Written by - Kalpana Jaiswal
Designation - Intern, MediateGuru
INTRODUCTION:
The UNCITRAL Model law on Commercial Arbitration was adopted by the United Nations Commission on International Trade Law (UNCITRAL) on 21 June 1985, at the Close of the Commission’s 18th annual session. The General Assembly, in its resolution 40/72 of 11 December 1985, recommended “that all states give due consideration to the Model Law on International Commercial Arbitration, in view of the desirability of uniformity of the law of arbitral procedures and the specific needs of the International commercial arbitration practice.”
The Model Law constitutes a sound and promising basis for the desired harmonisation and improvement of national laws. It covers all stages of arbitral process from the arbitration agreement to the recognition and enforcement of the arbitral award and reflects a worldwide consensus on the principle and important issues of International arbitral practice. It is acceptable to States of all regions and the different legal or economic systems of the world.
The form of a model law was chosen as the vehicle for harmonisation and improvement in view of the flexibility it gives to states in preparing new arbitration laws. It is advisable to follow the model as closely as possible since that would be the best contribution to the desired harmonisation and in the best interest of the users of international arbitration, who are primarily foreign and their lawyers.
NEED OF UNCITRAL MODEL LAW:
A global survey of national laws on arbitration revealed considerable disparity not only as regards individual provisions and solutions but also in terms of development and refinement. Some laws may be regarded as outdated, sometimes going back to the nineteenth century and often equating the arbitral process with court litigation. Other laws may be said to be fragmentary in that they do not address all relevant issues. Even most of those laws which appear to be up to date and comprehensive were drafted with domestic arbitration primarily, if not conclusively, in mind. While this approach is understandable in view of the fact that even today the bulk of cases governed by a general arbitration law would be a purely domestic nature, the unfortunate consequence is that traditional local concepts are imposed on international cases and the needs of modern practice are often not met.
Problems and undesired consequences whether emanating from mandatory or non-mandatory provisions or from a lack of pertinent provisions, are aggravated by the fact that national laws on arbitral procedure differ widely. The differences are a frequent source of concern in international arbitration, where at least one of the parties is, and often both parties are, confronted with foreign and unfamiliar provisions and procedures. For such a party it may be expensive, impractical or impossible to obtain a full and precise account of the law applicable to the arbitration.
IMPORTANT ASPECTS OF UNCITRAL MODEL LAW:
The principles and individual solutions adopted in the Model law aim at reducing or eliminating the above concerns and difficulties. As a response to the inadequacies and disparities of national laws, the model law presents a special legal regime geared to international commercial arbitration, without affecting any relevant treaty in force in the State adopting the Model Law.
The Model law defines an arbitration as international if “the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their places of business in different states” [article 1 (3)]. The vast majority of situations commonly regarded as international if the place of arbitration, the place of contract performance, or the place of the subject-matter of the dispute is situated in a State other than where the parties have their place of business, or if the parties have expressly agreed that the subject-matter of the arbitration agreement relates to more than one country. As regards the term “commercial”, no hard and fast definition is provided under model law.
In this spirit, the Model Law envisages court involvement in the following instances. A first group comprise appointment, challenge and termination of the mandate of an arbitrator (article 11, 13, and 14), jurisdiction of the arbitral tribunal (article 16) and setting aside the arbitral award (article 34). These instances are listed in article 6 as functions which should be entrusted, for the sake of centralisation, specialisation and acceleration, to a specially designated court or, as regards article 11, 13 and 14, possibly to another authority (e.g. arbitral institution, chamber of commerce). A second group comprises court assistance in taking evidence (article 27), recognition of the arbitration agreement, including its compatibility with court ordered interim measures of protection (article 8 and 9), and recognition and enforcement of arbitral awards (article 35 and 36).
CONCLUSION:
The Model law was only designed to meet concerns relating state of national laws on arbitration and to eradicate existing disparities among nations relating to arbitration laws.
Comments