LexBHARAT ALUMINIUM CO. versus KAISER ALUMINIUM TECHNICAL SERVICE, INC.
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[2012) 12 S.C.R. 327 BHARAT ALUMINIUM CO. v. KAISER ALUMINIUM TECHNICAL SERVICE, INC. (Civil Appeal No. 7019 of 2005) SEPTEMBER 6, 2012 [S.H. KAPADIA, CJI. AND D.K. JAIN, SURINDER SINGH NIJJAR, RANJANA PRAKASH DESAI AND JAGDISH SINGH KHEHAR, JJ.] A B Arbitration and Conciliation Act, 1996- ss.2(2) and 9; Part C I and Part II - Interpretation of s. 2(2) - Scope of the provisions of Part I and Part II of the Act- Territoriality principle - Whether s. 2(2) bars application of Part I of the Act to Arbitrations which take place outside India - Grant of interim measures by Indian Courts where seat of arbitration is outside India - D Maintainability of inter-parte suit for interim relief - Held: The Act has accepted the territoriality principle which has been adopted in the UNCITRAL Model Law - s.2(2) makes declaration that Part I of the Act shall apply to all arbitrations which take place within India - Part I of the Act would have no E application to International Commercial Arbitration held outside India - Therefore, such awards would only be subject to jurisdiction of the Indian courts when the same are sought to be enforced in India in accordance with the provisions contained in Part II of the Act - No overlapping or intermingling of the provisions contained in Part I with the F provisions contained in Part II of the Act - S. 2(2) not in conflict with any of the provisions either in Part I or in Part II of the Act - In a foreign seated international commercial arbitration, no application for interim relief would be maintainable u/s.9 or any other provision, as applicability of Part I of Act is limited to all G arbitrations which take place in India - Similarly, no suit for interim injunction simplicitor would be maintainable in India, on the basis of an international commercial arbitration with a 327 H 328 SUPREME COURT REPORTS [2012] 12 S.C.R. A seat outside India - Part I of the Act applicable only to all the arbitrations which take place within the territory of India - Law declared to apply prospectively, to all the arbitration agreements executed hereafter. An agreement was executed between the appellant 8 and the respondent. The agreement contained an arbitration clause for resolution of disputes arising out of the contract. The arbitration clause itself indicated that by reason of the agreement between the parties, the governing law of the agreement was the prevailing law C of India. However, the settlement procedure for adjudication of rights or obligations under the agreement was by way of arbitration in London and the English Arbitration Law was made applicable to such proceedings. Disputes arose between the parties with D regard to the performance of the agreement. Negotiations to reach a settlement were unsuccessful and a written notice of request for arbitration was issued by the respondent to the appellant. The disputes were duly referred to arbitration which was held in England. The E arbitral tribunal made two awards in England. The appellant thereafter filed applications under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside the aforesaid two foreign awards. The trial Court held that the applications were not maintainable and F dismissed the same. The order was upheld by the High Court in appeal. Whilst hearing of further appeal before a two Judge Bench of this Court, counsel for the appellant referred to the three-Judges Bench decision of this Court in G Bhatia International which was followed in a recent decision of two Judges Bench in Venture Global Engineering. On account of difference of opinion amongst the Hon'ble Judges on the correctness of the said decisions in view of the interpretation of Clause (2) H BHARAT ALUMINIUM CO. v. KAISER ALUMINIUM TECHNICAL 329 SERVICE, INC. of Section 2 of the Arbitration and Conciliation Act, 1996, A the appeal was placed for hearing before a three Judge Bench, which thereafter directed the matters to be placed before the present Constitution Bench to consider the true scope of the provisions of Part I and Part II of the Arbitration Act, 1996. B Answering the Reference, the Court HELD: Does Section 2(2) bar the Application of Part I to C Arbitrations which take place outside India? 1.1. The omission of the word "only" in Section 2(2) is not an instance of "CASUS OMISSUS". It is not the funct.ion of the Court to supply the supposed omission, 0 w
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