Intervention of Indian Courts in Arbitrations conducted outside India Anirudh Krishnan Advocate, Madras High Court Solicitor, England and Wales Chief Editor – Justice R. S. Bachawat’s Law of Arbitration and Conciliation Author – Law of Reservation and Anti-Discrimination

Introduction Where an arbitration is conducted in Country A, can the Courts of Country B - A. Grant interim relief with respect to the subject matter of the arbitration? B. Appoint an arbitrator in case of dispute relating to appointment of an arbitrator? C. Set aside the award that has been rendered?

Broadly accepted position of law in foreign jurisdictions Question A- Power independent of seat of arbitration generally (due to provision such as Article 1(2) of Uncitral Model Law).Article 1(2) Question B and C- Only courts at the seat of arbitration have the power.

Article 1(2) Article 1(2) of the UNCITRAL Model Law- “The provisions of this Law, except articles 8, 9, 35 and 36, apply only if the place of arbitration is in the territory of this State."

The position in India Section 2(2) of the Arbitration and Conciliation Act-" This Part shall apply where the place of arbitration is in India“ Contrast with Article 1(2) of the UNCITRAL Model Law-“The provisions of this Law, except articles 8, 9, 35 and 36, apply only if the place of arbitration is in the territory of this State."

Supreme Court on Section 2(2) Supreme Court held- Section 2(2) not to be read as "This Part shall only apply where the place of arbitration is in India". Part 1 mandatorily applies if the arbitration is held in India. Part 1 applies if the arbitration is held abroad unless it is expressly or impliedly excluded. Merely specifying the seat of arbitration to be foreign does not amount to implied exclusion.

Law as it stands today-construing an implied exclusion Foreign seat alone = no implied exclusion (Bhatia International v. Bulk Trading) Foreign seat+foreign law law governing the contract= implied exclusion can be presumed (Dozco India Ltd v. Doosan Infrastructure P Ltd) Foreign law governing the arbitration+ Indian law governing contract= express exclusion. (Videocon Industries Ltd. v. Union Of India) Simple point- implied exclusion not based on PIL principles.

Three possible interpretations of Section 2(2) Interpretation 1- “This Part shall apply only where the place of arbitration is in India”. Interpretation 2- The Bhatia interpretation Interpretation 3- Part I applies unless expressly/ impliedly excluded but an implied exclusion must be construed based on recognized conflict of laws principles.

Problems with Interpretation 1 Opening words of Section 28 rule out such an interpretation. Section 28- “Rules applicable to substance of dispute.- (1) Where the place of arbitration is situate in India, (a) in an arbitration other than an international commercial arbitration, the arbitral tribunal shall decide the dispute submitted to arbitration in accordance with the substantive law for the time being in force in India; ….”

Problems with Interpretation 2 In cases where Part 1 applies, non- Convention awards become easier to enforce than Convention awards. In direct contravention with conflict of law principles.

Interpretation 3 Main argument of proponents of Interpretation 1. Interpretation 3 does not explain why the words "except Articles 8,9,35 and 36" used in Article 1(2) of the UNCITRAL Model Law were excluded from Section 2(2) of the Indian Act.Article 1(2) An equivalent of Sections 8, 35 and 36 find a place in Part 2 (in Sections 45, 47, 49) whereas Section 9 does not. Clearly the intention was to exclude Section 9 in all circumstances. Parties cannot therefore be provided the power to read in provisions such as Section 9.

Article 1(2) Article 1(2) of the UNCITRAL Model Law- “The provisions of this Law, except articles 8, 9, 35 and 36, apply only if the place of arbitration is in the territory of this State."

However… Such a conclusion does not follow. The intention of Parliament was that Section 9 should not apply unless expressly included whereas Sections 8, 35 and 36 are so fundamental that they needed to be incorporated to apply in all situations.

Interpretation 3 explained Thus, if seat is foreign, then the presumption is that the law governing arbitration agreement and the curial law are foreign and hence there is an implied exclusion of Part 1. Thus, in case of arbitrations conducted abroad, Part 1 is excluded unless expressly included.

Current status Bhatia being reviewed by a Constitution Bench. Judgment is much awaited.

Thank You Anirudh Krishnan Contact: - Mobile