India: India and International Commercial Arbitration

NTPC v. Singer Co.[xxiii]

[T]he laws applicable to this Contract shall be the laws in force in India. The courts of Delhi shall have exclusive jurisdiction in all matters arising under this contract." (7.2).

27.7 In the event of foreign contractor, the arbitration shall be conducted by three arbitrators, one each to be nominated by the owner and the contractor and the third to be named by the President of the International Chamber of Commerce, Paris. Save as above all rules of conciliation and arbitration of the International Chamber of Commerce shall apply to such arbitrations. The arbitration shall be conducted at such places as the arbitrators may determine

Issue: "7. The point for consideration is whether the High Court was right in rejecting the appellant's application filed under the provisions of the Arbitration Act, 1940 and in holding that the award which was made in London on an arbitration agreement was not governed by the law of India and that it was a foreign award within the meaning of the Foreign Awards Act and beyond the jurisdiction of the Indian Courts except for the purpose of recognition and enforcement under the latter Act."

"27. The proper law of the contract in the present case being expressly stipulated to be the laws in force in India and the exclusive jurisdiction of the courts in Delhi in all matters arising under the contract having been specifically accepted, and the parties not having chosen expressly or by implication a law different from the Indian law in regard to the agreement contained in the arbitration clause, the proper law governing the arbitration agreement is indeed the law in force in India, and the competent courts of this country must necessarily have jurisdiction over all matters concerning arbitration. Neither the rules of procedure for the conduct of arbitration contractually chosen by the parties (the ICC Rules) nor the mandatory requirements of the procedure followed in the courts of the country in which the arbitration is held can in any manner supersede the overriding jurisdiction and control of the Indian law and the Indian courts.

51. In sum, it may be stated that the law expressly chosen by the parties in respect of all matters arising under their contract, which must necessarily include the agreement contained in the arbitration clause, being Indian law and the exclusive jurisdiction of the courts in Delhi having been expressly recognised by the parties to the contract in all matters arising under it, and the contract being most intimately associated with India, the proper law of arbitration and the competent courts are both exclusively Indian, while matters of procedure connected with the conduct of arbitration are left to be regulated by the contractually chosen rules of the ICC to the extent that such rules are not in conflict with the public policy and the mandatory requirements of the proper law and of the law of the place of arbitration. The Foreign Awards Act, 1961 has no application to the award in question which has been made on an arbitration agreement governed by the law of India".

Sumitomo Heavy Industries Ltd.

Vs.

ONGC Ltd. and Ors[xxiv]

"17.0 Laws/Arbitration

17.1 Applicable Laws

All questions, disputes or differences arising under, out of or in connection with this contract shall be subject to the laws of India.

17.2 Arbitration

If any dispute, difference or question shall at any time hereafter arise between the parties hereto or their respective representatives or assigns in respect of the construction of these presents or concerning anything herein contained or arising out of these presents or as to the rights, liabilities or duties of the said parties hereunder which cannot be mutually resolved by the parties, the same shall be referred to arbitration, the proceedings of which shall be held at London, U.K. Within 30 days of the receipt of the notice of intention of appointing arbitrators each party shall appoint an arbitrator of its own choice and inform the other party. Before entering upon the arbitration, the two arbitrators shall appoint an umpire. In case the parties fail to appoint its arbitrator within 30 days from the receipt of a notice from the other party in this behalf or if any dispute in selection of umpire, the President of International Chamber of Commerce, Paris, shall appoint the arbitrator and/or the umpire as the case may be.

The decision of the arbitrators and failing to an agreed decision by them, the decision of the umpire shall be final and binding on the parties.

The arbitration proceedings shall be held in accordance with the provision of International Chamber of Commerce and the rules made thereunder as amended from time to time. The arbitration proceedings shall be conducted in English language."

Issue: "7....What is the area of operation of the curial law."

"11. The conclusion that we reach is that the curial law operates during the continuance of the proceedings before the arbitrator to govern the procedure and conduct thereof. The courts administering the curial law have the authority to entertain applications by parties to arbitrations being conducted within their jurisdiction for the purpose of ensuring that the procedure that is adopted in the proceedings before the arbitrator conforms to the requirements of the curial law and for reliefs incidental thereto. Such authority of the courts administering the curial law ceases when the proceedings before the arbitrator are concluded."

