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Disputes

When two or more partners agree on an International Joint Venture, there are possibilities for

disputes to arise. Particularly in IJV’s, there can be issues between the partners who are likely

to want their home country’s governing law and jurisdiction to apply to any disputes that may

come up; therefore, to avoid such a problem, a neutral governing law and jurisdiction is

chosen in some cases. A popular dispute resolution technique used in IJV’s is arbitration;

however, many times a court process is given priority as this system has more authority.

Other dispute resolution strategies utilized are mediation and litigation.

Kinds of disputes

1. Ethics - ethics violations, complaints, and grievances

2. Malpractice - medical, legal, and accounting malpractice claims

3. Estates/Trusts - disputes involving wills, trusts, estates, and other probate matters

4. Premises Liability - negligence actions

5. Insurance - coverage and denial issues

6. Intellectual Property/Patents - disputes over trademarks, copyrights, advertising,

patents, licensing, software, trade secrets, unfair competition, and literary and artistic

works.

7. Products Liability - consumer claims regarding defective products

8. Class Actions - class or collective action lawsuits involving wage and hour issues,

employment law issues, products liability claims, consumer protection issues, and

securities and shareholder derivative claims

9. Environmental – Statutory violations

Arbitration Meaning

Arbitration, a form of alternative dispute resolution (ADR), is a technique for the resolution

of disputes outside the courts, where the parties to a dispute refer it to one or more persons

(the "arbitrators", "arbiters" or "arbitral tribunal"), by whose decision (the "award") they

agree to be bound. It is a resolution technique in which a third party reviews the evidence in

the case and imposes a decision that is legally binding for both sides and enforceable. Other

forms of ADR include mediation (a form of settlement negotiation facilitated by a neutral

third party) and non-binding resolution by experts. Arbitration is often used for the

resolution of commercial disputes, particularly in the context of international commercial

transactions. The use of arbitration is also frequently employed in consumer and employment

matters, where arbitration may be mandated by the terms of employment or commercial

contracts.

Arbitration can be either voluntary or mandatory (although mandatory arbitration can only

come from a statute or from a contract that is voluntarily entered into, where the parties agree

to hold all existing or future disputes to arbitration, without necessarily knowing, specifically,

what disputes will ever occur) and can be either binding or non-binding. Non-binding

arbitration is similar to mediation in that a decision can-not be imposed on the parties.

However, the principal distinction is that whereas a mediator will try to help the parties find a

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middle ground on which to compromise, the (non-binding) arbitrator remains totally removed

from the settlement process and will only give a determination of liability and, if appropriate,

an indication of the quantum of damages payable. By one definition arbitration is binding and

so non-binding arbitration is technically not arbitration.

Types of Arbitration

As methods of dispute resolution, arbitration procedure can be varied to suit the needs of the

parties. Certain specific "types" of arbitration procedure have developed, particularly in North

America.

Judicial Arbitration is, usually, not arbitration at all, but merely a court process

which refers to itself as arbitration, such as small claims arbitration before the County

Courts in the United Kingdom.

High-Low Arbitration, or Bracketed Arbitration, is an arbitration wherein the

parties to the dispute agree in advance the limits within which the arbitral tribunal

must render its award. It is only generally useful where liability is not in dispute, and

the only issue between the parties is the amount of compensation. If the award is

lower than the agreed minimum, then the defendant only need pay the lower limit; if

the award is higher than the agreed maximum, the claimant will receive the upper

limit. If the award falls within the agreed range, then the parties are bound by the

actual award amount. Practice varies as to whether the figures may or may not be

revealed to the tribunal, or whether the tribunal is even advised of the parties'

agreement.

Binding Arbitration is a form of arbitration where the decision by the arbitrator is

legally binding and enforceable, similar to a court order.

Non-Binding Arbitration is a process which is conducted as if it were a conventional

arbitration, except that the award issued by the tribunal is not binding on the parties,

and they retain their rights to bring a claim before the courts or other arbitration

tribunal; the award is in the form of an independent assessment of the merits of the

case, designated to facilitate an out-of-court settlement. State law may automatically

make a non-binding arbitration binding, if, for example, the non-binding arbitration is

court-ordered, and no party requests a trial de novo (as if the arbitration had not been

held).

Pendulum Arbitration refers to a determination in industrial disputes where an

arbitrator has to resolve a claim between a trade union and management by making a

determination of which of the two sides has the more reasonable position. The

arbitrator must choose only between the two options, and cannot split the difference

or select an alternative position. It was initiated in Chile in 1979.

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o This form of arbitration is also known as Baseball Arbitration. It takes its

name from a practice which arose in relation to salary arbitration in Major

League Baseball.

o Night Baseball Arbitration is a variation of baseball arbitration where the

figures are not revealed to the arbitration tribunal. The arbitrator will

determinate the quantum of the claim in the usual way, and the parties agree to

accept and be bound by the figure which is closest to the tribunal's award.

Some forms of "Last Offer Arbitration" can also be combined with mediation to create

MEDALOA hybrid processes (Mediation followed by Last Offer Arbitration).

Choice of Law in Arbitration

A choice of law clause or proper law clause is a term of a contract in which the parties

specify that any dispute arising under the contract shall be determined in accordance with the

law of a particular jurisdiction.

Explanation

As people and transactions now more frequently cross sub-national, national and international

borders both physically and electronically, it becomes necessary to consider which law will

be applied in the event of a dispute. Should the laws be the same, the question will be

academic. But, if the laws are sufficiently different that the judgment will change depending

on which law the court applies, the issue of the choice of law becomes highly significant.

Choice of Forum Arbitration

The United States Supreme Court has upheld forum selection clauses on several occasions,

and has suggested that they should generally be enforced. See The Bremen v. Zapata Off-

Shore Company, 407 U.S. 1 (1972); Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585

(1991). The Bremen and Carnival Cruise cases, however, arose under the Court's admiralty

jurisdiction, not under diversity of citizenship jurisdiction.

