IMPORTANT POINT
In case of international arbitration Supreme Court will have jurisdiction u/s 11(5) of 1996 Act if Part I thereof is not expressly or impliedly excluded.

Judgment :-

V.S. Sirpurkar, J.

1. This is an application under Section 11 (5) of the Arbitration and Conciliation Act, 1996. The applicant M/s Citation Infowares Ltd. is a company registered under the Companies Act carrying on business in United States of America as also in Gurgaon, India through its establishment/subsidiary. The respondent Equinox Corporation is also a company registered within the appropriate laws of United States of America, having its office at 10, Corporate Park, Suit No.130, Irvine, CA-92606, USA. The Equinox Corporation has been carrying on business in India through outsourcing. It is also carrying on business in India through its own establishment in India, Equinox Global Services Private Limited (hereinafter called `EGSPL). The said EGSPL is a company registered under the Companies Act and has its office in Gurgaon. It is pleaded in the application that the respondent company Equinox Corporation (hereinafter called `EC) had entered into an outsourcing agreement singed in Kolkata, India with the applicant Citation Infowares Ltd (hereinafter called `CIL) on 09.02.2004 wherein the applicant was engaged as a service provider on terms and conditions contained in the agreement. It was agreed in this agreement dated 09.02.2004 that CIL which had bagged orders from its client and since it had sufficient funds, space and existing infrastructure to execute the projects and since it required expert manpower to provide service to its client and further since CIL had approached EC for providing the required number of resources to CIL as against the monthly charges at mutually agreed consideration, EC had agreed to provide resources and, hence, both the parties had, in short, mutually agreed to do the business on certain agreed terms. The terms included that the duration of the agreement was to be for three years. There was a confidentiality clause 10. Following was the clause 10:

"10. Any dispute between the parties hereto to arising from this Agreement, or from an individual agreement concluded on the basis thereof, shall be finally referred to a mutually agreed Arbitrator."

2. Two more agreements were entered into, they being agreements dated 23.07.2004 and 25.01.2007 in between the parties. It is the claim of the applicant that it created infrastructure for seating capacity of 200 customized seats at Gurgaon address of the respondents and same were being utilized by the respondent. All the three agreements were signed at Kolkata, India and the services were being provided and rendered under the said agreement by the applicant at Gurgaon, India.

3. On this backdrop, by a notice dated 09.01.2008 sent through e-mail, the respondent terminated the agreements dated 25.01.2007 w.e.f. 07.03.2008. According to the applicant, this termination of agreement was illegal and wrongful, causing it huge loss. The applicant assessed the damages to be compensated by the respondent tentatively at US $ 23,49,182. The applicant also pleads that the respondent had also failed to pay the outstanding amount of US $ 6,32,182 payable to the applicant under the contract against the invoice raised by the applicant for the period from July, 2007 to January, 2008. The applicant also claimed on this amount the interest @ 18 % per annum.

4. What is important is the agreement dated 25.01.2007 which has already been referred to. Under the said agreement clause 10.1 provided as under:

"10.1 Governing law- This agreement shall be governed by and interpreted in accordance with the laws of California, USA and matters of dispute, if any, relating to this agreement or its subject matter shall be referred for arbitration to a mutually agreed Arbitrator"

5. Thus, in between, first agreement dated 09.02.2004 and the subsequent agreement dated 25.01.2007 there was an essential difference that under the last agreement the governing law was to be that of California, USA. However, that clause did provide for arbitration in case of disputes. On the disputes a