17. The law which would apply to the filing of the award, to its enforcement and to its setting aside would be the law governing the agreement to arbitrate and the performance of that agreement. Having regard to the clear terms of Clause 17 of the contract between the appellant and the first respondent, we are in no doubt that the law governing the contract and the law governing the rights and obligations of the parties arising from their agreement to arbitrate, and, in particular, their obligation to submit disputes to arbitration and to honour the award, are governed by the law of India; nor is there any dispute in this behalf.."

Bhatia International[xxv]

Arbitration was to be conducted as per ICC Rules at Paris. However, the actual clause is not reproduced in the Judgment.

Issue: Whether Part I of the 1996 Act applies to international commercial arbitrations.

"21. ... By omitting to provide that Part I will not apply to international commercial arbitrations which take place outside India the effect would be that Part I would also apply to International commercial arbitrations held out of India. But by not specifically providing that the provisions of Part I apply to international commercial arbitrations held out of India, the intention of the legislature appears to be to ally (sic allow) parties to provide by agreement that Part I or any provision therein will not apply. Thus in respect of arbitrations which take place outside India even the nonderogable provisions of Part I can be excluded. Such an agreement may be express or implied.

32. To conclude, we hold that the provisions of Part I would apply to all arbitrations and to all proceedings relating thereto. Where such arbitration is held in India the provisions of Part I would compulsorily apply and parties are free to deviate only to the extent permitted by the derogable provisions of Part I. In cases of international commercial arbitrations held out of India provisions of Part I would apply unless the parties by agreement, express or implied, exclude all or any of its provisions. In that case the laws or rules chosen by the parties would prevail. Any provision, in Part I, which is contrary to or excluded by that law or rules will not apply."

Shreejee Traco (I) (P) Ltd. v. Paperline International Inc.[xxvi]

"Any disputes or claims will be submitted to arbitration in New York."

whether the Chief Justice of India or his designate within the meaning of Section 11 of the Act would be competent to appoint an arbitrator.[xxvii]

"7.... in the absence of express choice of the law governing the contract as a whole or the arbitration agreement as such having been exercised by the parties, a presumption may arise that the law of the country where the arbitration is agreed to be held is the proper law of the arbitration agreement. The presumption is rebuttable. The parties have the freedom to choose the law governing an international commercial arbitration agreement. Where there is no express choice of the law governing the contract as a whole, or the arbitration agreement in particular, there is, in the absence of any contrary indication, a presumption that the parties have intended that the proper law of the contract as well as the law governing the arbitration agreement are the same as law of the country in which the arbitration is agreed to be held. There is nothing in the contract or correspondence between the parties to rebut the ordinary presumption and spell out an intention of the parties that they intended proper law of India to govern arbitration in spite of the place of arbitration having been agreed to be at New York."

National Agricultural Coop. Marketing Federation India Ltd. v. Gains Trading Ltd[xxviii]

"17. Arbitration.—Any dispute arising out of or in this connection with this contract or the execution thereof shall, to the extent possible, be settled amicably by negotiation and mutual agreement between the seller and the buyer. If no settlement can be reached in this way, the matter in dispute shall then be referred to and finally resolved by arbitration in Hong Kong in accordance with the provisions of the Arbitration and Conciliation Act, 1996 or any other statutory modification, enactment or amendment thereof for the time being in force."

Issue: "(i) Whether an arbitration clause comes to an end, if the contract containing such arbitration agreement, was abrogated?

(ii) Whether Section 11 of the Act is inapplicable in regard to the arbitrations which are to take place outside India?

(iii) Whether the appointment of the arbitrator, and the reference arbitration are governed by the laws in force in Hong Kong and not by the Arbitration and Conciliation Act, 1996?"

"9. ..... When read normally, the arbitration clause makes it clear that the matter in dispute shall be referred to and finally resolved by arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996 (or any statutory modification, enactment or amendment thereof) and the venue of arbitration shall be Hong Kong. This interpretation does not render any part of the arbitration clause meaningless or redundant. Merely because the parties have agreed that the venue of arbitration shall be Hong Kong, it does not follow that laws in force in Hong Kong will apply. The arbitration clause states that the Arbitration and Conciliation Act, 1996 (an Indian statute) will apply. Therefore, the said Act will govern the appointment of arbitrator, the reference of disputes and the entire process and procedure of arbitration from the stage of appointment of arbitrator till the award is made and executed/given effect to".

