exclude the application of Part I to the Arbitration proceedings between
them by choosing London as the venue for Arbitration and by making
English law applicable to Arbitration, as observed earlier. It is too well
settled by now that where the parties choose a juridical seat of
Arbitration outside India and provide that the law which governs
Arbitration will be a law other than Indian law, part I of the Act would not
have any application and, therefore, the award debtor would not be
entitled to challenge the award by raising objections under Section 34
before a Court in India. A Court in India could not have jurisdiction to
entertain such objections under Section 34 in such a case.
As a matter of fact the mere choosing of the juridical seat of
Arbitration attracts the law applicable to such location. In other words it
would not be necessary to specify which law would apply to the
Arbitration proceedings, since the law of the particular country would
apply ipso jure. The following passage from Redfern and Hunter on
International Arbitration contains the following explication of the issue:-
“It is also sometimes said that parties have
selected the procedural law that will govern
their arbitration, by providing for arbitration in
a particular country. This is too elliptical and,
as an English court itself held more recently in
Breas of Doune Wind Farm it does not always
hold true. What the parties have done is to
choose a place of arbitration in a particular
country. That choice brings with it submission
to the laws of that country, including any
mandatory provisions of its law on arbitration.
To say that the parties have ‘chosen’ that
particular law to govern the arbitration is
rather like saying that an English woman who
takes her car to France has ‘chosen’ French
traffic law, which will oblige her to drive on the
right-hand side of the road, to give priority to
vehicles approaching from the right, and
generally to obey traffic laws to which she may
not be accustomed. But it would be an odd
use of language to say this notional motorist
had opted for ‘French traffic law’. What she
has done is to choose to go to France. The
applicability of French law then follows
automatically. It is not a matter of choice.
Parties may well choose a particular place of
arbitration precisely because its lex arbitri is
one which they find attractive. Nevertheless,
once a place of arbitration has been chosen, it
brings with it its own law. If that law contains
provisions that are mandatory so far as
arbitration are concerned, those provisions
must be obeyed. It is not a matter of choice
any more than the notional motorist is free to
choose which local traffic laws to obey and
which to disregard.”
In this view of the matter, the judgment of the Gujarat High
Court holding that Ashapura’s objections under Section 34 of the
Arbitration Act are tenable before a Court in India that is the Court at
Jam-Khambalia, Gujarat is contrary to law. The proceedings under
Section 34, which occurs in Part I, are liable to be dismissed as
untenable. The Civil Appeals of Eitzen are liable to succeed and are,
therefore, allowed. The judgment of the Bombay High Court dated
03.12.2015 enforcing the Foreign Award under Part II of the Arbitration
Act is correct and liable to be upheld.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL Nos. 5131-5133 OF 2016
(Arising out of SLP (CIVIL) Nos. 2210-2212/2011)
EITZEN BULK A/S V ASHAPURA MINECHEM LTD. & ANR.
Dated;MAY 13, 2016
Leave granted in SLP (C) Nos.2210-2212/2011, SLP (C)
Nos.3959/2012 and SLP (C) No.7562-7563/2016.
2. The dispute in these appeals, arises out of the Contract of
Affreightment dated 18.1.2008 (hereinafter referred as `the Contract’).
Eitzen Bulk A/S of Denmark (hereinafter referred to as `Eitzen’) entered
into the contract with Ashapura Minechem Limited of Mumbai (hereinafter
referred to as `Ashapura’) as charterers for shipment of bauxite from
India to China. The Charter party contains an Arbitration Clause as
follows:-
“Clause No. 28
Any dispute arising under this C.O.A. is to
be settled and referred to Arbitration in London.
One Arbitrator to be employed by the
Charterers and one by the Owners and in case
they shall not agree then shall appoint an
Umpire whose decision shall be final and
binding, the Arbitrators and Umpire to be
Commercial Shipping Men. English Law to
apply. Notwithstanding anything to the
contrary agreed in the C.O.A., all disputes
where the amount involved is less then USD
50,000/- (fifty thousand) the Arbitration shall
be conducted in accordance with the Small
Claims Procedure of the L.M.A.A.”
