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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL Nos. 5131-5133 OF 2016 (Arising out of SLP (CIVIL) Nos. 2210-2212/2011)

EITZEN BULK A/S                               …. APPELLANT (S)

VERSUS

ASHAPURA MINECHEM LTD. & ANR.            …. RESPONDENT(S)

WITH

CIVIL APPEAL No. 5136 OF 2016 (Arising out of SLP (CIVIL) No. 3959/2012)

ASHAPURA MINECHEM LTD.                                 …. APPELLANT (S)

VERSUS

EITZEN BULK A/S                                     …. RESPONDENT(S)

WITH

SLP (CIVIL) No. ………../2016 (Arising out of CC NO. 3266/2013)

ASHAPURA MINECHEM LTD.                                 …. PETITIONER (S)

VERSUS

ARMADA (SINGAPORE) PTE LTD.                        …. RESPONDENT(S)

WITH

SLP (CIVIL) No. ………../2016 (Arising out of CC NO. 3382/2013)

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ASHAPURA MINECHEM LTD.                                 …. PETITIONER (S)

VERSUS

ARMADA (SINGAPORE) PTE LTD.                         …. RESPONDENT(S)

WITH

CIVIL APPEAL Nos. 5134-5135 OF 2016 (Arising out of SLP (CIVIL) Nos. 7562-7563/2016)

ASHAPURA MINECHEM LTD.                              …. APPELLANT (S)

VERSUS

EITZEN BULK A/S                                     …. RESPONDENT(S)

JUDGMENT

S. A. BOBDE, J.

Leave  granted  in  SLP  (C)  Nos.2210-2212/2011,  SLP  (C)

Nos.3959/2012 and SLP (C) No.7562-7563/2016.

2. The  dispute  in  these  appeals,  arises  out  of  the  Contract  of

Affreightment dated 18.1.2008 (hereinafter referred as `the Contract’).

Eitzen Bulk A/S of Denmark (hereinafter referred to as `Eitzen’) entered

into the contract with Ashapura Minechem Limited of Mumbai (hereinafter

referred to as `Ashapura’)  as charterers  for  shipment of  bauxite from 2

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India  to  China.   The  Charter  party  contains  an  Arbitration  Clause  as

follows:-    

“Clause No. 28

Any dispute arising under this C.O.A. is to be settled and referred to Arbitration in London. One  Arbitrator  to  be  employed  by  the Charterers and one by the Owners and in case they  shall  not  agree  then  shall  appoint  an Umpire  whose  decision  shall  be  final  and binding,  the  Arbitrators  and  Umpire  to  be Commercial  Shipping  Men.   English  Law  to apply.   Notwithstanding  anything  to  the contrary  agreed  in  the  C.O.A.,  all  disputes where  the  amount  involved  is  less  then  USD 50,000/-  (fifty  thousand)  the Arbitration shall be  conducted  in  accordance  with  the  Small Claims Procedure of the L.M.A.A.”

     (emphasis supplied)

   3. Disputes  having  arisen  between  the  parties,  the  matter  was

referred to Arbitration by a sole Arbitrator.  The Arbitration was held in

London according to English Law.  Ashapura Minechem was held liable

and directed to pay a sum of 36,306,104 US$ together with compound

interest at the rate of 3.75 % per annum.  In addition they were directed

to pay 74,135 US$ together with compound interest at the rate of 3.75%

per  annum  and  another  sum  of  90,233.66  Pounds  together  with

compound interest at the rate of  2.5% per annum vide Award of the Sole

Arbitrator dated 26.5.2009.   

Proceedings in Gujarat

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4. Before  Arbitration  had  commenced,  Ashapura  filed  a  suit

alongwith  an  application  for  injunction  before  the  Civil  Judge  at

Jam-khambalia,  Gujarat  praying  inter-alia  that  the  Contract  and  the

Arbitration Clause contained therein was illegal, null and void, ab-initio.

Though initially an interim injunction was granted, the learned Civil Judge

dismissed the suit for want of jurisdiction vide order dated 12.1.2009.

The  appeal  filed  by  Ashapura  before  the  Gujarat  High  Court  was

dismissed as withdrawn on 2.7.2009.   