Venture Global[xxix]

(b) This agreement shall be construed in accordance with and governed by the laws of the State of Michigan, United States, without regard to the conflicts of law rules of such jurisdiction. Disputes between the parties that cannot be resolved via negotiations shall be submitted for final, binding arbitration to the London Court of Arbitration.

(c) Notwithstanding anything to the contrary in this agreement, the shareholders shall at all times act in accordance with the Companies Act and other applicable Acts/rules being in force, in India at any time."

whether the aggrieved party is entitled to challenge the foreign award which was passed outside India in terms of Sections 9/34 of the Act[xxx]

"44. The non obstante clause would override the entirety of the agreement including Clause (b) which deals with settlement of the dispute by arbitration. Clause (c), therefore, would apply to the enforcement of the award which declares that, notwithstanding that the proper law or the governing law of the contract is the law of the State of Michigan, their shareholders shall at all times act in accordance with the Companies Act and other applicable Acts/rules being in force in India at any time. ....."

47. In terms of the decision in Bhatia International., we hold that Part I of the Act is applicable to the award in question even though it is a foreign award. We have not expressed anything on the merits of claim of both the parties. It is further made clear that if it is found that the court in which the appellant has filed a petition challenging the award is not competent and having jurisdiction, the same shall be transferred to the appropriate court."

Indtel Technical Services (P) Ltd. v. W.S. Atkins Rail Ltd[xxxi]

"13. Settlement of disputes 13.1. This agreement, its construction, validity and performance shall be governed by and construed in accordance with the laws of England and Wales;

13.2. Subject to Clause 13.3 all disputes or differences arising out of, or in connection with, this agreement which cannot be settled amicably by the parties shall be referred to adjudication;

13.3. If any dispute or difference under this agreement touches or concerns any dispute or difference under either of the sub-contract agreements, then the parties agree that such dispute or difference hereunder will be referred to the adjudicator or the courts as the case may be appointed to decide the dispute or difference under the relevant sub-contract agreement and the parties hereto agree to abide by such decision as if it were a decision under this agreement."

"... primarily two questions were required to be answered in this matter, namely:

(i) Whether Clauses 13.2 and 13.3 of the memorandum of understanding can be construed to be an arbitration agreement; and

(ii) Whether having regard to Clause 13.1 of the memorandum of understanding indicating that the construction, validity and performance of the agreement would be governed by and constructed in accordance with laws of England and Wales, this Court would have jurisdiction to appoint an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996."

36. "..... it is fairly well settled that when an arbitration agreement is silent as to the law and procedure to be followed in implementing the arbitration agreement, the law governing the said agreement would ordinarily be the same as the law governing the contract itself. The decisions cited by Mr Tripathi and the views of the jurists referred to in NTPC support such a proposition. What, however, distinguishes the various decisions and views of the authorities in this case is the fact that in Bhatia International this Court laid down the proposition that notwithstanding the provisions of Section 2(2) of the Arbitration and Conciliation Act, 1996, indicating that Part I of the said Act would apply where the place of arbitration is in India, even in respect of international commercial agreements, which are to be governed by the laws of another country, the parties would be entitled to invoke the provisions of Part I of the aforesaid Act and consequently the application made under Section 11 thereof would be maintainable."

Citation Infowares Ltd. v. Equinox Corp.[xxxii]

"10. Any dispute between the parties hereto arising from this Agreement, or from an individual agreement concluded on the basis thereof, shall be finally referred to a mutually agreed Arbitrator.

"10.1 Governing law- This agreement shall be governed by and interpreted in accordance with the laws of California, USA and matters of dispute, if any, relating to this agreement or its subject matter shall be referred for arbitration to a mutually agreed Arbitrator.

"12. .... the question that has arisen is whether this Court would have the jurisdiction in the present factual scenario and on the backdrop of the fact that the parties vide the aforementioned Clause 10.1 had agreed that the governing law would be that of California, USA."

"26. In my opinion the scope of the expressions in para 23 of NTPC case must be held to be limited. There may be presumption where the parties have agreed to hold arbitration in a particular country. In that circumstance, the presumption would arise that the law of the country where the arbitration is agreed to be held would apply as a law of contract. Where there has been no specific expression about the law of contract, the situation is otherwise. In this case the law of contract is agreed upon as the Californian law.

