India: Arbitration With Indian Parties Now More Predictable Following Landmark Indian Supreme Court Decision

Last Updated: 24 September 2012
Article by Gary Born, Suzanne A. Spears, Rachael D. Kent and John A. Trenor

India's Supreme Court recently gave the country's standing as a jurisdiction hospitable to international commercial arbitration a major boost. On 6 September 2012, the Court handed down a landmark judgment in Bharat Aluminium v. Kaiser Aluminium, C.A. No. 7019/2005 ("Bharat Aluminium") (available here), holding that Indian courts would no longer exercise authority to annul awards, or remove and appoint arbitrators in arbitrations seated outside India. In doing so, the Court relied on international authority, including Gary Born's International Commercial Arbitration, to overrule three decades of domestic decisions in which Indian courts had claimed the right to set aside awards made outside Indiaâ€"notwithstanding the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("New York Convention") and essentially uniform international authority to the contrary. 

In Bharat Aluminium, the appellant had filed applications under Part I, Section 34 of the Indian Arbitration and Conciliation Ordinance of 1996 ("Indian Act") to set aside two ad hoc arbitral awards rendered by a tribunal seated in London. The Supreme Court held that Part I of the Indian Act, which confers significant powers on Indian courts to grant provisional measures (Section 9), to make arbitral appointments in the absence of agreement by the parties (Section 11), to obtain evidence (Section 27) and to set aside arbitration awards (Section 34), does not apply to arbitrations seated outside of India and that Indian courts therefore may not annul awards made outside of India under Section 34 of the Act. It further held that arbitrations seated outside India are dealt with only in Part II of the Act, which addresses the recognition and enforcement in India of foreign arbitral awards under the New York Convention and which provides for no judicial supervisory or annulment authority for foreign-seated arbitrations. 

In holding that Part I of the Act does not grant Indian courts supervisory authority with respect to arbitrations seated outside India, the Court in Bharat Aluminium expressly overruled two of its own highly controversial earlier decisions. In its 2002 decision, Bhatia International v. Bulk Trading SA, AIR 2002 SC 1432 ("Bhatia"), the Supreme Court had held that Part I of the Act applied to all arbitrations, including foreign arbitrations, unless expressly or impliedly excluded by agreement of the parties. That holding paved the way for the Court's 2008 holding in Venture Global Engineering v. Satyam Computer Services Ltd., AIR 2008 SC 1061 ("Venture Global") that Indian courts were authorized to annul awards made outside India under Part I, Section 34 of the Act. In that regard, the Bhatia and Venture Global decisions had led to substantial criticism of India for adopting an outlier position that was incompatible with the New York Convention. 

In addition to overruling Bhatia and Venture Global, the Supreme Court in Bharat Aluminium clarified a number of other issues regarding the meaning of the Act. In particular, it affirmed that Part I of the Act adopted the territorial principle embraced by the UNCITRAL Model Law; that the law of the seat of the arbitration governs the conduct of the arbitration; and that an annulment action may be brought outside of the arbitral seat only in the very rare circumstance of the parties having agreed upon a procedural law other than that of the arbitral seat. 

At the same time, Bharat Aluminium re-exposed some of the lacunas in Indian arbitration law that Bhatia had intended to cover over. These include the inability of parties to foreign arbitrations to obtain any form of effective interim relief with respect to assets located in India, and the unenforceability in India of foreign arbitral awards rendered in states that are not parties to the New York Convention and recognized as such in the official Indian Gazette. The Court also indicated that its holding would only "apply prospectively, to all arbitration agreements executed hereafter," leaving parties with arbitration agreements executed before 6 September 2012 subject to the Court's Bhatia decision and its progeny.

Despite its effective date and the challenges that remain in its aftermath, Bharat Aluminium is of momentous significance. The decision represents an affirmation by the Indian Supreme Court of India's commitment to the New York Convention, and marks a new beginning for international arbitration in India and the region. On a practical level, knowing that arbitrations with Indian parties seated outside of India will not be subject to interference by local courts will encourage parties to do business on more favorable terms with Indian parties, while consistent application of this approach should contribute to increased willingness to select India as an arbitral seat. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Gary Born
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.