Case Note & Summary
The dispute arose from a Production Sharing Contract (PSC) executed in 1994 between the Government of India and a consortium of companies, including Videocon Industries Limited. Disputes emerged in 2000 regarding cost recoveries and profits, leading to arbitration proceedings. The arbitral tribunal initially set the seat of arbitration in Kuala Lumpur, Malaysia, but later shifted hearings to London due to the SARS epidemic. The Government of India challenged the partial award in the High Court of Malaysia, while simultaneously seeking to conduct remaining proceedings in Kuala Lumpur, which was rejected. The respondents then filed petitions in the Delhi High Court under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim measures and questioning the jurisdiction of the arbitral tribunal. The Delhi High Court ruled in favor of the respondents, asserting its jurisdiction based on the applicability of Part I of the Act to international arbitrations held outside India, referencing the precedent set in Bhatia International v. Bulk Trading S.A. The Supreme Court upheld the Delhi High Court's decision, clarifying that the seat of arbitration remained Kuala Lumpur as no formal agreement was made to change it. The court emphasized that the procedural law governing arbitration was determined by the seat, and the parties had not consented to a change in the juridical seat. The court concluded that the High Court's intervention was necessary to prevent a stalemate in the arbitral proceedings, thereby facilitating the ongoing arbitration process.
Headnote
A) Arbitration Law - Jurisdiction of Courts - Applicability of Section 9 - The Delhi High Court held jurisdiction to entertain a petition under Section 9 of the Arbitration and Conciliation Act, 1996 for interim measures despite the arbitration being held outside India, as the provisions of Part I apply to international commercial arbitrations unless expressly excluded by the parties. The court emphasized that the seat of arbitration was Kuala Lumpur, and any change required a written agreement by all parties, which was not present in this case. Held that the High Court's jurisdiction was valid (Paras 8-20).
Issue of Consideration
Whether the Delhi High Court could entertain the petition filed under Section 9 of the Arbitration and Conciliation Act, 1996 regarding the seat of arbitration.
Final Decision
The Supreme Court upheld the jurisdiction of the Delhi High Court to entertain the petition under Section 9 of the Arbitration and Conciliation Act, 1996, affirming that the seat of arbitration was Kuala Lumpur and any change required a written agreement by all parties.
Law Points
- jurisdiction of courts
- arbitration agreement
- seat of arbitration
- interim measures
- applicability of Arbitration Act
