Contribution Of National Court In International Commercial Arbitration - A Comprehensive Study

Author: LawSphereX

Category: Arbitration & ADR

Published: 2026-08-23T18:57:43.818Z

Updated: 2026-08-30T07:06:00.767Z

CONTRIBUTION OF NATIONAL COURT IN

INTERNATIONAL COMMERCIAL ARBITRATION: A COMPREHENSIVE STUDY

Vrinda Tekriwal, BA LLB, Asian Law College, Noida

1 INTRODUCTION

The term International Commercial Arbitration (ICA) has been well-defined as the process of resolving the dispute between the two or more disputed parties of diverse countries through an arbitrator or the board of arbitrators. The process of arbitration includes submissions of the disputes through the writing to the arbitration rather than, pursuing of the litigation in the court of law International commercial arbitration is the process to resolve the dispute between the two or more parties of various countries involved in various related contract, intellectual property, investment, trade or for the construction purpose. The first and foremost step, in the international commercial begins with the signing of the arbitration agreement by both the parties entering together, forming a contract.

After the signing of the arbitration agreement, where both the parties agree to resolve the dispute arising between them through the process of the arbitration instead of suing each other through the process of litigation in the court of law. The arbitrator or the panel of the arbitrators are guaranteed to perceive the arguments or the disputes that has been arisen, between both of the parties. After listening to such arguments, the arbitrator or the panel of the arbitrator makes the decision resolving the dispute. The decision made by the arbitrator is of biding in nature in order to maintain the social efficacy between both the parties. The decision of the arbitrator is final and can be challenged only under the limited circumstances in the court of law.

Various International conventions have been established such as United Nations Commission on International Trade Law (UNCITRAL) Model Law for governing the general principles of International Commercial Arbitration. 1 1 UNCITRAL Model Law on International Commercial Arbitration (1985), with amendments as adopted in 2006; New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958.

International Commercial Arbitration paves a curial role to resolve the dispute arisen, between the parties of cross-borders, forming an agreement to perform the long terms business activities. The procedure of International Commercial Arbitration is almost as the procedure of the domestic arbitration. The process of arbitration also allows the parties to choose the arbitrator in order to resolve their disputes, wherein both the parties are equally satisfied that, the decision which will be made by the arbitrator or over the listening of their arguments will be justified and impartial in nature. The concept of International Commercial Arbitration, followed by the domestic arbitration is deemed to burden down the loads of the national courts and to avoid long trials procedure of hearings.

2. EVOLUTION OF INTERNATIONAL COMMERCIAL ARBITRATION

The major and significant development of International Arbitration can be comprehensively traced by Jay Treaty (1794) established between the Great Britain and the United States2, which further listed down the three arbitral commission in order to resolve and settle down the claims in the Americans Revolutions. One of the most vital of those claims, was the Alabama Claims arbitration which was settled under the Treaty of Washington (1871), by the formulation of such treaty both the United States and Great Britain decided to settle those claims which are arising out of the Great Britain in order to maintain the neutrality during the American Civil War3. The Hague Conference of 1899, gave more prominent validity origin to the Internation Arbitration. The development and uniform structure of International Commercial Arbitration was further led under the U. N conference in 1958.

Various multiple treaties were formed for the settlement of dispute by the process of arbitration. Various treaties include Geneva General Act for the Settlement of Dispute, 1928, which was adopted by League of Nations, and was further reenergized by UN General Assembly in 1949. Furthermore, after the foundations of the courts were laid down in the country, the first and foremost the international commercial arbitration statue was established in England which is further referred as, English Arbitration Act, 1889 and later was acknowledged and recognized as English Arbitration Act, 1950. 4 Likewise, the same practice was also adopted in USA and the country established its own statutory namely, Federal Arbitration Act, 1925. 5 Soon with 2 Treaty of Amity, Commerce, and Navigation, U. S. -Gr. Brit. , Nov. 19, 1794, 52 U. S. T. 243 (commonly known as the Jay Treaty).

