Mid Term Examination, September- 2016
B.A.LL.B. (HONS.)
SEMESTER VII IX INTERNATIONAL COMMERCIAL ARBITRATION
Max. Marks: 20 Max. Time: 1:30 Hrs.
Note: Answer any TWO questions out of three. All questions carry equal marks.
1. One Direction a UK based band entered into a contract with Newyork based VMA Group to
perform in MTV Video Music Awards in Newyork. Harry Styles of 1D on behalf of his band was
negotiating about the details of their performance through BBM. In that communication through BBM,
they discussed and finalized the dates of performance, money to be paid, "Perfect" to be played as
opening song, accommodation, arbitration as dispute settlement mechanism, timing of rehearsal etc.
When 1D reached Newyork, they refused to perform as they said that advance payments of 1000
Pounds were agreed upon not 1000 dollars, while VMA Group claimed that payment had to be done in
dollars. VMA Group initiated arbitration proceeding against 1D and claimed damages for nonperformance
of contract. 1D on the other hand said that there was no meeting of minds, no consensus
ad idem in the first hand itself for Performance contract (based on dollar- pound issue), so contract is
null and void and therefore no arbitration should take place. 1D even argued that this contract does not
fall under the term commercial, what they do is an artistic work and is paid for the same and even there
is no valid arbitration agreement. Now on the basis of given facts you will have to answer the
following questionsa.
Does this dispute fall under the term commercial?
b. No consensus ad idem is argued, so no arbitration can take place. Is it correct?
c. Is there a valid arbitration agreement?
d. What kind of approach India follows while defining term commercial? (Marks 2.5×4=10)
2. Pikachu Ltd. was the company involved in the production of electricity. They decided to merge
with Torkoal Inc. who was a leading coal industry. In this merger agreement there were certain terms
related to what all coal fields controlled by Torkoal Inc. will become the asset of resulting company,
shareholding division, arbitration clause etc. Now before merger could take place completely. Torkoal
Inc transferred its main coal field to Squirtle Co. Ltd.. Pikachu Ltd considered this as violation of
merger agreement as that coal field would have become the part of resulting company. Pikachu ltd
initiated arbitration proceeding against Torkoal Inc.
Torkoal Inc came up with the argument that by this merger, dominant position would have been
created in market, this merger agreement itself is against the law, thus no arbitration can take place.
Tribunal permitted the arbitration and passed the award in favour of Pikachu Inc.
a. Can such dominant position issue be dealt in arbitration? Can tribunal decide the question
challenging its own jurisdiction?
b. Suppose seat was Spain. If Spain refused to enforce the award, then will that award have any
value; can Pikachu Ltd get that award enforced in Pokemon Land where they were registered.
c. If seat would have been India then what would have happened in this case.
Newyork Convention, 1958 and UNCITRAL Model Law, 1985 are two leading sources of
International Commercial Arbitration. Do you think these two are perfect laws? If No, then highlight
the flaws and suggest solutions to make them more efficient. (Marks
3. Sheldon Cooper Pvt. Ltd. was a company registered in India with 30 of its controlling stake in
France held by Barney Co.. It was selling some research equipments to Indian Company Dr. Gregory
House Corp. whose 57 controlling stake were with Jon Snow Association in Japan. In their sale
deed there was an arbitration clause stating seat- USA and French law as a law governing arbitration
agreement. Dispute cropped up regarding payment; so Sheldon Cooper Pvt. Ltd. initiated arbitration
proceeding in USA. Entire arbitration proceeding took place peacefully and award was passed in
favour of Dr. Gregory House Corp. Will this award be enforced in India? Was that a valid
International Commercial Arbitration?
Discuss the points which make International Commercial Arbitration different from Domestic
Arbitration. Is arbitrability issue a big and complex hurdle in case of domestic arbitration also?
Explain. (Marks