Case: Avitel Post.Studioz Limited Vs. Hsbc Pi Holdings (Mauritius) Limited

is contrary to or excluded by that law or rules will not be applicable.23. In Harmony Innovation Shipping Limited v. Gupta Coal India Limited & Anr, (supra) the litigation was in respect of foreign seated international commercial arbitration. The issue arose was whether judgment referred in Bharat Aluminium Company v. Kaiser Aluminum Technical Services Inc (supra), would apply. Their Lordships in unequivocal terms opined that since there was ample material indicating the intention of the parties through various phrases used in the arbitration agreement, with regard to seat of arbitration, who should be arbitrators and the contract to be governed and construed according to which law, therefore, opined that the seat of arbitration will be at London, and further opined that the contract be governed and construed according to the English law. They further opined that the clauses in the arbitration agreement should be looked into to understand whether a particular clause in question is substantial arbitration clause or a curial/procedural one. Ultimately, opined that law laid down in Bharat Aluminium Company v. Kaiser Aluminum Technical Services Inc (supra) is not applicable to agreements entered into prior to 6th September 2012 (date of decision of said case), and opined that the law rendered in Bhatia International v. Bulk Trading S.A (supra) is applicable. They further opined that the clear unambiguous terms/clauses stipulated in the arbitration agreement clearly points out juridical seat being London and ouster of jurisdiction of Indian Courts.24. So far as Reliance Industries Ltd & Anr v. Union of India (supra), in this case, the Apex Court in detail referred to the law which would be applicable to the filing of the award, enforcement of award, and also the law which provides for setting aside the agreement to arbitrate and the performance of parties.25. In Reliance Infrastructure Ltd. Mumbai v. Roadway Solution (I) Pvt. Ltd, Pune (supra), it was held that the parties to the agreement having agreed to a place of arbitration for all disputes arising out of the said agreement shall be subject to jurisdiction of Mumbai Court. Since no challenge was made to said terms and clauses of agreement, therefore, such terms and clauses are binding on the parties.26. Going through the above decisions, terms of two agreements SSA and SHA, one has to see what happens in the present case with reference to the terms of two agreements in the light of above judgments.27. So far as factual situation in the earlier proceedings, learned Single Judge as well as Division Bench in the proceedings filed under Section 9 of Arbitration Act opined that in the light of jurisdictional award and interim award being made by Arbitral Tribunal between the same parties arising out of the same agreement in the arbitration proceedings at Singapore determines the jurisdiction of the Arbitral Tribunal, and in the partial award dated 17th December 2012, it is declared that the parties are governed by Singapore law in terms of arbitration agreement.28. In the present case, after detail discussion of the judgment of the Single Judge and Division Bench in the earlier proceedings, learned Single Judge was justified in opining that there is finality so far as interpretation of some clauses of SSA and SHA. On perusal of the terms of agreement, clause 16.1.2 clearly mentions that the seat of arbitration shall be Singapore. 16.1.6 - First Part clearly indicate that parties have waived their right to apply to any Court of law for determination on any preliminary point of law/review any question of law and merits only in so far as such waiver. They further agree that such waiver shall not be deemed to have included waiver of right to challenge any award on the ground that the Tribunal lacks substantive jurisdiction or the grounds of serious irregularity affecting the Tribunal, the proceedings or the award to the extend allowed by the law of the seat of arbitration. In other words, since the seat of arbitration was Singapore, the parties reserve right to challenge award on the ground that the Tribunal lacks substantive jurisdiction or there exists serious irregularity affecting the proceedings, etc alone.29. 16.4 clearly indicate application of Arbitration Act of 1996. It clearly says except for the purpose of Section 9, provisions of Part 1 of Indian Arbitration and Conciliation Act, 1996 shall not apply to the terms of the agreement. From reading of the above terms, it is crystal clear that seat of arbitration is at Singapore and the parties have waived the right to apply to any Court of law with regard to preliminary point of law as indicated at 16.1.6 except right to challenge award on the ground that the Tribunal lacks jurisdiction, etc. Definitely, this does not mean that the provisions of Part-I of Arbitration Act shall apply to the terms of the agreement.30. So far as SHA is concerned, the agreement shall be governed by the laws of Republic of India without regard to applicable conflict of laws principles. Clause 19.1 refers to arbitration at SIAC in accordance with the SIAC administered arbitration Rules that were in force. Again, clause 19.4 provides that except invoking provisions of section 9 of Arbitration and Conciliation Act, 1996, the entire Part-I of the 1996 Act is not applicable. Therefore, reading both the agreements with reference to the above clauses, it is crystal clear that 16.4 of SSA can be considered as an amendment to 16.1.1, and 16.1.6 carves out exception to an exception. Reading of clause 16.4 along with clause 19 of SSA and 19.4 of SHA, there is no scope to understand the terms agreed between the parties otherwise. In other words, except invoking provisions of Section 9 of Arbitration Act, the entire Part 1 of Arbitration Act of 1996 (Indian Law) is expressly excluded, thereby any challenge made under Section 34 cannot be entertained in terms of law applicable in India. Parties have expressly excluded application of Part 1 of 1996 Act, except provisions of Section 9 of Part 1 of Arbitration Act, 1996.