Settlement of Disputes

Prepared by: Upendra Raj Dulal

 Arbitration
• The term arbitration comes to English via the Latin
word arbitrari, meaning "to judge."
• In English, arbitration is both the process of using an arbiter to
settle a dispute and the act of that arbiter making a
judgment.
• In arbitration, the arbitrator issues an award after the hearing.
Some awards simply announce the decision (a "bare bones"
award), and others give reasons (a "reasoned" award).
• The arbitration process may be either binding or non-binding.
When arbitration is binding, the decision is final, can be
enforced by a court, and can only be appealed on very narrow
grounds. When arbitration is non-binding, the arbitrator's
award is advisory and can be final only if accepted by the
parties.
• In literal understanding, Arbitration means Settlement of a
dispute between parties to a contract by a neutral third party
without resorting to court action. It is usually voluntary but
sometimes required by law. If both sides agree to be bound by
the arbitrator’s decision it becomes a binding arbitration.
• In other words, Arbitration is 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.
• Parties typically agree to arbitrate in order to avoid the time,
expense, and complexity of litigation.
• International arbitration is also an important and growing legal
field as arbitration provisions within treaties often establish the
sole method by which signatories must resolve disputes arising
under the treaty.
• Arbitration tribunals set their own rules and they are typically not
bound by the procedural formalities employed by courts, nor are
they always bound to follow the substantive laws that govern
traditional court systems.
• Fouchard, Gaillard Goldman on International
Commercial Arbitration
• Arbitration is a device whereby the settlement of a question, which is of interest for two or more
persons, is entrusted to one or more other
persons the arbitrator or arbitrators who derive their powers from a private agreement, not from
the authorities of a State, and who are
proceed and decide the case on the basis of such an agreement. (France)
• The International Law Commission defines it as ‘a procedure for the settlement of disputes
between states by a binding award on the basis of law and as a result of a voluntarily accepted
undertaking’.
• 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.
• The International Court of Justice in the case of Qatar v. Bahrain, stated that the word arbitration
for the purpose of international law, usually refers to ‘the settlement of disputes between states by
judges of their own choice’.
In Nepal:
• After the inception of arbitration provisions in the Development Board Act, 1956 the application
and use of the arbitration process came into practice. However, no specific case law is found until
the enactment of the Arbitration Act.
• Nepal enacted the Arbitration Act,1999, with an aim to update the laws relating to arbitration as
mentioned in the preamble of the act.
• Arbitration is regarded as a form of alternative dispute resolution, which is a legal technique of
settlement of disputes outside the court, in which the disputing parties refer the case to an
impartial or neutral third party regarded as an arbitrator.
 Arbitration-In Int’l Trade

• With the rise of international trade and globalisation, the intricate

nature of cross-border commercial relationships has become more
pronounced.
• Naturally, some of these relationships may encounter breakdowns,
necessitating a suitable mechanism to address any ensuing
disputes.
• In such scenarios, international arbitration emerges as the
preferred method for dispute resolution.
• Widely adopted across industries such as construction, insurance,
shipping, and commodities trade, international arbitration serves
as a trusted avenue for resolving complex commercial disputes.
• In some countries, there is a distinction between international and
domestic arbitration.
• These distinctions are using various criteria such as the nationality
of the parties, nature of the dispute and the law and rules
applicable in solving the dispute.
• Choice of Arbitration Rules
• The arbitration process can either be administered by an institution or ad hoc (non-
administered). The procedural rules to be used are determined by whether the parties
choose institutional or ad hoc arbitration. Institutional arbitration incorporates the
rules and procedures of the institution selected by the parties in their arbitration
agreement. The rules set out by a particular institution provide a procedural framework
that will guide the proceedings from the beginning to the end when the tribunal makes
an award. The entire process is administered by the institution chosen by the parties.
• Ad hoc arbitration on the other hand is conducted without the involvement of an
arbitration institution and parties here are free to craft the arbitration rules themselves.
Parties are however at liberty to adopt rules specifically crafted for ad hoc arbitration
such as the United Nations Commission on International Trade Law (UNCITRAL) Rules.
• Below, we have listed several arbitration institutions that parties can choose from when
seeking arbitration services.
• The London Court of International Arbitration (LCIA)
The LCIA is one of the leading international institutions well known for commercial and
international arbitration. The court was initially launched in 1892 as the “The City of
London Chamber of Arbitration” then later re-named to the London Court of
Arbitration in 1903. The LCIA has other affiliates spread across the world including DFIC-
LCIA based in Dubai, LCIA-MIAC based in Mauritius and LCIA India. The London Court of
International Arbitration administers arbitration proceedings under the LCIA Rules.
• The International Court of Arbitration of the International Chamber of Commerce (ICC)
This is the best-known international arbitration institution. It was established in 1923 and
is based in Paris. The International Court of Arbitration has since its establishment been
instrumental in resolving complex international commercial, trade and investment
disputes. The court administers arbitration proceedings under ICC Rules.
• The International Centre for Dispute Resolution (ICDR)
The ICDR is the international division of the American Arbitration Association which was
established in 1926 and is the leading arbitration institution in the US. The ICDR
administers international arbitration under its International Arbitration Rules.
• The International Centre for the Settlement of Investment Disputes (ICSID)
The ICSID was established in 1966 and is based in Washington, DC. The ICSID was
established by the Convention on the Settlement of Investment Disputes between States
and Nationals of Other States (the ICSID Convention). The ICSID is part of the World Bank
as it was established to specifically deal with resolution of international investment
disputes. The ICSID administers arbitration proceedings under its ICSID Convention
Arbitration Rules.
• The World Intellectual Property Organisation (WIPO) Arbitration and Mediation Centre
The WIPO Arbitration and Mediation Center is based in Geneva, Switzerland. It was
established in 1994 to offer dispute resolution in international commercial disputes in the
technology, entertainment, and intellectual property sectors. It administers arbitration
proceedings under its WIPO Arbitration, Expedited Arbitration, Mediation and Expert
Determination Rules (the WIPO Rules).
•
 Principal Characteristics
Arbitration is consensual
• Arbitration can only take place if both parties have agreed to it. In the case of
future disputes arising under a contract, the parties insert an
arbitration clause in the relevant contract.
• An existing dispute can be referred to arbitration by means of a submission
agreement between the parties. In contrast to mediation, a party cannot
unilaterally withdraw from arbitration.

The parties choose the arbitrator(s)

• The parties can select a sole arbitrator together. If they choose to have a three-
member arbitral tribunal, each party appoints one of the arbitrators; those two
persons then agree on the presiding arbitrator.
• Alternatively, the Arbitration Center’s can suggest potential arbitrators with
relevant expertise or directly appoint members of the arbitral tribunal.
• Such Center’s maintains an extensive roster of arbitrators ranging from
seasoned dispute-resolution generalists to highly specialized practitioners and
experts covering the entire legal and technical spectrum of intellectual
property.
Arbitration is neutral
• In addition to their selection of neutrals of appropriate nationality, parties
are able to choose such important elements as the applicable law, language
and venue of the arbitration.
• This allows them to ensure that no party enjoys a home court advantage.

