The Supreme Court of India overruled Bhatia International and
Venture Global by its decision in Bharat Aluminum Co. dated 6th
Substantial part of the judgment debates the omission of the
word "only" in section 2 (2) of The Arbitration and
Conciliation Act, 1996 ("the 1996 Act"). The SC
held that the omission of the word "only" was not an
instance of "CASSUS OMISSUS". It emphasized it was not
permissible for courts to reconstruct provisions while construing a
provision and added that the courts cannot produce a new jacket,
whilst ironing out the creases of the old one.
After hearing extensive arguments of both sides and analyzing
several judgments the SC opined that the 1996 Act had accepted the
territorial principle adopted in the UNCITRAL Model law and held
that Part I would have no application to International Commercial
Arbitration having the seat of arbitration outside India and
further concluded that Part I would be applicable only to the
arbitrations which take place within the territory of
The SC however declared the application of this judgment would
be prospective and apply to arbitration agreements executed after
6th September 2012. This would mean that on application
of this judgment parties in disputes relating to international
commercial arbitration will no longer have the right to apply under
section 9 of Part I of the 1996 Act, for interim reliefs and
protection. This is bound to raise difficulties for parties
in obtaining interim orders and enforcing them in India.
Parties henceforth whilst entering into international arbitration
agreements will have to be careful whilst drafting the agreements
and in making their choice, on the seat of arbitration, which will
have an impact on how they obtain urgent reliefs and expeditious
enforcement of such reliefs in India.
Some of the conclusions of this judgment that can be highlighted
Non applicability of Part I to international commercial
Application of this decision to apply prospectively;
The 1996 Act does not apply to awards from non convention
Clarifies Part I of the 1996 Act deals with the
commencement, conduct of arbitration, challenge and
recognition and enforcement whilst Part II deals with only
commencement and regulation and enforcement.
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.
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Singhania & Partners LLP, Solicitors and Advocates
Under the Arbitration and Conciliation (Amendment) Act, 2015. There are two avenues available for the enforcement of foreign awards in India, viz., the New York Convention and the Geneva Convention, as the case may be.
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