IMPORTANT POINT
If either the juridical seat of the arbitration is outside India, or the law governing the arbitration agreement is a law other than Indian law, then, Part I of the 1996 Act shall be excluded by necessary implication.

Headnote:(a) Administration of Justice – Binding precedent – Bharat Aluminium Company overruling Bhatia International – However judgment in Bharat Aluminium Company made applicable prospectively – Meaning thereby that all arbitration agreements made prior to date of pronouncement of Bharat Aluminium Company would be governed by Bhatia International. (Para 16)
       (2012) 9 SCC –Relied upon
       (2002) 4 SCC 105 – Referred
       (b) Arbitration and Conciliation Act, 1996 – Part I – If either the juridical seat of the arbitration is outside India, or the law governing the arbitration agreement is a law other than Indian law – Then, Part I shall be excluded by necessary implication. (Para 17)
       (2011) 6 SCC 161; (2011) 6 SCC 179; (2011) 9 SCC 735; (2014) 7 SCC 603; Civil Appeal No. 610 of 2015 – Relied upon
       (c) Arbitration and Conciliation Act, 1996 – Part I, Section 14 – Arbitration Agreement making juridical seat of arbitration at London – Agreement also stating that it is governed by English law – Part I of the Act excluded by necessary implication – Application made u/s 14 – Not maintainable. (Para 21)
       (1970) 1 SCC 613 – Distinguished
       (d) Arbitration and Conciliation Act, 1996 – Part I, Section 14 – Union of India moving under UNCITRAL – Getting adverse judgment from the Permanent Court of Arbitration – Filing instant application u/s 14 two days thereafter – Abuse of process of law. (Para 21)
       Facts of the case:
       The present case arises as a sequel to this Court’s decision delivered on 28th May, 2014 in Reliance Industries Limited and another v. Union of India, (2014) 7 SCC 603.
       A brief résumé of the facts that led to the judgment of this Court on 28th May, 2014 are as follows:-
       Two Production Sharing Contracts (“PSC”) for the Tapti and Panna Mukta Fields were executed between Reliance Industries Limited, the Union of India, Enron Oil and Gas India Limited and the ONGC.
       The PSCs were amended to substitute Enron Oil & Gas India Limited with BG Exploration and Production India Limited on 10.1.2005. Since certain disputes and differences arose between the Union of India and Reliance Industries Limited sometime in 2010, the Union of India invoked the arbitration clause. On 14.9.2011, the Union of India, Reliance Industries Limited and BG Exploration and Production India Limited, agreed to change the seat of arbitration to London, England and a final partial consent award was made and duly signed by the parties to this effect. On 12.9.2012, the Arbitral Tribunal passed a final partial award which became the subject matter of a Section 34 petition filed in the Delhi High Court by the Union of India, dated 13.12.2012. The Delhi High Court by a judgment and order dated 22.3.2013 decided that the said petition filed under Section 34 was maintainable. Supreme Court in a detailed judgment dated 28.5.2014 reversed the judgment of Delhi High Court.
       The present SLP arises out of a judgment dated 3.7.2014 whereby the Delhi High Court has dismissed an application filed under Section 14 of the Arbitration and Conciliation Act, 1996, dated 12.6.2013, on the ground that Supreme Court’s judgment dated 28.5.2014 having held that Part-I of the Arbitration Act, 1996 is not applicable, such petition filed under Section 14 would not be maintainable.
       Finding of the Court:
       Part I of the 1996 Act is not applicable to instant case.

JUDGMENT

R.F. Nariman, J.

1. The present case arises as a sequel to this Court’s decision delivered on 28th May, 2014 in Reliance Industries Limited and another v. Union of India, (2014) 7 SCC 603.

2. A brief résumé of the facts that led to the judgment of this Court on 28th May, 2014 are as follows:-Two Production Sharing Contracts (hereinafter referred to as “PSC”) for the Tapti and Panna Mukta Fields were executed between Reliance Industries Limited, the Union of India, Enron Oil and Gas India Limited and the ONGC. The relevant clauses of the PSCs insofar as they are applicable to the present controversy are as follows:-

“ARTICLE 32: APPLICABLE LAW AND LANGUAGE OF THE CONTRACT

32.1 Subject to the provisions of Article 33.12, this Contract shall be governed and interpreted in accordance with the laws of India.

