1. Court, year: Supreme Court of India, 2002.
2. Bench: 3 judges’ bench (before G.B. PATTANAIK, S.N. PHUKAN, S.N. VARIAVA)
3. Judgment delivered: Justice S.N. VARIAVA
4. Provisions of the arbitration and conciliation act, 1996: Part 1 and 2 sections 9, 17, 2(2), (3), (4), (5),2(1)(f), (e), (a),2(7), 28 and 36.
5. International law: article 23 of ICC rules, article 1(2) of UNCITRAL model.
6. The impugned government notification: the appeal against the judgment passed by Madhya Pradesh High Court.
7. Other judgments.
   1. Corocraft ltd v. pan American railways1 – court held that courts are therefore held as finishers, refiners, and polishers of legislation which comes to them in a state requiring varying degrees of further proceeding.
   2. National thermal power corporation v. singer co2. – if part 1 was not to apply to an arbitration which takes place outside India there would be no necessity to specify that the rules are to apply “where the place of

arbitration is situate in India” according to section 28 of the act.

8. Issues of the case
   1. Whether part 1 of the arbitration and conciliation act, 1996 is applicable to international commercial arbitrations situated outside India?
   2. Whether section 2(2) is applicable where the place of arbitration is outside India?
   3. Whether the high court have authority to entertain applications where arbitration which took place outside India?
   4. Whether interim measure according to section 9 can be made in Indian courts?
9. Brief decision: The supreme court held that, part 1 applies also to international commercial arbitrations which takes place out of India unless the parties by an agreement express or implied exclude the provisions of the said act. Theres no

lacune/ gap in the said act, the interpretation by the court is the party should not be left remedy less.

1 (1968)3 WLR 714: (1969) 1 QB 616: (1968) 2 ALL ER 1059

2 (1992)3 SCC 551

10. Facts of the case:

• Appellant entered a contract containing an arbitration clause, that arbitration should be according to the rules of international chamber of commerce (ICC).
• Arbitration was in Paris, France, ICC appointed a sole arbitrator.
• The first respondent according to section of the arbitration and conciliation act, 1996, filed an application before III additional district judge, appellant stated that part 1 is not applicable outside India and the application was dismissed.
• The appeal was preferred to Madhya Pradesh high court, the court held that part 1 is applicable to arbitration outside India, aggrieved preferred an appeal to

supreme court.

Brief discussion of the judgment:

• From the appellants side counsel, the provisions of the act is applicable to arbitrations within the territory of India and not to the place outside India. According to section 2(2) part 1 applies where place of arbitration is in India. According to sub section 2(4) which talks about the part applies to every arbitration and sub section 2(5) the part

shall apply to all arbitrations lead to a conflict with section 2(2). It is to the court to interpret the true intention of the legislature if a provision is open to more than one interpretation.

• According to section 5 of the act the judicial intervention should be minimal, unless it is provided by the act.
• According to the respondents counsel, where the court relied on stated that section 2(1)(a) defines arbitration means any arbitration whether or not administered by a

permanent arbitral institution. So, arbitration could be a body which includes Indian chamber of commerce or international chamber of commerce.

• Also according to section 2(e) the definition of court doesn’t exclude international commercial arbitration. Hence ouster of jurisdiction cannot be implied has to be expressed.
• The main essence of the judgment is section 2(2) of the act is not providing that part 1 will “ONLY” apply where the place of arbitration is in india. The intention of the

legislature was to make provision of part 1 compulsorily applicable to international

commercial arbitration which takes place in India but if there is any agreement part 1will not apply.

• And sub section (4) and (5) are not made subject to sub section (2) of section 2. Sub section (5) is made subject to subsection (4).
• As the legislature had the intention to apply part 1 in international commercial

arbitrations, the term “judicial authority” is used instead of the word “court” in section 5 and 8.

• Also the article 1(2) of UNCITRAL model is not applied in part 1 because it only applies to that particular territory. Significantly in section 2(2) the word “ONLY” is omitted.

Conclusion:

From the above judgment we can understand that part 1 place of arbitration is not restricted to only India, the legislature’s intent was to apply the whole act to international commercial arbitrations outside India and the party should not be left remedy less, the Indian courts can intervene and pass interim measures. Parties are at liberty to choose expressly or impliedly the law and procedure to be made applicable.

Author: M.Syamala