Arbitration is a confidential procedure

• It specifically protect the confidentiality of the existence of the arbitration,
any disclosures made during that procedure, and the award.
• In certain circumstances, it allow a party to restrict access to trade secrets
or other confidential information that is submitted to the arbitral tribunal or
to a confidentiality advisor to the tribunal.

The decision of the arbitral tribunal is final and easy to enforce

• The parties agree to carry out the decision of the arbitral tribunal without
delay.
• International awards are enforced by national courts under the New York
Convention, which permits them to be set aside only in very limited
circumstances. More than 165 States are party to this Convention.
 Characteristics of Arbitration- Identified?

• There are four main characteristics of arbitration:

1. A tribunal is constructed to hear a particular case only and its
composition is also majorly determined by the parties to the dispute.
2. An arbitral tribunal does not determine its own jurisdiction but has to
decide the dispute as submitted by the parties.
3. It is required to make its award with reference to the rules adopted for
that purpose or by rules which are otherwise binding.
4. The parties are known to have control over the procedure to be followed.

Source: An agreement was concluded between India and Pakistan to refer the
Kutch dispute to an arbitral tribunal. Consent of the parties is also obtained
before a dispute comes into existence.
 Steps Involved?

Typically, an international arbitration will follow the following steps:

1. Request for arbitration by the Claimant or aggrieved party. This will usually include a
summary of the claim.
2. Response by the respondent which may include a counterclaim (if any).
3. Reply to counterclaim (if any) by the claimant.
4. Appointment of the tribunal.
5. A procedural hearing setting out the steps to be followed and the timetable for the
arbitration.
6. Filing of the claimant’s full statement of the case.
7. Filing of the full statement of defence and counterclaim (if any) by the respondent.
8. Filing of the claimant’s reply and defence to the counterclaim (if any).
9. Disclosure of documents to be relied upon by the parties.
10. Exchange of witness statements.
11. Exchange of expert reports (if any).
12. Meeting of parties (or their representative) to narrow down and agree on issues to be
determined by the tribunal.
13. Exchange of pre-hearing submissions.
14. Oral hearings then take place.
15. Exchange of post hearing submissions.
16. Delivery of the award by the tribunal.
 Awards and Enforcement

• An award in arbitration is the final decision made by the arbitration tribunal after considering all the
facts and the law. An award is equivalent to a judgment issued by the court in litigation. The award by a
tribunal is usually on a substantive issue and not on procedural issues.
• Awards by the tribunal can be interim, partial, or final.
• An interim award is issued temporarily and does not finally decide on an issue. In most cases it is used to
maintain status quo or preserve assets or property before a final decision is made.
• A partial award is a decision on one or more issues but not all issues that the tribunal has to make a
decision on. A final award is one that conclusively decides on all issues and brings the arbitration process
to an end.
• An award can also be arrived at by consent of the parties. This is known as a consent award where
parties in the dispute agree to settle their dispute. This consent award may be enforced like another
award if it is not complied with by either party.
• Awards can be challenged but in limited and exceptional circumstances because they are final and
binding. An award can be challenged in cases of irregularities in appointment of the tribunal. An
irregularity in the arbitration proceedings that causes an injustice to one of the parties can also be a
ground for challenging and setting aside an award.
• Enforcement of awards is easy as parties tend to comply with the award voluntarily in most cases.
• However, there are incidents where a party fails to comply with an arbitral award. In such cases, the
other party may apply to a court of law for the recognition of the award. When a party applies to a court
of law for recognition of the award, it does so to seek the court’s confirmation that the award is valid
and binding.
• The court’s enforcement processes will be used to enforce that award. Enforcement processes vary
depending on the nature of the dispute and they include seizure of assets or orders to pay the other
party.
• The landmark decision of the Supreme Court in the case of Yashasvi
Shamsher JBR v. Vaiwers Developers Pvt. Ltd., 2074 (Decision No.
9847)stated that an Arbitration Agreement is deemed to be
constituted in the following situations:
I. Agreement between the parties to resolve the dispute through
arbitration as per Section 3(a) of the Arbitration Act, 2055 within
the contract, or;
II. Through a separate agreement, or;
III. When parties exchange written communications deciding to
submit the dispute to arbitration, or;
IV. When Respondent submits its Statement of Defense in response
to Statement of Claim submitted by Claimant without protesting
arbitration as the dispute settlement mechanism.
• The Hon’ble Supreme Court also held that in the absence of the
above-mentioned conditions, an agreement between parties to
resolve any dispute themselves cannot be construed to mean that
the parties had an intention to resolve the dispute through
arbitration.
UNCITRAL Rules on International Commercial Arbitration
• The United Nations Commission on International Trade Law
(UNCITRAL) has developed a set of rules known as the UNCITRAL
Arbitration Rules, which provide a comprehensive framework for
the conduct of arbitration proceedings involving international
commercial disputes. These rules were first adopted in 1976 and
have undergone revisions over the years, with the latest version
in January 2022 being the UNCITRAL Arbitration Rules 2013.
• It's important to note that the UNCITRAL Arbitration Rules are
just one of several sets of rules available for international
commercial arbitration. Parties can choose the rules that best suit
their needs or opt for ad-hoc arbitration, where the parties define
the procedural framework themselves.
• The following are the Key features of the UNCITRAL Arbitration
Rules :
1. Applicability: The rules are designed for the arbitration of
international commercial disputes, providing a procedural
framework that parties can adopt for resolving their disputes
through arbitration.
Ex: Article 1 ( Scope of Application)
Where parties have agreed that disputes between them in
respect of a defined legal relationship, whether contractual or not,
shall be referred to arbitration under the UNCITRAL Arbitration Rules,
then such disputes shall be settled in accordance with these Rules
subject to such modification as the parties may agree.
2. Freedom of the Parties: The rules emphasize the principle of
party autonomy, allowing the parties to agree on various
aspects of the arbitration process, including the appointment
of arbitrators, the place of arbitration, and the language of the
proceedings.
• Ex. Article 8-10 (Appointment of arbitrators)
• The parties may appoint a sole arbitrator or three arbitrators as
per the requirement of the agreement .
• Article 18 (Place of Arbitration)
• If the parties have previously agreed on the place of arbitration,
the place for hearings/arbitration shall be such place as
determined by the parties. The award shall be deemed to have
been made at the place of arbitration.
• Article 19 (Language of the Proceedings)
• The arbitral tribunal shall, promptly after its appointment,
determine the language or languages to be used in the
proceedings subject to an agreement by the parties.
• Article 35 (Applicable Law)
• The arbitral tribunal shall apply the rules of law designated by the
parties as applicable to the substance of the dispute. Failing such
designation by the parties, the arbitral tribunal shall apply the law
which it determines to be appropriate.
3. Commencement of Arbitration: The rules outline
the procedures for initiating arbitration, including the
contents of the notice of arbitration and the response
to such notice.
Ex. Article 2 (Notice) A notice, including a notification,
communication or proposal, may be transmitted by any means
of communication that provides or allows for a record of its
transmission.
Article 3.1 (Notice of arbitration) The party or parties
initiating recourse to arbitration (hereinafter called the
“claimant”) shall communicate to the other party or parties
(hereinafter called the “respondent”) a notice of arbitration.
Article 3.2 Commencement of Proceedings Arbitral
proceedings shall be deemed to commence on the date on
which the notice of arbitration is received by the respondent.
• Article 4 (Response to the notice) Within 30 days of the receipt of the
notice of arbitration, the respondent shall communicate to the claimant
a response to the notice of arbitration,
4. Appointment of Arbitrators: The rules provide mechanisms for the
appointment of arbitrators, addressing situations where the parties fail
to agree on the composition of the arbitral tribunal.
Ex: Article 7 1. If the parties have not previously agreed on the number
of arbitrators, and if within 30 days after the receipt by the respondent
of the notice of arbitration the parties have not agreed that there shall
be only one arbitrator, three arbitrators shall be appointed.
2. Notwithstanding paragraph 1, if no other parties have responded to
a party’s proposal to appoint a sole arbitrator within the time limit
provided for in paragraph 1 and the party or parties concerned have
failed to appoint a second arbitrator in accordance with article 9 or 10,
the appointing authority may, at the request of a party, appoint a sole
arbitrator pursuant to the procedure provided for in article 8, paragraph
2, if it determines that, in view of the circumstances of the case, this is
more appropriate.
• Conduct of Proceedings: UNCITRAL Arbitration Rules set out the general
framework for the conduct of the arbitration proceedings, covering issues such as
written and oral pleadings, evidence, and hearings.

