The main legal principle established in the judgment is the binding nature of the Supreme Court's decision on the seat of arbitration, the importance of adhering to the agreed-upon seat of arbitration, and the limitations of courts in resolving jurisdictional disputes related to arbitration.

PRADEEP NANDRAJOG, J.

1. Though arising out of two separate proceedings and two separate orders being challenged in the above captioned appeals, the factual backdrop though different but giving birth to the same legal issue, is the reason why the two appeals are being decided by a singular decision. Whereas Videocon Industries challenges the order dated July 21, 2015 passed in CS (OS) No.2074/2015, wherein the learned Single Judge has, in an anti-suit injunction matter, directed the Arbitral Tribunal comprising Hon’ble Justice (Retd.) G.T.Nanawati, Hon’ble Justice (Retd.) J.K.Mehra and Sh.Soli J.Sorabjee, Senior Advocate to hold arbitral proceedings only at Kuala Lumpur (Malaysia) and has restrained the Tribunal from holding a hearing at Colombo (Sri Lanka); Cairn India Ltd., Ravva Oil (Singapore) and Videocon Industries Ltd. challenge the order dated August 14, 2015 passed in CS (OS) No.2445/2015 in a suit filed by the Union of India restraining the defendants in the suit from participating in the arbitration proceedings before the Arbitral Tribunal comprising Andrew Berkeley, Sir Anthony Evans and Justice (Retd.) A.S.Anand.

2. The two arbitration proceedings emanate from the same contract, having multiple parties thereto. It is the admitted position between the parties that as per Article 33.1 of the Contract it is governed by the laws in India. As per Article 34.12 the seat of the arbitration is at Kuala Lumpur (Malaysia) and therefore concededly curial remedies concerning any award pronounced by the Arbitral Tribunal has to be in Kuala Lumpur. As per the second limb of Article 34.12 of the Contract the arbitration agreement between the parties is governed by the laws of England and thus the constitution of the Arbitral Tribunal and the procedure to be adopted by the Arbitral Tribunal and the proper law of the arbitration would be the laws of England. As per Article 35.2 the contract could not be amended, modified, varied or supplemented in any respect except by an instrument in writing signed by all the parties with the instrument stating the date upon which the amendment/modification shall become effective.

3. We do not intend to make a catalogue of decisions, which are legion, evincing that such kind of agreements, where the underlying law of the contract is of one municipal jurisdiction, curial remedies of another and procedure of arbitration of the third are a fertile ground of litigation in Courts frustrating the very purpose of arbitration. If not a cheap remedy but at least a remedy where decisions are arrived at in the least possible time. For, as was held by the Supreme Court of India in the decision reported as (2014) 7 SCC 603 Reliance Industries Ltd. & Anr. Vs. Union of India, three sets of law may apply under a contract : (i) proper law of the contract; (ii) proper law of the arbitration agreement/lex arbitri; and (iii) proper law of the conduct of arbitration/lex fori/curial law. The doctrine of severability was explained. Thus, under a contract parties are entitled to agree that law of one country would govern the substantive contract and laws of other country would apply to arbitration proceedings and the parties can also agree that conduct of reference to arbitration would be governed by laws of yet a third country.

4. The Union of India, as the custodian of natural resources including petroleum in the territorial waters of India, and therefore exercising the right as the owner thereof, through the Ministry of Petroleum and Natural Gas, entered into a Production Sharing Contract on October 28, 1994 at New Delhi. The contract was executed between the Union of India on the one hand and a consortium of four companies comprising Oil and Natural Gas Corporation Limited (ONGC), Videocon Petroleum Limited, Command Petroleum (India) Private Limited and Ravva Oil (Singapore) Private Limited. In terms of the contract, the consortium was granted an exploration licence and mining lease to explore and produce