TMI Blog2021 (4) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... ong Kong is for final resolution by arbitration administered in Hong Kong. The agreement between the parties that the dispute shall be referred to and finally resolved by arbitration administered in Hong Kong clearly suggests that the parties have agreed that the arbitration be seated at Hong Kong and that laws of Hong Kong shall govern the arbitration proceedings as well as have power of judicial review over the arbitration award. The closest connection test strongly relied upon by Mr. Himani would only apply if it is unclear that a seat has been designated either by the parties or by the tribunal. In this case, the seat has clearly been designated both by the parties and by the tribunal, and has been accepted by both the parties - it is not possible to accept Mr. Himani s contention that the seat of arbitration ought to be held to be Mumbai in the facts of the present case. Part I and Part II of the Arbitration Act are mutually exclusive - HELD THAT:- This Court categorically held that a foreign award cannot be refused to be enforced merely because it was made between two Indian parties, under pari materia provisions of the Foreign Awards Act. The Court also held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1. Leave granted. 2. The present appeal raises an interesting question as to whether two companies incorporated in India can choose a forum for arbitration outside India and whether an award made at such forum outside India, to which the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 [ New York Convention ] applies, can be said to be a foreign award under Part II of the Arbitration and Conciliation Act, 1996 [ Arbitration Act ] and be enforceable as such. Factual Background 3.1. The appellant is a company incorporated under the Companies Act, 1956 with its registered office at Ahmedabad, Gujarat. The respondent is a company incorporated under the Companies Act, 1956 with its registered office at Chennai, Tamil Nadu, and is a 99% subsidiary of General Electric Conversion International SAS, France, which in turn is a subsidiary of the General Electric Company, United States. 3.2. In 2010, the appellant issued three purchase orders to the respondent for supply of certain converters. Pursuant to these purchase orders, the respondent supplied six converters to the appellant. Disputes arose between the parties in relation to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt opposed the said application and asserted that there was no bar in law from this being done. By Procedural Order No.3 dated 20.02.2018, the learned sole arbitrator, Mr. Ian Leonard Meakin, dismissed the respondent s preliminary application, holding as follows: The Tribunal finds that two Indian parties can arbitrate outside India. The Tribunal is persuaded that the Supreme Court of India s decision in Reliance Industries Ltd v. Union of India (2014) 7 SCC 603 (Exhibit CLM-3) is a leading authority. This has been confirmed by the Supreme Court of India in Sasan Power Limited v. North American Coal Corporation India Private Limited (2016) 10 SCC 813 (RL-6), which at an earlier instance before the High Court of Madhya Pradesh 2016 (2) ARBLR 179 (MP), rendered on 11.09.2015, held that two Indian companies can arbitrate outside of India. Furthermore, the earlier case of Atlas Export Industries v. Kotak Company (1999) 7 SCC 61, which was applied in Sasan, found that a contract which is unlawful under section 23 of the Indian Contract Act 1872, because it breaches Indian public policy, would be void but that merely because the arbitrators are situated in a for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losest and most real connection test under Indian law do not assist the Respondent because that test is only relevant where the seat is unclear. Moreover, Bharat clearly held that the applicability of section 28 of the Indian Act is restricted to the substantive law of the contract and does not apply to the seat of the arbitration. Conclusion For the reasons set out above, the Tribunal therefore finds that the arbitration clause in the Settlement Agreement is valid and will proceed to apply the Swiss Act because the seat of the arbitration is Zurich, Switzerland. 3.5. This procedural order was not challenged by either of the parties. Vide the said procedural order, the seat of the arbitration was stated to be Zurich, Switzerland. The respondent suggested Mumbai, India as a convenient venue in which to hold arbitration proceedings as costs would be reduced thereby. The appellant objected to this suggestion. At the Case Management Conference dated 28.06.2018, the learned arbitrator decided that though the seat is in Zurich, all hearings will be held in Mumbai, acceding to the application made by the respondent. Since the mountain did not come to Muhammad, Muhammad, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ract Act ] read with section 28(1)(a) and section 34(2A) of the Arbitration Act. To buttress this submission, Mr. Himani pointed out the provisions of the Prohibition of Benami Property Transactions Act, 1988 [ Benami Transactions Act ] which cannot be bypassed if two Indians are to apply only the substantive law of India. However, by designating a seat outside India, it is open to two Indian parties to opt out of the substantive law of India which itself would be contrary to the public policy of India. 4.2. He then argued that foreign awards contemplated under Part II of the Arbitration Act arise only from international commercial arbitrations. International commercial arbitration , as has been defined in section 2(1)(f) of the Arbitration Act, would make it clear that there has to be a foreign element when parties arbitrate outside India, the foreign element being that at least one of the parties is, inter alia, a national of a country other than India, or habitually resident in a country other than India, or a body corporate incorporated outside India. For this reason, the award passed in the present case cannot be designated as a foreign award under Part II of the Arbitrati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge that joined Part II to Part I, as a result of which it became clear that section 44 refers only to international commercial arbitrations, as is stated in the proviso to section 2(2). 4.6. He then went on to argue that the Arbitration Act is a self-contained code, as has been held by several judgments of this Court, and that when there is no foreign element involved in an award made in Zurich between two Indian companies, such award cannot be the subject matter of challenge or enforcement either under Part I or Part II of the Arbitration Act. 4.7. Mr. Himani then relied heavily upon section 10 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 [ Commercial Courts Act ] which also recognises only two categories of arbitrations international commercial arbitration and other than international commercial arbitration. He argued that there is a head-on conflict between section 10(3) of the Commercial Courts Act and section 47 of the Arbitration Act, as a result of which the former must prevail. For this purpose, he relied upon the non-obstante clause in section 21 of the Commercial Courts Act. This being the case, in any ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... New York Convention which only requires persons , both of whom can be Indian, having disputes arising out of commercial legal relationships, which are to be decided in the territory of a State outside India, which State is a signatory to the New York Convention. He then argued that any attempt to breach the wall created between Part I and Part II, which have been held to be mutually exclusive in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 [ BALCO ], cannot be countenanced by this Court. 5.3. He further argued that unlike the definition of international commercial arbitration contained in section 2(1)(f) in Part I, nationality, domicile or residence of parties is irrelevant for the purpose of applicability of section 44 of the Arbitration Act. As a matter of fact, according to the learned Senior Advocate, this is no longer res integra as it has been expressly decided under the pari materia provisions of the Foreign Awards (Recognition and Enforcement) Act, 1961 [ Foreign Awards Act ] in Atlas (supra) that two Indian parties can enter into an arbitration agreement with a seat outside India, which would result in an award that would th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is outside India and cited case law for this proposition. 