A court in the United States will not necessarily honor a simple forum selection clause

whereas it is likely to respect a clause that points to a specific forum with the express

exclusion of others. Two October 2011 appellate rulings illustrate the difference. In Future

Industries of America v. Advanced UV Light GmbH, 10-3928, [2] the United States Court of

Appeals for the Second Circuit in New York City affirmed the dismissal of a case which sent

the parties to Germany because the forum selection clause made German courts the

exclusive/restricted forum. By contrast, the same court in Global Seafood Inc. v. Bantry Bay

Mussels Ltd., 08-1358, [3] affirmed the refusal of the lower court to refer the parties to

Ireland because the clause was not exclusive/restricted, and the litigation continues in

America.

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The state of New York has a statute expressly dealing with those circumstances under which

a New York court may not dismiss a case on the grounds of forum non convenience if the

parties' contract provides that the agreed upon venue is a court in New York.

The Foreign Awards (Recognition And enforcement) Act, 1961

ACT NO. 45 OF 1961 [30th November, 1961.]

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also

known as the New York Convention, was adopted by a United Nations diplomatic conference

on 10 June 1958 and entered into force on 7 June 1959. The Convention requires courts of

contracting states to give effect to private agreements to arbitrate and to recognize and

enforce arbitration awards made in other contracting states. Widely considered the

foundational instrument for international arbitration, it applies to arbitrations which are not

considered as domestic awards in the state where recognition and enforcement is sought.

Though other international conventions apply to the cross-border enforcement of arbitration

awards, the New York Convention is by far the most important

An Act to enable effect to be given to the Convention on the Recognition and Enforcement of

Foreign Arbitral Awards, done at New York, on the tenth day of June, 1958, to which India is

a party and for purposes connected therewith. BE it enacted by Parliament in the Twelfth

Year of the Republic of India as follows:-

1. Short title and extent.

This Act may be called the Foreign Awards (Recognition and Enforcement) Act,

1961.

It extends to the whole of India.

Definition: In this Act, unless the context otherwise requires," foreign award" means an

award on differences between persons arising out of legal relationships, whether contractual

or not, considered as commercial under the law in force in India, made on or after the 11th

day of October, 1960 –

(a) in pursuance of an agreement in writing for arbitra tion to which the Convention set forth

in the Schedule applies, and

(b) in one of such territories as the Central Government, being satisfied that reciprocal

provisions have been made, may, by notification in the Official Gazette, declare to be

territories to which the said Convention applies.

3. Stay of proceedings in respect of matters to be referred to arbitration.

Notwithstanding anything contained in the Arbitration Act, 1940 (10 of 1940 ), or in the

Code of Civil Procedure, 1908 (5 of 1908 ), if any party to an agreement to which Article II

of the Convention set forth in the Schedule applies, or any person claiming through or under

him commences any legal proceedings in any court against any other party to the agreement

or any person claiming through or under him in respect of any matter agreed to be referred to

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arbitration in such agreement, any party to such legal proceedings may, at any time after

appearance and before filing a written statement or taking any other step in the proceedings,

apply to the Court to stay the proceedings and the Court, unless satisfied that the agreement is

null and void, inoperative or. incapable of being performed or that there is not, in fact, any

dispute between the parties with regard to the matter agreed to be referred, shall make an

order staying the proceedings.]

4. Effect of foreign awards.

(1) A foreign award shall, subject to the provisions of this Act, be enforceable in India as if it

were an award made on a matter referred to arbitration in India.

(2) Any foreign award which would be enforceable under this Act shall be treated as binding

for all purposes on the persons as between whom it was made, and may accordingly be relied

on by any of those persons by way of defence, set off or otherwise in any legal proceedings in

India and any references in this Act to enforcing a foreign award shall be construed as

including references to relying on an award.

5. Filing of foreign award in court.

(1) Any person interested in a foreign award may apply to any court having jurisdiction over

the subject- matter of the award that the award be filed in court.

(2) The application shall be in writing and shall be numbered and registered as a suit between

the applicant as plaintiff and the other parties as defendants.

(3) The court shall direct notice to be given to the parties to the arbitration, other than the

applicant, requiring them to show cause, within a time specified why the award should not be

filed. 6. Enforcement of foreign award. (1) Where the court is satisfied that the foreign

award is enforceable under this Act, the court shall order the award to be filed and shall

proceed to pronounce judgment according to the award.

(2) Upon the judgment so pronounced a decree shall follow, and no appeal shall lie from such

decree except in so far as the decree is in excess of or not in accordance with the award.

7. Conditions for enforcement of foreign awards.

(1) A foreign award may not be enforced under this Act-

(a) if the party against whom it is sought to enforce the award proves to the court dealing with

the case that-

(i) the parties to the agreement were, under the law applicable to them, under some

incapacity, or the said agreement is not valid under the law to which the parties have

subjected it, or failing any indication thereon, under the law of the country where the award

was made; or

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(ii) that party was not given proper notice of the appointment of the a rbitrator or of the

arbitration proceedings or was otherwise unable to present his case; or

(iii) the award deals with questions not referred or contains decisions on matters beyond the

scope of the agreement: Provided that if the decisions on matters submitted to arbitration can

be separated from those not submitted, that part of the award which contains decisions on

matters submitted to arbitration may be enforced; or

(iv) the composition of the arbitral authority or the arbitral procedure was not in accordance

with the agreement of the parties or, failing such agreement, was not in accordance with the

law of the country where the arbitration took place; or

(v) the award has not yet become binding on the parties or has been set aside or suspended by

a competent authority of the country in which, or under the law of which, that award was

made; or

(b) if the court dealing with the case is satisfied that-

(i) the subject- matter of the difference is not cap- able of settlement by arbitration under the

law of India; or

(ii) the enforcement of the award will be contrary to public policy.

(2) If the court before which a foreign award is sought to be relied upon is satisfied that an

application for the setting aside or suspension of the award has been made to a competent

authority referred to in sub- clause (v) of clause (a) of sub- section (1), the court may, if it

deems proper, adjourn the decision on the enforcement of the award and may also, on the

application of the party claiming enforcement of the award, order the other party to furnish

suitable security.

8. Evidence.

(1) The party applying for the enforcement of a foreign award shall, at the time of the

application, produce-

(a) the original award or a copy thereof, duly authenticated in the manner required by the law

of the country in which it was made;

(b) the original agreement for arbitration or a duly certified copy thereof; and

(c) such evidence as may be necessary to prove that the award is a foreign award.

