLACKABY & CONSTANTINE PARTASIDES, REDFERN AND HUNTER ON INTERNATIONAL
ARBITRATION (Kluwer Law International 2022).
 I. CONCEPT & NATURE OF INTERNATIONAL
ARBITRATION
The Need for International Arbitration
• Businesses engage in transactions across borders, leading to an increase in
international disputes. International arbitration provides a neutral and efficient
mechanism for resolving these disputes, ensuring fairness and enforceability
across diverse legal jurisdictions. FgG
• National court systems may favor the home country of one party, leading to
concerns about bias and lack of impartiality. International arbitration offers a
neutral forum where parties can present their cases to arbitrators selected for
their expertise and impartiality, ensuring a fair resolution.
• Arbitration proceedings are often faster and more cost-effective than traditional
litigation, providing parties with a timely and efficient resolution mechanism.
 I. CONCEPT & NATURE OF INTERNATIONAL
ARBITRATION
The Emerging Relevance of International Arbitration

FgG

The China International Economic and Trade Arbitration Commission (CIETAC) is one of the major permanent
arbitration institutions in the world. Statistics indicate that international institutional arbitration is a preferred
method to resolve disputes
 I. CONCEPT & NATURE OF INTERNATIONAL
ARBITRATION
Nature of International Arbitration
• Private: International arbitration is a private form of dispute resolution conducted outside of
national court systems. Parties agree to resolve their disputes through arbitration, choosing
arbitrators and procedural rules tailored to their specific needs and circumstances.
• Flexible and Party-Friendly: Arbitration offers parties the flexibility to customize various
aspects of the process, including the selection
FgG of arbitrators, procedural rules, language, and

venue.
• Enforceable: Arbitral awards are recognized and enforceable across borders under
international conventions such as the New York Convention. This ensures that parties have a
reliable mechanism for enforcing their rights, regardless of the jurisdiction where the
arbitration took place or where enforcement is sought.

SIAC Video on arbitration: https://www.youtube.com/watch?v=RX6Fvy3sWgI&t=6s

 CONTENTS

I. CONCEPT AND 3. SCOPE OF

NATURE INTERNATIONAL
ARBITRATION 5. LEGAL
RESEARCH &
PRACTICE
2. HISTORICAL AND
4. ESSENCE &
GLOBAL
PRINCIPLES
PERSPECTIVE
 2. HISTORICAL & GLOBAL
PERSPECTIVE

Genesis of Arbitration

● Arbitration is sometimes traced to ancient mythology. Although not referred to as

arbitration, these instances hint at the arbitrator’s impartial, adjudicatory function
and the central role of rule of law in arbitration.

● For example: A dispute between Poseidon and Helios over the ownership of
Corinth (split between them in an arbitration before a giant).

Source: GARY BORN, INTERNATIONAL COMMERCIAL ARBITRATION, 3rd ed. (Kluwer Law International 2021)
 2. HISTORICAL & GLOBAL
PERSPECTIVE
History of Arbitration
• Arbitration originated in ancient cultures, when arbitrators or mediators were
chosen to settle conflicts between individuals or groups.
• During the mediaeval period, trade and business led to the formation of merchant
courts and guilds. These organizations had their own arbitration processes to
resolve commercial conflicts.
• Arbitration in its common law form developed in England; in the Middle Ages,
tribunals such as the Courts of the Boroughs, of the Fair and of the Staple arose as
the Royal Courts were not designed for trade disputes, and trade with foreigners
was otherwise unenforceable.
• Courts became suspicious of arbitration; for example, in Kill v. Hollister (1746), an
English court ruled that the arbitration agreement could 'oust' courts of law and
equity of jurisdiction.
 2. HISTORICAL & GLOBAL
PERSPECTIVE
History of Arbitration (contd.)
• Later, however, the Common Law Procedure Act 1854 was introduced, which
provided for the appointment of arbitrators and umpires, allowed courts to 'stay
proceedings' when a disputant filed a suit despite an agreement to arbitrate.

