BHARAT ALUMINIUM COMPANY versus KAISER ALUMINIUM TECHNICAL SERVICES INC.

Citation: [2016] 1 S.C.R. 364 · Decided: 28-01-2016 · Supreme Court of India · Bench: ANIL R. DAVE · Disposal: Dismissed

Cited by 10 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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[2016] l S.C.R. 364 
BHARAT ALUMINIUM COMPANY 
v. 
KAISER ALUMINIUM TECHNICAL SERVICES INC. 
(Civil Appeal No. 7019 of2005) 
JANUARY 28, 2016 
(ANIL R. DAVE, KURIAN JOSEPH AND 
AMITAVA ROY, JJ.( 
Arbitration and Conciliation Act, 1996 - Part I, s. 34 -
lnternationai commercial arbitration 
Challenge to foreign awards 
- Disputes between parties referred to arbitration -- Arbitration 
proceedings in England - Foreign awards passed in favour of 
respondent -Applications uls. 3./ by appellant-· Dismissed by District 
Judge as also High Court - Issue as regards whether the parties by 
agreement, express or implied, have excluded wholly or partly, Part 
I of the Arbitration Act - Held: From the clauses of the arbitration 
agreement, it is clear that law goveming the arbitration agreemel1/ 
is English Law, thus, there is a implied exclusion of Part I of the 
Arbitration Act - View taken by the High Court that the applications 
flied by appellant u/s. 3./ are not maintainable against the foreign 
awards between the parties, upheld. 
Interpretation - Interpretation of Act, Rule or Regulation! 
deeds, treaties, settlements in court/documents made by laymen like 
Wills - Approach by the court - Held: Court has to make dijferel1/ 
approaches depending i1pon the instrument falling for interpretation 
- Legal quality or perfection of the document is comparatively low 
in the third category, high in second and higher in first -· In the 
process of interpretation in the first category, the courts gather the 
purpose of the legislation, its context and text - In the second 
category also, the text as well as the purpose is important - In the 
third category, intention alone of the executor is releva111. 
Dismissing the appeals, the Court. 
HELD: 1.1 In the instant case, being a contract executed 
between the two parties, the court cannot adopt an approach for 
interpreting a statute. The terms of the contract would have to 
be understood in the way the parties wanted and intended them 
364 
BHARAT ALUMINIUM COMPANY v. KAISER ALUMINIUM 
365 
TECHNICAL SERVICES INC. 
to be. In that context, particularly in agreements of arbitration, 
where party autonomy is the grundnorm, how the parties worked 
out the agreement, is one of the indicators to decipher the 
intention, apart from the plain or grammatical meaning of the 
expressions and the use of the expressions at the proper places 
in the agreement. The respondent had invoked the provisions of 
English law for the purpose of the initiation of the unsettled 
disputes. It has hence, while interpreting an agreement, to be 
kept in mind that the parties, intended to avoid impracticable 
and inconvenient processes and procedures in working out the 
agreement. [Para 10] [370-G-H] [371-A-B] 
1.2 A close perusal of the terms between the parties would 
clearly show that in the first part of Article 22 of the Arbitration 
Agreement, it is agreed between the parties that the proper law 
of the contract will be governed by the prevailing law of India, 
and in the case of arbitration, English Law would apply. In other 
words, the agreement as a whole would be governed by Indian 
Law, and in case of arbitration, the English Law will apply. No 
doubt, one should not strain too much to interpret an agreement 
between two parties as in the case of a statutory interpretation. 
The approach in analysing the terms of agreement should be 
straight and plain but at the same time cohesive and logical. [Para 
9) [370-C-D] 
1.3 The law applicable to arbitration agreement in the 
instant case is English Law. Once it is found that the law governing 
the arbitration agreement is English Law, Part I of the Arbitration 
Act stands impliedly excluded. It cannot be said that the arbitration 
agreement is to be governed by the Indian Law. There is no error 
in the view taken by the High Court that the applications filed by 
the appellant under section 34 of the Arbitration Act are not 
maintainable against the two foreign awards between the parties. 
[Para 13, 14, 15] [371-H; 372-A, E, F] 
Bharat Aluminium Company i: Kafrer Aluminium 
Technical Services Inc. (2012) 9 SCC 552:2012 (12) 
SCR 327; Bhatia International v. Bulk Trading S.A. 
and another (2002) 4 SCC 105:2002 (2) SCR 411; 
Sumitomo Heavy Industries Limited v. ONGC Limited 
and others (1998) 1 SCC 305: 2002 (2) SCR 411; 
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SUPREME COURT REPORTS 
[2016] I S.C.R. 
Reliance Jndu5tries Li111ited a

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