EITZEN BULK A/S versus ASHAPURA MLNECHEM LTD. & ANR.
[2016] 2 S.C.R. 634, Supreme Court of India, 2016
Outcome: Disposed off
Segment: Facts
A 
B 
c 
(2016) 2 S.C.R. 634 
EITZEN BULK A/S 
v. 
ASHAPURA MlNECHEM LTD. & ANR. 
(Civil Appeal No. 5131-33 of2016) 
MAY 13, 2016 
[FAKKIR MOHAMED IBRAHIM KALIFULLA 
AND S.A. BOBDE, JJ.] 
Arbitration and Conciliation Act, 1996 -Part I -Foreign award, 
where arbitration is not held in India and is governed by foreign 
law - Enforcement -Application of Part I of the Act to the Foreign 
award - Held: Where the parties choose a juridical seat of Arbitration 
outside India and provide that the law which governs Arbitration 
would be a lmv other than Indian lmv Part I of the Act would not 
have any application - Mere choosing of the juridical seat of 
D Arbitration attracts the law applicable to such, location - 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 - On facts, dispute between the parties arising out of 
contract of affreightment - By arbitration clause, the parties chose 
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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 lm1• applicable to Arbitration - Thus, the award 
debtor not entitled to challenge the award by raising objections u/ 
s. 34 before a court in India - Proceedings uls. 34, dismissed as 
untenable - Judgment of the High Court enforcing the Foreign 
Award under Part II of the Act is correct and upheld. 
Disposing of the appeals, the
Court 
HELD: 1.1 The clause 28, Arbitration Clause in the Contract 
evinces such an intention by providing that the English Law would 
apply to the Arbitration. The clause expressly provides that Indian 
Law or any other law would not apply by positing that English 
Law would apply. The intention is that English Law would apply 
to the resolution of any dispute arising under the law. This means 
that English Law would apply to the conduct of the Arbitration. It 
must also follow that any objection to the conduct'of the Arbitration 
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EITZEN BULK A/S v. ASHAPURA MINECHEM LTD. & ANR. 
or the Award would also be governed by English Law. Clearly, 
this implies that the challenge to the Award must be in accordance 
with English Law. There is thns 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. It may be noted that the 
Arbitration and Conciliation Act, 1996 makes no provision for 
Uinpires 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 iustaut Arbitration proceedings. 
[Para 27] [643~B-E] 
1.2 By Clause 28, the parties chose to exclude the application 
of Part I to the Arbitratiou proceedings between them by choosing 
Loudou as the venue for Arbitration and by makiug Euglish law 
applicable to Arbitration. It is well settled 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 before a Court 
in Iudia. A Court in India could not have jurisdiction to eutertain 
such objections under Section 34 in such a case. 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. [Paras 32, 33) [647-C-E) 
1.3 The judgment of the Gujarat High Court holding that, 
award debtor's objectioris under Section 34 of the Act are tenable 
before a Court in India that is the Court in Gujarat is contrary to 
law. The proceedings under Section 34, which occurs in Part I, 
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SUPREME COURT REPORTS 
[2016] 2 S.C.R. 
A are dismissed as untenable. The judgment of the Bombay High 
Court enforcing the Foreign Award under Part II of the Arbitration 
Act is correct and upheld. [Para 34] [648-D-E] 
B 
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D 
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F 
Bhatia International v. Bulk Trading SA. and another 
2002 (2) SCR 411:(2002) 4 SCC 105; Union of India 
v. Reliance Industries Limited and others 2015 (10) SCR 
85:(2015) 10 SCC 213; Harmony Innovation Shipping 
Limited v. Gupta Coal India Limited and another 2015 
(2) SCR 697:(2015) 9 SCC 172; Ba/co v. Kaiser 
Aluminium Technical Services Inc. 2012 (12) SCR 
327:(2012) 9 SCC 552; Reliance Industries Limited and 
another v. Union of India 2014 (6) SCR 456 : 2014 (7) 
sec 603 - referred to. 
