2018 Supreme(SC) 917

SUPREME COURT OF INDIA
Dipak Misra, CJI., A.M. Khanwilkar, D.Y. Chandrachud, JJ.
Union of India – Appellant
Versus
Hardy Exploration and Production (India) INC – Respondent
Civil Appeal No. 4628 of 2018
Decided On : 25-09-2018

IMPORTANT POINTS
To arrive at a conclusion on whether it determines the seat or not, the arbitration clause had to be read appositely.
When the place/seat of arbitration was to be decided by the parties and in the event of their failure to do so Arbitral Tribunal was required to determine the same but nothing was done, held, Courts in India have jurisdiction.

Headnote:(a) Arbitration law – Seat and venue of arbitration – Apposite reading of arbitration clause for understanding intention of parties – To arrive at a conclusion on whether it determines the seat or not – If venue of arbitration is mentioned with some appendix, depending on the nature of the prescription, the Court can come to a conclusion that there is implied exclusion of Part I of the Arbitration and Conciliation Act, 1996. (Para 17, 23)

       (2002) 4 SCC 105; (2011) 6 SCC 161; (2011) 6 SCC 179; (2012) 9 SCC 552; (2014) 7 SCC 603; (2008) 10 SCC 308; (2008) 10 SCC 308; (2016) 11 SCC 508; (2017) 5 SCC 331 – Relied upon

       (1988) (1) Lloyd’s Law Reports 116; (1993) 2 Lloyd’s Law Reports 48; (2005) 3 WLR 129; (2009) EWHC 957 (Comm.); (2018) 7 SCC 374; (1992) 1 AC 562; (2007) EWCA Civ 1282 (CA); (2008) 1 Lloyd’s Law Reports 239; (2008) EWHC 426 (TCC) ; (2012) EWCA Civ 638 (1); (2012) EWHC 3711 (Comm.); (2016) SCC Online MYFC 35; (2008) 4 SCC 190; (2014) 5 SCC 1; (2015) 10 SCC 213; (2017) 14 SCC 722 – Referred

       (1998) 1 SCC 305 – Distinguished

       (b) UNCITRAL Model Law, 1985 – Articles 20 and 31 – Unless specifically agreed by the parties, the seat and venue of arbitration shall be decided by the arbitrator – In such a case the Award shall state the date and the place of arbitration as determined in accordance with Article 20(1) – Instantly, place of arbitration was to be decided by the parties – In the event of their failure to do so Arbitral Tribunal required to determine the same – The determination required to be clearly stated in the “form and contents of award” – No determination made – Holding arbitration at some place and signing the award – Relatable to venue, not seat. (Para 29, 31, 32)

       (2015) 9 SCC 172; (2017) 5 SCC 331; (2014) 7 SCC 603 – Relied upon

       (2009) EWHC 957 (Comm.) – Referred

       © Arbitration law – Seat and place of arbitration – Used interchangeably – Mention of a place without any conditions – Equivalent to seat – Condition, if any postulated, has to be satisfied to treat the place as seat – Instantly two distinct and disjunct riders placed on ‘place’ – No agreement about place, no determination thereof by arbitral tribunal – Held place of arbitration cannot be held the seat – Thus Kuala Lumpur, the place of arbitration, is venue and not seat – Held, Courts in India have jurisdiction. (Para 33, 34)

       (2004) 3 SCC 1 – Relied upon

       Facts of the case:

       Division Bench of the High Court had dismissed the appeal preferred by the Union of India, the appellant herein, assailing the order dated 9th July, 2015 passed by the learned Single Judge in OMP No. 693 of 2013 and the order dated 20th January, 2016 passed in Review Petition No. 400 of 2015 in OMP No. 693 of 2013. The Division Bench took note of the fact that

       The appellant had challenged the legal propriety and correctness of the award made by the Arbitrators in favour of the respondents under Section 34 of the Arbitration and Conciliation Act, 1996.

       The thrust of the objection raised by respondent related to the maintainability of the application under Section 34 of the Act. It was contended before the High Court that the courts in India do not have the jurisdiction to entertain an application under Section 34 of the Act to challenge the legality of the award in question. The learned Single Judge, vide order dated 9th July, 2015, accepted the preliminary objection and came to hold that in view of the terms of the agreement and the precedents holding the field, the Indian courts have no jurisdiction to entertain the application. Being of this view, the learned Single Judge did not advert to the other grounds urged in the petition.

       The Division Bench concurred with the opinion expressed by the learned Single Judge.

       Finding of the Court:

       Seat and venue are often used interchangeably but without anything more place cannot become the seat of arbitration.

       Result: Appeal allowed.