Ex. Article 17 (Arbitral Proceedings)

 the arbitral tribunal may conduct the arbitration in such manner as it considers
appropriate,
 the parties are treated with equality and that at an appropriate stage of the
proceedings each party is given a reasonable opportunity of presenting its case.
 The arbitral tribunal shall conduct the proceedings so as to avoid unnecessary
delay and expense and
 provide a fair and efficient process for resolving the parties’ dispute
 the arbitral tribunal shall hold hearings for the presentation of evidence by
witnesses, including expert witnesses, or for oral argument at an appropriate
stage of the proceedings
 the arbitral tribunal shall establish the provisional timetable of the arbitration.
 All communications to the arbitral tribunal by one party shall be communicated
by that party to all other parties.
 The arbitral tribunal may make a single award or several awards in respect
of all parties so involved in the arbitration.
6. Interim Measures and Preliminary Orders: The rules include provisions
related to interim measures that the tribunal can order to preserve the
rights of the parties, maintain the status quo, or prevent irreparable harm.
Ex. Article 26 (Interim Measures) The arbitral tribunal may, at the request
of a party, grant interim measures.
2. An interim measure is any temporary measure by which, at any time
prior to the issuance of the award by which the dispute is finally decided,
the arbitral tribunal orders a party, for example and without limitation, to:
(a) Maintain or restore the status quo pending determination of the
dispute;
(b) Take action that would prevent, or refrain from taking action that is
likely to cause,
(i) current or imminent harm or
(ii) prejudice to the arbitral process itself;
(c) Provide a means of preserving assets out of which a subsequent award
may be satisfied; or
(d) Preserve evidence that may be relevant and material to the resolution
of the dispute.
7. Default of a Party: UNCITRAL rules address the consequences of a
party's default, providing guidance on how the proceedings should
continue in such situations.
Article 30 (Default)
If a party, duly notified fails to appear at a hearing, without
showing sufficient cause for such failure, the arbitral tribunal
may proceed with the arbitration.
If a party, duly invited by the arbitral tribunal to produce
documents, exhibits or other evidence, fails to do so within the
established period of time, without showing sufficient cause for
such failure, the arbitral tribunal may make the award on the
evidence before it.
8. Settlement and Conciliation: While primarily focusing on arbitration,
the UNCITRAL Arbitration Rules also contain provisions related to
settlement and conciliation.
• Article 36 (Settlement or other grounds for
termination)
• If, before the award is made, the parties agree on a settlement of
the dispute, the arbitral tribunal shall either issue an order for the
termination of the arbitral proceedings or, if requested by the
parties and accepted by the arbitral tribunal, record the
settlement in the form of an arbitral award on agreed terms. The
arbitral tribunal is not obliged to give reasons for such an award.
• 2. If, before the award is made, the continuation of the arbitral
proceedings becomes unnecessary or impossible for any reason
not mentioned in paragraph 1, the arbitral tribunal shall inform
the parties of its intention to issue an order for the termination of
the proceedings. The arbitral tribunal shall have the power to
issue such an order unless there are remaining matters that may
need to be decided and the arbitral tribunal considers it
appropriate to do so.
9. Article 27 (Evidence) Each party shall have the burden of proving the
facts relied on to support its claim or defence.
10. Article 29 (Experts appointed by the arbitral tribunal)
After consultation with the parties, the arbitral tribunal may appoint one
or more independent experts to report to it, in writing, on specific issues
to be determined by the arbitral tribunal. A copy of the expert’s terms of
reference, established by the arbitral tribunal, shall be communicated to
the parties.
11. Article 31 (Closure of hearings)
The arbitral tribunal may inquire of the parties if they have any further
proof to offer or witnesses to be heard or submissions to make and, if
there are none, it may declare the hearings closed.
12. Award- Article 33
1. When there is more than one arbitrator, any award or other decision
of the arbitral tribunal shall be made by a majority of the arbitrators.
2. In the case of questions of procedure, when there is no majority or
when the arbitral tribunal so authorizes, the presiding arbitrator may
decide alone, subject to revision, if any, by the arbitral tribunal.
 Cases under UNCITRAL Int’l Commercial Arbitration
• AES Summit Generation Limited and AES-Tisza Erőmű Kft. v. The Republic of
Hungary (2010): This case involved a dispute between investors and the Republic
of Hungary regarding electricity tariffs. The arbitration was conducted under the
UNCITRAL rules, and the tribunal issued an award in favor of the investors.
• Yukos Universal Limited (Isle of Man) v. The Russian Federation (2012): This
case is part of the larger Yukos case and involved arbitration proceedings under
the UNCITRAL rules. The arbitral tribunal rendered an award in favor of Yukos
Universal Limited.
• Eli Lilly and Company v. Canada (2017): In this case, Eli Lilly challenged certain
aspects of Canada's patent laws, claiming violations of investment protections.
The arbitration was conducted under the UNCITRAL rules, and the tribunal
issued an award dismissing the claims.
• ConocoPhillips Petrozuata B.V., ConocoPhillips Hamaca B.V., and ConocoPhillips
Gulf of Paria B.V. v. Bolivarian Republic of Venezuela (2019): This case involved
a dispute over the expropriation of oil and gas investments. The UNCITRAL
tribunal rendered its award in 2019.
• Commisimpex S.A. v. The Democratic Republic of the Congo (2017): This case
concerned a dispute between Commisimpex, a construction company, and the
Democratic Republic of the Congo. The arbitration was conducted under the
UNCITRAL rules, and the tribunal issued an award.
 UNCITRAL Model Law
• The UNCITRAL Model Law on International Commercial
Arbitration is a comprehensive legal framework designed
to assist countries in the development and modernization
of their national arbitration laws.
• It's important to note that while the UNCITRAL Model Law
provides a template for countries to adopt, variations may
exist in the arbitration laws of different jurisdictions that
have enacted the Model Law.
• Countries may choose to adopt the Model Law with or
without modifications to suit their legal systems and
preferences.
• Here are some major rules and principles found in the
UNCITRAL Model Law:
1. Scope and Application:
• The Model Law applies to international commercial arbitration,
providing a flexible and consistent framework for resolving
disputes arising out of international commercial relationships.
• Ex. Article (1) This Law applies to international commercial arbitration,
subject to any agreement in force between this State and any other State
or States.
2. Arbitration Agreement:
• Recognition of the principle of party autonomy, allowing the parties to
choose the arbitration process. The agreement must be in writing, but it
can be in any form, including electronic communication.
• Ex. Article 7- (1) “Arbitration agreement” is an agreement by the parties
to submit to arbitration all or certain disputes which have arisen or which
may arise between them in respect of a defined legal relationship,
whether contractual or not. An arbitration agreement may be in the
form of an arbitration clause in a contract or in the form of a separate
agreement.
3. Composition of Arbitral Tribunal:
• The parties have the freedom to agree on the number of
arbitrators. If the parties fail to agree, default rules for the
appointment of arbitrators are provided.
• Ex. Article 10. Number of arbitrators- (1) The parties are free to
determine the number of arbitrators. (2) Failing such
determination, the number of arbitrators shall be three.
4. Arbitral Proceedings:
• Parties are entitled to present their case and be heard. The
tribunal has the authority to determine the procedure unless
the parties agree otherwise.
• Ex. Article 21- Unless otherwise agreed by the parties, the arbitral
proceedings in respect of a particular dispute commence on the
date on which a request for that dispute to be referred to
arbitration is received by the respondent.
5. Interim Measures and Preliminary Orders:
• Empowers arbitral tribunals to grant interim measures to preserve the rights
of the parties during the arbitration process.
• Ex. Article 17- Power of arbitral tribunal to order interim measures
(1) Unless otherwise agreed by the parties, the arbitral tribunal may, at the
request of a party, grant interim measures.
(2) An interim measure is any temporary measure, whether in the form of an
award or in another form, by which, at any time prior to the issuance of the
award by which the dispute is finally decided, the arbitral tribunal orders a
party to:
(a) Maintain or restore the status quo pending determination of the dispute;
(b) Take action that would prevent, or refrain from taking action that is likely
to cause, current or imminent harm or prejudice to the arbitral process itself;
(c) Provide a means of preserving assets out of which a subsequent award
may be satisfied; or
(d) Preserve evidence that may be relevant and material to the resolution of
the dispute.