(2) If the award or agreement requiring to be produced under sub- section (1) is in a foreign

language, the party seeking to enforce the award shall produce a translation into English

certified as correct by a diplomatic or consular agent of the country to which that party

belongs or certified as correct in such other manner as may be sufficient according to the law

in force in India.

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9. Saving. Nothing in this Act shall-

(a) prejudice any rights which any person would have had of enforcing in India of any award

or of availing himself in India of any award if this Act had not been passed; or

(b) apply to any award made on an arbitration agreement governed by the law of India.

10. Repeal. The Arbitration (Protocol and Convention) Act, 1937 (6 of 1937 ), shall cease to

have effect in relation to foreign awards to which this Act applies.

11. Rule making power of the High Court. The High Court may make rules consistent with

this Act as to-

(a) the filing of foreign awards and all proceedings consequent thereon or incidental thereto;

(b) the evidence which must be furnished by a party seeking to enforce a foreign award under

this Act; and

(c) generally, all proceedings in court under this Act.

New York conventions

The Convention on the Recognition and Enforcement of Foreign Arb itral Awards, also

known as the "New York Arbitration Convention" or the "New York Convention," is one of

the key instruments in international arbitration. The New York Convention applies to the

recognition and enforcement of foreign arbitral awards and the referral by a court to

arbitration.

UNCITRAL (United Nations Commission on International Trade Law) Model Law on

International Commercial Arbitration

The United Nations Commission on International Trade Law (UNCITRAL) was established

by the United Nations General Assembly by its Resolution 2205 (XXI) of 17 December 1966

"to promote the progressive harmonization and unification of international trade law".

UNCITRAL carries out its work at annual sessions held alternately in New York City and

Vienna.

When world trade began to expand dramatically in the 1960s, national governments began to

realize the need for a global set of standards and rules to harmonize national and regional

regulations, which until then governed international trade

The UNCITRAL Model Law on International Commercial Arbitration was prepared by

UNCITRAL, and adopted by the United Nations Commission on International Trade Law on

21 June 1985. In 2006 the model law was amended, it now includes more detailed provisions

on interim measures.

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The model law is not binding, but individual states may adopt the model law by incorporating

it into their domestic law (as, for example, Australia did, in the International Arbitration Act

1974, as amended).

The model law was published in English and in French. Translations in all six United Nations

languages now exist.

UNCITRAL's original membership comprised 29 states, and was expanded to 36 in 1973,

and again to 60 in 2004. Member states of UNCITRAL are representing different legal

traditions and levels of economic development, as well as different geographic regions. States

includes 14 African states, 14 Asian states, 8 Eastern European states, 10 Latin American and

Caribbean states, and 14 Western European states. The Commission member States are

elected by the General Assembly. Membership is structured so as to be representative of the

world's various geographic regions and its principal economic and legal systems. Members of

the commission are elected for terms of six years, the terms of half the members expiring

every three years.

The methods of work are organized at three levels. The first level is UNCITRAL itself (The

Commission), which holds an annual plenary session. The second level is the

intergovernmental working groups (which is developing the topics on UNCITRAL's work

program. Texts designed to simplify trade transactions and reduce associated costs are

developed by working groups comprising all member States of UNCITRAL, which meet

once or twice per year. Non-member States and interested international and regional

organizations are also invited and can actively contribute to the work since decisions are

taken by consensus, not by vote. Draft texts completed by these working groups are

submitted to UNCITRAL for finalization and adoption at its annual session. The International

Trade Law Division of the United Nations Office of Legal Affairs provides substantive

secretariat services to UNCITRAL, such as conducting research and preparing studies and

drafts. This is the third level, which assists the other two in the prepara tion and conduct of

their work.

Conventions

The Convention is an agreement among participating states establishing obligations binding

upon those States that ratify or accede or accept to it. A convention is designed to unify law

by establishing binding legal obligations. To become a party to a convention, States are

required formally to deposit a binding instrument of ratification or accession with the

depository. The entry into force of a convention is usually dependent upon the deposit of a

minimum number of instruments of ratification.

UNCITRAL conventions:

the Convention on the Limitation Period in the International Sale of Goods (1974)

(text)

the United Nations Convention on the Carriage of Goods by Sea (1978)

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the United Nations Convention on Contracts for the International Sale of Goods

(1980)

the United Nations Convention on International Bills of Exchange and International

Promissory Notes (1988)

the United Nations Convention on the Liability of Operators of Transport Terminals

in International Trade (1991)

the United Nations Convention on Independent Guarantees and Stand-by Letters of

Credit (1995)

the United Nations Convention on the Assignment of Receivables in International

Trade (2001)

the United Nations Convention on the Use of Electronic Communications in

International Contracts (2005)

the United Nations Convention on Contracts for the International Carriage of Goods

Wholly or Partly by Sea (2008)

Model laws

A model law is a legislative text that is recommended to States for enactment as part of their

national law. Model laws are generally finalized and adapted by UNCITRAL, at its annual

session, while conventions requires the convening of a diplomatic conference.

UNCITRAL Model Law on International Commercial Arbitration (1985) (text)

Model Law on International Credit Transfers (1992)

UNCITRAL Model Law on Procurement of Goods, Construction and Services (1994)

UNCITRAL Model Law on Electronic Commerce (1996)

Model Law on Cross-border Insolvency (1997)

UNCITRAL Model Law on Electronic Signatures (2001)

UNCITRAL Model Law on International Commercial Conciliation (2002) (text)

Model Legislative Provisions on Privately Financed Infrastructure Projects (2003)

UNCITRAL also drafted the:

UNCITRAL Arbitration Rules (1976) (text)—revised rules will be effective August

15, 2010; pre-released, July 12, 2010

UNCITRAL Conciliation Rules (1980)

UNCITRAL Arbitration Rules (1982)

UNCITRAL Notes on Organizing Arbitral Proceedings (1996)

Note that there is a distinct difference between the UNCITRAL Model Law on International

Commercial Arbitration (1985) and the UNCITRAL Arbitration Rules.[4] On its website,

UNCITRAL explains the difference as follows: "The UNCITRAL Model Law provides a

pattern that law-makers in national governments can adopt as part of their domestic

legislation on arbitration. The UNCITRAL Arbitration Rules, on the other hand, are selected

by parties either as part of their contract, or after a dispute arises, to govern the conduct of an

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arbitration intended to resolve a dispute or disputes between themselves. Put simply, the

Model Law is directed at States, while the Arbitration Rules are directed at potential (or

actual) parties to a dispute

UNCITRAL CONCILIATION RULES (Commercial conciliation rules 1980)

APPLICATION OF THE RULES

Article 1

(1) These Rules apply to conciliation of disputes arising out of or relating to a contractual or

other legal relationship where the parties seeking an amicable settlement of their dispute have

agreed that the

UNCITRAL Conciliation Rules apply.

