Territorial seat principle limits Part I relief, excluding Indian court supervision over foreign-seated arbitrations and awards.

The Arbitration and Conciliation Act, 1996 adopts the territoriality principle: Part I applies only where the seat or place of arbitration is in India, so it does not extend to foreign-seated international commercial arbitrations. As a result, Indian courts cannot grant Section 9 interim measures or entertain a Section 34 setting-aside challenge for such arbitrations, because supervisory jurisdiction under Part I is confined to domestic-seated proceedings. Section 48(1)(e) is only an enforcement defence tied to the New York Convention and does not create concurrent jurisdiction in India to annul foreign awards. An independent suit for interim injunction pending a foreign-seated arbitration is also not maintainable absent a substantive cause of action.

---

---

Issues: (i) Whether Part I of the Arbitration and Conciliation Act, 1996 applies only to arbitrations seated in India and not to foreign-seated international commercial arbitrations; (ii) Whether Section 2(2) permits Indian courts to grant interim measures under Section 9 or to entertain challenges under Section 34 in respect of foreign-seated arbitrations; (iii) Whether Section 48(1)(e) of the Arbitration and Conciliation Act, 1996 confers concurrent jurisdiction on Indian courts to annul foreign awards; (iv) Whether an independent suit for interim injunction pending a foreign-seated arbitration is maintainable.

Issue (i): Whether Part I of the Arbitration and Conciliation Act, 1996 applies only to arbitrations seated in India and not to foreign-seated international commercial arbitrations.

Analysis: The scheme of the Act, its preamble, the Statement of Objects and Reasons, and the statutory structure of Parts I and II show that Parliament adopted the territoriality principle reflected in the UNCITRAL Model Law. The expression in Section 2(2) that Part I applies where the place of arbitration is in India was held to be a legislative declaration that Part I is confined to arbitrations seated in India. The omission of the word "only" was held not to enlarge the provision to foreign-seated arbitrations. Sections 2(4), 2(5), 2(7), 20 and 28 were construed harmoniously and not as extending Part I extraterritorially.

Conclusion: Part I applies only to arbitrations which take place within India, and not to foreign-seated international commercial arbitrations.

Issue (ii): Whether Section 2(2) permits Indian courts to grant interim measures under Section 9 or to entertain challenges under Section 34 in respect of foreign-seated arbitrations.

Analysis: Section 9 was held to be part of Part I and therefore subject to the territorial limitation in Section 2(2). Section 36 was treated as referring to enforcement of domestic awards, and Section 34 as the setting-aside provision applicable only to awards made in India. The Court rejected the argument that a party would be left remediless, holding that party autonomy to choose a foreign seat carries the consequence that Indian courts cannot exercise supervisory jurisdiction under Part I over that arbitration.

Conclusion: Indian courts cannot grant Section 9 interim relief or entertain a Section 34 challenge in respect of a foreign-seated arbitration.

Issue (iii): Whether Section 48(1)(e) of the Arbitration and Conciliation Act, 1996 confers concurrent jurisdiction on Indian courts to annul foreign awards.

Analysis: Section 48(1)(e) was held to be an enforcement-defence provision corresponding to Article V(1)(e) of the New York Convention. The phrases "country where the award was made" and "under the law of which the award was made" were interpreted to refer to the supervisory court at the arbitral seat and, exceptionally, the court applying the procedural law governing the arbitration. The provision was held not to confer independent jurisdiction on Indian courts to set aside foreign awards, and the Court rejected the notion of concurrent annulment jurisdiction.

Conclusion: Section 48(1)(e) does not confer jurisdiction on Indian courts to annul foreign awards.

Issue (iv): Whether an independent suit for interim injunction pending a foreign-seated arbitration is maintainable.

Analysis: The Court held that a suit for bare interim relief, unconnected to any substantive claim within the court's jurisdiction, lacks a proper cause of action and cannot support interlocutory injunction relief. Interim relief must be ancillary to an existing substantive right. Since the merits of the dispute are to be decided by a foreign-seated arbitral tribunal, such a suit would be speculative and impermissible.

Conclusion: An independent suit for interim injunction pending a foreign-seated arbitration is not maintainable.

Final Conclusion: The territorial seat of arbitration determines the applicability of Part I, and foreign-seated international commercial arbitrations are governed outside Part I, leaving Indian courts with no supervisory power except at the enforcement stage under Part II.

Ratio Decidendi: The Arbitration and Conciliation Act, 1996 adopts the territoriality principle, so Part I applies only where the seat or place of arbitration is in India, while challenges to and interim control over foreign-seated awards lie outside Part I and are confined to the enforcement framework of Part II.

---