5.8. He also refuted Mr. Himani s argument that Mumbai should be the seat, as the closest connection test applies only absent the determination of seat. In the present case, the arbitration clause in the settlement agreement, together with the procedural orders passed by the arbitrator, designated Zurich as the seat and Mumbai only as a convenient venue, which has been accepted by both parties, and must govern the arbitral proceedings in this case. 5.9. He then proceeded to distinguish the three judgments relied upon by Mr. Himani to demonstrate that two Indian parties can choose a foreign seat. He then went on to argue that both in the proviso to section 2(2) and section 10 of the Commercial Courts Act, the phrase international commercial arbitration is not governed by the definition contained in section 2(1)(f) but would only refer to arbitrations in which the seat is outside India. The Arbitration and Conciliation Act, 1996 6. Having heard learned counsel for both parties, it is first necessary to set out the relevant provisions of Part I and Part II of the Arbitration Act. 2. Definitions.-( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) An arbitral award made under this Part shall be considered as a domestic award. A party may choose to waive its right to object under section 4 of the Arbitration Act, which reads as follows: 4. Waiver of right to object.- A party who knows that- (a) any provision of this Part from which the parties may derogate, or (b) any requirement under the arbitration agreement, has not been complied with and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay or, if a time-limit is provided for stating that objection, within that period of time, shall be deemed to have waived his right to so object. The rules applicable to the substance of dispute are set out in section 28 as follows: 28. Rules applicable to substance of dispute.-( 1) Where the place of arbitration is situated in India,- (a) in an arbitration other than an international commercial arbitration, the arbitral tribunal shall decide the dispute submitted to arbitration in accordance with the substantive law for the time being in force in India; (b) in international commercial arbitration,- (i) the arbitral tribunal shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Government, being satisfied that reciprocal provisions have been made may, by notification in the Official Gazette, declare to be territories to which the said Convention applies. 46. When foreign award binding.- Any foreign award which would be enforceable under this Chapter shall be treated as binding for all purposes on the persons as between whom it was made, and may accordingly be relied on by any of those persons by way of defence, set-off or otherwise in any legal proceedings in India and any references in this Chapter to enforcing a foreign award shall be construed as including references to relying on an award. 47. Evidence.-( 1) The party applying for the enforcement of a foreign award shall, at the time of the application, produce before the Court- (a) the original award or a copy thereof, duly authenticated in the manner required by the law of the country in which it was made; (b) the original agreement for arbitration or a duly certified copy thereof; and (c) such evidence as may be necessary to prove that the award is a foreign award. (2) If the award or agreement to be produced under sub-section (1) is in a foreign language ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ests that the parties have agreed that the arbitration be seated at Hong Kong and that laws of Hong Kong shall govern the arbitration proceedings as well as have power of judicial review over the arbitration award. (emphasis in original) As per this clause, Zurich was therefore determined to be the juridical seat of arbitration between the parties. 8. At the Case Management Conference held on 28.06.2018, the learned arbitrator specifically decided: 3. The venue of the hearing shall be Mumbai, India. The seat of the arbitration of course remains Zurich, Switzerland. I am grateful to the Respondent for offering to assist with the organisation of the hearing in India. The consequence of holding the hearing in Mumbai will of course be dealt with in the Award on costs, depending on the outcome. The Tribunal is of the view that it is cost efficient to hold the hearing in India where the parties are based, the Respondent s five witnesses are based, where Respondent s legal team are based and Claimant s co-counsel is based. This means that the Claimant s lead counsel, the Claimant s sole witness and the sole arbitrator must travel to India. This arrangement has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der this Act, section 2, which is pari materia to section 44 of the Arbitration Act, laid down: 2. Definition.- In this Act, unless the context otherwise requires, foreign award means an award on differences between persons arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India, made on or after the 11th day of October, 1960- (a) in pursuance of an agreement in writing for arbitration to which the Convention set forth in the Schedule applies; and (b) in one of such territories as the Central Government being satisfied that reciprocal provisions have been made, may, by notification in the official Gazette, declare to be territories to which the said Convention applies. Under section 6 of the Foreign Awards Act, where the court is satisfied that the foreign award is enforceable, the court shall order the award to be filed and shall proceed to pronounce judgment according to the award. This provision has since been done away with by the Arbitration Act, 1996 as section 49 of the Arbitration Act expressly provides that the award shall be deemed to be a decree of the court. Thereafter, section 7 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rely domestic arbitrations i.e. where none of the parties are in any way foreign but also to international commercial arbitrations covered within Section 2(1)(f) held in India. The term domestic award can be used in two senses: one to distinguish it from international award , and the other to distinguish it from a foreign award . It must also be remembered that foreign award may well be a domestic award in the country in which it is rendered. As the whole of the Arbitration Act, 1996 is designed to give different treatments to the awards made in India and those made outside India, the distinction is necessarily to be made between the terms domestic awards and foreign awards . The scheme of the Arbitration Act, 1996 provides that Part I shall apply to both international arbitrations which take place in India as well as domestic arbitrations which would normally take place in India. This is clear from a number of provisions contained in the Arbitration Act, 1996 viz. the Preamble of the said Act, proviso and the explanation to Section 1(2), Sections 2(1)(f), 11(9), 11(12), 28(1)(a) and 28(1)(b). All the aforesaid provisions, which incorporate the term internati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Arbitration Act, 1996, precludes Part I from being applicable to a foreign seated arbitration, even if the agreement purports to provide that the arbitration proceedings will be governed by the Arbitration Act, 1996. * * * 120. We are unable to agree with the submission of the learned Senior Counsel that there is any overlapping of the provisions in Part I and Part II; nor are the provisions in Part II supplementary to Part I. Rather there is complete segregation between the two parts. 