Holding

Indian law governs the arbitration agreement, and Indian courts have jurisdiction under Section 11(6) of the Arbitration and Conciliation Act, 1996 to appoint a sole arbitrator.

Summary

Disortho S.A.S., a Colombian company, and Meril Life Sciences, an Indian company, entered an International Exclusive Distributor Agreement for medical products in Colombia. Clause 16.5 of the agreement states that Indian law governs the contract and Gujarat courts have jurisdiction, while Clause 18 provides for conciliation and arbitration in Bogota under the local Chamber of Commerce, with the award to be governed by Colombian law. Disortho filed an arbitration petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of arbitrators, and Meril contested Indian courts' jurisdiction, arguing that the arbitration clauses did not confer such jurisdiction. The Supreme Court applied the three‑step Sulamérica test, found no express choice of law for the arbitration agreement, inferred an implied choice of Indian law (lex contractus), and held that the mere venue of Bogota did not override this presumption. Consequently, Indian law governs the arbitration agreement, giving Indian courts jurisdiction to appoint a sole arbitrator, and the parties consented to conduct the arbitration in India under Delhi International Arbitration Centre rules. The petition was allowed, a sole arbitrator was appointed, and the arbitration was ordered to proceed in India.

Issues considered

The applicability of Section 11(6) of the Arbitration and Conciliation Act, 1996 to the trans‑border arbitration agreement.
Which law governs the arbitration agreement – Indian law or Colombian law?
Whether the venue clause designating Bogota constitutes a seat of arbitration that would place the arbitration outside Indian jurisdiction.
Whether an implied choice of law can be inferred in the absence of an express choice in the arbitration clause.
Whether Indian courts have jurisdiction to appoint arbitrators under the agreement.

Legislation cited

Arbitration and Conciliation Act, 1996s. 11(6)

Headnote

Issue for Consideration Law governing the arbitration agreement in the present case. Headnotes† Arbitration and Conciliation Act, 1996 – s.11(6) – International Commercial Arbitration – Petitioner is a company incorporated in Bogota, Colombia – Respondent is in Gujarat, India – International Exclusive Distributor Agreement executed between parties for distribution of medical products in Colombia – Disputes emerged – Petition u/s.11(6) of the Arbitration and Conciliation Act, 1996, for appointment of an arbitral panel in terms

Subjects

International Commercial ArbitrationTrans-border arbitrationThree-fold testLaw governing the arbitration agreementExpress choice of lawImplied choiceClosest and most real connectionBogota, ColombiaCompany incorporated in Gujarat, IndiaInternational Exclusive Distributor AgreementDelhi International Arbitration Centre attached to the High Court of DelhiLex contractusLex arbitriLex fori

Judgment

[2025] 3 S.C.R. 1555 : 2025 INSC 352

Disortho S.A.S.
v.
Meril Life Sciences Private Limited
(Arbitration Petition No. 48 of 2023)
18 March 2025
[Sanjiv Khanna,* CJI, Sanjay Kumar and
K.V. Viswanathan, JJ.]

Issue for Consideration
Law governing the arbitration agreement in the present case.

Headnotes†
Arbitration and Conciliation Act, 1996 – s.11(6) – International
Commercial Arbitration – Petitioner is a company incorporated
in Bogota, Colombia – Respondent is a company incorporated
in Gujarat, India – International Exclusive Distributor Agreement
executed between parties for distribution of medical products
in Colombia – Disputes emerged – Petition u/s.11(6) of the
Arbitration and Conciliation Act, 1996, for appointment of an
arbitral panel in terms of Clauses 16.5 and 18 of the Distributor
Agreement, opposed by the Respondent on jurisdictional
grounds, contending that these clauses do not grant Indian
Courts jurisdiction to appoint arbitrators:
Held: Applying the three-step test developed by Sulamérica
Cia, neither Clause 16.5 nor Clause 18 explicitly stipulates the
governing law of the arbitration agreement – The next step of the
test involves identifying the parties' implied choice of law for the
arbitration agreement – There is a strong presumption that the lex
contractus, i.e., Indian law, governs the arbitration agreement –
This presumption may be displaced if the arbitration agreement is
rendered non-arbitrable under Indian law – But that is not the case
here – Furthermore, the mere choice of ‘place’ is not sufficient, in
the absence of other relevant factors, to override the presumption in
favor of the lex contractus – In this case, it is important to note that
no seat of arbitration has been explicitly chosen – In conclusion, at
this second stage of the inquiry, it is found the parties have impliedly
agreed that Indian law governs the arbitration agreement, and the
controversy can be resolved accordingly – Applicability of the A&C
* Author
1556 [2025] 3 S.C.R.

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Act u/s.11(6) of the Arbitration and Conciliation Act, affirmed – In
accordance with Clause 16.5 and 18, the procedural rules of the
arbitration would be the rules of the Conciliation and Arbitration
Centre of the Chamber of Commerce of Bogota DC, with Bogota
DC as the venue of arbitration – However, the parties unanimously
stated that, should the present application under Section 11(6) of
the Arbitration and Conciliation Act, 1996, be allowed, the parties
are agreeable to the arbitration being held in India – Parties also
consented to the appointment of a sole arbitrator to adjudicate
and decide the disputes in question – Sole arbitrator appointed –
Venue of the arbitration be decided mutually by the parties and the
arbitrator – Arbitration shall be governed by the rules applicable
to the Delhi International Arbitration Centre attached to the High
Court of Delhi. [Paras 31-33, 35]

Arbitration and Conciliation Act, 1996 – Three-fold test to
determine the law governing the arbitration agreement as laid
down in Sulamérica Cia case:
Held: Sulamérica Cia observed that the law governing the arbitration
agreement may differ from the law of the contract – However, it
is reasonable to presume that the parties intended for their entire
relationship to be governed by the same system of law throughout
the contract – In this context, a distinction is made between a
stand-alone arbitration agreement and one that is embedded within
a contract – In the former, a choice of seat of arbitration becomes
highly significant, and the law of the seat would likely govern the
arbitration agreement – However, when the arbitration agreement
forms part of a contract, the express choice of a lex contractus
strongly indicates the parties' intention – It would generally be
inferred that the arbitration is governed by the same law as the
substantive contract – However, this presumption is rebuttable –
Even when the arbitration agreement is part of the contract, the
court must conduct a three-step inquiry: first, looking at the express
choice of law; second, considering any implied choice; and third,
determining the closest and most real connection – Second step
is applied when the first step is negative, and the third step is
applied when the first and second steps are negative. [Para 16]

