Report No. 176
(ii) Omission to apply sections 8, 35 and 36 to international arbitrations outside India to be rectified:
It has been noticed that Art. 1(2) of the Model Law makes not only Art. 9 but also Articles 8, 35 and 36 of the Model Law applicable to such international arbitrations where the seat of arbitration is outside the country. In fact, almost all statutes of various countries which have adopted the UNCITRAL Model Law do permit the application of provisions of their statutes which correspond to Arts. 8, 35 and 36 of the Model Law. There is need to extend the provision of sections 8, 35 and 36 also to such arbitrations, apart from sec. 9 and sec. 27 as stated above.
The reason is that in a suit or other legal proceeding filed before a judicial authority under sec.8 of the 1996 Act, where one of the parties is not an Indian national, the opposite party may plead an arbitration clause where the place of arbitration is outside India or the place of arbitration is not specified. In such cases, the Court must be enabled to refer the parties to arbitration under sec.8.
Some objections based on reciprocity have been raised in this behalf but the Commission is of the view that the 1996 Act is one of the statutes which deals with alternative methods of resolution of disputes and the need to encourage such procedures should override considerations of reciprocity. Sections 35 and 36 of the Act deal with recognition and enforcement of the arbitration awards.
In the case of arbitration of an international nature where the place of arbitration is outside India or is not specified, then it is necessary to make sections 35 and 36 of the Act to be invoked rather than stipulate that parties are to obtain a judgment in a foreign Court on the basis of award and then file a suit in India for enforcement in cases not covered by sec. 44A of the Code of Civil Procedure, 1908 (CPC).
Section 27 deals with Court assistance and this is also be applied to international arbitrations outside India. Thus, sections 8, 9, 27, 35 and 36 are to be applied to international arbitrations where the place of arbitration is outside India or where the place of arbitration is not specified.
2.1.7 An amendment to this effect is being proposed in clause (b) of section 2 (2) as follows:
"(b) Sections 8, 9, 27, 35 and 36 of this Part shall apply also to international arbitration (whether commercial or not) where the place of arbitration is outside India or is not specified in the arbitration agreement."