Holding

When the parties agree on a foreign seat of arbitration and expressly or by necessary implication apply foreign law, Part I of the Arbitration and Conciliation Act, 1996 is excluded and Indian courts lack jurisdiction to entertain a Section 34 challenge to the foreign award.

Summary

Eitzen Bulk A/S and Ashapura Minechem Ltd entered into a charter party that contained an arbitration clause specifying London as the seat and English law as the governing law. A dispute arose and was arbitrated in London, resulting in an award against Ashapura. Ashapura sought to set aside the award in India under Section 34 of the Arbitration and Conciliation Act, 1996, while Eitzen filed for enforcement of the award under Part II of the same Act. The Supreme Court held that the parties' agreement excluded the application of Part I of the Act because the arbitration was seated abroad and governed by English law, rendering any Section 34 challenge in India untenable. Consequently, the Court upheld the Bombay High Court's order enforcing the foreign award and dismissed Ashapura's attempts to challenge it. The appeals filed by Eitzen were allowed, and those filed by Ashapura were dismissed.

Issues considered

The applicability of Part I of the Arbitration and Conciliation Act, 1996 to a foreign award where the seat of arbitration is outside India and the governing law is foreign.
Whether a party can invoke Section 34 of the Act to set aside a foreign award in an Indian court under such circumstances.
The effect of an arbitration clause that designates a foreign seat and foreign law on the jurisdiction of Indian courts.
The relevance of Section 42 of the Act in relation to subsequent applications after a Section 34 filing.

Legislation cited

Arbitration and Conciliation Act, 1996s. 34, s. 42, s. 47, s. 48, s. 49
English Arbitration Act, 1996s. 67, s. 68, s. 69
Sick Industrial Companies (Special Provisions) Act, 1985

Subjects

ArbitrationForeign awardEnforcementPart I exclusionSeat of arbitrationEnglish lawSection 34Section 42JurisdictionInternational commercial arbitration

Judgment

(2016) 2 S.C.R. 634

A EITZEN BULK A/S
v.
ASHAPURA MlNECHEM LTD. & ANR.
(Civil Appeal No. 5131-33 of2016)
B 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
c law - Enforcement -Application of Part I of the Act to the Foreign
award - Held: Where the parties choose a juridical seat ofArbitration
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
to exclude the application of Part I to the Arbitration proceedings
E
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
F 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
G 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
H
634
EITZEN BULK A/S v. ASHAPURA MINECHEM LTD. & ANR. 635

or the Award would also be governed by English Law. Clearly, A
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
B
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 c
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.
D
[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 E
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 F
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) G

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,
H
636 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]
Bhatia International v. Bulk Trading SA. and another
2002 (2) SCR 411:(2002) 4 SCC 105; Union of India
B 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
c 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
D 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
E
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.
F
WITH
C. A. Nos. 5136, 5134-35 of2016
CC Nos. 3266 and 3382 of2013
G Siddharth Dave, Ms. Jemtiben Ao, Senthil Jagadeesan, E. C.
Agrawala, Ms. Jyoti Mendiratta for the appearing parties.
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.
H
EJTZEN BULK A/S v. ASHAPURA MJNECHEM LTD. & ANR. 637
rs. A BOBDE, J. l
2. The dispute in these appeals, arises out of the Contract of A
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
B
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 c
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 D
conducted in accordance with the Small Claims Procedure of
the L.MA.A. "
(emphasis supplied)
3. Disputes having arisen between the parties, the matter was E
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 F
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
G
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 H
638 SUPREME COURT REPORTS [2016] 2 S.C.R.

A withdrawn on 2.7.2009.
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
B 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
c 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
D 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
E 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
F
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
G
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,
H
EITZEN BULK A/S v. ASHAPURA MINECHEM LTD. & ANR. 639
rs.
A. BOBDE, J.l.

the English High Court declared the award dated 26'' May, 2009 A
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 B
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
c
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 D
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 E
Judge at Jam-Khambhalia from adjudicatingAshapura's application under
Section 34 ofthe 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 F
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 G
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
15. On 27.7.2009, Eitzen filed Arbitration Petition No. 561/2009 H
640 SUPREME COURT REPORTS [2016] 2 S.C.R.

A 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
B 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
C 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
D 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
G 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.
20. The High Court has also rejected the contention of Ashapura
H
EITZEN BULK A/S v. ASHAPURA MINECHEM LTD. & ANR. 641
(S. A. BOBDE, J.]

under Section 42' of the Arbitration Act, rightly; that since an application A
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
B
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. c
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 D
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 E
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.
F
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 G
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.
H
642 SUPREME COURT REPORTS [2016] 2 S.C.R.

A 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.
B
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 .
c 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".
G 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
H '(2012) 9 sec 552
EITZEN BULK A/S v. ASHAPURA MINECHEM LTD. & ANR. 643
rs.
A. BOBDE, 1.1

with English Law and the seafoftheArbitration will be at London. A
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 B
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
c
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, D
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 E
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 1to 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 F
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 G
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 H
644 SUPREME COURT REPORTS [2016] 2 S.C.R.

A 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)
"Primary conclusion
16. I shall deal with Mr Hirst 's arguments in due course but,
B 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
c 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
D ;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
E 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
F 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
G ;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 ofJustice, Quee11 's Bench Division,
Commercial Court (England) in Sulamerica Cia Nacional de
H Seguros.SA v. Enesa Enge/haria SA - Enesa. In laying down
EITZEN BULK A/S v. ASHAPURA MJNECHEM LTD. & ANR. 645
rs. A. BOBDE, J.l
the same proposition, the High Court noticed that the issue in A
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:
B
'"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 c
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 D
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) E
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. F
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 G
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 H
646 SUPREME COURT REPORTS [2016) 2 S.C.R.

A 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
B
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 1itigation and
c (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
D follows:-
"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
E 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 ofdecisions
F 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
G 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. 647
[S. A. BOBDE, J.]

apply to all arbitrations and to all proceedings relating A
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
B
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
c
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 ofArbitration
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 D
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 E
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:-
F
" 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 G
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 H
648 SUPREME COURT REPORTS [2016] 2 S.C .R.

A 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
B
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
c 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"
D 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.
E 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,
F 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
G
[CC No. 3382 of2013 -filed by Ashapura Minechem Ltd.] is rejected.
No costs.
Nidhi Jain Appeals disposed of.