Trans-border arbitration – Appropriate test to determine
jurisdiction – Divergence of opinion, internationally and
domestically:
[2025] 3 S.C.R. 1557

Disortho S.A.S. v. Meril Life Sciences Private Limited

Held: The divergence stems from the interaction between three
distinct legal systems which come into play when a dispute occurs:
(i) lex-contractus, the law governing the substantive contractual
issues; (ii) lex arbitri, the law governing the arbitration agreement
and the performance of this agreement; and (iii) lex-fori, the law
governing the procedural aspects of arbitration – These legal
systems may either differ or align, depending on the parties’
choices – Furthermore, there may be internal splits within these
legal systems, such as for lex arbitri. [Para 3]

Case Law Cited
M/s. Arif Azim Co. Ltd. v. M/s. Micromax Informatics Fze, 2024
INSC 850 : [2024] 11 SCR 1142; Group of Companies Doctrine,
Cox and Kings Ltd. v. SAP India Pvt. Ltd. and Another, 2023
INSC 1051 : [2023] 15 SCR 621; BALCO v. Kaiser Aluminium
Technical Services Inc. [2016] 1 SCR 364 : (2016) 4 SCC 126;
Bhatia International v. Bulk Trading S.A. and Another [2002] 2
SCR 411 : (2002) 4 SCC 105; Mankastu Impex Private Limited v.
Airvisual Limited [2020] 4 SCR 565 : (2020) 5 SCC 399; Enercon
(India) Ltd. v. Enercon GmbH [2014] 2 SCR 855 : (2014) 5
SCC 1 – referred to.
Melford Capital Partners (Holdings) LLP and Others v. Frederick
John Wingfield Digby [2021] EWHC 872 (Ch); Paul Smith Ltd. v.
H&S International Holdings Inc. [1991] 2 Lloyd’s Rep 127; Ace
Capital Limited v. CMS Energy Corporation, 2008 EW SC 1843
Comm; Enka Insaat Ve Sanayi AS v. OOO Insurance Company
Chubb, 2020 UK SC 38; Sulamérica Cia Nacional De Seguros S.A.
and Others v. Enesa Engenharia S.A. and Others [2012] EWCA
Civ 638; Anupam Mittal v. Westbridge Ventures II Investment
Holdings [2023] SGCA 1; BYC v. BCZ [2016] SGHC 249; BNA v.
BNP and Another [2019] SGCA 84; Braes of Doune Wind Farm
(Scotland) Ltd. v. Alfred McAlpine Business Services Ltd. [2008]
EWHC 426; C v. D [2007] EWCA Civ 1282; Roger Shashoua
(1) v. Sharma [2009] EWHC 957 (Comm); Arnold v. Britton, 2015
AC 1619 – referred to.

Books and Periodicals Cited
Hugh Beale, Chitty on Contracts, Sweet and Maxwell, Vol. 1, 33rd
Ed. (2019).
1558 [2025] 3 S.C.R.

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List of Acts
Arbitration and Conciliation Act, 1996.

List of Keywords
International Commercial Arbitration; Trans-border arbitration;
Three-fold test; Law governing the arbitration agreement; Express
choice of law; Implied choice; Closest and most real connection;
Bogota, Colombia; Company incorporated in Gujarat, India;
International Exclusive Distributor Agreement; Delhi International
Arbitration Centre attached to the High Court of Delhi; Lex
contractus; Lex arbitri; Lex fori.

Case Arising From
CIVIL ORIGINAL JURISDICTION: Arbitration Petition No. 48 of 2023
Under Section 11(6) of the Arbitration and Conciliation Act, 1996

Appearances for Parties
Advs. for the Petitioner:
Preetesh Kapur, Sr. Adv., Shaunak Kashyap, Ms. Nistha Gupta,
M/S. Mitter & Mitter Co.
Advs. for the Respondent:
Nakul Dewan, Sr. Adv., Ms. Marylou Bilawala, Abinash Pradhan,
Chiranjivi Sharma, Ms. Garima Agarwal, Ms. Rubeka Himayat, Ms.
Nehal Gupta, Rohan Naik, Pranaya Goyal.

Judgment / Order of the Supreme Court

Judgment

Sanjiv Khanna, CJI

Disortho S.A.S,1 the petitioner before us, is a company incorporated
in Bogota, Colombia. The respondent, Meril Life Science Private
Limited,2 is a company incorporated in Gujarat, India. Disortho and
Meril executed an International Exclusive Distributor Agreement,3

1 Hereinafter referred to as, “Disortho”.
2 Hereinafter referred to as, “Meril”.
3 Hereinafter referred to as, “Distributor Agreement”.
[2025] 3 S.C.R. 1559

Disortho S.A.S. v. Meril Life Sciences Private Limited

dated 16th May 2016, for distribution of medical products in Colombia.
Later, disputes emerged between the parties.
2. Disortho has filed this petition under Section 11(6) of the Arbitration
and Conciliation Act, 19964, for appointment of an arbitral panel in
terms of Clauses 16.5 and 18 of the Distributor Agreement. Meril has
opposed the petition on jurisdictional grounds, contending that these
clauses do not grant Indian Courts jurisdiction to appoint arbitrators.
The clauses 16.5 and 18 read:
“16. Miscellaneous
16.5. This Agreement shall be governed by and construed
in accordance with the laws of lndia and all matter pertaining
to this agreement or the matters arising as a consequence
of this agreement with be subject to the jurisdiction of
courts in Gujarat, India.
18. Direct Settlement of Disputes
The Parties mutually agree and pact that any dispute,
controversy or claim arising during this Agreement related
to subscription, execution, termination, breach, as well
as non-contractual relationships, related to the clauses
mentioned above; They may be submitted to conciliation
in accordance with the Rules of Arbitration and Conciliation
of the Chamber of Commerce of Bogota DC., or instead.
of this city, where the Director of the Centre so determine.
Similarly, the Parties mutually agree and pact that if the
dispute or difference has not been settled in conciliation,
or to the extent that has not been resolved; it will be
committed to Arbitration by either party for final settlement
in accordance with the Arbitration and Conciliation Center
of the Chamber of Bogota DC. The Arbitral Tribunal shall
consist of one (1) arbitrator in cases of minor or no value
E according to the Rules of Conciliation and Arbitration
Center of the Chamber of Commerce of Bogota DC. Also,
in the event of greater amount, the Court of conformity shall
comply with the Regulations of the Center for Conciliation
and Arbitration of the Chamber of Commerce of Bogota