5. In London, Mr. Tim Marshal, who was appointed as Arbitrator,

held that Ashapura was in repudiatory breach and awarded Eitzen Bulk an

amount of 36,306,104.00 $ plus interest, as stated above.

6. Having failed to stall the Arbitration and then having failed in the

Arbitration  proceedings,  Ashapura  resorted  to  Section  34  of  the

Arbitration Act and filed objections in India in respect of the Award passed

in  London.   These  proceedings  were  filed  before  the  District  Judge,

Jamnagar for setting aside the Foreign Award made in London.  A Misc.

Civil Application No. 101/2009 for injunction restricting Eitzen Bulk from

enforcing the Award in foreign jurisdictions outside India was also moved.

The District Judge, Jamnagar on 24.8.2009 dismissed the application for

injunction seeking restraint on enforcement of the Award.

7. From 14.7.2009 to 3.8.2009 Eitzen applied for enforcement of

the Award in the countries of Netherlands, USA, Belgium, UK.  The Courts

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in  various  jurisdictions  have  held  the  Award  to  be  enforceable  as  a

judgment of the Court.  

8. On 14th July, 2009, the appellant filed proceedings in Netherlands

Court  seeking  a  declaration  that  the  award  dated  26th May,  2009  is

enforceable as a judgment of the Court.  The respondent appeared in the

said  proceedings  and  filed  their  objections.   The  Netherlands  Court,

however, declared that the award is enforceable as a judgment of the

Court on 17th March, 2010.

9. On 24th July, 2009, the United States District Court for Southern State

of New York declared the award dated 26th May, 2009 enforceable as a

judgment  of  that  court.  The  proceedings  filed  by  the  appellant  were

contested by the respondent.

10. On 27th July, 2009, the appellant filed present proceedings under

Sections 47 to 49 of Part II of the Arbitration Act for enforcing the award

dated 26th May, 2009 on the ground that the respondent was carrying on

business within the jurisdiction of this Court and has its registered office

and  corporate  office  and  assets  within  the  territorial  jurisdiction   

of this Court.  

11. On 29th July, 2009, the Antwerp Court declared the award dated

26th May,  2009  enforceable  as  a  judgment  of  the  Court.   The  said

proceedings were contested by the respondent.  On 3rd August, 2009, the

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English High Court declared the award dated 26th May, 2009 enforceable

as a judgment of the Court.   

12. Against the rejection of the application for injunction Ashapura

filed a petition under Articles 226 and 227 of the Constitution of India

before the High Court of Gujarat at Ahmadabad for a Writ of Certiorari to

quash and set aside the Order dated 24.8.2009 rendered by the District

Judge, Jam-Khambalia and for a direction not to enforce the execution of

the judgment dated 24.7.2009.  Ashapura inter-alia contended that the

Award  cannot  be  enforced  or  executed  since  their  objections  under

Section 34 were pending.  A learned Single Judge who heard the petition

however, observed that the issues before him were inextricably connected

with the issues of jurisdiction of the Court in the Section 34 application

and the contentions of Eitzen opposing the said Section 34 application.

The Single Judge, therefore,  set aside the Order dated 24.8.2009 and

remanded the matter for fresh decision in accordance with law by Order

dated 3.9.2009.   In Letters  Patent  Appeal  filed by Eitzen  the Division

Bench of the High Court of Gujarat directed the District Judge to consider

all contentions by its Order dated 29.10.2009.

13. Eitzen  however  questioned the very  jurisdiction of  a  Court  in

India  to  decide  objections  under  Section  34  of  the  Arbitration  Act  in

respect of a Foreign Award by way of a Writ Petition.  They prayed for

issue of a Writ of Prohibition and an Order restraining the learned District

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Judge at Jam-Khambhalia from adjudicating Ashapura’s application under

Section  34  of  the  Arbitration  and  Conciliation  Act,  1996  against  the

Foreign Award dated 26.5.2009.

