Case Note & Summary
The petitioner, J. S. Ocean Liners Inc., a US company, entered into a Charter Party contract with the respondent, S.K. Shipping (Singapore) Pte Limited, a Singapore company, on 13 April 2006. A dispute arose, and the petitioner invoked the arbitration clause. The arbitration clause provided: "Any disputes arising under this Charter to be referred to arbitration in London with English Law to apply." The arbitration was conducted in London, and the tribunal passed an interim award on 15 November 2007, an order on 25 April 2008 directing the petitioner to secure costs, and a final award on 31 July 2008 dismissing the petitioner's claim for US$27,772.75, granting the respondent costs of £6,223.50, and holding the petitioner liable for the costs of the award at £7,700. The petitioner received the award on 2 September 2008. On 28 January 2009, the petitioner filed a petition in the Bombay High Court under Sections 16, 31(4), 34 and 48 of the Arbitration and Conciliation Act, 1996, seeking to set aside the award. The respondent resisted the petition solely on the ground of lack of jurisdiction. The court heard the parties on the issue of jurisdiction only. The court examined the arbitration clause and held that since the seat of arbitration was London and the governing law was English law, Part I of the Act (which includes Sections 16, 31(4), and 34) does not apply. The court also noted that Section 48 deals with enforcement of foreign awards and is not a ground for setting aside. Consequently, the court dismissed the petition for lack of jurisdiction.
Headnote
A) Arbitration - International Commercial Arbitration - Jurisdiction of Indian Courts - Sections 2(2), 16, 31(4), 34, 48 of the Arbitration and Conciliation Act, 1996 - The court held that Part I of the Act applies only to arbitrations where the seat is in India. Since the arbitration clause provided for arbitration in London with English law to apply, the seat is London, and Indian courts have no jurisdiction to entertain a petition under Part I. The petition was dismissed for lack of jurisdiction. (Paras 1-7)
Issue of Consideration
Whether the Bombay High Court has jurisdiction to entertain a petition under Sections 16, 31(4), 34 and 48 of the Arbitration and Conciliation Act, 1996 to set aside an international arbitral award where the seat of arbitration is London and the governing law is English law.
Final Decision
The petition is dismissed for lack of jurisdiction. No order as to costs.
Law Points
- Jurisdiction of Indian courts over foreign-seated international arbitration
- Section 2(2) of the Arbitration and Conciliation Act
- 1996
- Part I applicability only to arbitrations seated in India
- Doctrine of severability of arbitration clause