121. Generally speaking, regulation of arbitration consists of four steps: (a) the commencement of arbitration; (b) the conduct of arbitration; (c) the challenge to the award; and (d) the recognition or enforcement of the award. In our opinion, the aforesaid delineation is self-evident in Part I and Part II of the Arbitration Act, 1996. Part I of the Arbitration Act, 1996 regulates arbitrations at all the four stages. Part II, however, regulates arbitration only in respect of commencement and recognition or enforcement of the award. * * * 124. Having accepted the principle of territoriality, it is evident that the intention of Parliament was to segreg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d recognised under the provisions of Part II of the Arbitration Act. The context of this expression is, therefore, different from the context of the definition of international commercial arbitration contained in Section 2(1)(f), which is in the context of such arbitration taking place in India, which only applies unless the context otherwise requires . The four sub-clauses contained in section 2(1)(f) would make it clear that the definition of the expression international commercial arbitration contained therein is party-centric in the sense that at least one of the parties to the arbitration agreement should, inter alia, be a person who is a national of or habitually resident in any country other than India. On the other hand, when international commercial arbitration is spoken of in the context of taking place outside India, it is place-centric as is provided by section 44 of the Arbitration Act. This expression, therefore, only means that it is an arbitration which takes place between two parties in a territory outside India, the New York Convention applying to such territory, thus making it an international commercial arbitration. Ingredients of a Foreign Award s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll not be deemed to be final if any proceedings for the purpose of contesting the validity of the award are pending in the country in which it was made. It will be seen that the requirement of section 53(b) is conspicuous by its absence in section 44 when it comes to an award to which the New York Convention applies. 17. As a matter of fact, before the New York Convention was made final, several countries wanted to insert the provisions of section 53(b), which reflected Article I of the Geneva Convention, in the New York Convention as well. Thus, China objected to the phrasing of Article I of the New York Convention, stating: China The first part of article I, paragraph 2, provides: Any Contracting State may, upon signing, ratifying or acceding to this Convention, declare that it will apply the Convention only to the recognition and enforcement of arbitral awards made in the territory of another Contracting State. It follows from this provision that any person receiving an arbitral award in a Contracting State may request recognition and enforcement, and this right is not limited to the nationals of a Contracting State. The Chinese Government considers this pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons who are subject to the jurisdiction of one of the High Contracting Parties , is too vague and ambiguous. The scope of the present draft seems on the other hand to be unreasonably comprehensive. As now formulated, the convention would apply even if both the parties to the arbitral award are nationals of the State where enforcement is sought as well as in cases where none of them is a national of a Contracting State. 18. Professor Pieter Sanders, in an article New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (Netherlands International Law Review, Volume 6, Issue 1, March 1959), outlined what he referred to as the strides made by the New York Convention when compared with the Geneva Convention, thus: The international business world, for whom these conventions are made, strongly hopes that Government will soon ratify the New York Convention or accede to it, as in their opinion the Convention constitutes an important step forward compared with the Geneva Convention. Before briefly commenting upon the separate articles of the Convention, I may try to give a broad outline of the most important differences between the Geneva Convention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the categories of arbitration agreements which are subject to the Convention. Instead, the Convention s text only addresses what arbitral awards are entitled to the treaty s protections. As a consequence, the definition of those arbitration agreements that are within the scope of the New York Convention must be ascertained by implication, either by reference to the Convention s treatment of awards or otherwise. In these circumstances, there are unfortunately several possible interpretations that may be adopted. The analysis of these permutations can be frustratingly complex, but, properly understood, ultimately produces a simple, sensible result. 20. Finally, the New York Convention, in Article I(3), referred to only two conditions that can be made by a State when it signs, ratifies, or accedes to the New York Convention, as follows: 3. When signing, ratifying or acceding to this Convention, or notifying extension under article X hereof, any State may on the basis of reciprocity declare that it will apply the Convention to the recognition and enforcement of awards made only in the territory of another Contracting State. It may also declare that it will apply the Convent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation in State A and to the enforcement of any award that would result. Aiding foreign arbitration In some legal systems the courts will not come to the aid of a foreign arbitration by way of aiding in the procurement of evidence, granting interim orders of protection or the like. However, many modern arbitration laws provide that the courts will aid arbitrations taking place in a foreign State. 1.4.3 Definition of an international arbitration * * * Model Law In the Model Law an arbitration is international if any one of four different situations is present: * * * 2) The place of arbitration, if determined in or pursuant to, the arbitration agreement, is situated outside the State in which the parties have their places of business. 23. The ICCA s Guide to the Interpretation of the 1958 New York Convention: A Handbook for Judges, compiled by the International Council for Commercial Arbitration with the assistance of the Permanent Court of Arbitration, in its comment on Article I(1) of the New York Convention, and particularly, the expression awards made in the territory of a State other than the State where the recognition and enforcement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding upon the subject or the context. That is why all definitions in statutes generally begin with the qualifying words similar to the words used in the present case, namely, unless there is anything repugnant in the subject or context. Therefore in finding out the meaning of the word insurer in various sections of the Act, the meaning to be ordinarily given to it is that given in the definition clause. But this is not inflexible and there may be sections in the Act where the meaning may have to be departed from on account of the subject or context in which the word has been used and that will be giving effect to the opening sentence in the definition section, namely, unless there is anything repugnant in the subject or context. In view of this qualification, the court has not only to look at the words but also to look at the context, the collocation and the object of such words relating to such matter and interpret the meaning intended to be conveyed by the use of the words under the circumstances. Therefore, though ordinarily the word insurer as used in the Act would mean a person or body corporate actually carrying on the business of insurance it may be that in certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th industrial questions is to permit an ex-employee to avail of the benefits of their provisions, the only requirement being that the claim in dispute must be one which has arisen or accrued whilst the claimant was in the employment of the person against whom it is made. There can, therefore, be no doubt that the definitions of a newspaper employee and working journalist being subject to a context to the contrary, the benefit of Sections 5 and 17 is available to an ex-employee though he has ceased to be in the employment of that particular newspaper establishment at the time of his application for gratuity. The contention that the respondent was not entitled to maintain his application as he was not in the service of the appellant company on the date of his claim before the Labour Court cannot be sustained. (iii) Allied Motors (P) Ltd. v. CIT, (1997) 3 SCC 472 12. In the case of Goodyear India Ltd. v. State of Haryana [(1990) 2 SCC 71 : 1990 SCC (Tax) 223 : (1991) 188 ITR 402] this Court said that the rule of reasonable construction must be applied while construing a statute. Literal construction should be avoided if it defeats the manifest object and purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the phrase is absolutely clear in having opposite effect (see Jobbins v. Middlesex County Council [(1949) 1 KB 142 : (1948) 2 All ER 610] ). Where the definition of an expression in a definition clause is preceded by the words unless the context otherwise requires , normally the definition given in the section should be applied and given effect to but this normal rule may, however, be departed from if there be something in the context to show that the definition should not be applied (see Khanna, J., in Indira Nehru Gandhi v. Raj Narain [(1975) Supp SCC 1, 97]). It would thus appear that ordinarily one has to adhere to the definition and if it is an expansive definition the same should be adhered to. The frame of any definition more often than not is capable of being made flexible but the precision and certainty in law requires that it should not be made loose and kept tight as far as possible (see Kalya Singh v. Genda Lal [(1976) 1 SCC 304, 309 : (1975) 3 SCR 783]). 