Foreign Arbitral Award: Court held Part-I of the Arbitration Act excluded from its operation as parties, while signing agreement, intending so
Civil Appeal No. 5131- 5133 of 2016
Bench: Justice Fakkir Mohamed Ibrahim Kalifulla; Justice S. A. Bobde
Case Brief: In this judgement, the concerned bench was to consider the challenges brought before it against the decision of two high courts in India, in connection with the Arbitral Award made in foreign county. In the decision of Gujarat High Court, it held that a Court of India has jurisdiction under section 34 to decide objections raised in respect of a Foreign Award as the Arbitration Act’s Part I is not excluded from operation in respect of a Foreign Award. However, the Bombay High Court held that the Part I of the said Act excluded from operation in case of a Foreign Award and thereupon directed enforcement of the Award. Now, both the parties came before this bench challenging the said decisions of the High courts. As such, this bench decided to consider the main question in this case, i.e. “whether Part I of the Arbitration Act is excluded from its operation in case of Foreign Award where the Arbitration is not held in India and is governed by foreign law.” Moreover, it is notable submission that the Clause 28 of the concerned agreement, which is also a Arbitration Clause, clearly provides that any dispute under the Contract “is to be settled and referred to Arbitration in London.” Also that clause further requires the application of the English Law to the proceedings.
Thus, this bench observed that there is an express exclusion of the applicability of Part I to the instant Arbitration by said Clause 28. And in such situation, this bench said that the award debtor is not having right to challenge the said arbitral award in Indian courts, as such courts are not having jurisdiction for entertaining the such objections under section 34 of the Act. As such, this bench held that the decision of Gujarat High Court is contrary to law, as it was saying that the objection under section 34 of the Act, against the arbitral award made in foreign is tenable before a court in India. However, this bench decided to uphold the judgement of the Bombay High Court, which speaks for the enforcement of the Foreign Award under Part II of the Act.
Read the Judgement: Eitzen Bulk A/S Vs. Ashapura Minechem Limited & Anr