TMI Blog2010 (10) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... ul, South Korea with its principle place at Seoul. The disputes have arisen in between these two companies out of a Distributorship Agreement which was entered between the parties on 2.2.2004. By this, the petitioner was to be the exclusive distributor of the respondent in India and Bhutan for its products like Excavators, Wheel Loaders etc. Article 23 of the Distributorship Agreement provides for the resolution of disputes by arbitration. Since the disputes have arisen in between the two companies and since one of the companies is based in Seoul, South Korea, the present petition has been filed treating this to be an international arbitration. There is no dispute between the parties that this will be the international arbitration on the basis of the arbitration Clause being Article 23 of the Distributorship Agreement. 2. There is also no dispute that the disputes have arisen between the parties on account of which the respondent purported to terminate the Agreement entered into between them. In pursuance of the disputes, the petitioner issued notice dated 01.09.2007 for appointment of an Arbitrator to resolve the disputes arisen between the parties. However, that not having bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended that there is express exclusion of Indian Courts and/or the applicability of the Act. Their basic contention was that under the relevant clauses the jurisdiction of the Indian Courts is specifically outstayed. This is particularly because it is specifically provided in Clause 33 that there is an express agreement to get the disputes settled by arbitration in Seoul in terms of the Rules of Arbitration of Indian Chamber of Commerce, Paris. The respondent in its Counter has relied on Article 4 of the Rules of Arbitration of International Chamber of Commerce. 6. It seems that previously an application was filed under Section 9 of the Act before the Madras High Court seeking interim injunction restraining the respondents, their men and agents from in any manner dealing with their products in India directly till the conclusion of the arbitral proceedings. It was pointed out that there was an ex parte order of ad interim injunction by the High Court on 8.5.2008. However, when the respondent moved an application for vacating the ex parte order, the respondent had specifically contended that the Courts at Chennai had no jurisdiction to entertain the application. It was pointed out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision in Bhatia International v. Bulk Trading S.A. Anr. (cited supra) was relied upon. From all these three judgments, it becomes clear that unless the jurisdiction of the Indian Courts is not specifically excluded at least Part I of the Act whereunder there is a power to appoint Arbitrator is covered by Section 11 (6) of the Act, this Court would have jurisdiction to appoint an Arbitrator even if the arbitration is to be governed by foreign law. 9. Shri Gurukrishna Kumar, learned Counsel for the respondent, however, while opposing this plea urged that in this case and, more particularly, in paragraph 23 such exclusion can be specifically seen. He has compared the language of Clause 23, more particularly, with the jurisdictional cause which had fallen for consideration in Citation Infowares Ltd. v. Equinox Corporation (supra). The learned Counsel also argued that the bracketed portion in Article 23 cannot be interpreted so as to mean that the seat of arbitration could be anywhere else as per the choice of the parties. He pointed out that the bracketed portion is only for the purpose of providing the convenience of holding proceedings of the arbitration else where than Seoul. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Commerce. 12. On the backdrop of these conflicting claims, the question boils down to as to what is the true interpretation of Article 23. This Article 23 will have to be read in the backdrop of Article 22 and more particularly, Article 22.1. It is clear from the language of Article 22.1 that the whole Agreement would be governed by and construed in accordance with the laws of The Republic of Korea. It is for this reason that the respondent heavily relied on the law laid down in Sumitomo Heavy Industries Ltd. v. ONGC Ltd. Ors. (cited supra). This judgment is a complete authority on the proposition that the arbitrability of the dispute is to be determined in terms of the law governing arbitration agreement and the arbitration proceedings has to be conducted in accordance with the curial law. This Court, in that judgment, relying on Mustill and Boyd (the Law and Practice of Commercial Arbitration in England, 2nd Edition), observed in paragraph 15 that where the law governing the conduct of the reference is different from the law governing the underlying arbitration agreement, the Court looks to the arbitration agreement to see if the dispute is arbitrable, then to the curial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. In paragraphs 15 and 16, this Court has heavily relied on the observations quoted above. If we see the language of Article 23.1 in the light of the Article 22.1, it is clear that the parties had agreed that the disputes arising out of the Agreement between them would be finally settled by the arbitration in Seoul, Korea. Not only that, but the rules of arbitration to be made applicable were the Rules of International Chamber of Commerce. This gives the prima facie impression that the seat of arbitration was only in Seoul, South Korea. However, Ms. Mohana, learned Counsel appearing on behalf of the petitioner drew our attention to the bracketed portion and contended that because of the bracketed portion which is to the effect or such other place as the parties may agree in writing , the seat could be elsewhere also. It is based on this that Ms. Mohana contended that, therefore, there is no express exclusion of Part I of the Act. It is not possible to accept this contention for the simple reason tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etween the parties in this case, whereas, Shri Gurukrishna Kumar, learned Counsel for the respondent contended that there is essential difference in the language of both the Clauses. He pointed out that the language of Article 23.1, in contradistinction with the Clause 10.1 in the case of Citation Infowares Ltd. v. Equinox Corporation (cited supra), clearly spells out that the seat of the arbitration was agreed to be in Seoul, Korea and thereby, there would be express exclusion of Part I of the Act. In my opinion, there is essential difference between the clauses referred to in the case of Citation Infowares Ltd. v. Equinox Corporation (cited supra) as also in Indtel Technical Services Private Ltd. v. W.S. Atkins Rail Ltd. (cited supra) on one hand and Article 23.1 in the present case, on the other. Shri Gurukrishna Kumar rightly pointed out that the advantage of bracketed portion cannot be taken, particularly, in view of the decision in Naviera Amozonica Peruana S.A. v. Compania Internationacional De Seguros Del Peru (cited supra), wherein it was held:- All contracts which provide for arbitration and contain a foreign element may involve three potentially relevant systems of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... borne in mind when one comes to the Judge's construction of this policy. It would be clear from this that the bracketed portion in the Article was not for deciding upon the seat of the arbitration, but for the convenience of the parties in case they find to hold the arbitration proceedings somewhere else than Seoul, Korea. The part which has been quoted above from the decision in Naviera Amozonica Peruana S.A. v. Compania Internationacional De Seguros Del Peru (cited supra) supports this inference. In that view, my inferences are that:- 1. a clear language of Articles 22 and 23 of the Distributorship Agreement between the parties in this case spell out a clear agreement between the parties excluding Part I of the Act. 2. the law laid down in Bhatia International v. Bulk Trading S.A. Anr. (cited supra) and Indtel Technical Services Private Ltd. v. W.S. Atkins Rail Ltd. (cited supra), as also in Citation Infowares Ltd. v. Equinox Corporation (cited supra) is not applicable to the present case. 3. Since the interpretation of Article 23.1 suggests that the law governing the arbitration will be Korean law and the seat of arbitration will be Seoul in Korea, there will ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