3 William E. Hall, A Treatise on International Law, 6th ed. (Clarendon Press, 1909), pp. 307–312.

4 Arbitration Act, 1950, 14 Geo. 6 c. 27 (UK)

5 Gary Born, International Commercial Arbitration (3rd ed., Kluwer Law International, 2021), Vol. I, pp. 90–95 the evolution of globalization and liberalization in worldwide, the business of the trade took its action all across the cross-borders for the carrying their business globally. This served as a serious reason that led to the economic rise of the various countries. As the result it directly increased the demand, in assistance to solve the alternative dispute, between the parties because of their carrying the business process worldwide in exchange of capital, goods and services etc. hence, led to the emerging development of International Arbitration throughout the country.6

3. ARBITRATION IN THE INSTITUTION OF INTERNATIONAL COMMERCIAL

COURTS The institution of ICCs such as the Singapore International Commercial Court (SICC), the Qatar International Court, and the Dubai International Financial Centre Courts (DIFC), illustrate an institutional answer to the increasing intricacies of international commercial disputes. 7 These established courts compete with arbitration's competence and global satisfactoriness by introducing elasticity in procedural rules of law, permitting the foreign depiction or representation, and smoothing multi-jurisdictional acknowledgement of the judgments. The institutional logic behind these supra courts is not to replace arbitration but to offer an alternative judicial environment that duplicates arbitration's core characteristics within a courtadministered atmosphere.

For instance, the SICC allows the proceedings in English, involvement of the foreign counsel, and the admissibility of foreign laws, thereby plummeting barriers conventionally connected with the national courts. 8

4 EUROPEAN PERSPECTIVES

INTERNATIONAL COMMERCIAL COURTS AS A COMPETITOR OF ARBITRATION In Europe, the intensification of courts such as the Paris International Commercial Court, the Netherlands Commercial Court (NCC), and the London Commercial Court signifies an attempt to reclaim international dispute resolution from arbitration. These courts get the most out of

6 Emmanuel Gaillard and John Savage (eds.), Fouchard Gaillard Goldman on International Commercial

Arbitration (Kluwer Law International, 1999), pp. 13–20 7 Sundaresh Menon, ‘International Commercial Courts: Towards a Transnational System of Dispute Resolution’ (2015) 1 Singapore Journal of Legal Studies 1, 5. 8 Singapore International Commercial Court, ‘Overview’ https://www.sicc.gov.sg/about-the-sicc/overview accessed 28 May 2025. rising dissatisfaction with arbitration over issues like high costs, postponements, and lack of transparency. A relevant example is the Brussels I Recast Regulation which simplifies the communal

acknowledgement

of civil and commercial findings across EU member states, providing a powerful implementation tool akin to the New York Convention for arbitral rewards. In Republic of Moldova v. Komstroy, the ECJ shortened the jurisdiction of arbitral tribunals under the Energy Charter Treaty within the EU legal agenda, signalling a restatement of judicial sovereignty over international investment arbitration 9. Such expansions designate a European tendency to improve the keenness of national courts vis-à-vis arbitration by improving procedural competence and legal inevitability.

5 ASIAN PERSPECTIVES

INTERNATIONAL COMMERCIAL COURTS AS A PARTNER OF ARBITRATION Contrastingly, Asian jurisdictions have adopted more cooperative model. The SICC, combined within Singapore’s legal system, everything works synergistically with the Singapore International Arbitration Centre (SIAC). The double mechanism provides controversialists the elasticity to opt for court litigation or arbitration based on their planned welfares. In India, the judiciary has changed from an interventionist method to a more arbitrationfriendly posture. Landmark judgments such as Bharat Aluminium Co. v. Kaiser (BALCO), supra finished the appropriateness of Part I of the Arbitration and Conciliation Act, 1996, to foreign-seated arbitrations, strengthening arbitral autonomy. Further, in Pasl Wind Solutions Pvt. Ltd. v. GE Power Conversion India Pvt. Ltd.

, the Supreme Court upheld the strength of a foreign seat designated by Indian parties, emphasizing the inviolability of party independence in arbitration. 10

6. ROLE OF THE NATIONAL COURT IN THE ESTABLISHMENT OF

INTERNATIONAL COMMERCIAL ARBITRATION There has been an always an existence of genuine relationship and shack up between the

9 Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 (India).

