The Delhi High Court (the Court) has recently passed a judgement dated 25.10.2018 in the case of Delhi Airport Metro Express Private Ltd. vs. Construcciones Y. Auxiliar De Ferrocarriles & Anr (Judgement), whereby the Court held that Part I of the Arbitration and Conciliation Act, 1996 as amended thereof (the Act) would not be applicable to foreign seated international commercial arbitrations, rather be only applicable to domestic seated arbitrations.
In this case, the Petitioner and the Respondent (the Parties) had mutually agreed vide an agreement dated 30.6.2008 (the Agreement) to refer any dispute between them to arbitration and such arbitration proceedings would be held in accordance with the rules of the conciliation and arbitration of International Chamber of Commerce, Paris (Seat of Arbitration), and the venue of the arbitration would be London, United Kingdom (Place of Arbitration). Therefore, the Court held that the Parties had impliedly excluded the applicability of Part I of the Act for governing the arbitration proceedings.
Earlier the Supreme Court in a case of Bhatia International vs. Bulk Trading S.A. & Anr. 2002, held that provisions of Part I of the Act would apply in cases of international commercial arbitrations held out of India, unless the parties either expressly or impliedly exclude all or any of the provisions of Part I of the Act. In such a case, the laws or rules chosen by the parties would prevail.
Therefore, in view of the Bhatia judgement, the Delhi High Court herein held that the Parties, by specifying the Seat and the Place of Arbitration in their Agreement (executed prior to the passing of the Bhatia judgement), have impliedly excluded Part I of the Act.
As a result of which the Delhi High Court held that the Parties cannot seek recourse under Part I of the Act to set aside the award passed in foreign seated arbitration and thus, the Court did not have jurisdiction to entertain a petition under Part I of the Act in the present case.
The Indian Lawyer
Senior Legal Associate
The Indian Lawyer