In the case of CalCo and IndCo, while disputes arose between them, CalCo filed a request for arbitration with ICC claiming various defaults and damages due to breaching contracts before attempting to resolve disputes inter alia.
When IndCo filed suit in Mumbai High Court seeking inter alia with CalCo before the arbitration proceeding to be done and argued the contract was invalid or incapable of being performed the claimant filed a claim with California Federal Court to compel arbitration proceedings. IndCo responded saying that American court should wait until Mumbai court decides on the case and the contract has violated US antitrust laws. IndCo was still on the argument that the case is not arbitrable. According to the ‘arbitrational clause’ that both IndCo and CalCo agreed upon, each party has to appoint one arbitrator and the third one shall be appointed by Indian Chamber of Commerce, but this was not considered by ICC.
Even though ICC tribunal decided that the case has close connection with Indian law and hence the contract is valid and awarded the claimant $ 2,000,000, the primary claims of IndCo that it is not arbitrable as according to their clause that an arbitration can be done only when both parties are unable to solve by negotiation, and secondly the appointment of arbitrators is not according to what both parties had agreed upon can be considered to be valid but this was not so considered by ICC.
According to Article 10 of ICC (2008), “In the absence of such a joint nomination and where all parties are unable to agree to a method for the constitution of the Arbitral Tribunal, the Court may appoint each member of the Arbitral Tribunal and shall designate one of them to act as chairman. In such case, the Court shall be at liberty to choose any person it regards as suitable to act as arbitrator, applying Article 9 when it considers this appropriate” (p. 9).