Indian law governs arbitration agreement despite foreign seat, so the award is not treated as a foreign award.

Where a contract expressly selects Indian law and the arbitration clause is part of that contract, the arbitration agreement is governed by Indian law unless a contrary intention is unmistakably shown. The foreign seat of arbitration and ICC Rules govern procedure only; they do not by themselves change the proper law of the arbitration agreement. An award is not foreign merely because it is made abroad, and section 9 of the Foreign Awards Act excludes awards made on arbitration agreements governed by Indian law. The result is that such an award falls under the Arbitration Act, 1940, not the Foreign Awards Act, 1961.

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Issues: Whether an arbitral award made in London under an ICC arbitration clause in a contract expressly governed by Indian law and conferring exclusive jurisdiction on Delhi courts was a foreign award under the Foreign Awards (Recognition and Enforcement) Act, 1961, or an award governed by the Arbitration Act, 1940.

Analysis: The contract expressly provided that the laws in force in India would govern it and that Delhi courts would have exclusive jurisdiction in matters arising under it. The arbitration clause was part of the main contract, not a separate agreement. In the absence of an unmistakable intention to the contrary, the proper law of the arbitration agreement follows the proper law of the contract. The place of arbitration and the ICC Rules governed only procedural aspects of the reference, subject to the mandatory requirements of the proper law and the law of the seat. An award is not foreign merely because it is made abroad; it is foreign only if made on an arbitration agreement not governed by Indian law. Section 9 of the Foreign Awards Act excludes awards made on arbitration agreements governed by Indian law.

Conclusion: The arbitration agreement was governed by Indian law, the award was not a foreign award, and the award fell within the Arbitration Act, 1940 rather than the Foreign Awards Act, 1961.

Ratio Decidendi: Where the contract expressly selects Indian law as the governing law and the arbitration clause forms part of that contract, the arbitration agreement is governed by Indian law unless a contrary intention is unmistakably shown; the foreign seat of arbitration affects procedure only and does not by itself render the award a foreign award.

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