Case: Imax Corporation Vs. M/S E-City Entertainment (I) P.Ltd

2. The appellant-Imax Corporation has challenged the interim order dated 10.06.2013 passed by the High Court of Judicature at Bombay in Notice of Motion No.2560 of 2008 in the Arbitration Petition (Lodging) No.525 of 2008.3. By the aforementioned order, the High Court held that the petition under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, "the Arbitration Act") filed by the respondent-M/S E-City Entertainment (I) Pvt. Ltd. against two partial final awards dated 11.02.2006, 24.08.2007, and third final award dated 27.03.2008 was maintainable.The appellant had objected to the maintainability of the petition under Section 34 of the Arbitration Act on the ground that the arbitration clause excluded the applicability of Part-I which contains the said section.4. The only issue before us is whether the petition under Section 34 of the Arbitration Act is maintainable before a court in India, and in this case, the Bombay High Court.5. On 28.09.2000, the appellant entered into an agreement with the respondent for a supply of large format projection systems for cinema theatres to be installed in theatres all across India. Clause 14 of the agreement contained an arbitration clause which reads asAgreement shall be governed by and construed according to the laws of Singapore, and the parties attorn to the jurisdiction of the courts of Singapore. Any dispute arising out of this master agreement or concerning the rights, duties or liabilities of E-City or Imax hereunder shall be finally settled by arbitration pursuant to the ICC Rules of Arbitration.On 16.06.2004, the appellant filed a request for arbitration with the ICC, and claimed damages. On 08.10.2004, the ICC i.e. the chosen arbitral forum fixed London as the place of arbitration i.e. the juridical seat of arbitration, after consulting the parties.FIRST PARTIAL FINAL AWARD7. On 11.02.2006, the first partial final award was made in favour of the appellant declaring that the respondent was in breach of the agreement and therefore liable for damages. The award stated that the decision on the other issues, including damages/costs would be reserved for a future award.8. The aforementioned declaration was made after observing in the award that the court of the ICC had decided to fix London as the juridical seat of arbitration in accordance with the powers vested in the court under Article 14(1) of the ICC Rules. The observation read aswell be noticed, no provision was made for a venue for any arbitration contemplated by Clause 14, but subsequently the court of the ICC decided on the 8th of October, 2004 to fix London as the juridical seat of the arbitration in accordance with the powers vested in the court under Article 14 of the ICC Rules. Accordingly, this is an arbitration to which Part-I of the English Arbitration Act 1996 applies.The appellant filed its statement of damages before the Arbitral Tribunal. The respondent filed its statement of defence.10. On 05.09.2006 the respondent objected that the appellant has no legal status and the law firm representing them is not authorized to pursue the arbitration. In that application, the respondent stated asseat of this arbitration is London. Therefore, English law determines the effect of any want of capacity suffered by "Imax Ltd" under the Canadian law as a result of its amalgamation into Imax Corporation with effect from 1st January,PARTIAL FINAL AWARD11. On 24.08.2007, the Arbitral Tribunal passed the second partial award rejecting the above objection filed by the respondent. By this award, the tribunal determined the quantum of damages payable to the appellant. This award was also made in London, the juridical seat of this arbitration. A sum of $9,406,148.31 was awarded to the appellant.THIRD FINAL AWARD12. The Arbitral Tribunal passed a final award on 27.03.2008 on the issue of interest and costs. A sum of $1,118,558.54 by way of interest and a further sum of $2,512.60 per day from 01.10.2007 until the payment of the award was awarded in favour of the appellant. Sums of $400,000 and $384,789.21 by way of costs of arbitration fixed by the ICC and costs by way of attorneys fees, expert fees and related expenses were also directed to be paid. Final award dated 27.03.2008 was received by the respondent on 01.04.2008.The final award on the issues of interest and costs was amalgamated with the earlier awards, both of which were incorporated by reference into itself. The third final award also stated that the place of arbitration is London.PETITION UNDER SECTION 34 BEFORE THE BOMBAY HIGH COURT13. On 21.07.2008, the respondent challenged the aforesaid awards under Section 34 of the Arbitration Act before the Bombay High Court in India after a period of more than two years from the first partial award, more than one year from the second partial award and a period of 3 months, 24 days from the final award.14. The learned Single Judge allowed the notice of motion on the condonation of delay and held that the petition under Section 34 was maintainable before the Bombay High Court.Hence, this appeal.

