Jurisdiction of national courts in foreign seated arb

 NTPC v Sengar Co (1940 act)

o Contract – governed by India law.
o 2 contracts – 1 NTPC with Indian co – arb at New Delhi
 NTPC with foreign: ICC arb in London
 Interim order passed in this regard. NTPC wanted to set this aside in India
o Law governing contract = Indian, so read law governing arbn agreement = Indian
 Bhatia Int v Bulk Trading
o Seat of arbitration Paris – ICC rules
o Party moved Indian courts for Interim Measures to secure payment for final award
o Bhatia argued –
 No application of part 1 of 1996 act.
 Raised argument of Section 2(2) – this part applies where place of arb is in India. So,
part I – application within Indian Territory. Part II – recognition and enforcement of
foreign award applied where arbitration takes place in foreign territory
 S. 9 (interim by court) and s 17 (interim by arb) exist only in part I and no such
comparable provision exists in part II. Shows intention of legislature
 Enforcement of domestic award under s 36 (part I) and enforcement of foreign award
under s 48 (part II) shows different intention of legislature
o Argument of Bulk –
 Compared it with Article 1(2) Model law
 Model law uses word ‘only’. Sec 2(2) doesn’t.
o Court: looked into consequences of accepting both arguments
 This act is consolidation of 3 acts. Intention of legislature was never to exclude non-
convention countries. Part II deals with convention countries (applies only when
award is covered under NYC: ch 1; or Geneva Convention ch 2) If you don’t include
non convention countries under domestic awards, then they’d become remedy-less.
Thus, part 1 can have extra territorial juris.
 If no power of interim measure is given to courts in cases of foreign seated arb, it’ll
create a huge amount of problem
 Because 2(2) doesn’t use the word only, means that 2(2) is not of mandatory nature.
 Section 2(2) of the Act provides that Part I will apply where the place of
arbitration is in India and section 2(4) of the Act uses the words 'every
arbitration'. Section 2(5) refers to 'all arbitrations and to all proceedings
relating thereto'.
 Indian courts will have jurisdiction unless necessary/implied exclusion.
o Criticism:
 Created huge problems for business communities.
 Next 10 years created huge hardships.
 Venture Global Engineering v Satyam Int
o Satyam filed an application for enforcement in US Michigan court. Venture resisted + filed
application in india under s 34 for setting aside
o Court: applying logic of section 9, entire part I also applies to foreign award
o Also justified on basis of public policy
National courts in foreign seated - 1 -
 Citation Info Wares Ltd. v Equinox Corp
o Arbitration was to be governed by Californian law
o Application under 11(6) for appointment of arbitrator
o Court: no implied exclusion. Part I shall continue to apply
 Indtel technical services v W S Atkins
o SC extended the application of part I so as to appoint arbitrators in a foreign seated arbitration
 Dozoco India Pvt Ltd v Dooshan infra care Co
o ICC Rules – contract governed by South Korean law. Seat = “Seoul (at any other place)”
 Appellant – emphasis on “at any other place”. Resp – this just means geographical
venue
 Court: governing law = foreign law + seat = foreign seat, there is implied exclusion.
o Court: there is implied exclusion. No application of part 1
 Flawed reasoning. Based it on a Guj HC decision. Confused between curial law and
law governing arb agreement.
 Videocon group of industries v UOI
o Union of india – contract with consortium of which Videocon was part of.
o Seat = Kuala Lampur
o Due to outbreak of disease, proceedings held in amstredam and London
o Arb tribunal order – arbitration is shifting to London by consent of parties.
 UOI – this is geographical delocalisation. Videocon – seat has shifted to London
o Combination of foreign seat with a foreign curial law shall be read as implied exclusion (i.e.
foreign seat + one more foreign element)
 BALCO industries v Kaiser Technical Services
o Arb in England. Award in favour of respondent. BALCO wanted Indian courts to set it aside
o Court: part I shall apply only to domestic arb. No application to ICA held outside India
o In foreign seated arb, no interim measures, as there is no provision of interim measured in
part II
o Overrules Bhatia Int
 Bhatia followed a party centric approach. Balco followed a seat centric approach
o To be applied prospectively to all agreements executed hereafter from 6/9/2012

 2015 amendment
o Partially overruled Balco
o Added proviso to 2(2) – s9 (interim measures), 27 and certain sub section of 37 shall apply to
Int.Com. Arb even if seat is outside India
 For s 9, 4 conditions should be met
 Arb = int. Commercial arb
 Arb must take place outside india
 Award must be made in convention countries
 No express/ implied exclusion. (implied exclusion doctrine continues)
o Act to not apply to pending arb proceedings (section 26)
 Present situation
o Arb Agreement entered before 6/9/2012
 Bhatia will continue to govern
o Arb Agreement entered after 6/9/2012 but arb initiated before 23/10/2015
 BALCO will govern and no recourse to s 9
National courts in foreign seated - 2 -
 o Arb Agreement entered after 6/9/2012 and arb initiated after 23/10/2015
 2015 amendment will goven and sec 9 shall apply even to foreign seated arb. For
other matters BALCO shall continue toapply

Etison bulk v ashapura

 Implied exlusion read

 Judgement may be per incuriam

RELIANCE industries v UOI

Sulanerica v ENSA

2015 ammendment

 Section 34 – district court changed to HC

 Time Limit – earlier no limit, continued forever.
o now 1 year + 6months (that to on agreement between parties)
o time limit for s 34 = 1 year
 interim measures – interim orders enforceable like order of court
 fee to be charged
 fast track arb
 appointment of Arb
 minimum interference of courts
 prospective application
 appointment of arb

National courts in foreign seated - 3 -