(2) The parties may agree to exclude or vary any of these Rules at any time.

(3) Where any of these Rules is in conflict with a provision of law from which the parties

cannot derogate, that provision prevails.

COMMENCEMENT OF CONCILIATION PROCEEDINGS

Article 2

(1) The party initiating conciliation sends to the other party a written invitation to conciliate

under these Rules, briefly identifying the subject of the dispute.

(2) Conciliation proceedings commence when the other party accepts the invitation to

conciliate. If the acceptance is made orally, it is advisable that it be confirmed in writing.

(3) If the other party rejects the invitation, there will be no conciliation proceedings.

(4) If the party initiating conciliation does not receive a reply within thirty days from the date

on which he sends the invitation, or within such other period of time as specified in the

invitation, he may elect to treat this as a rejection of the invitation to conciliate. If he so

elects, he informs the other party accordingly.

NUMBER OF CONCILIATORS

Article 3

There shall be one conciliator unless the parties agree that there shall be two or three

conciliators. Where there is more than one conciliator, they ought, as a general rule, to act

jointly.

APPOINTMENT OF CONCILIATORS

Article 4

(1) (a) In conciliation proceedings with one conciliator, the parties shall endeavour to reach

agreement on the name of a sole conciliator;

(b) In conciliation proceedings with two conciliators, each party appoints one conciliator;

(c) In conciliation proceedings with three conciliators, each party appoints one co nciliator.

The parties shall endeavour to reach agreement on the name of the third conciliator.

(2) Parties may enlist the assistance of an appropriate institution or person in connexion with

the appointment of conciliators. In particular,

(a) A party may request such an institution or person to recommend the names of suitable

individuals to act as conciliator; or

(b) The parties may agree that the appointment of one or more conciliators be made

directly by such an institution or person.

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In recommending or appointing individuals to act as conciliator, the institution or person shall

have regard to such considerations as are likely to secure the appointment of an independent

and impartial conciliator and, with respect to a sole or third conciliator, shall take into

account the advisability of appointing a conciliator of a nationality other than the nationalities

of the parties.

SUBMISSION OF STATEMENTS TO CONCILIATOR

Article 5

(1) The conciliator,* upon his appointment, requests each party to submit to him a brief

written statement describing the general nature of the dispute and the points at issue. Each

party sends a copy of his statement to the other party.

(2) The conciliator may request each party to submit to him a further written statement of his

position and the facts and grounds in support thereof, supplemented by any documents and

other evidence that such party deems appropriate. The party sends a copy of his statement to

the other party.

(3) At any stage of the conciliation proceedings the conciliator may request a party to submit

to him such additional information as he deems appropriate.

*In this and all following articles, the term "conciliator" applies to a sole conciliator, two or

three conciliators, as the case may be.

REPRESENTATION AND ASSISTANCE

Article 6

The parties may be represented or assisted by persons of their choice. The names and

addresses of such persons are to be communicated in writing to the other party and to the

conciliator; such communication is to specify whether the appointment is made for purposes

of representation or of assistance.

ROLE OF CONCILIATOR

Article 7

(1) The conciliator assists the parties in an independent and impartial manner in their attempt

to reach an amicable settlement of their dispute.

(2) The conciliator will be guided by principles of objectivity, fairness and justice, giving

consideration to, among other things, the rights and obligations of the parties, the usages of

the trade concerned and the circumstances surrounding the dispute, including any previous

business practices between the parties.

(3) The conciliator may conduct the conciliation proceedings in such a manner as he

considers appropriate, taking into account the circumstances of the case, the wishes the

parties may express, including any request by a party that the conciliator hear oral statements,

and the need for a speedy settlement of the dispute.

(4) The conciliator may, at any stage of the conciliation proceedings, make proposals for a

settlement of the dispute. Such proposals need not be in writing and need not be accompanied

by a statement of the reasons therefor.

ADMINISTRATIVE ASSISTANCE

Article 8

In order to facilitate the conduct of the conciliation proceedings, the parties, or the conciliator

with the consent of the parties, may arrange for administrative assistance by a suitable

institution or person.

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COMMUNICATION BETWEEN CONCILIATOR AND PARTIES

Article 9

(1) The conciliator may invite the parties to meet with him or may communicate with them

orally or in writing. He may meet or communicate with the parties together or with each of

them separately.

(2) Unless the parties have agreed upon the place where meetings with the conciliator are to

be held, such place will be determined by the conciliator, after consultation with the parties,

having regard to the circumstances of the conciliation proceedings.

DISCLOSURE OF INFORMATION

Article 10

When the conciliator receives factual information concerning the dispute from a party, he

discloses the substance of that information to the other party in order that the other party may

have the opportunity to present any explanation which he considers appropriate. However,

when a party gives any information to the conciliator subject to a specific condition that it be

kept confidential, the conciliator does not disclose that information to the other party.

CO-OPERATION OF PARTIES WITH CONCILIATOR

Article 11

The parties will in good faith co-operate with the conciliator and, in particular, will

endeavour to comply with requests by the conciliator to submit written materials, provide

evidence and attend meetings.

SUGGESTIONS BY PARTIES FOR SETTLEMENT OF DISPUTE

Article 12

Each party may, on his own initiative or at the invitation of the conciliator, submit to the

conciliator suggestions for the settlement of the dispute.

SETTLEMENT AGREEMENT

Article 13

(1) When it appears to the conciliator that there exist elements of a settlement which would

be acceptable to the parties, he formulates the terms of a possible settlement and submits

them to the parties for their observations. After receiving the observations of the parties, the

conciliator may reformulate the terms of a possible settlement in the light of such

observations.

(2) If the parties reach agreement on a settlement of the dispute, they draw up and sign a

written settlement agreement.** If requested by the parties, the conciliator draws up, or

assists the parties in drawing up, the settlement agreement.