4 Hereinafter referred to as, “A&C Act”.
1560 [2025] 3 S.C.R.

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DC., With three (3) arbitrators appointed by the Centre
and by drawing lots. The arbitration will take place in
Bogota DC. On the premises of Center for Conciliation
and Arbitration of the Chamber of Commerce of Bogota
DC., or at the place where the Director of the Centre as
determined in this city. The award shall be in law and
standard will be applicable Colombian law governing
the mailer, Expenditure in the conciliation and arbitration
proceedings shall be borne equally.”
3. What initially appeared to be a straightforward question has, in fact,
become a vexed one, primarily for two salient reasons. First, there
exists a divergence of opinion, both internationally and domestically,
on the appropriate test to determine jurisdiction in a case of trans-
border arbitration. This divergence stems from the interaction
between three distinct legal systems which come into play when a
dispute occurs: (i) lex-contractus, the law governing the substantive
contractual issues; (ii) lex arbitri, the law governing the arbitration
agreement and the performance of this agreement; and (iii) lex-fori,
the law governing the procedural aspects of arbitration. These legal
systems may either differ or align, depending on the parties’ choices.
Furthermore, there may be internal splits within these legal systems,
such as for lex arbitri.5 Secondly, when contractual clauses conflict, as
is the case here, the resolution becomes legalistic and complicated.
4. In the interest of avoiding prolixity, we deem it unnecessary to
separately address each argument raised or delve into the extensive
body of jurisprudence surrounding the issue. It suffices to note that
a similar, though not in pari materia, question was examined by this
Court in M/s. Arif Azim Co. Ltd. v. M/s. Micromax Informatics
Fze.6 This judgment references earlier precedents of this Court on
the subject, and we will discuss these judgments subsequently.
5. We begin by referring to Redfern and Hunter’s Commentary on
International Arbitration.7 Chapter 7, titled “Agreement to Arbitrate”,

5 Lex arbitri might be split into two components if the parties so desire – (i) law governing the agreement
to arbitrate or the proper law of arbitration and (ii) the law governing the arbitration. While the former
relates to validity, scope and interpretation of the arbitration agreement, the later refers to the supervisory
jurisdiction exercised by the courts. We will refer to this split later in this judgment.
6 2024 INSC 850.
7 Blackaby KC, Nigel, Constantine Partasides, and Alan Redfern, Redfern and Hunter on International
Arbitration, 7th Edition (2022), Oxford University Press.
[2025] 3 S.C.R. 1561

Disortho S.A.S. v. Meril Life Sciences Private Limited

emphasizes the cardinal importance of parties’ chosen law. It is stated
that the law governing the arbitration agreement sets the rules and
norms that determine the validity, scope, and interpretation of the
agreement. This chosen law assumes paramount significance when
disputes arise concerning the tribunal’s jurisdiction. For instance,
disputes related to actions in rem may not be arbitrable in India but
arbitrable in another jurisdiction. Additionally, it determines whether
the arbitration agreement extends to third parties, such as parent or
sister concerns.8 Equally, it plays a key role in determining the validity
of the arbitration agreement itself—some national laws may render the
agreement void or unenforceable, thereby affecting the arbitrability of
the dispute, while others may uphold its enforceability. Finally, this law
serves as a guiding principle when the dispute resolution mechanism
is unclear, inconsistent or when conflicting dispute resolution clauses
are bundled together in the same agreement.
6. In our opinion, the law governing the arbitration may differ from both
the lex contractus and the lex fori.9 This distinction was succinctly
brought out in the recent English High Court decision of Melford
Capital Partners (Holdings) LLP and Others v. Frederick John
Wingfield Digby.10 This decision refers to the earlier decision of
Paul Smith Ltd. v. H&S International Holdings Inc.,11 which dealt
with two conflicting clauses. One clause provided for resolution of
disputes through ICC arbitration, while the other designated the
courts of England as having exclusive jurisdiction. The conflict
between these provisions was resolved by the Steyn J. by adopted
the following analysis:
“Fortunately, there is a simple and straight forward answer
to the suggestion that cll. 13 and 14 are inconsistent.
Clause 13 is a self-contained agreement providing for the
resolution of disputes by arbitration. Clause 14 specifies
the lex arbitri the curial law or the law governing the
arbitration, which will apply to this particular arbitration.

8 See the Group of Companies Doctrine, Cox and Kings Ltd. v. SAP India Pvt. Ltd. and Another, 2023
INSC 1051.
9 This is assuming that the law governing the (i) agreement to arbitrate, and (ii) arbitration itself, are
the same, which is most often the case. As explained earlier, the former relates to validity, scope, and
interpretation of the arbitration agreement, while the later relates to inter alia the supervisory jurisdiction
by national courts.
10 [2021] EWHC 872 (Ch).
11 [1991] 2 Lloyd’s Rep 127.
1562 [2025] 3 S.C.R.

