venture global vs satyam computer

balco vs Kaiser
The judgment in detail analyses, the provisions of various sections in the Act and applicability of
Part I of the Act to international commercial arbitrations. Some significant issues dealt with in
the judgment are as follows:
1. It was observed that the object of section 2(7) of the Act is to distinguish the domestic award
(Part I of the Act) from the ‘foreign award’ (Part II of the Act); and not to distinguish the
‘domestic award’ from an ‘international award’ rendered in India. The term ‘domestic award’
means an award made in India whether in a purely domestic context, (i.e., domestically rendered
award in a domestic arbitration or in the international arbitration which awards are liable to be
challenged u/s 34 and are enforceable u/s 36 of the Act).
2. It was held that there is a clear distinction between Part I and Part II as being applicable in
completely different fields and with no overlapping provisions.
3. The Court has also drawn a distinction between a ‘seat’ and ‘venue’ which would be quite
crucial in the event, the arbitration agreement designates a foreign country as the ‘seat’/ ‘place’
of the arbitration and also select the Act as the curial law/ law governing the arbitration
proceedings. The Court further clarified that the choice of another country as the seat of
arbitration inevitably imports an acceptance that the law of that country relating to the conduct
and supervision of arbitrations will apply to the proceedings. It would, therefore, follow that if
the arbitration agreement is found or held to provide for a seat / place of arbitration outside India,
then even if the contract specifies that the Act shall govern the arbitration proceedings, Part I of
the Act would not be applicable or shall not 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 Act, 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 or curial law. Therefore, it can be inferred that Part I applies only to
arbitrations having their seat / place in India.
4. The Court dissented with the observations made in Bhatia International case and further
observed on a logical construction of the Act, that the Indian Courts do not have the power to
grant interim measures when the seat of arbitration is outside India. A bare perusal of Section 9
of the Act would clearly show that it relates to interim measures before or during arbitral
proceedings or at any time after the making of the arbitral award, but before it is enforced in
accordance with Section 36 (enforcement of domestic awards). Therefore, the arbitral
proceedings prior to the award contemplated u/s 36 can only relate to arbitrations which take
place in India.
5. The Court further held that in foreign related international commercial arbitration, no
application for interim relief will be maintainable in India, either by arbitration or by filing a suit.
NNR global logistics vs argus global
1. Whether by virtue of the seat of arbitration being Malaysia, curial law of
Malaysia be applicable?
2. Whether the petition of Aargus under Section 34 of the Arbitration and
Conciliation Act of 1996, maintainable or not?
3. Whether the claims of NNR barred by Limita
4. Whether the award can be enforced under section 48 of the act?

IOCL vs NCC ltd

Overturning the finding rendered by the Delhi High Court, the Supreme Court in Indian Oil
Corporation Limited v NCC Limited1 inter alia held that a Court when deciding an application
under Section 11 of the Arbitration and Conciliation Act, 1996 (Act) is not restricted to
ascertaining only the existence and validity of an arbitration agreement
It is imperative to mention here that the contracting parties had specifically excluded the
following disputes from the scope of the arbitration agreement:
i. Scope or existence of the arbitration agreement
ii. Whether the Claim sought to be referred to arbitration is a Notified Claim
iii. Whether the Notified Claim is included in NCCL's final bill raised
iv. Whether NCCL has opted for alternative dispute resolution with respect to the Notified
Claims included in NCCL's final bill
Findings & Analysis of the Court:
The Supreme Court inter alia held and observed as follows:
i. The parties to a contract are free to agree on the applicability of (a) the proper law of
contract; (b) the proper law of the arbitration agreement; and (c) the proper law of
conduct of the arbitration. Further, the parties are also at liberty to exclude certain matters
from the scope of arbitration.
ii. The Court was not in consonance with the judgment of the Delhi High Court as it was of
the opinion that the High Court had misinterpreted the arbitration clause of the agreement
and had erred in holding that the Notified Claims would fall within the ambit of the
arbitration agreement, despite the same being specifically excluded and falling under the
term 'excepted matters'.
 iii. In doing so, it further held, that the High Court erred in referring the dispute to arbitration
and appointing a sole arbitrator to adjudicate on the dispute with respect to the claims
which were held to be not Notified Claims by the General Manager.
iv. Furthermore, the Supreme Court was not agreeable to the Respondent's submission that a
Section 11 Court cannot look into the conclusion of 'accord and satisfaction' of the claims
and held that at the referral stage, the Court may prima facie consider this issue.
v. As state above, it was held that the question of jurisdiction and arbitrability can be
decided by the Court at the referral stage and the Court is not restricted to ascertaining
only the existence and the validity of an arbitration agreement between the disputing
parties.