10 Pasl Wind Solutions Pvt. Ltd. v. GE Power Conversion India Pvt. Ltd., (2021) 7 SCC 1 (India).

national court and the arbitral tribunal. The successfulness of the arbitration is highly dependent of the degree of Interference from the national court of law. As already known fact is that, the court has the right and power of the liberation of the arbitration while another parties to seeks to damage it. The best way to solve the dispute that arise between the parties, performing the commercial trade or business worldwide, cross-borders, is through the process of the International Commercial Arbitration. The parties enjoy the full-fledged rights to enter into the agreement which states that, if any dispute arise between the parties in the near future, then that dispute between the aggrieved parties perhaps, should be solved through the process of arbitration or other alternative resolution methods rather that pursuing the parties through the litigation process in the court of law.

11 There is an agreement that lies between the parties performing the international trade or commercial business which permits the process of arbitration to reserve itself from the wings of the court. The involvement of the court may, seriously disrupt and create hindrance in the process of the arbitration that aims for the speedy resolution of the dispute between the parties. It is further aforesaid, “least judicial interference” paves the speedy dissolution of the dispute between the aggrieved parties outside the court of law. The involvement of the court is unavoidable if the procedure of the arbitration is threatened or disrupted. The court has the right to put forward its assistance as much as it is permissible, beyond its permitted limit, any assistance of the court may result in counter– productive.

The role of the national court can be further discussed under various circumstances during the procedure of the arbitration, which are as followsa. Arbitration Agreement: When an agreement signed between the parties includes any written clause of arbitration that manifest, if any dispute arises between the parties to the agreement in the near future, has to be solved through the process of arbitration. The parties have an arbitration to be conducted as per the ICC Rules. Example if the two parties include one party of Japan and the other party of India. If the said dispute arises between the parties, and the Japan party files a suit in the court of Japan, then the Indian party will have the right to object that suit, as there is consensual existence of an arbitration clause in their agreement. Under such circumstances the National court are bound to enforce the agreement to arbitrate.

12 11 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, Art. II (1).

12 UNCITRAL Model Law, Art. 8(1); Arbitration and Conciliation Act, 1996, s. 8.

b. Constitution of Arbitral Tribunal: The parties to the agreement, have the right to choose the arbitrator of their own choice in order to settle their dispute. The developed statutes of the arbitration state the appointment of the arbitrator by national court of law in the procedure of the national arbitration, under the limited circumstances. Since there is always a supremacy of the national court above the international arbitration that implies certain laws and provisions regarding the appointment of the arbitration for the same. Henceforth, all laws distinguish, the “party autonomy” that means freedom of the parties to select their own arbitrators which will help them to settle down their dispute and maintain the social efficacy. 13 When the parties decide to choose the sole arbitrator for the settlement of their dispute. c.

Challenging the Arbitral Jurisdiction: There might be certain situation, where the involvement of the national court becomes necessary, and challenging the jurisdiction of the arbitral tribunal includes the such involvement of the court. It is pertinent to note that if a party is trying to challenge the jurisdiction of the tribunal, the whole thing can be made out only at the initial stage of the proceeding. Another thing is that, when a party is successful in challenging the arbitral tribunal, the proceeding of the arbitration gets lapsed. The entire conversation is being supported with the help of the UNCITRAL Model Law and Section 16 of the Arbitration and Conciliation Act. The verdict on the issue of the jurisdictional challenge of the arbitral tribunal entirely lays with the concerned national court of law.

The three important grounds on which the jurisdiction can be challenged are (a) existence of the agreement; (b) validity of the agreement and (c) scope of the agreement. 14 d. Assistance via collecting the evidences: As per Article 26 mentioned under the Model Law, states that either the parties in the agreement or the arbitral tribunal after taking the permission from the tribunal can proceed to the national court of law, seeking the assistance in collecting the evidences which may further lead to the pair procedure of law. At the outset of the request made, the court my exercise its jurisdictional power in order to collect evidences. 15 However, under the provisions of the Model law the parties are not competent enough to preclude their permission to the court in collection of the evidences. Therefore,

13 Model Law, Art. 11; Arbitration and Conciliation Act, 1996, s. 11

14 S. Sangyong Engg. v. NHAI, (2019) 15 SCC 131.

15 UNCITRAL Model Law, Art.26, 27.

if the act of collection of evidences is done by the domestic court such act promotes the International Commercial Arbitration and the scope of Article 27 of the Model law and various other provisions remains silent and narrow in the ambit of the national arbitration laws. e. Enforcement of the Awards: An arbitration agreement as well as the arbitral award is binding in nature when it is enforceable by the court of law. The party in whose favour, the award has been passed shall invoke the powers of the court in order to enforce the award and make it legally certified as courts judgement. Either of the parties have the right to challenge the award in the national court as an appeal if it suffices a sustainable question of law which needs to be rendered in order to serve the justice.