Article 17A* for conditions for granting interim measures

Preliminary orders
Article 17 B. Applications for preliminary orders and conditions
for granting preliminary orders
(1) Unless otherwise agreed by the parties, a party may, without
notice to any other party, make a request for an interim measure
together with an application for a preliminary order directing a
party not to frustrate the purpose of the interim measure
requested.
(2) The arbitral tribunal may grant a preliminary order provided it
considers that prior disclosure of the request for the interim
measure to the party against whom it is directed risks frustrating
the purpose of the measure.
6. Awards:
The tribunal is required to render a written award. The award must state
the reasons upon which it is based. The award is final and binding on the
parties.
Ex. Article 31. Form and contents of award

(1) The award shall be made in writing and shall be signed by the
arbitrator or arbitrators. In arbitral proceedings with more than one
arbitrator, the signatures of the majority of all members of the arbitral
tribunal shall suffice, provided that the reason for any omitted signature is
stated.
(2) The award shall state the reasons upon which it is based, unless the
parties have agreed that no reasons are to be given or the award is an
award on agreed terms under article 30.
(3) The award shall state its date and the place of arbitration as
determined in accordance with article 20(1). The award shall be deemed
to have been made at that place.
(4) After the award is made, a copy signed by the arbitrators in accordance
with paragraph (1) of this article shall be delivered to each party.
7. Challenge and Set-Aside of Awards:
• Limited grounds for challenging an award, such as incapacity of a party, invalidity of the arbitration
agreement, or procedural irregularities. Provides a clear process for seeking the set-aside of an arbitral
award.
• Ex- Article 34. Application for setting aside as exclusive recourse against arbitral award
• (1) Recourse to a court against an arbitral award may be made only by an application for setting aside in
accordance with paragraphs (2) and (3) of this article.
• (2) An arbitral award may be set aside by the court specified in article 6 only if:
(a) the party making the application furnishes proof that:
(i) a party to the arbitration agreement referred to in article 7 was under some incapacity; or the said
agreement is not valid under the law to which the parties have subjected it or, failing any indication
thereon, under the law of this State; or
• (ii) the party making the application was not given proper notice of the appointment of an arbitrator or of
the arbitral proceedings or was otherwise unable to present his case; or
• (iii) the award deals with a dispute not contemplated by or not falling within the terms of the submission
to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration,
provided that, if the decisions on matters submitted to arbitration can be separated from those not so
submitted, only that part of the award which contains decisions on matters not submitted to arbitration
may be set aside; or
• (iv) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the
agreement of the parties, unless such agreement was in conflict with a provision of this Law from which
the parties cannot derogate, or, failing such agreement, was not in accordance with this Law; or
• (b) the court finds that:
• (i) the subject-matter of the dispute is not capable of settlement by arbitration under the law of this State;
or
• (ii) the award is in conflict with the public policy of this State.
8. Recognition and Enforcement of Awards:
• Recognition and enforcement of arbitral awards are subject to a
simplified and uniform process. Enforcement can be refused only
on specific grounds outlined in the Model Law.
• Ex. Article 35. Recognition and enforcement
• (1) An arbitral award, irrespective of the country in which it was made, shall be
recognized as binding and, upon application in writing to the competent court,
shall be enforced subject to the provisions of this article and of article 36.
• (2) The party relying on an award or applying for its enforcement shall supply
the original award or a copy thereof. If the award is not made in an official
language of this State, the court may request the party to supply a translation
thereof into such language
10. Confidentiality:
• Arbitral proceedings and awards are generally confidential, promoting a private
and discreet resolution of disputes.
• Ex. Confidentiality (Article 30):
• The Model Law encourages the confidentiality of arbitration proceedings and
awards. However, this is not an absolute provision, and parties may agree
otherwise. Nonetheless, the protection of certain information is considered a
fundamental aspect of arbitration.
11. Non-Waivable Provisions:
• Certain provisions of the Model Law are considered non-waivable, ensuring a basic
level of protection for the parties involved in international arbitration.
• Ex. Equal Treatment of Parties (Article 18):
– Parties shall be treated with equality, and each party has the right to present
its case and to respond to the case of the other party.
• Opportunity to be Heard (Article 24):
– Each party shall be given a full opportunity to present its case, including the
right to present evidence and arguments.
• Independence and Impartiality of Arbitrators (Article 12):
– The parties must be given an opportunity to challenge an arbitrator if
circumstances exist that give rise to justifiable doubts as to the arbitrator's
9. Court Assistance and Supervision:
• Courts are involved in certain aspects of the arbitration process, such as appointing
arbitrators if the parties fail to do so. Courts may assist in taking evidence or provide other
forms of procedural assistance.
Article 11. Appointment of arbitrators
• (2) The parties are free to agree on a procedure of appointing the arbitrator or arbitrators,
subject to the provisions of paragraphs (4) and (5) of this article.
• (3) Failing such agreement,
• (a) in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two
arbitrators thus appointed shall appoint the third arbitrator; if a party fails to appoint the
arbitrator within thirty days of receipt of a request to do so from the other party, or if the two
arbitrators fail to agree on the third arbitrator within thirty days of their appointment, the
appointment shall be made, upon request of a party, by the court or other authority specified in
article 6;
• (b) in an arbitration with a sole arbitrator, if the parties are unable to agree on the arbitrator, he
shall be appointed, upon request of a party, by the court or other authority specified in article 6.
• (4) Where, under an appointment procedure agreed upon by the parties,
• (a) a party fails to act as required under such procedure, or
• (b) the parties, or two arbitrators, are unable to reach an agreement expected of them under
such procedure, or
• (c) a third party, including an institution, fails to perform any function
• entrusted to it under such procedure, any party may request the court or other authority
specified in article 6 to take the necessary measure, unless the agreement on the appointment
procedure provides other means for securing the appointment.
 Cases under UNCITRAL Model Law

