TaxTMI 
TaxTMI 
2019 (4) TMI 462
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....d 49 of 2017) and a Shareholding Agreement dated 25th July 2011 (in Arbitration Application Nos. 50 and 51 of 2017). The facts in brief giving rise to the filing of these applications are set out below : 3. In Arbitration Application No. 49 of 2017 the Applicant has stated : (i) that he is a Non-Resident Indian residing and working in Dubai, UAE; the Respondent is a company incorporated in Mumbai and governed by the provisions of the Companies Act, 2013; the Respondent is primarily engaged in the business of providing products and services for drilling fluids, completion fluids and drilling waste management services. (ii) that considering the Applicant's experience in the oil and gas industry, the Respondent decided to avail the Applicant's services; the Applicant began working for the Respondent since March 2011 for a remuneration fixed at USD 15000/- per month. (iii) that the terms of his employment were formalised and an agreement styled as a 'Service Agreement' was entered into on 18th October 2011 between the Applicant and the Respondent. (iv) that despite several reminders, the Respondent has not paid to the Applicant, the balance rem....
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....lding Agreement. (v) that the Respondent No. 1 failed to appoint an arbitrator and neither of the Respondents in fact responded to his Advocate's letter dated 23rd January 2017. In this background, he filed the present Application under Section 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of an arbitrator to adjudicate the disputes that have arisen between the Applicant and the Respondents. 5. In Arbitration Application No. 51 of 2017, the Applicant is the same as in the above application and is again described in the Application itself as a Non-Resident Indian residing and working in Dubai, UAE. The Applicant has further stated that : (i) the Respondent No. 1 is a company incorporated in Mumbai and governed by the provisions of the Companies Act, 2013; the Respondent No. 1 is primarily engaged in the business of providing products and services for drilling fluids, completion fluids and drilling waste management services; the Respondent No. 2 is a company governed by the provisions of the Companies Act, 2013 and is primarily engaged in oil field and mud services. (ii) that sometime in March 2011, he along with three others, i.e.....
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....ble Chief Justice of India or a designate of the Hon'ble Chief Justice of India, and not before this Court. 7. Therefore, the main issue that arises for consideration in all the above Applications is: whether the arbitration is an international commercial arbitration by reason of one of the parties, viz. the Applicant, being an individual who is a habitual resident in any country other than India? If the arbitrations in this case are "international commercial arbitrations" then under Section 11(12) of the Act, these Applications under Section 11 of the Act will have to be made to the Hon'ble Supreme Court of India and not in this Court as the jurisdiction to appoint an arbitrator and constitute a tribunal would lie only with the Hon'ble Chief Justice of India or a designate of the Hon'ble Chief Justice of India. 8. It is the submission of the Applicant that the present Application is not an international commercial arbitration because the Applicant is a national of India holding an Indian passport. It is submitted that the Applicant is domiciled in India which is evident from the Applicant having a Ration Card and an Aadhar Card. It is submitted that the Applicant is presentl....
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....thorities in support of the meaning that has been given by different courts to the expression 'habitually resident' and other allied expressions like 'ordinary resident'. 13. The learned Advocate for the Respondents then distinguished the judgment in TDM Infrastructure Development Pvt. Ltd.,supra, on the basis that it dealt with the definition of 'international commercial arbitrations' where the party was a corporation and the issue in that case was in respect of the nationality of corporations. He submitted that the Applicant is completely misreading the judgment to support its contention that where individuals are Indian nationals the arbitration can never be an international commercial arbitration. Alternatively, he submitted that the Hon'ble Supreme Court in the case of TDM Infrastructure Development (P.) Ltd., (supra), was rendered under Section 11 of the Act and in view of the Supreme Court judgment in the case of State of West Bengal v. Associated Contractors [2015] 53 taxmann.com 364/129 SCL 439 (SC), that judgment is not of the Hon'ble Supreme Court but of a designate of the Hon'ble Chief Justice of India and hence would not have any precedential value and would not be ....
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....e parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court. (6) Where, under an appointment procedure agreed upon by the parties,- (a) a party fails to act as required under that procedure; or (b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or (c) a person, including an institution, fails to perform any function entrusted to him or it under that procedure, a party may request the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment. (6A) The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Co....
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....s habitually resident in a country other than India but a national of India, this provision would still be applicable, and it would be an international commercial arbitration. 19. In the case of TDM Infrastructure Development Pvt. Ltd., (supra), the Hon'ble Supreme Court was dealing with a situation where the parties were companies registered and incorporated under the Companies Act, 1956, but the Directors and shareholders of the petitioner company were said to be resident of Malaysia and the Board of that company also sits in Malaysia. Hence, it is clear that the Hon'ble Supreme Court was dealing with a case involving companies that is separately provided for in sub-clause (ii) of Section 2(1)(f) of the Act and was not dealing with a case involving individuals that would be governed by a different sub-clause of the definition of "international commercial arbitration" altogether. The Hon'ble Supreme Court, in that context, stated as follows: "17 A statute which provides for an arbitration between the parties and a taxing statute must be interpreted differently. The term "international commercial arbitration" does not even find place in the Uncitral Model Law. It finds ....
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....uage of sub-clause (i) of the definition of Section 2(1)(f) of the Act. 21. The Applicant cannot read one stray sentence out of context to support its contention that if parties are nationals of India then even if they are habitually resident outside India, the provision would not apply. It is very clear that the last sentence of paragraph 19 also deals with a situation where the parties are companies and the judgment was not dealing with a situation of individuals. 22. As regards the submission of the Respondents that the said judgment being under Section 11 of the Act has no precedential value and not binding on this Court, in view of my findings as stated above it is not necessary to consider this submission. In any event, the said judgment would have persuasive value and hence I have dealt with the same. 23. The Applicant has then relied upon the meaning of domicile and judgments in that regard in support of its submission. I am of the view that this contention is also without any basis and those judgments would be of no assistance to the Applicant. It is very clear that language of sub-clause (i) of Section 2(1)(f) of the Act does not use the expression 'domicile'. It....