26. For this reason, it is not possible to accede to the argument that the expression unless the context otherwise requires can be held to undo the very basis of section 44 by converting it from a seat-orie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed to be cognisant. (b) Neither party hereto, nor any persons claiming under either of them, shall bring any such dispute until such dispute shall first have been heard and determined by the arbitrators, umpire or Board of Appeal, as the case may be, in accordance with the arbitration rules and it is expressly agreed and declared that the obtaining of the award from the arbitration, umpire or Board of Appeal, as the case may be, shall be a condition precedent to the right of either party hereto or of any person claiming under either of them to bring any action or other legal proceedings against the other of them in respect of any such dispute. A foreign award was delivered on 22.06.1987 as per the Rules of GAFTA, London. Kotak Co. moved an application under sections 5 and 6 of the Foreign Awards Act before the High Court, seeking enforcement of the award by filing the same and praying for pronouncement of judgment according to the award. The award was made a rule of the court, followed by a decree, by a learned Single Judge of the Bombay High Court. A Letters Patent Appeal preferred by Atlas Exports Pvt. Ltd. was dismissed. A specific contention was raised that sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bitrators, participated in arbitration proceedings and suffered an award. The plea raised before us was not raised either before or during the arbitration proceedings, nor before the learned Single Judge of the High Court in the objections filed before him, nor in the letters patent appeal filed before the Division Bench. Such a plea is not available to be raised by the appellant Atlas before this Court for the first time. 28. It is clear that this Court categorically held that a foreign award cannot be refused to be enforced merely because it was made between two Indian parties, under pari materia provisions of the Foreign Awards Act. The Court also held that since this plea had never been taken in any of the courts below, it was not available to the appellant to raise the said plea before this Court for the first time. 29. It is clear that there can be more than one ratio decidendi to a judgment. Thus, In Jacobs v. London County Council, (1950) 1 All ER 737, the House of Lords, after referring to some earlier decisions, held, as follows: However, this may be, there is, in my opinion, no justification for regarding as obiter dictum a reason given by a Judge for his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) 2 SCC 300 (at paragraphs 78 and 79) and in Shayara Bano v. Union of India, (2017) 9 SCC 1 (at footnote 65). 30. Obviously, there were two reasons for discarding the appellant s argument in Atlas (supra) the first reason was clearly on merits. The second reason undoubtedly refused to entertain this plea as it had not been raised earlier. However, this was coupled with the fact that the parties participated in the arbitral proceedings and suffered an award, after which such plea was then taken. We are, therefore, unable to accede to the contention of Mr. Himani that this case cannot be regarded as an authority for the proposition that sections 23 and 28 of the Contract Act are out of harm s way when it comes to enforcing a foreign award under the Foreign Awards Act, 1961, where both parties are Indian companies. 31. It is interesting to note that under U.S. law, an arbitration agreement or award made between two U.S. citizens shall not fall under the New York Convention unless such relationship involves properties located abroad, envisages performance of a contract, entered in the U.S., to take place abroad, or has some reasonable connection with one or more foreign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s commercial arbitration rules then in effect (the Rules ). The place of arbitration shall be London, England. Each party shall appoint one (1) arbitrator and the two (2) arbitrators so appointed shall together select and appoint a third arbitrator. If either Reliance, on the one hand, or NAC, on the other hand, fail to appoint their respective arbitrator within 30(thirty) days after receipt by respondent(s) of the demand for arbitration or if the two (2) party-appointed arbitrators are unable to appoint the chairperson of the arbitral tribunal within thirty (30) days of the appointment of the second arbitrator, then the ICC shall appoint such arbitrator or the chairperson, as the case may be, in accordance with the listing, ranking and striking provisions of the Rules. Save and except the provision under Section 9, the provisions of the Part 1 of (Indian) Arbitration and Conciliation Act, 1996, as amended (the Arbitration Act ) shall not apply to the arbitration. The arbitrators shall not award punitive, exemplary, multiple or consequential damages. In connection with the arbitration proceedings, the parties hereby agree to cooperate in good faith with each other and the arbitra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indian parties do not circumvent the substantive Indian law, by resorting to arbitrations. The provision would have an overriding effect over any other contrary provision in such contract. On the other hand, where an arbitration under Part I is an international commercial arbitration within Section 2(1) (f), the parties would be free to agree to any other substantive law and if not so agreed, the substantive law applicable would be as determined by the Tribunal. The section merely shows that the legislature has segregated the domestic and international arbitration. Therefore, to suit India, conflict of law rules have been suitably modified, where the arbitration is in India. This will not apply where the seat is outside India. In that event, the conflict of law rules of the country in which the arbitration takes place would have to be applied. Therefore, in our opinion, the emphasis placed on the express where the place of arbitration is situated in India , by the learned Senior Counsel for the appellants, is not indicative of the fact that the intention of Parliament was to give an extra-territorial operation to Part I of the Arbitration Act, 1996. (emphasis in original ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rbitration. However, after having said so, in paragraph 23 reference is made to section 28, the intention of the legislature, to hold that two Indian nationals should not be permitted to derogate Indian Law. 50. Finally, in para 23 the following observations are made by the Supreme Court in the aforesaid case: 23. Section 28 of the 1996 Act is imperative in character in view of Section 2(6) thereof, which excluded the same from those provisions which parties derogate from (if so provided by the Act). The intention of the legislature appears to be clear that Indian nationals should not be permitted to derogate from Indian Law. This is part of the public policy of the country. 