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The law governing the arbitration is not to be confused
with (1) the proper law of the contract, (2) the proper
law of the arbitration agreement, or (3) the procedural
rules which will apply in the arbitration. These three
regimes depend on the choice, express or presumed,
of the parties. In this case it is common ground that both
the contract and the arbitration agreement are governed
by English law. The procedural rules applicable to the
arbitration are not rules derived from English law. On the
contrary, the procedural regime is the comprehensive
and sophisticated ICC rules which apply by virtue of the
parties’ agreement.
What then is the law governing the arbitration? It
is, as Martin Hunter and Alan Redfern, International
Commercial Arbitration, p. 53, trenchantly explain, a
body of rules which sets a standard external to the
arbitration agreement, and the wishes of the parties,
for the conduct of the arbitration. The law governing
the arbitration comprises the rules governing interim
measures (e.g. Court orders for the preservation or
storage of goods), the rules empowering the exercise
by the Court of supportive measures to assist an
arbitration which has run into difficulties (e.g. filling
a vacancy in the composition of the arbitral tribunal if
there is no other mechanism) and the rules providing
for the exercise by the Court of its supervisory
jurisdiction over arbitrations (e.g. removing an ,
arbitrator for misconduct).
(emphasis supplied)”

7. This ratio distinguishes between four choices of law – (i) the law
governing the arbitration, (ii) the proper law of arbitration agreement,
(iii) the proper law of contract, and (iv) the procedural rules which
apply in the arbitration. These choices are either expressly provided
or implied by the parties involved. The passage also highlights the
subtle distinction between the proper law of arbitration agreement (i.e.,
law governing the agreement to arbitrate) and the law governing the
arbitration as a whole. The law governing the agreement to arbitrate
determines the validity, scope, and interpretation of the agreement.
[2025] 3 S.C.R. 1563

Disortho S.A.S. v. Meril Life Sciences Private Limited

In contrast, the law governing the arbitration itself is concerned
with determining which court has supervisory jurisdiction over the
arbitration. This jurisdictional framework pertains to the conduct of the
arbitration, the rules governing interim measures, and the provisions
under which the court may exercise its supervisory authority, such
as in the removal of arbitrators.
8. While parties may elect to differentiate between the lex arbitri — the
law governing the agreement to arbitrate and the law governing the
arbitration itself — such a distinction warrants caution. A distinction
should not be readily drawn unless the parties intended to preserve
such a distinction. Invariably, these concepts are subsumed in each
other. They are inherently intertwined as a part and parcel of the lex
arbitri. This is particularly apparent in matters such as the filling of
vacancies within the arbitral tribunal or the removal of an arbitrator
for misconduct. In these situations, the law governing the arbitration
agreement and the law governing the arbitration overlap, as both
are essential to the functioning and integrity of the arbitral process.
Consequently, unless the parties have provided otherwise, it is
prudent not to divide lex arbitri.
9. A more common distinction exists between the lex arbitri and the
lex fori, that is the governing law of arbitration and the procedure
of arbitration. The lex arbitri determines which court exercises
supervisory jurisdiction. In Melford Capital (supra), it was held that
both the contract and the arbitration agreement would be governed
by English Law but the procedural rules shall be the rules of ICC.
10. This position is also clear from the judgment of Christopher Clark, J.
in Ace Capital Limited v. CMS Energy Corporation,12 which had
examined Paul Smith (supra) to observe that the law governing the
arbitration decides the extent of the court’s supervisory jurisdiction.
Agreeing on the approach adopted in Ace Capital (supra), the
judgment in Milford Capital (supra) states that it is the appropriate
lodestar.
11. We are of the view that matters such as filling vacancies on arbitral
tribunals and the removal of an arbitrator through the exercise of
supervisory jurisdiction, in the absence of a clear mechanism within

12 2008 EW SC 1843 Comm.
1564 [2025] 3 S.C.R.

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the arbitration agreement, should be normally governed by the law
applicable to the arbitration agreement itself, rather than by the
procedural rules that govern the arbitration process. It is, after all, the
lex arbitri that governs the arbitration and its associated processes.
However, as noticed above, this may not be the position in all cases
as the mutually agreed terms may stipulate otherwise.
12. At this juncture, the pertinent question that arises is: how do we
determine the law that governs the arbitration agreement?
13. In Enka Insaat Ve Sanayi AS v. OOO Insurance Company Chubb,13
the UK Supreme Court examined this legal issue and divergent
opinions surrounding it. One line of precedents suggest that the
lex contractus should govern the arbitration agreement. Although
the arbitration agreement is separable from the main contract, it
is not completely detached from it. Conversely, there is case law
indicating that the law of the seat of arbitration should typically
govern the arbitration agreement. Enka Insaat (supra) follows the
principles stipulated in Sulamérica Cia Nacional De Seguros
S.A. and Others v. Enesa Engenharia S.A. and Others,14 which
it observes straddles both views. The Court ultimately establishes
the following principles:
“X Conclusions on applicable law
170. It may be useful to summarise the principles which in
our judgment govern the determination of the law applicable
to the arbitration agreement in cases of this kind:
i) Where a contract contains an agreement to resolve
disputes arising from it by arbitration, the law applicable
to the arbitration agreement may not be the same as the
law applicable to the other parts of the contract and is to
be determined by applying English common law rules for
resolving conflicts of laws rather than the provisions of
the Rome I Regulation.
ii) According to these rules, the law applicable to the
arbitration agreement will be (a) the law chosen by the

13 2020 UK SC 38.
14 [2012] EWCA Civ 638.
[2025] 3 S.C.R. 1565

Disortho S.A.S. v. Meril Life Sciences Private Limited

parties to govern it or (b) in the absence of such a choice,
the system of law with which the arbitration agreement is
most closely connected.
iii) Whether the parties have agreed on a choice of law
to govern the arbitration agreement is ascertained by
construing the arbitration agreement and the contract
containing it, as a whole, applying the rules of contractual
interpretation of English law as the law of the forum.
iv) Where the law applicable to the arbitration
agreement is not specified, a choice of governing law
for the contract will generally apply to an arbitration
agreement which forms part of the contract.
v) The choice of a different country as the seat of the
arbitration is not, without more, sufficient to negate an
inference that a choice of law to govern the contract
was intended to apply to the arbitration agreement.
vi) Additional factors which may, however, negate such
an inference and may in some cases imply that the
arbitration agreement was intended to be governed by
the law of the seat are: (a) any provision of the law
of the seat which indicates that, where an arbitration
is subject to that law, the arbitration agreement will
also be treated as governed by that country’s law; or
(b) the existence of a serious risk that, if governed
by the same law as the main contract, the arbitration
agreement would be ineffective. Either factor may be
reinforced by circumstances indicating that the seat
was deliberately chosen as a neutral forum for the
arbitration.
vii) Where there is no express choice of law to govern the
contract, a clause providing for arbitration in a particular
place will not by itself justify an inference that the contract
(or the arbitration agreement) is intended to be governed
by the law of that place.
viii) In the absence of any choice of law to govern the
arbitration agreement, the arbitration agreement is
governed by the law with which it is most closely connected.
1566 [2025] 3 S.C.R.

