Holding

Part I of the Arbitration and Conciliation Act, 1996 applies to international commercial arbitrations held outside India unless expressly excluded, and the MoU clauses amount to an arbitration agreement, making the application under Section 11(9) maintainable.

Summary

M/s. Indtel Technical Services Pvt. Ltd. and W.S. Atkins Rail Ltd. entered into a Memorandum of Understanding on 11 June 2002 to jointly prepare a tender for the Indian Railways Crashworthiness Project. The respondent unilaterally terminated the MoU and withdrew the joint bid, leading the applicant to claim breach and seek compensation. After failed settlement attempts, the applicant filed an application under Section 11(9) of the Arbitration and Conciliation Act, 1996 for the appointment of a sole arbitrator, invoking Clause 13 of the MoU which referred disputes to "adjudication" and stipulated English law as governing the agreement. The key issues were whether the clause constituted an arbitration agreement and whether Indian courts could exercise jurisdiction despite the choice of English law and the absence of a designated seat. The Supreme Court held that Part I of the Arbitration Act applies to international commercial arbitrations even when held outside India unless expressly excluded, and that the MoU clauses amount to a valid arbitration agreement. Consequently, the petition for appointment of an arbitrator was allowed and Justice B.N. Srikrishna was appointed as sole arbitrator.

Issues considered

Whether clauses 13.2 and 13.3 of the Memorandum of Understanding constitute a valid arbitration agreement within the meaning of Section 7 of the Arbitration and Conciliation Act, 1996.
Whether the Supreme Court of India has jurisdiction to appoint an arbitrator under Section 11(9) of the Act when the parties have chosen English law to govern the contract and have not specified a seat of arbitration.
Whether Part I of the Arbitration and Conciliation Act, 1996 applies to an international commercial arbitration held outside India in the absence of an express exclusion.

Legislation cited

Arbitration and Conciliation Act, 1996s. 11(9), s. 2(2), s. 2(8), s. 2(f), s. 2(i)(f), s. 7

Subjects

ArbitrationInternational Commercial ArbitrationArbitration AgreementSection 11(9) Arbitration ActJurisdictionSeat of ArbitrationAdjudicationAppointment of ArbitratorEnglish LawBreach of Contract

Judgment

__f1.<
f
[2008] 12 S.C.R. 673

~

~
M/S. INDTEL TECHNICAL SERVICES PVT. LTD. A
'; II.
W.S. ATKINS RAIL LTD.
(Arbitration Application No.16 of 2006)
AUGUST 25, 2008
B
)' [AlTAMAS KABIR, J]

Arbitration and Reconciliation Act, 1996:
ss. 2(f) and 11 (9) - International commercial arbitration
- Appointment of arbitrator - Relevant clause of the contract c
stipulating validity and performance of agreement to be
governecf by laws of England and Wales, and all disputes and
differences which could not be settled amicably by parties, to
be referred to adjudication - HELD: Though law governing
the agreement would ordinarily be the same as law governing D
the contract, in view of law laid down by the Supreme Court*
provisions of Part I of the Act
I
would be equally applicable to
International Commercial arbitration held outside India, unless
any of the said provisions are excluded by agreement between
parties expressly or by implication, which is not so in the instant
case - Furthermore, from wording of the relevant clause of E
agreement, for the purpose of instant application, parties
intended to have their disputes resolved by arbitration -
Application allowed - Sole arbitrator appointed who will be
entitled to decide upon procedure to be adopted in arbitral
__ ..., proceedings and sittings of arbitral proceedings. F
Words and Phrases:
"Adjudication" - Connotation of in the context of Arbitration
and Conciliation Act, 1996.
*Bhatia International vs. Bulk Trading S.A 2002(2) SCR G
' -1 411= 2002 (4) sec 105 - relied on.
National Thermal Power Corporation vs. Singer
Company & Anr. 1992(3) SCR 106=1992 (3) sec 551;
673 H
674 SUPREME COURT REPORTS [2008] 12 S.C.R.

