B H AT I A I N T E R N AT I O N A L

V.

B U L K T R A D I N G SA:
Divya Sood Roll No. 586

A C as e C om m en t

In Bhatia International v Bulk Trading SA, the Indian Supreme ourt ruled that the Ar!itration and on"iliation A"t, #$$6 %A"t&, applie' to international "ommer"ial ar!itration' held out'ide India. In it' a(termath, thi' ruling ha' !een mi'"on'trued and mi'applied !y the Indian "ourt' to (undamentally alter the nature o( the A"t and )iden their *uri'di"tion over 'u"h international "ommer"ial ar!itration'. Thi' pre'entation provide' an in+depth in'ight into the ruling, "ull' out the la) laid do)n and e,plain' the limit' o( the appli"a!ility o( it' ratio decidendi. Therea(ter, it "riti"ally e,amine' the 'u!'e-uent ruling' o( the Indian "ourt' )hi"h have interpreted and applied thi' de"i'ion. It argue' that the (ailure on the part o( Indian "ourt' to under'tand the true import o( thi' de"i'ion ha' mired international "ommer"ial ar!itration' held out'ide India in legal un"ertainty a' regard' the validity and en(or"ea!ility o( a)ard' ari'ing out o( them in India I. Introduct on Bhatia International v Bulk Trading SA# i' a ruling o( momentou' 'igni(i"an"e a' it empo)er' the Indian "ourt' to nter!ene n nternat ona" commerc a" ar!itration' held out'ide India irre'pe"tive o( the proper la) governing the ar!itration agreement. The e,tent o( intervention e,tend' (rom the #$ grant o( interim mea'ure' and the %$ appointment o( ar!itrator' to the vacatur o( an a)ard re'ulting (rom 'u"h ar!itration'.
II. Nature o& D s'ute

Bhatia International %appellant& and Bulk Trading SA %re'pondent& entered into a "ontra"t )ith an ar!itration "lau'e providing (or ar!itration a' per the rule' o( the International ham!er o( ommer"e %I &. A 'ole ar!itrator )a' appointed !y the I on re-ue't o( the re'pondent and the partie' agreed (or ar!itration to !e held in .ari'. Therea(ter, the re'pondent (iled an appli"ation under '.$ o( the A"t in the Di'tri"t ourt, Indore, (or o!taining an order o( in*un"tion re'training the appellant (rom tran'(erring it' !u'ine'' a''et' and propertie' lo"ated in India. The appellant oppo'ed the appli"ation !y "ontending that .art I o( the A"t, )hi"h "ontain' '.$, applie' only to ar!itration' "ondu"ted in India. Di'mi''ing thi' o!*e"tion, the lo)er "ourt admitted the appli"ation. /en"e, an appeal )a' made to the Supreme ourt (or de"iding )hether an Indian "ourt "an provide interim relie( under '.$ in "a'e' )here an international "ommer"ial ar!itration i' held out'ide India.
III. Content ons o& (art es

The re'pondent argued that a "on*oint reading o( the provi'ion' o( the A"t 'ho)' that .art I applie' to ar!itration' out'ide India unle'' the partie' e,"lude it' appli"a!ility !y their agreement. 0 In oppo'ition, the appellant pre'ented the (ollo)ing 'et o( argument'1 S.0%0&2 'pe"i(i"ally provide' that .art I o( the A"t applie' to ar!itration' )ho'e pla"e o( ar!itration i' in India. 3or ar!itration' held out'ide India, .art II o( the A"t )ould apply. 4
# 0

%0550& 4 S #55. id, paragraph #2, at ##5. 2 The te,t o( '. 0%0& read' a'1 Thi' .art 'hall apply )here the pla"e o( ar!itration i' in India. 4 'upra note #, paragraph 4, at ##2.