27. However, there is no agreement in respect of the law governing the procedure of arbitration.

32...if the parties intended specifically in this case that the law governing the contract was Californian law, as expressed in Bhatia International as well as in Indtel Technical Services case, an implied exclusion of Part I should be presumed. I am afraid it is not possible to read such an implied exclusion. Seeing the striking similarity between Clause 10.1 in the instant case and Clauses 13.1 and 13.2 in Indtel case which have been quoted above and further the view expressed by the learned Judge in Indtel Technical Services case regarding the exclusion, it is not possible to even distantly read such an implied exclusion of Part I. It cannot be forgotten that one of the contracting parties is the Indian party. The obligations under the contract were to be completed in India. Further, considering the nature of the contract, it is difficult to read any such implied exclusion of Part I in the language of Clause 10.1. That argument of learned Senior Counsel for the respondent therefore must be rejected."

Videocon Industries Ltd. v. Union of India[xxxiii]

"33.1. Indian law to govern.—Subject to the provisions of Article 34.12, this contract shall be governed and interpreted in accordance with the laws of India.

.....

34.12. Venue and law of arbitration agreement.—The venue of sole expert, conciliation or arbitration proceedings pursuant to this article, unless the parties otherwise agree, shall be Kuala Lumpur, Malaysia, and shall be conducted in the English language. Insofar as practicable, the parties shall continue to implement the terms of this contract notwithstanding the initiation of arbitral proceedings and any pending claim or dispute. Notwithstanding the provisions of Article 33.1, the arbitration agreement contained in this Article 34 shall be governed by the laws of England."

"Whether the Delhi High Court could entertain the petition filed by the respondents under Section 9 of the Arbitration and Conciliation Act, 1996 (for short "the Act") for grant of a declaration that Kuala Lumpur (Malaysia) is the contractual and juridical seat of arbitration and for issuance of a direction to the Arbitral Tribunal to continue the hearing at Kuala Lumpur in terms of Clause 34 of the Production Sharing Contract (PSC), is the question which arises for consideration in this appeal."

33. In the present case also, the parties had agreed that notwithstanding Article 33.1, the arbitration agreement contained in Article 34 shall be governed by laws of England. This necessarily implies that the parties had agreed to exclude the provisions of Part I of the Act.

Dozco India Private Ltd. v. Doosan Infracore Company Ltd[xxxiv]

Article 22. Governing Laws — 22.1: This agreement shall be governed by and construed in accordance with the laws of The Republic of Korea.

Article 23. Arbitration — 23.1: All disputes arising in connection with this agreement shall be finally settled by arbitration in Seoul, Korea (or such other place as the parties may agree in writing), pursuant to the rules of agreement then in force of the International Chamber of Commerce."

"5. The respondent, therefore, contended that the petitioner would not be entitled to maintain the present proceedings in India by invoking the provisions of the Act. The respondent specifically disputes the stand of the petitioner that there is nothing in the agreement to deny the applicability of Indian procedural law seeking appointment of arbitrator. The respondent also specifically contended that there is express exclusion of Indian courts and/or the applicability of the Act.

"20. In that view, my inferences are that:

(i) The clear language of Articles 22 and 23 of the distributorship agreement between the parties in this case spells out a clear agreement between the parties excluding Part I of the Act.

(ii) The law laid down in Bhatia International v. Bulk Trading S.A. and Indtel Technical Services (P) Ltd. v. W.S. Atkins Rail Ltd., as also in Citation Infowares Ltd. v. Equinox Corpn. is not applicable to the present case.

(iii) Since the interpretation of Article 23.1 suggests that the law governing the arbitration will be Korean Law and the seat of arbitration will be Seoul in Korea, there will be no question of applicability of Section 11(6) of the Act and the appointment of arbitrator in terms of that provision.

Yograj  Infrastructure Ltd. v. Ssang Yong Engg. and Construction Co. Ltd[xxxv]

"27. Arbitration.

27.1 All disputes, differences arising out of or in connection with the Agreement shall be referred to arbitration. The arbitration proceedings shall be conducted in English in Singapore in accordance with the Singapore International Arbitration Centre (SIAC) Rules as in force at the time of signing of this Agreement. The arbitration shall be final and binding.

27.2 The arbitration shall take place in Singapore and be conducted in English language.

27.3 None of the Party shall be entitled to suspend the performance of the Agreement merely by reason of a dispute and/or a dispute referred to arbitration.

"32. Clause 28 of the Agreement describes the governing law and provides as follows:

This agreement shall be subject to the laws of India. During the period of arbitration, the performance of this agreement shall be carried on without interruption and in accordance with its terms and provisions".