36. It is, however, made clear that any findings/observations made hereinbefore were only for the purpose of determining the jurisdiction of this Court as envisaged under Section 11 of the 1996 Act and not for any other purpose. (emphasis in original) 51. If we analyse this judgment, we find, that apart from being one rendered in a proceeding held under section 11(6), is based on the consideration made with reference to section 28(1), as is evident from paragraph 23 relied upon by Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputes having arisen between them. They have appointed arbitrators, participated in arbitration proceedings and suffered an award. The plea raised before us was not raised either before or during the arbitration proceedings, nor before the learned Single Judge of the High Court in the objections filed before him, nor in the letters patent appeal filed before the Division Bench. Such a plea is not available to be raised by the appellant Atlas before this Court for the first time. (emphasis in original) 52. In this case i.e. Atlas Exports (supra), Sections 23 and 28 of the Contract Act are considered and it is held that when a dispute arises where both the parties are Indian, and if the contract has the effect of compelling them to resort to arbitration by foreign arbitrators and thereby impliedly excluding the remedy available to them under the ordinary law of India, the same is not opposed to public policy. Section 28 exception (1) of the Contract Act is taken note of and it is held that merely because the arbitrators are situated in a foreign country that by itself cannot be enough to nullify the arbitration agreement, when the parties have with their eyes open, willi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra), a note of caution is indicated in paragraph 36, which was added by a corrigendum subsequent to pronouncement of judgment, this clearly indicates the principle laid down by the Supreme Court was only for determining the jurisdiction under section 11 and nothing more. We need not go into the questions any further now, as we find that the judgment in the case of Atlas Exports (supra) is a binding precedent. 56. Various other contentions were also advanced by Shri. Anirudh Krishnan, learned counsel, to say that the judgment in the case of TDM Infrastructure (supra) is not by a Court and, therefore, the provision of Article 141 of the Constitution will not apply. Once we have held that the principle of law laid down by the Supreme Court in the case of Atlas Exports (supra) is binding on us and is applicable to the present dispute, we need not go into all these questions. 57. On going through the scheme of the Arbitration and Conciliation Act, 1996, we find that based on the seat of arbitration so also the nationality of parties, an arbitration is classified to be an International Arbitration , and the governing law is also determined on the basis of the seat of arbit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irement is fulfilled, Part II will apply and in the present case as this requirement is fulfilled, we have no hesitation in holding that the dispute in question is covered by Part II of the Act of 1996. * * * 72. Finally, we may observe that once it is found by us that parties by mutual agreement have decided to resolve their dispute by arbitration and when they, on their own, chose to have the seat of arbitration in a foreign country, then in view of the provisions of Section 2(2) of the Act of 1996, Part I of the Act, will not apply in a case where the place of arbitration is not India and if Part I does not apply and if the agreement in question fulfils the requirement of Section 44 then Part II will apply and when Part II applies and it is found that agreement is not null or void or inoperative, the bar created under Section 45 would come into play and if bar created under Section 45 comes into play then it is a case where the Court below had no option but to refer the parties for arbitration as the bar under Section 45 would also apply and the suit itself was not maintainable. This statement of the law has our approval. It may only be mentioned that the judgment i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the intention of the legislature would be clear that Indian nationals should not be permitted to derogate from Indian law. This is part of the public policy of the country. 9. Insofar as submission of the learned counsel for the respondent that if such provision is interpreted in the manner in which it is canvassed by the learned counsel for the applicant, it would be in violation of section 28(1)(a) is concerned, since I am of the view that the arbitration has to be conducted in India, under section 28(1)(a), the arbitral tribunal will have to decide the disputes in accordance with the substantive law for the time being in force in India. In my view the said agreement which provides for arbitration in India thus does not violate section 28(1)(a) as canvassed by the learned counsel for the respondent. 36. Both these decisions rely on the judgment of this Court in TDM (supra) and have not appreciated the law in its correct perspective and, therefore, stand overruled. On the other hand, a learned Single Judge of the Delhi High Court in GMR Energy Limited v. Doosan Power Systems India, CS (COMM) 447/2017 (decided on 14.11.2017), considered the same question and foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In this Chapter, unless the context otherwise requires, foreign award means an arbitral award on differences between persons arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India, made on or after the 11th day of October, 1960- (a) in pursuance of an agreement in writing for arbitration to which the Convention set forth in the First Schedule applies, and (b) in one of such territories as the Central Government being satisfied that reciprocal provisions have been made, may, by notification in the Official Gazette, declare to be territories to which the said Convention applies. (b) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made may, by notification in the Official Gazette, declare to be territories to which the said Convention applies. 3. Stay of proceedings in respect of matters to be referred to arbitration.- Notwithstanding anything contained in the Arbitration Act, 1940 (10 of 1940), or in the Code of Civil Procedure, 1908 (5 of 1908), if any party to an agreement to which Article II of the Convention set forth in the Sched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the persons as between whom it was made, and may accordingly be relied on by any of those persons by way of defence, set-off or otherwise in any legal proceedings in India and any references in this Chapter to enforcing a foreign award shall be construed as including references to relying on an award. (3) The court shall direct notice to be given to the parties to the arbitration, other than the applicant, requiring them to show cause, within a time specified why the award should not be filed. 6. Enforcement of foreign award.- (1) Where the court is satisfied that the foreign award is enforceable under this Act, the court shall order the award to be filed and shall proceed to pronounce judgment according to the award. (2) Upon the judgment so pronounced a decree shall follow, and no appeal shall lie from such decree except insofar as the decree is in excess of or not in accordance with the award. 49. Enforcement of foreign awards.-Where the court is satisfied that the foreign award is enforceable under this Chapter, the award shall be deemed to be a decree of that court. Appealable orders.-(1) An appeal shall lie from the order refusing to- ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise unable to present his case; or (c) the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration: Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be enforced; or (d) the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or (e) the award has not yet become binding on the parties, or has been set aside or suspended by a competent which, that award was made; or (b) if the court dealing with the case is satisfied that- (i) the subject-matter of the difference is not capable of settlement by arbitration under the law of India; or (ii) the enforcement of the award will be contrary to public policy. authority of the country in which, or under the law of which, that award was made. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ginal award or a copy thereof, duly authenticated in the manner required by the law of the country in which it was made; the original agreement for arbitration or a duly certified copy thereof; and such evidence as may be necessary to prove that the award is a foreign award. (2) If the award or agreement to be produced under sub-section (1) is in a foreign language, the party seeking to enforce the award shall produce a translation into English certified as correct by a diplomatic or consular agent of the country to which that party belongs or certified as correct in such other manner as may be sufficient according to the law in force in India. 9. Saving.-Nothing in this Act shall- Explanation .