(emphasis supplied)
3. Disputes having arisen between the parties, the matter was
referred to Arbitration by a sole Arbitrator. The Arbitration was held in
London according to English Law. Ashapura Minechem was held liable
and directed to pay a sum of 36,306,104 US$ together with compound
interest at the rate of 3.75 % per annum. In addition they were directed
to pay 74,135 US$ together with compound interest at the rate of 3.75%
per annum and another sum of 90,233.66 Pounds together with
compound interest at the rate of 2.5% per annum vide Award of the Sole
Arbitrator dated 26.5.2009.
Proceedings in Gujarat
3Page 4
4. Before Arbitration had commenced, Ashapura filed a suit
alongwith an application for injunction before the Civil Judge at
Jam-khambalia, Gujarat praying inter-alia that the Contract and the
Arbitration Clause contained therein was illegal, null and void, ab-initio.
Though initially an interim injunction was granted, the learned Civil Judge
dismissed the suit for want of jurisdiction vide order dated 12.1.2009.
The appeal filed by Ashapura before the Gujarat High Court was
dismissed as withdrawn on 2.7.2009.
5. In London, Mr. Tim Marshal, who was appointed as Arbitrator,
held that Ashapura was in repudiatory breach and awarded Eitzen Bulk an
amount of 36,306,104.00 $ plus interest, as stated above.
6. Having failed to stall the Arbitration and then having failed in the
Arbitration proceedings, Ashapura resorted to Section 34 of the
Arbitration Act and filed objections in India in respect of the Award passed
in London. These proceedings were filed before the District Judge,
Jamnagar for setting aside the Foreign Award made in London. A Misc.
Civil Application No. 101/2009 for injunction restricting Eitzen Bulk from
enforcing the Award in foreign jurisdictions outside India was also moved.
The District Judge, Jamnagar on 24.8.2009 dismissed the application for
injunction seeking restraint on enforcement of the Award.
7. From 14.7.2009 to 3.8.2009 Eitzen applied for enforcement of
the Award in the countries of Netherlands, USA, Belgium, UK. The Courts
4Page 5
in various jurisdictions have held the Award to be enforceable as a
judgment of the Court.
8. On 14th July, 2009, the appellant filed proceedings in Netherlands
Court seeking a declaration that the award dated 26th May, 2009 is
enforceable as a judgment of the Court. The respondent appeared in the
said proceedings and filed their objections. The Netherlands Court,
however, declared that the award is enforceable as a judgment of the
Court on 17th March, 2010.
9. On 24th July, 2009, the United States District Court for Southern State
of New York declared the award dated 26th May, 2009 enforceable as a
judgment of that court. The proceedings filed by the appellant were
contested by the respondent.
10. On 27th July, 2009, the appellant filed present proceedings under
Sections 47 to 49 of Part II of the Arbitration Act for enforcing the award
dated 26th May, 2009 on the ground that the respondent was carrying on
business within the jurisdiction of this Court and has its registered office
and corporate office and assets within the territorial jurisdiction
of this Court.
11. On 29th July, 2009, the Antwerp Court declared the award dated
26th May, 2009 enforceable as a judgment of the Court. The said
proceedings were contested by the respondent. On 3rd August, 2009, the
5Page 6
English High Court declared the award dated 26th May, 2009 enforceable
as a judgment of the Court.
12. Against the rejection of the application for injunction Ashapura
filed a petition under Articles 226 and 227 of the Constitution of India
before the High Court of Gujarat at Ahmadabad for a Writ of Certiorari to
quash and set aside the Order dated 24.8.2009 rendered by the District
Judge, Jam-Khambalia and for a direction not to enforce the execution of
the judgment dated 24.7.2009. Ashapura inter-alia contended that the
Award cannot be enforced or executed since their objections under
Section 34 were pending. A learned Single Judge who heard the petition
however, observed that the issues before him were inextricably connected
with the issues of jurisdiction of the Court in the Section 34 application
and the contentions of Eitzen opposing the said Section 34 application.
