Case Note & Summary
The dispute arose from a Contract Agreement executed on 14.04.2009 between the Punatsangchhu – 1 Hydroelectric Project Authority of Bhutan and Larsen & Toubro Ltd. for the construction of a hydroelectric project. The contract included provisions for arbitration to resolve disputes, specifying that the law applicable would be Bhutanese law and arbitration would occur in Thimphu. Following disputes regarding claims made by the contractor, a notice of arbitration was sent on 28.07.2020, to which the appellant agreed but insisted on the arbitration being governed by the Bhutan Act, 2013. The contractor subsequently filed an application under Section 11 of the Indian Arbitration and Conciliation Act, 1996, seeking the appointment of an arbitrator due to the appellant's failure to do so. The Delhi High Court ruled that the arbitration would be governed by the Indian Act, despite the Bhutan Act's enactment. The appellant then filed a special leave petition against this order. During hearings, both parties reached a consensus that the arbitration should proceed under the Bhutan Act, with the seat at Thimphu. The Supreme Court modified the High Court's order accordingly, allowing the tribunal to conduct hearings at convenient venues. The appeal was disposed of without costs.
Headnote
A) Arbitration Law - Applicability of Arbitration Acts - Jurisdiction and Applicable Law - Indian Arbitration and Conciliation Act, 1996, Section 11; Bhutan Alternative Dispute Resolution Act, 2013 - The court determined that the arbitration would be governed by the Bhutan Act, 2013, as agreed by the parties, with the seat of arbitration at Thimphu, Bhutan. The modification was made in light of the consensus between the parties regarding the applicable law for arbitration (Paras 7-9).
Issue of Consideration
Whether the arbitration should be governed by the Indian Arbitration and Conciliation Act, 1996 or the Bhutan Alternative Dispute Resolution Act, 2013.
Final Decision
The Supreme Court modified the High Court's order, determining that arbitration would be conducted under the Bhutan Alternative Dispute Resolution Act, 2013, with the seat at Thimphu, Bhutan.
Law Points
- Arbitration
- Dispute Resolution
- Jurisdiction
- Contract Law
