Case Note & Summary
The petitioners, GL Asia Mauritius II Cayman Limited and others, filed a writ petition challenging an order dated 21/08/2010 passed by the District Judge, South Goa at Margao in Arbitration Application No.31/2008. The impugned order disposed of a preliminary objection raised by the petitioners regarding the jurisdiction of the learned Judge to entertain an application under Section 9 of the Arbitration and Conciliation Act, 1996, holding that the Court had jurisdiction. The matter was adjourned pending the Supreme Court's decision in Bharat Aluminum Company v. Kaiser Aluminum Technical Services INC (2012) 9 SCC 552, which held that Part I of the Act does not apply to international commercial arbitrations unless the parties expressly agree. However, the Supreme Court directed that this judgment would operate only prospectively, applying to agreements executed after the date of the judgment. Since the agreement in the present case was executed prior to that date, the petition was taken up for hearing. The petitioners argued that the learned Judge erred in holding that respondent No.2 (Sunset Resort Limited) was an implied party to the arbitration agreement, as respondent No.2 was not a signatory to the agreement. The court considered whether Part I of the Act applies to pre-BALCO agreements and whether a non-signatory can be considered an implied party. The court held that since the agreement was executed before the BALCO judgment, Part I applies and the District Judge had jurisdiction. However, the court found that the learned Judge misconstrued the agreement to conclude that respondent No.2 was an implied party, as there was no express consent. The court set aside the impugned order and remanded the matter for fresh consideration on the issue of whether respondent No.2 is a party to the arbitration agreement.
Headnote
A) Arbitration Law - Jurisdiction under Section 9 - International Commercial Arbitration - Part I applicability - The court considered whether Part I of the Arbitration and Conciliation Act, 1996 applies to international commercial arbitration agreements executed prior to the prospective overruling in Bharat Aluminum v. Kaiser Aluminum (2012) 9 SCC 552 - Held that since the agreement was executed before the said judgment, Part I applies and the District Judge had jurisdiction to entertain the Section 9 application (Paras 2-3). B) Arbitration Law - Implied Party to Arbitration Agreement - Non-signatory - The court examined whether respondent No.2 could be treated as an implied party to the arbitration agreement when it was not a signatory - Held that the court cannot infer an arbitration agreement against a non-signatory without express consent; the learned Judge misconstrued the agreement to hold respondent No.2 as an implied party (Paras 4-5).
Issue of Consideration
Whether the District Judge had jurisdiction to entertain an application under Section 9 of the Arbitration and Conciliation Act, 1996 in respect of an international commercial agreement executed prior to the judgment in Bharat Aluminum v. Kaiser Aluminum, and whether the respondent No.2 could be considered an implied party to the arbitration agreement.
Final Decision
The impugned order dated 21/08/2010 is set aside. The matter is remanded to the District Judge for fresh consideration on the issue of whether respondent No.2 is a party to the arbitration agreement. The petition is disposed of accordingly.
Law Points
- Part I of Arbitration and Conciliation Act
- 1996 applies to international commercial arbitration agreements executed prior to Bharat Aluminum v. Kaiser Aluminum (2012) 9 SCC 552
- Section 9 application maintainable
- implied party to arbitration agreement requires express consent
- court cannot infer arbitration agreement against non-signatory
