2025 Supreme(SC) 1960

SUPREME COURT OF INDIA
PAMIDIGHANTAM SRI NARASIMHA, ATUL S. CHANDURKAR, JJ.
Balaji Steel Trade – Petitioner
VERSUS
Fludor Benin S.A. & Ors. – Respondents
Arbitration Petition No. 65 of 2023
Decided On : 21-11-2025

The jurisdiction for disputes governed by an international arbitration agreement lies with the designated seat, in this case Benin, precluding any proceedings in Indian courts under the Indian Arbitration Act.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - Dismissal of petition for appointment of arbitrator in international commercial arbitration governed by laws of Benin - Jurisdiction of Indian Courts excluded due to the international nature of arbitration as designated in Buyer and Seller Agreement (BSA) - No novation of BSA by subsequent contracts - All disputes must be resolved under the arbitration clause contained in BSA, which stipulates arbitration in Benin - Doctrine of issue estoppel applies as the same issues were previously adjudicated by the High Court. (Paras 23-30)

Facts of the case:
The petitioner, Balaji Steel Trade, sought to invoke arbitration for disputes under the BSA with Respondent No.1, Fludor Benin S.A., and the contracts with Respondents No. 2 and 3 in connection with a supply agreement for cottonseed cake. Disputes arose regarding obligations and the invocation of arbitration in Benin against the petitioner’s intention to resolve the matter in India. (Paras 3-12)

Findings of Court:
The court held that the arbitration agreement in the BSA governs the disputes, and it was intentionally established that arbitration would take place in Benin, excluding jurisdiction under Indian law via Section 11. The subsequent contracts did not novate the BSA’s clauses, and the invocation of Part I of the Act in India was legally untenable. (Paras 30-39)

Issues: The main issues include the applicability of arbitration clauses in the BSA versus subsequent Sales Contracts and HSSAs, the presence of issue estoppel, and the jurisdiction of Indian courts in light of international commercial arbitration. (Paras 23-41)

Ratio Decidendi: The court reasoned that since the arbitration clause in the BSA clearly designated Benin as the seat, and governed by Benin law, the jurisdiction of Indian courts is excluded. Furthermore, established legal principles mandate that unless clearly demonstrated, subsequent contracts do not override original agreements unless intended to novate. (Paras 24-39)

Result: Petition dismissed.