A Constitutional Bench of the Supreme Court has delivered a
landmark judgment on September 6, 2012 in Bharat Aluminium Co v
Kaiser Aluminium Technical Services Inc superseding the
doctrine laid down by it earlier in Bhatia International v Bulk
Trading S.A. ("Bhatia International") in the year
2002. In Bhatia International case, the Supreme Court had held that
Part I of the [Indian] Arbitration and Conciliation Act, 1996
("Arbitration Act"), dealing with the power of a court to
grant interim relief, could be applied to arbitration having a
foreign seat unless the parties specifically opted out of such an
Now, the Court has held that Part I of the Arbitration Act would
have no application to international commercial arbitration held
outside India. Therefore, such awards would only be subject to the
jurisdiction of the Indian courts when the same are sought to be
enforced in India in accordance with the provisions contained in
Part II of the Arbitration Act. The provisions contained in
Arbitration Act make it crystal clear that there can be no
overlapping or intermingling of the provisions contained in Part I
with the provisions contained in Part II of the Arbitration
The Court further held that the provision contained in Section
2(2) of the Arbitration Act is not in conflict with any of the
provisions of either Part I or Part II of the Arbitration Act. In
an international commercial arbitration having foreign seat, no
application for interim relief would be maintainable under Section
9 or any other provision, as applicability of Part I of the
Arbitration Act is limited to all arbitrations which take place in
India. Similarly, no suit for interim injunction simplicitor would
be maintainable in India, on the basis of an international
commercial arbitration having seat outside India.
Therefore, the Part I of the Arbitration Act is applicable only
to all the arbitrations which take place within the territory of
India. The Supreme Court has also held that the doctrine laid down
in this case shall apply prospectively and the doctrine laid down
in Bhatia International shall hold good for the arbitration
agreements entered prior to this ruling.
Editorial Team: Bomi F. Daruwala, Gautam Chopra, Hemant
Puthran, Rupesh Jain and Shilpi Shivangi
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In the recent years, particularly 2014 and 2015, the High Courts of different States in India were faced with the submission or issue: ‘Whether two Indian parties to a dispute can choose a foreign seat'.
Adding one more kind of dispute to the list of non-arbitrable disputes, the Supreme Court of India has held that any dispute pertaining to affairs of a trust cannot be decided by an arbitrator under the Arbitration and Conciliation Act, 1996.
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