TMI Blog2019 (12) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Act, 1940, but replaces any and every civil court by only the principal civil court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary civil jurisdiction. Section 42 of the Arbitration Act, 1996 also substantially follows the drill of Section 31(4) of the Arbitration Act, 1940 - given the new concept of juridical seat of the arbitral proceedings, and the importance given by the Arbitration Act, 1996 to this seat , the arbitral award is now not only to state its date, but also the place of arbitration as determined in accordance with Section 20. However, the definition of Court contained in Section 2(1)(c) of the Arbitration Act, 1940, continued as such in the Arbitration Act, 1996, though narrowed to mean only principal civil court and the High Court in exercise of their original ordinary civil jurisdiction. Thus, the concept of juridical seat of the arbitral proceedings and its relationship to the jurisdiction of courts which are then to look into matters relating to the arbitral proceedings - including challenges to arbitral awards - was unclear, and had to be developed in accordance with international practice on a case by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vedi, Adv. Mr. Amitesh Chandra Mishra, Adv. ACM Legal, AOR Mr. Tarkeshwar Nath, Adv. Mr. Puneet Taneja, AOR Mr. Rameshwar Prasad Goyal, AOR JUDGMENT R. F. Nariman, J. 1. Leave granted. 2. Three appeals before us raise questions as to maintainability of appeals under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Arbitration Act, 1996 ), and, given the arbitration clause in these proceedings, whether the seat of the arbitration proceedings is New Delhi or Faridabad, consequent upon which a petition under Section 34 of the Arbitration Act, 1996 may be filed dependent on where the seat of arbitration is located. 3. At the outset, the facts in SLP (Civil) No.25618 of 2018 are set out as follows. On 16.01.2004, the Petitioner was awarded a contract for construction of Diversion Tunnels, Coffer Dams, Concrete Gravity Dams, Plunge Pools and Cutoff Walls of Subansri Lower Hydroelectric Project on river Subansri, with an installed capacity of 2000 MW, stated to be the largest Hydropower project yet in India. The project site is located in the lower Subansri distri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho is not registered in India and is not a juridic person created under Indian Law. In case of any contradiction between Indian Arbitration and Conciliation Act, 1996 and UNCITRAL Arbitration Rules, the provisions in the Indian Arbitration and Conciliation Act, 1996 shall prevail. (iii) Arbitration may be commenced prior to or after completion of the Works, provided that the obligations of the Employers, the Engineer, and the Contractor shall not be altered by reason of the arbitration being conducted during the progress of the Works. xxx xxx xxx (v) If one of the parties fail to appoint its arbitrator in pursuance of sub-clause (i) and (ii) above, within 30 days after receipt of the notice of the appointment of its arbitrator by the other party, then the President of the Institution of Engineers (India), both in cases of foreign contractors as well as Indian Contractors, shall appoint the arbitrator. A certified copy of the order of the President of Institution of Engineers (India), making such an appointment shall be furnished to each of the parties. (vi) Arbitration Proceedings shall be held at New Delhi/Far ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition filed at Faridabad was transferred to the said Gurugram Commercial Court and numbered as Arbitration Case No.74 (CIS No. ARB/118/2017). 5. On 21.12.2017, the Special Commercial Court, Gurugram allowed the application of the Petitioner, and returned the Section 34 petition for presentation to the proper court having jurisdiction in New Delhi. On 15.02.2018, the Respondent filed an appeal under Section 37 of the Arbitration Act, 1996 read with Section 13(1) of the Commercial Courts Act, 2015 before the High Court of Punjab and Haryana at Chandigarh. On 12.09.2018, the impugned judgment was delivered by the Punjab and Haryana High Court, in which it was held that the appeal filed under Section 37 of the Arbitration Act, 1996 was maintainable, and that Delhi being only a convenient venue where arbitral proceedings were held and not the seat of the arbitration proceedings, Faridabad would have jurisdiction on the basis of the cause of action having arisen in part in Faridabad. As a result, the appeal was allowed and the judgment of the Special Commercial Court, Gurugram was set aside. 6. Dr. Abhishek Manu Singhvi, learned Senior Advocate appeari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Private Limited Ors., (2017) 7 SCC 678, and various other judgments to buttress his submissions. According to him, the recent judgment delivered in Union of India v. Hardy Exploration and Production (India) Inc. 2018 SCC Online SC 1640 queers the pitch, in that it is directly contrary to the Five Judge bench decision in BALCO (supra). It is only as a result of the confusion caused by judgments such as Hardy Exploration and Production (India) Inc. (supra) that the impugned judgment has arrived at the wrong conclusion that New Delhi is not the seat , but only the venue of the present arbitral proceedings. He, therefore, in the course of his submissions argued that this confusion should be removed, and exhorted us to declare that Hardy Exploration and Production (India) Inc. (supra) was not correctly decided, being contrary to the larger bench in BALCO (supra). 7. Dr. Singhvi in the course of his submissions also referred pointedly to paragraph 96 of BALCO (supra), and argued that not only was the example given in the said paragraph contrary to the theory of concurrent jurisdiction propounded therein, but was also contrary to subsequent paragraphs in the said judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose. On the second point, she argued that the arbitration clause did not expressly state that either New Delhi or Faridabad was to be the seat of the Arbitral Tribunal. Therefore, the arbitration clause only referred to a convenient venue, and the fact that the sittings were held at New Delhi, therefore, would not make New Delhi the seat of the arbitration under Section 20(1) of the Arbitration Act, 1996. According to her, since the agreements in the present case were signed in Faridabad, and since notices were sent by the Petitioners to the Respondent s Faridabad office, part of the cause of action clearly arose in Faridabad, as a result of which the courts in Faridabad would be clothed with jurisdiction to decide a Section 34 application. She stressed the fact that in BALCO (supra), even assuming that New Delhi was the seat of arbitration, both New Delhi and Faridabad would have concurrent jurisdiction - New Delhi being a neutral forum in which no part of the cause of action arose, and Faridabad being a chosen forum where a part of the cause of action has arisen. When read with Section 42 of the Arbitration Act, 