14.  A  learned  Single  Judge  issued  notice  and  stayed  further

proceedings  before  the  Jamnagar  Court  on  20.11.2009.   Ashapura

however filed LPA No. 2469 of 2009 challenging the Order of the learned

Single Judge dated 20.11.2009.   The Division Bench which heard  the

appeal has held by Judgment and Order dated 22.9.2010, that Ashapura

is entitled to challenge the Foreign Award under Section 34 of Part I of

the Arbitration Act.  It has further held that the territorial jurisdiction is a

mixed question of fact and law and is required to be decided by the   

Trial  Court  on  the  basis  of  the  Plaint  and  Written  Statement   

and Evidence before it. This judgment was questioned by way of SLP (C)

Nos. 2210-2212 of 2011 filed by Eitzen.

Proceedings in Maharashtra

15. On  27.7.2009,  Eitzen  filed  Arbitration  Petition  No.  561/2009

under Sections 47 to 49 of the Arbitration Act for enforcing the Foreign

Award  in  the  Bombay  High  Court,  within  whose  jurisdiction  Ashapura

carries  on business and has  a registered  office.   The Award  was also

received by Ashapura within the jurisdiction of the Bombay High Court.

This petition for enforcement was filed on the basis that Part I of the

Arbitration Act has no application to a Foreign Award made in London

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under English Law.  The petition for enforcement of a Foreign Award was

accompanied by Notice of Motion No. 3143 of 2009 under Section 49 (3)

of the Arbitration Act for securing their claim under the ex-parte Award

dated 26.5.2009.

16. The learned Single Judge held that since the parties had agreed

that the juridical seat of the Arbitration in this case would be at London

and English Law would apply there was an express and in any case an

implied, exclusion of Part I of the Arbitration Act.  

17. Ashapura filed Notice of Motion No. 3975 of 2009 claiming that

since  proceedings  had  already  been  initiated  under  Part  I  before  the

Gujarat High Court,  the Bombay High Court  had no jurisdiction in the

matter by virtue of Section 42 of the Arbitration Act.  A learned Single

Judge of the Bombay High Court vide order dated 05.10.2011 dismissed

the  Notice  of  Motion  and  held  that  Part  I  of  the  Arbitration  Act  was

excluded by the parties and therefore Section 42, which occurs in Part I,

had no application to the present case. The learned Single Judge also

directed that the petition be heard on merits.  This decision is questioned

by Ashapura in SLP (C) No. 3959 of 2012.  

18. The learned Single Judge of the Bombay High Court has allowed

Arbitration Petition No. 561 of 2009 of Eitzen for enforcing the Foreign

Award dated 26.5.2009.   

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19. As a preliminary objection, it was contented before the Bombay

High Court that this Court had passed an Order on 27.2.2012 ordering

status quo on further proceedings and, therefore, the Hon’ble Court ought

not  to  proceed  in  the  matter.  That  this  Order  was  to  operate  upto

16.4.2012 and was thereafter extended till 22.8.2012.  The High Court

rejected this contention on the ground that the Order of status quo had

not been extended.  We have examined the matter and find that there

was no Order of this Court restraining the High Court from hearing the

matter in October, 2015.  

20. The High  Court  has  also  rejected  the contention  of  Ashapura

under Section 421 of the Arbitration Act, rightly; that since an application

under  Section  34  of  the  Arbitration  Act,  which  is  an  application

contemplated by Part I of the Arbitration Act, has been made before the

Court in Gujarat and that Court alone has jurisdiction over the Arbitration

proceedings and all subsequent applications must be made to that Court

alone.  This contention was rejected by the High Court on the ground that

Section 42 occurs in Part I of the Arbitration Act and in its view since   

Part I itself had no application to the Foreign Award, Section 42 would

have no application either.  The moot question thus arises is whether   

1 Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force,  where with respect  to an arbitration  agreement  any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court.

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Part I of the Arbitration Act has any application to the Foreign Award in

this case where the proceedings were held in London and the Arbitration

was governed by English Law.      