The Single Judge, therefore, set aside the Order dated 24.8.2009 and
remanded the matter for fresh decision in accordance with law by Order
dated 3.9.2009. In Letters Patent Appeal filed by Eitzen the Division
Bench of the High Court of Gujarat directed the District Judge to consider
all contentions by its Order dated 29.10.2009.
13. Eitzen however questioned the very jurisdiction of a Court in
India to decide objections under Section 34 of the Arbitration Act in
respect of a Foreign Award by way of a Writ Petition. They prayed for
issue of a Writ of Prohibition and an Order restraining the learned District
6Page 7
Judge at Jam-Khambhalia from adjudicating Ashapura’s application under
Section 34 of the Arbitration and Conciliation Act, 1996 against the
Foreign Award dated 26.5.2009.
14. A learned Single Judge issued notice and stayed further
proceedings before the Jamnagar Court on 20.11.2009. Ashapura
however filed LPA No. 2469 of 2009 challenging the Order of the learned
Single Judge dated 20.11.2009. The Division Bench which heard the
appeal has held by Judgment and Order dated 22.9.2010, that Ashapura
is entitled to challenge the Foreign Award under Section 34 of Part I of
the Arbitration Act. It has further held that the territorial jurisdiction is a
mixed question of fact and law and is required to be decided by the
Trial Court on the basis of the Plaint and Written Statement
and Evidence before it. This judgment was questioned by way of SLP (C)
Nos. 2210-2212 of 2011 filed by Eitzen.
Proceedings in Maharashtra
15. On 27.7.2009, Eitzen filed Arbitration Petition No. 561/2009
under Sections 47 to 49 of the Arbitration Act for enforcing the Foreign
Award in the Bombay High Court, within whose jurisdiction Ashapura
carries on business and has a registered office. The Award was also
received by Ashapura within the jurisdiction of the Bombay High Court.
This petition for enforcement was filed on the basis that Part I of the
Arbitration Act has no application to a Foreign Award made in London
7Page 8
under English Law. The petition for enforcement of a Foreign Award was
accompanied by Notice of Motion No. 3143 of 2009 under Section 49 (3)
of the Arbitration Act for securing their claim under the ex-parte Award
dated 26.5.2009.
16. The learned Single Judge held that since the parties had agreed
that the juridical seat of the Arbitration in this case would be at London
and English Law would apply there was an express and in any case an
implied, exclusion of Part I of the Arbitration Act.
17. Ashapura filed Notice of Motion No. 3975 of 2009 claiming that
since proceedings had already been initiated under Part I before the
Gujarat High Court, the Bombay High Court had no jurisdiction in the
matter by virtue of Section 42 of the Arbitration Act. A learned Single
Judge of the Bombay High Court vide order dated 05.10.2011 dismissed
the Notice of Motion and held that Part I of the Arbitration Act was
excluded by the parties and therefore Section 42, which occurs in Part I,
had no application to the present case. The learned Single Judge also
directed that the petition be heard on merits. This decision is questioned
by Ashapura in SLP (C) No. 3959 of 2012.
18. The learned Single Judge of the Bombay High Court has allowed
Arbitration Petition No. 561 of 2009 of Eitzen for enforcing the Foreign
Award dated 26.5.2009.
8Page 9
19. As a preliminary objection, it was contented before the Bombay
High Court that this Court had passed an Order on 27.2.2012 ordering
status quo on further proceedings and, therefore, the Hon’ble Court ought
not to proceed in the matter. That this Order was to operate upto
16.4.2012 and was thereafter extended till 22.8.2012. The High Court
rejected this contention on the ground that the Order of status quo had
not been extended. We have examined the matter and find that there
was no Order of this Court restraining the High Court from hearing the
matter in October, 2015.
