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D. Y. CHANDRACHUD, J. B. PARDIWALA, MANOJ MISRA
Arif Azim Co. Ltd – Appellant
Versus
Micromax Informatics Fze – Respondent
Key Points: - The designation of a specific place as the 'venue' of arbitration, where the proceedings are anchored to that location with no other significant contrary indicia, is construed as the 'seat' of arbitration. (!) (!) (!) (!) - Part I of the Arbitration and Conciliation Act, 1996 applies only to arbitrations where the seat is in India; it does not apply to international commercial arbitrations seated outside India. (!) (!) (!) (!) - The doctrine of concurrent jurisdiction is overruled, and the determination of the seat dictates the exclusive jurisdiction of the courts at that seat, excluding Indian courts if the seat is abroad. (!) (!) - If the seat is outside India, Indian courts lack jurisdiction to appoint arbitrators under Section 11 of the Act, 1996. (!) (!) (!) - The 'Closest Connection Test' is no longer the primary criterion for determining the seat; instead, the express designation of the venue/seat and the curial law are decisive. (!) (!) (!) - A stipulation of 'non-exclusive jurisdiction' of foreign courts does not prevent the place designated as 'venue' from being the 'seat' or oust the jurisdiction of courts at the seat. (!) (!) (!) - The agreement to arbitrate under UAE rules and Dubai as the venue establishes Dubai as the seat, excluding Indian court jurisdiction. (!) (!) - The petitioner's petition under Section 11 was dismissed because the seat of arbitration was determined to be Dubai, UAE, not India. (!) (!)
JUDGMENT
J.B. PARDIWALA, J.:
For the convenience of exposition, this judgment is divided into the following parts: -
| INDEX |
| A. FACTUAL MATRIX |
| B. SUBMISSIONS OF THE PARTIES |
| i. Submissions on behalf of the Petitioner. |
| ii. Submissions on behalf of the Respondent. |
| C. ISSUES FOR DETERMINATION |
| D. ANALYSIS |
| i. The Notional Doctrine of Concurrent Jurisdiction and Applicability of Part I of the Arbitration & Conciliation Act, 1996 |
| a. Pre-BALCO Regime. |
| b. Post BALCO Regime. |
| ii. Criterion or Test for Determination of Seat of Arbitration: Conflict of ‘Venue’ versus ‘Seat’ of Arbitration. |
| a. Closest Connection Test – Place of Arbitration to be ascertained by the Law governing the Arbitration Agreement and not the Place of Arbitration |
| b. The Shashoua Principle – ‘Venue’ to be construed as ‘Seat’ |
| iii. Whether the Seat of Arbitration in the underlying Distributorship Agreement is in India? |
| iv. Doctrine of Forum non Conveniens |
| E. CONCLUSION |
1. The present petition has been filed under Section 11 sub-section (6)(a) read with Section 11 sub-section (12)(a) of the Arbitration and Conciliation Act, 199
* **Bharat Aluminium Co. Ltd. VS Kaiser Aluminium Technical Service, Inc. - 2012 0 Supreme(SC) 596:** Identified as bad law. The provided text explicitly states: "The judgment in Bhatia International and in Venture Global Engineering overruled, but this overruling shall apply prospectively, to all the arbitration agreements executed hereafter." While the case itself is the source of the overruling, the cases cited within it (*Bhatia International* and *Venture Global Engineering*) are identified as overruled.
**Followed / Consistent with Prevailing Principles**
* **(Arif Azim Co. Ltd. v. M/s. Micromax Informatics Fze):** This case is treated as a current authority that applies the "Shashoua principle" and examines the arbitration regime change following *BALCO*.
* **Roger Shashoua VS Mukesh Sharma - 2017 0 Supreme(SC) 621:** This case is treated as valid law, confirming that *Enercon (India) Ltd.* is not *per incuriam* (i.e., it is not bad law) in relation to *BALCO*. It further outlines the application of Part I regarding the seat of arbitration.
* **BGS SGS Soma JV VS NHPC Ltd. - 2019 0 Supreme(SC) 1350:** This case is treated as an authoritative interpretation of the Arbitration Act, clarifying the distinction between "seat" and "venue," and affirming the role of Section 42 in avoiding conflicting jurisdiction.
**Established Principles / Interpretive Guidance**
* **INDUS MOBILE DISTRIBUTION PRIVATE LIMITED VS DATAWIND INNOVATIONS PRIVATE LIMITED - 2017 6 Supreme 514:** Establishes the principle that the seat of arbitration determines exclusive supervisory jurisdiction.
* **Enercon (India) Ltd. VS Enercon GMBH - 2014 1 Supreme 653:** Provides established points of law, noting the independence of arbitration agreements and the distinction between seat and venue.
* **Mankastu Impex Private Limited VS Airvisual Limited - 2020 3 Supreme 394:** Confirms established principles regarding international commercial arbitration, emphasizing that the seat determines applicable law and that seat/venue are not interchangeable.
* **UNION OF INDIA VS RELIANCE INDUSTRIES LIMITED - 2015 7 Supreme 166:** Establishes the clear rule that if the juridical seat is outside India, Part I of the 1996 Act is excluded by necessary implication.
* **Swastik Gases P. Ltd. VS Indian Oil Corp. Ltd. - 2013 0 Supreme(SC) 588:** Confirms the principle that specified jurisdiction in a contract implies the exclusion of others.
* **Modi Entertainment Network VS W. S. G. Cricket Pte. LTD. - 2003 1 Supreme 709:** Confirms the principle regarding the refusal of anti-suit injunctions when parties have chosen a foreign forum.
* **Indtel Technical Services Pvt. Ltd. VS W. S. Atkins Rail Ltd. - 2008 8 Supreme 98:** Clarifies the interpretation of law and procedure in silent arbitration agreements.
* **Venture Global Engineering VS Satyam Computer Services Ltd. - 2008 1 Supreme 1:** Affirms the rights of the judgment-debtor under Section 34 regarding public policy.
* **Sumitomo Heavy Industries VS Ongc LTD. - 1997 10 Supreme 157:** Provides a specific interpretation regarding the scope of "curial law" in relation to filing awards.
* **(Ltd. Vs. Datawind Innovations Pvt. Ltd. & Ors.):** The text is fragmentary ("Ltd." ... Ltd." ... Ltd. Vs...") and provides no context regarding its judicial treatment or the subject matter at issue.
* **(Secure Industries Ltd. v. Godrej and Boyce MFG. Co. ... & Construction Co.):** While the name of the case is provided, the descriptive text is incomplete and refers only to other entities without specifying its current legal status, treatment, or the principle it establishes.
The seat of arbitration is determined by the explicit terms of the arbitration agreement, and the designation of a venue as the seat excludes jurisdiction of Indian courts when the seat is outside In....
The designated seat of arbitration creates exclusive jurisdiction for resolving disputes as per contract, regardless of the place of contract execution or asset location.
Point of law: Where any disputes arise between parties in respect of or in connection with the agreement then parties shall first endeavour to conciliate the disputes failing which the same shall be ....
In a domestic arbitration, the selected forum should have precedence over the seat of arbitration to give primacy to party autonomy.
The jurisdiction for appointing an arbitrator lies with the court where the principal agreement was executed, as per Section 11(6), despite a venue specified in an ancillary agreement.
Point of Law : There was concurrent jurisdiction conferred on the courts ceased with subject matter in dispute and the courts where arbitration was carried out.
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