Before this Court

21. We thus have, on the one hand, the decision of the Gujarat High

Court holding that a Court in India has jurisdiction under Section 34 to

decide objections raised in respect of a Foreign Award because Part I of

the Arbitration Act is not excluded from operation in respect of a Foreign

Award and on the other, a decision of the Bombay High Court holding that

Part  I  is  excluded  from  operation  in  case  of  a  Foreign  Award  and

thereupon  directing  enforcement  of  the  Award.  The  decisions  of  the

Gujarat  High  Court  are  questioned  by  Eitzen  by  way  of  SLP  (C)

Nos.2210-2212/2011.   The  decisions  of  the  Bombay  High  Court  are

questioned by Ashapura by way of SLP (C) Nos.7562-7563/2016.  Interim

order  dated  05.10.2011  passed  by  the  High  Court  of  Judicature  at

Bombay in Notice of Motion No. 3975 of 2009 in Arbitration Petition No.

561 of 2009 is under challenge in appeal arising out of SLP (C) No. 3959

of 2012.  

22. Apparently  Ashapura  had  a  similar  dispute  with  Armada

(Singapore)  Pvt.  Ltd.   Armada  had,  similarly  filed  an  application  for

enforcement of the foreign award in its favour under Section 42 of the

Arbitration  Act  being  Arbitration  Petition  Nos.1359  and  1360  of  2010

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before the Bombay High Court.   Ashapura has raised similar objection to

the enforcement of the Foreign Award by way of Notice of Motion.  By

Notices of Motion Nos. 2390 and 2444 of 2012 Ashapura had contended

that the Bombay High Court cannot entertain the application in view of

the Section 42 of  the Arbitration Act.   Both these Notices of  Motion   

were  dismissed  by  the  learned  Single  Judge  of  the  Bombay  High   

Court.   Ashapura  has  challenged  the  said  dismissal  by  way  of  filing   

SLP Nos.….of 2016 [CC Nos.3266 and 3382 of 2013] before this Court.

23. It may be noted at the outset that since proceedings under the

Sick Industrial Companies (Special Provisions) Act, 1985 (for short, the

SICA  Act)  are  pending  before  the  Board  for  Industrial  and  Financial

Reconstruction  (BIFR),  though  the  Bombay  High  Court  has  ordered

execution of the Award, it has held that Eitzen would not be entitled to

take any step in execution of the Award or seek any relief in violation of

Section 22 of the SICA Act without permission from the BIFR.  

The main question

24. Thus, the main question on which contentions were advanced by

the learned counsel for the parties is whether Part I of the Arbitration Act

is  excluded  from its  operation  in  case  of  a  Foreign  Award  where  the

Arbitration is not held in India and is governed by foreign law.  

25. Shri  Prashant  S.  Pratap,  learned  senior  counsel  appearing for

Eitzen submitted that the main issue is covered by a decision of this Court

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in Bhatia International v. Bulk Trading S.A. and another2  and two

recent decisions of this Court in Union of India v. Reliance Industries

Limited and others3 and  Harmony Innovation Shipping Limited v.

Gupta Coal India Limited and another4.  We have not considered the

decision in the  Balco v. Kaiser Aluminium Technical Services Inc.5

since the decision in that case does not govern Arbitration agreements

entered  prior  to  6.9.2012  and  the  contract  in  the  instant  case  is   

dated 18.1.2008.

26. According  to  the  learned  counsel,  Clause  28,  which  is  the

Arbitration  Clause  in  the  Contract,  clearly  stipulates  that  any  dispute

under the Contract “is to be settled and referred to Arbitration in London”.

It further stipulates that English Law to apply.  The parties have thus

clearly intended that the Arbitration will be conducted in accordance with

English  Law  and  the  seat  of  the  Arbitration  will  be   

at London.  

27. The  question  is  whether  the  above  stipulations  show  the

intention of the parties to expressly or impliedly exclude the provisions of

Part  I  to  the  Arbitration,  which  was  to  be  held  outside  India,  i.e., in

London. We think that the clause evinces such an intention by providing

that the English Law will apply to the Arbitration.  The clause expressly

2 (2002) 4 SCC 105 3 (2015) 10 SCC 213 4 (2015) 9 SCC 172 5 (2012) 9 SCC 552  

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provides that Indian Law or any other law will not apply by positing that

