International Arbitration

Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 was primarily a procedural law, which had not repealed the Arbitration Act, 1940, but had only repealed the Arbitration (Protocol and Convention) Act, 1937; and thus domestic awards had to follow the path of the Arbitration Act, 1940 and after enactment of the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011; all foreign awards had to sail through the waters of the said Act

Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 merely changed procedures applicable to certain kind of arbitral awards and such procedural laws had retrospective effect

Notwithstanding the fact that an arbitration commenced before the enactment of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act (XVII of 2011), if the award for the same was announced after said enactment, then provisions of the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 would be applicable to such an arbitral award.

Convention On The Settlement Of Investment Disputes Between States and Nationals of other States ("ICSID Convention"), Arts. 25, 26, 27 & 36

International Centre For Settlement of Investment Disputes ("ICSID")

Bilateral Investment Treaties ("BITs")

Investor-State disputes

Standard Practice for dispute resolution, stated.

Application for stay of proceedings in an admiralty suit was filed by the defendant under S.4 of the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011

Contention of the defendant was that in the light of arbitration agreement between the parties, the proceedings of the suit could be stayed in terms of S.4 of the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011

Held, that arbitration agreement, in the present case, was incapable of being performed for the reason that the defendant had already initiated proceedings at the ICSID and it had therefore, itself created a situation where recourse to the arbitration clause between the parties would not be possible or feasible and therefore, the arbitration agreement was incapable of being performed

Present suit, therefore could not and ought not to be stayed under S.4 of the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011; however, there appeared to be nothing in the New York Convention to suggest that the reason why the arbitration agreement was incapable of being performed must be of a permanent or irremediable nature and may well be temporary or remediable

High Court observed that if the reason or situation rendering the arbitration agreement incapable of being performed existed when the application for stay of proceedings under S.4 came up for hearing before the court, then such application was to be dismissed, but if subsequently the situation changed and the reason ceases to exist (e.g., the impediment was removed), no reason existed why the defendant could not renew the application if the proceedings were still pending

In the present case, if the ICSID proceedings failed or were abandoned, then defendant would be able to renew its application under S.4 of the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011

High Court further observed, however, that any such application, if filed, would be dealt with on its own merits and subject to the rights of the plaintiff and in the light of the circumstances then prevailing

Application for stay of proceedings of the Admiralty Suit, was dismissed, accordingly.

Dispute over legality and validity of joint venture agreements between Provincial Government and transnational corporations/international companies

Arbitration over such dispute

Application to stay arbitration proceedings at International Council for Commercial Arbitration (ICCA) and International Centre for Settlement of Investment Disputes (ICSID)

Appointment of arbitrator by Provincial Government

Petitioner had moved an application to direct the respondents not to take further steps in the arbitration of the matter and also withdraw request for arbitration at the International Council for Commercial Arbitration (ICCA) and International Centre for Settlement of Investment Disputes (ICSID), till the Supreme Court decided upon the legality and validity of the joint venture agreements

Validity

Provincial and Federal Government were directed by Supreme Court to make a request to the International Council for Commercial Arbitration (ICCA) and International Centre for Settlement of Investment Disputes (ICSID), not to take any further steps in the arbitration proceedings and extend the period for nomination of arbitrator, so that Supreme Court could finally dispose of the petitions filed before it on the same subject and matter.

Dispute over legality and validity of joint venture agreements between Provincial Government and transnational corporations/ international companies

Arbitration over such dispute

Application to stay arbitration proceedings at International Council for Commercial Arbitration (ICCA) and International Centre for Settlement of Investment Disputes (ICSID)

Appointment of arbitrator by Provincial Government

Petitioner had moved an application to direct the respondents not to take further steps in the arbitration of the matter and also withdraw request for arbitration at the International Council for Commercial Arbitration (ICCA) and International Centre for Settlement of Investment Disputes (ICSID), till the Supreme Court decided upon the legality and validity of the joint venture agreements

Validity

Provincial and Federal Government were directed by Supreme Court to make a request to the International Council for Commercial Arbitration (ICCA) and International Centre for Settlement of Investment Disputes (ICSID), not to take any further steps in the arbitration proceedings and extend the period for nomination of arbitrator, so that Supreme Court could finally dispose of the petitions filed before it on the same subject and matter.