(3) The parties by signing the settlement agreement put an end to the dispute and are bound

by the agreement.

**The parties may wish to consider including in the settlement agreement a clause that any

dispute arising out of or relating to the settlement agreement shall be submitted to arbitration.

CONFIDENTIALITY

Article 14

The conciliator and the parties must keep confidential all matters relating to the conciliation

proceedings. Confidentiality extends also the settlement agreement, except where its

disclosure is necessary for purposes of implementation and enforcement.

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TERMINATION OF CONCILIATION PROCEEDINGS

Article 15

The conciliation proceedings are terminated:

(a) By the signing of the settlement agreement by the parties, on the date of the agreement; or

(b) By a written declaration of the conciliator, after consultation with the parties, to the effect

that further efforts at conciliation are no longer justified, on the date of the declaration; or

(c) By a written declaration of the parties addressed to the conciliator to the effect that the

conciliation proceedings are terminated, on the date of the declaration; or

(d) By a written declaration of a party to the other party and the conciliator, if appointed, to

the effect that the conciliation proceedings are terminated, on the date of the declaration.

RESORT TO ARBITRAL OR JUDICIAL PROCEEDINGS

Article 16

The parties undertake not to initiate, during the conciliation proceedings, any arbitral or

judicial proceedings in respect of a dispute that is the subject of the conciliation proceedings,

except that a party may initiate arbitral or judicial proceedings where, in his opinion, such

proceedings are necessary for preserving his rights.

COSTS

Article 17

(1) Upon termination of the conciliation proceedings, the conciliator fixes the costs of the

conciliation and gives written notice thereof to the parties. The term "costs" includes only:

(a) The fee of the conciliator which shall be reasonable in amount;

(b) The travel and other expenses of the conciliator;

(c) The travel and other expenses of witnesses requested by the conciliator with the consent

of the parties;

(d) The cost of any expert advice requested by the conciliator with the consent of the parties;

(e) The cost of any assistance provided pursuant to articles 4, paragraph (2)(b), and 8 of these

Rules.

(2) The costs, as defined above, are borne equally by the parties unless the settlement

agreement provides for a different apportionment. All other expenses incurred by a party are

borne by that party.

DEPOSITS

Article 18

(1) The conciliator, upon his appointment, may request each party to deposit an equal amount

as an advance for the costs referred to in article 17, paragraph (1) which he expects will be

incurred.

(2) During the course of the conciliation proceedings the conciliator may request

supplementary deposits in an equal amount from each party.

(3) If the required deposits under paragraphs (1) and (2) of this article are not paid in full by

both parties within thirty days, the conciliator may suspend the proceedings or may make a

written declaration of termination to the parties, effective on the date of that declaration.

(4) Upon termination of the conciliation proceedings, the conciliator renders an accounting to

the parties of the deposits received and returns any unexpended balance to the parties.

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ROLE OF CONCILIATOR IN OTHER PROCEEDINGS

Article 19

The parties and the conciliator undertake that the conciliator will not act as an arbitrator or as

a representative or counsel of a party in any arbitral or judicial proceedings in respect of a

dispute that is the subject of the conciliation proceedings. The parties also undertake that they

will not present the conciliator as a witness in any such proceedings.

ADMISSIBILITY OF EVIDENCE IN OTHER PROCEEDINGS

Article 20

The parties undertake not to rely on or introduce as evidence in arbitral or jud icial

proceedings, whether or not such proceedings relate to the dispute that is the subject of the

conciliation proceedings;

(a) Views expressed or suggestions made by the other party in respect of a possible

settlement of the dispute;

(b) Admissions made by the other party in the course of the conciliation proceedings;

(c) Proposals made by the conciliator;

(d) The fact that the other party had indicated his willingness to accept a proposal for

settlement made by the conciliator.

The Arbitration And Conciliation Act, 1996

THE ARBITRATION AND CONCILIATION ACT, 1996

ACT NO. 26 OF 1996 [16th August, 1996.] BE it enacted by Parliament in the Forty-

seventh Year of the Republic of India as follows:-

An Act to' consolidate and amend the law relating to domestic arbitration, international

commercial arbitration and enforcement of foreign arbitral awards as also to define the law

relating to conciliation and for matters connected therewith or incidental thereto.

Preamble. WHEREAS the United Nations Commission on International Trade Law

(UNCITRAL) has adopted the UNCITRAL Model Law on International Commercial

Arbitration in 1985; and WHEREAS the General Assembly of the United Nations has

recommended that all countries give due consideration to the said Model Law, in view of the

desirability of uniformity of the law of arbitral procedures and the specific needs of

international commercial arbitration practice;

And WHEREAS the UNCITRAL has adopted the UNCITRAL Conciliation Rules in 1980;

and WHEREAS the General Assembly of the United Nations has recommended the use of

the said Rules in cases where a dispute arises in the context of international commercial

relations and the parties seek an amicable settlement of that dispute by recourse to

conciliation;

AND WHEREAS the said Model Law and Rules make significant contribution to the

establishment of a unified legal framework for the fair and efficient settlement of disputes

arising in international commercial relations; and WHEREAS it is expedient to make law

respecting arbitration and conciliation, taking into account the aforesaid Model Law and

Rules;

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Salient Features of the Arbitration and Conciliation (Amendment) Bill 2003 introduced

in Rajya Sabha on 22-12-2003

The Major Objectives of the Bill are

To resolve the conflict between some judgments of the High Court under the Act

To bring it in conformity with the UNCITRAL Model Law in certain respects

To speed up the pending was well as future arbitrations by providing for a time limit within

which proceedings will have to be concluded which will be an improvement upon the

UNCITRAL model

To rectify certain mistakes which have crept into some provisions of the Act

To provide for the establishment of a new Arbitration Division within each High Court

where awards can be challenged under section 34,34A or 36

To provide for Fast Track Arbitration following a special procedure

Intellectual Property Law in India

Intellectual property rights are the rights given to persons over the creations of their minds

and give the creator an exclusive right over the use of his/her creation for a certain period of

time.

