The landmark judgement passed by Supreme court in this case moved India towards a more progressive judiciary and established a conducive atmosphere for the international arbitration to take its root in India. In this applaud able case the Supreme Court of India held the injunction order granted by the Bombay High Court to be not applicable and instead laid down that the case should be referred to the Singapore Arbitration council ICC instead, where it had been originally decided upon by the parties.
In this dispute both the parties were in conflict in relation to the media rights for Indian Premiere League (IPL). Near 2008, the Board of control for Cricket India, tendered all the global media rights to the WSG for a period of ten years. It was than claimed by MSM that in a pre-bid contract it had been decided upon that it will get the global media rights for broadcasting IPL for the first two years out of the ten. But later, the BCCI rescinded this agreement after one season and instead continued its negotiation with the WSG, which led to MSM filling a case against BCCI.
IN 2009, an agreement was drawn between WSG and MSM, where WSG agreed to relinquish all its Global media rights over IPL in exchange of INR 4.7 billion and MSM can directly obtain these right with BCCI. A clause in the agreement stated that in case of any dispute arising out of the agreement, the parties will refer the case to the Singapore ICC arbitration.
Subsequently, MSM paid three instalments but failed to pay the whole amount and instead filed a case against WSG for fraud and misrepresentation and therefore an injunction order on rescinding the agreement. WSG appealed that since the agreement mentions about taking the dispute to Singapore arbitral institution, this plea stands negated. Yet the Bombay High Court gave MSM and interim relief thus restraining the right of WSG to approach ICC. It than took its grievance to the Supreme court of India.
SUPREME COURTS DECISION:
The supreme court of India followed a progressive approach for the international arbitration in India and declared the order of Bombay high court as void and held that:
- In accordance with the New York Convention which are in sync with the Indian Arbitration and Conciliation Act, an Arbitration agreement doesn't become "void or not capable for being performed" essentially in light of the fact that the debate may include claims of misrepresentation;
- the courts cannot decline or refrain the parties of dispute from referring the dispute to arbitration only on the ground that claims of extortion host been made by one of the party to dispute;
- It is wrong to conclude that only the courts have the power to resolve a dispute in relation to fraud or misrepresentation. An arbitration tribunal can also handle such disputes in an effective manner.
- It also the duty of courts to refer the dispute to arbitration if the parties had included an arbitration clause in their agreement and such a condition would not be applicable only in the case of the agreement is “void, inoperative or impossible to perform”.