Arti"le # %0& o( the 6N ITRA7 8odel 7a) on International ommer"ial Ar!itration provide' that Arti"le $ %)hi"h "orre'pond' to '.$ o( the A"t& "an !e u'ed !y even )here pla"e o( ar!itration i' out'ide the territory. The A"t, )hi"h i' !a'ed on the 6N ITRA7 8odel 7a), omit' the a(ore'aid )ording. Thi' implie' that the legi'lative intent )a' to render .art I inappli"a!le to ar!itration' out'ide India.5 Though '. 0%4&6 and '. 0%5&9 u'e the )ord' :every ar!itration; and :all ar!itration' and to all pro"eeding' relating thereto; re'pe"tively, they are -uali(ied !y '. 0%0& and )ould apply only )hen 'u"h ar!itration' are held in India.8 3oreign a)ard' are governed !y .art II )hi"h doe' not "ontain any provi'ion 'imilar to '.$. Thi' deli!erate omi''ion 'igni(ie' that ar!itration' out'ide India are to !e governed !y the leading to (oreign a)ard'.$ S.5 !an' any *udi"ial intervention in ar!itration pro"eeding' e,"ept a' provided under the A"t. Interim mea'ure' !y Indian "ourt' )ould violate thi' 'alutary prin"iple o( minimum *udi"ial intervention on )hi"h the A"t i' !a'ed.#5 la) o( the pla"e o( ar!itration or the appli"a!le in'titutional rule'.## S.$ provide' that the appli"ation 'hould !e made either !e(ore or during the ar!itration or a(ter the making o( the a)ard !ut !e(ore it' en(or"ement under '.26. A' '.26 deal' )ith en(or"ement o( dome'ti" a)ard' only, it implie' that '.$ )a' not intended to apply to ar!itration' Rea'oning o( the ourt

The "ourt a""epted the re'pondent<' "ontention that .art I applie' to international "ommer"ial ar!itration held out'ide India. To 'upport it' "on"lu'ion, it o((ered the (ollo)ing 'trand' o( rea'oning1 %#& Lacuna in respect of non-Convention countries1 ourt did not a""ept the argument that .art II o( the A"t doe' not apply to a)ard' made in non+ onvention "ountrie', i.e., "ountrie' )hi"h have not 'igned and rati(ied the Ne) =ork onvention, #$58 and the >eneva onvention, #$09. In the "ourt<' opinion, 'u"h a la"una "ould not have !een intended !y the legi'lature. Thu', it "on"luded that a territorial limitation "annot !e read into .art I.#0 %0& Proviso to s. 1(2)1 S. #%0&#2 'tate' that the A"t e,tend' to the )hole o( India !ut put' a provi'o that in relation to the 'tate o( ?ammu @ Aa'hmir %? @ A&, it applie' only in "a'e o( international "ommer"ial ar!itration. The "ourt rea'oned that thi' provi'o doe' not 'tipulate that .art I )ould apply to ? @ A only )hen the international "ommer"ial ar!itration i' held in ? @ A, i.e., !y impli"ation it )ill apply in "a'e' )here international "ommer"ial ar!itration i' held out'ide ? @ A. Thu', it )ould !e anomalou' to hold the "ontrary in "a'e o( the re't o( India.#4 %2& Inferences from definitions1 In the "ourt<' opinion, the de(inition o( Binternational "ommer"ial ar!itration< in '. 0%(& make' no di'tin"tion !et)een 'u"h ar!itration' taking pla"e in India and tho'e
5

id, paragraph 4, at ##2. The te,t o( '. 0%4& read' a'1 Thi' .art e,"ept 'u!+'e"tion %#& o( 'e"tion 45, 'e"tion' 4# and 42 'hall apply to every ar!itration under any other ena"tment (or the time !eing in (or"e, a' i( the ar!itration )ere pur'uant to an ar!itration agreement and a' i( that other ena"tment )ere an ar!itration agreement, e,"ept in 'o (ar a' the provi'ion' o( thi' .art are in"on'i'tent )ith that other ena"tment or )ith any rule' made thereunder. 9 The te,t o( '. 0%5& read' a'1 Su!*e"t to the provi'ion' o( 'u!+'e"tion %4&, and 'ave in 'o (ar a' i' other)i'e provided !y any la) (or the time !eing in (or"e or in any agreement in (or"e !et)een India and any other "ountry or "ountrie', thi' .art 'hall apply to all ar!itration' and to all pro"eeding' relating thereto. 8 'upra note #, paragraph 6, at ##2+##4. $ id, paragraph $, at ##4. #5 id, paragraph #5, at ##4. ## id, paragraph 8, at ##4. #0 id, paragraph #6, at ##9. #2 The te,t o( '. #%0& read' a'1 It e,tend' to the )hole o( India. .rovided that .art' I, III and IC 'hall e,tend to the State o( ?ammu and Aa'hmir only in 'o (ar a' they relate to international "ommer"ial ar!itration or, a' the "a'e may !e, international "ommer"ial "on"iliation. #4 'upra note #, paragraph #9, at ##8.
6

