Petitioner- Bharat Aluminium Co.
Defendant- Kaiser Aluminium Technical Services
2010 1 SCC 72
Statutes referred-
The Indian Contract Act
Conciliation Act, 1996
Arbitration Act, 1996
Recognition and Enforcement Act, 1961
Foreign Awards Act
Cases Referred:
Bhatia International Vs Bulk Trading S.A. & Anr. 2002 4 SCC 105
ONGC Vs Western Company of North America (21)
Facts of the Case
- An agreement was made on 22 april 1993, between BALCO and Kaiser, under which it was stated that Kaiser has to supply and install a computer at the BALCO’s premises.
- According to the arbitration point in the agreement, if any kind of dispute arises, the proceedings will be held in London under English law. Further, the agreement says that governing law under the agreement will be Indian law. But the arbitration proceeding will still be held under English law.
- Then dispute arised refering the arbitration in England. In England, the tribunals has passed two awards which sought to be challenged in india under section 34 of the act in the lower court and after rejected appeals in the higher courts the petitioner has appealed to the apex court that is the supreme court.
- Then finally the appeal filed by BALCO before the divisional bench of supreme court that was placed for hearing in front of three judges bench, and one of the judge in the divisional bench found that the judghment in 5. Bhatia international and venture global was totally unsound but the judge disagreed with that observation.
Issues Raised
- Firstly, the judgments shall be applicable prospectively under the arbitration agreements.
- The situation has been contemplated, that whether the parties have been provided for a particular place of arbitration or not. And after some proceedings conducted in other territories as may be convenient to all or not.
- No interim relief under section 9 of the act has been provided. Whether the court tribunals are not enforceable in india and if the foreign remedies be applicable.
- Article-17 and Article-22 were challenged in the above case.
Parties Contention
Petitioner-
- BALCO has appealed that the decisions that were made outside the Indian territory will not be acceptable by him. As the london arbitration tribunal has passed two awards of the case which come under the jurisdiction of Indian law or Indian law system.
Defendant
- Kaiser has taken plea that the proceedings will held at the London courts following the English law and the awards that were removed by the London tribunal were appropriate and should be considered according to the English law only.
Judgement
- The court held that Article-22 is providing the proper law of contract under Indian law. Further they held that Article-17 under English law should be applicable to arbitration agreement but afterwards it would be impractical and inconvenient to interpret Article 22 to mean that Indian law wuld be substantive law governing the contract but only in case of arbitration, English law would govern.
- Therefore, the court found that English law was the only law which is applicable to the arbitration agreement. So, in the light of the same, the court upheld the decision of the high court and also dismisses the section-34 applications.
Rule of Law
The basic rule of law was applied here that the constitutionality laws were against the contemporary laws that might fall under the evidential laws.
Conclusion
To conclude the above case, the court has appropriate decision by upholding the decision of high court that English law should be followed by the arbitration tribunals. With that article-17 and 22 should be interpreted with all the articles.
By Krishna Das