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Where the parties have chosen a seat of arbitration, this
will generally be the law of the seat, even if this differs from
the law applicable to the parties’ substantive contractual
obligations.
ix) The fact that the contract requires the parties to attempt
to resolve a dispute through good faith negotiation,
mediation or any other procedure before referring it to
arbitration will not generally provide a reason to displace
the law of the seat of arbitration as the law applicable to
the arbitration agreement by default in the absence of a
choice of law to govern it.
(emphasis supplied)”

14. The conclusions in Enka Insaat (supra) summarizes the tie breaker
rules. Sub-paragraph (i) explains that the law governing the arbitration
agreement may differ from the law governing the contract. The former
should be determined through conflict of law rules. Sub-paragraph
(ii) states that the law governing the arbitration agreement is the
law chosen by the parties. If no such choice is made, the law most
closely connected to the agreement applies. However, sub-paragraph
(ii) must be read alongside sub-paragraph (iii), which clarifies that the
law chosen for the arbitration agreement is determined by interpreting
the agreement, and if necessary, the entire contract using rules of
contractual interpretation. Sub-paragraph (iv) states that when the
law governing the arbitration agreement is not specified, the law
of the contract (lex contractus) usually applies. Sub-paragraph (v)
highlights that selecting a country for the seat of arbitration does
not automatically alter the presumption that lex contractus governs
the arbitration agreement. Sub-paragraph (vi) outlines factors that
may override this presumption. This can happen when the law of the
seat mandates that the arbitration agreement must be governed by
the law of that country. For instance, this becomes relevant in the
context of the A&C Act. Section 2(2) of the A&C Act stipulates that
Part I of the A&C Act applies to arbitrations seated in India.15 The
second exception is when there is a serious risk that the agreement
will become ineffective, or the dispute will become inarbitrable, if

15 See Arif Azmi (supra) quoted in paragraph 25 post.
[2025] 3 S.C.R. 1567

Disortho S.A.S. v. Meril Life Sciences Private Limited

governed by the same law as that of the contract.16 Third factor is
where the seat is deliberately chosen as a neutral forum. These factors
will displace the presumption in favour of lex contractus governing
the arbitration agreement. The factors mentioned in sub-para (vi) are
not exhaustive and there may be other additional factors negating
the presumption. Sub-para (vii) deals with cases where a particular
place is chosen as the venue in contrast to the seat of arbitration.
A place being chosen, does not by itself justify an inference that the
arbitration agreement is intended to be governed by the law of this
venue. Sub-para (viii) states that in the absence of any choice of
law governing the arbitration agreement, the arbitration agreement
will be governed by the law with which it is most closely connected.
The close connection test applies only when the law governing the
arbitration agreement cannot be ascertained even after applying the
earlier paragraphs. In such a case, the law applicable to the seat
of arbitration will be the law having the closest connection to the
arbitration even if it differs from the parties’ contractual obligations.17
The closest connection test and a presumption in favour of seat in
terms of sub-para (viii) will only apply when the contract does not
stipulate the lex contractus. Sub-para (ix) states cases relating to
attempt to resolve a dispute through good faith, negotiation, mediation,
etc. will not generally provide reason to displace the law of the seat
of arbitration18.
15. We believe the above conclusions state the good and correct legal
position, except on the aspects where the Courts in India have
taken a different view. Consistency and uniformity in applying legal
principles are crucial for ensuring fairness and comity in international
commerce and dispute resolution mechanisms.
16. Earlier, Sulamérica Cia (supra) had laid down this three-fold test to
determine the law governing the arbitration agreement:
“25. Although there is a wealth of dicta touching on the
problem, it is accepted that there is no decision binding
on this court. However, the authorities establish two

16 See Anupam Mittal v. Westbridge Ventures II Investment Holdings, [2023] SGCA 1.
17 For the Indian Law relating to closest connection test see Arif Azmi (supra).
18 Recently enacted Arbitration Act, 2025, in the United Kingdom, which subject to significant exceptions
takes a different position from that in Enka Insaat (supra).
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propositions that were not controversial but which provide
the starting point for any enquiry into the proper law of
an arbitration agreement. The first is that, even if the
agreement forms part of a substantive contract (as is
commonly the case), its proper law may not be the same
as that of the substantive contract. The second is that
the proper law is to be determined by undertaking a
three-stage enquiry into (i) express choice, (ii) implied
choice and (iii) closest and most real connection.
As a matter of principle, those three stages ought to
be embarked on separately and in that order, since any
choice made by the parties ought to be respected, but it
has been said on many occasions that in practice stage
(ii) often merges into stage (iii), because identification of
the system of law with which the agreement has its closest
and most real connection is likely to be an important factor
in deciding whether the parties have made an implied
choice of proper law: see Dicey, Morris & Collins, op. cit.
paragraph 32-006. Much attention has been paid in
recent cases to the closest and most real connection,
but, for the reasons given earlier, it is important not to
overlook the question of implied choice of proper law,
particularly when the parties have expressly chosen
a system of law to govern the substantive contract of
which the arbitration agreement forms part.
(emphasis supplied)”