taking pla"e out'ide India. 3urther, the de(inition o( B"ourt< doe' not provide that Indian "ourt' )ould not have *uri'di"tion )hen international "ommer"ial ar!itration take' pla"e out'ide India.#5 7a'tly, the legi'lature )ould not have de(ined a Bdome'ti" a)ard< under '. 0%9& unle'' the intention )a' to "over a)ard' (rom non+ onvention "ountrie' %other)i'e 'u"h a)ard' )ould not !e dome'ti" a)ard'&.#6 %4& Inferences from s.8 & s.281 S.8#9 permit' a *udi"ial authority to re(er the partie' to ar!itration )hen an a"tion in re'pe"t o( a di'pute "overed !y an ar!itration agreement i' !rought !e(ore it. The ourt opined that i( .art I )a' intended to apply only to ar!itration' in'ide India, the legi'lature )ould have u'ed the term B"ourt< in'tead o( the term B*udi"ial authority<. The u'e o( the latter term 'igni(ie' that the legi'lature "ontemplated that in an international "ommer"ial ar!itration held out'ide India, the matter may !e taken !e(ore a *udi"ial authority out'ide India. Thu', the term *udi"ial authority ha' !een u'ed.#8 3urther, '. 08 open' )ith the )ord' B)here the pla"e o( ar!itration i' in India<. The ourt rea'oned that the u'e o( the'e )ord' )a' not ne"e''ary unle'' the A"t )a' appli"a!le to ar!itration' held out'ide India.#$ %5& Language of s. 2(2)1 The ourt opined that '. 0%0& doe' not 'pe"i(y that .art I i' to :only; apply )here the pla"e o( ar!itration i' in India. Thi' implie' that it i' only an in"lu'ive and "lari(i"atory provi'ion. 05 It e,plained the 'igni(i"an"e o( thi' omi''ion in the (ollo)ing )ord'10# By omitting to provide that .art I )ill not apply to international "ommer"ial ar!itration' )hi"h take pla"e out'ide India the e((e"t )ould !e that .art I )ould al'o apply to international "ommer"ial ar!itration' held out o( India. But !y not 'pe"i(i"ally providing that the provi'ion' o( .art I apply to international "ommer"ial ar!itration' held out o( India, the intention o( the 7egi'lature appear' to !e to all partie' to provide !y agreement that .art I or any provi'ion therein )ill not apply. Thu' in re'pe"t o( ar!itration' )hi"h take pla"e out'ide India even the non+deriva!le provi'ion' o( .art I "an !e e,"luded. Su"h an agreement may !e e,pre'' or implied. 3urther, '. 0%4& and '. 0%5& are not 'u!*e"t to '. 0%0&. The'e 'e"tion' provide that the A"t i' appli"a!le to Bevery ar!itration< and Ball ar!itration' and pro"eeding' relating thereto< re'pe"tively. The u'e o( )ord' o( 'u"h )ide import "annot !e re'tri"ted !y re(eren"e to '. 0%0& a' it )ould amount to reading in )ord' )hi"h are not pre'ent in the'e 'e"tion'.00 IV. La) "a d do)n n B*at a Internat ona" 6nder Arti"le #4# o( the on'titution o( India, the la) de"lared !y the Supreme ourt i' !inding on all the lo)er "ourt'. 3urther, all the !en"he' o( lo)er or "oordinate 'trength o( Supreme ourt religiou'ly (ollo) the la) laid do)n !y a previou' !en"h.02 The Supreme ourt adhere' to a prin"iple o( un)ritten la) )hi"h leave' the ta'k o( interpretation o( a previou' !en"h<' de"i'ion to 'u!'e-uent !en"he'. The (ollo)ing prin"iple' o( la) "an !e derived (rom the de"i'ion o( the Supreme ourt1 a. .art+I o( the A"t )ill apply to international "ommer"ial ar!itration' held out'ide India a' )ell.