A Jagdish Chander v. Ramesh Chander 2007 (5) SCC 719;
ITC Classic Finance Ltd. vs. Grapco Mining and Co. Ltd. AIR
1997 Cal. 397; and Teamco Private Ltd. vs. TM. S. Mani AIR
1967 Cal. 168 - referred to.
Naviera Amazonica Peruana S.A. vs. Compania
8 internacional De Seguros Del Peru, Lloyd's Law Reports
1988 (Vol.I) 116; and. Lesotho Highlands Development
Authority vs. lnpregilo SpA, 2005 UKHL 43 - referred to.
Case Law Reference:
c 2002(2) SCR 411 relied on para 6
1992(3) SCR 106 referred to. Para 10
Lloyd's Law. Reports 1988 (Vol.I) 116 referred to para 16
2007(5) SCR 720 referred to para 19
D AIR 1997 Cal. 397 referred to para 20 )-- .

AIR 1967 Cal. 168 referred to para 20
2005 UKHL 43 referred to para 23
ORIGINAL CIVIL JURISDICTION: Arbitration Application
E No. 16 of 2006
· Ramesh Babu M.R. for the Appellant.
Prag P. Tripathi, Kum Kum Sen, Rajiv Kumar and Arati
Gupta (for M/s. Rajinder Narain & Co.) for the Respondents.
F
The Order of the Court was delivered by
1. By a Memorandum of Understanding, hereinafter
referred to as "the Memorandum", entered into between the
appellant and the respondent on 11th June, 2002, the parties
G agreed to collaborate on an exclusive basis for jointly preparing
and submitting their tender for work associated with the
designing, manufacturing, supply, installation, test and
commissioning contract for the Indian Railways Crashworthiness
Project. Pursuant thereto the parties jointly prepared and
H submitted a tender signed by both the parties on 30.9.2002 ir;
MIS. INDTEL TECHNICAL SERVICES PVT. LTD. 675
v. W.S. /\TKINS RAIL LTD.

response to a bid invitation by RITES Limited, a Public Sector A
Undertaking of the Ministry of Railways, on 30.9.2002.
2. After submission of such bid the parties were invited to
call upon the respondent on 29.10.2002 for contract negotiation
in India, but without any valid or justifiable reason the respondent
terminated the Memorandum on 12.11.2002 and on 15.11.2002 8
unilaterally withdrew the joint bid submitted to RITES without
any reference to the applicant. According to the applicant, some
of the other terms of the Memorandum dated 11.6.2002 were
also breached by the respondent which impelled the applicant
to address a letter to the respondent on 23.6.2003 calling upon C
it to explain the various defaults committed by it. A request was
also made to the respondent to enter into a dialogue to work
out the fair level of compensation for the losses suffered by the
applicant on account of such breach. The allegations contained
in the letter were denied by the respondent by its reply dated D
20.8.2003. Several letters were thereafter exchanged between
the parties culminating in a legal notice being sent on behalf of
., the applicant to the respondent to compensate the applicant for
the losses incurred by it on account of the unlawful acts of the
respondent. The response of the respondent to the legal notice E
was one of denial and assertion that the respondent had acted
fairly and properly in the matter.

3. Since all attempts made by the applicant, including
resolution of the dispute through an alternate dispute resolution
- -1._ process and mediation, proved to be abortive, the applicant F
ultimately filed the present application for the appointment of a
sole Arbitrator under Section 11 (9) of the Arbitration Act, 1996,
as per clause 13(2) of the Memorandum of Understanding dated
11th June, 2002. Inasmuch as, one facet of the dispute between
the parties involves the wording of the said clause of the G
-1 Agreement, the same is reproduced hereinbelow for the sake
of reference:

"CLAUSE 13 - SETTLEMENT OF DISPUTES
13.1. This Agreeme~t, its construction, validity and H
676 SUPREME COURT REPORTS [2008] 12 S.C.R.