Intellectual Property Right (IPR) in India was imported from the west. The Indian Trade and

Merchandise Marks Act 1884, was the first Indian Law regarding IPR. The firs t Indian Patent

Law was enacted in 1856 followed by a series of Acts being passed. They are Indian Patents

and Designs Act in 1911 and Indian Copyright Act in 1914. Indian Trade and Merchandise

Marks Act and Indian Copyright Act have been replaced by Trade and Merchandise Marks

Act 1958 and Copyright Act 1957 respectively3. In 1948, the Indian Government appointed

the first committee to review the prevailing Patents and Designs legislation. In 1957,

Government appointed Justice Rajagobala Ayyangar Committee (RAC) to revise the Patent

Law. Rajagobala Ayyangar Committee submitted its report on 1959, the report tried to

balance the constitutional guarantee of economic and social justice enshrined in the preamble

of the constitution. This report provided the process for Patenting of drugs. This report

outlined the policy behind the Indian Patent system. The theory upon which the patent

system is based on, i.e., an opportunity of acquiring exclusive rights in an invention,

stimulates technical process in four ways.

1. Encourages research and invention.

2. Induces an inventor to disclose his discoveries.

3. Offers award for the expenses of developing inventions.

4. Provides an inducement to invest capital in new lines of

production which might not appear profitable.

Based on the Rajagobala Ayyangar Committee report, a Bill was introduced in the year 1965

and the bill was passed in the Lok Sabha but it lapsed in the Rajya Sabha and once again

lapsed in Lok Sabha in the year 1966 due to dissolution of Lok Sabha. But it was

reintroduced in 1967 and passed in 1970; the draft rules were incorporated in Patent Act and

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passed in the year 1971. The following steps are being suggested with particular reference to

the situation in India regarding IPR in the national Policy Making.

1. Constitute an integrated single window National IPR commission to deal with IPR

policy issues;

2. Integrate national technology planning with IPR and trends in international

technology trade;

3. Implement a formal national IPR literacy mission;

4. Set-up IPR training institutes to prepare technically qualified attorneys;

5. Introduce an enabling national taxation policy to encourage innovation, building of

IPR portfolio and its utilization in technology transfer and trade;

6. Urgently modernize the IPR administrative structures in the country;

7. Improve infrastructure for access and effective use of IPR information. There is an

urgent need to harmonize the patent classification system to ease and optimize

processes in patent searching;

8. Re-structure the judiciary and enforcement machinery for professional and speedy

response to IPR issues;

9. Training of corporate and institutional managers on effective management of IPR;

10. Standardize models for valuation and audit of IPR;

11. Evolve national taxation polices of development, use and transactions linked to IPR.

What Is a Copyright?

Copyright is a form of protection provided to the authors of "original works of authorship"

including literary, dramatic, musical, artistic, and certain other intellectual works, both

published and unpublished. The 1976 Copyright Act generally gives the owner of copyright

the exclusive right to reproduce the copyrighted work, to prepare derivative works, to

distribute copies or phonorecords of the copyrighted work, to perform the copyrighted work

publicly, or to display the copyrighted work publicly.

The copyright protects the form of expression rather than the subject matter of the writing.

For example, a description of a machine could be copyrighted, but this would only prevent

others from copying the description; it would not prevent others from writing a description of

their own or from making and using the machine. Copyrights are registered by the Copyright

Office of the Library of Congress.

What Is a Trademark or Service-mark?

A trademark is a word, name, symbol or device which is used in trade with goods to indicate

the source of the goods and to distinguish them from the goods of others. A service-mark is

the same as a trademark except that it identifies and distinguishes the source of a service

rather than a product. The terms "trademark" and "mark" are commonly used to refer to both

trademarks and service-marks.

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Trademark rights may be used to prevent others from using a confusingly similar mark, but

not to prevent others from making the same goods or from selling the same goods or services

under a clearly different mark. Trademarks which are used in interstate or foreign commerce

may be registered with the Patent and Trademark Office. The registration procedure for

trademarks and general information concerning trademarks is described in a separate

pamphlet entitled "Basic Facts about Trademarks".

What Is a Patent?

A patent for an invention is the grant of a property right to the inventor, issued by the Patent

and Trademark Office. The term of a new patent is 20 years from the date on which the

application for the patent was filed in the United States or, in special cases, from the date an

earlier related application was filed, subject to the payment of maintenance fees. US patent

grants are effective only within the US, US territories, and US possessions.

The right conferred by the patent grant is, in the language of the statute and of the grant itself,

"the right to exclude others from making, using, offering for sale, or selling" the invention in

the United States or "importing" the invention into the United States. What is granted is not

the right to make, use, offer for sale, sell or import, but the right to exclude others from

making, using, offering for sale, selling or importing the invention.

For better understanding go through following:

How do Patents Differ from Copyrights?

A patent's main purpose is in the protection of physical processes and inventions. For

example, developing a machine that turns coal into diamonds. In contrast, the purpose of

copyrights is to protect the expression of unique ideas. An example of this would be a book

describing the process of turning coal into diamonds.

A good way to differentiate patents from copyrights is in the idea of "mental steps." While

most patented items are born from ideas, their utility comes from the end product. For

example, the usefulness of a car is based on its physical design and the assembly of its parts.

In contrast, a copyrightable item gains its usefulness from its expression of a mental idea or

process. For example, the usefulness of a book isn't in the construction of the book itself, but

in the thoughts and ideas that are written down in the actual text.

What are some Examples of Patents and Copyrights?

An example of a patent includes just about any physical invention you can imagine. This

includes toasters, airplanes, computers, generators, and even something as simple as a toenail

clipper. In addition, patents can include the creation of synthetic (not naturally occurring)

plant breeds as well as unique design methods for existing inventions (e.g. a car that uses

magnetic force to move rather than an internal combustion engine)

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Examples of copyrights include all types of expressive mediums, such as books, songs,

screenplays, and paintings. In addition, copyrights include protection for computer software

and programs. Although a computer program may appear to be patentable, courts consider

them to be expressions of mental logic and reasoning (based on their creation from computer

coding). However, some programs may be patentable if they are designed in conjunction with

accompanying physical hardware.

Do Patents and Copyrights Differ in their Level of Protection?

Yes. Patents not only protect the particular design of an invention, they also protect against

deviations from that invention as well. For example, suppose X builds a perpetual motion

plane that Y intends to duplicate. Even if Y decides to use different parts or alters some of the

design, as long as Y's invention is also a perpetual motion plane, this is still considered patent

infringement of X's invention.