1996, since the Court at Faridabad was first approached by filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Kandla Export Corporation (supra). The precise question that arose in Kandla Export Corporation (supra) was as to whether an appeal, which was not maintainable under Section 50 of the Arbitration Act,1996, is nonetheless maintainable under Section 13(1) of the Commercial Courts Act, 2015. In this context, after setting out various provisions of the Commercial Courts Act, 2015 and the Arbitration Act, 1996, this Court held: 13. Section 13(1) of the Commercial Courts Act, with which we are immediately concerned in these appeals, is in two parts. The main provision is, as has been correctly submitted by Shri Giri, a provision which provides for appeals from judgments, orders and decrees of the Commercial Division of the High Court. To this main provision, an exception is carved out by the proviso 14. The proviso goes on to state that an appeal shall lie from such orders passed by the Commercial Division of the High Court that are specifically enumerated under Order 43 of the Code of Civil Procedure Code, 1908, and Section 37 of the Arbitration Act. It will at once be noticed that orders that are not specifically enumerated under Order 43 CPC wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over the general provision contained in Section 13(1) of the Commercial Courts Act. Incidentally, the amendment of 2015 introduced one more category into the category of appealable orders in the Arbitration Act, namely, a category where an order is made under Section 8 refusing to refer parties to arbitration. Parliament may have found it necessary to emphasise the fact that an order referring parties to arbitration under Section 8 is not appealable under Section 37(1)(a) and would, therefore, not be appealable under Section 13(1) of the Commercial Courts Act. Whatever may be the ultimate reason for including Section 37 of the Arbitration Act in the proviso to Section 13(1), the ratio decidendi of the judgment in Fuerst Day Lawson [Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333 : (2011) 4 SCC (Civ) 178] would apply, and this being so, appeals filed under Section 50 of the Arbitration Act would have to follow the drill of Section 50 alone. 22. This, in fact, follows from the language of Section 50 itself. In all arbitration cases of enforcement of foreign awards, it is Section 50 alone that provides an appeal. Having provided for an appeal, the for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harmonised by giving effect to the special statute i.e. the Arbitration Act, vis- -vis the more general statute, namely, the Commercial Courts Act, being left to operate in spheres other than arbitration. 14. Given the fact that there is no independent right of appeal under Section 13(1) of the Commercial Courts Act, 2015, which merely provides the forum of filing appeals, it is the parameters of Section 37 of the Arbitration Act,1996 alone which have to be looked at in order to determine whether the present appeals were maintainable. Section 37(1) makes it clear that appeals shall only lie from the orders set out in sub-clauses (a), (b) and (c) and from no others. The pigeonhole that the High Court in the impugned judgement has chosen to say that the appeals in the present cases were maintainable is sub-clause (c). According to the High Court, even where a Section 34 application is or- dered to be returned to the appropriate Court, such order would amount to an order refusing to set aside an arbitral award under Section 34 . 15. Interestingly, under the proviso to Section 13(1A) of the Commercial Courts Act, 2015, Order XLIII of the CPC is also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hi High Court said: 12. In view of the above discussions, we conclude that the present appeal is not maintainable. The appellant s remedy clearly lies elsewhere. An attempt was made to urge that no litigant can be deprived of remedy if there is a grievance: ubi jus ibi remedium; however, that argument is wholly without substance because an appeal, it has been repeatedly emphasised, is a specific creation of statute and cannot be claimed as a matter of right. This was explained pithily in Ganga Bai v. Vijay Kumar, (1974) 2 SCC 393, in the following terms: There is a basic distinction between the right of suit and the right of appeal. There is an inherent right in every person to bring suit of a civil nature and unless the suit is barred by statute one may, at one s peril, bring a suit of one s choice. It is no answer to a suit howsoever frivolous the claim, that the law confers no right to sue. A suit for its maintainability requires no authority of law and it is enough that no statute bars the suit. But the position in regard to appeals is quite the opposite. The right of appeal inheres in no one and therefore an appeal for its maintainability m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istinction is made between judgments which either set aside, or refuse to set aside, an arbitral award after the court applies its mind to Section 34 of the Arbitration Act, 1996, as against preliminary orders of condonation of delay, which do not in any way impact the arbitral award that has been assailed. 20. However, Smt. Acharya relied heavily upon the Division Bench judgment of the Delhi High Court in Antrix Corporation Ltd. (supra). On the facts of that case, on 28.02.2017, a learned Single Judge of the Delhi High Court ruled that Antrix s petition under Section 9 of the Arbitration Act, 1996 before the Bangalore Court was not maintainable, and that Devas petition under Section 9 was maintainable, the bar under Section 42 of the Arbitration Act, 1996 being inapplicable. The order also held that consequently, Antrix s petition under Section 34 of the Arbitration Act, 1996 before the Bangalore City Civil Court would not be maintainable, inasmuch as Devas petition filed in Delhi under Section 9 was filed earlier. The learned Single Judge then listed the matter for hearing on merits and directed Antrix to file an affidavit of an authorised officer, enclosing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nish securities. Therefore, an order mandating a party to disclose his assets or file his accounts would also be an interim measure within the meaning of Section 9. In this case, through Paragraph 57 of the impugned order, the Learned Single Judge had directed Antrix to file an affidavit of an authorised officer, enclosing therewith its audited balance sheets and profit and loss accounts for the past three years. Keeping in mind the view of the Court in Samson Maritime (supra), which this Court is in agreement with, this would also in effect be a Section 9 order as those details are sought for the purpose of adjudicating whether consequential relief could be given to Devas of securing the amount due from the arbitral award against Antrix. Moreover, this Court cannot take a doctrinaire and unbending approach in this matter, when it is clear that Antrix has suffered all but one remaining blow through the impugned order, and therefore, the Court should not wait till it suffers the final blow (that of the final Section 9 order) before it can assume jurisdiction over the appeal. The court's direction to Antrix furnish an affidavit along with the particulars sought, is to aid its ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra) was delivered on 07.02.2018, and was missed by the Division Bench in Antrix Corporation Ltd. (supra), as the Division Bench had reserved judgment on 06.12.2017, even though it ultimately pronounced the judgment on 30.05.2018. The judgment in South Delhi Municipal Corporation (supra) was decided after reference was made to Kandla (supra), resulting in a deposit order being held to be not appealable under Section 37 of the Arbitration Act, 1996. 