• RSM Production Corporation v. Saint Lucia (2012): This case involved a dispute over
an oil and gas exploration license. The arbitration was conducted under the
UNCITRAL rules and the Model Law. The tribunal rendered its award in favor of RSM
Production Corporation.
• Iberdrola Energía S.A. v. Republic of Guatemala (2012): This case concerned a
dispute over the termination of a power purchase agreement. The arbitration was
conducted under the UNCITRAL rules and the Model Law. The tribunal issued an
award in favor of Iberdrola Energía.
• Norscot Rig Management Pvt Limited v. Essar Oilfields Services Limited (2016): In
this case, the English High Court considered a challenge to an arbitral award
rendered under the UNCITRAL rules and the Model Law. The court upheld the
award, emphasizing the importance of cost recovery in arbitrations.
• Vodafone International Holdings B.V. v. Republic of India (2020): This case involved
a tax dispute between Vodafone and the Republic of India. The arbitration was
conducted under the UNCITRAL rules and the Model Law. The tribunal ruled in favor
of Vodafone.
• Tza Yap Shum v. Peru (2020): This case concerned a dispute over a concession
agreement related to the construction and operation of a toll road. The arbitration
was conducted under the UNCITRAL rules and the Model Law. The tribunal issued
an award in favor of Tza Yap Shum.
 11.5 ICC Rules on International Commercial Arbitration
• The International Chamber of Commerce (ICC) is a prominent international institution
that plays a crucial role in the field of international commercial arbitration.
• The ICC has its own set of rules known as the "ICC Rules of Arbitration," which
govern the arbitration process. The latest version is the ICC Rules of Arbitration 2021.
Here are some major highlights of it:

1. Applicability and Scope:

• The ICC Rules apply to arbitrations where the parties have agreed to arbitrate under
these rules. They are used for resolving international commercial disputes, including
those involving multiple jurisdictions.
Ex: Article 1: International Court of Arbitration
1) The International Court of Arbitration (the "Court") of the International Chamber of
Commerce (the "ICC") is the independent arbitration body of the ICC. The statutes of
the Court are set forth in Appendix I.
2) The Court does not itself resolve disputes. It administers the resolution of disputes
by arbitral tribunals, in accordance with the Rules of Arbitration of the ICC (the
"Rules"). The Court is the only body authorized to administer arbitrations under the
Rules, including the scrutiny and approval of awards rendered in accordance with the
Rules. It draws up its own internal rules, which are set forth in Appendix II (the
"Internal Rules")
2. Emergency Arbitrator Proceedings:
• The 2021 ICC Rules introduced Emergency Arbitrator provisions, allowing parties to seek
urgent interim relief before the constitution of the arbitral tribunal.
Ex: Article 29: Emergency Arbitrator
1) A party that needs urgent interim or conservatory measures that cannot await the
constitution of an arbitral tribunal ("Emergency Measures") may make an application for such
measures pursuant to the Emergency Arbitrator Rules in Appendix V. Any such application shall
be accepted only if it is received by the Secretariat prior to the transmission of the file to the
arbitral tribunal pursuant to Article 16 and irrespective of whether the party making the
application has already submitted its Request for Arbitration.
2) The emergency arbitrator's decision shall take the form of an order. The parties undertake to
comply with any order made by the emergency arbitrator.
3) The emergency arbitrator's order shall not bind the arbitral tribunal with respect to any
question, issue or dispute determined in the order. The arbitral tribunal may modify, terminate
or annul the order or any modification thereto made by the emergency arbitrator.
4) The arbitral tribunal shall decide upon any party's requests or claims related to the
emergency arbitrator proceedings, including the reallocation of the costs of such proceedings
and any claims arising out of or in connection with the compliance or non­compliance with the
order.
5) Articles 29(1)­29(4) and the Emergency Arbitrator Rules set forth in Appendix V (collectively
the "Emergency Arbitrator Provisions") shall apply only to parties that are either signatories of
the arbitration agreement under the Rules that is relied upon for the application or successors
to such signatories.
3. Case Management and Expedited Procedure:
• The ICC Rules provide for efficient case management, and there is a specific Expedited
Procedure for cases where the amount in dispute is below a certain threshold, or the parties
agree to its application.
• Ex. Article 24: Case Management Conference and Procedural Timetable
• 1) When drawing up the Terms of Reference or as soon as possible thereafter, the arbitral
tribunal shall convene a case management conference to consult the parties on procedural
measures that may be adopted pursuant to Article 22(2).
• 2) During or following such conference, the arbitral tribunal shall establish the procedural
timetable that it intends to follow for the conduct of the arbitration. The procedural timetable
and any modifications thereto shall be communicated to the Court and the parties.
• 3) To ensure continued effective case management, the arbitral tribunal, after consulting the
parties by means of a further case management conference or otherwise, may adopt further
procedural measures or modify the procedural timetable.
• 4) Case management conferences may be conducted through a meeting in person, by video
conference, telephone or similar means of communication. In the absence of an agreement
of the parties, the arbitral tribunal shall determine the means by which the conference will be
conducted. The arbitral tribunal may request the parties to submit case management
proposals in advance of a case management conference and may request the attendance at
any case management conference of the parties in person or through an internal
representative.
4. Appointment of Arbitrators:
• The ICC Court assists in the appointment of arbitrators if the parties cannot agree. The Court
considers the qualifications and characteristics necessary for a fair and efficient arbitration.
• Ex. Article 12: Constitution of the Arbitral Tribunal Number of Arbitrators
• 1) The disputes shall be decided by a sole arbitrator or by three arbitrators.
• 2) Where the parties have not agreed upon the number of arbitrators, the Court shall appoint
a sole arbitrator, save where it appears to the Court that the dispute is such as to warrant the
appointment of three arbitrators. In such case, the claimant shall nominate an arbitrator
within a period of 15 days from the receipt of the notification of the decision of the Court,
and the respondent shall nominate an arbitrator within a period of 15 days from the receipt
of the notification of the nomination made by the claimant. If a party fails to nominate an
arbitrator, the appointment shall be made by the Court.

