Multi-Tier Arbitration Clauses  
International Trends in Dispute Resolution
Author(s): Anjali Chawla
Published by Bloomsbury Publishing India Pvt. Ltd
Publication Date:  Available in all formats
ISBN: 9789356405905
Pages: 370

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ISBN: 9789354353000   Price: INR 999.00   

The aim of the book is to critically analyse the scope of enforceability of MDRC and to determine their true nature, as obligatory or merely optional, under the Indian Arbitration regime Arbitration law is procedural in nature, having an impact on the smooth functioning of the resolution of disputes which are substantive in nature. This book represents dispute resolution through ADR in its most composite/all-encompassing form by providing the most efficacious option in each jurisdiction.

The book discusses the:

• The nature of Multi Tier Dispute Resolution Clauses (MDRC), its functioning, benefits, and drawbacks.

• View of Indian courts on the nature of MDRC.

• Indian view of MDRC being a prerequisite to arbitration. It further establishes that both tribunal and courts are the competent fora to determine the enforceability of MDRC.

The book covers MDRC in different jurisdictions like UK, USA, France, Canada, Germany, Australia, Singapore, Hong Kong, China, Taiwan, Switzerland and India. It sheds light on the circumstances where MDRC fails to be enforced and provides recommendations and suggestions based on the best practice of international arbitration to draft an enforceable clause. This book is meant for lawyers, academicians, law students, courts and law colleges.

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The aim of the book is to critically analyse the scope of enforceability of MDRC and to determine their true nature, as obligatory or merely optional, under the Indian Arbitration regime Arbitration law is procedural in nature, having an impact on the smooth functioning of the resolution of disputes which are substantive in nature. This book represents dispute resolution through ADR in its most composite/all-encompassing form by providing the most efficacious option in each jurisdiction.

The book discusses the:

• The nature of Multi Tier Dispute Resolution Clauses (MDRC), its functioning, benefits, and drawbacks.

• View of Indian courts on the nature of MDRC.

• Indian view of MDRC being a prerequisite to arbitration. It further establishes that both tribunal and courts are the competent fora to determine the enforceability of MDRC.

The book covers MDRC in different jurisdictions like UK, USA, France, Canada, Germany, Australia, Singapore, Hong Kong, China, Taiwan, Switzerland and India. It sheds light on the circumstances where MDRC fails to be enforced and provides recommendations and suggestions based on the best practice of international arbitration to draft an enforceable clause. This book is meant for lawyers, academicians, law students, courts and law colleges.