v \

A performance shall be governed by and constructed in .,
'
accordance with the laws of England and Wales;
13.2 Subject to Clause 13.3 all disputes or-differences
arising out of, or in connection with, this Agreement which
cannot be settled amicably by the Parties shall be referred
B to adjudication;
'{
13.3 If any dispute or difference under this Agreement
touches or concerns any dispute or difference under either
of the Sub Contract Agreements, then the Parties agree
c that such dispute or difference hereunder will be referred
to the adjudicator or the courts as the case may be
appointed to decide the dispute or difference under the
relevant Sub Contract Agreement and the Parties hereto
agree to abide by such decision as if it were a decision
under this Agreement."
D
y
4. On behalf of the appellant company, Mr. S.C.. Gupta,
learned advocate, submitted that although in the Memorandum
the law which was to apply to the construction and performance
of the agreement had been mentioned, the venue for such
E adjudication or arbitration had not· been stipulated in the
agreement since the choice of venue has obviously been left to
the parties. It was submitted that primarily two questions were
required to be answered in this matter, namely,:
(i) Whether clauses 13.2 and 13.3 of the Memorandum
F of Understanding can be construed to be an ~-
arbitration agreement; and
(ii) Whether having regard to clause 13.1 of the
Memorandum of Understanding indicating that the
construction, validity and performance of the
G
agreement would be governed by and constructed
\-
in accordance with laws of England and Wales, this
Court would have jurisdiction to appoint an Arbitrator
under Section 11 of the Arbitration Act, 1996.

H 5. It was submitted that whenever the jurisdiction of the
M/S. INDTEL TECHNICAL SERVICES PVT. LTD. 677
v. W.S. ATKINS RAIL LTD.
domestic courts is invoked, the courts have to look to their own A
laws to see whether they have jurisdiction to take up such matter.
It was contended that since in the instant case an application
had been made under Section 11 of the Arbitration and
Conciliation Act, 1996, it is the said law which has to be treated
... as the relevant Indian Municipal Law applicable to the instant B
f ) case.
6. Mr. Gupta urged that a three-Judge Bench of this Court
had in Bhatia International vs. Bulk Trading S.A, [2002 (4) SCC
105] held that Part-I of the Arbitration and Conciliation Act, 1996,
applies both to domestic and international arbitrations, c
irrespective of whether the seat of arbitration is in India or not.
It was urged that while the present Memorandum was
undoubtedly an International Commercial Arbitration, Part-I of
the aforesaid Act would still apply thereto and this Court would
.., have jurisdiction to entertain the application made under Section D
11 of the aforesaid Act.
7. It was also urged that, although, the parties had decided
that the law relating to the working or an understanding of the
Agreement was to be the law of England and Wales, there is
nothing in the Memorandum to warrant a conclusion that the E
seat of arbitration is to be outside India in the Courts of England
and Wales or that the parties had mutually excluded the
application of any of the provisions of Part-I of the aforesaid Act
to the Agreement. It was also submitted that by virtue of the
--\ Memorandum, the parties thereto had not ousted the jurisdiction F
of this Court nor had any express intention to ~hat effect been
included in the said Memorandum.
8. Mr. Gupta contended that even with reference to the
laws of England and Wales, which is the proper law governing
G
the Arbitration Agreement, the Courts of England and Wales do
not have exclusive jurisdiction to appoint an Arbitrator in the
instant dispute having regard to the provisions of Sections 2(f)
and 2(8) of the.Arbitration and Conciliation Act, 1996. Referring
to some of the provisions of the (English) Arbitration Act, 1996,
H
678 SUPREME COURT REPORTS [2008] 12 S.C.R.