22. It is clear, therefore, that the appeals filed in the present case do not fall within Section 37 of the Arbitration Act,1996 and are not maintainable. 23. We now examine the second part of the challenge made by the Petitioners to the impugned judgment, which relates to the determination of the seat of the arbitral proceedings between the parties. The impugned judgment of the Punjab and Haryana High Court referred to BALCO (supra) and Indus Mobile Distribution Pvt. Ltd. (supra), and other judgments of this Court, in order to arrive at the conclusion that the arbitration clause in the present case does not refer to the seat of arbitration, but only refers to the venue of arbitration. Consequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgement according to the award, and upon the judgment so pronounced a decree shall follow, and no appeal shall lie from such a decree except on the ground that it is in excess of, or not otherwise in accordance with, the award. 26. It was in this setting that Court was defined by Section 2(c) of the Arbitration Act, 1940 as follows: 2. Definitions.- In this Act, unless there is anything repugnant in the subject or the context, xxx xxx xxx (c) Court means a Civil Court having jurisdiction to decide the questions forming the subject-matter of the reference if the same had been the subjectmatter of a suit, but does not, except for the purpose of arbitration proceedings under Section 21, include a Small Cause Court; 27. Section 31, which dealt with the Court in which an award may be filed then stated as follows: 31. Jurisdiction. (1)Subject to the provisions of this Act, an award may be file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Article 6. Court or other authority for certain functions of arbitration assistance and supervision The functions referred to in articles 11(3), 11(4), 13(3), 14, 16(3) and 34(2) shall be performed by ... [Each State enacting this model law specifies the court, courts or, where referred to therein, other authority competent to perform these functions.] xxx xxx xxx Article 20. Place of arbitration (1) The parties are free to agree on the place of arbitration. Failing such agreement, the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties. (2) Notwithstanding the provisions of paragraph (1) of this article, the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of goods, other property or documents. xxx xxx xxx Article 31. Form and contents of award xxx xxx xxx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and recognised under the provisions of Part II of this Act. 32. Sections 20, 31(4) and 42 of the Arbitration Act, 1996 read as follows: 20. Place of Arbitration.- (1)The parties are free to agree on the place of arbitration. (2)Failing any agreement referred to in sub-section (1), the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties. (3)Notwithstanding sub-section (1) or sub-section (2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property. 31. Form and contents of arbitral award.- xxx xxx xxx (4)The arbitral award shall state its date and the place of arbitration as determined in accordance with section 20 and the award shall be deemed to have been made at that place. 42. Jurisdiction.- Notwithstanding anything contained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Arbitration Act, 1996 does not make seat of the arbitration as the centre of gravity of the arbitration. On the contrary, it is accepted by most of the experts that in most of the national laws, arbitrations are anchored to the seat/place/situs of arbitration. Redfern in Para 3.54 concludes that the seat of the arbitration is thus intended to be its centre of gravity. [Blackaby, Partasides, Redfern and Hunter (Eds.), Redfern and Hunter on International Arbitration (5th Edn., Oxford University Press, Oxford/New York 2009).] This, however, does not mean that all the proceedings of the arbitration have to take place at the seat of the arbitration. The arbitrators at times hold meetings at more convenient locations. This is necessary as arbitrators often come from different countries. It may, therefore, on occasions be convenient to hold some of the meetings in a location which may be convenient to all. Such a situation was examined by the Court of Appeal in England in Naviera Amazonica Peruana S.A. v. Compania International de Seguros del Peru [(1988) 1 Lloyd's Rep 116 (CA)] wherein at p. 121 it is observed as follows: The preceding discussion has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. The New York Convention maintains the reference to the law of the country where the arbitration took place [Article V(1)(d)] and, synonymously to the law of the country where the award is made [Articles V(1) (a) and (e)]. The aforesaid observations clearly show that the New York Convention continues the clear territorial link between the place of arbitration and the law governing that arbitration. The author further points out that this territorial link is again maintained in the Model Law which provides in Article 1(2) that: 1. (2) the provision of this Law, except Articles 8, 9, 35 and 36, apply only if the place of arbitration is in the territory of the State. Just as the Arbitration Act, 1996 maintains the territorial link between the place of arbitration and its law of arbitration, the law in Switzerland and England also maintain a clear link between the seat of arbitration and the lex arbitri. The Swiss Law states: 176(I). (1) The provision of this chapter shall apply to any arbitration if the seat of the Arbitral Tribunal is in Switzerland and if, at the time when the arbitration agreement was co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term subject matter of the arbitration cannot be confused with subject matter of the suit . The term subject matter in Section 2(1) (e) is confined to Part I. It has a reference and connection with the process of dispute resolution. Its purpose is to identify the courts having supervisory control over the arbitration proceedings. Hence, it refers to a court which would essentially be a court of the seat of the arbitration process. In our opinion, the provision in Section 2(1)(e) has to be construed keeping in view the provisions in Section 20 which give recognition to party autonomy. Accepting the narrow construction as projected by the Learned Counsel for the Appellants would, in fact, render