Supreme Court Dismisses Petition in Arbitration Matter Due to Jurisdictional Exclusion. Clear Agreement on Korean Law and Seoul as Seat of Arbitration Excludes Indian Courts from Jurisdiction.

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Case Note & Summary

This case involved a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, filed by M/s Dozco India P. Ltd. against M/s Doosan Infracore Co. Ltd. regarding disputes arising from a Distributorship Agreement dated 2.2.2004. The petitioner sought to appoint an arbitrator after the respondent terminated the agreement. The respondent contended that the arbitration clause in the agreement specified that disputes would be settled in Seoul, Korea, under the rules of the International Chamber of Commerce, thereby excluding the jurisdiction of Indian courts. The petitioner argued that the provisions of Part I of the Act should apply as the arbitration was international but not expressly excluded. The court analyzed the language of the arbitration clause and previous judgments, concluding that the parties had clearly agreed to exclude Indian procedural law and that the seat of arbitration was in Seoul. Consequently, the court dismissed the petition, stating it lacked jurisdiction to appoint an arbitrator under Section 11(6) of the Act.

Headnote

A) Arbitration Law - Jurisdiction of Indian Courts - Exclusion of Part I of the Act - The parties agreed that the arbitration would be governed by Korean law with the seat in Seoul, thus excluding the applicability of Part I of the Arbitration and Conciliation Act, 1996. The court held that the clear language of the agreement indicated an express exclusion of Indian procedural law, and therefore, the court lacked jurisdiction to appoint an arbitrator under Section 11(6) of the Act. (Paras 1-14)

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Issue of Consideration

Whether the Supreme Court has jurisdiction to appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.

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Final Decision

The Supreme Court dismissed the petition, holding that it lacked jurisdiction to appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, due to the express exclusion of Indian procedural law as per the agreement between the parties.

Law Points

  • Arbitration jurisdiction
  • international arbitration
  • appointment of arbitrator
  • exclusion of Part I of the Arbitration and Conciliation Act
  • 1996
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Case Details

2010 LawText (SC) (10) 16

Arbitration Petition No. 5 of 2008

2010-10-08

V.S. Sirpurkar

Mohana, Gurukrishna Kumar

M/s Dozco India P. Ltd.

M/s Doosan Infracore Co. Ltd.

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Nature of Litigation

Petition for appointment of an arbitrator under the Arbitration and Conciliation Act, 1996.

Remedy Sought

Petitioner sought the appointment of an arbitrator.

Filing Reason

Disputes arising from the termination of a Distributorship Agreement.

Previous Decisions

An application under Section 9 was previously filed in the Madras High Court regarding interim injunction.

Issues

Whether the Supreme Court has jurisdiction to appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996. Whether the arbitration clause in the Distributorship Agreement excludes the applicability of Indian procedural law.

Submissions/Arguments

Petitioner argued that Part I of the Act applies unless expressly excluded. Respondent contended that the arbitration clause clearly excluded Indian courts and specified Korean law.

Ratio Decidendi

The court held that the clear language of the arbitration agreement indicated an express exclusion of Part I of the Arbitration and Conciliation Act, 1996, thus precluding the jurisdiction of Indian courts to appoint an arbitrator.

Judgment Excerpts

The disputes have arisen in between these two companies out of a Distributorship Agreement which was entered between the parties on 2.2.2004. The clear language of Articles 22 and 23 of the Distributorship Agreement between the parties in this case spell out a clear agreement between the parties excluding Part I of the Act.

Procedural History

The petitioner filed an application under Section 9 of the Act before the Madras High Court seeking interim injunction, which resulted in an ex parte order. The respondent's application to vacate the injunction was allowed, and the jurisdiction issue was left open for later determination.

Acts & Sections

  • Arbitration and Conciliation Act, 1996: Section 11, Section 9
  • Companies Act, 1956:
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