Authored By: Dimple Rathee, Rajiv Gandhi University of Law, India, Research Writer at Law Audience®,
Edited By: Mr. Varun Kumar, Advocate, Himachal, Punjab & Haryana and Founder at Law Audience.
UNCITRAL (United Nations Commission on International Trade Law) is a subsidiary body of the General Assembly of the United Nations which plays an important role in improving the legal framework for international trade by preparing international legislative texts for use by States in modernizing the law of international trade and non-legislative texts for use by commercial parties in negotiating transactions[1]. The body formulates model law, one of which is UNCITRAL Model Law on International Commercial Arbitration and same is topic of discussion in the present article.
I. INTRODUCTION:
When people from different countries did business, they sometimes faced problems or disputes. Arbitration came up as one of the popular ways to deal with International Commercial Dispute because it was faster, private, and worked across borders. But each country had its own laws for arbitration which made things confusing, caused delays and impeded free trade. To fix this, the United Nations Commission on International Trade Law (UNCITRAL) made a set of rules in 1985. These are called the UNCITRAL Model Law on International Commercial Arbitration. UNCITRAL Model Law on International Commercial Arbitration which was enacted in 1985 was also adopted by General Assembly on December 11 of 1985.[2] The Model Law is divided into 8 chapters and 36 articles and is intended to be adopted by various nations into their national laws or adapted into their national laws of arbitration based on the principles of this model law.[3]
II. IS MODEL LAW BINDING?
The Model Law is not a treaty which means it is not binding on countries rather it is a guide for countries to follow when making or changing their own arbitration laws. The aim of Model Law is harmonization of arbitration laws in all countries. It addresses all stages of the arbitral process, from the arbitration agreement to the recognition and enforcement of the arbitral award, and reflects a global consensus on the fundamental principles and critical issues of international arbitration practice. It is said that the UNCITRAL Model Law is considered the standard by which other arbitration laws around the world are measured
III. MAIN FEATURES:
- Party Autonomy: This means that the parties can make many decisions themselves. For example, they can choose where arbitration will take place, what language will be used and how many arbitrators there will be.[4]
- Limited Court Intervention: Before the Model Law, courts sometimes interfered too much, it would check the process at every stage which made arbitration slow and expensive. The Model Law says that courts should only interfere when necessary.
- Recognizing and Enforcing Awards: This means that awards made in one country can be enforced more easily in another country which is in line with New York Convention.
- Uses Clear Language: It avoids complicated legal words which makes it easier for everyone to read and understand.[5]
A good part of these features have been incorporated in Indian Arbitration Act as despite flexibility , states are encouraged to make as few changes as possible when incorporating the Model Law into their legal systems in order to increase the likelihood of achieving a satisfactory level of harmonization. For example – Section 4 of Indian Act is based on Model Law according to which a party can’t insist on compliance with non-mandatory provision of Act if it fails to make timely objection[6]. Under Indian Law mandatory provision must be deduced from content while UK Arbitration Act 1996 list mandatory provision under Schedule 1, [7]still the crux of Section in both countries is same in line with Model Law, thus creating harmonization
IV. INDIAN COURTS AND MODEL LAW:
Indian Act on Arbitration i.e. Arbitration and Conciliation Act,1996 is based on UNCITRAL Model Law on International Commercial Arbitation,1985 as has also been described by many Indian reports. 176th Report of Law Commission of India described Indian Arbitration Act as being “based” on UNCITRAL Model Law on International Commercial Arbitation,1985 which has further been supported by Consultation Paper of the Ministry of India, 246th Law Commission Report and general academic discourse.[8]
While Statement of Object and Preamble of Act clearly states that it was enacted after “taking into account” the Model Law, it has been point of contention for Indian courts that till what extent they could rely on Model Law while interpreting Indian Act and in trial to bring uniformity in interpretation across countries. The answer to same mainly depended on how “taking into account” is construed.
The present understanding we have regarding embracing Internationalist approach through case of Central Organisation for Railway Electrification v. M/s ECI SPIC SMO MCML (JV) has evolved through various judgements in past some of which are:
- Union of India vs. East Coast Boat Builders & Engineers Ltd.
In this case the Delhi High Court rejected the view that Article 16(3) of Model Law could be relied upon while interpreting Section 16 of Act. It emphasized that Model Law could only be read into when provision of Indian Act had some lacunae or were ambiguous reiterating principle of statutory interpretation.
Justice A.K. Srivastav in this case ,while looking into question that to what extent Model Law articles can be used while interpreting Articles of Indian Arbitration Act, he stated:
“it cannot be said that each and every provision of the said Modal Law and Rules forms part of the Act. Those Modal Law and Rules were in fact taken into account while drafting and enacting the Act but whatever has been enacted is the law on arbitartion enforceable in India.” [9]
- Bharat Aluminium Company vs. Kaiser Aluminium Technical Service Inc.