Section 20 nugatory. In our view, the legislature has intentionally given jurisdiction to two courts i.e. the court which would have jurisdiction where the cause of action is located and the courts where the arbitration takes place. This was necessary as on many occasions the agreement may provide for a seat of arbitration at a place which would be neutral to both the parties. Therefore, the courts where the arbitration takes place would be required to exercise supervisory control over t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0(3). Section 20, has to be read in the context of Section 2(2), which places a threshold limitation on the applicability of Part I, where the place of arbitration is in India. Therefore, Section 20 would also not support the submission of the extra-territorial applicability of Part I, as canvassed by the Learned Counsel for the Appellants, so far as purely domestic arbitration is concerned. (emphasis supplied) 36. The Court then went on to refer to several English judgments and specifically italicised several parts of the judgment in Roger Shashoua Ors. v. Mukesh Sharma [2009] EWHC 957 (Comm) as follows: 110. Examining the fact situation in the case, the Court observed as follows: The basis for the court's grant of an anti-suit injunction of the kind sought depended upon the seat of the arbitration. An agreement as to the seat of an arbitration brought in the law of that country as the curial law and was analogous to an exclusive jurisdiction clause. Not only was there agreement to the curial law of the seat, but also to the Courts of the seat having supervisory jurisdiction over the arbitration, so that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernational instruments, such as the Geneva Convention and the New York Convention as well as the UNCITRAL Model Law. It also recognises the territorial principle which gives effect to the sovereign right of a country to regulate, through its national courts, an adjudicatory duty being performed in its own country. By way of a comparative example, we may reiterate the observations made by the Court of Appeal, England in C v. D [2008 Bus LR 843 : 2007 EWCA Civ 1282 (CA)] wherein it is observed that: It follows from this that a choice of seat for the arbitration must be a choice of forum for remedies seeking to attack the award. In the aforesaid case, the Court of Appeal had approved the observations made in A v. B [(2007) 1 All ER (Comm) 591 : (2007) 1 Lloyd's Rep 237] wherein it is observed that: an agreement as to the seat of an arbitration is analogous to an exclusive jurisdiction clause. Any claim for a remedy as to the validity of an existing interim or final award is agreed to be made only in the courts of the place designated as the seat of arbitration. 39. The Court then concluded in paragraph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd was construed keeping in view the provisions in Section 20 of the Arbitration Act, 1996, which give recognition to party autonomy in choosing the seat of the arbitration proceedings. Secondly, the Court went on to state in two places in the said paragraph that jurisdiction is given to two sets of Courts, namely, those Courts which would have jurisdiction where the cause of action is located; and those Courts where the arbitration takes place. However, when it came to providing a neutral place as the seat of arbitration proceedings, the example given by the Five Judge Bench made it clear that appeals under Section 37 of the Arbitration Act, 1996 against interim orders passed under Section 17 of the Arbitration Act, 1996 would lie only to the Courts of the seat - which is Delhi in that example - which are the Courts having supervisory control, or jurisdiction, over the arbitration proceedings. The example then goes on to state that this would be irrespective of the fact that the obligations to be performed under the contract, that is the cause of action, may arise in part either at Mumbai or Kolkata. The fact that the arbitration is to take place in Delhi is of importance. Howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... J. as if it were an Act of Parliament. And, in Herrington v. British Railways Board [(1972) 2 WLR 537: (1972) 1 All Er 749 : 1972 AC 877 (HL)] Lord Morris said: There is always peril in treating the words of a speech or a judgment as though they were words in a legislative enactment, and it is to be remembered that judicial utterances are made in the setting of the facts of a particular case. (emphasis supplied) 44. More recently, this Court in Union of India v. Amrit Lal Manchanda (2004) 3 SCC 75 held as follows: 15. Cases involving challenges to orders of detention before and after execution of the order stand on different footings. Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of courts are neither to be read as Euclid's theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Judgments of courts are not to be construed as statutes. To interpret words ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the parties having chosen the seat, or the arbitral tribunal having determined the seat, have also chosen the Courts at the seat for the purpose of interim orders and challenges to the award. 48. This Court in Indus Mobile Distribution Private Limited (supra), after referring to Sections 2(1)(e) and 20 of the Arbitration Act, 1996, and various judgments distinguishing between the seat of an arbitral proceeding and venue of such proceeding, referred to the Law Commission Report, 2014 and the recommendations made therein as follows: 17. In amendments to be made to the Act, the Law Commission recommended the following: Amendment of Section 20 In Section 20, delete the word Place and add the words Seat and Venue before the words of arbitration . (i) In Sub-section (1), after the words agree on the delete the word place and add words seat and venue (ii) In Sub-section (3), after the words meet at any delete the word place and add word venue . [NOTE: The departure from the existing phrase place of arbitration is proposed to make the wording ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d (2013) 9 SCC 32. This was followed in a recent judgment in B.E. Simoese Von Staraburg Niedenthal and Anr. v. Chhattisgarh Investment Limited: (2015) 12 SCC 225. Having regard to the above, it is clear that Mumbai courts alone have jurisdiction to the exclusion of all other courts in the country, as the juridical seat of arbitration is at Mumbai. This being the case, the impugned judgment is set aside. The injunction confirmed by the impugned judgment will continue for a period of four weeks from the date of pronouncement of this judgment, so that the Respondents may take necessary steps Under Section 9 in the Mumbai Court. Appeals are disposed of accordingly. This judgment has recently been followed in Brahmani River Pellets Ltd. v. Kamachi Industries Ltd. 2019 SCC Online SC 929 at paragraph 15. 