English Law will apply.  The intention is that English Law will apply to the

resolution of any dispute arising under the law.  This means that English

Law will apply to the conduct of the Arbitration.  It must also follow that

any objection to the conduct of the Arbitration or the Award will also be

governed by English Law.  Clearly, this implies that the challenge to the

Award must be in accordance with English Law.  There is thus an express

exclusion  of  the  applicability  of  Part  I  to  the  instant  Arbitration  by

Clause 28.  In fact, Clause 28 deals with not only the seat of Arbitration

but also provides that there shall be two Arbitrators, one appointed by the

charterers and one by the owners and they shall appoint an Umpire, in

case there is no agreement. In this context, it may be noted that the

Indian  Arbitration  and  Conciliation  Act,  1996  makes  no  provision  for

Umpires and the intention is clearly to refer to an Umpire contemplated

by Section 21 of the English Arbitration Act, 1996.  It is thus clear that

the intention is that the Arbitration should be conducted under the English

law, i.e. the English Arbitration Act, 1996.   It may also be noted that

Sections 67, 68 and 69 of the English Arbitration Act provide for challenge

to an Award on grounds stated therein. The intention is thus clearly to

exclude the applicability of Part I to the instant Arbitration proceedings.

28. This is a case where two factors exclude the operation of Part I

of the Arbitration Act.  Firstly, the seat of Arbitration which is in London

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and secondly  the  clause that  English  Law will  apply.  In  fact,  such a

situation has been held to exclude the applicability of Part I in a case

where a similar clause governed the Arbitration. In Reliance Industries

Limited  and  another  v.  Union  of  India6,   this  Court  referred  to

judgments of some other jurisdictions and observed in paragraphs 55 to

57 as follows:-

“55. The effect of choice of seat of arbitration was considered by the Court of Appeal in C v. D.  This  judgment  has  been  specifically approved by this Court in Balco and reiterated in Enercon. In C v. D, the Court of Appeal has observed: (Bus LR p. 851, para 16)

“Primary conclusion

16. I shall deal with Mr Hirst’s arguments in due course but, in my judgment, they fail to grapple with the central point at issue which is whether  or  not,  by  choosing  London  as  the seat  of  the  arbitration,  the  parties  must  be taken to have agreed that proceedings on the award  should  be  only  those  permitted  by English law. In my view they must be taken to have so agreed for the reasons given by the Judge.  The  whole  purpose  of  the  balance achieved  by  the  Bermuda  form  (English arbitration but applying New York law to issues arising  under  the  policy)  is  that  judicial remedies  in  respect  of  the  award  should  be those permitted by English law and only those so permitted. Mr Hirst could not say (and did not say) that English judicial remedies for lack of  jurisdiction  on  procedural  irregularities under Sections 67 and 68 of the 1996 Act were not permitted; he was reduced to saying that New  York  judicial  remedies  were  also

6 2014 (7) SCC 603 14

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permitted.  That,  however,  would be a recipe for  litigation  and  (what  is  worse)  confusion which  cannot  have  been  intended  by  the parties.  No doubt New York law has its  own judicial  remedies for want of jurisdiction and serious  irregularity  but  it  could  scarcely  be supposed that a party aggrieved by one part of an award could proceed in one jurisdiction and a party aggrieved by another part of an award could proceed in another jurisdiction. Similarly, in  the  case  of  a  single  complaint  about  an award,  it  could  not  be  supposed  that  the aggrieved  party  could  complain  in  one jurisdiction and the satisfied party be entitled to  ask  the  other  jurisdiction  to  declare  its satisfaction with the award. There would be a serious risk of parties rushing to get the first judgment or of conflicting decisions which the parties cannot have contemplated.”

56. The aforesaid observations in C v. D were subsequently  followed  by  the  High  Court  of Justice,  Queen’s  Bench  Division,  Commercial Court (England) in Sulamerica Cia Nacional de Seguros SA v. Enesa Engelharia SA — Enesa. In laying down the same proposition, the High Court  noticed  that  the  issue  in  that  case depended upon the weight to be given to the provision  in  Condition  12  of  the  insurance policy that “the seat of the arbitration shall be London,  England”.  It  was  observed  that  this necessarily carried with it the English Court’s supervisory  jurisdiction  over  the  arbitration process. It was observed that:

“this follows from the express terms of the Arbitration Act, 1996 and, in particular, the provisions of Section 2 which provide that Part I of the Arbitration Act, 1996 applies where the seat of the arbitration is in England and Wales or  Northern  Ireland.  This  immediately establishes  a  strong  connection  between  the arbitration  agreement  itself  and  the  law  of England.  It  is  for  this  reason  that  recent

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authorities have laid stress upon the locations of the seat of the arbitration as an important factor  in  determining  the  proper  law  of  the arbitration agreement.”