#5 #6

id, paragraph 05, at ##$. id, paragraph 02, at #05. #9 The te,t o( '. 8%#& read' a'1 A *udi"ial authority !e(ore )hi"h an a"tion i' !rought in a matter, )hi"h i' the 'u!*e"t o( an ar!itration agreement, 'hall, i( a party 'o applie' not later than )hen 'u!mitting hi' (ir't 'tatement on the 'u!'tan"e o( the di'pute, re(er the partie' to ar!itration. #8 'upra note #, paragraph 04, at #05. #$ id, paragraph 05, at #05+0#. 05 id, paragraph 09, at #00. 0# id, paragraph 0#, at ##$. 00 id, paragraph 00, at ##$. 02 entral Board o( Da)oodi Bohra ommunity v State o( 8ahara'htra %0555& 0 S 692.

!. To the e,tent .art+II o( the A"t doe' not provide a parti"ular 'ituation, .art+I )ill apply to (oreign a)ard' a' )ell. /en"e, the provi'ion' o( .art I )ould apply to all ar!itration' and to all pro"eeding' relating thereto. Dhere an international "ommer"ial ar!itration i' held in India the provi'ion' o( .art I )ould "ompul'orily apply. In "a'e' o( international "ommer"ial ar!itration' held out'ide India, provi'ion' o( .art I )ould apply unle'' the partie' !y agreement, e,pre'' or implied, e,"lude all or any o( it' provi'ion' The "orre"tne'' o( the ruling in Bhatia International ha' !een dou!ted only on"e 04 and the later de"i'ion' have a""epted it' !inding authority. 05 The'e de"i'ion' deal )ith "ru"ial i''ue' like the nature o( a)ard ari'ing out o( international "ommer"ial ar!itration held out'ide India %dome'ti" a)ard or (oreign a)ard&, 'etting a'ide 'u"h an a)ard under '.24 and appointment o( ar!itrator' under '.## in 'u"h "a'e'. #. Sett n+ as de o& &ore +n a)ards: ,ud c a" Ad!enture n Venture G"o-a" In a re"ent ruling o( Centure >lo!al Engineering v Satyam omputer Servi"e' 7td. 06 %Centure >lo!al&, a 'maller !en"h o( t)o *udge' ha' "ulled out the la) laid do)n in Bhatia International. In thi' "a'e, the di'pute related to appellant<' "ommi''ion o( an event o( de(ault under it' Shareholder' Agreement )ith the re'pondent in re'pe"t o( their ?oint Centure in India. The re'pondent "laimed it' right to !uy the appellant<' 'hareholding in the ?oint Centure and an a)ard )a' made in it' (avour in an international "ommer"ial ar!itration held at the 7ondon ourt o( International Ar!itration. The re'pondent 'ought to en(or"e the a)ard through the 6nited State' Di'tri"t ourt at 8i"higan. In re'pon'e, the appellant in'tituted a 'uit in India (or 'etting a'ide the a)ard under '.24 o( the A"t. The lo)er "ourt' held that a (oreign a)ard "annot !e 'et a'ide !y the Indian "ourt' under '.24. Thu', the Supreme ourt )a' pre'ented )ith the -ue'tion )hether '. 24 applie' to 'u"h a)ard'. The appellant "ontended that the la) de"lared !y the "ourt in that "a'e )a' only that .art I applie' to international "ommer"ial ar!itration' out'ide India unle'' e,pre''ly or impliedly e,"luded !y the agreement o( partie'.09 The re'pondent argued that in addition to thi' prin"iple, the ourt had al'o laid do)n that BFtGo the e,tent that .art II provide' a 'eparate de(inition o( an ar!itral a)ard and 'eparate provi'ion' (or en(or"ement o( (oreign a)ard', provi'ion' o( .art I dealing )ith the'e a'pe"t' )ill not apply to 'u"h (oreign a)ard'.<08 A' per the re'pondent, '.48 i' a 'pe"ial provi'ion in .art II dealing )ith en(or"ement o( (oreign a)ard and thu', it )ill prevail over '.24 in .art I. The ourt a""epted the interpretation put (orth !y the appellant that the (inding o( the "ourt in Bhatia International i' limited to the la't one 'enten"e in .aragraph 061 Bit mu't !e immediately "lari(ied thatHthe provi'ion' o( .art I apply to .art II.< The re't o( the paragraph )a' !ru'hed a'ide a' !eing merely the argument o( the "oun'el, 8r. Sen, and not the rea'oning o( the ourt. Thu', the ourt ruled that '. 24 )a' appli"a!le in 'u"h "a'e' and the Indian "ourt' have the po)er to 'et a'ide (oreign a)ard' ari'ing out o( international "ommer"ial ar!itration held out'ide India. The ruling ha' (undamentally altered the *uri'di"tion o( Indian "ourt' in re'pe"t o( (oreign a)ard'. .reviou'ly, 'u"h a)ard' "ould only !e '"rutiniIed under '. 48 at the 'tage o( en(or"ement. The mo't 'igni(i"ant di'tin"tion !et)een '.24 and '.48 i' the )ider de(inition o( pu!li" poli"y under the (ormer. Dhile Bpatent illegality< i' a part o( pu!li" poli"y under '.24, it i' e,"luded (or the purpo'e o( *udi"ial revie) under '.48.0$ Thu', 'u"h a)ard' have !e"ome vulnera!le to !e 'et a'ide on the ground o( violation o( Indian pu!li"
04

