Supreme Court of India (Division Bench (DB)- Two Judge)

Appeal (Civil), 5131-5133 of 2016, Judgment Date: May 13, 2016


                                                                  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                                             …. APPELLANT (S)


                                   VERSUS


ASHAPURA MINECHEM LTD. & ANR.                               …. RESPONDENT(S)


                                    WITH

                        CIVIL APPEAL No. 5136 OF 2016
                 (Arising out of SLP (CIVIL) No. 3959/2012)

ASHAPURA MINECHEM  LTD.                                   ….  APPELLANT  (S)
                             VERSUS


EITZEN     BULK     A/S                                      ….RESPONDENT(S)

                                    WITH
                          SLP (CIVIL) No. ………../2016
                      (Arising out of CC NO. 3266/2013)


ASHAPURA MINECHEM LTD.                                   ….  PETITIONER  (S)
                             VERSUS


ARMADA (SINGAPORE) PTE LTD.                                 …. RESPONDENT(S)


                                    WITH
                         SLP (CIVIL) No. ………../2016
                      (Arising out of CC NO. 3382/2013)


ASHAPURA MINECHEM LTD.                                   ….  PETITIONER  (S)
                             VERSUS


ARMADA (SINGAPORE) PTE LTD.                                 …. RESPONDENT(S)


                                    WITH
                     CIVIL APPEAL Nos. 5134-5135 OF 2016
              (Arising out of SLP (CIVIL) Nos. 7562-7563/2016)



ASHAPURA  MINECHEM  LTD.                                ….   APPELLANT   (S)
                             VERSUS


EITZEN     BULK     A/S                                      ….RESPONDENT(S)



                                  JUDGMENT


S. A. BOBDE, J.

             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
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  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  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 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  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.
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 42[1] 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
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 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  in
Bhatia International v. Bulk Trading S.A. and  another[2]   and  two  recent
decisions of this Court in Union of India  v.  Reliance  Industries  Limited
and others[3] and Harmony Innovation Shipping Limited v.  Gupta  Coal  India
Limited and another[4].  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  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
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 India[6],  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  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  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
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 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.


                                       ………………………………….……………….…..........…..J.
                                          [FAKKIR MOHAMED IBRAHIM KALIFULLA]




                                  …………………………………….......................………J.

                                                                [S.A. BOBDE]
NEW DELHI,
MAY 13, 2016
-----------------------
[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.

[2]    (2002) 4 SCC 105
[3]    (2015) 10 SCC 213
[4]    (2015) 9 SCC 172
[5]    (2012) 9 SCC 552
[6]    2014 (7) SCC 603
[7]    C vs. D (2008 Bus LR 843)

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