57. In  our  opinion,  these  observations  in Sulamerica  case  are  fully  applicable  to  the facts  and  circumstances  of  this  case.  The conclusion  reached by  the  High  Court  would lead to the chaotic situation where the parties would  be  left  rushing  between  India  and England for redressal of their grievances. The provisions of Part I of the Arbitration Act, 1996 (Indian) are necessarily excluded; being wholly inconsistent  with  the  arbitration  agreement which  provides  “that  arbitration  agreement shall  be governed by English  law”.  Thus  the remedy  for  the  respondent  to  challenge  any award rendered in the arbitration proceedings would  lie  under  the  relevant  provisions contained  in  the  Arbitration  Act,  1996  of England and Wales.  Whether  or  not  such an application would now be entertained by the courts in England is not for us to examine, it would  have to  be  examined by  the  court  of competent jurisdiction in England.”

29. We are  in  agreement  with  the  above observation and  in  this

clause 28 in the present case must be intended to have a similar effect

that is to exclude the applicability of Part I of the Indian Arbitration and

Conciliation  Act  since  the  parties  have  chosen  London  as  the  seat  of

Arbitration and further provided that the Arbitration shall be governed by

English  Law.  In  this  case  the  losing  side  has  relentlessly  resorted  to

apparent remedies for stalling the execution of the Award and in fact even

attempted to prevent Arbitration.  This case has become typical of cases

where  even  the fruits  of  Arbitration  are  interminably  delayed.    Even 16

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though it has been settled law for quite some time that Part I is excluded

where parties choose that the seat of Arbitration is outside India and the

Arbitration should be governed by the law of a foreign country.   

30. Mr. Divan attempted to persuade us to accept the possibility that

Part I is not excluded and in any case not wholly excluded in such a case,

but the law is too well settled and with good reasons, for us to take any

other view.  We do not wish to endorse “a recipe for litigation and (what

is worse) confusion”7.     

   31. When  the  judgment  in  Reliance  was  sought  to  be  indirectly

reviewed in another case under the same agreement and between the

same parties, this Court reiterated its earlier view and observed in Union

of India v.  Reliance Industries Limited and others  in para 18 as

follows:-

“18. It is important to note that in para 32 of Bhatia International  itself this Court has held that Part I of the Arbitration Act, 1996 will not apply if it has been excluded either expressly or  by  necessary  implication.  Several judgments of this Court have held that Part I is excluded by necessary implication if it is found that on the facts of a case either the juridical seat of the arbitration is outside India or the law governing the arbitration agreement is  a law other  than Indian  law.  This  is  now well settled by a series of decisions of this Court [see Videocon Industries Ltd. v. Union of India, Dozco India (P) Ltd. v. Doosan Infracore Co. Ltd., Yograj Infrastructure Ltd. v. Ssang Yong Engg.  and  Construction  Co.  Ltd.,  the  very

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judgment  in  this  case  reported  in  Reliance Industries Ltd. v. Union of India and a recent judgment in Harmony Innovation Shipping Ltd. v. Gupta Coal India Ltd.].”

We see no reason to take a different view.  In Bhatia International’s

case, this Court concluded as follows:

“To conclude,  we hold that  the provisions of Part I would apply to all arbitrations and to all proceedings  relating  thereto.  Where  such arbitration  is  held  in  India  the  provisions  of Part I would compulsorily apply and parties are free to deviate only to the extent permitted by the derogable provisions of Part I. In cases of international  commercial arbitrations held out of India provisions of Part I would apply unless the parties by agreement, express or implied, exclude  all  or  any  of  its  provisions.  In  that case the laws or rules chosen by the parties would prevail. Any provision, in Part I, which is contrary to or excluded by that law or rules will not apply.”

