Two-Tier Arbitration

Where, the parties are accepting the Arbitration clauses which provides for a two-step arbitration, that process is held valid under Indian Arbitral Jurisprudence.

The Supreme Court of India held that the settlement of disputes or differences through a two-tier arbitration procedure (whereby a party can appeal the result of an arbitration to a second arbitration panel) is permissible under Indian law.

The court held that there was nothing in the Arbitration and Conciliation Act,1996 that precluded the parties from agreeing that an award could be referred to a second panel of arbitrators by way of an appeal, with the result of that appeal being subject to the challenge procedure provided by the (1996). (M/S Centrotrade Minerals and Metal Inc v Hindustan Copper Ltd (Civil Appeals No. 2562 and 2564 of 2006).