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]20. National Thermal Power Corporation Ltd. v. Singer Company (supra), is relied upon by appellants counsel by placing reliance on paras 237. It is contended that the normal practise would be the proper law of the arbitration agreement is generally the same as the proper law of the contract, and only in exceptional cases, it need not be so where the proper law of the contract is expressly chosen by the parties. According to him, a presumption would arise where there is no express choice of the law governing the contract as a whole or the arbitration agreement as such, and in such event, presumption may arise that the law of the country where the arbitration is agreed to be held is the proper law of the arbitration agreement. He also contends that so far as the validity of the arbitration agreement, including the effect and the interpretation are governed by its proper law, and such law will decide whether the arbitration clause is wide enough to cover the dispute between the parties. He also stresses upon the fact that parties have freedom to choose the law governing an International Commercial Arbitration Agreement, and further contends that where the proper law of the contract is expressly chosen by the parties, such law must, in the absence of an unmistakable intention to the contrary, govern the arbitration agreement which, though collateral or ancillary to the main contract, nevertheless a part of such contract. When proper law of the contract between the parties expressly stipulated to be the laws in force in a particular country and exclusive jurisdiction of the Courts at a particular place, the parties not having chosen expressly or by implication a law different from Indian Law in regard to the agreement contained in the arbitration clause, the proper law governing the arbitration clause is indeed the laws in India.21. Appellants counsel also banks upon Sumitomo Heavy Industries Ltd v. ONGC Ltd (supra). This was a case where parties to the contract/agreement belonging to different countries agreed upon that arbitrability of the dispute to be determined in terms of the law governing the arbitration agreement and the arbitration proceeding has to be conducted in accordance with the curial law and after rendering of the award, enforcement thereof has to be again in accordance with the law governing the arbitration agreement. Learned counsel for the appellants places reliance on paragraph no.10 of the said judgment to contend that the law governing the contract creating substantive rights of the parties in respect of which the dispute has arisen, the proper law of the arbitration agreement, the law governing the obligation of the parties to submit the disputes to arbitration and to honour the award must be the Curial law i.e. the law governing the conduct of the individual reference. He further emphasizes that where there is absence of express agreement, a strong presumption arises that parties intended the curial law to be the law of the seat of the arbitration. According to him, the enforcement process is entirely different since it is subsequent to and independent of the proceedings before the arbitrator since the need to challenge the award arises only if it is being enforced.22. Respondents counsel drew our attention to Bhatia International v. Bulk Trading S.A,(supra), paragraph no.32 wherein their Lordships opined that provisions of Part 1 would apply to all arbitrations and to all proceedings relating thereto when such arbitration is held in India. The provisions of Part 1 would compulsorily apply and parties are free to deviate only to extent permitted by the derogable provisions of Part I. In case, international arbitrations were held outside India, provisions of Part 1 would apply unless the parties by agreement, express or by implication, exclude all or any of its provisions. In such situation, depending on the terms of agreement, the laws/rules/regulations agreed upon by the parties would prevail. Therefore, it was opined that any provision from Part 1 which is contrary to or excluded by that law or rules will not be applicable.23. In Harmony Innovation Shipping Limited v. Gupta Coal India LimitedAnr, (supra) the litigation was in respect of foreign seated international commercial arbitration. The issue arose was whether judgment referred in Bharat Aluminium Company v. Kaiser Aluminum Technical Services Inc (supra), would apply. Their Lordships in unequivocal terms opined that since there was ample material indicating the intention of the parties through various phrases used in the arbitration agreement, with regard to seat of arbitration, who should be arbitrators and