2017 Supreme(SC) 247

SUPREME COURT OF INDIA
S.A. BOBDE, ASHOK BHUSHAN, JJ.
Imax Corporation - Appellant
Versus
M/s E-City Entertainment (I) Pvt. Ltd. - Respondent
Civil Appeal No. 3885 of 2017 (Arising out of SLP (C) No. 34009 of 2013)
Decided On : 10-03-2017

IMPORTANT POINT
When there is an agreement for holding arbitration outside India, Part-I of Act, 1996 stands excluded.

Headnote:(a) Arbitration law – Parties agreeing to invoke ICC Rules of Arbitration for arbitration – These Rules therefore must be construed as being read into the arbitration clause. (Para 18)

       (b) ICC Rules of Arbitration, 2004 – Article 14(1) – International Court of Arbitration deciding London, United Kingdom to be juridical seat of the arbitration and, therefore, on the basis of Part-I of the English Arbitration Act, 1996. (Para 19)

       (c) Arbitration law – Parties agreeing to law governing arbitration to be ICC Rules and the law governing contract as a whole will be the Singaporean Law – Law for the arbitration agreement not specified – Validity of the award – Therefore should be determined in accordance with the law of the state in which the arbitration proceedings have taken place – Instantly the English Law – The place of arbitration, i.e., London will attract the law of UK – In accord with Section 2(7), Arbitration and Conciliation Act, 1996 (Para 20, 21, 22)

       (2015) 5 SCC 656; (2015) 9 SCC 172; (2014) 7 SCC 603 – Distinguished

       (d) Arbitration law – Instantly there being an agreement for holding arbitration in London, Part-I of Act, 1996 stands excluded – a (Para 26,

       (1992) 3 SCC 551; (2015) 5 SCC 656; (2002) 4 SCC 105; (2008) 4 SCC 190; (2011) 6 SCC 161; (2011) 6 SCC 179; (2011) 10 SCC 420; (2014) 7 SCC 603; (2015) 10 SCC 213; (2015) 9 SCC 172; (2016) 11 SCC 508 – Referred

       (e) Arbitration and Conciliation Act, 1996 – Section 34 – Seat of arbitration in London – Arbitration conducted in accordance with ICC Rules – Law of arbitration apparently Law of UK – Law governing the contract being Singaporean law – Part I of the Act expressly excluded – Award passed in London – Cannot be challenged u/s 34. (Para 33)

       Facts of the case:

       On 28.09.2000, the appellant entered into an agreement with the respondent for a supply of large format projection systems for cinema theatres to be installed in theatres all across India.

       On 16.06.2004, the appellant filed a request for arbitration with the ICC, and claimed damages. On 08.10.2004, the ICC i.e. the chosen arbitral forum fixed London as the place of arbitration i.e. the juridical seat of arbitration, after consulting the parties.

       On 11.02.2006, the first partial final award was made in favour of the appellant declaring that the respondent was in breach of the agreement and therefore liable for damages. The award stated that the decision on the other issues, including damages/costs would be reserved for a future award.

       On 24.08.2007, the Arbitral Tribunal passed the second partial award rejecting the above objection filed by the respondent. By this award, the tribunal determined the quantum of damages payable to the appellant. This award was also made in London, the juridical seat of this arbitration. A sum of $9,406,148.31 was awarded to the appellant.

       The Arbitral Tribunal passed a final award on 27.03.2008 on the issue of interest and costs. A sum of $1,118,558.54 by way of interest and a further sum of $2,512.60 per day from 01.10.2007 until the payment of the award was awarded in favour of the appellant. Sums of $400,000 and $384,789.21 by way of costs of arbitration fixed by the ICC and costs by way of attorney’s fees, expert fees and related expenses were also directed to be paid. Final award dated 27.03.2008 was received by the respondent on 01.04.2008.

       The final award on the issues of interest and costs was amalgamated with the earlier awards, both of which were incorporated by reference into itself. The third final award also stated that the place of arbitration is London.

       On 21.07.2008, the respondent challenged the aforesaid awards under Section 34 of the Arbitration Act before the High Court in India after a period of more than two years from the first partial award, more than one year from the second partial award and a period of 3 months, 24 days from the final award.

       The learned Single Judge allowed the notice of motion on the condonation of delay and held that the petition under Section 34 was maintainable before the High Court.

       Finding of the Court:

       When there is an agreement for holding arbitration outside India, Part-I of Act, 1996 stands excluded.

       Result: Appeal allowed.