Table of contents
  • Cover
  • Title Page
  • Dedication
  • Acknowledgements
  • About the author
  • Foreword
  • Preface
  • Contents at a glance
  • Contents
  • Table of cases
  • List of abbreviations
  • Chapter 1 Addressing the White Elephant
    • 1.1 Introduction
    • 1.2 The understanding of
    • 1.3 The Infancy of Arbitration in Commercial Sphere
    • 1.4 The first step towards the
      • 1.4.1 Confidentiality
      • 1.4.2 Neutrality
      • 1.4.3 Party autonomy
      • 1.4.4 Kompetenz-Kompetenz
      • 1.4.5 Severability
  • Chapter 2 The Breaking Dawn: Commencement of the Arbitration Regime
    • 2.1 The Theory of Evolution
      • 2.1.1 Geneva Protocol on Arbitration Clauses 1923
      • 2.1.2 Geneva Convention on the Execution of Foreign Arbitral Awards, 1927
      • 2.1.3 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 1958
      • 2.1.4 The International Centre for Settlement of Investment Disputes Convention of 1965 (the ‘ICSID Convention)’
      • 2.1.5 The UNCITRAL Arbitration Rules
      • 2.1.6 The UNCITRAL Model Law
    • 2.2 The State of Affairs
      • 2.2.1 Swiss Arbitration Law
      • 2.2.2 The English Arbitration Act, 1996
      • 2.2.3 The Indian Arbitration Act
      • 2.2.4 The US Federal Arbitration Act, 1925
      • 2.2.5 The Swedish Arbitration Act
      • 2.2.6 The German Arbitration Law
      • 2.2.7 The French Arbitration
    • 2.3 The Bottom Line
  • Chapter 3 Decluttering of the Arbitration Practices
    • 3.1 Prologue
    • 3.2 Types of Arbitration
      • 3.2.1 Institutional Arbitration
      • 3.2.2 Ad-hoc Arbitration
    • 3.3 Advanced Arbitration Prototypes
      • 3.3.1 Fast-Track Arbitration
      • 3.3.2 Emergency Arbitration
    • 3.4 Challenges to the Stand- Alone Spirit of Arbitration
    • 3.5 The Rising Complexities
    • 3.6 Is Arbitration still considered cost-effective?
    • 3.7 Elevating the effects of dispute resolution
  • Chapter 4 Understanding the Layers of Multi-Tiered Dispute Resolution Clauses
    • 4.1 Definition and Scope
      • 4.1.1 Spectrum of ADR
    • 4.2 Types of ADR and their Mechanism
    • 4.3 Purpose and Functioning of the Multi-Tier Dispute Resolution
    • 4.4 Benefits of the Multi-Tier Clauses
    • 4.5 Drawbacks of Multi-Tier Clauses
  • Chapter 5 The Curious Case of Mediation & Arbitration
    • 5.1 Prelude
    • 5.2 The Legislative Journey
    • 5.3 The Rising Popularity of Med-Arb
    • 5.4 Advantages of Med-Arb
    • 5.5 Potential Demerits of Med-Arb
    • 5.6 Impacts of Med-Arb on the Dispute Resolution Industry
    • 5.7 Rapid Growth in Jurisdictions and Prominence in Institutional Rules
    • 5.8 Judicial intention of promoting mediation in India
    • 5.9 Mediation Regime in the World: Jurisdiction Examples from the US, Singapore, and India
      • 5.9.1 Mediation Regime in the United States
      • 5.9.2 Mediation Regime in Singapore
        • 5.9.2.1 Legislative Development in Singapore
        • 5.9.2.2 Types of Mediation in Singapore
        • 5.9.2.3 The Judicial Perspective
      • 5.9.3 Mediation in India
    • 5.10 Impact of Covid-19 on Dispute Resolution
  • Chapter 6 Multi-Tiered Resolution in France: A Conundrum of Polyclinique Des Fleurs & Clinique Du Morvan
    • 6.1 Background
    • 6.2 Jurisprudence Alert
    • 6.3 Advent of New Era: From the Effect of Poiré to the Changes by Medissimo
    • 6.4 Effects of Counterclaims on the Multi-Tier Clauses
    • 6.5 Interplay between MTDR Clauses and Competent Authority to Rule on the Admissibility of the Claims
    • 6.6 Trends Pertaining to the Multi-Tier Dispute Resolution Clauses: Effect of EU Directive on France
    • 6.7 The Interphase between Consumer Disputes and the Multi-Tier Dispute Resolution Clauses
    • 6.8 Developments witnessed by Arbitral Institutions in France
    • 6.9 Conclusion
  • Chapter 7 The Multiverse of Dispute Resolution: Hybrid Dispute Resolution in the United States
    • 7.1 Overview
    • 7.2 Multi-Tier Universe under the Statutory Regime
      • 7.2.1 The Federal Arbitration Act, 1925
      • 7.2.2 The Uniform Arbitration Act, 2000
    • 7.3 Understanding of the Institutional Practice in Multi-Tier Disputes
      • 7.3.1 The Judicial Interpretation of Multi-Tier Clauses
      • 7.3.2 Enforceability of Negotiation as a Pre-Arbitral Step
      • 7.3.3 The fulfillment of Conditions Precedent Mandate to the Pre-Arbitral Steps
      • 7.3.4 The Paradigm Shift
    • 7.4 Conclusion: Dismiss or Stay?
  • Chapter 8 Enforcement of Multi-Tier Clauses as a Condition Precedent to Arbitration: A Critique of the English System
    • 8.1 Inception
    • 8.2 Legislative Position
    • 8.3 Jurisprudential Trends
    • 8.4 The New Divergence
    • 8.5 The Recent past
    • 8.6 Challenges to the Enforceability
      • 8.6.1 Negotiations under Good Faith
      • 8.6.2 Narrow Interpretation
      • 8.6.3 Determinative vs Non-Determinative Provisions: Condition Precedent
      • 8.6.4 Mandatory v. Optional Language
      • 8.6.5 Specificity and Institutional Reliance
      • 8.6.6 Admissibility v. Jurisdiction in light of challenges raised
    • 8.7 Conclusion
