BHATIA INTERNATIONAL versus BULK TRADING S.A. AND ANR.

Citation: [2002] 2 S.C.R. 411 · Decided: 13-03-2002 · Supreme Court of India · Bench: G.B. PATTANAIK · Disposal: Dismissed

Cited by 11 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

BHATIA INTERNATIONAL 
v. 
BULK TRADING S.A. AND ANR. 
MARCH 13, 2002 
[G.B. PATTANAIK. S.N. PHUKAN AND S.N. VARIAVA, JJ.] 
Arbitration and Conciliation Act, 1996: Part-I and Part-II Sections 2, 5, 
9, 17, 48, 49, 57 and 58. 
International Chambers of Commerce Rules-Article 23. 
Arbitration-Jurisdiction of Courts in India-Exercise of-Held, may 
not be ousted unless explicitly expressed by the statutory provisions or by 
inferential conclusion. 
A 
B 
c 
Provisions of Part-I-Applicability to arbitration proceedings and D 
International Commercial Arbitration in India. 
Deviation from provisions-Extent of-Parties can deviate from the 
provisions to the extent permitted as per Part-I of the Act-For International 
Commercial Arbitration parties by an agreement may exclude all or any E 
provisions of the Act. 
Application for interim measure-Maintainability of-Such Application 
can be submitted to Courts in India irrespective of place of arbitration but 
before expiry of time of execution of the Award. 
Interim Award-Interim Order-Distinction between-Though Arbitral 
Tribunal could pass an interim award under Part-II of the Act, yet an interim 
order passed by it would not be enforceable in India. 
F 
Legislative lntent--Provisions of Part-! is compulsorily applicable to 
arbitration including an International Commercial Arbitration in India-Parties G 
by an agreement can declare that Part-1 or any of its provisions will not apply 
to arbitration-UNC!TRAL Model Laws Article I (2). 
Interpretation of Statutes: 
Statutory provisions-Possibility of more than one interpretation-Court H 
411 
412 
SUPREME COURT REPORTS 
(2002] 2 S.C.R. 
A to choose that interpretation which repre~ents the true intention of the 
,,4.... 
legislature-In the unforeseen situations which emerge after enactment of 
'. 
statute, Court could expound but should not try to legislate. 
Appellant entered into a contract with 1st Respondent. Arbitration 
"" 
B 
clause in the Contract provided for arbitration as per rules of the International 
Chambers of Commerce (ICC). 1st Respondent requested for arbitration. 
Parties agreed for the same and ICC appointed a sole arbitrator. In the 
meanwhile, 1st Respondent filed an application before the Distt. Judge in India 
and prayed for an order of injunction restraining the opposite parties from 
M:" 
alienating, transferring, creating third party right, disposing of, dealing with 
-..,., 
c and/or selling their business assets and properties. Appellant raised plea of 
maintainability of such application on the ground that Part-I of Arbitration 
and Conciliation Act would not apply where place of arbitration is not in India. 
On dismissal of the application, Appellant filed a Writ Petition which was 
_. 
also dismissed by the High Court. Hence the present appeal. 
I 
D 
It was contended for the appellant that Part-I of the Act only applies to 
arbitrations where place of arbitration is in India; and that Legislature did 
not want Part-I to apply to arbitrations which take place outside India; and 
~ 
that Part-II of the Act applies to foreign awards; and that 'every arbitration' 
in Section 2(2) and 'all arbitration' in Section 2(5) of the Act must necessarily 
E 
refer only to arbitrations which take place in India; and that if Part-I applies 
to all arbitrations then Section 2(2) would become redundant and/or otiose; 
and that the Legislature purposely omitted to make any provision for interim 
measures either by the Court or by Arbitral Tribunal; and that a number of 
High Courts have held Part-I of the Act would not apply to arbitrations which 
take place outside India. 
F 
It was contended for the Respondents that a conjoint reading of the 
provisions shows that Part-I applies to all arbitrations unless the parties by 
their agreement excludes its provisions, Part-I would also apply to all 
International Commercial Arbitrations including those which take place 
outside India. 
G 
,( 
Dismissing the appeal, the Court 
HELD: 1.1. The wording of sub-section (2) of Secti~n 2 of the 
Arbitration and Conciliation Act suggests that the intention of the Legislature 
was to make provisions of Part-I compulsorily applicable to an arbitration, 
H including an international commercial arbitration, which takes place in India. 
BHATIA INTERN A TI ON AL v. BULK TRADING S. A. 
413 
Parties cannot, by agreement, override or exclude the non-derogable A 
provisions of Part-I in such arbitrations. (423-G) 
1.2. By omitting to pro

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