Lasen air conditioning vs UOI

High Court doesn’t have the power to Modify the Award – M/s Larsen Air Conditioning and
Refrigeration Company v. Union of India; Order dated 11th August 2023 – Supreme Court
The only power a Court has under Sections 34 and 37 of the Arbitration Act, 1996, is to partially
or wholly set aside the arbitral award, and that too only on the condition that the limited grounds
available under the provisions of the Act are fulfilled.

NTPC vs singer
The Supreme Court of India in NTPC v. Singer had held that: (a) the law governing the
arbitration agreement is normally the same as the law governing the main contract; (c) Where,
however, there is no express choice of the law governing the contract as a whole, or the
arbitration agreement as such, a presumption may arise that the law of the country where the
arbitration is agreed to be held is the law of the arbitration agreement, but, that is only a
rebuttable presumption. This judgment was passed is 1992 and is consistent with the approach of
the UK Supreme Court.

Bhatia international vs Bulk trading

Issues Involved
 Whether Part I of the A&C Act which deals with the domestic arbitration process, would
apply to international arbitrations seated in India?
 Whether international arbitrations were governed solely by Part II of the act, which
incorporates the United Nations Commission on International Trade Law
(UNCITRAL) Model Law?
Observations
 The Court held that Part I of the A&C Act, would apply to international
arbitrations conducted in India unless the parties explicitly excluded its application.
 The court further said that the provisions related to domestic arbitration, including those
dealing with interim relief and appeal procedures, could be invoked in international
arbitrations unless the parties had specifically chosen not to apply them.
 The SC clearly allowed parties to international arbitrations seated in India to seek
interim relief from Indian courts under Part I of the act.
 It also allowed for the possibility of Indian courts playing a more active role in
international arbitration proceedings, which was a departure from the traditional pro-
arbitration stance of international commercial arbitration.

Dresser rand vs Bindal agro chem

principle of law defined in Dresser Rand S.A. v. Bindal Agro Chem Ltd. 2 ("Dresser Rand") that a
Letter of Intent ("LoI") merely indicates a party's intention to enter into a contract with the other
party in future, however, considered other aspects which point towards the binding nature of an
LoI. The court held that an important aspect to consider in deciding the binding nature of the
contract along with the terms of the LoI is also the nature of the contract, time spent by the
parties and consideration paid.

Reliance industries vs UOI

The Delhi High Court in its judgement coloured the nature of arbitration between Reliance and
Union of India, i.e. two Indian entities, with the paintbrush of international commercial
arbitration under Section 2(1)(f) of the A&C Act. The Delhi High Court reached this conclusion
on the grounds that firstly, foreign entities (i.e. Niko and British Petroleum) are parties to the
underlying contract, secondly, Reliance, the Indian party, was acting on behalf of the two foreign
entities and thirdly, the award by the arbitral tribunal would have an impact on the foreign
entities. The court held that the Supreme Court’s decision in Reliance Industries Ltd. and Ors.
vs. Union of India (“2014 judgement”) which arose from the same PSC, involving the same
parties, settled the matter. The apex court in its judgement held that the arbitration was an
international commercial arbitration. The Delhi High Court, following the rationale of 2104
judgement, held that the disputes subject to arbitration in the present case also related to the
primary contractual rights of all parties under the PSC. Consequently, the court held that the
arbitral proceedings in the present case unequivocally constituted an “international commercial
arbitration.” As a result, the scope of interference by the court under Section 34 of the A&C Act
was further restricted, and the Ministry’s challenge to the arbitral award on grounds of
disregarding evidence or drawing unfounded inferences was deemed untenable since such claims
fell within the realm of “patent illegality.”

Chamsey bhara vs Jivraj baloo

“An error of law on the face of the award means…that you can find in the award or a document
actually incorporated thereto, as for instance a note appended by the arbitrator stating the reasons
for his judgment, some legal proposition which is the basis of the award and which you can then
say is erroneous.”(per Lord Dunedin)

Videocon industries vs UOI 2011

The Supreme Court of India (“Supreme Court”) in the case of Videocon Industries Limited
(“Appellant”) –Vs- Union of India and Anr.1 (“Respondents”) held that when an arbitration
agreement is governed by a foreign law as selected by the parties, it necessarily implies that the
parties had agreed to exclude the provisions of Part I of the Arbitration & Conciliation Act, 1996
(“the Act”) and hence petition filed under Section 92 shall not be entertained.