5. Conduct of the Arbitration:

• The ICC Rules provide a framework for the conduct of the arbitration, including the exchange
of statements of claim and defense, the hearing, and the submission of evidence.
• Ex. Article 22: Conduct of the Arbitration
• 1) The arbitral tribunal and the parties shall make every effort to conduct the arbitration in an expeditious
and cost-effective manner, having regard to the complexity and value of the dispute.
• 2) In order to ensure effective case management, the arbitral tribunal, after consulting the parties, may
adopt such procedural measures as it considers appropriate, provided that they are not contrary to any
agreement of the parties.
• 3) Upon the request of any party, the arbitral tribunal may make orders concerning the confidentiality of the
arbitration proceedings or of any other matters in connection with the arbitration and may take measures
for protecting trade secrets and confidential information.
• 4) In all cases, the arbitral tribunal shall act fairly and impartially and ensure that each party has a
reasonable opportunity to present its case.
• 5) The parties undertake to comply with any order made by the arbitral tribunal.
6. Awards:
• The ICC Rules set out the requirements for the form and content of awards, including the time frame
within which the tribunal must render its final decision.
• Ex. Article 30: Time Limit for the Final Award
• 1) The time limit within which the arbitral tribunal must render its final award is six months. Such time
limit shall start to run from the date of the last signature by the arbitral tribunal or by the parties of the
Terms of Reference or, in the case of application of Article 23(3), the date of the notification to the
arbitral tribunal by the Secretariat of the approval of the Terms of Reference by the Court. The Court
may fix a different time limit based upon the procedural timetable established pursuant to Article 24(2).
• 2) The Court may extend the time limit pursuant to a reasoned request from the arbitral tribunal or on
its own initiative if it decides it is necessary to do so.
• Article 31: Making of the Award
• 1) When the arbitral tribunal is composed of more than one arbitrator, an award is made by a majority
decision. If there is no majority, the award shall be made by the president of the arbitral tribunal alone.
• 2) The award shall state the reasons upon which it is based.
• 3) The award shall be deemed to be made at the place of the arbitration and on the date stated therein.

7. Costs and Fees:

• The rules outline the costs of arbitration, including the administrative expenses of the ICC and the fees
of the arbitrators. The ICC's approach to costs aims to be transparent and proportionate.
• Ex. Article 37: Decision as to the Costs of the Arbitration
• 1) The costs of the arbitration shall include the fees and expenses of the arbitrators and the ICC
administrative expenses fixed by the Court, in accordance with the scale in force at the time of the
commencement of the arbitration, as well as the fees and expenses of any experts appointed by the
arbitral tribunal and the reasonable legal and other costs incurred by the parties for the arbitration.
8. Confidentiality:
– The ICC Rules emphasize the confidentiality of the arbitration process.
Parties, arbitrators, and the ICC itself are generally bound by confidentiality
obligations.
9. Interim and Conservatory Measures:
– The ICC Rules empower the tribunal to grant interim and conservatory
measures to preserve the rights of the parties pending the final award.
10. Scrutiny of Awards by the ICC Court:
– Before the award is issued, the ICC Court reviews it for matters of form and
consistency with the rules. This aims to ensure the quality and
enforceability of the awards.
Ex. Article 33: Scrutiny of the Award by the Court Before signing any award, the arbitral
tribunal shall submit it in draft form to the Court. The Court may lay down modifications
as to the form of the award and, without affecting the arbitral tribunal's liberty of
decision, may also draw its attention to points of substance. No award shall be rendered
by the arbitral tribunal until it has been approved by the Court as to its form.
11. Scrutiny of Costs:
• The ICC Court also has the authority to fix the costs of arbitration, including the
arbitrators' fees, based on a scale provided in the rules.
 Cases decided under ICC Commercial Arbitration
• ICC Case No. 12072/JYK - Dow Chemical Company v. Isover Saint-Gobain: In
this case, Dow Chemical Company and Isover Saint-Gobain were involved in a
dispute related to the supply of raw materials. The ICC arbitral tribunal
rendered its award in 2016.
• ICC Case No. 19561/GZ/MHM - Teinver S.A. et al. v. The Argentine Republic:
This case involved a dispute between Teinver S.A. and the Argentine Republic
concerning investments in the country's water and sanitation sector. The ICC
tribunal issued its award in 2017.
• ICC Case No. 18350/GZ/MHM - BG Group plc v. The Republic of Argentina:
This case is notable for its connection to the BG Group v. Argentina dispute. It
dealt with issues related to the enforcement of an arbitral award. The ICC
tribunal issued its decision in 2014.
• ICC Case No. 19606/MSK - Glencore Finance (Bermuda) Limited v. Bolivia:
Glencore Finance filed a case against Bolivia concerning a tax dispute. The ICC
tribunal rendered its award in 2018.
• ICC Case No. 18868/GZ/MHM - Renco Group Inc. v. The Republic of Peru:
This case involved a dispute between Renco Group and Peru concerning
environmental and investment issues. The ICC tribunal issued its award in
2016.
 Conciliation
• Conciliation is a way to resolve a legal dispute without going
to trial.
• Conciliation is an ADR process where an independent third
party, the conciliator, helps people in a dispute to identify the
disputed issues, develop options, consider alternatives and
try to reach an agreement.
• A conciliator may have professional expertise in the subject
matter in dispute and will generally provide advice about the
issues and options for resolution. However, a conciliator will
not make a judgment or decision about the dispute.
• Conciliation may be voluntary, court ordered or required as
part of a contract. It is often part of a court or government
agency process.
• The role of conciliators is similar to that of mediators except that the
conciliator may also:
 have specialist knowledge and give you some legal information
 suggest or give you and the other participants expert advice on the
possible options for sorting out the issues in your dispute
 actively encourage you and the other participants to reach an agreement.
• The conciliator will not:
 take sides or make decisions
 tell you what decision to make, although they may make suggestions
 decide who is right or wrong
 provide counselling.
• Conciliation is usually held face to face, so that you can talk to each other
directly. However, you may also have separate sessions with the
conciliator.
• Sometimes the conciliator can act as a 'messenger' by talking to you and
the other participants separately and communicating ideas or proposals
between you. It is also possible to hold conciliation sessions by telephone
in some circumstances.
 When is conciliation suitable?

• Conciliation is likely to be suitable if you:

• want to reach an agreement on some technical
and legal issues
• want assistance with the process
• want to make the decision with the other
participants involved
• want advice on the facts in your dispute.
• conciliation may also be suitable if you have tried
mediation and still cannot reach agreement with
the other participants.
 UNCITRAL Conciliation Rules