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....Counsel draws a comparison with the wording used in the well-known case of Indyka v. Indyka {([1967) 2 All ER 689 : 1969 1 AC 33}, the effect of which is, of course, superseded by the 1971 Act, and draws a distinction between the wording of the Act and the principles set forth in, for example, Traverse v. Holley {[1953]2 ALL ER 794 : [1953] P 246}. He says further that one may point to characteristics of residence which will not make it habitual but other than habitual. For example the residence must not be temporary or of a secondary nature. He urges that the phrase in the decree of the American court that the residence was 'actual' and 'bona fide' really defines what is meant by 'habitual' in this context, and denotes a regular physical presence which must endure for some time. He further submits that ordinary residence is different from habitual residence in that the latter is something more than the former and is similar to the residence normally required as part of a domicile, although in habitual residence there is no need for the element of animus which is necessary in domicile. I accept those submissions." 25. In Mother v. Father 1989 WL 1683783 at Pages 6 and 7, the Fam....
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...., where he says, at page 314: "and there must be a degree of settled purpose. The purpose may be one or there may be several. It may be specific or general. All that the law requires is that there is a settled purpose. That is not to say that the propositus intends to stay where he is indefinitely. Indeed his purpose while settled may be for a limited period. Education, business or profession, employment, health, family or merely love of the place spring to mind as common reasons for a choice of regular abode, and there may well be many others. All that is necessary is that the purpose of living where one does has a sufficient degree of continuity to be properly described as settled." When the facts of this case are analysed with those principles in mind, the result, in my judgment, is as follows. The New York apartment was taken on originally as a temporary base for Tatjana while the father was proposing to be in the Far East; it being common ground that the traveling, climate changes and so on would be too unsettling for it to be possible for the child to accompany her father there. The New York plan had acquired a more settled purpose by the time that the parties wer....
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....Abduction Convention does not define "habitual residence." The term is commonly used in international conventions covering a variety of subjects, and the drafters of the conventions deliberately avoided seeking to impose a precise, fixed definition. A 1989 Hague Convention case from the United Kingdom, In Re Bates, frequently cited in the United States, stated: "It is greatly to be hoped that the courts will resist the temptation to develop detailed and restrictive rules as to habitual residence, which might make it as technical a term of art as common law domicile. The facts and circumstances of each case should continue to be assessed without resort to presumptions or presuppositions." Courts in the United States also have noted that the Convention does not provide a definition of "habitual residence." The Ninth Circuit Court of Appeals said the decision to not include a definition of "habitual residence" in the Convention "has helped courts avoid formalities determinations but also has caused considerable confusion as to how courts should interpret 'habitual residence.'" III. Need for "Settled Purpose;" General Description of "Habitual Residence" In In....
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....arding acclimatization of the child to the country of residence. A single factor usually is not determinative, and courts often need to weigh conflicting factors. This section will list the factors that have been considered by courts and provide brief commentary about each. A. Factors Related to Parental Intent * Parental employment - The employment of one or both parents in a country to which the parents recently moved can be evidence of establishing a new habitual residence. Conversely, leaving one's employment in a country can be evidence of leaving a prior state of habitual residence. * Purchase of home - Purchase of a home also is evidence of establishing habitual residence. Purchase of a home is more likely to be a basis for such a finding than short-term stays with relatives or in a rental apartment. * Moving of belongings - The movement of family belonging can establish intent to establish a new habitual residence. However, shipping some belongings while keeping other belongings in the state from which one moved can be evidence of not intending to change habitual residence. * Location of bank accounts - A ....
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....he meaning of the word 'resident'. In this regard the Court stated as follows: "29. In Jagir Kaur v. Jaswant Singh [AIR 1963 SC 1521 : (1963) 2 Cri LJ 413] this Court was dealing with a case under Section 488 CrPC and the question of jurisdiction of the court to entertain a petition for maintenance. The Court noticed a near unanimity of opinion as to what is meant by the use of the word "resides" appearing in the provision and held that "resides" implied something more than a flying visit to, or casual stay at a particular place. The legal position was summed up in the following words: (AIR p. 1524, para 8) "8. ... Having regard to the object sought to be achieved, the meaning implicit in the words used, and the construction placed by decided cases thereon, we would define the word 'resides' thus: a person resides in a place if he through choice makes it his abode permanently or even temporarily; whether a person has chosen to make a particular place his abode depends upon the facts of each case." 30. In Kuldip Nayar v. Union of India [(2006) 7 SCC 1] the expression "ordinary residence" as used in the Representation of the People Act, 1950 fell for interpretati....
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....ce, if not for her domicile and nationality. The husband could not have been prevented from suing her for any relief where she resided. Indeed it is one of the principles of jurisdiction of Courts in India to see where the party resides and carries on business to confer jurisdiction upon that Court. This is more pronounced in cases relating to wives in matrimonial matters for which statutory provisions have been made." 30. From a reading of all of the above judgments and authorities it is clear that the question of whether a person habitually resides in a country or place may depend on various facts and circumstances. The term 'habitually resides' or similar terms such as 'ordinarily resides' have not been defined and do not have a technical meaning. However, from the above observations there are some factors or tests which are applicable to decide whether a person habitually resides in a particular place or location. Some of the important tests and factors, are as under: (i) The quality of the residence and not only the duration of the residence. (ii) The residence must be actual and bona fide and there must be a regular physical presence that must endure for ....