• Arbitration in general, however, has an even older history, and was even
employed by Philip the II of Macedonia, father of Alexander the Great who
often used arbitration in Ancient Greece, to resolve territorial disputes based on
a peace treaty.
• It was also used to resolve early commercial disputes in Marco Polo’s desert
caravans and between Greek and Phoenician traders.
 2. HISTORICAL & GLOBAL
PERSPECTIVE
The key events in history which shaped International Arbitration as
we know it today, are as follows:

FORMATION OF
THE PERMANENT
THE JAY TREATY ALABAMA
COURT OF
ARBITRATION CLAIMS (1872)
ARBITRATION
(1794)
(PCA) (1899)
 2. HISTORICAL & GLOBAL
PERSPECTIVE
THE JAY TREATY ARBITRATION (1794)
The Jay Treaty of 1794 emerged as a result of unresolved issues between the newly
independent United States and Great Britain following the Treaty of Paris (1783),
which ended the American Revolutionary War.
ISSUES
The issues related to boundary disputes, compensation as well as property.
ARBITRATION
Three commissions were set-up to deal with the three different issues.
IMPACT ON MODERN-DAY ARBITRATION
The arbitration was seen as the first recorded event of systematic international
arbitration. It paved way for future use of this dispute resolution mechanism, and
allowed for settlement of mixed disputes through arbitration.
 2. HISTORICAL & GLOBAL
PERSPECTIVE
ALABAMA CLAIMS (1871)
The Alabama Claims Arbitration was a result of the American Civil War, leading to a treaty
between the US and the UK called the Washington Treaty (1871) for settlement of Union-
Confederate disputes by a neutral tribunal in Geneva.
ISSUES
The issues related to damage caused to Union ships by Confederate ships.
ARBITRATION
The arbitration was conducted under the aegis of an international tribunal at Geneva
IMPACT ON MODERN-DAY ARBITRATION
It introduced the ideology of a third party having no interest in the dispute to be an
arbitrator under arbitration which resulted in the independence of the arbitral tribunal.
 2. HISTORICAL & GLOBAL
PERSPECTIVE

FORMATION OF THE PERMANENT COURT OF ARBITRATION (1899)

• The Permanent Court of Arbitration (PCA), located at The Hague, Netherlands,

was established in 1899 during the first Hague Peace Conference. It was created
as an international organization with the goal of facilitating arbitration and other
methods of dispute resolution between states.
• The PCA operates under the Hague Convention for the Pacific Settlement of
International Disputes, which provides a legal framework for the resolution of
disputes through arbitration, conciliation, and other peaceful means.

Source: https://pca-cpa.org/en/about/
 2. HISTORICAL & GLOBAL
PERSPECTIVE

COMPOSITION OF THE PERMANENT COURT OF ARBITRATION

• The PCA's membership consists of countries that have ratified the Hague Convention
for the Pacific Settlement of International Disputes, which serves as the PCA's
founding treaty. As of now, over 120 countries are parties to the convention. In
addition to member states, international organizations can also become parties to the
Hague Convention and participate in PCA proceedings.
• The PCA has a three-part organizational structure consisting of an Administrative
Council that oversees its policies and budgets, a panel of independent potential
arbitrators known as the Members of the Court, and its Secretariat, known as the
International Bureau, headed by the Secretary-General.
Source: https://pca-cpa.org/en/about/
 2. HISTORICAL & GLOBAL
PERSPECTIVE

IMPORTANCE OF THE PCA IN MODERN-DAY ARBITRATIONS

• The PCA provides a neutral forum for the resolution of international disputes, offering
parties a platform to resolve conflicts outside of national court systems.
• The PCA's extensive experience and expertise in international arbitration make it a
trusted institution for parties seeking to resolve complex disputes involving multiple
jurisdictions and legal systems.
• By facilitating peaceful dispute resolution, the PCA contributes to the promotion of
peace, stability, and cooperation among nations, thereby enhancing international
relations and fostering a rules-based global order.
 CONTENTS