20. The High Court has also rejected the contention of Ashapura
under Section 421
of the Arbitration Act, rightly; that since an application
under Section 34 of the Arbitration Act, which is an application
contemplated by Part I of the Arbitration Act, has been made before the
Court in Gujarat and that Court alone has jurisdiction over the Arbitration
proceedings and all subsequent applications must be made to that Court
alone. This contention was rejected by the High Court on the ground that
Section 42 occurs in Part I of the Arbitration Act and in its view since
Part I itself had no application to the Foreign Award, Section 42 would
have no application either. The moot question thus arises is whether
1 Notwithstanding anything contained elsewhere in this Part or in any other law for the
time being in force, where with respect to an arbitration agreement any application
under this Part has been made in a Court, that Court alone shall have jurisdiction over
the arbitral proceedings and all subsequent applications arising out of that agreement
and the arbitral proceedings shall be made in that Court and in no other Court.
9Page 10
Part I of the Arbitration Act has any application to the Foreign Award in
this case where the proceedings were held in London and the Arbitration
was governed by English Law.
Before this Court
21. We thus have, on the one hand, the decision of the Gujarat High
Court holding that a Court in India has jurisdiction under Section 34 to
decide objections raised in respect of a Foreign Award because Part I of
the Arbitration Act is not excluded from operation in respect of a Foreign
Award and on the other, a decision of the Bombay High Court holding that
Part I is excluded from operation in case of a Foreign Award and
thereupon directing enforcement of the Award. The decisions of the
Gujarat High Court are questioned by Eitzen by way of SLP (C)
Nos.2210-2212/2011. The decisions of the Bombay High Court are
questioned by Ashapura by way of SLP (C) Nos.7562-7563/2016. Interim
order dated 05.10.2011 passed by the High Court of Judicature at
Bombay in Notice of Motion No. 3975 of 2009 in Arbitration Petition No.
561 of 2009 is under challenge in appeal arising out of SLP (C) No. 3959
of 2012.
22. Apparently Ashapura had a similar dispute with Armada
(Singapore) Pvt. Ltd. Armada had, similarly filed an application for
enforcement of the foreign award in its favour under Section 42 of the
Arbitration Act being Arbitration Petition Nos.1359 and 1360 of 2010
10Page 11
before the Bombay High Court. Ashapura has raised similar objection to
the enforcement of the Foreign Award by way of Notice of Motion. By
Notices of Motion Nos. 2390 and 2444 of 2012 Ashapura had contended
that the Bombay High Court cannot entertain the application in view of
the Section 42 of the Arbitration Act. Both these Notices of Motion
were dismissed by the learned Single Judge of the Bombay High
Court. Ashapura has challenged the said dismissal by way of filing
SLP Nos.….of 2016 [CC Nos.3266 and 3382 of 2013] before this Court.
23. It may be noted at the outset that since proceedings under the
Sick Industrial Companies (Special Provisions) Act, 1985 (for short, the
SICA Act) are pending before the Board for Industrial and Financial
Reconstruction (BIFR), though the Bombay High Court has ordered
execution of the Award, it has held that Eitzen would not be entitled to
take any step in execution of the Award or seek any relief in violation of
Section 22 of the SICA Act without permission from the BIFR.
The main question
24. Thus, the main question on which contentions were advanced by
the learned counsel for the parties is whether Part I of the Arbitration Act
is excluded from its operation in case of a Foreign Award where the
Arbitration is not held in India and is governed by foreign law.
25. Shri Prashant S. Pratap, learned senior counsel appearing for
Eitzen submitted that the main issue is covered by a decision of this Court
11Page 12
in Bhatia International v. Bulk Trading S.A. and another2
and two
recent decisions of this Court in Union of India v. Reliance Industries
Limited and others3 and Harmony Innovation Shipping Limited v.
