EITZEN BULK A/S versus ASHAPURA MLNECHEM LTD. & ANR.

Citation: [2016] 2 S.C.R. 634 · Decided: 13-05-2016 · Supreme Court of India · Bench: F.M. IBRAHIM KALIFULLA · Disposal: Disposed off

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Judgment (excerpt)

A 
B 
c 
(2016) 2 S.C.R. 634 
EITZEN BULK A/S 
v. 
ASHAPURA MlNECHEM LTD. & ANR. 
(Civil Appeal No. 5131-33 of2016) 
MAY 13, 2016 
[FAKKIR MOHAMED IBRAHIM KALIFULLA 
AND S.A. BOBDE, JJ.] 
Arbitration and Conciliation Act, 1996 -Part I -Foreign award, 
where arbitration is not held in India and is governed by foreign 
law - Enforcement -Application of Part I of the Act to the Foreign 
award - Held: Where the parties choose a juridical seat of Arbitration 
outside India and provide that the law which governs Arbitration 
would be a lmv other than Indian lmv Part I of the Act would not 
have any application - Mere choosing of the juridical seat of 
D Arbitration attracts the law applicable to such, location - It would 
not be necessary to specify which law would apply to the Arbitration 
proceedings, since the law of the particular country would apply 
ipso jure - On facts, dispute between the parties arising out of 
contract of affreightment - By arbitration clause, the parties chose 
E 
F 
G 
H 
to exclude the application of Part I to the Arbitration proceedings 
between them by choosing London as the venue for Arbitration and 
by making English lm1• applicable to Arbitration - Thus, the award 
debtor not entitled to challenge the award by raising objections u/ 
s. 34 before a court in India - Proceedings uls. 34, dismissed as 
untenable - Judgment of the High Court enforcing the Foreign 
Award under Part II of the Act is correct and upheld. 
Disposing of the appeals, the Court 
HELD: 1.1 The clause 28, Arbitration Clause in the Contract 
evinces such an intention by providing that the English Law would 
apply to the Arbitration. The clause expressly provides that Indian 
Law or any other law would not apply by positing that English 
Law would apply. The intention is that English Law would apply 
to the resolution of any dispute arising under the law. This means 
that English Law would apply to the conduct of the Arbitration. It 
must also follow that any objection to the conduct'of the Arbitration 
634 
EITZEN BULK A/S v. ASHAPURA MINECHEM LTD. & ANR. 
or the Award would also be governed by English Law. Clearly, 
this implies that the challenge to the Award must be in accordance 
with English Law. There is thns an express exclusion of the 
applicability of Part I to the instant Arbitration by Clause 28. In 
fact, Clause 28 deals with not only the seat of Arbitration but also 
provides that there shall be two Arbitrators, one appointed by 
the charterers and one by the owners and they shall appoint an 
Umpire, in case there is no agreement. It may be noted that the 
Arbitration and Conciliation Act, 1996 makes no provision for 
Uinpires and the intention is clearly to refer to an Umpire 
contemplated by Section 21 of the English Arbitration Act, 1996. 
It is thus, clear that the intention is that the Arbitration should 
be conducted under the English law, i.e. the English Arbitration 
Act, 1996. It may also be noted that Sections 67, 68 and 69 of the 
English Arbitration Act provide for challenge to an Award on 
grounds stated therein. The intention is thus, clearly to exclude 
the applicability of Part I to the iustaut Arbitration proceedings. 
[Para 27] [643~B-E] 
1.2 By Clause 28, the parties chose to exclude the application 
of Part I to the Arbitratiou proceedings between them by choosing 
Loudou as the venue for Arbitration and by makiug Euglish law 
applicable to Arbitration. It is well settled that where the parties 
choose a juridical seat of Arbitration outside India and provide 
that the law which governs Arbitration will be a law other than 
Indian law, part I of the Act would not have any application and, 
therefore, the award debtor would not be .entitled to challenge 
the award by raising objections under Section 34 before a Court 
in Iudia. A Court in India could not have jurisdiction to eutertain 
such objections under Section 34 in such a case. The mere 
choosing of the juridical seat of Arbitration attracts the law 
applicable to such location. In other words it would'not be 
necessary to specify which law would apply to the Arbitration 
proceedings, since the law of the particular country would apply 
ipso jure. [Paras 32, 33) [647-C-E) 
1.3 The judgment of the Gujarat High Court holding that, 
award debtor's objectioris under Section 34 of the Act are tenable 
before a Court in India that is the Court in Gujarat is contrary to 
law. The proceedings under Section 34, which occurs in Part I, 
635 
A

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