A and, in particular, Section 2 thereof, Mr. Gupta submitted that
-v '
some of the sections of the Act would apply to arbitration
proceedings even if the seat of arbitration is outside England
and Wales or the Northern Islands, or'if no seat is designated
or determined, as in the instant case. According to Mr. Gupta,
B even though the present Arbitration Agreement was to be ,..
governed by the Laws of England and Wales, according to the y
choice of the parties to the Memorandum, the Venue for holding
the arbitration did not have to be situated within the jurisdiction
of the Courts of England and Wales. Mr. Gupta urged that an
c almost identical situation had arisen in the case of Bhatia
International (supra), where an application made by the
respondent therein to the Third Additional District Judge, Indore,
M.P., was under Section 9 of the Arbitration and Conciliation
Act, 1996, for grant of certain interim reliefs to restrain the
parties from alienating, transferring and creating third party
D y
rights, disposing of, dealing with and/or selling their business
assets and properties till the matter was decided by the Court.
Bhatia International raised a plea as to the maintainability of
the said application which was dismissed by the learned
Additional District Judge upon holding that the Court at Indore
E had jurisdiction to entertain the application filed by Bulk Trading
S.A. under Section 9 of the above Act and that the s·ame was
maintainable.
9. The order of the learned Third Additional District Judge
F was challenged before the M.P. High Court, Indore Bench, by )--
Bhatia International by way of a writ petition, which was also
dismissed by the High Court. The Judgment and Orders, both
of the learned Additional District Judge, !ndore, and the Madhya
Pradesh High Court, Indore Bench, -·were challenged before
this· Court by Bhatia International and it was submitted on its
G
behalf that Part-I of the Arbitration and Conciliation Act, 1996, .~
applies only to arbitrations where the place of arbitration is in
India, as has been clearly indicated in Sub-section (2) of Section
2 of the said Act. In the said case; it was also urged on behalf
of Bhatia International that Section 2(i)(f) of the Arbitration and
H
M/S. INDTEL TECHNICAL SERVICES PVT. LTD. 679
v. W.S. ATKINS RAIL LTD.
• '-../
Conciliation Act, 1996, defines "International Commercial A
Arbitration" and that such arbitration could take place either in
India or outside India. The submissions made on behalf of Bhatia
International were accepted by this Court upon a finding that,
although, Section 2(2) of the Arbitration and Conciliation Act,
1996, provides that Part-I of the Act would apply where the B
y place of arbitration is in India, it did not provide that Part-I would
not apply where the place of arbitration is. not in India. It was
also held that it was nowhere provided that Part-I of the aforesaid
Act would not apply to arbitrations taking place outside India.
Accordingly, this Court concluded as follows :- c
"To conclude, we hold that the provisions of Part-I would
apply to all arbitrations and to all proceedings relating
thereto. Where such arbitration is held in India the
provisions of Part-I would compulsory apply and parties
are free to deviate only to the extent permitted by the D·
--..;'
derogable provisions of Part-I. In cases of international
Commercial arbitrations held out of India provisions of
Part-I would apply unless the parties by agreement,
express or implied, exclude all or any of its provisions. In
that case the laws or rules chosen by the parties would E
prevail. Any provision, in Part-I, which is contrary to or
excluded by that law or rules will not apply."
10. Mr. Gupta submitted that all contracts which provide
for arbitration and contain a foreign element may involve three
___.._ relevant systems of law, which include the law governing the F
substantive contract or the proper law of contract, or the law
governing the agreement to arbitrate, which is the proper law
of the arbitration agreement, or the law governing the conduct
of the arbitration proceedings which is the curial law. It was
submitted that in the present case, the parties had mutually G
chosen the law of England and Wales to be the proper law of
contract and it could, therefore, be contended that the proper
law of the arbitration agreement is also the law of England and
Wales. He, however, urged that there was nothing in the
agreement to indicate that the parties had agreed as to the H
·1
680 SUPREME COURT REPORTS [2008] 12 S. C. R

A venue of arbitration. He submitted that the law which was to ~ "
govern the conduct of arbitration or the curial law, not having '
been indicated by the parties, the same could be determined 'I

