TaxTMI 
TaxTMI 
2019 (12) TMI 626
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....6 may be filed dependent on where the seat of arbitration is located. 3. At the outset, the facts in SLP (Civil) No.25618 of 2018 are set out as follows. On 16.01.2004, the Petitioner was awarded a contract for construction of Diversion Tunnels, Coffer Dams, Concrete Gravity Dams, Plunge Pools and Cutoff Walls of Subansri Lower Hydroelectric Project on river Subansri, with an installed capacity of 2000 MW, stated to be the largest Hydropower project yet in India. The project site is located in the lower Subansri districts in the States of Assam and Arunachal Pradesh. Clause 67.3 of the agreement between the parties provides for dispute resolution through arbitration. Clause 67.3 reads as follows: "Any dispute in respect of which the Employer and the Contractor have failed to reach at an amicable settlement pursuant to Sub-Clause 67.1, shall be finally settled by arbitration as set forth below. The Arbitral Tribunal shall have full power to open up, review and revise any decision, opinion, instruction, determination, certificate or valuation of the Engineer. (i) A dispute with an Indian Contractor shall be finally settled in accordance with the In- dian Arbitrat....
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....after receipt of the notice of the appointment of its arbitrator by the other party, then the President of the Institution of Engineers (India), both in cases of foreign contractors as well as Indian Contractors, shall appoint the arbitrator. A certified copy of the order of the President of Institution of Engineers (India), making such an appointment shall be furnished to each of the parties. (vi) Arbitration Proceedings shall be held at New Delhi/Faridabad, India and the language of the arbitration proceedings and that of all documents and communications between the parties shall be English. (vii) The decision of the majority of arbitrators shall be final and binding upon both parties. The cost and expenses of Arbitration shall be borne in such a manner as determined by the arbitral tribunal. However, the expenses incurred by each party in connection with the preparation, presentation etc. of its proceedings as also the fees and expenses paid to the arbitrator appointed by such party on its behalf shall be borne by each party itself." 4. On 16.05.2011, a Notice of Arbitration was issued by the Petitioner to the Respondent, in regard to payment of compensation....
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....ble, and that Delhi being only a convenient venue where arbitral proceedings were held and not the seat of the arbitration proceedings, Faridabad would have jurisdiction on the basis of the cause of action having arisen in part in Faridabad. As a result, the appeal was allowed and the judgment of the Special Commercial Court, Gurugram was set aside. 6. Dr. Abhishek Manu Singhvi, learned Senior Advocate appearing on behalf of the Petitioner in SLP (C) No.25618 of 2018, has assailed the impugned High Court judgment on both counts. According to him, on a combined reading of Section 13 of the Commercial Courts Act, 2015 and Section 37 of the Arbitration Act, 1996, it becomes clear that Section 13 of the Commercial Courts Act, 2015 only provides the forum for challenge, whereas Section 37 of the Arbitration Act, 1996 - which is expressly referred to in the proviso to Section 13(1) of the Commercial Courts Act, 2015 - circumscribes the right of appeal. He contended that this when read with Section 5 of the Arbitration Act, 1996, makes it clear that only certain judgments and orders are appealable, and no appeal lies under any provision outside Section 37 of the Arbitration Act, 1996. ....
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....nc. (supra) was not correctly decided, being contrary to the larger bench in BALCO (supra). 7. Dr. Singhvi in the course of his submissions also referred pointedly to paragraph 96 of BALCO (supra), and argued that not only was the example given in the said paragraph contrary to the theory of concurrent jurisdiction propounded therein, but was also contrary to subsequent paragraphs in the said judgment, in which it was clearly held that a clause in an agreement stating the "seat" of arbitration is akin to an exclusive jurisdiction clause, which would put paid to any theory of concurrent jurisdiction. As a matter of fact, two subsequent decisions have understood the ratio of BALCO (supra) to be that once the "seat" is indicated in an arbitration agreement, it is akin to an exclusive jurisdiction clause, which would oust the jurisdiction of courts other than courts at the seat. For this purpose he expressly referred to and relied upon Reliance Industries Ltd. v. Union of India (2014) 7 SCC 603 and Indus Mobile Distribution Pvt. Ltd. (supra). 8. Shri Arunabh Chowdhury, appearing in SLP (Civil) No. 25848 of 2018, argued that unlike the first SLP argued by Dr. Singhvi, in his case,....
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....eat of arbitration, both New Delhi and Faridabad would have concurrent jurisdiction - New Delhi being a neutral forum in which no part of the cause of action arose, and Faridabad being a chosen forum where a part of the cause of action has arisen. When read with Section 42 of the Arbitration Act, 1996, since the Court at Faridabad was first approached by filing an application under Section 34 of the Arbitration Act,1996, that Court alone would have jurisdiction, as a result of which the impugned judgment ought to be affirmed. Maintainability of the appeals under Section 37 of the Arbitration Act, 1996 11. Section 37(1) of the Arbitration Act, 1996 reads as follows: "37. Appealable Orders.- (1)An appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:- (a)refusing to refer the parties to arbitration under section 8; (b)granting or refusing to grant any measure under section 9; (c)setting aside or refusing to set aside an arbitral award under section 34." 12. Section 13 of the Commercial Courts Act, 2015 reads as follo....
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.... specifically enumerated under Order 43 of the Code of Civil Procedure Code, 1908, and Section 37 of the Arbitration Act. It will at once be noticed that orders that are not specifically enumerated under Order 43 CPC would, therefore, not be appealable, and appeals that are mentioned in Section 37 of the Arbitration Act alone are appeals that can be made to the Commercial Appellate Division of a High Court. 15. Thus, an order which refers parties to arbitration under Section 8, not being appealable under Section 37(1)(a), would not be appealable under Section 13(1) of the Commercial Courts Act. Similarly, an appeal rejecting a plea referred to in sub-sections (2) and (3) of Section 16 of the Arbitration Act would equally not be appealable under Section 37(2)(a) and, therefore, under Section 13(1) of the Commercial Courts Act. xxx xxx xxx 20. Given the judgment of this Court in Fuerst Day Lawson [Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333 : (2011) 4 SCC (Civ) 178] , which Parliament is presumed to know when it enacted the Arbitration Amendment Act, 2015, and given the fact that no change was made in Section 50 of the Arbitration Act wh....