Renusagar vs General electric

Renusagar Power Co Ltd (“Renusagar”) entered into a contract General Electric Company
(“General Electric”), which provided for arbitration under the auspices of the International
Chamber of Commerce (“ICC”) in Paris. A dispute arose and General Electric referred the matter
to arbitration. Renusagar argued that the dispute did not fall within the scope of the arbitration
agreement but the Supreme Court of India ruled against it. An award was rendered in favour of
General Electric which it sought to enforce before the High Court of Bombay. The High Court
enforced the award and Renusagar appealed to the Supreme Court, arguing that (i) the arbitral
tribunal had failed to inform it of the potential effects of certain of the Tribunal's decisions,
thereby rendering it unable to present its case in violation of Section 7(1)(a)(ii) of the Foreign
Awards (Recognition and Enforcement) Act 1961 (the “1961 Act”) (mirroring Article V(1)(b)
NYC); and, (ii) the terms of the award were grossly unfair, so enforcement would be contrary to
public policy, in violation of Section 7(b)(ii) of the 1961 Act (mirroring Article V(2)(b) NYC).
The Supreme Court dismissed Renusagar’s appeal and affirmed the lower court's decision. The
Court rejected Renusagar’s contention that it had been unable to present its case in violation of
Section 7(1)(a)(ii) of the 1961 Act because Renusagar voluntarily refused to appear before the
arbitral tribunal. Therefore, it could not complain of the alleged effects this had on presentation
of its case at this stage in the proceedings. The Court also rejected Renusagar’s public policy
argument. First, it held that the term “public policy” in Section 7(1)(b)(ii) of the 1961 Act
referred to the public policy of India and not the public policy of New York. It based this
conclusion on Article V(2)(b) NYC, which it found to clearly refer to the public policy of the
country enforcing the award. Second, it held that the award was not contrary to the public policy
of India. The Court determined that under Section 7(1)(b)(ii) of the 1961 Act, the enforcement an
award violates the public policy of India if enforcement would be contrary to (i) a fundamental
policy of Indian law; (ii) the interests of India; or, (iii) justice or morality. The Court found that
no aspect of the award or interest was excessive or unjust, and therefore enforcing the award
would not be contrary to India's public policy.