"(i) whether the Indian courts would have jurisdiction to entertain an appeal under Section 37 of the Arbitration and Conciliation Act, 1996, against an interim order passed by the Arbitral Tribunal with its seat in Singapore?

(ii) whether the "law of arbitration" would be the International Arbitration Act, 2002, of Singapore? and

(iii) whether the "curial law" would be the laws of Singapore?"

"38. Having agreed to the above, it was no longer available to the Appellant to contend that the "proper law" of the agreement would apply to the arbitration proceedings. The decision in Bhatia International v. Bulk Trading S.A., which was applied subsequently in the case of Venture Global Engg. v. Satyam Computer Services Ltd. and Citation Infowares Ltd. v. Equinox Corporation, would have no application once the parties agreed by virtue of Clause 27.1 of the Agreement that the arbitration proceedings would be conducted in Singapore, i.e., the seat of arbitration would be in Singapore, in accordance with the Singapore International Arbitration Centre Rules as in force at the time of signing of the Agreement.

...In the instant case, once the parties had specifically agreed that the arbitration proceedings would be conducted in accordance with the SIAC Rules, which includes Rule 32, the decision in Bhatia International and the subsequent decisions on the same lines, would no longer apply in the instant case where the parties had willingly agreed to be governed by the SIAC Rules."

Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc.[xxxvi]

"17.1. Any dispute or claim arising out of or relating to this agreement shall be in the first instance, endeavoured to be settled amicably by negotiation between the parties hereto and failing which the same will be settled by arbitration pursuant to the English arbitration law and subsequent amendments thereto.

17.2. The arbitration proceedings shall be carried out by two arbitrators, one appointed by Balco and one by Kaiser chosen freely and without any bias. The Court of Arbitration shall be held wholly in London, England and shall use English language in the proceeding. The findings and award of the Court of Arbitration shall be final and binding upon the parties.

***

22.Governing law.—This agreement will be governed by the prevailing law of India and in case of arbitration, the English law shall apply."

Does Section 2(2) bar the application of Part I to arbitrations which take place outside India?

Does Section 2(7) indicate that Part I applies to arbitrations held outside India?

194. In view of the above discussion, we are of the considered opinion that the Arbitration Act, 1996 has accepted the territoriality principle which has been adopted in the Uncitral Model Law. Section 2(2) makes a declaration that Part I of the Arbitration Act, 1996 shall apply to all arbitrations which take place within India. We are of the considered opinion that Part I of the Arbitration Act, 1996 would have no application to international commercial arbitration held outside India. Therefore, such awards would only be subject to the jurisdiction of the Indian courts when the same are sought to be enforced in India in accordance with the provisions contained in Part II of the Arbitration Act, 1996. In our opinion, the provisions contained in the Arbitration Act, 1996 make it crystal clear that there can be no overlapping or intermingling of the provisions contained in Part I with the provisions contained in Part II of the Arbitration Act, 1996.

196. We conclude that Part I of the Arbitration Act, 1996 is applicable only to all the arbitrations which take place within the territory of India.

Reliance Industries Limited and Another v. Union of India[xxxvii]

"32. Applicable law and language of the contract:

32.1. Subject to the provisions of Article 33.12, this contract shall be governed and interpreted in accordance with the laws of India.

32.2. Nothing in this contract shall entitle the Government or the contractor to exercise the rights, privileges and powers conferred upon it by this contract in a manner which will contravene the laws of India.

32.3. .....

33. Sole expert, conciliation and arbitration:

33.12. The venue of conciliation or arbitration proceedings pursuant to this article, unless the parties otherwise agree, shall be London, England and shall be conducted in the English language. The arbitration agreement contained in this Article 33 shall be governed by the laws of England. Insofar as practicable, the parties shall continue to implement the terms of this contract notwithstanding the initiation of arbitral proceedings and any pending claim or dispute."

"37. ...whether Part I of the Arbitration Act, 1996 would be applicable to the arbitration agreement irrespective of the fact that the seat of arbitration is outside India."

60. In this case, the parties have by agreement provided that the juridical seat of arbitration will be in London. On the basis of the aforesaid agreement, necessary amendment has been made in the PSCs. On the basis of the agreement and the consent of the parties, the Arbitral Tribunal has made the "final partial consent award" on 14-9-2011 fixing the juridical seat (or legal place) of arbitration for the purposes of arbitration initiated under the claimants' notice of arbitration dated 16-12-2010 in London, England. To make it even further clear that the award also records that any hearing in the arbitration may take place in Paris, France, Singapore or any other location the Tribunal considers convenient. Article 33.12 stipulates that arbitration proceedings shall be conducted in English language. The arbitration agreement contained in Article 33 shall be governed by the laws of England. A combined effect of all these factors would clearly show that the parties have by express agreement excluded the applicability of Part I of the Arbitration Act, 1996 (Indian) to the arbitration proceedings.