  • Chapter 9 A Comprehensive Analysis of Multi-Tier Arbitrations under the Swiss Jurisdiction
    • 9.1 Interpretation
    • 9.2 Treatment of Multi-Tier Dispute Resolution Clauses under the Swiss Jurisprudence
    • 9.3 Evolution of Pre-Arbitral Procedure in Switzerland
    • 9.4 Interpretation of the Multi-Tier Dispute Resolution Clauses
    • 9.5 Influence of MTDR Clauses Suggested by the Arbitral Institutions
    • 9.6 Impact of MTDR Clauses on the Jurisdiction of the Tribunal and their Enforceability
    • 9.7 Reliefs Against a Pre-Mature Arbitration
    • 9.8 Conclusion
  • Chapter 10 Analysis of the Multi-tiered Dispute Resolution Clauses in Canada
    • 10.1 Foreword
    • 10.2 Legislative Framework in Canada
    • 10.3 Judicial Interpretation of MTDR Clauses
    • 10.4 Jurisdiction of Tribunals and the Effect on Enforcement
    • 10.5 Enforcement of the Arbitral Awards and considerations related to the MTDR Clauses
    • 10.6 The Proposed Changes in the Policies and the Need for an ‘Ideal Model Clause’
    • 10.7 Conclusion
  • Chapter 11 The interphase between the Law and enforceability of Multi-Tier Resolution: Trend in Australia
    • 11.1 The Commencement
    • 11.2 The Coveted Precedent of Hooper Bailie: Laying the Ball Rolling for Enforcement of Pre-Arbitral Requirements
      • 11.2.1 The Umbrella of Good Faith
      • 11.2.2 The Power Dynamics under the ADR Remedies and the threshold of the formal participation
    • 11.3 Prologue
    • 11.4 Fast Forward to Judicial Progress
    • 11.5 Legislation and Institutional Framework
    • 11.6 Way Forward/Conclusion
  • Chapter 12 The Changing Narrative of the Multi-Tiered Dispute Resolution System: A German Perspective
    • 12.1 Prelim
    • 12.2 Ontogenesis of Multi-Tier Clauses under the German Regime
    • 12.3 Enforceability
    • 12.4 The Nature of the Multi-Tier Clause
    • 12.5 The Identification of the Competent Forum
    • 12.6 The German Arbitral Institute and Multi-Tier Dispute Resolution
    • 12.7 The Denouement
  • Chapter 13 The Singaporean Approach to the Hybrid Clauses: from Jurisdictional Preconditions to Enforceability
    • 13.1 Preamble
    • 13.2 The Preferred Hub For Arbitration
    • 13.3 The Validity of the Multi-Tiered Dispute Resolution Clauses
    • 13.4 The Understanding of the Multi-Tier Clauses: From Mandate To Enforceability
    • 13.5 The Scope of Arbitral Tribunal Jurisdiction on The Premature Disputes
    • 13.6 Reliefs
    • 13.7 The Role of Arbitral Institutions In Multi-Tier Arbitrations
    • 13.8 Conclusion
  • Chapter 14 The Narrow Lane of Multi-Tier Dispute Resolution Clauses: Overview of Hong Kong
    • 14.1 The Starting Point
    • 14.2 Historical Jurisprudence
    • 14.3 The Evolution of the Current Trends
    • 14.4 The Future Trends – Model Clauses/Acts/Legislations
    • 14.5 Whether The MTDR Clauses are a Pre – Condition to Arbitrate?
    • 14.6 Enforceability: Admissibility vs. Jurisdiction
    • 14.7 Concluding Remarks & Recommendations
  • Chapter 15 Multi-Tier Dispute Resolution in the East: Chinese Arbitral System
    • 15.1 Launching of the MTDR
    • 15.2 Tiered Dispute Mechanism under the Chinese System
    • 15.3 The Role Played by Arbitral Institutions in Facilitating MTDR
    • 15.4 Pre-Arbitral Dispute Resolution Mechanisms
    • 15.5 The Current & Future Trends in Multi-Tier Resolution
    • 15.6 Summing-up
  • Chapter 16 The Hybrid Dispute Resolution Affairs: Study of Taiwan
    • 16.1 Opening Remarks
    • 16.2 The Legal Framework For ADR
    • 16.3 The Arbitral Institutions in Taiwan
    • 16.4 ADR Trends Towards MTDR Approach
    • 16.5 Judicial Decisions on MTDR Clauses
    • 16.6 Concluding Remarks
  • Chapter 17 The Multi-Tier Dispute Resolution Influence and Consequences under the Indian Arbitration Framework
    • 17.1 The Basics
    • 17.2 The Attributes of Multi-Tiered Clauses: Mandatory v. Directory
      • 17.2.1 Minority View: Directions to Accompany
      • 17.2.2 Majority View: Mandate to Comply
      • 17.2.3 The Verdict
    • 17.3 Enforceability of the Multi-Tiered Clauses as Jurisdictional Pre-Conditions
      • 17.3.1 Interface between the Enforceability and Interpretation
      • 17.3.2 Intersection between the Enforceability and Parties’ Intention
      • 17.3.3 Interrelation between the Enforceability and Validity
      • 17.3.4 Enforceability of an Appellate Dispute Resolution Clause
      • 17.3.5 The Outcome
    • 17.4 The Competent Forum to Determine the Enforceability of a Multi-Tiered Clause
      • 17.4.1 Ratiocination
    • 17.5 Codified Provisions: Legislative and Institutional Dynamics Scaling Towards MTDR
      • 17.5.1 Statutory provisions and byelaws
      • 17.5.2 The Dynamics of the recently mandated Pre-Institution Mediation for Commercial Disputes
      • 17.5.3 Institutional Rules
    • 17.6 Epilogue
  • Chapter 18 Recommendations for Drafting an Enforceable Multi-Tiered Clause
    • 18.1 Language and intention
    • 18.2 The three-step formula
    • 18.3 Accepted practices for drafting MTDR clauses
    • 18.4 Role of institutional rules
    • 18.5 Co-operation of parties
  • Chapter 19 Conclusion
  • eCopyright
Biographical note

