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TMI Blog2017 (3) TMI 692X X X X Extracts X X X X X X X X Extracts X X X X ..... s case, there is no doubt the parties have agreed to exclude Part-I by agreeing that the arbitration would be conducted in accordance with the ICC Rules. The parties were undoubtedly conscious that the ICC could choose a venue for arbitration outside India. That in our view is sufficient to infer that the parties agreed to exclude Part-I. The ICC could well have chosen a venue in India. The possibility that ICC could have chosen India is not a counter indication of this inference. It could also be said that the decision to exclude the applicability of Part-I was taken when the ICC chose London after consulting the parties. Either way Part-I was excluded. The view that it is the law of the country where arbitration is held that will govern the arbitration and matters related thereto such as a challenge to the award is well entrenched. The relationship between the seat of arbitration and the law governing arbitration is an integral one. The seat of arbitration is defined as the juridical seat of arbitration designated by the parties, or by the arbitral institution or by the arbitrators themselves as the case may be. Therefore, the two reasons for Part-I not being applicable ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ising out of this master agreement or concerning the rights, duties or liabilities of E-City or Imax hereunder shall be finally settled by arbitration pursuant to the ICC Rules of Arbitration. 6. On 16.06.2004, the appellant filed a request for arbitration with the ICC, and claimed damages. On 08.10.2004, the ICC i.e. the chosen arbitral forum fixed London as the place of arbitration i.e. the juridical seat of arbitration, after consulting the parties. FIRST PARTIAL FINAL AWARD 7. On 11.02.2006, the first partial final award was made in favour of the appellant declaring that the respondent was in breach of the agreement and therefore liable for damages. The award stated that the decision on the other issues, including damages/costs would be reserved for a future award. 8. The aforementioned declaration was made after observing in the award that the court of the ICC had decided to fix London as the juridical seat of arbitration in accordance with the powers vested in the court under Article 14(1) of the ICC Rules. The observation read as follows: As well be noticed, no provision was made for a venue for any arbitration contemplated by Clause 14, but subsequently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... days from the final award. 14. The learned Single Judge allowed the notice of motion on the condonation of delay and held that the petition under Section 34 was maintainable before the Bombay High Court. Hence, this appeal. 15. The only question that arises for consideration before us is whether the challenge to the award made by the respondent under Section 34 of the Arbitration Act is maintainable before a court in India. Clearly, if the answer is in the negative it is not necessary to decide the question of delay. Thus, we make it clear that we are not deciding where else in the world a challenge to the award would be maintainable. 16. Dr. A.M. Singhvi, learned senior counsel for the respondent relied on Clause VIII (2) of the Request for Arbitration dated 16.06.2004 wherein the petitioner stated as follows: VIII Place of Arbitration, Law and Language (2) Section 14 of the letter Agreement is silent as to the place of the arbitration. Claimant believes that Paris and France are suitable places for arbitration to take place, indeed, this is the venue chosen by the ICC for the related EML Arbitration and the claimant believes that this arbitration should be conso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RULES 19. The ICC Rules provide for the entire conduct of arbitration from its commencement to the passing of an award. They provide that the arbitration shall be conducted by the court i.e. the International Court of Arbitration, appointed by the council of the ICC. A party wishing to have recourse to arbitration under the rules is required to submit a Request for Arbitration to the Secretariat of the ICC along with the information prescribed and in particular comments as to the place of arbitration. The ICC Rules clearly stipulate that the seat of arbitration shall be fixed by the court, in the following words:- 1. The place of the arbitration shall be fixed by the Court unless agreed upon by the parties. 2. The Arbitral Tribunal may, after consultation with the parties, conduct hearings and meetings at any location it considers appropriate unless otherwise agreed by the parties. 3. The Arbitral Tribunal may deliberate at any location it considers appropriate. In this case, the appellant had proposed the venue of arbitration to be Paris in France. Upon notice being issued, the respondent was obliged to file an answer including a comment concerning the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t would therefore be appropriate to hold that the question of validity of the award should be determined in accordance with the law of the state in which the arbitration proceedings have taken place i.e. the English Law. Though for the purposes of this decision we would only hold that the conduct of the parties exclude the applicability of Part-I. In other words, where the parties have not expressly chosen the law governing the contract as a whole or the arbitration agreement in particular, the law of the country where the arbitration is agreed to be held has primacy. 22. Here, an express choice has been made by the parties regarding the conduct of arbitration, i.e., that a dispute shall be finally settled by arbitration according to the ICC Rules of Arbitration. The parties have not chosen the place of arbitration. They have simply chosen the rules that will govern the arbitration, presumably aware of the provision in the rules that the place of arbitration will be decided by the ICC vide Article 14(1) of the ICC Rules. The ICC having chosen London, leaves no doubt that the place of arbitration will attract the law of UK in all matters concerning arbitration. 23. The arbi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntire agreement governed not according to Indian law is also apparent from the express provision that: This agreement shall be governed by and construed according to laws of Singapore and parties attorn to jurisdiction of the Courts of Singapore . In para 25 of National Thermal Power Corporation vs. Singer Company (1992) 3 SCC 551, this Court held: On the other hand, where the proper law of the contract is expressly chosen by the parties, as in the present case, such law must, in the absence of an unmistakable intention to the contrary, govern the arbitration agreement which, though collateral or ancillary to the main contract, is nevertheless a part of such contract . This principle is again reiterated in Sakuma Exports Ltd. (supra). This stipulation expressly excludes Part-I of the Act because it governs both the principal agreement as well as the accompanying arbitration agreement. NON- APPLICABILITY OF PART-I 27. It is settled law in India that the provisions of Part-I of the Arbitration Act would apply to all arbitrations and all proceedings relating thereto. In Bhatia International vs. Bulk Trading S.A. and Anr. (2002) 4 SCC 105, this Court obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Ltd. (supra), this Court observed:- In the absence of express agreement, there is a strong prima facie presumption that the parties intend the curial law to be the law of the seat of the arbitration i.e. the place at which the arbitration is to be conducted, on the ground that that is the country most closely connected with the proceedings. So in order to determine the curial law in the absence of an express choice by the parties it is first necessary to determine the seat of the arbitration, by construing the agreement to arbitrate. 30. The relationship between the seat of arbitration and the law governing arbitration is an integral one. The seat of arbitration is defined as the juridical seat of arbitration designated by the parties, or by the arbitral institution or by the arbitrators themselves as the case may be. It is pertinent to refer to the following passage from Redfern and Hunter (supra):- This introduction tries to make clear, the place or seat of the arbitration is not merely a matter of geography. It is the territorial link between the arbitration itself and the law of the place in which that arbitration is legally situated: When one says tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d followed therein. 32. The respondent contends before us that Part-I of the award was applicable, however they themselves stated the place of arbitration to be London. It is pertinent to reproduce the relevant portion in the respondent s application before the ICC while objecting to the authority of the law firms representing the appellant. It stated:- The seat of this arbitration is London. Therefore, the two reasons for Part-I not being applicable are as follows:- (i) Parties agreed that the seat maybe outside India as may be fixed by the ICC; and (ii) It was admitted that the seat of arbitration was London and the award was made there. Therefore, there is no doubt that Part-I has no application because the parties chose and agreed to the arbitration being conducted outside India and the arbitration was in fact held outside India. 33. In view of the foregoing observations, we find that the High Court committed an error in observing that the seat of arbitration itself is not a decisive factor to exclude Part-I of the Arbitration Act. We therefore set aside the judgment of the High Court and dismiss the petition filed by the respondent under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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