32.2 Nothing in this Contract shall entitle the Government or the Contractor to exercise the rights, privileges and powers conferred upon it by this Contract in a manner which will contravene the laws of India.

ARTICLE 33: SOLE EXPERT, CONCILIATION AND ARBITRATION

33.9 Arbitration proceedings shall be conducted in accordance with the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL) of 1985 except that in the event of any conflict between these rules and the provisions of this Article 33, the provisions of this Article 33 shall govern. …

33.12 The venue of conciliation or arbitration proceedings pursuant to this Article, unless the Parties otherwise agree, shall be London, England and shall be conducted in the English Language. The arbitration agreement contained in this Article 33 shall be governed by the laws of England. Insofar as practicable, the Parties shall continue to implement the terms of this Contract notwithstanding the initiation of arbitral proceedings and any pending claim or dispute.

34.2 This Contract shall not be amended, modified, varied or supplemented in any respect except by an instrument in writing signed by all the Parties, which shall state the date upon which the amendment or modification shall become effective.”

3. It needs to be mentioned that the PSCs were amended to substitute Enron Oil & Gas India Limited with BG Exploration and Production India Limited on 10.1.2005. Since certain disputes and differences arose between the Union of India and Reliance Industries Limited sometime in 2010, the Union of India invoked the arbitration clause and appointed Mr. Peter Leaver, QC as Arbitrator. Reliance Industries Limited appointed Justice B.P. Jeevan Reddy as Arbitrator and Mr. Christopher Lau SC was appointed as Chairman of the Tribunal. On 14.9.2011, the Union of India, Reliance Industries Limited and BG Exploration and Production India Limited, agreed to change the seat of arbitration to London, England and a final partial consent award was made and duly signed by the parties to this effect. On 12.9.2012, the Arbitral Tribunal passed a final partial award which became the subject matter of a Section 34 petition filed in the Delhi High Court by the Union of India, dated 13.12.2012. The Delhi High Court by a judgment and order dated 22.3.2013 decided that the said petition filed under Section 34 was maintainable. This Court in a detailed judgment dated 28.5.2014 reversed the Delhi High Court. Since this judgment in effect determines the controversy raised in the present SLP, it is important to set it out in some detail. After stating the facts and the contentions of both parties, this Court held:

“Before we analyse the submissions made by the learned Senior Counsel for both the parties, it would be appropriate to notice the various factual and legal points on which the parties are agreed. The controversy herein would have to be decided on the basis of the law declared by this Court in Bhatia International [(2002) 4 SCC 105] . The parties are agreed and it is also evident from the final partial consent award dated 14-9-2011 that the juridical seat (or legal pla

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2015 Supreme(SC) 908

SUPREME COURT OF INDIAA.K. Sikri, R.F. Nariman, JJ.UNION OF INDIA – PETITIONERVERSUS RELIANCE INDUSTRIES LIMITED & ORS. – RESPONDENTSSpecial Leave Petition (Civil) No.11396 of 2015Decided On : 22-09-2015

IMPORTANT POINTIf either the juridical seat of the arbitration is outside India, or the law governing the arbitration agreement is a law other than Indian law, then, Part I of the 1996 Act shall be excluded by necessary implication.

Cases Referred (10)

SUPREME COURT OF INDIA
A.K. Sikri, R.F. Nariman, JJ.
UNION OF INDIA – PETITIONER
VERSUS
RELIANCE INDUSTRIES LIMITED & ORS. – RESPONDENTS
Special Leave Petition (Civil) No.11396 of 2015
Decided On : 22-09-2015

IMPORTANT POINT
If either the juridical seat of the arbitration is outside India, or the law governing the arbitration agreement is a law other than Indian law, then, Part I of the 1996 Act shall be excluded by necessary implication.