Sakuma Exports v Louis Dreyfus Commodities Suisse S.A[xxxviii]

"This contract is subject to the Rules of The Refined Sugar Association, London as fully as if the same had been expressly inserted herein, whether or not either or both parties to it are Members of the Association.

If any provision of this contract is inconsistent with the Rules, said provisions shall prevail."

"Arbitration: All disputes arising out of or in conjunction with this Contract shall be referred to the Refined Sugar Association, London for settlement in accordance with the Rules relating to Arbitration. This Contract shall be governed by and construed in accordance with English Law."

"The issue which falls for determination in the appeal is whether parties in this case by their agreement, express or implied, have excluded all or any of the provisions of Part-I of the Act of 1996."[xxxix]

"5. Since one of the terms and conditions of the agreement makes the contract subject to the Rules of the Refined Sugar Association, London by treating the same to have been expressly inserted in the agreement, Rule 8 of the Refined Sugar Association, London leaves no manner of doubt that the parties have not only accepted English law as the law governing the contract but the disputes and the arbitration shall also be governed by the law of England. The seat of Arbitration is admittedly England.

Enercon (India) Ltd. v. Enercon GmbH[xl]

"17. Governing law

17.1 This agreement and any dispute or claims arising out of or in connection with its subject-matter are governed by and construed in accordance with the law of India.

18. Disputes and arbitration

18.3 The proceedings in such arbitration shall be conducted in English. The venue of the arbitration proceedings shall be in London. The arbitrators may (but shall not be obliged to) award costs and reasonable expenses (including reasonable fees of counsel) to the party(ies) that substantially prevail on merit. The provisions of the Indian Arbitration and Conciliation Act, 1996 shall apply.

The reference of any matter, dispute or claim or arbitration pursuant to this Section 18 or the continuance of any arbitration proceedings consequent thereto or both will in no way operate as a waiver of the obligations of the parties to perform their respective obligations under this agreement."

"71.5. (v) In case the arbitration clause is held to be workable, is the seat of arbitration in London or in India?

71.6. (vi) In the event it is held that the seat is in India, would the English courts have the concurrent jurisdiction for taking such measures as required in support of the arbitration as the venue for the arbitration proceedings is London?

"114... curial law of England would become applicable only if there was clear designation of the seat in London. Since the parties have deliberately chosen London as a venue, as a neutral place to hold the meetings of arbitration only, it cannot be accepted that London is the seat of arbitration. .... If seat is in London, then challenge to the award would also be in London. But the parties having chosen the Indian Arbitration Act, 1996—Chapters III, IV, V and VI; Section 11 would be applicable for appointment of arbitrator in case the machinery for appointment of arbitrators agreed between the parties breaks down. This would be so since the ratio laid down in Bhatia will apply i.e. Part I of the Indian Arbitration Act, 1996 would apply even though the seat of arbitration is not in India. This position has been reversed in Balco, but only prospectively. Balco would apply to the agreements on or after 6-9-2012. Therefore, to interpret that London has been designated as the seat would lead to absurd results

Harmony Innovation Shipping Ltd. v.

Gupta Coal India Ltd. & Anr.[xli]

"5. If any dispute or difference should arise under this charter, general average/arbitration in London to apply, one to be appointed by each of the parties hereto, the third by the two so chosen, and their decision or that of any two of them, shall be final and binding, and this agreement may, for enforcing the same, be made a rule of Court. Said three parties to be commercial men who are the members of the London Arbitrators Association. This contract is to be governed and construed according to English Law. For disputes where total amount claim by either party does not exceed USD 50,000 the arbitration should be conducted in accordance with small claims procedure of the London Maritime Arbitration Association."

