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Habitual residence of a party in a foreign country makes an arbitration International Commercial Arbitration
The Apex Court, in the case of Amway India Enterprises (P) Ltd. v. Ravindranath Rao Sindhia[1], said that “If at least one of the parties was either a foreign national, or habitually resident in any country other than India; or by a body corporate which was incorporated in any country other than India; or by the Government of a foreign country, the arbitration would become an international commercial arbitration even though the individual, body corporate, or the government of a foreign country carry on business in India through a business office in India.”
In the mentioned case, the respondent appointed the appellant for the distribution, sale, and marketing in India. Later, disputes arose between the parties and couldn’t be solved amicably, and the parties invoked the arbitration clause.
The Respondents in the present case approached the Delhi High Court as both the parties could not conclude deciding the final arbitrator. The main plea of the Petitioner was that the Delhi High Court does not has the jurisdiction as the matter belonged to International Commercial Arbitration as both the husband and wife habitually stayed in the United States of America. The Court took note that the office is in Mumbai, which is the primary factor to conclude with regards to the current issue and concluded that the matter does not fall within the purview of International Commercial Arbitration, and appointed an arbitrator.
The matter then went to the Supreme Court, and the Bench opined that the argument that there was no international flavour to the transaction between the parties had no legs to stand on. As, an analysis of Section 2(1)(f) would show that whatever be the transaction between the parties, if it happens to be entered into between persons, at least one of whom was either a foreign national, or habitually resident in, any country other than India; or by a body corporate which was incorporated in any country other than India; or by the Government of a foreign country, the arbitration becomes an international commercial arbitration although the individual, body corporate, or the government of a foreign country referred to in Section 2(1)(f) carry on business in India through a business office in India.
In the light of the above, the Bench opined that the High Court had no jurisdiction to appoint an arbitrator; therefore, the impugned judgment was set aside.
[1] 2021 SCC OnLine SC 171.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre shall not be responsible for any errors caused due to human error or otherwise.
- Habitual residence in another country makes it International Commercial Arbitration
- Criteria for International Commercial Arbitration
- Non interference as not a domestic matter