In contrast, copyright protection is much more literal. For example, suppose X writes a book

about yoga and its effects on golfing. Even if Y were to write a book on the same subject, this

is not considered copyright infringement. Y would likely have to copy exact passages or

employ the same arguments used in X's book to be guilty of infringement.

Indian Patent Law

Under Indian patent law, as in most patent laws, a patent is a statutory right for an invention

granted for a limited period of time to the patentee by the Government, in exchange of full

disclosure of his invention for excluding others, from making, using, selling, importing the

patented product or process for producing that product for those purposes without his

consent. To become patentable subject matter in India, an invention must meet the following

criteria:

1. It should be novel.

2. It should have inventive step or it must be non-obvious.

3. It should be capable of industrial application.

4. It should not fall within the provisions of section 3 and 4 of the Patents Act 1970

Indian trademark law statutorily protects trademarks as per the Trademark Act, 1999 and

also under the common law remedy of passing off. Statutory protection of trademark is

administered by the Controller General of Patents, Designs and Trade Marks, a government

agency which reports to the Department of Industrial Policy and Promotion (DIPP), under the

Ministry of Commerce and Industry.

The law of trademark deals with the mechanism of registration, protection of trademark and

prevention of fraudulent trademark. The law also provides for the rights acquired by

registration of trademark, modes of transfer and assignment of the rights, nature of

infringements, penalties for such infringement and remedies available to the owner in case of

such infringement.

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The Patents Act, 1970

Justice N. Rajagopala Ayyangar submitted a comprehensive Report on Patent Law Revision

in September 1959 and the new law of patent, namely, the Patents Act, 1970, came to be

enacted mainly based on the recommendations of the report, and came into force on April 20,

1972, replacing the Patents and Designs Act, 1911.

Chapter I

Sections 1 and 2 comprised Chapter I. Section 2 of Chapter I contained the definition and

interpretation clauses; it defined the terms “invention” and “medicine” in clauses (j) and (l)

respectively

Invention

According to Section 2(1)(j) of the act, "invention" means any new and useful-

1. art, process, method or manner of manufacture.

2. machine, apparatus or other article.

3. substance produced by manufacture.

Medicine or drug

According Section 2(1)(l) "medicine or drug" includes-

1. all medicines for internal or external use of human beings or animals,

2. all substances intended to be used for or in the diagnosis, treatment, mitigation or

prevention of diseases in human beings or animals,

3. all substances intended to be used or in the maintenance of public health, or the

prevention or control of any epidemic disease among human beings or animals

4. insecticides, germicides, fungicides, weedicides and all other substances intended to

be used for the protection or preservation of plants,

5. all chemical substances which are ordinarily used as intermediates in the preparation

or manufacture of any of the medicines or substances above referred to;

Chapter II

Chapter II was headed “Inventions not patentable” and had three sections on - "What are not

inventions", "Inventions relating to atomic energy not patentable", "Inventions where only

methods or processes of manufacture patentable". The most notable section is section 3(d)

which says "the mere discovery of any new property of new use for a known substance or of

the mere use of a known process, machine or apparatus unless such known process results in

a new product or employs at least one new reactant;"

Features

The Patent Act 1970, based on the recommendations of the 1959 Ayyangar Report, was a

crucial initiative to facilitate a domestically-owned pharmaceutical industry as an alternative

to the very expensive imported pharmaceuticals. Coming into force in 1972, this Act was

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designed to offer process patents for only five years, and no product patents, on

pharmaceuticals

Copyrights

The Copyright Act, 1957 came into effect from January 1958. This Act has been amended

five times since then, i.e., in 1983, 1984, 1992, 1994 and 1999, with the amendment of 1994

being the most substantial. Prior to the Act of 1957, the Law of Copyrights in the country was

governed by the Copyright Act of 1914. This Act was essentially the extension of the British

Copyright Act, 1911 to India.

The Copyright Act today is compliant with most international conventions and treaties in the

field of copyrights. India is a member of the Berne Convention of 1886 (as modified at Paris

in 1971), the Universal Copyright Convention of 1951 and the Agreement on Trade Related

Aspects of Intellectual Property Rights (TRIPS) Agreement of 1995. Though India is not a

member of the Rome Convention of 1961, WIPO Copyrights Treaty (WCT) and the WIPO

Performances and Phonograms Treaty (WPPT),the Copyright Act is compliant with it.

Copyright is a right given by the law to the creators of literary, dramatic, musical and artistic

works and producers of cinematograph films and sound recordings. In fact, it is a bundle of

rights including, inter alia, rights of reproduction, communication to the public, adaptation

and translation of the work. There could be slight variations in the composition of the rights

depending on the work.

Indian work

"Indian work" means a literary, dramatic or musical work,

The author of which is a citizen of India; or

Which is first published in India; or

The author of which, in the case of an unpublished work is, at the time of the making

of the work, a citizen of India.

Descriptions of work

Artistic work - An artistic work means

o A painting, a sculpture, a drawing (including a diagram, map, chart or plan),

an engraving or a photograph, whether or not any such work possesses artistic

quality;

o A work of architecture; and

o Any other work of artistic craftsmanship.

Musical work

o "Musical work" means a work consisting of music and includes any graphical

notation of such work but does not include any words or any action intended

to be sung, spoken or performed with the music. A musical work need not be

written down to enjoy copyright protection.

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Sound recording

o "Sound recording" means a recording of sounds from which sounds may be

produced regardless of the medium on which such recording is made or the

method by which the sounds are produced. A phonogram and a CD-ROM are

sound recordings.

Cinematograph film

o "Cinematograph film" means any work of visual recording on any medium

produced through a process from which a moving image may be produced by

any means and includes a sound recording accompanying such visual

recording and "cinematograph" shall be construed as including any work

produced by any process analogous to cinematography including video films.

Government work –

o "Government work" means a work which is made or published by or under

the direction or control of

o The government or any department of the government

o Any legislature in India, and

o Any court, tribunal or other judicial authority in India.

An author

In the case of a literary or dramatic work the author, i.e., the person who creates the

work

In the case of a musical work

Duration of copyright

Literary

dramatic,

musical and

artistic works

lifetime of the author + sixty years from the beginning

of the calendar year next following the year in which the

author dies.