Sulamérica Cia (supra) observes that the law governing the
arbitration agreement may differ from the law of the contract. However,
it is reasonable to presume that the parties intended for their entire
relationship to be governed by the same system of law throughout
the contract. In this context, a distinction is made between a stand-
alone arbitration agreement and one that is embedded within a
contract. In the former, a choice of seat of arbitration becomes highly
significant, and the law of the seat would likely govern the arbitration
agreement. However, when the arbitration agreement forms part of
a contract, the express choice of a lex contractus strongly indicates
the parties’ intention. It would generally be inferred that the arbitration
is governed by the same law as the substantive contract. However,
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this presumption is rebuttable as previously highlighted. Even when
the arbitration agreement is part of the contract, the court must
conduct a three-step inquiry: first, looking at the express choice of
law; second, considering any implied choice; and third, determining
the closest and most real connection. Second step is applied when
the first step is negative, and the third step is applied when the first
and second steps are negative.
17. In BYC v. BCZ,19 the High Court of Singapore references Sulamérica
Cia (supra) and notes sharply divided legal opinions. Some argue
that the choice of law, often expressed in broad and general terms,
would usually distinguish the main contract from the arbitration
agreement. The opposing view is that courts would require additional
factors to apply a governing law different from that of the seat
of arbitration. However, BCY (supra) favours the first view. The
argument of severability, it was observed, would be ineffective.
The doctrine simply ensures that the arbitration clause remains
enforceable even if the main contract is found to be invalid. It is
designed to prevent arbitration from being avoided by denying the
existence of the underlying contract. This, however, does not mean
that the arbitration clause is completely insulated or detached from
the main contract.20
18. BCY (supra) acknowledges that the seat of arbitration is chosen
based on a desire for a neutral forum. The law of seat would govern
the procedure of arbitration. However, it does not necessarily
follow that the said law would govern the law of formation of the
arbitration agreement, its validity, etc. Therefore, where the arbitration
agreement is a part of the main contract, the lex contractus is a
strong indicator of the law governing the arbitration agreement
unless there are indications to the contrary. The choice of a seat
different from the lex contractus is not, by itself, enough to displace
this presumption.
19. In BNA v. BNP and Another,21 the Singapore Court of Appeal
noted each of the following may be distinct – a seat of arbitration,
the arbitral institution, the arbitral rules and the governing law of

19 [2016] SGHC 249.
20
21 [2019] SGCA 84.
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arbitration agreement. It endorsed the three-step test from Sulamérica
Cia (supra) and BCY (supra). In this case, the phrase “arbitration
at Shanghai” was interpreted to indicate Shanghai as the seat of
arbitration. This was based on a natural reading of the clause. Although
Singapore International Arbitration Centre22 governed the procedural
aspects of arbitration, the Court ruled that the implied choice of the
law governing the arbitration agreement was the same as the seat
and lex contractus—the law of the People’s Republic of China.
20. In Enercon (India) Ltd. v. Enercon GmbH,23 this Court affirmed the
principle that the parties may agree to hold arbitration in a particular
place or country (Country X), but subject it to the procedural laws of
another country (Country Y). The Court also distinguished between
the venue and seat of arbitration. It accepted the notion that the
parties could agree on the law of one country to govern the arbitration,
irrespective of where the arbitration takes place. Reference was made
to Braes of Doune Wind Farm (Scotland) Ltd. v. Alfred McAlpine
Business Services Ltd.,24 and the Court of Appeal’s decision in
C v. D25. Reference was also made to Sulamérica Cia (supra),
with which the court agreed. In that case, despite the venue of the
arbitration proceedings being London, it was held that the seat of
arbitration was not necessarily London. In international commercial
arbitration, the venue can differ from the seat. The argument for
concurrent jurisdiction was rejected.
21. In Arif Azim (supra), this Court has examined the arbitration regime
change following the Constitution Bench judgment in BALCO v.
Kaiser Aluminium Technical Services Inc26. Reference was made
to the Court’s decision in Bhatia International v. Bulk Trading
S.A. and Another27. There is also a discussion on applicability of
Section 9 of the A&C Act to international commercial arbitrations. It
was observed that Part 1 of the A&C Act and its provisions apply
when the arbitration takes place in India—i.e., (i) when the seat
of arbitration is in India; or (ii) when the arbitration agreement is

22 Hereinafter referred to as, “SIAC”.
23 (2014) 5 SCC 1.
24 [2008] EWHC 426.
25 [2007] EWCA Civ 1282.
26 (2016) 4 SCC 126.
27 (2002) 4 SCC 105.
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governed Indian law. The Court also referred to Sulamérica Cia
(supra) and Roger Shashoua (1) v. Sharma28.
22. In Mankastu Impex Private Limited v. Airvisual Limited,29 the
agreement stipulated that all disputes arising out of the contract
shall be referred to and finally resolved by arbitration administered
in Hong Kong. The contract was to be governed by the laws of
India and the courts in Delhi shall have jurisdiction. Clause 17
reads as under:
“17. Governing law and dispute resolution
17.1 This MoU is governed by the laws of India, without
regard to its conflicts of laws provisions and courts at New
Delhi shall have the jurisdiction.
17.2 Any dispute, controversy, difference or claim arising
out of or relating to this MoU, including the existence,
validity, interpretation, performance, breach or termination
thereof or any dispute regarding non-contractual obligations
arising out of or relating to it shall be referred to and finally
resolved by arbitration administered in Hong Kong.”
In the context of Clause 17(2), this Court refused to entertain an
application for appointment of an arbitration panel. It stated that the
parties must approach the courts of Hong Kong. Clearly a distinction
was drawn between the law governing the arbitration agreement
and the law governing the contract i.e., lex contractus. The lex
contractus was Indian law, but the law applicable to the arbitration
agreement had to be in terms of Hong Kong law. Thus it was held
that, lex contractus, being different from lex arbitri, the Indian
Courts lacked jurisdiction.
23. In Roger Shashoua (2) and Others v. Mukesh Sharma and
Others,30 this Court affirmed Roger Shashoua (1) (supra), leading to
the acceptance of the Shashoua principle. In that case, London was
explicitly designated as the place of arbitration, with no alternative
location as the seat. Given this, along with the application of a
supranational body of arbitration rules, and the absence of any