Anjali Chawla, Dispute Resolver, Assistant Professor & Assistant Dean (Student Affairs), Independent Practitioner/ Jindal Global Law School

Anjali is an Assistant Professor at Jindal Global Law School, O.P. Jindal Global University.

She is also a qualified lawyer at the Bar Council of India. She has also been advising domestic and international clients regarding commercial and civil disputes. Anjali is also acting as a Dispute Resolver (Mediator/Arbitrator/ Conciliator) for various ODR platforms.

Anjali sits on the Editorial Board of Legal Maxim and the Review Board of Syin & Sern. She has previously published articles and book chapter on Dispute Resolution, Commercial Law, Reproductive Rights, and Jurisprudence, etc.

Anjali is an advocate for child care and education. Her research interest is centered around International Dispute Resolution, Commercial Law, Contractual Law, and Domestic Arbitration.

In her free time, Anjali volunteers for mentoring students, judging competitions and mock arbitrations. She also hosts at “International Arbitration Juniors”, a networking group for young international lawyers.

Excerpt

First published in India 2022

© 2022, Author

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This book is dedicated to my
parents Mrs. Pushpa Chawla and
Mr. Parveen Chawla, my brother
Aman Chawla, the everlasting
memories of Nishant Chawla, and
all the beautiful souls, who are
making this world a better place.