Gupta Coal India Limited and another4
. We have not considered the
decision in the Balco v. Kaiser Aluminium Technical Services Inc.5
since the decision in that case does not govern Arbitration agreements
entered prior to 6.9.2012 and the contract in the instant case is
dated 18.1.2008.
26. According to the learned counsel, Clause 28, which is the
Arbitration Clause in the Contract, clearly stipulates that any dispute
under the Contract “is to be settled and referred to Arbitration in London”.
It further stipulates that English Law to apply. The parties have thus
clearly intended that the Arbitration will be conducted in accordance with
English Law and the seat of the Arbitration will be
at London.
27. The question is whether the above stipulations show the
intention of the parties to expressly or impliedly exclude the provisions of
Part I to the Arbitration, which was to be held outside India, i.e., in
London. We think that the clause evinces such an intention by providing
that the English Law will apply to the Arbitration. The clause expressly
2
(2002) 4 SCC 105
3
(2015) 10 SCC 213
4
(2015) 9 SCC 172
5
(2012) 9 SCC 552
12Page 13
provides that Indian Law or any other law will not apply by positing that
English Law will apply. The intention is that English Law will apply to the
resolution of any dispute arising under the law. This means that English
Law will apply to the conduct of the Arbitration. It must also follow that
any objection to the conduct of the Arbitration or the Award will also be
governed by English Law. Clearly, this implies that the challenge to the
Award must be in accordance with English Law. There is thus an express
exclusion of the applicability of Part I to the instant Arbitration by
Clause 28. In fact, Clause 28 deals with not only the seat of Arbitration
but also provides that there shall be two Arbitrators, one appointed by the
charterers and one by the owners and they shall appoint an Umpire, in
case there is no agreement. In this context, it may be noted that the
Indian Arbitration and Conciliation Act, 1996 makes no provision for
Umpires and the intention is clearly to refer to an Umpire contemplated
by Section 21 of the English Arbitration Act, 1996. It is thus clear that
the intention is that the Arbitration should be conducted under the English
law, i.e. the English Arbitration Act, 1996. It may also be noted that
Sections 67, 68 and 69 of the English Arbitration Act provide for challenge
to an Award on grounds stated therein. The intention is thus clearly to
exclude the applicability of Part I to the instant Arbitration proceedings.
28. This is a case where two factors exclude the operation of Part I
of the Arbitration Act. Firstly, the seat of Arbitration which is in London
13Page 14
and secondly the clause that English Law will apply. In fact, such a
situation has been held to exclude the applicability of Part I in a case
where a similar clause governed the Arbitration. In Reliance Industries
Limited and another v. Union of India6
, this Court referred to
judgments of some other jurisdictions and observed in paragraphs 55 to
57 as follows:-
“55. The effect of choice of seat of arbitration
was considered by the Court of Appeal in C v.
D. This judgment has been specifically
approved by this Court in Balco and reiterated
in Enercon. In C v. D, 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 which is
whether or not, by choosing London as the
seat of the arbitration, the parties must be
taken to have agreed that proceedings on the
award should be only those permitted by
English law. In my view they must be taken to
have so agreed for the reasons given by the
Judge. The whole purpose of the balance
achieved by the Bermuda form (English
arbitration but applying New York law to issues
arising under the policy) is that judicial
remedies in respect of the award should be
those permitted by English law and only those
so permitted. Mr Hirst could not say (and did
not say) that English judicial remedies for lack
of jurisdiction on procedural irregularities
under Sections 67 and 68 of the 1996 Act were
not permitted; he was reduced to saying that
New York judicial remedies were also
6 2014 (7) SCC 603
14Page 15
permitted. That, however, would be a recipe
for litigation and (what is worse) confusion
which cannot have been intended by the
parties. No doubt New York law has its own
judicial remedies for want of jurisdiction and
serious irregularity 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.”
