TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether two Indian parties can validly choose a foreign seat of arbitration and whether an award made at that seat is a foreign award enforceable under Part II of the Arbitration and Conciliation Act, 1996; (ii) Whether Part I and Part II of the Arbitration and Conciliation Act, 1996 are mutually exclusive and whether section 10 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 alters the forum for enforcement of a foreign award; (iii) Whether the respondent's section 9 application was maintainable.
Issue (i): Whether two Indian parties can validly choose a foreign seat of arbitration and whether an award made at that seat is a foreign award enforceable under Part II of the Arbitration and Conciliation Act, 1996.
Analysis: The arbitration clause designated Zurich as the seat, and the tribunal also treated Zurich as the juridical seat while holding hearings in Mumbai only as a convenient venue. The Court applied the territorial conception of seat and held that once the seat is outside India, the arbitration is governed by the law of that seat. It further held that section 44 of the Arbitration and Conciliation Act, 1996 is party-neutral and place-centric, so nationality or residence of the parties does not determine whether the award is foreign. The Court also held that sections 23 and 28 of the Indian Contract Act, 1872 do not prohibit two Indian parties from agreeing to arbitrate in a neutral foreign forum, and that party autonomy permits such choice, subject to enforcement-stage objections under section 48.
Conclusion: Yes. Two Indian parties may choose a foreign seat, and an award made there is a foreign award within section 44.
Issue (ii): Whether Part I and Part II of the Arbitration and Conciliation Act, 1996 are mutually exclusive and whether section 10 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 alters the forum for enforcement of a foreign award.
Analysis: The Court reaffirmed that Part I governs arbitrations seated in India, while Part II governs recognition and enforcement of foreign awards, and the two parts operate in distinct fields. The proviso to section 2(2) was held not to bridge Part I and Part II, but only to preserve limited interim relief in aid of foreign-seated arbitrations. The Court also held that the expression "international commercial arbitration" in section 10 of the Commercial Courts Act must be read contextually, so that for Part II proceedings it refers to foreign-seated arbitrations and does not displace the special forum structure under the Arbitration and Conciliation Act, 1996. Accordingly, there was no jurisdictional conflict requiring resort to section 21 of the Commercial Courts Act.
Conclusion: Part I and Part II are mutually exclusive, and the Commercial Courts Act does not divest the High Court of jurisdiction over enforcement of the foreign award.
Issue (iii): Whether the respondent's section 9 application was maintainable.
Analysis: Since the Court held that the arbitration was foreign-seated but still within the scope of the statutory scheme permitting limited interim relief in aid of such arbitrations, the contrary view taken by the High Court on section 9 could not stand.
Conclusion: Yes. The section 9 application was maintainable.
Final Conclusion: The appeal failed on the principal challenge to the foreign seat and foreign award character, while the respondent succeeded on the maintainability of the interim relief application.
Ratio Decidendi: For purposes of enforcement under the New York Convention regime, the decisive factor is the place of the seat of arbitration, not the nationality of the parties; and a contractual choice of a foreign seat by two Indian parties is not invalid merely because both parties are Indian.
TaxTMI 