Acknowledgements

I would like to express my heartfelt gratitude to Hon’ble Mr. Justice G.S. Sistani (Former Judge of Delhi High Court, India) for writing the foreword and recognizing my work. For giving me an opportunity to assist your lordship and for introducing me to this interesting world of ADR in the early years of my legal career. Med-Arb was one of the very insightful topics that your lordship introduced to me, back in 2018.

I sincerely thank Hon’ble Mr. Justice G.P. Mittal (Former Judge of Delhi High Court, India) for advancing my understanding of the dispute resolution and regulatory framework of Arbitration.

A big thankyou to Hon’ble Mr. Justice M.L. Mehta (Former Judge of Delhi High Court, India) for your lordship’s timely encouragement and valuable insight on the ADR mechanism.

I would like to express sincere thanks to my professors at Jindal Global Law School: Vice-Chancellor Prof (Dr.) C. Raj Kumar, Prof. (Dr.) S. G. Sreejith, Prof. (Dr.) Manveen Singh, and Prof. Sushant Chandra for always pushing me to grow. I am forever thankful for their support and encouragement at each point of my career.

Special thanks to Prof. (Dr.) Sanjiv P. Sahni for mentoring, supporting and guiding me through the crucial years of my legal and professional career.

I want to thank Professor Patricia Shaughnessy for being my thesis supervisor at Stockholm University. Thank you for discussing the subject matter of this book, giving your thoughtful insights.

My deepest gratitude to Mr. Toby Thomas, Business Head of Bloomsbury India for his unconditional support in helping me with the contract, and extension. Despite his busy schedule, Mr. Thomas always took my calls and provided me with solutions. I am very thankful for his support.

I would also like to thank everyone on the Bloomsbury publishing team, thank you for making my dream come true.

A huge thank you to my mentor Ms. Sherlin Tung, for patiently listening to my professional roadblocks, giving me suggestions, and for always encouraging me to continue believing in myself. Thank you!

I am forever thankful to my brother, Advocate Deepak Wadhwa for encouraging me to write this book and supporting me throughout this process.

I would like to thank my very dear friend Daniela Bartsch for taking time out of her busy schedule and reviewing some parts of my work. Thank you for helping me procure some of the readings for my work.

A special thank you to Mr. Dharmil Doshi, Ms. Esha Kumar, Mr. Sarva Easwaran, and Ms. Vidyotma Malik (Advocate) for sparing their valuable time, after work hours, including on weekends. I sincerely thank and acknowledge their assistance. Thank you all for your useful suggestions and relevant edits on some chapters.

I am also very thankful to the JGU library staff for keeping up with all my emails and effortlessly helping me in procuring all the material for my research.

I would also like to thank my amazing friends: Karan, Akanksha, Digantika (Advocates), Mehak, Tanya, Shruti and Siddharth for their support and encouragement throughout this process. Special thanks to Karan for making efforts and running from one library to another in Sydney to help me find the relevant readings.

Thank you to my friends and colleagues: Chetan, Mukund, Sujay, Utkarsh, Kaberi and Aayushi (Advocates) for keeping my spirits high and keeping me motivated throughout the process. Special thanks to Adv Karan Deswal for his unconditional support, for trusting and believing in my potential.

My sincere and deepest gratitude to Gohonzon, SGI, and my Sokka Sisters for keeping me afloat throughout my project.

Lastly, I would like to thank my beautiful parents and my awesome brother, Aman for keeping up with me throughout this process of writing the book. Also, a big thank you for your unconditional support.

About the author

Anjali Chawla, Dispute Resolver, Assistant Professor & Assistant Dean (Student Affairs), Independent Practitioner/Jindal Global Law School

Anjali is an Assistant Professor at Jindal Global Law School, O.P. Jindal Global University.

She is also a qualified lawyer at the Bar Council of India. She has also been advising domestic and international clients regarding commercial and civil disputes. Anjali is also acting as a Dispute Resolver (Mediator/Arbitrator/Conciliator) for various ODR platforms.