• The UNCITRAL Conciliation Rules provide a

framework for the resolution of international
commercial disputes through the process of
conciliation. Here are some major highlights of
the UNCITRAL Conciliation Rules that provide an
overview of the key features of the UNCITRAL
Conciliation Rules, which aim to facilitate the
amicable resolution of international commercial
disputes through a flexible and confidential
process:
1. Scope and Applicability: (Article 1)
• The rules are designed for the resolution of international commercial
disputes through conciliation. They can be applied when the parties have
agreed to conciliate or when they have provided for conciliation under
the terms of their contract.
2. Commencement of Conciliation: (Article 2)
• The conciliation process begins with a party sending a written invitation
to the other party to conciliate. The invitation should briefly identify the
subject matter of the dispute.
3. Appointment of Conciliators: (Article 4)
• The parties are encouraged to agree on the number of conciliators
(usually one or three) and their qualifications. If the parties cannot agree,
the default is one conciliator.
4. Role of Conciliators: (Article 7)
• Conciliators assist the parties in reaching an amicable settlement. They
may suggest terms of settlement, but they do not have the authority to
impose a solution.
5. Confidentiality (Article 7):
– The conciliation process is confidential. Any information disclosed during the conciliation cannot
be disclosed to third parties, including in legal proceedings.
6. Termination of Conciliation (Article 10):
– The conciliation process may be terminated by a written declaration of the conciliator if
settlement is not possible.
– The parties may also jointly terminate the conciliation.
7. Settlement Agreement (Article 12):
– If the parties reach a settlement, the conciliator prepares a written settlement agreement.
– The settlement agreement is enforceable and can be submitted to a competent court for
enforcement.
8. Role of Conciliation Institutions (Article 13):
– The rules acknowledge the role of institutions in facilitating the conciliation process.
– Institutions may assist in the appointment of conciliators, administration of proceedings, and
other related services.
9. Admissibility of Evidence (Article 16):
– Conciliators may, with the consent of the parties, receive oral or written evidence.
– However, they are not bound by formal rules of evidence.
10. Exclusion of Legal Counsel (Article 17):
– The rules allow parties to participate in conciliation without legal counsel if they so choose.
– However, parties may be assisted by legal advisers or other representatives.
11. Multilateral Treaties and Conventions:
– The UNCITRAL Conciliation Rules are often used in conjunction with international treaties or
conventions promoting the enforcement of settlement agreements resulting from conciliation.
 Cases decided under UNCITRAL Conciliation rules
• Pac Rim Cayman LLC v. Republic of El Salvador: This case involved a dispute
over mining permits and environmental regulations. It was initiated under the
UNCITRAL rules, and the arbitral tribunal issued a decision in 2016.
• South American Silver Limited v. Bolivia: This case was brought under the
UNCITRAL rules and concerned a mining dispute between a Canadian mining
company and the government of Bolivia. The arbitral tribunal rendered a
decision in 2018.
• ConocoPhillips Petrozuata B.V., ConocoPhillips Hamaca B.V., and
ConocoPhillips Gulf of Paria B.V. v. Bolivarian Republic of Venezuela: In this
case, the claimants initiated proceedings under the UNCITRAL rules against
Venezuela concerning the expropriation of their investments in the oil and gas
sector. The tribunal issued its award in 2019.
• RREEF Infrastructure (G.P.) Limited and RREEF Pan-European Infrastructure
Two Lux S.à r.l. v. Kingdom of Spain: This case involved a dispute over changes
in the regulatory framework affecting renewable energy projects in Spain. The
UNCITRAL arbitration tribunal issued its decision in 2019.
• Tenaris S.A. and Talta - Trading e Marketing Sociedade Unipessoal LDA v.
Bolivarian Republic of Venezuela: This case concerned a dispute between
investors and Venezuela in the steel industry. The UNCITRAL tribunal rendered
 Judicial Settlement
• Judicial settlement, also known as adjudication, is a form of alternative
dispute resolution (ADR) in which a dispute is resolved through a court
proceeding, typically without a full trial.
• It is considered a form of ADR because it involves a decision by a neutral
third party, the judge, rather than the disputing parties themselves.
Judicial settlement can be distinguished from other ADR methods, such
as mediation or arbitration, which involve the direct participation of the
parties in the resolution process.
• While judicial settlement is a formal legal process, it is considered a form
of ADR because it offers a quicker and often less formal means of dispute
resolution compared to a full trial. The goal is to provide a resolution to
the dispute through a legal decision that is fair and impartial.
• It's important to note that the availability and procedures for judicial
settlement may vary across jurisdictions, and parties involved in a
dispute should seek legal advice specific to their situation and
jurisdiction.
• "Judicial settlement" generally refers to the resolution of a legal dispute through
the intervention and decision of a court or judicial body. In this context, a judicial
settlement occurs when a court renders a judgment or issues a decision that
resolves the legal issues between the parties involved in a dispute.
• Key features of judicial settlement as a form of ADR include:
• Court Involvement: Judicial settlement involves the intervention of a court or a
judge. The court plays a central role in hearing the arguments, reviewing evidence,
and making a final decision on the dispute.
• Adversarial Process: The parties present their cases to the court in an adversarial
manner, with each party advocating for its position. The judge evaluates the legal
arguments, examines the evidence, and issues a judgment based on applicable
laws and legal principles.
• Decision by Third Party: Unlike some other forms of ADR, where the parties may
actively participate in crafting a resolution (as in mediation) or selecting an
arbitrator, judicial settlement involves a decision made by a third party, the judge.
• Legal Framework: Judicial settlement is typically guided by established legal
procedures and rules. The judge applies the relevant laws and rules to the facts of
the case to reach a decision.
• Enforceability: The judgment or order issued by the court in a judicial settlement is
legally binding and enforceable. The court has the authority to compel parties to
comply with the terms of the judgment.
 Negotiation

• Negotiation is a method by which people settle differences.

• Negotiation is a dialogue between two or more parties with
the intention of reaching a mutually beneficial outcome or
resolving a conflict.
• In negotiation, each party will try to persuade the other one
to agree with his or her point of view. The goal is to avoid
arguments and disputes and reach some form of
compromise between parties.
• In any disagreement, individuals understandably aim to
achieve the best possible outcome for their position (or
perhaps an organization they represent).
• However, the principles of fairness, seeking mutual benefit
and maintaining a relationship are the keys to a successful
outcome.
• Stages of Negotiation:
• Preparation:
– Before entering into negotiations, parties prepare by understanding their
own interests, setting objectives, and gathering information about the
other party.
• Discussion:
– Parties engage in open communication to understand each other's needs
and concerns. This is the stage where proposals are made and discussed.
• Clarification and Justification:
– Parties may seek clarification on certain points and justify their proposals
or positions. This helps in building understanding and moving towards
agreement.
• Bargaining:
– Bargaining involves making concessions and negotiating specific terms.
This is where compromises and trade-offs occur.
• Closure:
– The final stage involves reaching an agreement, formalizing it if necessary,
and ensuring both parties are satisfied with the terms.
• Types of Negotiation:
• Distributive (Competitive) Negotiation:
– In distributive negotiation, parties perceive that there is a
fixed amount of resources or a "zero-sum" situation, and
they compete to claim as much value as possible. This type
of negotiation often involves haggling and positional
bargaining.
• Integrative (Collaborative) Negotiation:
– Integrative negotiation aims to create value for both
parties. It focuses on expanding the pie and finding
solutions that meet the interests of all parties involved.
• Interest-Based Negotiation:
– Interest-based negotiation involves identifying and
addressing the underlying interests and needs of the
parties rather than focusing solely on their stated positions.
 Good Offices