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....m the language of Section 50 itself. In all arbitration cases of enforcement of foreign awards, it is Section 50 alone that provides an appeal. Having provided for an appeal, the forum of appeal is left "to the Court authorised by law to hear appeals from such orders". Section 50 properly read would, therefore, mean that if an appeal lies under the said provision, then alone would Section 13(1) of the Commercial Courts Act be attracted as laying down the forum which will hear and decide such an appeal. xxx xxx xxx 27. The matter can be looked at from a slightly different angle. Given the objects of both the statutes, it is clear that arbitration itself is meant to be a speedy resolution of disputes between parties. Equally, enforcement of foreign awards should take place as soon as possible if India is to remain as an equal partner, commercially speaking, in the international community. In point of fact, the raison d'être for the enactment of the Commercial Courts Act is that commercial disputes involving high amounts of money should be speedily decided. Given the objects of both the enactments, if we were to provide an additional appeal, when Section 50....
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....Section 34". 15. Interestingly, under the proviso to Section 13(1A) of the Commercial Courts Act, 2015, Order XLIII of the CPC is also mentioned. Order XLIII Rule(1)(a) reads as follows: "1. Appeal from orders.- An appeal shall lie from the following orders under the provisions of Section 104, namely- (a)an order under Rule 10 of Order VII returning a plaint to be presented to the proper Court except where the procedure specified in rule 10A of Order VII has been followed;" 16. This provision is conspicuous by its absence in Section 37 of the Arbitration Act, 1996, which alone can be looked at for the purpose of filing appeals against orders setting aside, or refusing to set aside awards under Section 34. Also, what is missed by the impugned judgment is the words "under Section 34". Thus, the refusal to set aside an arbitral award must be under Section 34, i.e., after the grounds set out in Section 34 have been applied to the arbitral award in question, and after the Court has turned down such grounds. Admittedly, on the facts of these cases, there was no adjudication under Section 34 of the Arbitration Act, 1996 - all that was done was that the Special Comm....
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....of appeal inheres in no one and therefore an appeal for its maintainability must have the clear authority of law. That explains why the right of appeal is described as a creature of statute. 13. In view of the above discussion, it is held that the present appeal is plainly not maintainable by virtue of provisions of the Commercial Courts Act, 2015; the appeal is therefore dismissed. No costs." 18. Shri Chowdhury also referred to another Delhi High Court judgment reported as Hamanprit Singh Sidhu v. Arcadia Shares & Stock Brokers Pvt. Ltd 2016 234 DLT 30 (DB), in which a learned Single Judge of the Delhi High Court allowed an application for condonation of delay in filing a Section 34 petition. The Division Bench, in holding that an appeal against such an order would not be maintainable under Section 37 of the Arbitration Act, 1996, read with the Commercial Courts Act, 2015 held: "10. Coming to Section 37(1), it is evident that an appeal can lie from Coming to Section 37(1), it is evident that an appeal can lie from only the orders specified in clauses (a), (b) or (c). In other words, an appeal under Section 37 would only be maintainable against (a) an order ref....
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....icer, enclosing therewith its audited Balance Sheets, and Profit and Loss Accounts for the past three years. Antrix then ap- pealed against this order, to which a preliminary objection was taken, stating that this appeal would not be maintainable under Section 37 of the Arbitration Act, 1996. After setting out Section 13 of the Commercial Courts Act, 2015 and Sections 37 and 42 of the Arbitration Act, 1996, the Division Bench noticed Hamanprit Singh Sidhu (supra) in paragraph 39, without at all adverting to paragraph 10 of the judgment (which is set out hereinabove). Thereafter, the Court held as follows: "42. While undeniably, the Learned Single Judge in the impugned order has not decided the Section 9 petition finally and had listed the matter for hearing on merits, Antrix states that the impugned order is indistinguishable from an order under Section 9. Devas however, argued that the sequence of events has not been completed. Antrix should face an adverse order under Section 9 before it can approach this court in appeal. On this issue, significant reliance has been placed on the decision of the Madras High Court in Samson Maritime (supra). In that case, the Court held: ....
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.... respect to a possible distraint, attachment or further such consequential order towards interim relief. Such an order would not be made unless the court directs this as a prelude, or important step towards the inevitable interim order, which would be just consequential. Therefore, the Court finds that Antrix's appeal against the impugned order is maintainable. 44. This court also finds merit in Antrix's argument that as regards the single judge's observations that the Bangalore court cannot proceed with the matter, the impugned order is really final. It precludes in effect, Antrix from proceeding with its Section 34 petition before that court (in turn based on the pending Section 9 petition before that court). If Antrix were to accept the ruling, the effect would be to denude the Bangalore court of jurisdiction. It was contended-and correctly, in this court's opinion that whereas a court acts within jurisdiction in deciding whether it has or does not have jurisdiction over a cause of a matter, the declaration by it about the lack of jurisdiction of another court, based on the appreciation of the matter before the latter court is undeniably an adverse order....