-In this section and all the following sections of this Chapter, court means the Principal Civil Court of Original Jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction over the subject-matter of the award if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such Principal Civil Court, or any Court of Small Causes. 51. Saving.-Nothi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion not to stay the proceedings before it. The corresponding provision in Section 45 of the present Act has a wider application and it covers an action before any judicial authority. Further, under Section 45 the judicial authority has a narrower discretion to refuse to refer the parties to arbitration. The learned Single Judge thereafter arrived at the conclusion, on the facts of that case, that the arbitral award delivered in Singapore between the two Indian parties would be enforceable under Part II, and not Part I, of the Arbitration Act. 37. Likewise, a learned Single Judge of the Delhi High Court, in Dholi Spintex v. Louis Dreyfus, CS (COMM) 286/2020 (decided on 24.11.2020), had occasion to consider the same point of law, and after referring to Sasan I (supra), correctly held: 43. Learned counsel for the plaintiff has heavily relied upon Section 23 of the Contract Act which provides for considerations and object which are lawful and which are not, thus emphasizing that two Indian parties contracting out of Indian law would defeat the provisions of the law and would be opposed to public policy. Learned counsel for the plaintiff seeks either declaration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions and objects are lawful, and what not.-The consideration or object of an agreement is lawful, unless- it is forbidden by law; or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent; or involves or implies injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy. In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful, is void. 28. Agreements in restraint of legal proceedings void.- Every agreement,- (a) by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, or (b) which extinguishes the rights of any party thereto, or discharges any party thereto from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent. Exception 1.-Saving of contract to refer to arbitra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a fixed rule of customary law and a rule based on reason and policy. The latter may admit of exceptions, although the former may not. (at pages 661-662) * * * The result seems to me to be as follows: General restraints, or, in other words, restraints wholly unlimited in area, are not, as a rule, permitted by the law, although the rule admits of exceptions. Partial restraints, or, in other words, restraints which involve only a limit of places at which, of persons with whom, or of modes in which, the trade is to be carried on, are valid when made for a good consideration, and where they do not extend further than is necessary for the reasonable protection of the covenantee. A limit in time does not, by itself, convert a general restraint into a partial one. That which the law does not allow is not to be tolerated because it is to last for a short time only. In considering, however, the reasonableness of a partial restraint, the time for which it is to be imposed may be a material element to consider. (at pages 662-663) 40. The classic judgment of this Court in Gherulal Parakh v. Mahadeodas Maiya, 1959 Supp (2) SCR 406 [ Gherulal ] states as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ublic policy, like any other branch of the Common Law, ought to be, and I think is, governed by the judicial use of precedents. If it is said that rules of public policy have to be moulded to suit new conditions of a changing world, that is true; but the same is true of the principles of the Common Law generally. In Halsbury s Laws of England, 3rd Edn., Vol. 8, the doctrine is stated at p. 130 thus: Any agreement which tends to be injurious to the public or against the public good is void as being contrary to public policy . It seems, however, that this branch of the law will not be extended. The determination of what is contrary to the so-called policy of the law necessarily varies from time to time. Many transactions are upheld now which in a former generation would have been avoided as contrary to the supposed policy of the law. The rule remains, but its application varies with the principles which for the time being guide public opinion. (at pages 432-434) * * * The doctrine of public policy may be summarized thus: Public policy or the policy of the law is an illusive (sic elusive) concept; it has been described as untrustworthy guide , variable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and sectional interests. So, here we are concerned with the general freedom of contract which everyone possesses as against the principle that this freedom shall not be used to subject a class, to the harassment of suits without valid or reasonable grounds. Though there is considerable support in judicial dicta for the view that courts cannot create no (sic) new heads of public policy [ Gherulal Parekh v. Mahadeodas Maiya, 1959 Supp (2) SCR 406, 440 ] , there is also no lack of judicial authority for the view that the categories of heads of public policy are not closed and that there remains a broad field within which courts can apply a variable notion of policy as a principle of judicial legislation or interpretation founded on the current needs of the community [Dennis Lloyd, Public Policy (1953) pp. 112 113.]. 42. In Union of India v. Gopal Chandra Misra, (1978) 2 SCC 301 , this Court held: 38. It must be remembered that the doctrine of public policy is only a branch of the common law, and its principles have been crystallised and its scope well delineated by judicial precedents. It is sometimes described as a very unruly horse . Public policy, as Burroughs, J. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rts cannot create new heads of public policy whereas the latter countenances judicial law-making in this area. The adherents of the narrow view school would not invalidate a contract on the ground of public policy unless that particular ground had been well-established by authorities. Hardly ever has the voice of the timorous spoken more clearly and loudly than in these words of Lord Davey in Janson v. Driefontein Consolidated Gold Mines Ltd. [(1902) AC 484, 500]: Public policy is always an unsafe and treacherous ground for legal decision . That was in the year 1902. Seventy-eight years earlier, Burrough, J., in Richardson v. Mellish [(1824) 2 Bing 229, 252 : 130 ER 294, 303 and (182434) All ER 258, 266] described public policy as a very unruly horse, and when once you get astride it you never know where it will carry you . The Master of the Rolls, Lord Denning, however, was not a man to shy away from unmanageable horses and in words which conjure up before our eyes the picture of the young Alexander the Great taming Bucephalus, he said in Enderby Town Football Club Ltd. v. Football Assn. Ltd. [(1971) Ch 591, 606]: With a good man in the saddle, the unruly horse can be kept in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pace with the changing needs and values nor is it realistic to expect that it will have provided for all contingencies and eventualities. It is, therefore, not only necessary but obligatory on the courts to step in to fill the lacuna. When courts perform this function undoubtedly they legislate judicially. But that is a kind of legislation which stands implicitly delegated to them to further the object of the legislation and to promote the goals of the society. Or to put it negatively, to prevent the frustration of the legislation or perversion of the goals and values of the society. So long as the courts keep themselves tethered to the ethos of the society and do not travel off its course, so long as they attempt to furnish the felt necessities of the time and do not refurbish them, their role in this respect has to be welcomed. 45. In Renusagar Power Co. Ltd. v. General Electric Co., 1994 Supp (1) SCC 644 , this Court held: 48. Since the doctrine of public policy is somewhat opentextured and flexible, Judges in England have shown certain degree of reluctance to invoke it in domestic law. There are two conflicting positions which are referred as the narrow view and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound and apply them to different situations but it is trite that the said doctrine should not be taken recourse to in clear and incontestable cases of harm to the public though the heads are not closed and though theoretically it may be permissible to evolve a new head under exceptional circumstances of a changing world . (See Gherulal Parakh v. Mahadeodas Maiya [1959 Supp (2) SCR 406 : AIR 1959 SC 781 ].) 