32. We are thus of the view that by Clause 28, the parties chose to

exclude the application of Part I to the Arbitration proceedings between

them by choosing London as the venue for Arbitration and by making

English law applicable to Arbitration, as observed earlier.  It is too well

settled  by  now  that  where  the  parties  choose  a  juridical  seat  of

Arbitration  outside  India  and  provide  that  the  law  which  governs

Arbitration will be a law other than Indian law, part I of the Act would not

have  any  application  and,  therefore,  the  award  debtor  would  not  be

entitled to challenge the award by raising objections under Section 34

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before a Court in India.  A Court in India could not have jurisdiction to

entertain such objections under Section 34 in such a case.  

33. As a matter of fact the mere choosing of the juridical seat of

Arbitration attracts the law applicable to such location.  In other words it

would  not  be  necessary  to  specify  which  law  would  apply  to  the

Arbitration  proceedings,  since  the  law of  the  particular  country  would

apply  ipso  jure.   The  following  passage  from  Redfern  and  Hunter  on

International Arbitration contains the following explication of the issue:-

“It  is  also  sometimes  said  that  parties  have selected  the  procedural  law  that  will  govern their arbitration, by providing for arbitration in a particular country.  This is too elliptical and, as an English court itself held more recently in Breas of Doune Wind Farm it does not always hold true.  What the parties have done is to choose  a  place  of  arbitration  in  a  particular country.  That choice brings with it submission to  the  laws  of  that  country,  including  any mandatory provisions of its law on arbitration. To  say  that  the  parties  have  ‘chosen’  that particular  law  to  govern  the  arbitration  is rather like saying that an English woman who takes  her  car  to  France  has  ‘chosen’  French traffic law, which will oblige her to drive on the right-hand side of the road, to give priority to vehicles  approaching  from  the  right,  and generally to obey traffic laws to which she may not be accustomed.  But it would be an odd use of language to say this notional motorist had opted for ‘French traffic  law’.  What she has done is to choose to go to France.  The applicability  of  French  law  then  follows automatically.  It is not a matter of choice.

Parties may well  choose a particular place of arbitration precisely  because its  lex  arbitri  is

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one which they find attractive.  Nevertheless, once a place of arbitration has been chosen, it brings with it its own law.  If that law contains provisions  that  are  mandatory  so  far  as arbitration  are  concerned,  those  provisions must be obeyed.  It is not a matter of choice any more than the notional motorist is free to choose  which  local  traffic  laws  to  obey  and which to disregard.”

 34. In this view of the matter, the judgment of  the Gujarat  High

Court  holding  that  Ashapura’s  objections  under  Section  34  of  the

Arbitration Act are tenable before a Court in India that is the Court at

Jam-Khambalia,  Gujarat  is  contrary  to  law.   The  proceedings  under

Section  34,  which  occurs  in  Part  I,  are  liable  to  be  dismissed  as

untenable.   The Civil  Appeals of Eitzen are liable to succeed and are,

therefore,  allowed.   The  judgment  of  the  Bombay  High  Court  dated

03.12.2015 enforcing the Foreign Award under Part II of the Arbitration

Act is correct and liable to be upheld.   

35. In view of the above findings, appeals filed by Eitzen Bulk A/S,

arising out of SLP (C) Nos.  2210-2212 of 2011 are allowed; appeals filed

by Ashapura Minechem Ltd.,  arising out of SLP (C) Nos.  7562-7563 of

2016 are dismissed; appeal arising out of SLP (C) No. 3959 of 2012 (filed

by Ashapura Minechem Ltd.) is dismissed.

36. Permission to file SLP (C) No.…of 2016 [CC No. 3266 of 2013 -

filed by Ashapura Minechem Ltd.] and SLP (C) No....of 2016 [CC No. 3382

of 2013 - filed by Ashapura Minechem Ltd.] is rejected. No costs.

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………………………………….……………….…..........…..J.       [FAKKIR MOHAMED IBRAHIM KALIFULLA]

…………………………………….......................………J.                                                                            [S.A. BOBDE]

NEW DELHI,    MAY 13, 2016

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