only by the Arbitrator. He submitted that when the Arbitrator to '
L
f-
be appointed in the instant case, chooses the seat of arbitration,
B the law relating thereto will govern the law of the conduct of the
arbitration proceedings. ML Gupta urged that the above
proposition finds fyll support in the decision of this Court in
'(
"
National Thermal Power Corporation vs. Singer Company & .__
,__
Anr. [1992 (3) SCC 551] where in paragraph 28, it has been
c observed that questions relating to the jurisdiction of the
Arbitrator to decide a particular issue relating to the continuance
of an arbitration agreement, its validity, effect and interpretation
are determined exclusively by the proper law of the arbitration
agreement. The procedural power and duties of the Arbitrator
are regulated_ in accordance with the rules chosen by the parties
D
to the extent that those rules are applicable and sufficient and
~-
are not repugnant to the procedural law and practice of the seat
.,,
of arbitration. It was further observed that the concept of party
autonomy in international contracts is respected by all systems
of law so far as it is not incompatible with the proper law of the
E contract or the mandatory procedural rules of the place where
the arbitration is agreed to be conducted or any overriding
public policy.
11. It was submitted that since in the instant case the seat
F of arbitration would have to be determined by the Arbitrator,
once he was appointed, the question as to which law would ,,t-.~ ..
,.
govern the. conduct of the arbitratio·n proceedings should not be ·-· .
decided at this stage.
12. On behalf of the appellant it was lastly urged that clauses
G 13.2 and 13.3 of the Memorandum of Understanding clearly
indicates that the intention of the parties to the said Memorandum
of Understanding was to have their disputes resolved by
arbitration although the expression used in the said clauses is
"adjudication". According to Mr. Gupta, use of the said
H expression did not detract from the intention of the parties to
MIS. INDTEL TECHNICAL SERVICES PVT. LTD. 681
v. W.S. ATKINS RAIL LTD.
""' ~ have their disputes resolved by arbitration. He submitted that A
the expression "adjudication" had been defined in various legal
dictionaries to mean the act of adjudicating; the process of
trying and determining a case judicially; the application of the
law to the facts and an authoritative declaration of the result.

... 'f
Learned counsel submitted that in Black's Law Dictionary the B
expression "adjudication" is defined as being the legal process
of resolving of a dispute or the process of judicially deciding a
case. Learned counsel submitted that the expressions
'adjudicate' and 'adjudge' have also been defined to mean to
rule upon and award judicially. c
13. Mr. Gupta urged that having regard to the decision of
this Court in Bhatia International (supra), it is beyond question
that Part-I of the Arbitration Act, 1996, would also be attracted
to the instant case and the application made under Section 11
of the said_ Act was, therefore, maintainable. D
~
14. Mr. Gupta's submissions that although the proper law
of the arbitration agreement had been stipulated in Clause 13.1
to be the laws of England and Wales, such provision did not
automatically vest jurisdiction only on the Courts of England
and Wales to deal with and decide all issues arising out of E
arbitration agreement, was denied by Mr. Parag Tripathi, learned
Senior counsel for the· respondent. It was urged that an
application under Section 11 of the Arbitration and Conciliation
Act, 1996, is nothing but a step in performance of the arbitration
. clause and since the performance of the Memorandum is to be F
-4'
governed by the laws of England ~
and Wales, according to the
choice of the parties, it is the procedural law of England and
Wales which has to be applied to the performance of the
' arbitration agreement as well. Referring to the decision in the
-1'
National Thermal Power Corporation case (supra), which had G
.... also been referred to by Mr. Gupta, Mr. Tripathi submitted that
in the said decision the views of jurists such as Dicey, Mustill
and Boyd and Russel had been reiterated in support of the
contention that the overriding principle is that the courts of the
country, whose substantive laws govern the· arbitration H
\
··-·.
•.'~·

682 SUPREME .COURT REPORTS [2008] 12 S.C.R.
~
A agreement, are competent courts in respect of all matters arising
...'
;..,.

under the arbitration agreement, and the jurisdicHon exercised
by the courts of the seat of arbitration is merely concurrent and
not exclusive and strictly limited to the matter of procedure.
15. Mr. Tripathy submitted that the decision in the aforesaid ~
,I
8 case supports the proposition that when the parties to the \
:.
contract, do not express any choice with regard to the law l'
governing the contract or the arbitration agreement in particular,
a presumption has to be drawn that the parties intended that ·
the proper law of the contract as well as the law governing the
c arbitration agreement would be the same as the law of the
country which is the seat cif arbitration. But when the parties
expressly choose the proper law of the contract, as in the instant
case, in the absence of a clear intention such law must govern
the arbitration agreement also though it is collateral and ancillary
D to the main contract.
.,..--
16. Mr. Tripathi urged that similarly where the seat of
arbitration is indicated, then, unless there is an indication to the
contrary, it will be deemed that the place where the proper law ')

