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of <h1>Court upholds distinct arbitration clauses, mandates separate Tribunals for int'l & domestic disputes</h1> <h3>M/s Duro Felguera S.A Versus M/s. Gangavaram Port Limited</h3> M/s Duro Felguera S.A Versus M/s. Gangavaram Port Limited - 2017 AIR 5070, 2017 (10) SCR 285, 2017 (9) SCC 729, 2017 (12) SCALE 433 Issues Involved:1. Effect of the Arbitration and Conciliation (Amendment) Act, 2015, particularly Sections 11(6) and 11(6A).2. Whether the Memorandum of Understanding (MoU) subsumes all separate agreements.3. Whether there should be a single Arbitral Tribunal or multiple Tribunals for the disputes arising from the contracts and Corporate Guarantee.Issue-Wise Detailed Analysis:1. Effect of the Arbitration and Conciliation (Amendment) Act, 2015:The primary question was the effect of the 2015 Amendment, especially Sections 11(6) and 11(6A). Section 11(6A) restricts the power of the Court to only examining the existence of an arbitration agreement. The legislative intent is to minimize court intervention at the stage of appointing arbitrators, respecting the policy to confine judicial scrutiny to the presence of an arbitration agreement.2. Whether the Memorandum of Understanding (MoU) subsumes all separate agreements:The court examined if the arbitration clause in the MoU subsumed all separate agreements. It was concluded that the MoU did not incorporate an arbitration clause. The MoU was intended only for clarity on technical and execution-related matters and did not override the terms of the five separate contracts, each containing its own arbitration clause. The court referenced Section 7(5) of the 1996 Act and the case of M.R. Engineers and Contractors Pvt. Ltd. v. Som Datt Builders Ltd., emphasizing that a mere reference to another document does not incorporate its arbitration clause unless explicitly intended.3. Whether there should be a single Arbitral Tribunal or multiple Tribunals:The court addressed whether a single Arbitral Tribunal should be constituted for all disputes or multiple Tribunals for each contract. It was determined that there should be multiple Tribunals. Each of the five contracts and the Corporate Guarantee had distinct arbitration clauses, necessitating separate Tribunals. The court rejected the argument for a single Tribunal based on the MoU and Corporate Guarantee, noting that the parties had consciously agreed to split the original Package No. 4 Tender Document into five separate contracts, each with its own arbitration clause. Thus, there must be six Tribunals—two for international commercial arbitration involving the Spanish Company and four for domestic arbitration.Judgment Summary:- The court confirmed the necessity of multiple Arbitral Tribunals due to the distinct arbitration clauses in each contract.- The MoU did not incorporate an overarching arbitration clause covering all contracts.- The court appointed specific arbitrators for each Tribunal, ensuring separate Tribunals for the international and domestic disputes.- The decision emphasized the legislative intent of the 2015 Amendment to limit court intervention to the existence of arbitration agreements.Disposition:- Arbitration Petition No. 30 of 2016 was allowed.- Arbitration Petition No. 31 of 2016 and Transfer Cases Nos. 25/2017, 26/2017, 27/2017, and 28/2017 were disposed of in line with the judgment.- Each party bore its own costs.
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