entrotrade 8ineral' and 8etal' In". v /indu'tan opper 7td. 0556 %5& S A7E 525, paragraph #5$, at 562 a' per ?u'ti"e S.B. Sinha. 05 INDTE7 Te"hni"al Servi"e' .vt. 7td. v D.S. Atkin' .7 %0558& ## S A7E 925J Aurohill >lo!al ommoditie' 7td. v 8.S.T. . 7td. AIR 0559 S 0956, paragraph #0, at 0958J National Agri"ultural o+op. 8arketing 3ederation India 7td. v >ain' Trading 7td. %0559& 5 S 6$0, paragraph 9, at 6$6. 06 AIR 0558 S #56#. 09 id, paragraph #2, at #569. 08 id, paragraph #0, at #569. 0$ Kil and Natural >a' ompany 7td. v Sa) .ipe' 7td AIR 0552 S 060$.

poli"y and la). 8ore importantly, the 'etting a'ide o( a (oreign a)ard ha' an international e((e"t o( rendering the a)ard unen(or"ea!le in all onvention "ountrie' )hile the re(u'al to en(or"e ha' an e((e"t limited to only that "ountry. 25 %. A)ard Outs de Ind a: .ore +n or Domest c/ 6nder the A"t, dome'ti" a)ard' are governed !y .art I and "ould !e 'et a'ide under '.24 )hile (oreign a)ard' "an only !e '"rutiniIed (or en(or"ement under '.48 %'u!*e"t to the e,"eption de"lared in Centure >lo!al&. The ruling in Bhatia International ha' !een mi'"on'trued and mi'applied to o!literate thi' di'tin"tion in "a'e o( a)ard' re'ulting (rom international "ommer"ial ar!itration held out'ide India. In Hindustan Copper Ltd. v Centrotrade Meta s and Minera s Inc. 2#, the a)ard )a' made in an international "ommer"ial ar!itration held at 7ondon. The proper la) o( the ar!itration agreement )a' Indian la). In a pro"eeding !rought (or the en(or"ement o( the a)ard under '.48, the al"utta /igh ourt held that it "ould not !e 'o en(or"ed a' it )a' not a (oreign a)ard. The "ourt rea'oned that an a)ard (rom an ar!itration agreement governed !y Indian la) )ould !e a dome'ti" a)ard a' held in National Thermal .o)er orporation v Singer ompany.20 /o)ever, it )ent on to rely on Bhatia International (or it' "on"lu'ion. S. 0%9& 'pe"i(ie' that an a)ard made under .art I )ould !e regarded a' a Bdome'ti" a)ard<. Sin"e Bhatia International make' .art I appli"a!le to 'u"h ar!itration', it held that the a)ard )ould !e a dome'ti" a)ard a' per '. 0%9&. In 'imilar "ir"um'tan"e', the >u*arat /igh ourt "ame to the 'ame "on"lu'ion applying the ratio o( Bhatia International.22 The a(ore'aid de"i'ion o( al"utta /igh ourt ha' !een overruled !y the Supreme ourt in Centrotrade Minera s and Meta s Inc. v Hindustan Copper Ltd. 24 /o)ever, the Supreme ourt did not "on'ider the *udgment o( Bhatia International to "ome to the "ontrary "on"lu'ion. The "ourt ruled that 'u"h an a)ard i' a (oreign a)ard a' territoriality i' the only "riteria under '.44.25 3urther, the de"i'ion ha' it'el( !een re(erred to a larger !en"h (or re"on'ideration a' the *udge' di'agreed on permi''i!ility o( t)o+tier ar!itration under the A"t. . 0. Im'ort o& 1 m'" ed a+reement2 There i' no di'agreement that partie' "an e,"lude the appli"a!ility o( .art I !y an e,pre'' or implied agreement to that e((e"t. /o)ever, one i' at a lo'' to under'tand the meaning o( the e,pre''ion Bimplied agreement<. I' the de'ignation o( a (oreign la) a' the proper la) o( the ar!itration agreement 'u((i"ient to e,"lude .art IL I( not, )hat i' re-uired !eyond 'u"h a de'ignationL In Bhatia International, it )a' argued that the agreement o( the partie' to ar!itrate a' per the Rule' o( I it'el( meant that '.$ )a' e,"luded !y ne"e''ary impli"ation.26 The "ourt re*e"ted the argument !y holding that Arti"le 02 o( I Rule' allo)ed partie' to o!tain interim order' (rom "ompetent *udi"ial authoritie'. Thu', '.$ )a' not e,"luded there!y.29 The ruling it'el( indi"ate' that mere de'ignation o( (oreign la) or 'pe"ial ar!itral rule' i' not 'u((i"ient to e,"lude .art I. The ruling in Indtel Te"hni"al Servi"e' .vt. 7td. v D.S. Atkin' Rail 7td. 28 i' important (or thi' i''ue, . The "a'e involved an e,"lu'ive "olla!oration agreement !et)een the appli"ant and the re'pondent (or parti"ipating in the tender pro"e'' o( Indian Rail)ay' ra'h)orthine'' .ro*e"t. A' per "lau'e #2.#, the proper la) o( the agreement )a' 'pe"i(i"ally de'ignated a' the la) o( England and Dale'. The appli"ant
25