28 [2009] EWHC 957 (Comm).
29 (2020) 5 SCC 399.
30 [2009] EWHC 957 (Comm).
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significant contrary indications, London was determined to be the
juridical seat, with English law as the curial law.
24. In Arif Azim (supra), the Shashoua principle was applied to the
dispute resolution clause. The dispute resolution specified that any
disputes or differences arising from the agreement, including its
validity and applicability, would be referred to arbitration under the
UAE Arbitration and Conciliation Rules. The venue for the arbitration
was designated as Dubai, UAE. A separate clause related to law
and jurisdiction stated that the agreement would be governed by and
construed in accordance with the laws of the UAE, subject to the non-
exclusive jurisdiction of the Dubai courts. In this factual background,
it was held that the courts in Dubai, UAE, not Indian courts, would
have the jurisdiction to appoint an arbitrator. The conclusions drawn
by the Court are as follows:
“E. CONCLUSION
71. From the above exposition of law, the following
position of law emerges: (i) Part I of the Act, 1996
and the provisions thereunder only applies where the
arbitration takes place in India i.e., where either (I) the
seat of arbitration is in India OR (II) the law governing
the arbitration agreement are the laws of India.
(ii) Arbitration agreements executed after 06.09.2012 where
the seat of arbitration is outside India, Part I of the Act,
1996 and the provisions thereunder will not be applicable
and would fall beyond the jurisdiction of Indian courts.
(iii) Even those arbitration agreements that have been
executed prior to 06.09.2012 Part I of the Act, 1996 will
not be applicable, if its application has been excluded by
the parties in the arbitration agreement either explicitly by
designating the seat of arbitration outside India or implicitly
by choosing the law governing the agreement to be any
other law other than Indian law.
(iv) The moment ‘seat’ is determined, it would be akin to an
exclusive jurisdiction clause whereby only the jurisdictional
courts of that seat alone will have the jurisdiction to regulate
the arbitral proceedings. The notional doctrine of concurrent
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jurisdiction has been expressly rejected and overruled by
this Court in its subsequent decisions.
(v) The ‘Closest Connection Test’ for determining the seat of
arbitration by identifying the law with which the agreement
to arbitrate has its closest and most real connection is no
longer a viable criterion for determination of the seat or
situs of arbitration in view of the Shashoua Principle. The
seat of arbitration cannot be determined by formulaic and
unpredictable application of choice of law rules based on
abstract connecting factors to the underlying contract.
Even if the law governing the contract has been expressly
stipulated, it does not mean that the law governing the
arbitration agreement and by extension the seat of
arbitration will be the same as the lex contractus.
(vi) The more appropriate criterion for determining the seat
of arbitration in view of the subsequent decisions of this
Court is that where in an arbitration agreement there is an
express designation of a place of arbitration anchoring the
arbitral proceedings to such place, and there being no other
significant contrary indicia to show otherwise, such place
would be the ‘seat’ of arbitration even if it is designated in
the nomenclature of ‘venue’ in the arbitration agreement.
(vii) Where the curial law of a particular place or
supranational body of rules has been stipulated in an
arbitration agreement or clause, such stipulation is a
positive indicium that the place so designated is actually
the ‘seat’, as more often than not the law governing the
arbitration agreement and by extension the seat of the
arbitration tends to coincide with the curial law.
(viii) Merely because the parties have stipulated a venue
without any express choice of a seat, the courts cannot
sideline the specific choices made by the parties in the
arbitration agreement by imputing these stipulations as
inadvertence at the behest of the parties as regards the
seat of arbitration. Deference has to be shown to each and
every choice and stipulations made by the parties, after all
the courts are only a conduit or means to arbitration, and
the sum and substance of the arbitration is derived from
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the choices of the parties and their intentions contained
in the arbitration agreement. It is the duty of the court to
give weight and due consideration to each choice made
by the parties and to construe the arbitration agreement
in a manner that aligns the most with such stipulations
and intentions.
(ix) We do not for a moment say that, the Closest
Connection Test has no application whatsoever, where
there is no express or implied designation of a place of
arbitration in the agreement either in the form of ‘venue’
or ‘curial law’, there the closest connection test may be
more suitable for determining the seat of arbitration.
(x) Where two or more possible places that have been
designated in the arbitration agreement either expressly
or impliedly, equally appear to be the seat of arbitration,
then in such cases the conflict may be resolved through
recourse to the Doctrine of Forum Non Conveniens, and
the seat be then determined based on which one of the
possible places may be the most appropriate forum keeping
in mind the nature of the agreement, the dispute at hand,
the parties themselves and their intentions. The place most
suited for the interests of all the parties and the ends of
justice may be determined as the ‘seat’ of arbitration.”
25. We now turn our attention to the two clauses of the Distributor
Agreement. Clause 16.5 stipulates that the agreement shall be
governed by and construed in accordance with laws of India. It further
provides that all matters arising from the agreement shall be subject
to the jurisdiction of the courts in Gujarat, India. Clause 18, which
deals with the settlement of disputes, outlines both a conciliation and
arbitration process. Should disputes or differences remain unresolved
through conciliation, either party has the right to submit them to
arbitration. The arbitration will be conducted by the Arbitration and
Conciliation Centre at the Chambers of Commerce in Bogota. The
arbitration will take place in Bogota, either at the Centre’s premises
or at a location determined by the Director of the Centre. The award
shall be in law and in the standard as per the Colombian law governing
the mailer (sic matter). The costs of arbitration and conciliation will
be shared equally by the parties.
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26. To decide the controversy, we will address the conflict between
these clauses. Accordingly, we turn our attention to the conflict
of law principles. Milford Capital Holdings (supra) states that to
resolve conflicts between competing or inconsistent clauses, the
court should read the contract as a whole, striving to give effect to
all its provisions. One clause may influence the content of another,
and a clause should not be rejected unless it is clearly inconsistent
or repugnant to the rest of the agreement. Only when such a
reconciliation is not possible will the court consider one clause to
prevail over an incorporated standard. This approach marks a slight
departure from the principle that prioritizes the first clause in the
event of conflicting terms. While we do not need to explore these
principles exhaustively, it is significant to note that a clause should
not be dismissed as redundant unless it is manifestly inconsistent
with or repugnant to the rest of the agreement. This is particularly
important in the present case, as both parties have agreed to these
clauses. We must seek to interpret the clauses in a manner that
harmonizes their provisions, giving effect to each wherever possible.
27. In Arnold v. Britton,31 the Supreme Court of United Kingdom
observed as under:
“When interpreting a written contract, the court is concerned
to identify the intention of the parties by reference to “what
a reasonable person having all the background knowledge
which would have been available to the parties would
have understood them to be using the language in the
contract to mean”, to quote Lord Hoffmann in Chartbrook
Ltd v Persimmon Homes Ltd [2009] AC 1101, para 14. And
it does so by focussing on the meaning of the relevant
words, in this case clause 3(2) of each of the 25 leases,
in their documentary, factual and commercial context.
That meaning has to be assessed in the light of (i) the
natural and ordinary meaning of the clause, (ii) any other
relevant provisions of the lease, (iii) the overall purpose of
the clause and the lease, (iv) the facts and circumstances
known or assumed by the parties at the time that the
document was executed, and (v) commercial common

