Rules applicable to substance of dispute
Section 28 of the Arbitration and Conciliation Act, 1996 deals with rules applicable to substance of dispute. Where the place of arbitration is situate in India,— (a) in an arbitration other than an international commercial arbitration, the arbitral tribunal shall decide the dispute submitted to arbitration in accordance with the substantive law for the time being in force in India; The Act came into force on 22 Aug 1996.
(1) Where the place of arbitration is situate in India,—
(a) in an arbitration other than an international commercial arbitration, the arbitral tribunal shall decide the dispute submitted to arbitration in accordance with the substantive law for the time being in force in India;
(b) in international commercial arbitration,—
(i) the arbitral tribunal shall decide the dispute in accordance with the rules of law designated by the parties as applicable to the substance of the dispute;
(ii) any designation by the parties of the law or legal system of a given country shall be construed, unless otherwise expressed, as directly referring to the substantive law of that country and not to its conflict of laws rules;
(iii) failing any designation of the law under clause (a) by the parties, the arbitral tribunal shall apply the rules of law it considers to be appropriate given all the circumstances surrounding the dispute.
(2) The arbitral tribunal shall decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorised it to do so.
1[(3) While deciding and making an award, the arbitral tribunal shall, in all cases, take into account the terms of the contract and trade usages applicable to the transaction.]
Section 28, The Arbitration and Conciliation Act, 1996 (Act 26 of 1996).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
Referred to by 1
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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State of Chhattisgarh vs Sal Udyog(p) LTD through Managing Director
Court's Decision & Legal Precedent
When an arbitrator fails to decide in accordance with the express terms of a contract governing the parties, such failure amounts to patent illegality appearing on the face of the award which goes to the root of the matter and warrants judicial interference. Specifically, when clear contractual provisions stipulating recovery of supervision charges are completely ignored by an arbitrator without addressing the contractual terms or relevant governmental circulars implementing those terms, such ignoring constitutes gross contravention of Section 28(3) of the Arbitration and Conciliation Act, 1996, which mandates the Arbitral Tribunal to decide in accordance with the terms of the contract. Additionally, grounds constituting patent illegality can be invoked by courts suo moto under Section 34(2-A) in an appeal under Section 37, even if such grounds were not explicitly specified in the original Section 34 petition, provided the issue was raised before the Arbitrator and noted in the High Court order.
On this section: Provides that arbitral tribunal shall decide dispute in accordance with substantive law of India. Court examined whether ignoring contract terms violates this provision.
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Arun Dev Upadhyaya vs Integrated Sales Service Ltd. & ANR.
Court's Decision & Legal Precedent
A non-signatory to an arbitration agreement can be bound by a foreign arbitral award if the non-signatory is a 'person' bound by the award through doctrines like alter ego or succession, but not merely by virtue of being a non-signatory. Section 48(1)(a) applies only to parties to the agreement and cannot be expansively interpreted to include non-signatories. The grounds for refusing enforcement of foreign awards under Section 48 must be narrowly construed in consonance with the pro-enforcement bias of the New York Convention. The burden of proof under Section 48 means establishing the ground on the basis of the record of the arbitral tribunal, not requiring fresh oral evidence. An arbitrator's application of foreign law (here, Delaware law on alter ego doctrine) to bind non-signatories is reviewable by the enforcement court only to the extent of verifying whether the foreign law was properly applied, not on the merits of the award.
On this section: Arbitral tribunal can decide disputes in accordance with rules of law designated by parties as applicable to substance of dispute
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Questions about Section 28
What have the courts held on Section 28 of the Arbitration and Conciliation Act?
State of Chhattisgarh vs Sal Udyog(p) LTD through Managing Director (08 Nov 2021) is the leading judgment on this section among those set out below: Provides that arbitral tribunal shall decide dispute in accordance with substantive law of India. Court examined whether ignoring contract terms violates this provision. Another 1 judgment on this section is set out below, all of them from the Supreme Court.
How do I find court cases under Section 28 of the Arbitration and Conciliation Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Arbitration Act 28, section 28 Arbitration Act, section 28 of the Arbitration and Conciliation Act. People searching for it also type 28 arbitration act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 2 reported judgments on this section are set out on this page, beginning with State of Chhattisgarh vs Sal Udyog(p) LTD through Managing Director (08 Nov 2021).
What should I read with Section 28 of the Arbitration and Conciliation Act, and has it changed?
1 other provision in this corpus refers back to it.
When did Section 28 of the Arbitration and Conciliation Act come into force?
Section 28 of the Arbitration and Conciliation Act, cited as Arbitration Act 28, came into force on 22 Aug 1996, having been enacted on 16 Aug 1996. It is in force as at the date shown on this page.
Other sections of this Act
- 8. Power to refer parties to arbitration where there is an arbitration agreement1029 words
- 11. Appointment of arbitrators1027 words
- 34. Application for setting aside arbitral awards861 words
- 2. Definitions732 words
- 29A. Time limit for arbitral award635 words
- 57. Conditions for enforcement of foreign awards519 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 15 Oct 2026. This page is not a substitute for legal advice.