48. In Vodafone International Holdings BV v. Union of India, (2012) 6 SCC 613, this Court held: 263. This Court in Gherulal Parakh v. Mahadeodas Maiya [AIR 1959 SC 781 : 1959 Supp (2) SCR 406] held that freedom of contract can be restricted by law only in cases where it is for some good of the community. The Companies Act, 1956 or the FERA, 1973, RBI Regulation or the IT Act do not explicitly or impliedly forbid shareholders of a company to enter into agreements as to how they should exercise voting rights attached to their shares. 49. A reading of the aforesaid judgments leads to the conclusion that freedom of contract needs to be balanced with clear and undeniable harm to the public, even if the facts of a particular case do not fall within the crystallised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich case two Indian nationals would be entitled to have their dispute decided in India in accordance with the rules of law designated by the parties as applicable to the substance of the dispute, which need not be Indian law. This, by itself, is a strong indicator that section 28 of the Arbitration Act cannot be read in the manner suggested by Mr. Himani. 54. Even otherwise, BALCO (supra), which has been referred to by the Madhya Pradesh High Court in Sasan I (supra), in paragraph 118 thereof specifically indicated that section 28(1)(a) of the Arbitration Act will not apply where the seat is outside India as, in that event, the conflict of law rules of the country in which the arbitration takes place would have to be applied. 55. Coming to the example given by Shri Himani, namely, that the application of the Benami Transactions Act cannot be sought to be circumvented by two Indian nationals by resorting to an arbitration in a seat outside India, it is more than likely that, as in the present case, two Indian nationals will apply the substantive law of India to disputes between them which arise from a breach of contract which takes place in India. Even in the absence of any de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds a foreign government, but which nevertheless involve the doing of something unlawful according to the law of the country in which the contractual obligation is to be performed, e.g. because performance was rendered illegal by the lex loci solutionis after the making of the contract. If English law is the governing law of the contract, the consequences of illegality, whether initial or supervening, according to the law of the place of performance will be identical with those which arise from the initial or supervening illegality according to English domestic law of a contract to be performed in England. For the principle in Ralli Bros, as so understood, to be applicable it is necessary that performance includes the doing in a foreign country of something which the laws of that country make it illegal to do. What this means is not that performance is excused whenever it includes an act in a country whose law makes this act illegal. It is not enough that performance is excused, or that the act is unlawful by the law of the country in which it happens to be done, or that the contract is contrary to public policy according to the law of the place of performance. It must be un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int. In Kahler v. Midland Bank Ltd. Lord Reid said that the law of England will not require an act to be done in performance of an English contract if such act .would be unlawful by the law of the country in which the act has to be done. In Zivnostenska Banka v. Frankman, however, he regarded it as settled law that, whatever be the proper law of the contract, an English court will not require a party to do an act in performance of a contract which would be an offence under the law in force at the place where the act is to be done. 56. The case of Ralli Brothers was followed in Foster v. Driscoll 1929 1 Kings Bench 470. Both these judgments were then referred to in Regazzoni v. KC Sethia [1958] A.C. 301. In this case, the House of Lords decided a case in which the respondents agreed to sell and deliver to the appellant, jute bags. Both parties contemplated that they should be shipped from India to Genoa for resale in South Africa. The parties were also aware that the export of jute from India to South Africa was prohibited by Indian law. Despite the fact that English law was the proper law of the contract, the House of Lords held that the contract was unenforceable since an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It does not follow from the fact that today the court will not enforce a revenue law at the suit of a foreign State that today it will enforce a contract which requires the doing of an act in a foreign country which violates the revenue law of that country. The two things are not complementary or co-extensive. This may be seen if for revenue law penal law is substituted. For an English court will not enforce a penal law at the suit of a foreign State, yet it would be surprising if it would enforce a contract which required the commission of a crime in that State. It is sufficient, however, for the purposes of the present appeal to say that, whether or not an exception must still be made in regard to the breach of a revenue law in deference to old authority, there is no ground for making an exception in regard to any other law. I should myself have said - and this is, I think, the only point upon which I do not agree with the Court of Appeal - that the present case was precisely covered by the decision in Ralli Brothers, [1920] 2 K.B. 287. For when the fact is found that the very thing which the parties intended to do was to export the jute bags from India in order that they might ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orris, (1873) L.R. 8 Q.B. 202, 208: We quite agree, that, where a contract is to do a thing which cannot be performed without a violation of the law it is void, whether the parties knew the law or not. But we think, that to avoid a contract which can be legally performed, on the ground that there was an intention to perform it in an illegal manner, it is necessary to show that there was the wicked intention to break the law; and, if this be so, the knowledge of what the law is becomes of great importance. By a thing which cannot be performed without a violation of the law, I think that Blackburn J. meant a thing which the contract expressly or by clear implication requires to be done. This contract does not require the seller to obtain the goods from India: it is only after investigation of the facts that it appears that he could not have got them anywhere else. And this contract does not disclose the buyer's intention to send the goods to South Africa. On the face of it this contract could be performed without a breach of the laws of any country. I shall also quote from what Lawrence L.J. said in Foster's case, [1929] 1 K.B. 470, 510: On principle, however, I am clearl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Indian nationals in an award made outside India, which would fall within the definition of foreign award under Section 44 of the 1996 Act. 58. Even otherwise, a ground may be made out under section 48 against enforcement of a foreign award where enforcement of such award would be contrary to the public policy of India. If, on the facts of a given case, it is found that two Indian nationals have circumvented a law which pertains to the fundamental policy of India, such foreign award may then not be enforced under section 48(2)(b) of the Arbitration Act. On the assumption that Mr. Himani s example of the Benami Transactions Act pertains to the fundamental policy of Indian law, if the foreign award is contrary to such fundamental policy, such award will then not be enforced in India. 