E"khard R. /ell!e"k @ arolyn B. 7amm, The En(or"ement o( 3oreign Ar!itral A)ard' under the Ne) =ork Re"ent Development', F0550G Int. A.7.R., 5%5&, #29+#42. 2# AIR 0555 al #22. 20 AIR #$$2 S $$8. 22 Nirma v 7urgi Energie 6nd Ent'orgung >8B/ @ Kr'., AIR 0552 >u* #45. 24 0556 %5& S A7E 525. 25 id, paragraph 29, at 55# and paragraph #5$, at 594. 26 'upra note #, paragraph 22, at #02. 29 id, paragraph' 22 @ 24, at #02+04. 28 %0558& ## S A7E 925.

onvention1

alleged 'everal !rea"he' o( the "olla!oration agreement !y the re'pondent )hi"h )ere denied !y the latter. A(ter (ailure o( negotiation and mediation, the appli"ant (iled an appli"ation !e(ore the hie( ?u'ti"e o( India % ?I& under '.## %$& (or the appointment o( a 'ole ar!itrator. 2$ The appli"ant relied on Bhatia International to urge that 'in"e .art I )ould apply to international ar!itration' irre'pe"tive o( their 'eat, the ?I had the re-ui'ite *uri'di"tion. The re'pondent argued that the proper la) o( ar!itration agreement, )hen not 'pe"i(ied !y the partie', i' 'ame a' the proper la) o( the main "ontra"t a' per the ruling in !ationa "#erma Po$er Corporation v %inger Compan&.45 Thu', the de'ignation o( a (oreign la) )ould ne"e''arily imply that the ar!itral pro"eeding' )ere intended to !e 'u!*e"t to the *uri'di"tion o( "ourt' o( England and Dale' and thi' )ould "on'titute an agreement to the "ontrary a' laid de"lared in Bhatia International.4# The "ourt a""epted that the proper la) o( ar!itration agreement )a' the la) o( England and Dale'.40 /o)ever, the nominee o( ?I a''umed *uri'di"tion to appoint an ar!itrator on the (ollo)ing ground421 :Dhat, ho)ever, di'tingui'he' the variou' de"i'ion' and vie)' o( the authoritie' in thi' "a'e i' the (a"t that in the Bhatia International "a'e thi' "ourt laid do)n the propo'ition that not)ith'tanding the provi'ion' o( Se"tion 0 %0& o( the Ar!itration and on"iliation A"t, #$$6, indi"ating that .art I o( the 'aid A"t )ould apply )here the pla"e o( ar!itration i' in India, even in re'pe"t o( International ommer"ial agreement', )hi"h are to !e governed !y la)' o( another "ountry, the partie' )ould !e entitled to invoke the provi'ion' o( .art I o( the a(ore'aid A"t and "on'e-uently the appli"ation made under Se"tion ## thereo( )ould !e maintaina!le.; Therea(ter, the nominee o( ?I held that provi'ion' o( .art I )ere not e,"luded e,pre''ly or !y impli"ation in the pre'ent "a'e. learly, thi' interpretation o( Bhatia International i' patently erroneou'. The ruling never de"lared that .art I )ould apply to International ommer"ial Agreement' )hi"h are to !e governed !y la)' o( another "ountry.!hatia international 'aid that .art # )ould apply (or international "ommer"ial ar!itration' )here one o( the la)' )a' indian or re(erred to indian la). In'tead, the appli"a!ility o( Bhatia International depend' upon the 'eat o( ar!itration. In thi' "a'e, the 'eat o( ar!itration )a' not 'pe"i(ied in the agreement. Thu', a' per '. 