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        2010 (10) TMI 976 - SC - Indian Laws

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        Foreign seat arbitration clause excludes Part I of the Act, leaving Indian courts without jurisdiction to appoint an arbitrator. An arbitration clause fixing Seoul as the seat, read with a Korean governing-law clause and ICC rules, was construed as excluding Part I of the ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                        Provisions expressly mentioned in the judgment/order text.

                            Foreign seat arbitration clause excludes Part I of the Act, leaving Indian courts without jurisdiction to appoint an arbitrator.

                            An arbitration clause fixing Seoul as the seat, read with a Korean governing-law clause and ICC rules, was construed as excluding Part I of the Arbitration and Conciliation Act, 1996. The bracketed wording allowing another place by written agreement was treated as a hearing convenience, not a change of seat. As a result, Indian courts lacked jurisdiction under Section 11(6) to appoint an arbitrator, and the precedents on appointment where no such exclusion exists were inapplicable.




                            Issues: Whether the Indian court had jurisdiction under Section 11(6) of the Arbitration and Conciliation Act, 1996 to appoint an arbitrator when the arbitration clause provided for arbitration in Seoul, Korea under the rules of the International Chamber of Commerce and the agreement was governed by Korean law.

                            Analysis: The arbitration agreement was read along with the governing-law clause. The stipulation that the agreement would be governed and construed under Korean law, coupled with arbitration to be finally settled in Seoul under ICC rules, indicated that the seat of arbitration was Seoul and that the parties intended the arbitral process to be governed by the chosen foreign law and rules. The bracketed words permitting another place by written agreement were treated as a convenience for conducting hearings and not as altering the agreed seat. On that construction, Part I of the Act stood excluded by agreement, and the precedents applying Section 11(6) in the absence of such exclusion did not assist the petitioner.

                            Conclusion: The Court held that Section 11(6) of the Arbitration and Conciliation Act, 1996 was not applicable and the Indian court lacked jurisdiction to appoint an arbitrator.

                            Final Conclusion: The arbitration clause was construed as fixing Seoul as the seat and excluding Part I of the Act, so the petition for appointment of an arbitrator was not maintainable in India.

                            Ratio Decidendi: Where the arbitration agreement, read with the governing-law clause, clearly fixes a foreign seat and shows an intention to exclude Part I of the Act, Indian courts cannot appoint an arbitrator under Section 11(6).


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                            ActsIncome Tax
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