Photographs

Anonymous and

pseudonymous works

Posthumous work

Cinematograph films

Sound records

Government work

Public undertakings

International Agencies

until sixty years from the beginning of the calendar

years next following the year in which the work is first

published

Infringement

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Copyright & Trademarks infringement is punishable under the Copyright Act &

trademarks act 1999:

Offence of infringement of copyright or other rights conferred by this Act. Any

person who knowingly infringes or abets the infringement of-

(a) The copyright in a work, or

(b) Any other right conferred by this Act, shall be punishable with imprisonment for a

term which shall not be less than six months but which may extend to three years and

with fine which shall not be less than fifty thousand rupees but which may extend to

two lakh rupees:

Provided that the court may, for adequate and special reasons to be mentioned in the

judgment, impose a sentence of imprisonment for a term of less than six months or a

fine of less than fifty thousand rupees.

Explanation- Construction of a building or other structure which infringes or which, if

completed, would infringe the copyright in some other work shall not be an offence

under this section.

Design infringement

A US design patent covers the ornamental design for an object having practical utility. An

object with a design that is substantially similar to the design claimed in a design patent

cannot be made, used, copied or imported into the United States. The copy does not have to

be exact for the patent to be infringed. It only has to be substantially similar.[2] Design

patents with line drawings cover only the features shown as solid lines. Items shown as dotted

lines are not covered. This is one of the reasons Apple was awarded a jury verdict in the US

case of Apple v Samsung. Apple's patent showed much of their iPhone design as broken

lines. It didn’t matter if Samsung was different in those areas. The fact that the solid lines of

the patent were the same as Samsung's design meant that Samsung infringed the Apple

design patent.

Registration of Trademarks

1. The first step is conducting a trademark search so as to ensure that the logo or name in

respect of which you intend to register a trademark is not identical to an existing logo or

name. A comprehensive search can be conducted through the Trademarks Registry, although

there are other sources (available free or on a commercial basis, such as Trademark

Registration Services) which can also help you in getting started.

2. Note that a trademark can be revoked even after it is granted, if somebody successfully

challenges it on the ground that it is confusingly similar to an already registered trademark.

Hence, it is advisable to hire a trademark attorney with some experience for conducting the

search, in order to ensure that your business logo or name is not confusingly similar to an

already registered trademark. This will minimize chances of your trademark being revoked

subsequently, after it has been granted.

3. Next, the trademark application in the prescribed format under the Trademarks Rules needs

to be made to the Trademark Registry. WHERE TO FILE FOR REGISTRATION OF

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TRADEMARK The application must be filed at the office of the Trademark Registry which

jurisdiction to deal with it. So far, there are six registry offices, as per the official website of

the Registrar of Trade Marks, mentioned as follows:

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4. The application must be made in respect of one or more of the various categories of goods

and services as classified under Schedule IV of the Trade Marks Rules, 2002. If the

application is in respect of one class, the fee is INR 3500. It is also possible to make an

application for your product under more than one class heads. However, if the application is

in multiple classes, it is more expensive, the fee being INR 3500 multiplied by the number of

Classes. Hence, one must identify the category/categories under which you want to apply.

5. The application must be in the prescribed format. For example, the simplest kind of

application would be an application to register a trade mark for a specification of goods or

services included in any one class, which is required to be made in Form TM-1. In case the

goods or services fall within different classes, a single application can be made, but it must be

as specified in Form TM-51.

6. The application must be filed by the applicant or his agent. The agent must be a legal

practitioner or a person registered as a trademarks agent.

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7. An applicant may apply for an expedited examination procedure for the scrutiny of his

trademark application, stating reasons as to why such procedure is necessary. Expedited

scrutiny is not a right, but depends upon the satisfaction of the Registrar. Further, it is more

expensive, requiring payment of five times the normal application fee is to be paid for this

purpose. The fee is refunded if the expedited scrutiny is refused by the Registrar.

8. After the application has been filed, the Trademarks Registry shall search whether an

identical mark or a mark which is deceptively similar to the mark applied for, already exists,

in respect of the same goods and services or similar goods and services.

9. The trademark application shall be published in the Trade Marks Journal within six months

of its acceptance of by the Registrar. After this stage, there is an elaborate opposition process

in place under Indian trademark law, which is explained below. The opposition process is

important as it prevents others from acquiring a trademark in respect of an already existing

brand name. For company managers, strategists and advisors, it is a useful legal tool to avoid

risk of brand dilution, and hence an aspect of legal liability management. The detailed

opposition procedure is at the end of this post. In short, it is a lengthy and multiple step

procedure involving numerous exchanges between the objector and the applicant.

the

trademark in the register and a Registration Certificate shall be issued.

Appellate

Board.

typically range between INR 2500 to INR 5000, except for certification marks).

How are Trade Secrets Protected??

Contrary to patents, trade secrets are protected without registration, that is, trade secrets are

protected without any procedural formalities. Consequently, a trade secret can be protected

for an unlimited period of time. For these reasons, the protection of trade secrets may appear

to be particularly attractive for SMEs. There are, however, some conditions for the

information to be considered a trade secret. Compliance with such conditions may turn out to

be more difficult and costly than it would appear at first glance. While these conditions vary

from country to country, some general standards exist which are referred to in Art. 39 of the

Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement):

The information must be secret (i.e. it is not generally known among, or readily accessible

to, circles that normally deal with the kind of information in question).

It must have commercial value because it is a secret.

It must have been subject to reasonable steps by the rightful holder of the information to

keep it secret (e.g., through confidentiality agreements).

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Example

An SME develops a process for the manufacturing of its products that allows it to produce its

goods in a more cost-effective manner. Such a process provides the enterprise a competitive

edge over its competitors. The enterprise in question may therefore value its know-how as a

trade secret and would not want competitors to learn about it. It makes sure that only a

limited number of people know the secret, and those who know it are made well aware that it

is confidential. When dealing with third parties or licensing its know-how, the enterprise

signs confidentiality agreements to ensure that all parties know that the information is a

secret. In such circumstances, the misappropriation of the information by a competitor or by

any third party would be considered a violation of the enterprise's trade secrets.