1997 (12) TMI 598 - SC - Companies Law

Arbitration award under Indian-law agreement: Foreign Awards Act s.9(b) inapplicable; award received under 1940 Act, appeal dismissed.

The dominant issue was whether the dispute and resulting award fell within the scope of the applicable arbitration statute and whether Indian courts could ... Whether a dispute lies within the scope of the arbitration agreement? Held that:- By reason of Section 9(b), the 1961 Act does not apply to any award made on an arbitration agreement governed by the law of India. The 1961 Act, therefore, does not apply to the arbitration agreement between the appellant and the first respondent. The 1940 Act, applies to it and, by reason of Section 14(2) thereof, the courts in India are entitled to receive the award made by the second respondent. We must add in the interests of completeness that is not the case of the appellant that the High Court at Bombay lacked the territorial jurisdiction to do so. In the result, the appeal must fail, and it is dismissed with costs. Issues: Whether the courts administering the curial law (the law of the seat/venue of arbitration) retain jurisdiction to direct an umpire to file an award after the arbitrator has made the award, or whether the filing, enforcement and setting aside of the award are governed by the law of the arbitration agreement (the proper law governing the obligation to arbitrate).Analysis: The curial law governs the conduct and procedure of the reference during its continuance and supplies the procedural rules applicable while proceedings before the arbitrator are pending. The proceedings before the arbitrator commence when the arbitrator enters upon the reference and conclude with the making of the award; thereafter the arbitrator becomes functus officio. Filing, enforcement and challenges to an award arise after conclusion of the reference and are governed by the law of the arbitration agreement (the proper law governing the parties' obligations to submit to and honour arbitration). Where the arbitration agreement is governed by Indian law, the provisions of the Indian Arbitration Act, 1940 (including Section 47 and Section 14) apply to the receipt of the award by Indian courts; the Foreign Awards (Recognition and Enforcement) Act, 1961 does not apply where the arbitration agreement is governed by Indian law (see Section 9).Conclusion: The curial law ceases to operate for the purposes of filing, enforcement and setting aside once the award is made; those matters are governed by the law of the arbitration agreement (Indian law in this case). Consequently Indian courts are entitled to receive the award made by the umpire.