Centrotrade Minerals & Metal Inc. v Hindustan Copper Ltd.

Facts

• Centrotrade (US company) and Hindustan Copper (Indian PSU) had a contract for sale of copper concentrate
• The arbitration clause provided: (1) First tier: domestic arbitration in India by Indian Commercial Arbitration Centre; (2) Second tier: if dissatisfied, appeal arbitration before ICC in London
• Hindustan Copper argued that a two-tier arbitration (appeal against an arbitral award to another arbitral tribunal) is contrary to the finality principle (S.35)

Issue

1. Whether a two-tier arbitration clause providing for domestic arbitration as a first tier and international arbitration as a second tier (appellate arbitration) is valid and enforceable.

Held

• Valid and enforceable: Party autonomy permits parties to design multi-tier dispute resolution mechanisms, including appellate arbitration.
• The second-tier arbitration is not a "challenge" under S.34 but a contractually agreed appellate mechanism.
• Does not violate S.35 (finality) because parties have contractually agreed to a second level of review.
• The first-tier award is not "final" until the second tier has been exhausted or waived.

Ratio Decidendi

Party autonomy is the cornerstone of arbitration. Parties may agree to multi-tier dispute resolution mechanisms including appellate arbitration. Such clauses do not violate the finality principle because finality is subject to the parties' agreement on the dispute resolution framework.