Reasoning:
15. The only question that arises for consideration before us is whether the challenge to the award made by the respondent under Section 34 of the Arbitration Act is maintainable before a court in India. Clearly, if the answer is in the negative it is not necessary to decide the question of delay. Thus, we make it clear that we are not deciding where else in the world a challenge to the award would benoted the above submissions and statements made by the parties, we propose to decide the question on the construction of Clause 14 and the law governing such challenges.In this case, there is an express choice of the law governing the contract as a whole i.e. Singaporean Law.There is an express agreement that any arbitration would be governed by the ICC Rules of Arbitration. The general principle is that, in the absence of any contradictory indication, it shall be presumed that the parties have intended that the proper law of contract as well as the law governing the arbitration agreement is the same as the law of the country in which the arbitration is agreed to be held.Here, an express choice has been made by the parties regarding the conduct of arbitration, i.e., that a dispute shall be finally settled by arbitration according to the ICC Rules of Arbitration. The parties have not chosen the place of arbitration. They have simply chosen the rules that will govern the arbitration, presumably aware of the provision in the rules that the place of arbitration will be decided by the ICC vide Article 14(1) of the ICC Rules. The ICC having chosen London, leaves no doubt that the place of arbitration will attract the law of UK in all matters concerning arbitration.arbitration.24. Dr. Singhvi rightly submitted that the decisions of the court in Sakuma Exports Ltd. v. Louis Dreyfus Commodities Suisse Sa, (2015) 5 SCC 656 , Harmony Innovation Shipping Ltd. v. Gupta Coal India Ltd., (2015) 9 SCC 172 , and Reliance Industries Ltd. v. Union of India, (2014) 7 SCC 603  do not help the appellant in view of the main difference between the abovementioned cases and the present one i.e. in all these cases, the parties had specifically agreed that the seat of arbitration will be London. The arbitration clause in these cases itself specified the seat to be at London. In Reliance Industries Ltd. (supra), the agreement that the seat of arbitration would be London was incorporated in the final partial award.However, as we shall see the agreement to have the arbitration conducted by the ICC and the choice of London as the seat of arbitration has made no material difference for the purpose of exclusion of Part-I.The relevant clause in these cases was undoubtedly different in that the seat of arbitration outside India was specified in the clause itself. However, we have found that the relevant clause in the present case had the effect of an agreement to have the seat of the arbitration outside India, as chosen by the ICC and agreed to by the parties.25. We find that in the present case, the seat of arbitration has not been specified at all in the arbitration clause. There is however an agreement to have the arbitration conducted according to the ICC rules and thus a willingness that the seat of arbitration may be outside India. In any case, the parties having agreed to have the seat decided by the ICC and the ICC having chosen London after consulting the parties and the parties having abided by the decision, it must be held that upon the decision of the ICC to hold the arbitration in London, the parties agreed that the seat shall be in London for all practical purposes. Therefore, there is an agreement that the arbitration shall be held in London and thus Part-I of the Act should be excluded.On a true construction of Clause 14 in this case, there is no doubt the parties have agreed to exclude Part-I by agreeing that the arbitration would be conducted in accordance with the ICC Rules. The parties were undoubtedly conscious that the ICC could choose a venue for arbitration outside India. That in our view is sufficient to infer that the parties agreed to exclude Part-I. The ICC could well have chosen a venue in India. The possibility that ICC could have chosen India is not a counter indication of this inference. It could also be said that the decision to exclude the applicability of Part-I was taken when the ICC chose London after consulting the parties. Either way Part-I was excluded.The significant determinant in each case is the agreement of the parties as to the place of arbitration and where in fact the arbitration took place.If in pursuance of the arbitration agreement, the arbitration took place outside India, there is a clear exclusion of Part-I of the Arbitration Act. In the present case, the parties expressly agreed that the arbitration will be conducted according to the ICC Rules of Arbitration and left the place of arbitration to be chosen by the ICC. The ICC in fact, chose London as the seat of arbitration after consulting the parties. The arbitration was held in London without demur from any of the parties. All the awards i.e. the two partial final awards, and the third final award, were made in London and communicated to the parties. We find that this is a clear case of the exclusion of Part-I vide Eitzen Bulk A/S (supra), and the decisions referred to and followed therein.In view of the foregoing observations, we find that the High Court committed an error in observing that the seat of arbitration itself is not a decisive factor to exclude Part-I of the Arbitration Act.