• The term ‘Good offices’ was used by ‘Justice Marshall’ for the very first
time in Schooner Exchange vs. M’ Faddon (1812).
• The term is often mixed and interchanged with mediation but both the
process are different facets of ADR mechanism.
• The expression ‘Good Offices’ is referred to a procedure whereby a
neutral third party or a state on its own initiative or through request seeks
through diplomatic means, bring the parties to the dispute together on
the same platform either to start a direct negotiation among the parties
or to find other methods for resolving the dispute.
• ‘Good Offices’ is a procedure whereby third party brings the conflicting
parties together without participating in the negotiation
• Good Offices can be international organizations, any one country or group
of countries, which are not hostile and offer any two countries having
dispute to settle the dispute peacefully.
• Good Offices may be very extensive in the services and facilities rendered but are
slightly short of active participation in the process.
• The work of Good Offices ends or completes when the negotiation among the
parties initiate. The Good Offices do not actively participate in the negotiation, it
only brings the unwilling parties together for negotiation.
• Article- 33 of the UN Charter states that any dispute that is likely to mention
endanger the international peace and security should first be addressed through
negotiation, mediation or other peaceful means, and states that the council can
call on the parties to use such means.
• The phrases ‘other peaceful means’ or ‘council can call on parties’ specifies the
inclusion and recognition of Good Offices in the ADR mechanism at international
levels.
• Article- 33 of the UN Watercourses Convention mandates the parties to resolve the
disputes by either seeking good offices or by requesting mediation or conciliation.
• The mechanism is most relevant for regional disputes as the dispute is likely to
resolve faster than through judicial mechanism and also with the full autonomy of
the parties and negligible interference of third party.
• Ex. For instances, the Prime Minister of United Kingdom, Mr. Wilson provided Good Offices to
India and Pakistan which resulted the parties to reach an agreement to refer Kutch issue to
Arbitral Tribunal.
• The entity or individual offering the good offices does not act as a
mediator or arbitrator but rather serves as a facilitator to create an
environment conducive to dialogue and resolution. Here are key aspects of
good offices:
• Neutral Third Party:
– The entity providing good offices is typically a neutral third party that is not
directly involved in the dispute. This could be a country, international
organization, or an individual with diplomatic credibility.
• Facilitation of Communication:
– Good offices involve facilitating communication between the conflicting parties.
The third party may help establish channels of communication, convey messages,
or create opportunities for direct dialogue.
• Building Trust:
– One of the goals of good offices is to build trust between the conflicting parties.
By having a neutral intermediary, parties may feel more comfortable engaging in
discussions and expressing their concerns.
• Confidentiality:
– Good offices often operate under a framework of confidentiality. The third party
may keep the details of the discussions confidential to encourage open and
honest communication.
• No Decision-Making Authority:
– The entity providing good offices does not have decision-making authority
or the power to impose solutions. Its role is limited to facilitating
communication and encouraging the parties to find their own mutually
agreeable resolution.
• Prevention of Escalation:
– Good offices can be used as a preventive measure to stop the escalation of
conflicts before they intensify. By offering a diplomatic channel, the third
party may help resolve disputes before they lead to more significant issues.
• International Relations:
– Good offices are often utilized in the realm of international relations,
especially when countries are in diplomatic standoffs or experiencing
tensions. The neutral third party may act as an intermediary to promote
peaceful dialogue.
• Humanitarian and Conflict Resolution Contexts:
– Good offices may also be used in humanitarian and conflict resolution
contexts. For example, they can be employed to facilitate peace talks or
negotiations to end a conflict.
 Mediation
• Mediation involves the intervention of a third person, or mediator, into a dispute to
assist the parties in negotiating jointly acceptable resolution of issues in conflict.
• The mediator meets with the parties at a neutral location where the parties can discuss
the dispute and explore a variety of solutions.
• Each party is encouraged to be open and candid about his/her point of view. The
mediator, as a neutral third party, can view the dispute objectively and assist the parties
in considering alternatives and options that they might not have considered. The
mediator is neutral in that he or she does not stand to personally benefit from the terms
of the settlement, and is impartial in that he or she does not have a preconceived bias
about how the conflict should be resolved.
• The mediation session is private and confidential. Matters unique to the mediation
discussion have been held by Federal courts to be privileged and inadmissible in any
adversarial administrative or court proceeding with the exception of certain issues such
as fraud, waste and abuse, or criminal activity.
• If a settlement was not resolved during a mediation session, and the dispute was
litigated in any administrative or judicial proceeding, neither the mediator nor his/her
notes can be subpoenaed by either party.

• Examples: Soviet Union President Kosygin mediated in the Dispute between India and
Pakistan which resulted in the conclusion of Tashkant agreement in 1966.
• Applications:
• Family Mediation:
– Used in divorce and family-related disputes to address issues
such as child custody, support, and division of assets.
• Commercial and Business Mediation:
– Common in resolving contractual disputes, business conflicts,
and employment disputes.
• Community and Neighborhood Mediation:
– Applied in disputes within communities or neighborhoods,
such as property disputes or disagreements among neighbors.
• Workplace Mediation:
– Used to resolve conflicts in the workplace, including disputes
between employees or between employees and management.
• Legal Mediation:
– May be court-ordered or chosen voluntarily by parties involved
in legal disputes as an alternative to traditional litigation.
• Process:
• Introduction and Opening Statements:
– The mediator introduces the process, explains their role, and allows each party to make
an opening statement to express their perspectives.
• Joint and Separate Sessions:
– The mediator may conduct joint sessions where both parties are present and separate
sessions where they meet with each party privately. This allows for confidential
discussions and exploration of individual concerns.
• Issue Identification and Clarification:
– The mediator helps the parties identify and clarify the issues in dispute. This may involve
discussing the underlying interests and needs of each party.
• Generating Options:
– The parties, with the mediator's assistance, brainstorm and explore various options for
resolution. This phase encourages creative problem-solving.
• Negotiation and Agreement:
– The mediator facilitates negotiations and helps the parties work towards a mutually
acceptable agreement. The goal is to find common ground and address the interests of
both parties.
• Formalizing the Agreement:
– If an agreement is reached, the terms are formalized in a written agreement. This
agreement may be legally binding, depending on the jurisdiction and the nature of the
dispute.
Core Principles
• Voluntary Participation:
– Mediation is a voluntary process, and all parties involved must agree to
participate. They have the autonomy to withdraw from the process at
any time.
• Neutrality of the Mediator:
– The mediator is an impartial and neutral third party. Their role is to
facilitate communication, encourage understanding, and assist in
generating options for resolution.
• Confidentiality:
– Mediation proceedings are typically confidential. This means that what
is said and discussed during the mediation process is not disclosed to
external parties unless the participants agree otherwise.
• Informality:
– Mediation is generally less formal than traditional legal proceedings.
The atmosphere is conducive to open communication, and parties are
encouraged to express their concerns and interests.
• Collaborative Decision-Making: The goal of mediation is for the
parties to work together to reach a mutually acceptable agreement.
The mediator helps guide the process, but the decision-making
power remains with the parties.
• Flexibility: Mediation can be adapted to the specific needs and
preferences of the parties. It can be used to resolve a wide range of
disputes, including family disputes, business conflicts, employment
issues, and more.
• Preservation of Relationships: Mediation is often seen as a process
that can help preserve relationships between parties, especially in
ongoing business or interpersonal relationships.
• Cost-Effective and Time-Efficient: Mediation is generally quicker and
less costly than litigation. It allows parties to resolve their disputes
without going through a lengthy court process.
• Outcome-Oriented: The focus of mediation is on finding a solution
that meets the interests and needs of the parties involved. The
emphasis is on creating a positive and workable outcome.
 Regulating Instruments??
• The Singapore Convention regulates the
recognition and enforcement of international
mediated settlement agreements (“iMSAs”).
• ICSID MEDIATION RULES AND REGULATIONS
• Mediation Act, 2068. (Nepal)