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.... cause of action had arisen in Faridabad, and the Faridabad Commercial Court was approached first, the Faridabad Court alone would have jurisdiction over the arbitral proceedings, and the courts at New Delhi would have no such jurisdiction. The correctness of these propositions has been vehemently assailed before us, and it is therefore important to lay down the law on what constitutes the "juridical seat" of arbitral proceedings, and whether, once the seat is delineated by the arbitration agreement, courts at the place of the seat would alone thereafter have exclusive jurisdiction over the arbitral proceedings. The juridical seat of the arbitral proceedings 24. The Arbitration Act, 1940 did not refer to the "juridical seat" of the arbitral proceedings at all. Under the scheme of the Arbitration Act, 1940, Section 14 stated as follows: "14. Award to be signed and filed.- (1)When the arbitrators or umpire have made their award, they shall sign it and shall give notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbitration and award. (2)The arbitrators or umpire shall, at th....
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....ovided in this Act, all questions regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement- or persons claiming under them shall be decided by the Court in which the award under the agreement has been, or may be, filed, and by no other Court. (3)All applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings shall be made to the Court where the award has been, or may be, filed, and to no other Court. (4)Notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force, where in any reference any application under this Act has been made in a Court competent to entertain it, that Court alone shall have jurisdiction over the arbitration proceedings-, and all subsequent applications arising, out of that reference, and the arbitration proceedings shall be made in that Court and in no other Court." 28. It will be noticed that in this statutory setting, the "place" in which the award is made is not referred to at all. Given this fact, the "Court" was defined as any Civil Court having jurisdiction to decide questions form....
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....a unified legal framework for the fair and efficient settlement of disputes arising in international commercial relations. 31. The Arbitration Act, 1996 refers to "the place" of arbitration and defines 'Court', and indicates which Courts have jurisdiction in relation to arbitral proceedings in several sections in Part I. Section 2(1)(e) and Section 2(2) of the Arbitration Act, 1996 are as follows: "2.Definitions.- (1) In this Part, unless the context otherwise requires,- xxx xxx xxx (e)"Court" means- (i) in case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes; (ii) in the case of international commercial arbitration, the High Court in exercise of its ordinary original civil jurisdiction, having jurisdictio....
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....en to the juridical seat of the arbitral proceedings. However, the definition of "court" in Section 2(1)(e) of the Arbitration Act, 1996 continues the definition contained in the Arbitration Act, 1940, but replaces any and every civil court by only the principal civil court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary civil jurisdiction. Section 42 of the Arbitration Act, 1996 also substantially follows the drill of Section 31(4) of the Arbitration Act, 1940. 34. It can thus be seen that given the new concept of "juridical seat" of the arbitral proceedings, and the importance given by the Arbitration Act, 1996 to this "seat", the arbitral award is now not only to state its date, but also the place of arbitration as determined in accordance with Section 20. However, the definition of "Court" contained in Section 2(1)(c) of the Arbitration Act, 1940, continued as such in the Arbitration Act, 1996, though narrowed to mean only principal civil court and the High Court in exercise of their original ordinary civil jurisdiction. Thus, the concept of juridical seat of the arbitral proceedings and its relationship to the jurisdiction of ....
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....place other than the designated place of arbitration, either for its own convenience or for the convenience of the parties or their witnesses.... It may be more convenient for an Arbitral Tribunal sitting in one country to conduct a hearing in another country - for instance, for the purpose of taking evidence.... In such circumstances each move of the Arbitral Tribunal does not of itself mean that the seat of arbitration changes. The seat of arbitration remains the place initially agreed by or on behalf of the parties." 76. It must be pointed out that the law of the seat or place where the arbitration is held, is normally the law to govern that arbitration. The territorial link between the place of arbitration and the law governing that arbitration is well established in the international instruments, namely, the New York Convention of 1958 and the UNCITRAL Model Law of 1985. It is true that the terms "seat" and "place" are often used interchangeably. In Redfern and Hunter on International Arbitration [ Blackaby, Partasides, Redfern and Hunter (Eds.), Redfern and Hunter on International Arbitration (5th Edn., Oxford University Press, Oxford/New York 2009).] (Para 3.51), th....
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....the "centre of gravity" so far as the Arbitration Act, 1996 is concerned. We are of the considered opinion that the aforesaid provisions have to be interpreted by keeping the principle of territoriality at the forefront. We have earlier observed that Section 2(2) does not make Part I applicable to arbitrations seated or held outside India. In view of the expression used in Section 2(2), the maxim expressum facit cessare tacitum, would not permit by interpretation to hold that Part I would also apply to arbitrations held outside the territory of India. The expression "this Part shall apply where the place of arbitration is in India" necessarily excludes application of Part I to arbitration seated or held outside India. It appears to us that neither of the provisions relied upon by the Learned Counsel for the Appellants would make any section of Part I applicable to arbitration seated outside India. It will be apposite now to consider each of the aforesaid provisions in turn. 96. Section 2(1)(e) of the Arbitration Act, 1996 reads as under: "2. Definitions (1) In this Part, unless the context otherwise requires (e) "Court" means the principal Civil Court of ....
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....he Court within whose jurisdiction the subject matter of the suit is situated and the courts within the jurisdiction of which the dispute resolution, i.e., arbitration is located. xxx xxx xxx 98. We now come to Section 20, which is as under: 20. Place of arbitration (1) The parties are free to agree on the place of arbitration. (2) Failing any agreement referred to in Sub-section (1), the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties. (3) Notwithstanding Sub-section (1) or Sub-section (2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, good or other property." A plain reading of Section 20 leaves no room for doubt that where the place of arbitration is in India, the parties are free to agree to any "place" or "seat" within India, be it Delhi, Mumbai etc. In the absence of the parties' agreement thereto, Section 20(2) authorizes the tr....