I. CONCEPT AND 3. SCOPE OF

NATURE INTERNATIONAL
ARBITRATION 5. LEGAL
RESEARCH &
PRACTICE
2. HISTORICAL AND
4. ESSENCE &
GLOBAL
PRINCIPLES
PERSPECTIVE
 3. SCOPE OF INTERNATIONAL
ARBITRATION
International Arbitration can be used to resolve disputes of the
following nature:

COMMERCIAL INVESTOR-STATE
DISPUTES DISPUTES

OTHER DISPUTES
(LABOUR, BOUNDARY & TERRITORIAL
CONFLICTS, SEA CONFLICTS, ETC.)
 3. SCOPE OF INTERNATIONAL
ARBITRATION
International Commercial Arbitration
• International Commercial Arbitration resolves disputes in international commercial
transactions involving parties from different countries.
• Parties involved in international commercial transactions often include arbitration clauses in
their contracts, specifying arbitration as the chosen method for resolving disputes.
• The matters concerning commercial arbitration may include issues relating to contracts,
intellectual property, construction, etc.
• International commercial arbitration typically involves disputes between private entities, such
as companies, corporations, or individuals, engaged in commercial transactions across
national borders.
• Various arbitral institutions, such as the International Chamber of Commerce (ICC), the
London Court of International Arbitration (LCIA), Singapore International Arbitration Centre
(SIAC) and the International Centre for Dispute Resolution (ICDR), provide administrative
support and procedural rules for international commercial arbitration.
 3. SCOPE OF INTERNATIONAL
ARBITRATION

Investor-State/Investment Treaty Arbitration

• Investment treaty arbitration involves disputes between foreign investors and host states.
Foreign investors, which may include individuals, companies, or multinational corporations,
invest capital in another country's territory, often through direct investments or investment
projects. Host states are the sovereign nations where these investments are made.
• Investment treaty arbitration typically arises under international investment agreements, such
as Bilateral Investment Treaties (BITs), multilateral investment treaties, or investment
contracts between foreign investors and host states.
• These agreements provide foreign investors with legal protections and guarantees against
expropriation, discrimination, and unfair treatment by host states.
• Investment treaty arbitration proceedings are typically conducted under the rules of
international arbitration institutions, such as the International Centre for Settlement of
Investment Disputes (ICSID).
 3. SCOPE OF INTERNATIONAL
ARBITRATION
Other Forms of Disputes
• Labour: International labor disputes, such as those arising from employment contracts,
collective bargaining agreements, or labor rights violations, can be resolved through
international arbitration. Arbitration mechanisms provided by organizations, such as the
International Labour Organization (ILO), may be utilized to resolve disputes.
• Boundary: Boundary and territorial conflicts between states or other entities may be resolved
through international arbitration, often based on principles of international law, treaties,
historical agreements, and equitable principles.
• Sea: Arbitration mechanisms under the United Nations Convention on the Law of the Sea
(UNCLOS) provide a framework for resolving sea conflicts, including the International Tribunal
for the Law of the Sea (ITLOS) and ad hoc arbitration under UNCLOS Annex VII.
• Environment: Arbitration mechanisms, such as those provided by the Permanent Court of
Arbitration (PCA) or specialized environmental arbitration bodies, can address disputes
between states, multinational corporations, or other entities regarding environmental issues.
 CONTENTS

I. CONCEPT AND 3. SCOPE OF

NATURE INTERNATIONAL
ARBITRATION 5. LEGAL
RESEARCH &
PRACTICE
2. HISTORICAL AND
4. ESSENCE &
GLOBAL
PRINCIPLES
PERSPECTIVE
 4. ESSENCE AND PRINCIPLES OF
INTERNATIONAL ARBITRATION

Some principles prevalent in international arbitration are as

follows:

• Party Autonomy
• Kompetenz-Kompetenz/Competence-Competence/Compétence de
la compétence
• Neutrality
• Enforceability
 4. ESSENCE AND PRINCIPLES OF
INTERNATIONAL ARBITRATION
PRINCIPLE OF PARTY AUTONOMY
• The principle of party autonomy in international arbitration refers to the freedom of parties to
determine the terms of their arbitration agreement and the procedures governing the arbitration
process.
• It allows parties to tailor the arbitration proceedings to their specific needs and preferences,
enhancing the efficiency, flexibility, and effectiveness of the process.
• Party autonomy reflects the principle of respect for parties' intentions and autonomy in shaping
the resolution of their disputes. Arbitration agreements should be interpreted and enforced in
accordance with the parties' intentions as expressed in their contractual arrangements.
• There have been several instances where courts have refused enforcement of awards on grounds
of dishonour of the principle of party autonomy [Noble Resources v. Good Credit (2016)]
 4. ESSENCE AND PRINCIPLES OF
INTERNATIONAL ARBITRATION
Case Law: Noble Resources v. Good Credit (2016)
Background –
• The case involved a dispute arising from an Iron Ore Sale & Purchase Agreement between Noble Resources
International Pte Ltd (the Claimant) and Shanghai Good Credit International Trade Co., Ltd. (the Respondent).
• The agreement consisted of an arbitration agreement mandating resolution of disputes by arbitration with
three arbitrators.
• The Claimant initiated arbitration against the Respondent and requested the expedited procedure under the
SIAC Rules. The expedited procedure would involve a sole arbitrator, contrary to the three-arbitrator
provision in the agreement.
• The Claimant sought to enforce the award before a Shanghai Court.
Held –
The Court refused the recognition of the award on the ground that the composition of the arbitral tribunal and/or
the arbitral procedure did not align with the parties’ agreement. The case highlighted the importance of party
autonomy and adherence to the agreed-upon arbitration terms.
 4. ESSENCE AND PRINCIPLES OF
INTERNATIONAL ARBITRATION
KOMPETENZ-KOMPETENZ/COMPETENCE-COMPETENCE/COMPÉTENCE DE LA COMPÉTENCE
• According to Kompetenz-Kompetenz, arbitral tribunals have the primary authority to rule on their own
jurisdiction. This means that arbitrators have the power to determine whether they have jurisdiction to
hear and decide the dispute submitted to them, including any objections raised by the parties regarding
the validity or scope of the arbitration agreement.
• The principle is a legacy of the Jay Treaty Arbitrations and has been upheld by a number of instruments.
[e.g. – Art. 6, ICC Rules; Rule 23, PCA Rules; Art. 16, UNCITRAL Model Law; Rule 28, SIAC Rules]
• Arbitral tribunals are presumed to have jurisdiction unless and until their jurisdiction is challenged by a
party or unless the tribunal decides to r. This presumption reflects the pro-arbitration policy underlying
international arbitration.
• The Kompetenz-Kompetenz principle is closely related to the doctrine of separability, which holds that
an arbitration agreement is separate and independent from the underlying contract in which it is
contained.
• The term originates from German law.
 4. ESSENCE AND PRINCIPLES OF
INTERNATIONAL ARBITRATION
Case Law: Salini Costruttori S.P.A. v. Ethiopia (2001)
Background –
• The dispute arose out of a construction contract which consisted of an agreement to arbitrate
and Salini Costruttori accordingly referred the dispute to the ICC for arbitration.
• The Respondent, Federal Democratic Republic of Ethiopia, approached local courts to call for
suspension of the arbitral proceedings in light of their objections, which was done by the local
courts.
• The issue dealt with by the Tribunal here was whether the proceedings would be suspended in
light of the decisions.

