A Sovereign State must provide actual submission to a court's jurisdiction; prior agreements are insufficient for jurisdiction, and counterclaims unrelated to the main action cannot proceed.

[1] Enclosure 12 is defendants' application for injunctions and encl 15 is the summons in chambers by the plaintiff to strike out defendants' counterclaim. Both applications were agreed by the parties to be heard together.

[2] Plaintiff has filed written submissions for encl 15 dated 19 December 2011. The defendants also had tendered written submissions.

[3] The preliminary issue to be decided here is that of jurisdiction. Thus, the court has the jurisdiction to grant the relief sought by the defendants in encl 12 and whether the plaintiff had submitted to the jurisdiction of this court. It is a fact that the plaintiff is a Sovereign State.

[4] The background facts material to the present proceedings are as follows. Plaintiff and defendants entered into Product Sharing Contract ("PSC") on 28 October 1994. This is exhibited in exh 2 of encl 2 Jilid 2, the plaintiff's affidavit in support filed in respect of encl 15 affirmed on 14 April 2011. Article 33 of the PSC at p 225 of the affidavit, provides that Indian law governs the contract and the applicable Indian law are not to be contravened. It is clearly provided in the agreement between the parties that the contractor cannot exercise any act that contravenes the Indian law. Article 34.2 of the PSC refers to venue of arbitration which is Kuala Lumpur; but the law governing arbitration is English law. Learned counsel for the plaintiff submitted that though the law governing arbitration is English law and the venue of arbitration is Kuala Lumpur, there cannot be any contravention of Indian law which governs the contract Indian law because of art 33.2 of the PSC. None of the parties are Malaysian and no part of the contract is to be performed in Malaysia except for arbitration.

[5] Parties have disputes and had referred the disputes to arbitration in Kuala Lumpur. An Award was given on 18 January 2011 see encl 2 exh 1.

[6] Plaintiff is a foreign Sovereign State and is the respondent in a related arbitration proceedings with the defendants who was the claimant.

[7] On the issue of jurisdiction, learned counsel for the defendants submitted that the court has the jurisdiction to grant the prayers in encl 12; and withregard to the plaintiff's application to strike out the counterclaim by the defendants, learned counsel submitted that the court has to consider the nature of the counterclaim and the test to be applied these are the issues before the court decides whether to strike out the counterclaim.

[8] In this case, the counterclaim by the defendants was mounted in an affidavit in reply to the plaintiff's application in encl 1 to set aside the arbitration Award obtained by the defendants against the plaintiff.

[9] Learned counsel for the defendants submitted that the court has jurisdiction because the seat of arbitration is Kuala Lumpur, Malaysia by virtue of art 34.1 of the PSC. It was further submitted that the choice of seat of arbitration clause in the PSC is analogous to exclusive jurisdiction clause. In an earlier case between the same parties, (The Government Of India v. Cairn Energy India Pty Ltd & Anor, ), the court has ruled that the curial or procedural law applicable in the arbitration proceedings between the parties at Kuala Lumpur are Malaysian laws. Therefore, learned counsel for the defendants argued that by agreeing to Kuala Lumpur as seat of arbitration as under cl 34 of the PSC, the plaintiff has submitted to the jurisdiction of Malaysia court. Accordingly, the learned counsel submitted that since the court has jurisdict