It is the duty of the national courts to protect and preserve the integrity and dignity of the arbitral process.

7 IMPORTANT JUDGEMENTS

In the case of Vidya Drolia v. Durga Trading Corporation16 where the Supreme Court clarified the key aspects of arbitrability of dispute under the Arbitration and Conciliation Act. This case envisages a pro-arbitration shift in India jurisprudence. Wherein, it broadened the scope of the arbitration and clarified the pre-arbitral stage when the intervention can be done by the courts. This judgement of the Supreme Court aligns Indian Law with the global best practices and imitates the nominal national courts intervention in the arbitration proceedings. In the case of Bharat Aluminium Co. v. Kaiser Aluminium, supra the Supreme Court made several significant observations concerning to the arbitration laws and held that Part 1 of the Arbitration and Conciliation Act, 1966 is exclusively applicable to arbitrations seated in India.

The court further held that the seat of arbitrations is of paramount importance and the law governing the same is the law of the seat i. e. , the lex arbitri. Through this judgement the court emphasized on the concept of the part autonomy in choosing the seat and the procedural law of arbitration. In the case of Dallah Real Estate v. Pakistan17 where it was held that even after the arbitral tribunal’s decision has been passed the national court can conduct its own independent review

16 Vidya Drolia v. Durga Trading Corp., (2021) 2 SCC 1.

17 Dallah Real Estate & Tourism Holding Co. v. Ministry of Religious Affairs, Government of Pakistan, [2010] UKSC 46, [2011] 1 AC 763. of the jurisdiction. It clarified that the courts have a supervisory role while enforcing the awards, precisely on the issues of arbitrability and jurisdiction. Further it reinforced that the enforcement courts are not bound by the arbitral tribunal’s decision on jurisdiction. In the case of Yukos Capital v. The Russian18 the award being annulled in Russia was upheld by the Dutch Courts and founded as lack of independence of Russian Judiciary. This case highly demonstrated that national court can refuse to recognize aannulment decisions of courts from jurisdictions that violate due process of law and basic principle of fairness. In the case of Nafimco v.

Liao the German Federal Court refused enforcement of an arbitral award on grounds of public policy, illustrating the tension between private adjudication and sovereign legal standards. 19

8 CONCLUSION

The whole process of arbitration is to lessen down the burden of the parties as it less cost effective and time consuming from litigation. International Arbitration has been initially selected method of resolving the cross-border or international dispute between the aggrieved parties commencing an international contract. The role of the national court in the proceeding where the parties made the decision of excluding the jurisdiction of the court is quite critical. While there is a robust emphasize on the international arbitration for resolving the dispute without the interventions of the court, however, the entire system depends upon the court’s inherent power to intervene to function. The UNCITRAL Model Law, New York Conventions and National law has provided various provisions where it states the power of the national court to intervene in the arbitration proceedings.

However, the interface should not be overly high by the judicial system to avoid the hindrance in the proceedings. Keeping the same in mind, the judicial interpreters with over the passage of time had come up with the amendment in year

2015 which evidently restrict the intervention of the courts at different stages.

Therefore, it can be concluded that the role played by the national court in the international arbitration proceedings is important and crucial but at the same time should be interfered with 18 Yukos Capital S.a.r.l. v. Russian Federation, Supreme Court of the Netherlands, ECLI:NL:HR:2021:1534 (Nov. 5, 2021). 19 Bundesgerichtshof [BGH] [Federal Court of Justice] Jan. 14, 2009, Neue Juristische Wochenschrift [NJW] 2009, 1653 (Ger.). certain restrictions and obligations.