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....this idea attractive initially, we are persuaded that it would be wrong in principle to allow this and that it would create undue practical problems in any event. On the basis of what I have already decided, England is the seat of the arbitration and since this carries with it something akin to an exclusive jurisdiction clause, as a matter of principle the foreign court should not decide matters which are for this Court to decide in the context of an anti-suit injunction. In making the aforesaid observations, the Court relied on judgments of the Court of Appeal in C v. D (2007) EWCA Civ 1282 (CA)." (emphasis in original) 37. Finally, the conclusion drawn in paragraph 116 was as follows: "116. The legal position that emerges from a conspectus of all the decisions, seems to be, that the choice of another country as the seat of arbitration inevitably imports an acceptance that the law of that country relating to the conduct and supervision of arbitrations will apply to the proceedings 38. Also, in paragraph 123, the Court held as follows: "123. Thus, it is clear that the regulation of conduct of arbitration and challenge to an award would have....
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...., 76, 96, 110, 116, 123 and 194 of BALCO (supra) would show that where parties have selected the seat of arbitration in their agreement, such selection would then amount to an exclusive jurisdiction clause, as the parties have now indicated that the Courts at the "seat" would alone have jurisdiction to entertain challenges against the arbitral award which have been made at the seat. The example given in paragraph 96 buttresses this proposition, and is supported by the previous and subsequent paragraphs pointed out hereinabove. The BALCO judgment (supra), when read as a whole, applies the concept of "seat" as laid down by the English judgments (and which is in Section 20 of the Arbitration Act, 1996), by harmoniously construing Section 20 with Section 2(1)(e), so as to broaden the definition of "court", and bring within its ken courts of the "seat" of the arbitration^1. 41. However, this proposition is contradicted when paragraph 96 speaks of the concurrent jurisdiction of Courts within whose jurisdiction the cause of action arises wholly or in part, and Courts within the jurisdiction of which the dispute resolution i.e. arbitration, is located. 42. Paragraph 96 is in several ....
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....ssary for Judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes. In London Graving Dock Co. Ltd. v. Horton [1951 AC 737, 761 : (1951)-2 All ER 1, 14 (HL)] Lord MacDermott observed: "The matter cannot, of course, be settled merely by treating the ipsissima verba of Willes, J., as though they were part of an Act of Parliament and applying the rules of interpretation appropriate thereto. This is not to detract from the great weight to be given to the language actually used by that most distinguished Judge.... In Home Office v. Dorset Yacht Co. Ltd. [(1970) 2 All ER 294 : (1970) 2 WLR 1140 : 1970 AC 1004 (HL)] Lord Reid said: "Lord Atkin's speech [Donoghue v. Stevension, 1932 All ER Rep 1, 11 : 1932 AC 562, 580 : 101 LJPC 119 : 147 LT 281 (HL)] ... is not to be treated as if it was a statutory definition. It will require qualification in new circumstances." Megarry, J. in (1971) 1 WLR 1062 observed: "One must not, of course, construe even a r....
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....onomy - the Arbitration Act, 1996 having accepted the territoriality principle in Section 2(2), following the UNCITRAL Model Law. The narrow construction of Section 2(1)(e) was expressly rejected by the Five Judge bench in BALCO (supra). This being so, what has then to be seen is what is the effect Section 20 would have on Section 2(1)(e) of the Arbitration Act, 1996. 47. It was not until this Court's judgment in Indus Mobile Distribution Private Limited (supra) that the provisions of Section 20 were properly analysed in the light of the 246th Report of the Law Commission of India titled, 'Amendments to the Arbitration and Conciliation Act, 1996' (August, 2014) (hereinafter referred to as the "Law Commission Report, 2014"), under which Section 20(1) and (2) would refer to the "seat" of the arbitration, and Section 20(3) would refer only to the "venue" of the arbitration. Given the fact that when parties, either by agreement or, in default of there being an agreement, where the arbitral tribunal determines a particular place as the seat of the arbitration under Section 31(4) of the Arbitration Act, 1996, it becomes clear that the parties having chosen the seat, or the arbitral tr....
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....clusively vests in the Mumbai courts. Under the Law of Arbitration, unlike the Code of Civil Procedure which applies to suits filed in courts, a reference to "seat" is a concept by which a neutral venue can be chosen by the parties to an arbitration clause. The neutral venue may not in the classical sense have jurisdiction - that is, no part of the cause of action may have arisen at the neutral venue and neither would any of the provisions of Section 16 to 21 of the Code of Civil Procedure be attracted. In arbitration law however, as has been held above, the moment "seat" is determined, the fact that the seat is at Mumbai would vest Mumbai courts with exclusive jurisdiction for purposes of regulating arbitral proceedings arising out of the agreement between the parties. 20. It is well settled that where more than one court has jurisdiction, it is open for parties to exclude all other courts. For an exhaustive analysis of the case law, see Swastik Gases Private Limited v. Indian Oil Corporation Limited (2013) 9 SCC 32. This was followed in a recent judgment in B.E. Simoese Von Staraburg Niedenthal and Anr. v. Chhattisgarh Investment Limited: (2015) 12 SCC 225. Having regard....
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.... jurisdiction over the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subjectmatter of the arbitration if the same had been the subject-matter of a suit, but does not include any Court of a grade inferior to such High Court, or in cases involving grant of interim measures in respect of arbitrations outside India, the High Court exercising jurisdiction over the court having jurisdiction to grant such measures as per the laws of India, and includes the High Court in exercise of its ordinary original civil jurisdiction." [NOTE: This is to solve the problem of conflict of jurisdiction that would arise in cases where interim measures are sought in India in cases of arbitrations seated outside India. This also ensures that in International Commercial Arbitrations, jurisdiction is exercised by the High Court, even if such High Court does not exercise ordinary original civil jurisdiction.]" 50. The aforesaid amendment carried out in the definition of "Court" is also a step showing the right direction, namely, that in interna....
