IMPORTANT POINT
Bharat Aluminium applies only prospectively.

JUDGMENT :

Shiva Kirti Singh, J.:-

1. After hearing the parties at length and upon going through the impugned judgment and order dated 6.8.2013 passed by Division Bench of High Court of Judicature at Bombay in Appeal No. 337 of 2013, filed under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’), we are of the considered view that the impugned order is based upon proper appreciation of relevant facts and follows the law laid down by this Court correctly in arriving at the finding that in the facts of the case the courts in India have no jurisdiction to entertain the petition under Section 34 of the Act, challenging the international commercial award of an arbitral tribunal constituted by the Refined Sugar Association, London.

2. There is no dispute between the parties that the Constitution Bench judgment of this Court in the case of Bharat Aluminium Company etc. vs. Kaiser Aluminium Technical Services Inc. etc. (BALCO)[2012 (9) SCC 552] overruled the earlier judgment in Bhatia International Vs. Bulk Trading S.A. and Anr.[2002 (4) SCC 105] in coming to the conclusion that Part I of the Act would have no application to international Commercial Arbitration held outside India, but on account of further direction that the law so declared shall apply only prospectively to all arbitration agreements executed thereafter, the arbitration agreement in the present case is to be governed by the law decided in the case of Bhatia International (supra). According to the judgment in the case of Bhatia International (supra) the provisions of Part I of the Act would apply to International Commercial Arbitration held out of India unless the parties by agreement, express or implied, exclude all or any of its provisions.

3. Since we are in agreement with the views of learned High Court of Bombay, it is not necessary to go to the factual details but on account of lengthy submissions advanced on behalf of the petitioner, we feel it proper to extract paragraph 3 of the impugned judgment which reflects not only the relevant facts but also the relevant terms and conditions of the agreement between the parties. It reads thus:

“3. The Appellant is an Indian Company which carries on the business of import and export of sugar among other commodities. The Respondent is a Swiss Company with whom the Appellant entered into an agreement on 12th January 2010 for the purchase of 2700 metric tons of Brazilian white sugar of a stipulated description. The sugar was to be shipped between 15 January 2010 and 15 February 2010 at the option of the seller, the Respondent. The port of destination was to be Nhava Sheva or Kolkata at the option of the Appellant. Disputes arose between the parties. The agreement between the parties contained inter alia the following terms and conditions:

‘Terms and conditions:

This Contract is subject to the Rules of the Refined Sugar Association, London as fully as if the same had been expressly inserted herein, whether or not either or both parties to it are Members of the Association.

If any provision of this Contract is inconsistent with the Rules, such provision shall prevail.’

Parties envisaged that all disputes would be submitted to arbitration. The arbitration agreement was thus:

‘Arbitration: All disputes arising out of or in conjunction with this Contract shall be referred to the Refined Sugar Association, London for settlement in accordance with the Rules relating to Arbitration. This Contract shall be governed by and construed in accordance with English Law.’

A final award was passed by the arbitral tribunal on 31 December, 2010 which was sought to be challenged by the Appellant in proceedings under Section 34 of the Act of 1996 before the learned Single Judge of this Court. An objection was taken to the jurisdiction of this Court to entertain the petition on the ground that the applicability of Part- I of the Act was excluded by the agreement between the parties and consequently even u