"The issue that has emanated for consideration in this appeal is whether in the obtaining factual matrix, especially regard being had to the nature of the arbitration clause, the High Court is justified in setting aside the order passed by the learned Additional District Judge, Ernakulam on 25.9.2014 in I.A. No. 4345 of 2014 in O.P. (ARB) No. 802/2014 directing the first respondent therein to furnish security for US$ 11,15,400 or its equivalent (approximate) Indian Rupees 6,60,00,000/- or to show cause on or before 01.10.2014, and as an interim measure conditionally attaching the cargo belonging to the first respondent herein, while dealing with an application moved under Section 9 of the Arbitration and Conciliation Act, 1996 (for brevity, "the Act"), on the foundation that Section 9 of the Act is limited to the applications to arbitration that takes place in India and has no applicability to arbitration which takes place outside India in view of the pronouncement in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. inasmuch as clause 5 of the contract which is the arbitration clause clearly spells out that the contract is to be governed and construed according to English law and if the dispute of the claim does not exceed USD 50,000, the arbitration should be conducted in accordance with small claims procedure of the London Maritime Arbitration Association."

"44. ...... As we perceive, it forms as a part of the arbitration clause. There is ample indication through various phrases like "arbitration in London to apply", arbitrators are to be the members of the "London Arbitration Association" and the contract "to be governed and construed according to English Law". It is worth noting that there is no other stipulation relating to the applicability of any law to the agreement. There is no other clause anywhere in the contract. That apart, it is also postulated that if the dispute is for an amount less than US $ 50000 then, the arbitration should be conducted in accordance with small claims procedure of the London Maritime Arbitration Association. When the aforesaid stipulations are read and appreciated in the contextual perspective, "the presumed intention" of the parties is clear as crystal that the juridical seat of arbitration would be London.

46. Thus, interpreting the clause in question on the bedrock of the aforesaid principles it is vivid that the intended effect is to have the seat of arbitration at London. The commercial background, the context of the contract and the circumstances of the parties and in the background in which the contract was entered into, irresistibly lead in that direction. We are not impressed by the submission that by such interpretation it will put the respondent in an advantageous position. Therefore, we think it would be appropriate to interpret the clause that it is a proper clause or substantial clause and not a curial or a procedural one by which the arbitration proceedings are to be conducted and hence, we are disposed to think that the seat of arbitration will be at London.

47. Having said that the implied exclusion principle stated in Bhatia International (supra) would be applicable, regard being had to the clause in the agreement, there is no need to dwell upon the contention raised pertaining to the addendum, for any interpretation placed on the said document would not make any difference to the ultimate conclusion that we have already arrived at."

Eitzen Bulk A/S v. Ashapura Minechem Ltd.[xlii]

28. Any dispute arising under this C.O.A. is to be settled and referred to Arbitration in London. One Arbitrator to be employed by the Charterers and one by the Owners and in case they shall not agree then shall appoint an Umpire whose decision shall be final and binding, the Arbitrators and Umpire to be Commercial Shipping Men. English Law to apply. Notwithstanding anything to the contrary agreed in the C.O.A., all disputes where the amount involved is less that USD 50,000/- (fifty thousand) the Arbitration shall be conducted in accordance with the Small Claims Procedure of L.M.A.A.

24. Thus, the main question on which contentions were advanced by the learned counsel for the parties is whether Part I of the Arbitration Act is excluded from its operation in case of a foreign award where the arbitration is not held in India and is governed by foreign law

The question is whether the above stipulations show the intention of the parties to expressly or impliedly exclude the provisions of Part I to the arbitration, which was to be held outside India i.e. in London. We think that the clause evinces such an intention by providing that the English law will apply to the arbitration. The clause expressly provides that Indian law or any other law will not apply by positing that English law will apply. The intention is that English law will apply to the resolution of any dispute arising under the law. This means that English law will apply to the conduct of the arbitration. It must also follow that any objection to the conduct of the arbitration or the award will also be governed by English law. Clearly, this implies that the challenge to the award must be in accordance with English law. There is thus an express exclusion of the applicability of Part I to the instant arbitration by Clause 28. In fact, Clause 28 deals with not only the seat of arbitration but also provides that there shall be two arbitrators, one appointed by the charterers and one by the owners and they shall appoint an umpire, in case there is no agreement. In this context, it may be noted that the Indian Arbitration and Conciliation Act, 1996 makes no provision for umpires and the intention is clearly to refer to an umpire contemplated by Section 21 of the English Arbitration Act, 1996. It is thus clear that the intention is that the arbitration should be conducted under the English law i.e. the English Arbitration Act, 1996. It may also be noted that Sections 67, 68 and 69 of the English Arbitration Act provide for challenge to an award on grounds stated therein. The intention is thus clearly to exclude the applicability of Part I to the instant arbitration proceedings.

