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TMI Blog2009 (4) TMI 841X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent Equinox Corporation is also a company registered within the appropriate laws of United States of America, having its office at 10, Corporate Park, Suit No.130, Irvine, CA- 92606, USA. The Equinox Corporation has been carrying on business in India through outsourcing. It is also carrying on business in India through its own establishment in India, Equinox Global Services Private Limited (hereinafter called `EGSPL'). The said EGSPL is a company registered under the Companies Act and has its office in Gurgaon. It is pleaded in the application that the respondent company Equinox Corporation (hereinafter called `EC') had entered into an outsourcing agreement singed in Kolkata, India with the applicant Citation Infowares Ltd (hereinafter called `CIL') on 09.02.2004 wherein the applicant was engaged as a service provider on terms and conditions contained in the agreement. It was agreed in this agreement dated 09.02.2004 that CIL which had bagged orders from its client and since it had sufficient funds, space and existing infrastructure to execute the projects and since it required expert manpower to provide service to its client and further since CIL had approached EC for providin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, that clause did provide for arbitration in case of disputes. On the disputes arisen, the applicant invoked arbitration clause by its notice dated 08.02.2008 and further notice dated 09.02.2008 informing the respondent about appointment of Arbitrator and requested the respondent to agree to the said appointment. The respondent did not agree within the period of 30 days provided in Section 11(5) of the Arbitration and Conciliation Act, 1996 (hereinafter called the `Arbitration Act') and, thus, parties have failed to agree to the appointment of sole Arbitrator within the time limit prescribed under that Section necessitating the present application for appointment of an Arbitrator by this Court since this happens to be an international arbitration. 6. There is no dispute between the parties that this is an international arbitration and, therefore, under the Arbitration Act, the Chief Justice or his nominee alone would have the jurisdiction to appoint the Arbitrator. There is also no dispute that there is a live dispute between the parties and there is an Arbitration Clause in case of dispute between the parties. 7. So far so good. However, the question that has arisen is wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the governing law is agreed between the parties, say foreign law, then essentially, the question of appointment of arbitrator also falls in the realm of the said foreign law and not within the realm of Arbitration and Conciliation Act. The Learned Senior Counsel further urged that in the wake of language of Clause 10.1, it was very clear that the agreement was to be governed by and interpreted in accordance with the Laws of California and further in continuation of the earlier words, it was provided that the matters of dispute relating to the agreement or its subject matter, would be referred to arbitration to a mutually agreed arbitrator. The Learned Senior Counsel, therefore, urged that considering the positive language of Clause 10.1, it was clear that the parties had specifically agreed that the matter of appointment of arbitrator would also be governed by the Laws of California. The Learned Senior Counsel urged that, therefore, there was a clear cut agreement between the parties to that effect and as such, as held in Bhatia International Vs. Bulk Trading S.A. reported in 2002 (4) SCC 105 (cited supra), parties had expressly excluded the provisions of Part I of the Arbitr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of Indtel Technical Services' case (cited supra), the earlier judgments in Bhatia International (cited supra) and even National Thermal Power Corporation' case (cited supra) have been considered. Learned counsel pointed out that the clause of arbitration which fell for consideration was as follows: Although the matter has been argued at great length and Mr. Tripathi has tried to establish that the decision of this Court in Bhatia International's Case is not relevant for a decision in this case, I am unable to accept such contention in the facts and circumstances of the present case. It is no doubt true that it is fairly well settled that when an arbitration agreement is silent as to the law and procedure to be followed in implementing the arbitration agreement, the law governing the said agreement would ordinarily be the same as the law governing the contract itself. The decisions cited by Mr. Tripathi and the views of the jurists referred to in NTPC's case support such a proposition. What, however, distinguishes the various decisions and views of the authorities in this case is he fact that in Bhatia International this Court laid down the proposition that notwithstanding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alifornian law. 15. However, there is no agreement in respect of the law governing the procedure of arbitration. Again in paragraph 25 the Court expressed that the party had the freedom to choose the law governing international agreement of choosing substantive law of arbitration agreement as well as the procedural law governing the conduct of the arbitration. It is then the choice to be exercised by the parties or by implication, except to such situations where there is no express choice of the law governing the contract as a whole or the arbitration agreement in particular. There is, in absence of any contrary intention, a presumption that the parties have intended that the proper law of contract as well as the law governing arbitration agreement are the same as the law of the country in which the arbitration is agreed to be held. Here again the stress is on the agreement about the country where the arbitration is agreed to be held and precisely this situation is absent in the present case. Here the substantive law of contract governing the contract is specifically agreed upon. However, the place where arbitration would be held is not to be found in the language of Clause 10.1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally in this case that the law governing the contract was Californian law, as expressed in Bhatia Internation as well as in Indtel Technical Services' case (cited supra), an implied exclusion of Part I should be presumed. I am afraid it is not possible to read such an implied exclusion. 20. Seen the striking similarity between Clause 10.1 and Clauses 13.1 and 13.2 which have been quoted above and further the view expressed by learned Judge in Indtel Technical Services' case (cited supra) regarding the exclusion, it is only possible to read even distantly such an implied exclusion of Part I. It cannot be forgotten that one of the contracting parties is the Indian party. The obligations under the contract were to be completed in India. Further considering the nature of the contract, it is difficult to read any such implied exclusion of Part I in the language of Clause 10.1. That argument of learned senior counsel for the respondent therefore must be rejected. 21. Learned senior counsel for the respondent invited attention of this Court to paragraphs 32 and 34 of Bhatia International (cited supra) and again reiterated that the implied exclusion must be read in the language of Clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra) is concerned the reliance is placed on paragraph 35 of the said decision to the following effect: Two points in the speech of Lord Wilberforce are notable here. First, he said that in the normal case where the contract itself is governed by English law, any arbitration would be held under English procedure. Secondly, he said that the mere fact that the arbitrator was to set either partly or exclusively in another part of the United Kingdom, or, for that matter, abroad, would not lead to a different result; the place might be chosen for many reasons of convenience or be purely accidental; a choice so made should not affect the parties' rights. The passage in his speech is at page 616 of the report. These observations apply to the normal case which is not a case here. 27. As regards the third decision in ABB Lummus Global's case (cited supra) the relied upon passage again does not clinch the issue. What is stated there is that where the parties chose the curial law of arbitration they would be taken to chose the place and sitting of arbitration. In my opinion the observations are not apposite to the present controversy. 28. In the result the application must succeed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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