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....jurisdiction over the entire arbitral process. 52. In fact, subsequent Division Benches of this Court have understood the law to be that once the seat of arbitration is chosen, it amounts to an exclusive jurisdiction clause, insofar as the Courts at that seat are concerned. In Enercon (India) Ltd. and Ors. v. Enercon GmbH and Anr. (2014) 5 SCC 1, this Court approved the dictum in Roger Shashoua (supra) as follows: "126. Examining the fact situation in the case, the Court in Shashoua case [Shashoua v. Sharma, (2009) 2 Lloyd's Law Rep 376] observed as follows: "The basis for the court's grant of an anti-suit injunction of the kind sought depended upon the seat of the arbitration. An agreement as to the seat of an arbitration brought in the law of that country as the curial law and was analogous to an exclusive jurisdiction clause. Not only was there agreement to the curial law of the seat, but also to the courts of the seat having supervisory jurisdiction over the arbitration, so that, by agreeing to the seat, the parties agreed that any challenge to an interim or final award was to be made only in the courts of the place designated as the seat of the arb....
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.... Part I of the Act. As a corollary to the above conclusion, we hold that the Delhi High Court did not have the jurisdiction to entertain the petition filed by the respondents under Section 9 of the Act and the mere fact that the appellant had earlier filed similar petitions was not sufficient to clothe that High Court with the jurisdiction to entertain the petition filed by the respondents." xxx xxx xxx 55. The effect of choice of seat of arbitration was considered by the Court of Appeal in C v. D [2008 Bus LR 843 : (2008) 1 Lloyd's Law 239 : 2007 EWCA Civ 1282] . This judgment has been specifically approved by this Court in Balco [BALCO v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 : (2012) 4 SCC (Civ) 810] and reiterated in Enercon [Enercon (India) Ltd. v. Enercon GmbH, (2014) 5 SCC 1 : (2014) 3 SCC (Civ) 59 : (2014) 1 ALR 257] . In C v. D [2008 Bus LR 843 : (2008) 1 Lloyd's Law 239 : 2007 EWCA Civ 1282] , the Court of Appeal has observed: (Bus LR p. 851, para 16) "Primary conclusion 16. I shall deal with Mr Hirst's arguments in due course but, in my judgment, they fail to grapple with the central point at issue whic....
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.... "this follows from the express terms of the Arbitration Act, 1996 and, in particular, the provisions of Section 2 which provide that Part I of the Arbitration Act, 1996 applies where the seat of the arbitration is in England and Wales or Northern Ireland. This immediately establishes a strong connection between the arbitration agreement itself and the law of England. It is for this reason that recent authorities have laid stress upon the locations of the seat of the arbitration as an important factor in determining the proper law of the arbitration agreement."" 55. In Indus Mobile Distribution Private Limited and Ors. (supra), after clearing the air on the meaning of Section 20 of the Arbitration Act, 1996, the Court in paragraph 19 (which has already been set out hereinabove) made it clear that the moment a seat is designated by agreement between the parties, it is akin to an exclusive jurisdiction clause, which would then vest the Courts at the "seat" with exclusive jurisdiction for purposes of regulating arbitral proceedings arising out of the agreement between the parties. 56. Despite the aforesaid judgments of this Court, discordant notes have been struck by some....
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.... since that court would anyway not have jurisdiction. In sum therefore, paragraph 96 of BALCO (supra) gives jurisdiction to both courts at the seat and the courts within whose jurisdiction the cause of action arises, if the dispute were the subject matter of a suit. This is what the Bombay High Court in Konkola Copper Mines (supra) also interpreted BALCO (supra) as holding: "The Supreme Court held that the provisions of Section 2(1)(e) are purely jurisdictional in nature and can have no relevance to the question whether any part of the cause of action has taken place outside India. The observations which have been extracted above, clearly establish that the Court where the arbitration takes place would be required to exercise supervisory control over the arbitral process. The Supreme Court has held that Parliament has given jurisdiction to two courts - the Court which would have jurisdiction where the cause of action is located and the Court where the arbitration takes place. This is evident from the example which is contained in the above quoted extract from the decision." 57. Having so stated, the Division Bench then went on to give a restricted meaning to Indus Mobil....
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....use in Part-I arbitrations, then every time parties would designate a seat, that would in effect mean that Section 42 would have no application. Thus, only those few situations where parties do not actually designate any seat (and thus no exclusive competence is conferred on one forum) would Section 42 have any role. In fact, often, when parties do not agree upon a seat in the arbitration agreement, for convenience, the arbitral tribunal designates a particular seat of the arbitration, or the agreement vests the discretion in the tribunal to decide the seat (and not just the "venue"). In all those circumstances then as well, the decision of the tribunal to agree upon a "seat" would amount to an exclusive jurisdiction clause and Section 42 would have no application. This would dilute Section 42 and would accordingly, be contrary to Parliamentary intent. Undoubtedly, in the present case, the parties have only chosen the seat as New Delhi and have not specified an exclusive forum selection clause. Therefore, it cannot be said that the courts in Delhi have exclusive competence to entertain applications under the Arbitration Act in the present dispute. The jurisdiction of the courts whe....
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....It is thus wholly incorrect to state that Indus Mobile Distribution Private Ltd. (supra) has a limited ratio decidendi contained in paragraph 20 alone, and that paragraph 19, if read by itself, would run contrary to the 5 Judge Bench decision in BALCO (supra). 61. Equally incorrect is the finding in Antrix Corporation Ltd. (supra) that Section 42 of the Arbitration Act, 1996 would be rendered ineffective and useless. Section 42 is meant to avoid conflicts in jurisdiction of Courts by placing the supervisory jurisdiction over all arbitral proceedings in connection with the arbitration in one Court exclusively. This is why the section begins with a non-obstante clause, and then goes on to state "...where with respect to an arbitration agreement any application under this Part has been made in a Court..." It is obvious that the application made under this part to a Court must be a Court which has jurisdiction to decide such application. The subsequent holdings of this Court, that where a seat is designated in an agreement, the Courts of the seat alone have jurisdiction, would require that all applications under Part I be made only in the Court where the seat is located, and that Co....