31 2015 AC 1619.
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sense, but (vi) disregarding subjective evidence of any
party’s intentions […].”
28. The interpretation of a contract involves determining the meaning
that a reasonable person, with all relevant background knowledge
available to the parties at the time of the contract, would derive from
the document. A similar principle is outlined in Chitty on Contracts,32
which, when discussing inconsistent terms, observes:
“Where the different parts of an instrument are inconsistent,
effect must be given to that part which is calculated to carry
into effect the purpose of the contract as gathered from
the instrument as a whole and the available background,
and that part which would defeat it must be rejected.
The old rule was, in such a case, that the earlier clause
was to be received and the later rejected; but this rule
was a mere rule of thumb, totally unscientific, and out
of keeping with the modern construction of documents.
When considering how to interpret a contract in the case
of alleged inconsistency, the courts distinguish between a
case where the contract makes provision for the possibility
of inconsistency and the case where there is no such
provision. In the latter case the contract documents should
as far as possible be read as complementing each other
and therefore as expressing the parties’ intentions in a
consistent and coherent manner.”
29. Clause 16.5 is clear and unambiguous. It explicitly states that the
entire agreement shall be governed by and construed in accordance
with the laws of India, and all matters arising from the agreement
shall fall under the jurisdiction of the courts in Gujarat, India. Given
this, it is reasonable to assume that, when drafting this clause, the
parties were fully aware of Clause 18, which provides for arbitration
and conciliation under the Arbitration and Conciliation Centre of the
Chambers of Commerce in Bogota. In our view, Bogota has been
designated as the venue for conciliation and arbitration, while the
courts in Gujarat, India, retain exclusive jurisdiction over disputes. This
must, unless there is a divergence in lex arbitri, include jurisdiction

32 Hugh Beale, Chitty on Contracts, Sweet and Maxwell, Vol. 1, 33rd Ed. (2019).
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over appointments and act as a conduit for the arbitration in Bogota,
Colombia.
30. The law governing the arbitration agreement, being Indian law,
means that its validity, scope, and interpretation will be determined
in accordance with Indian law. But which national courts—those
in India or Colombia—exercise supervisory jurisdiction over the
arbitration proceedings? Does the A&C Act apply to these arbitration
proceedings? Upon a consistent reading of the Distributor Agreement,
it is clear that only the courts in Gujarat, India, are referenced. While
it is acknowledged that the venue for arbitration is Bogota, Colombia,
and that the procedural rules of the Arbitration and Conciliation Centre
at the Chambers of Commerce in Bogota are to apply, this does
not diminish the supervisory powers of Indian courts, as explicitly
outlined in Clause 16.5.
31. While recording the above findings, we are also guided by the
principles outlined above for locating the law governing the arbitration
agreement. We begin by applying the three-step test developed by
Sulamérica Cia (supra). First, neither Clause 16.5 nor Clause 18
explicitly stipulates the governing law of the arbitration agreement.
Therefore, we proceed to the next step of the test, which involves
identifying the parties’ implied choice of law for the arbitration
agreement. At this stage, there is a strong presumption that the lex
contractus, i.e., Indian law, governs the arbitration agreement. As
explained earlier, this presumption may be displaced if the arbitration
agreement is rendered non-arbitrable under Indian law. But that is not
the case here. Furthermore, the mere choice of ‘place’ is not sufficient,
in the absence of other relevant factors, to override the presumption
in favor of the lex contractus. In this case, it is important to note that
no seat of arbitration has been explicitly chosen. In conclusion, at this
second stage of the inquiry, we find that the parties have impliedly
agreed that Indian law governs the arbitration agreement, and the
controversy can be resolved accordingly.
32. We reiterate that the use of the premises at the Centre, or any other
location designated by the Director of the Centre in Bogota, does not
imply that Colombian law governs the arbitration agreement. Although
Clause 18 specifies that the award shall conform to Colombian law, this
provision pertains solely to the arbitration proceedings or the award
matters. It does not override or diminish the effect of Clause 16.5,
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which clearly stipulates that Indian law shall govern the agreement
and the related disputes. The legal implications of this would include
the applicability of the A&C Act, and the appointment jurisdiction of
Indian courts. We do not interpret the final portion of Clause 18 as
undermining the legal impact of Clause 16.5. Therefore, we affirm
the applicability of the A&C Act under Section 11(6) of the Arbitration
and Conciliation Act.
33. In accordance with Clause 16.5 and 18, the procedural rules of
the arbitration would be the rules of the Conciliation and Arbitration
Centre of the Chamber of Commerce of Bogota DC, with Bogota
DC as the venue of arbitration.
34. However, during the course of the hearing, the learned counsel for
both parties, Meril and Disortho, unanimously stated that, should
the present application under Section 11(6) of the Arbitration and
Conciliation Act, 1996, be allowed, the parties are agreeable to
the arbitration being held in India. Furthermore, the parties have
consented to the appointment of a sole arbitrator to adjudicate and
decide the disputes in question.
35. In view of this consensus, we appoint Mr. Justice S.P. Garg, retired
judge of the High Court of Delhi, as the sole arbitrator. The venue
of the arbitration shall be decided mutually by the parties and the
learned arbitrator. The arbitration shall be governed by the rules
applicable to the Delhi International Arbitration Centre attached to
the High Court of Delhi. The fee schedule applicable to international
arbitrations shall apply.
36. The arbitration petition is allowed in the above terms and disposed
of accordingly.

Result of the case: Arbitration petition allowed.

Headnotes prepared by: Divya Pandey