Case Law Reference 
2.0!12 (2) SCR 411 
referred to 
Para25 
2_01~ (10) SCR 85 
referred to 
Para25 
2_0,5 (2) SCR 697 
referred to 
Para 25 
2012 (12) SCR 327 
referred to 
Para 25 
2014 (6) SCR 456 
referred to 
Para 28 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 5131-
33 OF 2016. 
From the Judgment and Order dated 22.09.2010 of the High Court 
of Gujarat at Ahmedabad in SCA No. 12021/2009, 22.09.2010 in LPA 
No.2469/2009, 22.09.2010 in CA No. 13324/2009. 
WITH 
C. A. Nos. 5136, 5134-35 of2016 
CC Nos. 3266 and 3382 of2013 
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Siddharth Dave, Ms. Jemtiben Ao, Senthil Jagadeesan, E. C. 
Agrawala, Ms. Jyoti Mendiratta for the appearing parties. 
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The Judgment of the Court was delivered by 
S. A. BOBDE, J. I. Leave granted in SLP (C) Nos}210-2212/
20 II, SLP (C) Nos.3959/2012 and SLP (C) No. 7562-7563/201.6.
EJTZEN BULK A/S v. ASHAPURA MJNECHEM LTD. & ANR. 
rs. A BOBDE, J. l 
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 India to China. The Charter party contains an Arbitration 
Clause as follows:-
"Clause No. 28 
Any dispute arising under this C. 0.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, 0001- (fifty thousand) the Arbitration shall be 
conducted in accordance with the Small Claims Procedure of 
the L.MA.A. " 
(emphasis supplied) 
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3. Disputes having arisen between the parties, the matter was 
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referred to Arbitration by a sole Arbitrator. The Arbitration was held in 
London according to English Law. Ashapura l'v!inechem was held liable 
and directed to pay a sum of 36,306, 104 US$ together with compound 
interest at the rate of3.75 % per annum. In addition
they were directed 
to pay 74, 13 5 US$ together with compound interest at the rate of3. 75% 
per annum and another sum of90,233.66 Pounds together with compound 
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interest at the rate of 2.5% per annum vide Award of the Sole Arbitrator 
dated 26.5.2009. 
Proceedings in Gujarat 
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 
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SUPREME COURT REPORTS 
[2016] 2 S.C.R. 
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withdrawn on 2.7.2009. 
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5. In London, Mr. Tim Marshal, who was appointed as Arbitrator, 
held that Ashapura was in repudiatory breach and awarded Eitzen Bulk 
an amount of36,306, 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 Disttict Judge, Jamnagar for 
setting aside the Foreign Award made in London. A Misc. Civil 
Application No. 10112009 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 in various jurisdictions have held the Award to be enforceable as 
a judgment of the Court. 
8. On 14'" July, 2009, the appellant filed proceedings in Netherlands 
Court seeking a declaration that the award dated 26'" 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 17'" March, 2010. 
9. On 24'" July, 2009, the United States District Court for Southern 
State ofNew York declared the award dated 26'" May, 2009 enforceable 
as a judgment of that court. The proceedings filed by the appellant were 
contested by the respondent. 
10. On 27"' July, 2009, the appellant filed present proceedings under 
Sections 47 to 49 of Part II of the Arbitration Act for enforcing the 
award dated 26'" 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 29"' July, 2009, the Antwerp Court declared the award dated 
26'" May, 2009 enforceable as a judgment of the Court. The said 
proceedings were contested by the respondent. On 3"' August, 2009,
EITZEN BULK A/S v. ASHAPURA MINECHEM LTD. & ANR. 
rs. A. BOBDE, J.l. 
the English High Court declared the award dated 26'' 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. l 0.2009. 
13. Eitzen however questioned the very jurisdiction ofa 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 
Judge at Jam-Khambhalia from adjudicatingAshapura's application under 
Section 34 of the Arbitration and Conciliation Act, 1996 againsttheForeign 
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 of2009 challenging the Order of the learned 
Single Judge dated 20.11.2009. The DivisioQ Bench which heard the 
appeal has held by Judgment and Order dated 22. 9.20 I 0, 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 ofSLP (C) Nos. 2210-
2212 of2011 filed by Eitzen. 
Proceedings in l\iaharashtra 
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15. On 27.7.2009, Eitzen filed Arbitration Petition No. 561/2009 
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[2016] 2 S.C.R. 
