Case Note & Summary
The petitioner, Sakuma Exports Ltd., a Mumbai-based company, entered into a contract dated 12 January 2010 with the respondent, Louis Drefus Commodities Suisse S.A., a Swiss company, for the purchase of 2700 MT of Brazilian White Sugar. The contract contained an arbitration clause referring all disputes to the Refined Sugar Association (RSA) in London, with the contract governed by English law. Disputes arose regarding the quality of sugar supplied, and the respondent initiated arbitration before the RSA. The Arbitral Tribunal passed a final award on 31 December 2010 in favor of the respondent. The petitioner challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996 before the Bombay High Court. The respondent raised a preliminary objection that the court lacked jurisdiction because the seat of arbitration was London and the award was a foreign award. The court heard arguments only on the issue of jurisdiction. The petitioner argued that since the contract was performed in India, the courts in India had jurisdiction. The respondent contended that the parties had chosen London as the seat and English law as the governing law, ousting Indian courts. The court analyzed the arbitration clause and the RSA Rules, noting that the arbitration was to be conducted in London under English law. The court held that the seat of arbitration was London, making the award a foreign award. Consequently, the petition under Section 34 of the Act was not maintainable. The court dismissed the petition for lack of jurisdiction, leaving the petitioner to seek remedies under the law applicable to foreign awards.
Headnote
A) Arbitration - Jurisdiction - Section 34 of the Arbitration and Conciliation Act, 1996 - Challenge to Foreign Award - The court considered whether it had jurisdiction to hear a petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging an award passed by the Refined Sugar Association, London. The contract provided for arbitration in London under English law. The court held that the seat of arbitration was London, and therefore, the award was a foreign award not amenable to challenge under Section 34 of the Act. The petition was dismissed for lack of jurisdiction. (Paras 1-5)
Issue of Consideration
Whether the Bombay High Court has jurisdiction to entertain a petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging a foreign award where the arbitration agreement specifies the seat as London and the governing law as English law.
Final Decision
The court held that it lacked jurisdiction to entertain the petition under Section 34 of the Arbitration and Conciliation Act, 1996. The petition was dismissed, leaving the petitioner to seek remedies under the law applicable to foreign awards.
Law Points
- Jurisdiction under Section 34 of the Arbitration and Conciliation Act
- 1996 is determined by the seat of arbitration
- not the place of performance
- parties' choice of English law and London arbitration excludes Indian courts' supervisory jurisdiction over foreign awards.