56. The aforesaid observations in C v. D were
subsequently followed by the High Court of
Justice, Queen’s Bench Division, Commercial
Court (England) in Sulamerica Cia Nacional de
Seguros SA v. Enesa Engelharia SA — Enesa.
In laying down the same proposition, the High
Court noticed that the issue in that case
depended upon the weight to be given to the
provision in Condition 12 of the insurance
policy that “the seat of the arbitration shall be
London, England”. It was observed that this
necessarily carried with it the English Court’s
supervisory jurisdiction over the arbitration
process. It was observed that:
“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
15Page 16
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.”
57. In our opinion, these observations in
Sulamerica case are fully applicable to the
facts and circumstances of this case. The
conclusion reached by the High Court would
lead to the chaotic situation where the parties
would be left rushing between India and
England for redressal of their grievances. The
provisions of Part I of the Arbitration Act, 1996
(Indian) are necessarily excluded; being wholly
inconsistent with the arbitration agreement
which provides “that arbitration agreement
shall be governed by English law”. Thus the
remedy for the respondent to challenge any
award rendered in the arbitration proceedings
would lie under the relevant provisions
contained in the Arbitration Act, 1996 of
England and Wales. Whether or not such an
application would now be entertained by the
courts in England is not for us to examine, it
would have to be examined by the court of
competent jurisdiction in England.”
29. We are in agreement with the above observation and in this
clause 28 in the present case must be intended to have a similar effect
that is to exclude the applicability of Part I of the Indian Arbitration and
Conciliation Act since the parties have chosen London as the seat of
Arbitration and further provided that the Arbitration shall be governed by
English Law. In this case the losing side has relentlessly resorted to
apparent remedies for stalling the execution of the Award and in fact even
attempted to prevent Arbitration. This case has become typical of cases
where even the fruits of Arbitration are interminably delayed. Even
16Page 17
though it has been settled law for quite some time that Part I is excluded
where parties choose that the seat of Arbitration is outside India and the
Arbitration should be governed by the law of a foreign country.
30. Mr. Divan attempted to persuade us to accept the possibility that
Part I is not excluded and in any case not wholly excluded in such a case,
but the law is too well settled and with good reasons, for us to take any
other view. We do not wish to endorse “a recipe for litigation and (what
is worse) confusion”7
.
31. When the judgment in Reliance was sought to be indirectly
reviewed in another case under the same agreement and between the
same parties, this Court reiterated its earlier view and observed in Union
of India v. Reliance Industries Limited and others in para 18 as
follows:-
“18. It is important to note that in para 32 of
Bhatia International itself this Court has held
that Part I of the Arbitration Act, 1996 will not
apply if it has been excluded either expressly
or by necessary implication. Several
judgments of this Court have held that Part I is
excluded by necessary implication if it is found
that on the facts of a case either the juridical
seat of the arbitration is outside India or the
law governing the arbitration agreement is a
law other than Indian law. This is now well
settled by a series of decisions of this Court
[see Videocon Industries Ltd. v. Union of India,
Dozco India (P) Ltd. v. Doosan Infracore Co.
Ltd., Yograj Infrastructure Ltd. v. Ssang Yong
Engg. and Construction Co. Ltd., the very
7 C vs. D (2008 Bus LR 843)
17Page 18
judgment in this case reported in Reliance
Industries Ltd. v. Union of India and a recent
judgment in Harmony Innovation Shipping Ltd.
v. Gupta Coal India Ltd.].”
We see no reason to take a different view. In Bhatia International’s
case, this Court concluded as follows:
“To conclude, we hold that the provisions of
Part I would apply to all arbitrations and to all
proceedings relating thereto. Where such
arbitration is held in India the provisions of
Part I would compulsorily apply and parties are
free to deviate only to the extent permitted by
the derogable provisions of Part I. In cases of
international commercial arbitrations held out
of India provisions of Part I would apply unless
the parties by agreement, express or implied,
exclude all or any of its provisions. In that
case the laws or rules chosen by the parties
would prevail. Any provision, in Part I, which is
contrary to or excluded by that law or rules
will not apply.”