Anjali sits on the Editorial Board of Legal Maxim and the Review Board of Syin & Sern. She has previously published articles and book chapter on Dispute Resolution, Commercial Law, Reproductive Rights, and Jurisprudence, etc.

Anjali is an advocate for child care and education. Her research interest is centered around International Dispute Resolution, Commercial Law, Contractual Law, and Domestic Arbitration.

In her free time, Anjali volunteers for mentoring students, judging competitions and mock arbitrations. She also hosts at “International Arbitration Juniors”, a networking group for young international lawyers.

Justice Gurindar Singh Sistani

Former Judge Delhi High Court

sistanilaw@gmail.com

justicesistani@gmail.com

+91 9871300034

Foreword

Not all disputes are one-dimensional. Circumstantially, there are several factors that individually concern the parties to a disagreement such as the relationship between them and the paucity of time to arrive at a settlement. This makes every dispute unique, requiring them to be treated in a manner that is most appropriate to the individuals and entities involved. Multi-tier dispute resolution presents the answer to these questions. Arbitration as a dispute resolution mechanism is predominantly dictated by party autonomy. Multi-Tier Dispute Resolution involving pre-arbitral attempts to resolve the dispute just acts as an extension to this principle.

Amicably resolving such a dispute is an option that most dispute parties do not fathom, owing to the age-old practice of dragging each other to court. Such procedures tend to get dismissed at the first instance as being too simple and ineffective in contemplating the complexities of disputes. While reading the book, I could not help but recount the experiences I had during my time at the bench in Delhi High Court, they have taught me to the contrary. A simple attempt at amicably resolving the dispute, keeping aside the personal and professional differences can take the parties a long way by helping them preserye their relationship in the long run for future associations.

‘Multi-Tier Dispute Resolution,’ as the phrase suggests allows the parties to a dispute to visualize the myriad possibilities of resolving their issues be it negotiation, mediation, or conciliation. It is indeed not a process without limitations such as, the cooperation and intension of the parties, the mandate under the lex arbtri, its futility in irreconcilable differences etc. Yet, the application of such processes in several nations over the years has displayed that these limitations are easily curable. The immediate resolve to several of these limitations is having a global outlook and identifying the embracement or the general hesitation towards such mechanisms.

Since, business, trade, commerce and contracting in pursuance of such commerce is not restricted to the boundaries of one nation, where the multi-party contracts are bound by the law of a third country in several instances, it is apropos to investigate the positions taken by various nations towards facilitating pre-arbitral procedures to resolve disputes.

Anjali in this endeavor, has left no stone unturned in giving a holistic academic insight on everything that is entailed in such dispute resolution processes. Multi-Tier Dispute Resolution being an evolving concept in arbitration traAsnationally, leads to a lack of uniformity between several jurisdictions. She has critically examined the laws of such eminent jurisdictions such as India, United Kingdom, United States of America, Switzerland, Hong Kong, Taiwan, Canada, Singapore in the sphere of arbitration to arrive a comprehensive piece of scholarly work.

Residence cum office : M-23, Jangpura Extension, New Delhi-110014

Several jurisdictions are yet to take a conclusive stance on the treatment of Multi-Tier Dispute Resolution clauses in arbitration agreements, their impact on the jurisdiction and competence of the arbitral tribunal and on the mandate, imposed on the parties. Their conflicting stances place the parties in a difficult position of being unaware of the ramifications of their decision to participate in a multi-tier dispute resolution process. In this context, with the jurisprudence on MTDR being limited, the book has effectively scrutinized judicial precedents to harmoniously read them with the works of commentators to give an insight into the endless possibilities in resolving a dispute by presenting the most effective options in each jurisdiction. This book is not limited to being an analysis of pre-arbitral procedures in the various jurisdictions, it rather very efficiently acts as a practitioners’ guide by presenting suggestions for the incorporation and interpretation of such clauses in line with the applicable laws.

The author’s approach towards this subject has been very thorough and consistent throughout the book, which I believe will cater to the interests of academicians, people in the legal practice and students globally.

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