49. In fact, the Law Commission Report, 2014 also recommended an amendment in the definition of Court under Section 2(1)(e) of the Arbitration Act, 1996, so that in the case of international commercial arbitrations held in India, the High Court alone should be the Court for the purposes of the Arbitration Act, 1996, even where such a High Court does n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions, jurisdiction is exercised by the High Court, even if such High Court does not exercise ordinary original civil jurisdiction.] 50. The aforesaid amendment carried out in the definition of Court is also a step showing the right direction, namely, that in international commercial arbitrations held in India, the High Court alone is to exercise jurisdiction over such proceedings, even where no part of the cause of action may have arisen within the jurisdiction of such High Court, such High Court not having ordinary original jurisdiction. In such cases, the place where the award is delivered alone is looked at, and the High Court given jurisdiction to supervise the arbitration proceedings, on the footing of its jurisdiction to hear appeals from decrees of courts subordinate to it, which is only on the basis of territorial jurisdiction which in turn relates to the place where the award is made. In the light of this important change in the law, Section 2(1)(e) (i) of the Arbitration Act, 1996 must also be construed in the manner indicated by this judgment. 51. Take the consequence of the opposite conclusion, in the light of the facts of a given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot only was there agreement to the curial law of the seat, but also to the courts of the seat having supervisory jurisdiction over the arbitration, so that, by agreeing to the seat, the parties agreed that any challenge to an interim or final award was to be made only in the courts of the place designated as the seat of the arbitration. Although, venue was not synonymous with seat , in an arbitration clause which provided for arbitration to be conducted in accordance with the Rules of the ICC in Paris (a supranational body of rules), a provision that the venue of arbitration shall be London, United Kingdom did amount to the designation of a juridical seat . In para 54, it is further observed as follows: There was a little debate about the possibility of the issues relating to the alleged submission by the claimants to the jurisdiction of the High Court of Delhi being heard by that Court, because it was best fitted to determine such issues under the Indian law. Whilst I found this idea attractive initially, we are persuaded that it would be wrong in principle to allow this and that it would create undue practical problems ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nercon [Enercon (India) Ltd. v. Enercon GmbH, (2014) 5 SCC 1 : (2014) 3 SCC (Civ) 59 : (2014) 1 ALR 257] . In C v. D [2008 Bus LR 843 : (2008) 1 Lloyd's Law 239 : 2007 EWCA Civ 1282] , the Court of Appeal has observed: (Bus LR p. 851, para 16) Primary conclusion 16. I shall deal with Mr Hirst's arguments in due course but, in my judgment, they fail to grapple with the central point at issue which is whether or not, by choosing London as the seat of the arbitration, the parties must be taken to have agreed that proceedings on the award should be only those permitted by English law. In my view they must be taken to have so agreed for the reasons given by the Judge. The whole purpose of the balance achieved by the Bermuda form (English arbitration but applying New York law to issues arising under the policy) is that judicial remedies in respect of the award should be those permitted by English law and only those so permitted. Mr Hirst could not say (and did not say) that English judicial remedies for lack of jurisdiction on procedural irregularities under Sections 67 and 68 of the 1996 Act were not permitted; he was reduced to saying that N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, the Court in paragraph 19 (which has already been set out hereinabove) made it clear that the moment a seat is designated by agreement between the parties, it is akin to an exclusive jurisdiction clause, which would then vest the Courts at the seat with exclusive jurisdiction for purposes of regulating arbitral proceedings arising out of the agreement between the parties. 56. Despite the aforesaid judgments of this Court, discordant notes have been struck by some of the High Courts. In Antrix Corporation Ltd. (supra), a Division Bench of the Delhi High Court, after setting out paragraph 96 of BALCO (supra), then followed the reasoning of judgements of the Bombay High Court, in stating that the ratio decidendi of the 5 Judge Bench in BALCO (supra) is that Courts would have concurrent jurisdiction, notwithstanding the designation of the seat of arbitration by agreement between the parties. The Delhi High Court stated: 52. Having held that the statement in paragraph 96 of BALCO (supra) would apply to the present case as well, this court has to examine its legal consequence in light of the law declared in BALCO (supra). It is important to note tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tration takes place would be required to exercise supervisory control over the arbitral process. The Supreme Court has held that Parliament has given jurisdiction to two courts - the Court which would have jurisdiction where the cause of action is located and the Court where the arbitration takes place. This is evident from the example which is contained in the above quoted extract from the decision. 57. Having so stated, the Division Bench then went on to give a restricted meaning to Indus Mobile Distribution Private Ltd. (supra) in paragraph 56 as follows: 56. In Datawind (supra), as the facts and the question framed by the Court in the second paragraph of its decision suggest, the Court was faced with a situation where the parties had designated both the seat and specified an exclusive forum selection clause. Therefore, its findings have to be interpreted in that light. In fact, were this Court to find otherwise, and interpret Datawind (supra) as holding that the designation of seat alone would amount to an exclusive forum selection clause in domestic arbitrations, then this would run contrary to the five-Judge decision in BALCO (supra), which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the tribunal to agree upon a seat would amount to an exclusive jurisdiction clause and Section 42 would have no application. This would dilute Section 42 and would accordingly, be contrary to Parliamentary intent. Undoubtedly, in the present case, the parties have only chosen the seat as New Delhi and have not specified an exclusive forum selection clause. Therefore, it cannot be said that the courts in Delhi have exclusive competence to entertain applications under the Arbitration Act in the present dispute. The jurisdiction of the courts where the cause of action arises, which in this case, is the Bangalore City Civil Court, cannot be said to have been excluded therefore. Accordingly, question (ii) is also answered in favour of Antrix... 