32. We are thus of the view that by Clause 28, the parties chose to
exclude the application of Part I to the Arbitration proceedings between
them by choosing London as the venue for Arbitration and by making
English law applicable to Arbitration, as observed earlier. It is too well
settled by now that where the parties choose a juridical seat of
Arbitration outside India and provide that the law which governs
Arbitration will be a law other than Indian law, part I of the Act would not
have any application and, therefore, the award debtor would not be
entitled to challenge the award by raising objections under Section 34
before a Court in India. A Court in India could not have jurisdiction to
entertain such objections under Section 34 in such a case.
33. As a matter of fact the mere choosing of the juridical seat of
Arbitration attracts the law applicable to such location. In other words it
would not be necessary to specify which law would apply to the
Arbitration proceedings, since the law of the particular country would
apply ipso jure. The following passage from Redfern and Hunter on
International Arbitration contains the following explication of the issue:-
“It is also sometimes said that parties have
selected the procedural law that will govern
their arbitration, by providing for arbitration in
a particular country. This is too elliptical and,
as an English court itself held more recently in
Breas of Doune Wind Farm it does not always
hold true. What the parties have done is to
choose a place of arbitration in a particular
country. That choice brings with it submission
to the laws of that country, including any
mandatory provisions of its law on arbitration.
To say that the parties have ‘chosen’ that
particular law to govern the arbitration is
rather like saying that an English woman who
takes her car to France has ‘chosen’ French
traffic law, which will oblige her to drive on the
right-hand side of the road, to give priority to
vehicles approaching from the right, and
generally to obey traffic laws to which she may
not be accustomed. But it would be an odd
use of language to say this notional motorist
had opted for ‘French traffic law’. What she
has done is to choose to go to France. The
applicability of French law then follows
automatically. It is not a matter of choice.
Parties may well choose a particular place of
arbitration precisely because its lex arbitri is
one which they find attractive. Nevertheless,
once a place of arbitration has been chosen, it
brings with it its own law. If that law contains
provisions that are mandatory so far as
arbitration are concerned, those provisions
must be obeyed. It is not a matter of choice
any more than the notional motorist is free to
choose which local traffic laws to obey and
which to disregard.”
34. In this view of the matter, the judgment of the Gujarat High
Court holding that Ashapura’s objections under Section 34 of the
Arbitration Act are tenable before a Court in India that is the Court at
Jam-Khambalia, Gujarat is contrary to law. The proceedings under
Section 34, which occurs in Part I, are liable to be dismissed as
untenable. The Civil Appeals of Eitzen are liable to succeed and are,
therefore, allowed. The judgment of the Bombay High Court dated
03.12.2015 enforcing the Foreign Award under Part II of the Arbitration
Act is correct and liable to be upheld.
35. In view of the above findings, appeals filed by Eitzen Bulk A/S,
arising out of SLP (C) Nos. 2210-2212 of 2011 are allowed; appeals filed
by Ashapura Minechem Ltd., arising out of SLP (C) Nos. 7562-7563 of
2016 are dismissed; appeal arising out of SLP (C) No. 3959 of 2012 (filed
by Ashapura Minechem Ltd.) is dismissed.
36. Permission to file SLP (C) No.…of 2016 [CC No. 3266 of 2013 -
filed by Ashapura Minechem Ltd.] and SLP (C) No....of 2016 [CC No. 3382
of 2013 - filed by Ashapura Minechem Ltd.] is rejected. No costs.
20Page 21
………………………………….……………….…..........…..J.
[FAKKIR MOHAMED IBRAHIM KALIFULLA]
…………………………………….......................………J.
[S.A. BOBDE]
NEW DELHI,
MAY 13, 2016
No comments:
Post a Comment