Enercon vs Enercon
the Indian Supreme Court in Enercon (India) Ltd and Ors v Enercon Gmbh and Anr,¹ applied the
principles of severability of the arbitration clause from the underlying contract and referred a
dispute to arbitration despite some flaws in the drafting of the arbitration clause.
Issues before the Indian Supreme Court
1. Whether the Parties can refuse to arbitrate on the grounds that there was no validly
concluded IPLA? Further, whether the Court decides this issue or if it is an issue that is to
be left for the Arbitral Tribunal to decide?
2. Assuming that there is an arbitration agreement in place, whether the arbitration clause is
vague and 'unworkable'?
3. Assuming that the arbitration clause is 'workable' whether the seat of arbitration is in
London or India?
4. Assuming that the seat is India, whether the English Courts would have concurrent
jurisdiction as the venue of arbitration is in London?
Decision of the Indian Supreme Court
1. Arbitration Agreement is valid and existing
The Supreme Court started out by stating that the legislative mandate under section 45 of the
Indian Arbitration Act only allowed the court to decline referring a dispute to arbitration if the
agreement was found to be "null and void, inoperative or incapable of being performed". A party
is required to contend and prove that one of these infirmities exist and the mere allegation that
the underlying contract containing the arbitration clause (here the IPLA) was not properly
concluded would not be enough to fall within the parameters set out under section 45 of the
Indian Arbitration Act. The Supreme Court held that the signing of the IPLA by the parties
together with evidence of past dealing – all of which were subject to arbitration – was enough for
the court to arrive at a prima facie conclusion that the parties intended to arbitrate and on that
basis refer the parties to arbitration.
The Supreme Court supported its above conclusion by asserting that parties cannot be permitted
to avoid arbitration without satisfying the court that it would be just and in the interest of all the
parties not to proceed with arbitration. The Court also considered the widely worded arbitration
clause where all disputes (including those with regard to the validity of the IPLA) were to be
referred to arbitration. The Court reiterated the concept of separability of the arbitration
agreement and held that an arbitral tribunal had jurisdiction to consider claims even where there
is a dispute as to the validity of the underlying contract. The Supreme Court went on to hold that
in the present case, the issue as to whether the IPLA was properly concluded would be one for
the Arbitral Tribunal to decide.
2. Arbitration Agreement is not 'unworkable'
The Supreme Court held that although there were some errors in the drafting of the clause – such
as the clause's failure to specify the procedure for appointment of a third arbitrator – the clause
was not 'unworkable' or pathological. The Supreme Court held that courts are required to adopt a
pragmatic approach and not a pedantic or technical approach while interpreting or construing
arbitration clauses and must try to give effect to the intention of the parties to arbitrate – where
this is clear. Therefore, when faced with a seemingly unworkable arbitration clause, it is the
courts' duty to make the same workable within the limits permissible under the law. On the facts,
the court interpreted the arbitration clause from the point of view of a 'reasonable business
person'. The Court held that the arbitration clause in the IPLA was missing a line to the effect
that the two arbitrators appointed by the parties shall appoint the third arbitrator. The Court felt
that this omission was so obvious that the court was entitled to legitimately supply the missing
line in the clause. In the interests of time however the Supreme Court appointed the third
arbitrator itself, as the parties had already appointed an arbitrator each.
3. Seat of arbitration is India
The Supreme Court relied heavily on the ratio of the case of Naviera Amazonica Peruana S.A. v
Compania Internacional De Seguros Del Peru² and applied the closest and intimate connection
test to determine the seat of arbitration.
The Supreme Court held that Indian law was chosen as the law applicable to all aspects of the
agreement and the arbitration; i.e. the law governing the contract, the law governing the
arbitration agreement and the procedural law of the arbitration were all Indian law. The court
started with the presumption (based on various English cases) that given the parties' choice of
Indian law particularly for the conduct of the arbitration, the parties are not likely to have
intended to have fixed the seat of arbitration in London. The Court was willing to consider
displacing this presumption – it indicated that the threshold to displace this presumption could be
quite low – a mere choice of a transnational set of arbitration rules could be sufficient to consider
a 'venue' as being a 'seat'. However it found no other connecting factor in favor of London. On
that basis, the court held that the 'seat' was India and London was merely chosen by the parties as
a venue for the conduct of the hearings.
The Supreme Court also relied on the 2012 BALCO decision support its conclusion. It held that
since the parties has specifically applied portions from Part I of the Indian Arbitration Act –
which, in the post BALCO context was only effective where the seat of arbitration was India –
the parties must have intended for the seat to be in India.
4. English Courts do not have concurrent supervisory jurisdiction over the arbitration
The Bombay High Court had concluded that although the seat of arbitration was in India, the
English courts would have concurrent jurisdiction over the dispute as the venue chosen was
London. The Supreme Court disagreed with this finding and held that the overarching aim of
arbitration is to enable the parties to resolve the disputes speedily, economically and finally and
there are several difficulties that can be caused by courts in two countries exercising concurrent
jurisdiction over the same subject matter. The court held that (consistent with the law in most
arbitration friendly jurisdictions) once the seat of arbitration has been fixed as India, then it is the
Indian courts that would have the exclusive jurisdiction to exercise supervisory powers over the
arbitration.

ONGC vs Saw pipes

 Whether ONGC possessed the right to claim Liquidated Damages.
 Whether patent illegality could serve as grounds to challenge the award under section 34.

Further, to what extent the term public policy should be interpreted as one of the significant
points of discussion. Analysing the past judgments and the constitutional spirit the court came to
the conclusion that ‘Public Policy’ cannot be restrained and has to be interpreted liberally thereby
including one more aspect to the public policy i.e. ‘patent illegality’. Moreover, the court took in
stride the comments by jurist and Sr. Advocate late Mr. Nani Palkhiwala wherein he stated that
“if the arbitral tribunal does not dispense justice, it cannot truly be reflective of an alternate
dispute resolution mechanism. Hence, if the award has resulted in an injustice, a court would be
well within its rights in upholding the challenge to the award on the ground that it is in conflict
with public policy in India.”
Furthermore, force majeure clauses also could not be invoked in the present case in the face of
labour strikes all over Europe because the clause in the contract did not enumerate the possibility
of a strike. In a nutshell, the Hon’ble Supreme Court herein set aside the award passed by the
tribunal on grounds of patent illegality violating ‘public Policy.’