the contract to be governed and construed according to which law, therefore, opined that the seat of arbitration will be at London, and further opined that the contract be governed and construed according to the English law. They further opined that the clauses in the arbitration agreement should be looked into to understand whether a particular clause in question is substantial arbitration clause or a curial/procedural one. Ultimately, opined that law laid down in Bharat Aluminium Company v. Kaiser Aluminum Technical Services Inc (supra) is not applicable to agreements entered into prior to 6th September 2012 (date of decision of said case), and opined that the law rendered in Bhatia International v. Bulk Trading S.A (supra) is applicable. They further opined that the clear unambiguous terms/clauses stipulated in the arbitration agreement clearly points out juridical seat being London and ouster of jurisdiction of Indian Courts.24. So far as Reliance Industries LtdAnr v. Union of India (supra), in this case, the Apex Court in detail referred to the law which would be applicable to the filing of the award, enforcement of award, and also the law which provides for setting aside the agreement to arbitrate and the performance of parties.25. In Reliance Infrastructure Ltd. Mumbai v. Roadway Solution (I) Pvt. Ltd, Pune (supra), it was held that the parties to the agreement having agreed to a place of arbitration for all disputes arising out of the said agreement shall be subject to jurisdiction of Mumbai Court. Since no challenge was made to said terms and clauses of agreement, therefore, such terms and clauses are binding on the parties.26. Going through the above decisions, terms of two agreements SSA and SHA, one has to see what happens in the present case with reference to the terms of two agreements in the light of above judgments.27. So far as factual situation in the earlier proceedings, learned Single Judge as well as Division Bench in the proceedings filed under Section 9 of Arbitration Act opined that in the light of jurisdictional award and interim award being made by Arbitral Tribunal between the same parties arising out of the same agreement in the arbitration proceedings at Singapore determines the jurisdiction of the Arbitral Tribunal, and in the partial award dated 17th December 2012, it is declared that the parties are governed by Singapore law in terms of arbitration agreement.28. In the present case, after detail discussion of the judgment of the Single Judge and Division Bench in the earlier proceedings, learned Single Judge was justified in opining that there is finality so far as interpretation of some clauses of SSA and SHA. On perusal of the terms of agreement, clause 16.1.2 clearly mentions that the seat of arbitration shall be Singapore. 16.1.6First Part clearly indicate that parties have waived their right to apply to any Court of law for determination on any preliminary point of law/review any question of law and merits only in so far as such waiver. They further agree that such waiver shall not be deemed to have included waiver of right to challenge any award on the ground that the Tribunal lacks substantive jurisdiction or the grounds of serious irregularity affecting the Tribunal, the proceedings or the award to the extend allowed by the law of the seat of arbitration. In other words, since the seat of arbitration was Singapore, the parties reserve right to challenge award on the ground that the Tribunal lacks substantive jurisdiction or there exists serious irregularity affecting the proceedings, etc alone.29. 16.4 clearly indicate application of Arbitration Act of 1996. It clearly says except for the purpose of Section 9, provisions of Part 1 of Indian Arbitration and Conciliation Act, 1996 shall not apply to the terms of the agreement. From reading of the above terms, it is crystal clear that seat of arbitration is at Singapore and the parties have waived the right to apply to any Court of law with regard to preliminary point of law as indicated at 16.1.6 except right to challenge award on the ground that the Tribunal lacks jurisdiction, etc. Definitely, this does not mean that the provisions ofof Arbitration Act shall apply to the terms of the agreement.30. So far as SHA is concerned, the agreement shall be governed by the laws of Republic of India without regard to applicable conflict of laws principles. Clause 19.1 refers to arbitration at SIAC in accordance with the SIAC administered arbitration Rules that were in force. Again, clause 19.4 provides that except invoking provisions of section 9 of Arbitration and Conciliation Act, 1996, the entireof the 1996 Act is not applicable. Therefore, reading both the agreements with reference to the above clauses, it is crystal clear that 16.4 of SSA can be considered as an amendment to 16.1.1, and 16.1.6 carves out exception to an exception. Reading of clause 16.4 along with clause 19 of SSA and 19.4 of SHA, there is no scope to understand the terms agreed between the parties otherwise. In other words, except invoking provisions of Section 9 of Arbitration Act, the entire Part 1 of Arbitration Act of 1996 (Indian Law) is expressly excluded, thereby any challenge made under Section 34 cannot be entertained in terms of law applicable in India. Parties have expressly excluded application of Part 1 of 1996 Act, except provisions of Section 9 of Part 1 of Arbitration Act, 1996.