Judgement

AHMADI, J.:- Special leave granted.

2. The principal question which this Court is called upon to answer in this appeal by special leave is whether the arbitration clause contained in Art. XII (paragraph 12. 1) of the Technical Collaboration Agreement entered into at Dubai, United Arab Emirates, on September 25, 1984, between the appellant Burn Standard Company Ltd., a Government of India Undertaking, and the respondent McDermott International Inc., a foreign company, is rendered void by virtue of the agreement itself being ab initio void for want of general or special permission of the Reserve Bank of India (RBI) under S. 28 of the Foreign Exchange Regulation Act, 1973 (FERA). The relevant part of the said provision reads as under:

"28(1)- Without prejudice to the provisions of S. 47 and notwithstanding anything contained in any other provision of this Act or the Companies Act, 1956, a person resident outside India (whether a citizen of India or not) or a person who is not a citizen of India but is resident in India, or a company (other than a banking company) which is not incorporated under any law in force in India or in which the non-resident interest is more than forty per cent, or any branch of such company, shall not, except with the general or special permission of the Reserve Bank,-

(a) act, or accept appointment, as agent in India or any person or company, in the trading or commercial transactions of such person or company; or

(b) act, or accept appointment, as technical or management adviser in India or any person or company; or

(c) permit any trade mark, which he or it is entitled to use, to be used by any person or company for any direct or indirect consideration.

(2) where any such person or company (including its branch) as is referred to in subsec. (1) acts or accepts appointment as such agent, or technical management adviser, or permits the use of any such trade mark, without the permission of the Reserve Bank, such acting, appointment or permission, as the case may be, shall be void.

The petitioner is a Government company incorporated under the Companies Act, 1956, having its registered office at IOC, Hungerford Street, Calcutta, whereas the respondent is a Corporation organised and existing under the laws of the Republic of Panama with its executive office at P.O. Box 61961, 1010 ,Common Street, New Orleans, Louisiana 70161, U.S.A., with a branch office at P.O. Box 3098, Dubai, UAE. On 25th September, 1984 the said parties entered into an agreement, styled "Technical Collaboration Agreement", for the fabrication of off-shore platform structure, including but not limited to Jackets, Piles, Decks, Modules, Platform and Pipeline components, including their sub-components, for the oil and gas industry which required the high degree of expertise and experience as well as the technical knowhow possessed by the respondent. The duration of the agreement was fixed under Art. VIII to be five years from the effective date or five years after commencement of commercial production, whichever is greater, or until otherwise terminated earlier under the agreement. The expression effective date as defined in Art. 1 means the date on which notification is received by the respondent that all Governmental approvals relating to the agreement have been secured; provided that if such approvals are not secured within 180 days from the signing of the agreement, the agreement, upon notice pursuant to Art. XVII of the agreement by either party may be made ineffective whereupon the agreement shall be treated as null and void. Obviously the purpose of the agreement was to establish the basis whereupon the respondent was to provide and the appellant was to receive technology and special technical services related to the establishment and operation of Fabrication Yard for fabricating off-shore platform structures and additional special technical services for any contracts related to marine construction activities that are awarded to the