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Seat outside India in reference with Bharat Aluminium v/s. Kaiser Aluminium Technical Services (BALCO).
Seat outside India in reference with Bharat Aluminium v/s. Kaiser Aluminium Technical Services (BALCO).
Introduction
The Constitution Bench of the Apex Court of India considered the question of the applicability of Part I of the (Indian) Arbitration & Conciliation Act, 1996 (from now on referred to as the "Act") to arbitration proceedings with their seat outside India in the case of Bharat Aluminium Co v. Kaiser Aluminium Technical Services Inc[1], (from now on referred to as the "Balco Case") on 6th September 2012, was a watershed moment in the legal environment of international commercial arbitrations with a seat outside of India.
Facts
The parties agreed on the delivery of equipment and the renovation and upgrading of production facilities. Unfortunately, disagreements began to arise, and the matter was brought to arbitration. Because the arbitration's seat was in England, the procedures were held there, and the award was rendered in the Respondent's favour. Dissatisfied with the ruling, the appellant filed an application in India against the award before the Chhattisgarh High Court under Section 34 of the statute, which is Part 1 of the act. Subsequent orders of the district court and the High Court of Chhattisgarh rejected the appeals. Therefore, BALCO appealed to the Supreme Court.
Held
The court ruled that Part 1 of the law does not apply to instances in which the arbitration occurs outside of India. It will only apply to arbitrations in which India is the seat of the arbitration.
Analysis
The Hon'ble Supreme Court's Constitutional Bench examined the English law and its relevance to the Act in this case. Before delving into the merits of the case, the history of arbitration in India and the current state of international commercial arbitration were thoroughly studied. The purposes of the Act and the requirements of the UNCITRAL Model Laws were taken into account. In this case, the Hon'ble Supreme Court examined decisions of several Indian courts and courts from other countries on the issue of award enforcement under international arbitral laws.
Since Part, I only apply to arbitrations performed in India, foreign parties whose seat of arbitration is outside India will find it tough to get interim relief in India. The Hon'ble Supreme Court's judgments in the Bhatia International and Venture Global Engineering cases (cited above) are put down concerning arbitration agreements executed according to the date of this judgment, i.e. 6 September 2012.
Conclusion
The BALCO decision has demonstrated a will to bring India into the fold of “arbitration-friendly” jurisdictions. There are still questions left unanswered, some of which need to be resolved through legislative reform.
References:
https://blog.ipleaders.in/jurisdiction-indian-courts-international-commercial-arbitration/
http://docs.manupatra.in/newsline/articles/Upload/03D471A1-CEC8-46DC-8E27-A42DC5D09E7C.pdf
[1] (Civil Appeal No. 7019 of 2005)
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 Foundation shall not be responsible for any errors caused due to human error or otherwise.
- Part I of the (Indian) Arbitration & Conciliation Act, 1996 (hereinafter referred to as the
- Successive orders of the district court and the High Court of Chhattisgarh rejected the appeals. Therefore, BALCO appealed to the Supreme Court.
- The court ruled that Part 1 of the law does not apply to instances in which the arbitration takes place outside of India. It will only apply to arbitrations in which India is the seat of the arbitrati