NTPC v. Singer Co.[xliii]

Bench Strength: 2 Judges

Proceedings: Sections 14, 30 and 33 of the Arbitration Act, 1940

√ (Indian law)

√[xliv] (Indian law)

√ (ICC Rules)

None

None

√ (Courts of Delhi)

Applicable

Sumitomo Heavy Industries Ltd. v. ONGC Ltd. and Ors[xlv]

Bench Strength: 3 Judges

Proceedings: Appellate

√ (Indian law)

None

√ (ICC Rules)

None

√ (London)

None

Applicable

Bhatia International[xlvi]

Bench Strength: 3 Judges

Proceedings: Appellate proceeding against rejection of Petition under Section 9 of the 1996 Act (Rejection of interim measure)

   None

None

√ (ICC Rules)

None

√ (Paris)

None

Applicable

Shreejee Traco (I) (P) Ltd. v. Paperline International Inc.[xlvii]

Bench Strength: Single Judge

Proceedings: Section 11 of the 1996 Act (Appointment of Arbitrator)

None

None

None

None

√ (New York)

None

Applicable[xlviii]

National Agricultural Coop. Marketing Federation India Ltd. v. Gains Trading Ltd[xlix]

Bench Strength: Single Judge

Proceedings: Section 11 of the 1996 Act (Appointment of Arbitrator)

None

None

√ (1996 Act)

None

√ (Hong Kong)

None

Applicable

Venture Global[l]

Bench Strength: 2 Judges

Proceedings: Appeal against rejection to set aside the arbitral award.

In issue

None

None

None

None

None

Applicable

Indtel Technical Services (P) Ltd. v. W.S. Atkins Rail Ltd[li]

Bench Strength: Single Judge

Proceedings: Section 11 of the 1996 Act (Appointment of Arbitrator)

√ (English law)

None

None

None

None

None

Applicable

Citation Infowares Ltd. v. Equinox Corp.[lii]

Bench Strength: Single Judge

Proceedings: Section 11 of the 1996 Act (Appointment of Arbitrator)

√ (Laws of California, USA)

None

None

None

None

None

Applicable

Videocon Industries Ltd. v. Union of India[liii]

Bench Strength: 2 Judges

Proceedings: Appeal against Section 9 proceedings.

√(Indian law)

√(English law)

None

None

√(Kuala Lumpur, Malaysia)

None

Not applicable

Dozco India Private Ltd. v. Doosan Infracore Company Ltd[liv]

Bench Strength: Single Judge

Proceedings: Section 11 of the 1996 Act (Appointment of Arbitrator)

√(Korean law)

None

√(ICC Rules)

None

√(Korea)

None

Not applicable

Yograj Infrastructure Ltd. v. Ssang Yong Engg. and Construction Co. Ltd[lv]

Bench Strength: 2 Judges

Proceedings: Appeal from Section 37 Proceeding.

√(Indian)

None

√(SIAC Rules)

None

√(Singapore)

None

Not applicable

Reliance Industries Limited and Another v. Union of India[lvi]

Bench Strength: 2 Judges

Proceedings: Appeal from Section 34 Proceeding

√(Indian law)

√(English law)

None

√[lvii] (London)

√(London)

None

Not applicable

Sakuma Exports v Louis Dreyfus Commodities Suisse S.A[lviii]

Bench Strength: 2 Judges

Proceedings: Appeal against Section 34 proceeding.

√(English law)

None

√(The Refined Sugar Association, London)

England

None

None

Not applicable

Enercon (India) Ltd. v. Enercon GmbH[lix]

Bench Strength: Single Judge

Proceedings: Section 11 of the 1996 Act (Appointment of Arbitrator)

√(Indian law)

None

√(1996 Act)

√[lx] (India)

√(London)

None

Applicable

Harmony Innovation Shipping Ltd. v. Gupta Coal India Ltd. & Anr.[lxi]

Bench Strength: 2 Judges

Proceedings: Sections 9/47 and 49 of the 1996 Act

√(English Law)

None

√(London Maritime Arbitration Association)

√[lxii] (London)

√(London)

None

Not applicable

Eitzen Bulk A/S v. Ashapura Minechem Ltd.

Bench Strength: 2 Judges

Proceedings: Sections 34,47, 48 and 49 of the 1996 Act

English law

None

√(London Maritime Arbitration Association)

London[lxiv]

London

None

Not applicable