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2019 (4) TMI 462 - HC - Indian LawsMaintainability of Arbitral application before High Court - Interpretation of statute - Section 2(1)(f)(i) of Arbitration and Conciliation Act, 1996 - international commercial arbitration - meaning of habitually resident in, any country other than India - whether the arbitration is an international commercial arbitration by reason of one of the parties, viz. the Applicant, being an individual who is a habitual resident in any country other than India? The principal legal submission or defense raised by the Respondent is that the Applicant is ex facie a person habitually resident in a country other than India and therefore the present arbitration is an international commercial arbitration, and in view of Section 11(12)(a) of the Act, an application under Section 11 of the Act would only lie to the Hon ble Supreme Court to the Hon ble Chief Justice of India or a designate of the Hon ble Chief Justice of India, and not before this Court. Held that - The present issue as to maintainability of the Applicant before this Court arises because of the provisions of sub-section 12 of Section 11, which states that where the arbitration is an international commercial arbitration, an application under sub-sections (4) to (6) would lie to the Hon ble Supreme Court. It would be necessary to consider the definition of international commercial arbitration and in particular sub-clause (i). From a plain reading of the definition it is clear that an arbitration will be an international commercial arbitration where at least one of the parties to it is an individual who is a national of, or habitually resident in, any country other than India.It is clear from the definition that the legislature has used two distinct expressions viz. national and habitual resident . These two expressions are separated by the expression or , which means they have been used disjunctively. Therefore, if even one of the parties to the arbitration satisfies the requirement of being a national of, or habitual resident in, any country other than India, it would be an international commercial arbitration. The Applicant cannot read one stray sentence out of context to support its contention that if parties are nationals of India then even if they are habitually resident outside India, the provision would not apply. It is very clear that the last sentence of paragraph 19 also deals with a situation where the parties are companies and the judgment was not dealing with a situation of individuals. The meaning of the expression habitually resident is similar in meaning to ordinary resident . This has also been noted in a judgment of a Division Bench of this Court in the case of Hasmukh v. Union of India 2010 (10) TMI 226 - BOMBAY HIGH COURT where the Court was considering a preliminary objection as to the maintainability of an Appeal under Section 35 of the Foreign Exchange Management Act, 1999. In the present case, the Applicant habitually resides in Dubai. This is clear from the pleadings, documents and the undisputed facts. The Applicants address in the Applications is shown as an address in Dubai. All the Applications expressly states that the Applicant is a Non-Resident Indian, who is currently residing and working in Dubai. The Applicant receives his remuneration in USD in a bank in Dubai. The Agreements under which arbitration has been invoked also disclose that the Applicant is residing in Dubai, and this position is noted as of the Agreement dated 18th October 2011 and is obviously continuing till the filing of the Application in 2017 - The fact that the Applicants family lives in India does not change the position that even if it is primarily for the reason of the Applicants work or employment, he is and has for quite a few years habitually resided in Dubai. His intention is clearly to be in Dubai, and it cannot be said that his presence there is merely casual or temporary. In the facts of the present case, both the quality of his residence, the purpose of his residence and the duration of residence in Dubai, make it clear that he habitually resides in Dubai. The proposed arbitral proceedings in the present case would constitute an international commercial arbitration and therefore the Applications under Section 11 of the Act are not maintainable in this Court under the provision of Section 11(12)(a) of the Act - application dismissed.
Issues Involved:
1. Interpretation of Section 2(1)(f)(i) of the Arbitration and Conciliation Act, 1996. 2. Determination of whether the arbitration is an international commercial arbitration. 3. Jurisdiction to appoint an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996. Issue-Wise Detailed Analysis: 1. Interpretation of Section 2(1)(f)(i) of the Arbitration and Conciliation Act, 1996: The primary issue revolves around the interpretation of the term "habitually resident in, any country other than India" as stated in Section 2(1)(f)(i) of the Arbitration and Conciliation Act, 1996. The court emphasized that the expressions "national" and "habitual resident" are used disjunctively, implying that satisfying either condition qualifies the arbitration as an international commercial arbitration. The court clarified that even if one of the parties is habitually resident in a country other than India but is a national of India, the arbitration would still be considered international commercial arbitration. 2. Determination of whether the arbitration is an international commercial arbitration: The court examined whether the applicant, who is a Non-Resident Indian residing and working in Dubai, UAE, qualifies the arbitration as an international commercial arbitration. The applicant argued that he is domiciled in India, holding an Indian passport, and frequently visits India, suggesting that his habitual residence should be considered India. However, the court relied on various legal definitions and judgments to conclude that habitual residence implies a regular physical presence with a degree of continuity, not necessarily requiring the intent to establish domicile. The court found that the applicant's residence in Dubai, his receipt of remuneration in USD in a Dubai bank, and his official residential status in Dubai collectively indicate that he habitually resides in Dubai. 3. Jurisdiction to appoint an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996: Given the determination that the arbitration is an international commercial arbitration, the court addressed the jurisdiction issue under Section 11(12)(a) of the Act, which states that in cases of international commercial arbitration, applications under Section 11 should be made to the Hon’ble Supreme Court of India or the Chief Justice of India or their designate. As the applicant is habitually resident in Dubai, the court concluded that it lacks jurisdiction to entertain the applications for the appointment of an arbitrator. Conclusion: The court dismissed the applications under Section 11 of the Arbitration and Conciliation Act, 1996, concluding that the proposed arbitral proceedings constitute an international commercial arbitration due to the applicant's habitual residence in Dubai. Consequently, the applications should be made to the Hon’ble Supreme Court of India, as per Section 11(12)(a) of the Act.
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