59. The view of the Delhi High Court in Antrix Corporation Ltd. (supra), which followed judgments of the Bombay High Court, does not commend itself to us. First and foremost, it is incorrect to state that the example given by the Court in paragraph 96 of BALCO (supra) reinforces the concurrent jurisdiction aspect of the said paragraph. As has been pointed out by us, the conclusion that the Delhi as well as the Mumbai or K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt exclusively. This is why the section begins with a non-obstante clause, and then goes on to state where with respect to an arbitration agreement any application under this Part has been made in a Court It is obvious that the application made under this part to a Court must be a Court which has jurisdiction to decide such application. The subsequent holdings of this Court, that where a seat is designated in an agreement, the Courts of the seat alone have jurisdiction, would require that all applications under Part I be made only in the Court where the seat is located, and that Court alone then has jurisdiction over the arbitral proceedings and all subsequent applications arising out of the arbitral agreement. So read, Section 42 is not rendered ineffective or useless. Also, where it is found on the facts of a particular case that either no seat is designated by agreement, or the socalled seat is only a convenient venue , then there may be several Courts where a part of the cause of action arises that may have juris- diction. Again, an application under Section 9 of the Arbitration Act, 1996 may be preferred before a court in which part of the cause of action arises in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the arbitral proceeding. 64. In Enercon GmbH v. Enercon (India) Ltd. [2012] EWHC 689, the arbitration clause between the parties read as follows: 18.3 All proceedings in such arbitration shall be conducted in English. The venue of the arbitration proceedings shall be London. The arbitrators may (but shall not be obliged to) award costs and reasonable expenses (including reasonable fees of counsel) to the Party(ies) that substantially prevail on merit. The provisions of the Indian Arbitration and Conciliation Act, 1996 shall apply. 65. The Court began its discussion on the seat of the arbitration by referring to Roger Shashoua (supra), and then referring to The Conflict of Laws , Dicey, Morris Collins, 14th Ed. as follows: Moreover, as Cooke J. noted, this conclusion is consistent with the views expressed in The Conflict of Laws, Dicey, Morris Collins, 14th Edition at 16 035 where the authors state that the seat is in most cases sufficiently indicated by the country chosen as the place of the arbitration. For such a choice of place not to be given effect as a choice of seat, there will need to be cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Court held to be an expression which included not just one or more individual hearings, but the arbitral proceedings as a whole, culminating in the making of an award. The Court held: Second, the language in clause 18.3 refers to the arbitration proceedings . That is an expression which includes not just one or more individual or particular hearings but the arbitration proceedings as a whole including the making of an award. In other words the parties were anchoring the whole arbitration process in London right up to and including the making of an award. The place designated for the making of an award is a designation of seat. Moreover the language in clause 18.3 does not refer to the venue of all hearings taking place in London. Clause 18.3 instead provides that the venue of the arbitration proceedings shall be London. This again suggests the parties intended to anchor the arbitration proceedings to and in London rather than simply physically locating the arbitration hearings in London. Indeed in a case where evidence might need to be taken or perhaps more likely inspected in India it would make no commercial sense to construe the provision as mandating a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdinarily carry with it an implied choice of Hong Kong as the seat of the arbitration and of the application of Hong Kong law as the curial law. Clear words or significant contrary indicia are necessary to establish that some other seat or curial law has been agreed. 70. In Process and Indusrial Developments Ltd. v. Nigeria [2019] EWHC 2241 the Court was concerned with a dispute that arose out of a gas supply and processing agreement. The arbitration clause in that case read as follows: The Parties agree that if any difference or dispute arises between them concerning the interpretation or performance of this Agreement and if they fail to settle such difference or dispute amicably, then a Party may serve on the other a notice of arbitration under the rules of the Nigerian Arbitration and Conciliation Act (Cap A18 LFN 2004) which, except as otherwise provided herein, shall apply to any dispute between such Parties under this Agreement. Within thirty (30) days of the notice of arbitration being issued by the initiating Party, the Parties shall each appoint an arbitrator and the arbitrators thus appointed by the Parties shall within fifteen (15) d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent for the arbitrators to be able to decide. If that arrangement was to be displaced it would, in my judgment, have to be spelled out clearly. Accordingly, the reference to the venue as being London or otherwise as agreed between the parties, is better read as providing that the seat of the arbitration is to be England, unless the parties agree to change it. This would still allow the arbitrators to decide where particular hearings should take place, while providing for an anchor to England for supervisory purposes, unless changed. (emphasis supplied) 72. Coming to the judgments of our Courts, this Court in Dozco India (P) Ltd. v. Doosan Infracore Co. Ltd. (2011) 16 SCC 179, was concerned with the following arbitration clause contained in the agreement between the parties: Article 22. Governing Laws - 22.1: This agreement shall be governed by and construed in accordance with the laws of The Republic of Korea. Article 23. Arbitration - 23.1: All disputes arising in connection with this agreement shall be finally settled by arbitration in Seoul, Korea (or such other place as the parties may agree in writing), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the terms of reference or the minutes of proceedings or in some other way as the place or seat of the arbitration. This does not mean, however, that the Arbitral Tribunal must hold all its meetings or hearings at the place of arbitration. International commercial arbitration often involves people of many different nationalities, from many different countries. In these circumstances, it is by no means unusual for an Arbitral Tribunal to hold meetings - or even hearings - in a place other than the designated place of arbitration, either for its own convenience or for the convenience of the parties or their witnesses . It may be more convenient for an Arbitral Tribunal sitting in one country to conduct a hearing in another country - for instance, for the purpose of taking evidence . In such