Foreign governing law clause does not exclude Indian arbitration law; Section 11 appointment jurisdiction upheld.

A foreign governing law clause does not by itself exclude Part I of the Arbitration and Conciliation Act, 1996 from an international commercial arbitration. Where the agreement merely states that it is governed by and interpreted under California law, without expressly choosing a foreign seat or clearly excluding the Indian statute, exclusion of Part I cannot be inferred by necessary implication. On that basis, Section 11(5) remained applicable and the Chief Justice or nominee retained jurisdiction to appoint the sole arbitrator. The objection to jurisdiction was rejected.

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Issues: Whether the Chief Justice or his nominee had jurisdiction under Section 11(5) of the Arbitration and Conciliation Act, 1996 to appoint an arbitrator in an international commercial arbitration where the contract was governed by California law.

Analysis: The agreement contained an arbitration clause but also stipulated that it would be governed by and interpreted in accordance with the laws of California, USA. The decisive question was whether such a choice of governing law excluded Part I of the Arbitration and Conciliation Act, 1996 by express term or necessary implication. The governing law clause did not specify the place of arbitration or contain any clear exclusion of the Indian statute. Applying the principles that Part I remains available in international commercial arbitrations unless excluded expressly or by necessary implication, the Court found no basis to infer exclusion merely because the substantive law of the contract was foreign law. The earlier decisions relied upon by the parties were distinguished on their facts and did not displace the applicability of Section 11.

Conclusion: Section 11(5) was held to be applicable, and the Court had jurisdiction to appoint the sole arbitrator. The objection to jurisdiction was rejected.

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