2013 (6) TMI 935 - HC - FEMA

Summary

Issues Involved:

1. Jurisdiction and maintainability of Section 34 Petition in India.
2. Proper law governing the arbitration agreement and the contract.
3. Applicability of Part I of the Arbitration Act.
4. Conflict of laws and the governing law.
5. Enforceability and challenge to foreign awards in India.
6. Delay in filing the petition and condonation of delay.

Detailed Analysis:

1. Jurisdiction and Maintainability of Section 34 Petition in India:

The primary issue was whether the Section 34 Petition to set aside the arbitral awards is maintainable in India. The judgment emphasized that the awards in question, being foreign awards, were challenged under Section 34 of the Arbitration Act. The court considered the precedents set by the Supreme Court in Bhatia International and Venture Global, which held that Part I of the Arbitration Act applies to international commercial arbitrations unless expressly excluded by the parties. The court concluded that the petition is maintainable in India, as there was no specific exclusion of Part I, and the subject matter and cause of action were closely connected to India.

2. Proper Law Governing the Arbitration Agreement and the Contract:

The court analyzed the proper law governing the arbitration agreement and the contract. It noted that the agreement specified Singapore law as the governing law, but the procedural law was determined by the seat of arbitration, which was London. The court highlighted that the proper law of the arbitration agreement governs the validity and scope of the arbitration, while the curial law governs the procedure. Despite the choice of Singapore law, the court held that Indian law should prevail for determining the validity and enforceability of the contract and the arbitration agreement due to the significant connection with India.

3. Applicability of Part I of the Arbitration Act:

The court addressed the applicability of Part I of the Arbitration Act, stating that the exclusion of Part I must be explicit. In this case, the court found no such exclusion, and thus, Part I applied. The court reiterated that Part I applies to all arbitrations, including international ones, unless expressly excluded. The judgment emphasized that the venue of arbitration does not automatically exclude the applicability of Part I.

4. Conflict of Laws and the Governing Law:

The judgment delved into the conflict of laws, considering the multiple legal systems involved-Singapore, English, and Indian laws. The court noted the inconsistency in the agreed clauses and emphasized the need to consider the surrounding circumstances and the close nexus with Indian laws. It concluded that the Indian laws should govern the contract's interpretation and enforcement, given the significant connection to India and the absence of a clear exclusion of Indian law.

5. Enforceability and Challenge to Foreign Awards in India:

The court examined the enforceability of foreign awards in India and the right to challenge them under Section 34. It held that the awards could be challenged in India, as the subject matter and cause of action were situated in India. The court emphasized that the finality of an award is subject to the competent court's confirmation and that the procedural law of the seat of arbitration does not override the substantive law governing the contract.

6. Delay in Filing the Petition and Condonation of Delay:

The court addressed the issue of delay in filing the petition, noting that the final award was received on 1 April 2008, and the petition was filed on 21 July 2008, resulting in a 20-day delay beyond the prescribed period. The court found that the delay was within the permissible outer limit and condoned it, allowing the Notice of Motion for condonation of delay. The court recognized that the partial awards were interlinked with the final award, justifying the challenge to all awards together.

Conclusion:

The court concluded that the Section 34 Petition is maintainable in India, condoned the delay in filing, and directed the matter to be placed for admission, emphasizing the applicability of Indian laws and the significant connection to India in the arbitration proceedings.