circumstances, each move of the Arbitral Tribunal does not of itself mean that the seat of the arbitration changes. The seat of the arbitration remains the place initially agreed by or on behalf of the parties. These aspects need to be borne in mind when one comes to the Judge's construction of this policy. It would be clear from this t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 on 14-10-2003 and 15-10-2003 at London, the Arbitral Tribunal recorded the consent of the parties for shifting the juridical seat of arbitration to London. Whether this amounted to shifting of the physical or juridical seat of arbitration from Kuala Lumpur to London? The decision of this would depend on a holistic consideration of the relevant clauses of the PSC. 21. Though, it may appear repetitive, we deem it necessary to mention that as per the terms of agreement, the seat of arbitration was Kuala Lumpur. If the parties wanted to amend Article 34.12, they could have done so only by a written instrument which was required to be signed by all of them. Admittedly, neither was there any agreement between the parties to the PSC to shift the juridical seat of arbitration from Kuala Lumpur to London nor was any written instrument signed by them for amending Article 34.12. Therefore, the mere fact that the parties t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of Laws (11th Edn.), Vol. 1, was approved by the House of Lords in James Miller Partners Ltd. v. Whitworth Street Estates (Manchester) Ltd. [1970 AC 583 : (1970) 2 WLR 728 : (1970) 1 All ER 796 : (1970) 1 Lloyd's Rep 269 (HL)] and Mustill, J. in Black Clawson International Ltd. v. Papierwerke Waldhof-Aschaffenburg A.G. [(1981) 2 Lloyd's Rep 446 at p. 453] , a little later characterised the same proposition as the law of the place where the reference is conducted, the lex fori . The position of law in India is the same. 77. The Court then examined Braes of Doune Wind Farm (Scotland) v. Alfred McAlpine Business Services Ltd. [2008] EWHC 436 (TCC) in some detail, and concluded in paragraph 118 as follows: 118. In Braes of Doune [Braes of Doune Wind Farm (Scotland) Ltd. v. Alfred McAlpine Business Services Ltd., [2008] Bus LR D 137 (QBD) : 2008 EWHC 426 (TCC)] , detailed examination was undertaken by the Court to discern the intention of the parties as to whether the place mentioned refers to venue or the seat of the arbitration. The factual situation in the present case is not as difficult or complex as the parties herein have only desi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pposed that a party aggrieved by one part of an award could proceed in one jurisdiction and a party aggrieved by another part of an award could proceed in another jurisdiction. Similarly, in the case of a single complaint about an award, it could not be supposed that the aggrieved party could complain in one jurisdiction and the satisfied party be entitled to ask the other jurisdiction to declare its satisfaction with the award. There would be a serious risk of parties rushing to get the first judgment or of conflicting decisions which the parties cannot have contemplated. 17. It follows from this that a choice of seat for the arbitration must be a choice of forum for remedies seeking to attack the award. On the facts of the case, the Court held that the seat of the arbitration was in England and accordingly entertained the challenge to the award. 79. Reference was made to Roger Shashoua (supra) in paragraphs 124 to 128, and then to various other judgments, including BALCO (supra), as follows: 134. It is accepted by most of the experts in the law relating to international arbitration that in almost all the nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se observations have also been noticed in Union of India v. McDonnell Douglas Corpn. [(1993) 2 Lloyd's Rep 48] 80. The Court finally concluded: 135. In the present case, even though the venue of arbitration proceedings has been fixed in London, it cannot be presumed that the parties have intended the seat to be also in London. In an international commercial arbitration, venue can often be different from the seat of arbitration. In such circumstances, the hearing of the arbitration will be conducted at the venue fixed by the parties, but this would not bring about a change in the seat of the arbitration. This is precisely the ratio in Braes of Doune [Braes of Doune Wind Farm (Scotland) Ltd. v. Alfred McAlpine Business Services Ltd., [2008] Bus LR D 137 (QBD) : 2008 EWHC 426 (TCC)] . Therefore, in the present case, the seat would remain in India. 81. In Harmony Innovation Shipping Ltd. v. Gupta Coal India Ltd. and Anr. (2015) 9 SCC 172, the Court dealt with an arbitration clause between the parties which read as follows: 5. If any dispute or difference should arise under this charter, general average/arbitrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue of arbitration shall be Bhubaneswar. After citing several judgments of this Court and then referring to Indus Mobile Distribution (supra), the Court held: 18. Where the contract specifies the jurisdiction of the court at a particular place, only such court will have the jurisdiction to deal with the matter and parties intended to exclude all other courts. In the present case, the parties have agreed that the venue of arbitration shall be at Bhubaneswar. Considering the agreement of the parties having Bhubaneswar as the venue of arbitration, the intention of the parties is to exclude all other courts. As held in Swastik, non-use of words like exclusive jurisdiction , only , exclusive , alone is not decisive and does not make any material difference. 19. When the parties have agreed to the have the venue of arbitration at Bhubaneshwar, the Madras High Court erred in assuming the jurisdiction under Section 11(6) of the Act. Since only the Orissa High Court will have the jurisdiction to entertain the petition filed under Section 11(6) of the Act, the impugned order is liable to be set aside. 84. On a conspectus of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. It would, therefore, follow that if the arbitration agreement is found or held to provide for a seat / place of arbitration outside India, then the provision that the Arbitration Act, 1996 would govern the arbitration proceedings, would not make Part I of the Arbitration Act, 1996 applicable or enable Indian Courts to exercise supervisory jurisdiction over the arbitration or the award. It would only mean that the parties have contractually imported from the Arbitration Act, 1996, those provisions which are concerned with the internal conduct of their arbitration and which are not inconsistent with the mandatory provisions of the English Procedural Law/Curial Law. This necessarily follows from the fact that Part I applies only to arbitrations having their seat / place in India. 