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2018 Supreme(Del) 2148

IN THE HIGH COURT OF DELHI AT NEW DELHI
NAVIN CHAWLA, J.
Dredging Corporation of India - Petitioner
Versus
Mercator Limited - Respondent
O.M.P. (COMM) 334, 335, 336 of 2018
Decided On : 10-10-2018

Advocates Appeared:
For the Petitioners: Mr. V. Seshagiri, Mr. Siddharth Sachar, Mr. Varun Loonkar, Advs.
For the Respondents: Mr.Sandeep Sethi, Sr. Adv. with Mr. A.K. Gupta, Mr. Prashant Bhardwaj, Mr. Amitava Majumdar, Mr. Arjun Mital, Ms. Tripti Sharma, Advs., Mr.Arvind Kumar Gupta, Mr. Amitava Majumdar, Mr. Prashant Bhardwaj, Mr. Gajanand Kirodiwar, Mr. Arjun Mittal, Ms. Tripti Sharma, Advs.

The determination of the 'Seat' of arbitration is based on the agreement, correspondence, and conduct of the parties.

Headnote:

Jurisdiction - Arbitration Agreement - Arbitration and Conciliation Act, 1996 - Section 34

Fact of the Case:

The respondent challenged the jurisdiction of the court to entertain the petitions under Section 34 of the Arbitration and Conciliation Act, 1996, arguing that the seat of arbitration was in London and therefore, Part-I and Section 34 of the Act would not be applicable.

Finding of the Court:

The court found that the parties agreed on the 'Seat' of arbitration to be at London based on the Arbitration Agreement, correspondence, and conduct of the parties.

Issues: The main issue was whether the court had jurisdiction to entertain the petitions under Section 34 of the Act due to the seat of arbitration being in London.

Ratio Decidendi: The court applied the principles from Union of India vs. Hardy Exploration and Production (India) INC 2018 SCC OnLine SC 1640 to determine the 'Seat' of arbitration based on the agreement, correspondence, and conduct of the parties.

Final Decision: The court dismissed the petitions under Section 34 of the Act, stating that it lacked jurisdiction to entertain them.

JUDGMENT :

NAVIN CHAWLA, J.

1. The respondent has challenged the jurisdiction of this Court to entertain these petitions under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’).

2. The ground of challenge is that the seat of arbitration in the present petitions was London and therefore, Part-I and Section 34 of the Act will not be applicable to such arbitration proceedings.

3. The Arbitration Agreement between the parties is contained in Clause 24 of the Time Charter Party Agreements which is identical in all three cases and is reproduced herein below:

“24. Law and Arbitration:

(a) This contract shall be governed by and construed in accordance with Indian Law and any dispute arising out of or in connection with this contract shall be referred to arbitration in London in accordance with the Arbitration Act, 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this clause. The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.

The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator with 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has does so within the 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within 14 days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advice the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement.

Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.

In cases where neither the claim nor any counter claim exceeds the sum of USD 50,000 (or such other sum as the parties may agree), the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.”

4. It is not disputed by the counsel for the petitioner that this Agreement would make London as the ‘Seat’ of arbitration. In fact, the learned senior counsel for the respondent has brought my notice to the procedural order passed by the Arbitral Tribunal for the hearing held from 25.03.2017 to 27.03.2017, wherein it is categorically recorded that the ‘Seat’ of arbitration in terms of the Arbitration Agreement is London, though the hearings were being conducted at New Delhi. The relevant extract from the said order is as under:

“Both Parties confirm that the Seat of the Arbitration in terms of the Arbitration Agreement in the Charter-parties, is London, although the hearings were conducted in New Delhi. It is also confirmed by the Parties that the procedure adopted by the Tribunal was by consent of the Parties.”

5. The petitioner had also filed an application under Section 57(3) of the (English) Arbitration Act, 1996 before the Arbitral Tribunal seeking correction of the Award.

6. It is further brought to my notice that the petitioner itself has challenged the Impugned Award before the High Court of Justice, Business and Property Courts of England and Wales, Commercial Court (QBD) by way of a petition under Section 68 of the (English) Arbitration Act, 1996. In the said petition also, it has been contended that the ‘Seat’ of arbitration was London. In fact, the petitioner has also filed an affidavit of Mr.Damian Michael Joseph Wilkes, Solicitor of St. Olave’s House, Ironmonger Lane,


























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