Law: Arbitration Act, 1940

Section: 31

(a) Arbitration Act (X of 1940)--- ----S. 31---International commercial contracts---Law applicable---Place of arbitration, selection of---Principle---Arbitration agreement, which creates rights and obligations of parties to submit disputes to arbitration and to abide by award, is an agreement severable from substantive contract in which it is embedded---Agreement is also capable of surviving termination, repudiation and frustration of substantive contract---Arbitration agreement is considered to have a distinct life of its own, it can be governed by a proper law of its own which need not be the same as the law governing substantive contract---Where there is no express choice of law governing arbitration agreement, presumption would be that the parties intended for law chosen to govern the substantive contract to be the law governing the arbitration agreement---Proper law of arbitration agreement governs obligation of parties to submit disputes to arbitration, and to honour an award---This has to be distinguished from curial law of arbitration, which governs conduct of individual reference---Procedural law of arbitration which is also called "lex arbitri" or "curial law" deals with a range of issues including the form and validity of arbitral award; and finality of award, including any right to challenge award in Courts of the place of arbitration---In order to determine curial law in absence of an express choice by parties, it is first necessary to determine the seat of arbitration---This is so because where parties do not choose curial law, the law of seat of arbitration would be the curial law which governs arbitration proceedings---Seat of arbitration is a location selected by parties as the legal place of arbitration, which consequently determines procedural framework of arbitration---Contracting parties have freedom to agree on seat of arbitration---Where parties make no such agreement, the seat may be determined by arbitral tribunal or administering arbitral institution in accordance with and subject to arbitration rules chosen by the parties---Where this is also not done the place where the arbitration is conducted is the seat of arbitration. Enka Insaat…

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