governing the arbitration proceedings is in force is the place
E chosen by the parties to be the seat of arbitration as well.
Learned counsel referred to the decision of the Court of Appeal
in Naviera Amazonica Peruana S.A. vs. Compania internacional
De Seguros Del Peru, reported in Lloyd's Law Reports (1988
(Vol.I) 116), wherein it was held that whiie interpreting an
F arbitration clause the use of the phrase "arbitration agreeing to
~
the conditions of laws of London" means that the arbitratioi:i
was to be held in London, not by the implication of some
additional term, but by giving to those words their ordinary
commercial meaning.
G
17. Mr. Tripathi submitted that in this case also since the
parties had stipulated the law which was to govern the _....
Memorandum, but had not indicated the seat of arbitration, in
keeping with the consistent v~ews expressed by the Courts and
jurists, it must be held that the seat of arb:tration must necessarily
H
M/S. INDTEL TECHNICAL SERVICES PVT. LTD. 683
v. W.S. ATKINS RAIL LTD.
''-I
be the Courts of England and Wales. Mr. Tripathy submitted A
that consequently this court has no jurisdiction to entertain the
applicant's petition under Section 11 (9) of the Arbitration and
Conciliation Act, 1996, and the· same was liable to be
dismissed.
18. Mr. Tripathy also urged that the expression "may be B
'1 referred to arbitration" or "can be referred to arbitration" have
consistently been held by the Indian Courts to be antithetical to
the concept of arbitration. Reference was made to various
decisions on this count as well. Regarding use of the expression
"adjudication", Mr. Tripathy submitted that a final decision arrived c
in such adjudication proceedings would not make it a valid
arbitration agreement. He urged that unless it is the clear
intention of the parties that arbitration is to be the only forum for
adjudication of disputes, the requirement of a valid arbitration
clause is not fulfilled. D
19. In support of his aforesaid submission, Mr. Tripathy
referred to decisions of various High Courts and also the
decision of this Court in Jagdish Chander v. Ramesh Chander,
[2007 (5) sec 719], wherein while dealing with the provisions
and scope of Sections 7, 8 and 11 of the Arbitration and E
Conciliation Act, 1996, with reference to Section 89 of the Code
of Civil Procedure, this Court held that the existence of an
_,,
arbitration agreement, as defined under Section 7 of the above
Act, is a condition precedent for exercise of power for
--~ appointment of the Arbitrator/Arbitral Tribunal, under Section F
11 of the aforesaid Act. Mr. Tripathy pointed out that while arriving
at such conclusion, this Court laid down certain tests to decide
as to what would constitute an arbitration agreement, namely,
(i) that the intention of the parties to enter into an arbitration
agreement would have to be gathered from the terms of the G
·I. Agreement; (ii) that even if the words "arbitration" and "arbitrator"
are not used in a clause relating to settlement of disputes with
reference to the process of such agreement or with reference
to the private tribunal which is to adjudicate upon the disputes,
it does not detract from the clause being an arbitration H
684 SUPREME COURT REPORTS [2008] 12 S.<;.R.

A agreement if it has the attributes and elements of an arbitration
agreement. Conversely, the mere use of the words 'arbitration'
or 'arbitrator" in a clause will not make it an arbitration
agreement, if it requires or contemplates a further or fresh
consent of the parties for reference to arbitration.
B '
20. Mr. Tripathy submitted that any ambiguity and ..,•'
'
v.aguene.ss in the arbitration clause would render the same
invalid as had been held by the Calcutta High Court. in (i) ITC l
Classic Finance Ltd. vs. Grapco Miningand Co. Ltd, [AIR 1997
Gal. 397] and (ii) Teamco Private Ltd. vs. T.M.S. Mani, [AIR
C 1967 Cal. 168]. Mr. Tripathy urged that both clauses 13.2 and
.,