05, it had to !e determined !y the ar!itral tri!unal. /o) "an the la) o( Bhatia International !e applied on the "on*e"ture that the 'eat )ould !e out'ide IndiaL In 'uro#i ( o)a Commodities Ltd. v. M.%.".C. Ltd. 44, the ar!itration "lau'e provided (or ar!itration at 7ondon in a""ordan"e )ith rule' o( ar!itration o( >reat Britain. 3urther, the partie' "on(erred e,"lu'ive *uri'di"tion on "ompetent "ourt' under Briti'h la) to de"ide all matter', di'pute' and di((eren"e' relating to the "ontra"t, in"luding ar!itration pro"eeding' in'tituted or to !e in'tituted. The ?I<' nominee applied Bhatia International and a''umed *uri'di"tion under '.## to appoint an ar!itrator. In thi' "a'e a' )ell, no te't )a' applied to "he"k )hether the la)' o( >reat Britain e,"lude the appli"a!ility o( '.##. 3urther *udi"ial interpretation' in the "a'e' o( 3rontier Drilling AS v ?ag'on International 7td. 45, itation In(o)are v. E-uino,46, Cideo"on v. 6nion o( India49 and =ogra* In(ra'tru"ture v. S'ang =ong Engineering 48 have "reated (urther "on(u'ion on the meaning o( Bimplied e,"luu'ion<.
2$

6nder '.##, the hie( ?u'ti"e o( Supreme ourt Fkno)n a' B hie( ?u'ti"e o( India % ?I&<G ha' the po)er to appoint ar!itrator on re-ue't o( one o( the partie' in an international "ommer"ial ar!itration )here the partie' have (ailed to agree on the appointment o( an ar!itrator or an ar!itral panel. In dome'ti" ar!itration', thi' po)er i' e,er"i'ed !y hie( ?u'ti"e o( appropriate /igh ourt.
45 4#

AIR #$$2 S $$8. 'upra note 55, paragraph 00, at 940. 40 id, paragraph 04, at 940. 42 id. 44 AIR 0559 S 0956. 45 0552 %2& ARB7R 548 %Bom&. 46 %055$&9S 005
49

%05##&6S %05##&$S

#6# 925

48

V. Conc"us on In "a'e o( international "ommer"ial ar!itration to !e held out'ide India, (oreign partie' "an avoid any un(ore'een inter(eren"e !y the Indian "ourt' through the ar!itration agreement. It )ould !e ri'ky to rely on the mere (a"t that a (oreign la) ha' !een de'ignated a' the proper la) o( ar!itration agreement. /en"e, partie' 'hould e,"lude .art I o( the A"t !y an e,pre'' 'tipulation. /o)ever, it i' not prudent to e,"lude the )hole o( .art I. The a!'urditie' that have en'ued in appli"ation o( Bhatia International have !een taken up re"ently !y a on'titutional Ben"h o( Supreme ourt and re'ult' remain to !e 'een in thi' regard. It i' advi'a!le that the e((e"t o( Bhatia International !e toned do)n in light o( variou' a!'urd interpretation' that have (ollo)ed the *udgment.