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....he arbitration, or, having regard to the parties' agreement and all the relevant circumstances, it is the seat to be determined in accordance with the final fall back provision of section 3 of the arbitration act." 63. It will thus be seen that wherever there is an express designation of a "venue", and no designation of any alternative place as the "seat", combined with a supranational body of rules governing the arbitration, and no other significant contrary indicia, the inexorable conclusion is that the stated venue is actually the juridical seat of the arbitral proceeding. 64. In Enercon GmbH v. Enercon (India) Ltd. [2012] EWHC 689, the arbitration clause between the parties read as follows: "18.3 All proceedings in such arbitration shall be conducted in English. The venue of the arbitration proceedings shall be London. The arbitrators may (but shall not be obliged to) award costs and reasonable expenses (including reasonable fees of counsel) to the Party(ies) that substantially prevail on merit. The provisions of the Indian Arbitration and Conciliation Act, 1996 shall apply." 65. The Court began its discussion on the "seat" of the arbitration by referring to R....
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....the word "venue" is not synonymous with "seat", on the facts of that case, London - though described as the "venue" - was really the "seat" of the arbitration. This was for the reason that London was a neutral place in which neither party worked for gain, and in which no part of the cause of action arose. It was thus understood to be a neutral place in which the proceedings could be "anchored". Secondly, the Court stressed on the expression "arbitration proceedings" in clause 18.3, which the Court held to be an expression which included not just one or more individual hearings, but the arbitral proceedings as a whole, culminating in the making of an award. The Court held: "Second, the language in clause 18.3 refers to the "arbitration proceedings". That is an expression which includes not just one or more individual or particular hearings but the arbitration proceedings as a whole including the making of an award. In other words the parties were anchoring the whole arbitration process in London right up to and including the making of an award. The place designated for the making of an award is a designation of seat. Moreover the language in clause 18.3 does not refer to th....
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....hangang, China. The Fixture Note provided: "Clause 23. ARBITRATION TO BE HELD IN HONGKONG. ENGLISH LAW TO BE APPLIED." 69. After referring to Roger Shashoua (supra) and Enercon GmbH (supra), the Court held: "In my judgment the approach adopted in Shashoua v Sharma and in other cases is appropriate in this case also. An agreement that the arbitration is 'to be held in Hong Kong' would ordinarily carry with it an implied choice of Hong Kong as the seat of the arbitration and of the application of Hong Kong law as the curial law. Clear words or 'significant contrary indicia' are necessary to establish that some other seat or curial law has been agreed." 70. In Process and Indusrial Developments Ltd. v. Nigeria [2019] EWHC 2241 the Court was concerned with a dispute that arose out of a gas supply and processing agreement. The arbitration clause in that case read as follows: "The Parties agree that if any difference or dispute arises between them concerning the interpretation or performance of this Agreement and if they fail to settle such difference or dispute amicably, then a Party may serve on the other a notice of arbitration under the rules of the Nigeria....
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....ement. Clearly if the parties were in agreement as to where a particular hearing were to take place, that would be likely to be very influential on the arbitral tribunal. But if for whatever reason they were not in agreement, and it is not unknown for parties to arbitration to become at loggerheads about very many matters, then it is convenient for the arbitrators to be able to decide. If that arrangement was to be displaced it would, in my judgment, have to be spelled out clearly. Accordingly, the reference to the "venue" as being London or otherwise as agreed between the parties, is better read as providing that the seat of the arbitration is to be England, unless the parties agree to change it. This would still allow the arbitrators to decide where particular hearings should take place, while providing for an anchor to England for supervisory purposes, unless changed." (emphasis supplied) 72. Coming to the judgments of our Courts, this Court in Dozco India (P) Ltd. v. Doosan Infracore Co. Ltd. (2011) 16 SCC 179, was concerned with the following arbitration clause contained in the agreement between the parties: "Article 22. Governing Laws - 22.1: This agreeme....
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.... Arbitration': 'The preceding discussion has been on the basis that there is only one "place" of arbitration. This will be the place chosen by or on behalf of the parties; and it will be designated in the arbitration agreement or the terms of reference or the minutes of proceedings or in some other way as the place or "seat" of the arbitration. This does not mean, however, that the Arbitral Tribunal must hold all its meetings or hearings at the place of arbitration. International commercial arbitration often involves people of many different nationalities, from many different countries. In these circumstances, it is by no means unusual for an Arbitral Tribunal to hold meetings - or even hearings - in a place other than the designated place of arbitration, either for its own convenience or for the convenience of the parties or their witnesses.... It may be more convenient for an Arbitral Tribunal sitting in one country to conduct a hearing in another country - for instance, for the purpose of taking evidence.... In such circumstances, each move of the Arbitral Tribunal does not of itself mean that the seat of the arbitration changes. The seat of the arbitration rem....
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....d seat or juridical seat of arbitration and the same had been shifted to London. In terms of Article 34.12 of the PSC entered into by 5 parties, the seat of arbitration was Kuala Lumpur, Malaysia. However, due to outbreak of epidemic SARS, the Arbitral Tribunal decided to hold its sittings first at Amsterdam and then at London and the parties did not object to this. In the proceedings held on 14-10-2003 and 15-10-2003 at London, the Arbitral Tribunal recorded the consent of the parties for shifting the juridical seat of arbitration to London. Whether this amounted to shifting of the physical or juridical seat of arbitration from Kuala Lumpur to London? The decision of this would depend on a holistic consideration of the relevant clauses of the PSC. 21. Though, it may appear repetitive, we deem it necessary to mention that as per the terms of agreement, the seat of arbitration was Kuala Lumpur. If the parties wanted to amend Article 34.12, they could have done so only by a written instrument which was required to be signed by all of them. Admittedly, neither was there any agreement between the parties to the PSC to shift the juridical seat of arbitration from Kuala Lumpur t....