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under Sections 4 7 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 
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Arbitration Act has no application to a Foreign Award made in London 
under English Law. The petition for enforcement of a Foreign Award 
was accompanied by Notice of Motion No. 3143 of2009 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 
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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 
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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. l 0.2011 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, 
E 
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 of2012. 
18. The learned Single Judge of the Bombay High Coart has allowed 
Arbitration Petition No. 56 l of2009 of Eitzen for enforcing the Foreign 
F 
Award dated 26.5.2009. 
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 
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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 eidended. 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. 
H 
20. The High Court has also rejected the contention of Ashapura
EITZEN BULK A/S v. ASHAPURA MINECHEM LTD. & ANR. 
(S. A. BOBDE, J.] 
under Section 42' of the Arbitration Act, rightly; that since an application 
under Section 34 of the Arbitration Act, which is an application 
contemplated by Part I ofthe;_rbitration 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 
a_lone. This contention was rejected by the High Court on the ground 
that Section 42 occurs in Patt 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 
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 1 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 ofSLP(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 of2009 is under challenge in appeal arising outofSLP (C) No. 
3959 of2012. 
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 of2010 
before the Bombay High Court. Ashapura has raised similar objection to 
the enforcement of the Foreign Award by way ofNotice of Motion. By 
1 Notwithstanding anything contained else\vhere in this Part or in any other law for the 
time being in force, where \vith 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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[2016] 2 S.C.R. 
Notices of Motion Nos. 2390 and 2444of2012 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 of2013] 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 
D 
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 
E . Court in Bhatia International v. Bulk Trading S.A. and another' 
and two recent decisions of this
Court in Union of India v. Reliance 
Industries Limited and others' and Harmony Innovation Shipping 
Limited v. Gupta Coal India Limited and another'. We have not 
considered the decision in the Balco v. Kaiser Aluminium Technical 
Services Inc.' since the decision in that case does not govern Arbitration 
F 
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". 
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It further stipulates that English Law to apply. The parties have thus 
clearly intended that the Arbitration will be conducted in accordance 
'(2002J 4 sec 105 
'(2015) 10 sec 213 
'(2015)9SCC 172 
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'(2012) 9 sec 552
EITZEN BULK A/S v. ASHAPURA MINECHEM LTD. & ANR. 
rs. A. BOBDE, 1.1 
with English Law and the seafoftheArbitration will be at London. 
27. The question is whether the above stipulations show the intention 
of th" 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 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 Lawwill 
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 th"Y 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 1 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 
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 India', 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 
'2014 (7) sec 603 
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specifically approved by this Court in Ba/co and reiterated in 
Enercon. In C v. D, the Court of Appeal has observed: (Bus 
LR p. 851, para 16) 
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"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 
;udicial 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 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 jurisdictio11 a11d a party aggrieved by a11other part of an 
award could proceed in another jurisdiction. Similarly, i11 the 
case of a single complaint about an award, it could not be 
supposed that the aggrieved party could complain in one 
;urisdiction and the satisfied party be entitled to ask the other 
;urisdiction to declare its satisfaction with the award. There 
would be a serious risk of parties rushing to gel the first 
;udgment 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, Quee11 's Bench Division, 
Commercial Court (England) in Sulamerica Cia Nacional de 
Seguros.SA v. Enesa Enge/haria SA -
Enesa. In laying down
EITZEN BULK A/S v. ASHAPURA MJNECHEM LTD. & ANR. 
rs. A. BOBDE, J.l 
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 Courts supervisory 
;urisdiction 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 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 
"<igreement 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 
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SUPREME COURT REPORTS 
[2016) 2 S.C.R. 
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 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 1 itigation and 
(what is worse) confusion"'. 
3 I. 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 Indnstries Limited and others in para I 8 as 
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follows:-
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"18. It is important to note that in para 32 of Bh"atia 
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 
iudgments 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 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 
-----
H 
'C vs. D (2008 Bus LR 843)
EITZEN BULK A/S v. ASHAPURA MINECHEM LTD. & ANR. 
[S. A. BOBDE, J.] 
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 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 s)lecify 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 
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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 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 03.12.4015 
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 NS, 
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 of2016 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 .... of2016 
[CC No. 3382 of2013 -filed by Ashapura Minechem Ltd.] is rejected. 
No costs. 
Nidhi Jain 
Appeals disposed of.