TaxTMI 
TaxTMI 
2010 (10) TMI 976
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.... to be an international arbitration. There is no dispute between the parties that this will be the international arbitration on the basis of the arbitration Clause being Article 23 of the Distributorship Agreement. 2. There is also no dispute that the disputes have arisen between the parties on account of which the respondent purported to terminate the Agreement entered into between them. In pursuance of the disputes, the petitioner issued notice dated 01.09.2007 for appointment of an Arbitrator to resolve the disputes arisen between the parties. However, that not having been done, the present petition is necessitated. 3. Since the parties have not disputed about the existence of the arbitration clause, a live issue on account of the existence of the disputes, there would be no question of recording any finding. However, for putting the record straight, the issues as raised by the petitioner are as follows: "1. whether the premature and whether allegedly premature and unilateral termination of the distributorship agreement by the respondent is valid in law. 2. whether the various contentions raised by respondent for terminating the distributorship agreement are valid in....
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....as filed under Section 9 of the Act before the Madras High Court seeking interim injunction restraining the respondents, their men and agents from in any manner dealing with their products in India directly till the conclusion of the arbitral proceedings. It was pointed out that there was an ex parte order of ad interim injunction by the High Court on 8.5.2008. However, when the respondent moved an application for vacating the ex parte order, the respondent had specifically contended that the Courts at Chennai had no jurisdiction to entertain the application. It was pointed out that the respondent's application for vacating the injunction was allowed by the Madras High Court by its order dated 9.6.2008. However, in its order, it seems that the Madras High Court clarified that the question relating to the jurisdiction of the Court was left open by the parties to be decided at a later stage. It also recorded a finding that it was not necessary for it to go into the question of jurisdiction for the purpose of considering the injunction application. The respondent has filed the said order before this Court along with the application under Section 9. 7. From the rival contentions....
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.... such exclusion can be specifically seen. He has compared the language of Clause 23, more particularly, with the jurisdictional cause which had fallen for consideration in Citation Infowares Ltd. v. Equinox Corporation (supra). The learned Counsel also argued that the bracketed portion in Article 23 cannot be interpreted so as to mean that the seat of arbitration could be anywhere else as per the choice of the parties. He pointed out that the bracketed portion is only for the purpose of providing the convenience of holding proceedings of the arbitration else where than Seoul. However, that cannot be allowed to override the main Clause of Article 23. The learned Counsel has contended that the law laid down in Bhatia International v. Bulk Trading S.A. & Anr. (cited supra) and the subsequent decisions would not be applicable. The learned Counsel relied on Sumitomo Heavy Industries Ltd. v. ONGC Ltd. & Ors. [1998 (1) SCC 305]. He also relied on a decision reported as Naviera Amozonica Peruana S.A. v. Compania Internationacional De Seguros Del Peru [1998] Vol.1 Lloyd's Law Reports. 10. The learned Counsel earnestly argued that there is distinction between a legal seat of the arbit....
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....at the arbitrability of the dispute is to be determined in terms of the law governing arbitration agreement and the arbitration proceedings has to be conducted in accordance with the curial law. This Court, in that judgment, relying on Mustill and Boyd (the Law and Practice of Commercial Arbitration in England, 2nd Edition), observed in paragraph 15 that where the law governing the conduct of the reference is different from the law governing the underlying arbitration agreement, the Court looks to the arbitration agreement to see if the dispute is arbitrable, then to the curial law to see how the reference should be conducted and then returns to the first law in order to give effect to the resulting award. In paragraph 16, this Court, in no uncertain terms, declared that the law which would apply to the filing of the award, to its enforcement and to its setting aside would be the law governing the agreement to arbitrate and the performance of that agreement. The Court relied on the observations in Mustill and Boyd to the effect:- "It may, therefore, be seen that problems arising out of an arbitration may, at least in theory, call for the application of any one or more of the fol....
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....of Commerce. This gives the prima facie impression that the seat of arbitration was only in Seoul, South Korea. However, Ms. Mohana, learned Counsel appearing on behalf of the petitioner drew our attention to the bracketed portion and contended that because of the bracketed portion which is to the effect "or such other place as the parties may agree in writing", the seat could be elsewhere also. It is based on this that Ms. Mohana contended that, therefore, there is no express exclusion of Part I of the Act. It is not possible to accept this contention for the simple reason that a bracket could not be allowed to control the main clause. Bracketed portion is only for the purposes of further explanation. In my opinion, Shri Gurukrishna Kumar, learned Counsel appearing on behalf of the respondent, is right in contending that the bracketed portion is meant only for the convenience of the arbitral Tribunal and/or the parties for conducting the proceedings of the arbitration, but the bracketed portion does not, in any manner, change the seat of arbitration, which is only Seoul, Korea. The language is clearly indicative of the express exclusion of Part I of the Act. If there is such exclu....
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....Ltd. v. Equinox Corporation (cited supra) as also in Indtel Technical Services Private Ltd. v. W.S. Atkins Rail Ltd. (cited supra) on one hand and Article 23.1 in the present case, on the other. Shri Gurukrishna Kumar rightly pointed out that the advantage of bracketed portion cannot be taken, particularly, in view of the decision in Naviera Amozonica Peruana S.A. v. Compania Internationacional De Seguros Del Peru (cited supra), wherein it was held:- "All contracts which provide for arbitration and contain a foreign element may involve three potentially relevant systems of law: (a) the law governing the substantive contract; (2) the law governing the agreement to arbitrate and the performance of that agreement; (3) the law governing the conduct of the arbitration. In the majority of the cases all three will be the same, but (1) will often be different from (2) and (3) and occasionally, but rarely, (2) may also differ from (3)". That is exactly the case here. The language of Article 23.1 clearly suggests that all the three laws are the laws of The Republic of Korea with the seat of the arbitration in Seoul, Korea and the arbitration to be conducted in accordance with the rules....