Held –
The Tribunal held that it has competence to rule on its own jurisdiction and that anti-arbitration
injunctions granted by Courts harm the principle of kompetenz-kompetenz and comity of nations
and parties.
 4. ESSENCE AND PRINCIPLES OF
INTERNATIONAL ARBITRATION
NEUTRALITY
• Neutrality in international arbitration refers to the impartiality and independence of arbitrators
and arbitral institutions in resolving disputes between parties.
• Arbitrators are expected to approach the arbitration process with an open mind and without bias
or prejudice towards either party. They must refrain from favoring one party over the other and
should base their decisions solely on the merits of the case and the applicable law.
• Arbitrators must be independent from the parties and any external influences that may
compromise their ability to act impartially. They should disclose any conflicts of interest or
relationships that could give rise to doubts about their impartiality and integrity.
• Impartiality and independence of arbitrators is ensured through soft-law instruments like the IBA
Guidelines on Conflict of Interest, as well as instruments like the UNCITRAL Rules, ICSID
Convention and the SCC Arbitration Rules
 4. ESSENCE AND PRINCIPLES OF
INTERNATIONAL ARBITRATION
Case Law: Eiser v. Spain (2013)
Background –
• An ICSID tribunal awarded damages to Eiser (the Claimant), in light of a breach of obligations by
Spain (the Respondent).
• Spain filed for annulment of the award on the grounds that one of the arbitrators had
undisclosed business ties with the claimants’ damages experts. The arbitrator’s former law firm
frequently engaged with them in other proceedings where he acted as counsel.

Held –
The ad hoc committee, composed of three members, concluded that the arbitrator’s undisclosed
business relationship was improper. The award was annulled on two grounds: a. Improper
constitution of the Tribunal: The undisclosed relationship affected the tribunal’s composition. b.
Serious departure from a fundamental rule of procedure: The arbitrator’s failure to disclose the
relationship violated procedural fairness.
 4. ESSENCE AND PRINCIPLES OF
INTERNATIONAL ARBITRATION
ENFORCEABILITY
• The principle of enforceability in international arbitration refers to the ability of arbitral awards to
be recognized and enforced across national borders. It is a fundamental aspect of international
arbitration that enhances the effectiveness, reliability, and attractiveness of arbitration as a
method for resolving disputes.
• Arbitral awards are final and binding decisions rendered by arbitral tribunals at the conclusion of
arbitration proceedings. The binding nature of arbitral awards means that parties are generally
obligated to comply with the terms of the award and fulfill any monetary or other obligations
imposed by the tribunal.
• International conventions, such as the New York Convention on the Recognition and
Enforcement of Foreign Arbitral Awards, 1958 provide a legal framework for the recognition
and enforcement of arbitral awards in over 160 countries worldwide.
• In the case of investor-treaty arbitrations, Art. 53 of the ICSID Convention governs enforcement
of awards and creates “automatic” enforceability of an arbitral award.
 CONTENTS

I. CONCEPT AND 3. SCOPE OF

NATURE INTERNATIONAL
ARBITRATION 5. LEGAL
RESEARCH &
PRACTICE
2. HISTORICAL AND
4. ESSENCE &
GLOBAL
PRINCIPLES
PERSPECTIVE
 4. LEGAL RESEARCH &
PRACTICE
Legal research in practice of international arbitration is essential for navigating the complexities
of transnational disputes and ensuring effective representation. Following are certain key areas
of research, which contribute to practice in international arbitration:
• Applicable Law: Researching substantive legal principles, including contract law, international trade
law, investment law, and public international law, guides the resolution of disputes in international
arbitration.
• Precedents and Case Law: Analyzing past arbitral awards, court decisions, and academic literature
provides valuable precedents and insights for crafting legal arguments and strategies in
international arbitration.
• Procedural Rules: Researching the procedural rules and practices of leading arbitral institutions,
such as the ICC, LCIA, and ICSID, informs procedural decisions and strategies in international
arbitration proceedings.
• Enforceability: Understanding the enforceability of arbitral awards under international conventions,
such as the New York Convention, and national laws enhances practitioners' ability to assess the
effectiveness of arbitration as a dispute resolution mechanism.
 CONTENTS

I. CONCEPT AND 3. SCOPE OF

NATURE INTERNATIONAL
ARBITRATION 5. LEGAL
RESEARCH &
PRACTICE
2. HISTORICAL AND
4. ESSENCE &
GLOBAL
PRINCIPLES
PERSPECTIVE
THANK YOU