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2011 (5) TMI 1115 - SC - Indian LawsPowers of High Court in case of petition against International arbitration agreement - HELD THAT - In terms of Clause 34.12 of the PSC entered into by 5 parties, the seat of arbitration was Kuala Lumpur, Malaysia. However, due to outbreak of epidemic SARS, the arbitral tribunal decided to hold its sittings first at Amsterdam and then at London and the parties did not object to this. In the proceedings held at London, the arbitral tribunal recorded the consent of the parties for shifting the juridical seat of arbitration to London. Therefore, mere change in the physical venue of the hearing from Kuala Lumpur to Amsterdam and London did not amount to change in the juridical seat of arbitration. This is expressly indicated in Section 53 of the English Arbitration Act, 1996. In our opinion, the learned Single Judge of Gujarat High Court had rightly followed the conclusion recorded by the three-Judge Bench in Bhatia International v. Bulk Trading SA 2002 (3) TMI 824 - SUPREME COURT and held that the District Court, Vadodara did not have the jurisdiction to entertain the petition filed u/s 9 of the Act because the parties had agreed that the law governing the arbitration will be English law and the provisions of Part-I of the Indian Arbitration Act would apply to international commercial arbitrations held outside India, unless the parties by agreement express or implied, exclude all or any of its provisions. In the present case also, the parties had agreed that notwithstanding Article 33.1, the arbitration agreement contained in Article 34 shall be governed by laws of England. This necessarily implies that the parties had agreed to exclude the provisions of Part I of the Act. As a corollary to the above conclusion, we hold that the Delhi HC did not have the jurisdiction to entertain the petition filed by the Respondents under Section 9 of the Act and the mere fact that the Appellant had earlier filed similar petitions was not sufficient to clothe that High Court with the jurisdiction to entertain the petition filed by the Respondents. In the result, the appeal is allowed. The impugned order is set aside and the petition filed by the Respondents under Section 9 of the Act is dismissed.
Issues Involved:
1. Jurisdiction of the Delhi High Court under Section 9 of the Arbitration and Conciliation Act, 1996. 2. Designation and change of the seat of arbitration from Kuala Lumpur to London. 3. Applicability of Part I of the Arbitration and Conciliation Act, 1996 to international commercial arbitrations held outside India. Issue-wise Detailed Analysis: 1. Jurisdiction of the Delhi High Court under Section 9 of the Arbitration and Conciliation Act, 1996: The primary issue was whether the Delhi High Court could entertain the petition filed by the Respondents under Section 9 of the Arbitration and Conciliation Act, 1996 for interim relief. The High Court had held that it had jurisdiction based on the judgment in Bhatia International v. Bulk Trading S.A. (2002) 4 SCC 105, which stated that Part I of the Act applies to international commercial arbitrations held outside India unless expressly excluded by the parties. However, the Supreme Court found that the parties had agreed that the arbitration agreement would be governed by English law, thereby excluding the applicability of Part I of the Act. Consequently, the Delhi High Court did not have jurisdiction to entertain the petition. 2. Designation and change of the seat of arbitration from Kuala Lumpur to London: The Production Sharing Contract (PSC) initially designated Kuala Lumpur as the seat of arbitration. Due to the SARS epidemic, the arbitral tribunal shifted the venue to Amsterdam and then to London. The tribunal recorded the parties' consent to shift the seat to London. However, the Supreme Court emphasized that any change in the seat of arbitration required a written agreement signed by all parties, as per Clause 35.2 of the PSC. Since no such agreement existed, the shift was deemed a physical change of venue, not a juridical change of the seat of arbitration. Thus, Kuala Lumpur remained the juridical seat. 3. Applicability of Part I of the Arbitration and Conciliation Act, 1996 to international commercial arbitrations held outside India: Referencing Bhatia International, the Supreme Court reiterated that Part I of the Act applies to international commercial arbitrations held outside India unless expressly excluded. In this case, the parties had agreed that the arbitration agreement would be governed by English law, thereby excluding the provisions of Part I. This was further supported by the judgment in Venture Global Engineering v. Satyam Computer Services Limited (2008) 4 SCC 190, which confirmed the applicability of Part I unless expressly excluded by the parties. Conclusion: The Supreme Court concluded that the Delhi High Court did not have jurisdiction to entertain the petition under Section 9 of the Act because the parties had agreed to be governed by English law, effectively excluding Part I of the Act. Consequently, the appeal was allowed, the impugned order was set aside, and the petition filed by the Respondents under Section 9 of the Act was dismissed.
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