13.3 are,somewhat vague on the question of reference and the
finality of the decision in the adjudication proceedings.
21. It was contended that the expressions "construction,
. validity and performance" used in clause 13.3 of the
0
Memorandum is a decisive indication that the intention of the ,_
parties was to give exclusive jurisdiction to the procedural law
of England and Wales even in respect of the appointment of an
Arbitrator.
E 22. In concluding, Mr. Tripathy attempted to distinguish the
decision in Bhatia lnternational's case (supra) by submitting
that the law laid· down in the said decision was not attracted to
the facts of the instant case as in the said decision it had only
been held that Part-I of the Arbitration and Conciliation Act,
F 1996, would apply to International Commercial Arbitrations
unless there was a specific agreement either expressed or
implied to the contrary. Mr. Tripathy contended that since the
parties had clearly expressed their intention in clause 13(i) of
the Memorandum of Understanding that the law of England and
G Wales was to be the proper law in respect of the Memoran~um,
it must necessarily follow that it was the intention of the parties
that the arbitral proceedings should also be subject to the
jurisdiction of the Courts of England and Wales.
23. It appears that after the conclusion of the hearing of
H this case. another decision of the House of Lords in Lesotho
,._

'
M/S. INDTEL TECHNICAL SERVICES PVT. LTD. 685
v. W.S. ATKINS RAIL LTD.
'"I
Highlands Development Authority vs. lnpregilo SpA, [2005 UKHL A
43], came to the notice of the respondent where a reference to
the juridical seat of the arbitration had been made and it was
observed that the determination of the juridical seat of arbitration
as England is the gateway to the powers of the Tribunal spelt
. )-
out in many provisions of the English Arbitration Act, 1996. B
24. Although, the matter has been argued at great length
and Mr. Tripathy has tried to establish that the decision of this
Court in Bhatia lnternational's case (supra) is not relevant for a
decision in this case, I am unable to accept such contention in
the facts and circurr stances of the present case. It is no doubt c
true that it is fairly well-settled that when an arbitration agreement
is silent as to the law and procedure to be followed in
implementing the arbitration agreement, the law governing the
said agreement would ordinarily be the same as the law
governing the contract itself. D
The decisions cited by Mr. Tripathy and the views of the
jurists referred to in the National Thermal Power Corporation
case (supra) support such a proposition. What, however,
distinguishes the various decisions and views of the authorities
in this case is the fact that in the Bhatia International case E
(supra) this court laid down the proposition that notwithstanding
the provisions of Section 2(2) of the Arbitration and Conciliation
'Act, 1996, indicating that Part-I of the said Act would apply
where the place of arbitration is in India, even in respect of
International Commercial agreements, which are to be governed F
by laws of another country, the parties would be entitled to invoke
the provisions of Part-I of the aforesaid Act and consequently
the application made under Section 11 thereof would be
maintainable.
G
-•A 25. The decision in the Bhatia International case (supra)
has been rendered by a Bench of Three Judges and governs
the scope of the application under consideration, as it clearly
lays down that the provisions of Part-I of the Arbitration and
Conciliation Act, 1996, would be equally applicable to
H
686 SUPREME COURT REPORTS [2008] 12 S.C.R.

A International CommeJcial arbitrations held outside India, unless
any of the said provisions are excluded by agreement between
the parties expressly or by irpplication, which is not so in the
instant case.
26. Furthermore, from the wording of clause 132 and
8 clause 13.31 am convinced, for the purpose of this application, y
that the parties to the Memorandum intended to have their
disputes resolved by arbitration and in the facts of this case the
petition has to be allowed.
c 27. Accordingly, Justice B.N. Srikrishna, is appointed as
sole arbitrator,to arbitrate upon the disputes which have arisen
betweens the parties hereto as set out in sub~paragraphs (a)
to (h) of paragraph 19 of the present application. The sole
Arbitrator will be entitled to decide upon the procedure fo be
adopted in the arbitral proceedings, the sittings of the arbitral
0
•· proceedings and to also settle his f~es in respect thereof. The
sole Arbitrator shall make positive efforts to complete the
arbitration proceedings and pass his award with expedition. ·
R.P. Petition allowed.

; ___ _

I
... ,,.·
_