TMI Blog1997 (12) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... vs., with them for the appearing parties. JUDGMENT BHARUCHA, J. This appeal by special leave assails the correctness of the judgment and order of a learned single Judge of the High Court at Bombay. By the Judgment and order the petition of the first respondent for the issuance of a direction to the second respondent to file the award that he had made as the umpire in arbitration proceeding between the appellant and the first respondent in that court was allowed. Briefly stated, these are the facts relevant to the issue in the appeal: The appellant and the first respondent entered into a contraction on 7th September, 1983, whereunder the appellant agreed to install and commission on trunkey basis an oil platform at Bombay High, about 100 miles north-west of Bombay. The contract stipulated the following. "17.0 Laws/Arbitration 17.1 Applicable Laws All questions disputes or difference arising under, out of or in connection with this Contract shall be subject to the laws of Indian. 17.2 Arbitration If any dispute, difference or question shall at any time hereafter arise between the parties hereto or their respective representatives or assigns in respect of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent was decided on 23rd July, 1993 by Potter, J. (The Judgment and order is reported in (1994) 1 LIoyd's Law Reports 45). The arbitrators having differed, the second respondent entered upon the reference and, on 27th June, 1995, made his award. The award was served on the first respondent on 10th July, 1995. On 26th July, 1995, the first respondent filed in the High Court at Bombay a petition praying that the second respondent be directed, under Section 14 of the Indian Arbitration Act, 1940, to file the award in that court. The first respondent submitted that the award was invalid, unenforceable and liable to be set aside under the provisions of the said Act. The learned Judge, as aforestated, allowed the petition. The decision rendered by Potter, J. in the Commercial Court is of some importance because the jurisdiction of the English Courts was discussed. The learned Judge said: "Before stating my reasons for that conclusion and then turning to the "frustration" argument, and because questions have arisen as to whether English law or Indian law is appropriate to be applied at various stages of this application, I propose briefly to advert to the various laws potentially applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial law in cases where the parties have made an express choice for arbitration (frequently in London) in a jurisdiction divorced from the jurisdiction with which the contract in (1) has most real connection. In this case, as to (1), the parties have made an express choice of Indian law as the proper law of the contract. As to (2), it seems to me likely (although) it is not necessary finally to decide) that the proper law of the arbitration agreement is similarly Indian law, since the arbitration agreement is part of the substance of the underlying contract and the terms of cl. 17.1 are clear in that respect. As to (3), it matters not for the purpose of this application whether the governing law in English or Indian law, because Mr. Dunning has conceded before me that there is no material difference between the two so far as applicable to the doctrine of frustration upon which he relies (see also par. 7 of the affidavit of Mr. Majumdar to that effect). As to (4), the curial law, it seems to me plain that it is the law of England. There is, it is true, no express choice of curial law. However, there is a clear requirement that the arbitration proceedings be held in London. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... performance of that agreement. (3) The law governing the conduct of the arbitration. In the majority of cases all three will be the same. But (1) will often be different from (2) and (3). And occasionally, but rarely, (2) may also differ from (3)." He said, "Prima facie, i.e. in the absence of some express and clear provision to the contrary it must follow that an agreement that the curial or procedural law of an arbitration is to be law of X has the consequence that X is also to be the "seat" of the arbitration. The lex fori is then the law of X, and accordingly X is the agreed forum of the arbitration. A further consequence is then that the Courts which are competent to control or assistant the arbitration are the Courts exercising jurisdiction at X". The learned Judge observed that there was no reason in theory which precluded "parties to agree that an arbitration shall be held at a place or in country X but subject to the procedural laws of Y". (Emphasis supplied.) In the Law and Practice of Commercial Arbitration in England, Second Edition by Mustill and Boyd, there is a chapter on "The applicable law and the jurisdiction of the Court". Under the subtitle, "Law Governing The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arisen. 2. The proper law of the arbitration agreement, i.e. the law governing the obligation of the parties to submit the disputes to arbitration, and to honour an award. 3. The curial law, i.e. the law governing the conduct of the individual reference. XXX XXX XXX 1. The proper law of the arbitration agreement governs the validity of the arbitration agreement, the question whether a dispute lies within the scope of the arbitration agreement; the validity of the notice of arbitration; the constitution of the tribunal; the question whether an award lies within the jurisdiction of the arbitrator; the formal validity of the award; the question whether the parties have been discharged from any obligation to arbitrate future disputes. 2. The curial law governs' the manner in which the reference is to be conducted; the procedural powers and duties of the arbitrator; questions of evidence; the determination of the proper law of the contract. 3. The proper law of the reference governs; the question whether the parties have been discharged from their obligation to continue with the reference of the individual dispute. XXX XXX XXX The conclusion that we reach is that the cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the authority of an arbitrator can be revoked. The law will also determine what law the arbitrators are to apply, and whether they are expected or allowed to decide ex aequo et bono or as amiables compositeurs, and, if not, whether the parties can gave them this power or impose on them this duty. That law will also determine the procedural powers and duties of the arbitrators, e.g. whether they must hear oral evidence (but not their jurisdiction to decide the dispute, which is governed by the arbitration agreement and the law applicable to it) or whether the arbitrators have been guilty of misconduct. It will also determine what judicial remedies are available to a party who wishes to apply for security for costs or for discovery or who wishes to challenge the award once it has been rendered and before it is sought to enforce it abroad, and the circumstances in which judicial remedies may be excluded." (Emphasis supplied.) Mr. Sorabjee submitted, relying upon the proposition that the procedural law would determine what judicial remedies were available to a party "who wishes to challenge the award once it has been rendered and before it is sought to enforce it abroad", that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause 17 of the contract between the appellant and the first respondent, we are in no doubt that the law governing the contract and the law governing the rights and obligations of the parties arising from their agreement to arbitrate, and, in particular, their obligations to submit disputes to arbitration and to honour the award, are governed by the law of India; nor is there any dispute in this behalf. Section 47 of the Indian Arbitration Act, 1940, reads thus: "47. Act to apply to all arbitrations. - Subject to the provisions of Section 46, and save in so far as is otherwise provided by any law for the time being in force, the provisions of this Act shall apply to all arbitrations and to all proceedings thereunder" Provided that an arbitration award otherwise obtained may with the consent of all the parties interested be taken into consideration as a compromise or adjustment of a suit by any Court before which the suit is pending." The only other statute which is required to be considered in the context of the provisions of Section 47 of the 1940 Act is the Foreign Awards (Recognition and Enforcement) Act, 1961. For the purposes of determining whether the provision of the 1940 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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