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UNCITRAL Model Law

With the emergence of Global & liberal trade worldwide, there has been tremendous increase in the exchange of goods & services on the global level. With such emergence, comes the disputes amongst people & businesses & an inevitable need was felt to introduce a mechanism for resolution of disputes.

The domiciliary courts were over burdened with the number of increasing conflicts amongst participating people on the international forum. For the speedy disposal of conflicts, Arbitration Dispute Resolution has come into existence for the amicable settlement between the parties & countries.

The UNCITRAL Model law on Arbitration is an international legal framework that provides the set of provisions on international commercial arbitration conduct & management. It came into being on 21st June, 1985. It is one of the three pillars of arbitration created by the UN to assist countries with different legal system in harmonizing their arbitration laws. As the model law is not a treaty, government are free to copy or modify it. Over 70 jurisdictions have already accepted it.

The model law consists of 36 Articles classified in 9 chapters covering all the stages of arbitration from limitation of court intervention to the recognition and imposition of the award by balancing b/w the parties freedom to choose their own procedure & the need to provide default rules to fill potential gaps.

Relevance of UNCITRAL Model law
The UNCITRAL is the vital legal part of the UN in the field of international trade law. Every nation has very contrasting laws in general. However, arbitration has an international connotation to it with often being international in nature. Thus, it needs uniformity of states & in that regard domestic laws of arbitration that has been included b/w different countries needs to be in uniformity. If not so, would result in creating hurdles to the smooth flow of trade.

Hence, it plays an vigorous role in scrapping out the hardships. It has been formulated to assist the nations to set up their domiciliary law & modernize their arbitration laws while keeping in mind the needs of international commercial arbitration.

The aim & objective of modern law was to majorly eliminate the concern for inadequacy of national laws & disparity b/w the states concerned.

Lately, UNCITRAL Expedited Arbitration Rules have come into existence as were being adopted on 21st July, 2021 & entered into effect on 19 th September, 2021. These rules function as discretionary preference of parties.

Uncetral Law & Uncitral Rules
UNCITRAL Rules are the exhaustive bunch of rules requiring the party to give consent for the conduct of arbitral proceedings b/w the participating parties. It pursue to provide competency in the procedures by laying out requirement of the reasonableness of cost & review mechanism.

On the contrary, Model laws dispense bunch of patterns legislation of different nations can alter by being a part of their domiciliary legislation on arbitration.

Both plays an indispensable role in international commercial arbitration in order to harmonize the global trade.

Principles of Model law on International Commercial Arbitration
It empowers the parties to freely choose their rules applicable on the arising conflicts. Majorly, the principles are agreeable and adaptable.

Following are the binding principles:
  • Party Autonomy:
    It lays down the parties with unprejudiced platform to have substantial control over the process for the removal of disputes. Parties are also provided with the option to alter the needs & requirements.
     
  • Separability:
    The arbitration clause in the contract is liberated and stays stand even if the substantial contract get invalid or becomes void. As per the Arbitration & Conciliation Act, 1996, an arbitration maybe in the form of as a clause in a contract or a separate agreement.
     
  • Competence:
    competence: Competency of an arbitral tribunal is of utmost importance to rule in its own jurisdiction. This principle is given recognition by numerous convention on international arbitration.
     
  • Territorial Principle:
    As the name suggests, it facilitates the tribunal to regulate people & events within its jurisdiction, with barring the tribunal to regulate the people & events outside its boarders.
     
  • Enforceability:
    It takes care & mandates that the decision resolving the dispute the executed in all the nation concerning the mention dispute in hand. Also, to accommodate the winning party to credit the assets of losing party based in & around the world.
     
UNCITRAL Model law in India
Arbitration was never been alien to India & has its existence since the ancient times. History being from 1889 arbitration legislation to provisions under CPC, 1908, India has tremendously developed arbitration by ratifying Geneva protocol,1923 & Geneva Convention,1927 under Arbitration Act, 1937. 1940's Arbitration Act was an attempt to consolidate & amend the law pertaining to domiciliary conflicts.

To reduce the already overworked judicial system in India, the legislation introduced Arbitration & Conciliation Act, 1996 for speedy, thrifty, & flexible disposal of disputes. The foundation principle of the act is UNCITRAL Model laws, 1985 covering both international & domestic commercial arbitration.

The demarcation of the act is in such a way that it consists of two parts, first being when both domestic and international arbitration are in India itself. Second part provides for foreign awards along with their execution under the New York Convention and the Geneva Convention. It sets the standard clause for arbitration agreement & also provides the interposition of the courts when the tribunals are not functioning adequately.

Further, it talks about the composition & jurisdiction of tribunals. Additionally, it also states the provision for arbitral award, its execution, mannerism of proceedings. Whatsoever is there in the said act, keeps the consensus with the model law.

Keeping in view, the lately given pronouncements by the judicial authorities shows the intent of the government to support the developments in the said field & in making India a hub of institutional arbitration.

Conclusion
UNCITRAL Model law in generality discusses the standards for implementation of arbitration laws globally. It governs all the procedures of arbitration such as how an arbitration agreement should be, composition of an arbitral tribunal, whether there should be three arbitrator or sole arbitration, demarcation of appointment of arbitrators, jurisdiction of arbitration, principle of competence-competence, extent of court intervention, recognition & execution of awards, power to grant interim measures.

To conclude, it wouldn't be wrong saying it is nothing but an international understanding between countries on crucial elements & to have a uniform legal structure on arbitration globally applicable.

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