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....assic statement of the conflict of law rules as quoted in Dicey & Morris on the Conflict of Laws (11th Edn.), Vol. 1, was approved by the House of Lords in James Miller & Partners Ltd. v. Whitworth Street Estates (Manchester) Ltd. [1970 AC 583 : (1970) 2 WLR 728 : (1970) 1 All ER 796 : (1970) 1 Lloyd's Rep 269 (HL)] and Mustill, J. in Black Clawson International Ltd. v. Papierwerke Waldhof-Aschaffenburg A.G. [(1981) 2 Lloyd's Rep 446 at p. 453] , a little later characterised the same proposition as "the law of the place where the reference is conducted, the lex fori". The position of law in India is the same. 77. The Court then examined Braes of Doune Wind Farm (Scotland) v. Alfred McAlpine Business Services Ltd. [2008] EWHC 436 (TCC) in some detail, and concluded in paragraph 118 as follows: "118. In Braes of Doune [Braes of Doune Wind Farm (Scotland) Ltd. v. Alfred McAlpine Business Services Ltd., [2008] Bus LR D 137 (QBD) : 2008 EWHC 426 (TCC)] , detailed examination was undertaken by the Court to discern the intention of the parties as to whether the place mentioned refers to venue or the seat of the arbitration. The factual situation in the present case is ....
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....arity but it could scarcely be supposed that a party aggrieved by one part of an award could proceed in one jurisdiction and a party aggrieved by another part of an award could proceed in another jurisdiction. Similarly, in the case of a single complaint about an award, it could not be supposed that the aggrieved party could complain in one jurisdiction and the satisfied party be entitled to ask the other jurisdiction to declare its satisfaction with the award. There would be a serious risk of parties rushing to get the first judgment or of conflicting decisions which the parties cannot have contemplated. 17. It follows from this that a choice of seat for the arbitration must be a choice of forum for remedies seeking to attack the award." On the facts of the case, the Court held that the seat of the arbitration was in England and accordingly entertained the challenge to the award." 79. Reference was made to Roger Shashoua (supra) in paragraphs 124 to 128, and then to various other judgments, including BALCO (supra), as follows: "134. It is accepted by most of the experts in the law relating to international arbitration that in almost all the national l....
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....e also been noticed in Union of India v. McDonnell Douglas Corpn. [(1993) 2 Lloyd's Rep 48]" 80. The Court finally concluded: "135. In the present case, even though the venue of arbitration proceedings has been fixed in London, it cannot be presumed that the parties have intended the seat to be also in London. In an international commercial arbitration, venue can often be different from the seat of arbitration. In such circumstances, the hearing of the arbitration will be conducted at the venue fixed by the parties, but this would not bring about a change in the seat of the arbitration. This is precisely the ratio in Braes of Doune [Braes of Doune Wind Farm (Scotland) Ltd. v. Alfred McAlpine Business Services Ltd., [2008] Bus LR D 137 (QBD) : 2008 EWHC 426 (TCC)] . Therefore, in the present case, the seat would remain in India." 81. In Harmony Innovation Shipping Ltd. v. Gupta Coal India Ltd. and Anr. (2015) 9 SCC 172, the Court dealt with an arbitration clause between the parties which read as follows: "5. If any dispute or difference should arise under this charter, general average/arbitration in London to apply, one to be appointed by each of the part....
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....ferring to Indus Mobile Distribution (supra), the Court held: "18. Where the contract specifies the jurisdiction of the court at a particular place, only such court will have the jurisdiction to deal with the matter and parties intended to exclude all other courts. In the present case, the parties have agreed that the "venue" of arbitration shall be at Bhubaneswar. Considering the agreement of the parties having Bhubaneswar as the venue of arbitration, the intention of the parties is to exclude all other courts. As held in Swastik, non-use of words like "exclusive jurisdiction", "only", "exclusive", "alone" is not decisive and does not make any material difference. 19. When the parties have agreed to the have the "venue" of arbitration at Bhubaneshwar, the Madras High Court erred in assuming the jurisdiction under Section 11(6) of the Act. Since only the Orissa High Court will have the jurisdiction to entertain the petition filed under Section 11(6) of the Act, the impugned order is liable to be set aside." 84. On a conspectus of the aforesaid judgments, it may be concluded that whenever there is the designation of a place of arbitration in an arbitration claus....
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....tion Act, 1996 would govern the arbitration proceedings, would not make Part I of the Arbitration Act, 1996 applicable or enable Indian Courts to exercise supervisory jurisdiction over the arbitration or the award. It would only mean that the parties have contractually imported from the Arbitration Act, 1996, those provisions which are concerned with the internal conduct of their arbitration and which are not inconsistent with the mandatory provisions of the English Procedural Law/Curial Law. This necessarily follows from the fact that Part I applies only to arbitrations having their seat / place in India." 86. In Roger Shashoua & Ors. v. Mukesh Sharma & Ors., (2017) 14 SCC 722, a Division Bench of this Court, after referring to a number of judgments, referred to the English Shashoua judgment [2009] EWHC 957 (Comm) as follows: "46. As stated earlier, in Shashoua Cooke, J., in the course of analysis, held that "London arbitration" is a well known phenomenon which is often chosen by foreign nationals with a different law, such as the law of New York, governing the substantive rights of the parties and it is because of the legislative framework and supervisory powers of th....