86. In Roger Shashoua Ors. v. Mukesh Sharma Ors., (2017) 14 SCC 722, a Division Bench of this Court, after referring to a number of judgments, referred to the English Shashoua judgment [2009] EWHC 957 (Comm) as follows: 46. As stated earlier, in Shashoua Cooke, J., in the course of analysis, held that London arbitration is a well known phenomenon which is often cho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he agreement and scrutinize whether there is any scope to hold that the courts in India could have entertained the petition. Clause 14 of the shareholders agreement (SHA) refers to arbitration. The said Clause reads thus: 14. ARBITRATION 14.1 ...Each party shall nominate one arbitrator and in the event of any difference between the two arbitrators, a third arbitrator/umpire shall be appointed. The arbitration proceedings shall be in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce Paris. 14.2 Proceedings in such arbitrations shall be conducted in the English language. 14.3 The arbitration award shall be substantiated in writing and shall be final and binding on the parties. 14.4 The venue of the arbitration shall be London, United Kingdom. 70. Clause 17.6 deals with governing law, which reads as follows: 17.6 GOVERNING LAW This Agreement shall be governed by and construed in accordance with the laws of India. 89. The court then went on to state: 72. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itration law, as developed in England and by our courts. The Three Judge Bench answered the reference as follows: 27. In view of the aforesaid development of law, there is no confusion with regard to what the seat of arbitration and venue of arbitration mean. There is no shadow of doubt that the arbitration Clause has to be read in a holistic manner so as to determine the jurisdiction of the Court. That apart, if there is mention of venue and something else is appended thereto, depending on the nature of the prescription, the Court can come to a conclusion that there is implied exclusion of Part I of the Act. The principle laid down in Sumitomo Heavy Industries Ltd. (supra) has been referred to in Reliance Industries Limited (II) and distinguished. In any case, it has no applicability to a controversy under the Act. The said controversy has to be governed by the BALCO principle or by the agreement or by the principle of implied exclusion as has been held in Bhatia International. 28. Thus, we answer the reference accordingly. 91. Having answered the reference, the Court then went on to consider the arbitration clause in the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order passed by the Delhi High Court is set aside. Resultantly, the appeal stands allowed and the High Court is requested to deal with the application preferred Under Section 34 of the Act as expeditiously as possible. There shall be no order as to costs. 93. The Three Judge Bench in Hardy Exploration and Production (India) Inc (supra) failed to apply the Shashoua principle to the arbitration clause in question. Had the Shashoua principle been applied, the answer would have been that Kuala Lumpur, which was stated to be the venue of arbitration proceedings, being governed by the UNCITRAL Model Law, would be governed by a supranational set of rules, and there being no other contrary indicator, it would be clear that Kuala Lumpur would therefore be the juridical seat of the arbitration. 94. As we have seen hereinabove, the judgement of Cooke, J. in Roger Shashoua and Ors. v. Mukesh Sharma [2009] EWHC 957 (Comm), was expressly approved by the 5-Judge Bench in BALCO (supra), as was stated by the Supreme Court of India in Roger Shashoua and Ors. v. Mukesh Sharma and Ors. (2017) 14 SCC 722 By failing to apply the Shashoua principle to the arbitrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be accepted. This also seems to be the view of the national courts in different jurisdictions across the world. For the reasons stated above, we are also unable to agree with the conclusions recorded by this Court in Venture Global Engg. [(2008) 4 SCC 190] that the foreign award could be annulled on the exclusive grounds that the Indian law governed the substance of the dispute. Such an opinion is not borne out by the huge body of judicial precedents in different jurisdictions of the world. 95. The Five Judge Bench then went on to state: 195. With utmost respect, we are unable to agree with the conclusions recorded in the judgments of this Court in Bhatia International (supra) and Venture Global Engineering (supra). In our opinion, the provision contained in Section 2(2) of the Arbitration Act, 1996 is not in conflict with any of the provisions either in Part I or in Part II of the Arbitration Act, 1996. In a foreign seated international commercial arbitration, no application for interim relief would be maintainable under Section 9 or any other provision, as applicability of Part I of the Arbitration Act, 1996 is limited to all arbitrations which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n within the meaning of Section 2(1)(f) of the Arbitration Act, 1996, would have to be finally settled in accordance with the Arbitration Act, 1996 read with the UNCITRAL Arbitration Rules, and in case of any conflict, the Arbitration Act, 1996 is to prevail (as an award made under Part I is considered a domestic award under Section 2(7) of the Arbitration Act, 1996 notwithstanding the fact that it is an award made in an international commercial arbitration). Applying the Shashoua principle delineated above, it is clear that if the dispute was with a foreign contractor under Clause 67.3 of the agreement, the fact that arbitration proceedings shall be held at New Delhi/Faridabad, India in sub-clause (vi) of Clause 67.3, would amount to the designation of either of these places as the seat of arbitration, as a supranational body of law is to be applied, namely, the UNCITRAL Arbitration Rules, in conjunction with the Arbitration Act, 1996. As such arbitration would be an international commercial arbitration which would be decided in India, the Arbitration Act, 1996 is to apply as well. There being no other contra indication in such a situation, either New Delhi or Faridabad, India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tition is ordered to be presented in the Courts in New Delhi, as was held by the learned Single Judge of the Special Commercial Court at Gurugram. 102. The appeals are allowed in the aforesaid terms. 1 Section 3 of the English Arbitration Act, 1996 defines seat as follows: In this Part the seat of the arbitration means the juridical seat of the arbitration designated- (a)by the parties to the arbitration agreement, or (b)by any arbitral or other institution or person vested by the parties with powers in that regard, or (c)by the arbitral tribunal if so authorised by the parties, or determined, in the absence of any such designation, having regard to the parties agreement and all the relevant circumstances. It will be noticed that this Section closely approximates with Section 20 of the Indian Arbitration Act, 1996. The meaning of Court is laid down in Section 105 of the English Arbitration Act, 1996 whereby the Lord Chancellor may, by order, make provision allocating and specifying proceedings under the Act wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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