This judgement of Supreme Court overruled it’s earlier judgement Bhatia International v. Bulk Trading S.A and its concluded judgement laid the foundation for the Model Law to be used as a ready reckoner for interpreting the Act in future cases[10]
The contention continued until years later in recent judgement of Central Organisation for Railway Electrification vs. M/s ECI SPIC SMO MCML (JV) which referred to Article 2A of Model Law, internationalist interpretative approach was clearly adopted.[11] The Court advised applying the Internationalist Interpretation for the Arbitration Act by stating:
“19. Article 2A of the Model Law enunciates the following principles to interpret the provisions of national arbitration laws: regard for the arbitration law’s international origin; (ii) the need to promote uniformity in its application; and (iii) observance of good faith. It further provides that issues not expressly settled under the arbitration law are to be settled in conformity with the “general principles” on which the law is based.[12]
Overall India’s arbitration landscape is undergoing profound changes as it strives to align with global arbitration trends. In 2024, India introduced substantial amendments to the Arbitration and Conciliation Act, 1996, aiming to modernize its arbitration framework. These reforms focus on streamlining arbitration processes, reducing judicial intervention, and promoting institutional arbitration. The government has also proposed further amendments to enhance efficiency and align with international arbitration practices.
V. CONCLUSION:
The UNCITRAL Model Law has played a foundational role in shaping India’s arbitration regime by promoting party autonomy, minimal judicial interference, and international harmonisation. While early judicial interpretations adopted a cautious approach, recent decisions reflect a clear shift towards internationalist interpretation consistent with the Model Law. India’s evolving arbitration jurisprudence and ongoing reform initiatives demonstrate a strong commitment to aligning domestic practice with global arbitration standards. This trajectory strengthens India’s position as an emerging hub for international commercial arbitration.
References & Footnotes:
[1] United Nations, A Guide to UNCITRAL: Brief facts about the United Nations Commission on International Trade law, available at http://www.uncitral.org/pdf/english/texts/general/12-57491-Guide-to-UNCITRAL-e.pdf.
2 IJLLR Journal, ‘UNCITRAL Model Law in Indian Legislation: A Descriptive Analysis’ (IJLLR Journal, 1 February 2023) <https://www.ijllr.com/post/uncitral-model-law-in-indian-legislation-a-descriptive-analysis> accessed 26 December 2025
3 Swopnil Jain, ‘Impact of UNCITRAL Model Law and International Commercial Arbitration on Indian Arbitration Practices’ (2025) 13(6) International Journal of Creative Research Thoughts (IJCRT) https://www.ijcrt.org/papers/IJCRT25A6218.pdf .
4 Mosaraf Hossain, International Commercial Arbitration and the UNCITRAL Model Law: A Critical Analysis of Its Impact on Dispute Resolution and Global Trade (SSRN Working Paper No 5425915, 2025) https://papers.ssrn.com/abstract=5425915.
5 Mosaraf Hossain, International Commercial Arbitration and the UNCITRAL Model Law: A Critical Analysis of Its Impact on Dispute Resolution and Global Trade (SSRN Working Paper No 5425915, 2025) https://papers.ssrn.com/abstract=5425915.
6 Mundi J and Connect J, ‘Indian Supreme Court’s Internationalist Approach to Arbitration – Daily Jus’ (Daily Jus – Your daily dose of arbitration and legal industry insights, 19 March 2025) <https://dailyjus.com/world/2025/03/indian-supreme-courts-internationalist-approach-to-arbitration>
7 Mundi J and Connect J, ‘Indian Supreme Court’s Internationalist Approach to Arbitration – Daily Jus’ (Daily Jus – Your daily dose of arbitration and legal industry insights, 19 March 2025) <https://dailyjus.com/world/2025/03/indian-supreme-courts-internationalist-approach-to-arbitration>
8 Law Commission of India, The 176th Report on the Arbitration and Conciliation (Amendment) Bill, 2001, at 5 available at http://lawcommissionofindia.nic.in/arb.pdf
9 Union of India v. East Coast Boat Builders & Engineers Ltd., AIR 1999 Del 44 (India)
[1]0 Bharat Aluminium Company v. Kaiser Aluminium Technical Service Inc., (2012) 9 SCC 552
[1]1 Judicial Import of the Model Law: How Far is too Far?, 4.1 IJAL (2015) 19
[1]2 Central Organisation for Railway Electrification v. M/s ECI SPIC SMO MCML 2024 INSC 857.