59. When it comes to the ground raised under section 34(2A) of the Arbitration Act, it is clear that in an international commercial arbitration, say, between an Indian national habitually resident outside India and an Indian national resident in India, even when the arbitration takes place in India resulting in an award being made in India, the ground available under section 34(2A) would not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliance Industries Ltd. v. Union of India [ Reliance Industries Ltd. v. Union of India, (2014) 7 SCC 603 : (2014) 3 SCC (Civ) 737 ] . * * * 10. In the matter of interpretation, the court has to make different approaches depending upon the instrument falling for interpretation. Legislative drafting is made by experts and is subjected to scrutiny at different stages before it takes final shape of an Act, Rule or Regulation. There is another category of drafting by lawmen or document writers who are professionally qualified and experienced in the field like drafting deeds, treaties, settlements in court, etc. And then there is the third category of documents made by laymen who have no knowledge of law or expertise in the field. The legal quality or perfection of the document is comparatively low in the third category, high in second and higher in first. No doubt, in the process of interpretation in the first category, the courts do make an attempt to gather the purpose of the legislation, its context and text. In the second category also, the text as well as the purpose is certainly important, and in the third category of documents like wills, it is simply intention alone of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he subsequent decisions including the recent Reliance Industries Ltd. v. Union of India [ Reliance Industries Ltd. v. Union of India, (2014) 7 SCC 603 : (2014) 3 SCC (Civ) 737 ] . (emphasis in original) Later in para 10 of the Report, it was held: (SCC pp. 131-32) 10. In the matter of interpretation, the court has to make different approaches depending upon the instrument falling for interpretation. Legislative drafting is made by experts and is subjected to scrutiny at different stages before it takes final shape of an Act, Rule or Regulation. There is another category of drafting by lawmen or document writers who are professionally qualified and experienced in the field like drafting deeds, treaties, settlements in court, etc. And then there is the third category of documents made by laymen who have no knowledge of law or expertise in the field. The legal quality or perfection of the document is comparatively low in the third category, high in second and higher in first. No doubt, in the process of interpretation in the first category, the courts do make an attempt to gather the purpose of the legislation, its context and text. In the second category also, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the authors in Comparative International Commercial Arbitration [Chapter 17: Determination of Applicable Law in Julian D.M. Lew, Loukas A. Mistelis, et al., Comparative International Commercial Arbitration (Kluwer Law International 2003) pp. 411-437, Para 17-8] go a step further in that, apart from procedure, they say that party autonomy permits parties to have their choice of substantive law as well. It is said: All modern arbitration laws recognise party autonomy, that is, parties are free to determine the substantive law or rules applicable to the merits of the dispute to be resolved by arbitration. Party autonomy provides contracting parties with a mechanism of avoiding the application of an unfavourable or inappropriate law to an international dispute. This choice is and should be binding on the Arbitration Tribunal. This is also confirmed in most arbitration rules. (emphasis in original) 42. Be that as it may, the legal position as we understand it is that the parties to an arbitration agreement have the autonomy to decide not only on the procedural law to be followed but also the substantive law. The choice of jurisdiction is left to the contracting partie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bjectionable in the parties preferring and accepting the two-tier arbitration system. The parties to the contract have not by-passed any mandatory provision of the A C Act and were aware, or at least ought to have been aware that they could have agreed upon the finality of an award given by the arbitration panel of the Indian Council of Arbitration in accordance with the Rules of Arbitration of the Indian Council of Arbitration. Yet they voluntarily and deliberately chose to agree upon a second or appellate arbitration in London, UK in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce. There is nothing in the A C Act that prohibits the contracting parties from agreeing upon a second instance or appellate arbitration - either explicitly or implicitly. No such prohibition or mandate can be read into the A C Act except by an unreasonable and awkward misconstruction and by straining its language to a vanishing point. We are not concerned with the reason why the parties (including HCL) agreed to a second instance arbitration - the fact is that they did and are bound by the agreement entered into by them. HCL cannot wriggle out of a solemn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in any other law for the time being in force or in any instrument having effect by virtue of any law for the time being in force other than this Act. 63. It must be remembered that when a foreign award is sought to be enforced under Part II of the Arbitration Act, the explanation to section 47 makes it clear that it is the High Court alone which is the court on whose doors the applicant must knock. This is sought to be answered by Shri Himani by stating that since the explanation to section 47 is in direct collision with section 10(3) of the Commercial Courts Act, vide section 21 of the Commercial Courts Act, section 10(3) would prevail over the explanation to section 47. 64. Before entering into a discussion as to whether there is any direct collision between the aforesaid provisions, one is first to appreciate the purport of the expression international commercial arbitration contained in section 10(1) of the Commercial Courts Act. We have already seen how section 2(1)(f) of the Arbitration Act which defines the expression international commercial arbitration is only for a limited purpose, namely, for the purpose of Part I of the Arbitration Act. Under section 2(2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. In Kandla Export Corpn. v. OCI Corpn., (2018) 14 SCC 715 , this Court held: 20. Given the judgment of this Court in Fuerst Day Lawson [ Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333 : (2011) 4 SCC (Civ) 178] , which Parliament is presumed to know when it enacted the Arbitration Amendment Act, 2015, and given the fact that no change was made in Section 50 of the Arbitration Act when the Commercial Courts Act was brought into force, it is clear that Section 50 is a provision contained in a self-contained code on matters pertaining to arbitration, and which is exhaustive in nature. It carries the negative import mentioned in para 89 of Fuerst Day Lawson [ Fuerst Day Lawson Ltd. v . Jindal Exports Ltd., (2011) 8 SCC 333 : (2011) 4 SCC (Civ) 178 ] that appeals which are not mentioned therein, are not permissible. This being the case, it is clear that Section 13(1) of the Commercial Courts Act, being a general provision vis- -vis arbitration relating to appeals arising out of commercial disputes, would obviously not apply to cases covered by Section 50 of the Arbitration Act. * * * 27. The matter can be looked at from a slightly different angle. G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court held that even a later general law which contains a non-obstante clause does not override a special law as both must be held to operate as follows: 13. As already noted, there should be a clear inconsistency between the two enactments before giving an overriding effect to the non-obstante clause but when the scope of the provisions of an earlier enactment is clear the same cannot be cut down by resort to non-obstante clause. In the instant case we have noticed that even the General Rules of which Rule 3(2) forms a part provide for promotion by selection. As a matter of fact Rules 1(3)(a) and 3(1) and 4 also provide for the enforceability of the Special Rules. The very Rule 3 of the General Rules which provides for recruitment also provides for promotion by selection and further lays down that the methods of recruitment shall be as specified in the Special Rules, if any. In this background if we examine the General Rules it becomes clear that the object of these Rules only is to provide broadly for recruitment to services of all the departments and they are framed generally to cover situations that are not covered by the Special Rules of any particular department. In s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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