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....ION 14.1 ...Each party shall nominate one arbitrator and in the event of any difference between the two arbitrators, a third arbitrator/umpire shall be appointed. The arbitration proceedings shall be in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce Paris. 14.2 Proceedings in such arbitrations shall be conducted in the English language. 14.3 The arbitration award shall be substantiated in writing and shall be final and binding on the parties. 14.4 The venue of the arbitration shall be London, United Kingdom." 70. Clause 17.6 deals with governing law, which reads as follows: 17.6 GOVERNING LAW This Agreement shall be governed by and construed in accordance with the laws of India." 89. The court then went on to state: "72. It is worthy to note that the arbitration agreement is not silent as to what law and procedure is to be followed. On the contrary, Clause 14.1 lays down that the arbitration proceedings shall be in accordance with the Rules of Conciliation and Arbitration of the ICC. In Enercon (India) Ltd. (supra), the two-Judge Bench referring to Shashoua....
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....o determine the jurisdiction of the Court. That apart, if there is mention of venue and something else is appended thereto, depending on the nature of the prescription, the Court can come to a conclusion that there is implied exclusion of Part I of the Act. The principle laid down in Sumitomo Heavy Industries Ltd. (supra) has been referred to in Reliance Industries Limited (II) and distinguished. In any case, it has no applicability to a controversy under the Act. The said controversy has to be governed by the BALCO principle or by the agreement or by the principle of implied exclusion as has been held in Bhatia International. 28. Thus, we answer the reference accordingly." 91. Having answered the reference, the Court then went on to consider the arbitration clause in the facts of that case, which was set out in paragraph 30 as follows: "30. Article 33 deals with "Sole expert, conciliation and arbitrator". Article 33.9 and 33.12 read thus: 33.9 Arbitration proceedings shall be conducted in accordance with the UNICITRAL Model Law on International Commercial Arbitration of 1985 except that in the event of any conflict between the Rules and the provisions....
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....e answer would have been that Kuala Lumpur, which was stated to be the "venue" of arbitration proceedings, being governed by the UNCITRAL Model Law, would be governed by a supranational set of rules, and there being no other contrary indicator, it would be clear that Kuala Lumpur would therefore be the juridical "seat" of the arbitration. 94. As we have seen hereinabove, the judgement of Cooke, J. in Roger Shashoua and Ors. v. Mukesh Sharma [2009] EWHC 957 (Comm), was expressly approved by the 5-Judge Bench in BALCO (supra), as was stated by the Supreme Court of India in Roger Shashoua and Ors. v. Mukesh Sharma and Ors. (2017) 14 SCC 722 By failing to apply the Shashoua principle to the arbitration clause in question, the Three Judge Bench in Hardy Exploration and Production (India) Inc (supra) has not followed the law as to determination of a "juridical seat", laid down by a Five Judge Bench of this Court in BALCO (supra). The result in Hardy Exploration and Production (India) Inc (supra) is that a foreign award that would be delivered in Kuala Lumpur, would now be liable to be challenged in the Courts at Kuala Lumpur, and also be challenged in the courts in India, under Sectio....
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....e Bench then went on to state: "195. With utmost respect, we are unable to agree with the conclusions recorded in the judgments of this Court in Bhatia International (supra) and Venture Global Engineering (supra). In our opinion, the provision contained in Section 2(2) of the Arbitration Act, 1996 is not in conflict with any of the provisions either in Part I or in Part II of the Arbitration Act, 1996. In a foreign seated international commercial arbitration, no application for interim relief would be maintainable under Section 9 or any other provision, as applicability of Part I of the Arbitration Act, 1996 is limited to all arbitrations which take place in India. Similarly, no suit for interim injunction simplicitor would be maintainable in India, on the basis of an international commercial arbitration with a seat outside India." 96. The decision in Hardy Exploration and Production (India) Inc. (supra) is therefore contrary to the Five Judge Bench in BALCO (supra), in that it failed to apply the Shashoua principle to the arbitration clause in question. The Hardy Exploration and Production (India) Inc. (supra) decision would lead to the result that a foreign award woul....
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....der Clause 67.3 of the agreement, the fact that arbitration proceedings shall be held at New Delhi/Faridabad, India in sub-clause (vi) of Clause 67.3, would amount to the designation of either of these places as the "seat" of arbitration, as a supranational body of law is to be applied, namely, the UNCITRAL Arbitration Rules, in conjunction with the Arbitration Act, 1996. As such arbitration would be an international commercial arbitration which would be decided in India, the Arbitration Act, 1996 is to apply as well. There being no other contra indication in such a situation, either New Delhi or Faridabad, India is the designated "seat" under the agreement, and it is thereafter for the parties to choose as to in which of the two places the arbitration is finally to be held. 99. Given the fact that if there were a dispute between NHPC Ltd. and a foreign contractor, clause 67.3(vi) would have to be read as a clause designating the "seat" of arbitration, the same must follow even when sub-clause (vi) is to be read with sub-clause (i) of Clause 67.3, where the dispute between NHPC Ltd. would be with an Indian Contractor. The arbitration clause in the present case states that "Arbit....
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....bitral tribunal if so authorised by the parties, or determined, in the absence of any such designation, having regard to the parties' agreement and all the relevant circumstances." It will be noticed that this Section closely approximates with Section 20 of the Indian Arbitration Act, 1996. The meaning of "Court" is laid down in Section 105 of the English Arbitration Act, 1996 whereby the Lord Chancellor may, by order, make provision allocating and specifying proceedings under the Act which may go to the High Court or to county courts. 2 In Harper (supra), the decision in Central Asbestos Co. Ltd. vs. Dodd (1972) 2 All ER 1135, a House of Lords judgment, had to be applied. It was found that two learned Law Lords decided the question of law in favour of Dodd, whereas two learned Law Lords decided the question of law against Dodd, stating that his claim was barred. As Lord Denning stated, the fifth Law Lord, Lord Pearson, was the odd man out, in that he agreed with the two learned Law Lords that the law did not support Dodd's case, but agreed with the minority judges that Dodd's claim was not barred. This being the case, Lord Denning spoke of the precedenti....