M/S CENTROTRADE MINERALS & METAL INC. versus HINDUSTAN COPPER LTD.

Citation: [2016] 9 S.C.R. 83 · Decided: 15-12-2016 · Supreme Court of India · Bench: MADAN B. LOKUR · Disposal: Hearing Adjourned

Cited by 9 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

[2016] 9 S.C.R. 83 
M/S CENTROTRADE MINERALS & METAL INC. 
A 
v. 
HINDUSTAN COPPER LTD. 
(Civil Appeal No. 2562 of2006) 
DECEMBER 15, 2016 
(MADAN B. LOKUR, R. K. AGRAWAL AND 
DR. D. Y. CHANDRACHUD, JJ.) 
Arbitration and Conciliation Act, 1996 - s. 48 - Dispute 
resolution by two-tier arbitration system - Validity of - Parties 
entered into a contract containing arbitration clause - Subsequently 
dispute between the parties - Appellant company invoked 
arbitration clause - Appointment of arbitrator by Indian Council 
of Arbitration, who gave NIL award - Thereafter, invocation of 
second part of the arbitration clause by the appellant company -
Award passed by arbitrator in London in accordance with the Rules 
of Conciliation and Arbitration of the International Chamber of 
Commerce - Application u!s. 48 by the appellant company seeking 
enforcement of the said award - Validity of two tier arbitration -
Held: Resolving of disputes by two tier arbitration system was valid 
under the Indian law and not contrary to the public policy -
Arbitration clause in the agreement between the parties does not 
violate the fundamental or public policy of India by the parties 
agreeing to a second instance arbitration - Parties to an arbitration 
agreement have the autonomy to decide not only on the procedural 
law to be followed but also the substantive law. 
Adjourning the matters, the Court 
HELD: 1.1 It is necessary to appreciate the parties' 
intention when they agreed upon the arbitration clause in the 
contract. A plain reading of the arbitration clause suggests that 
the contracting parties intended: firstly, a settlement of their 
disputes or differences by arbitration in India through an 
arbitration panel of the Indian Council of Arbitration and in 
accordance with the Rules of Arbitration of the Indian Council of 
Arbitration, and secondly, if either of the contracting parties was 
in disagreement with the 'arbitration result' in India, then the 
aggrieved party would have a right to appeal to a second 
83 
B 
c 
D 
E 
F 
G 
H 
84 
A 
B 
c 
D 
E 
F 
G 
SUPREME COURT REPORTS 
[2016] 9 S.C.R. 
ai·bitration in London in accordance with the Rules of Conciliation 
and Arbitration of the International Chamber of Commerce. The 
result of the appellate arbitration would be binding on both the 
parties, subject to a legal challenge in accordance with law. The 
text of the arbitration clause is quite clear and explicit and does 
not admit of any doubt on its interpretation. The contracting 
parties intended Clause 14 of the contract to provide for two 
opportunities at resolving their disputes or differences. The first 
occasion would be a settlement by arbitration in lndia-'arbitration 
result' and the second occasion would be by arbitration in London, 
being in the nature of an appeal against the 'arbitration result' in 
India. [Para 6] (92-D-G] 
1.2 While Clause 14 of the contract may have used the 
expression 'arbitration result' and not the expression 'arbitration 
award' clearly the parties' intention was that the 'arbitration result' 
would be an award or at least in the nature of an award rendered 
by the arbitration panel of the Indian Council of Arbitration. The 
proceedings before the arbitration panel were intended to be 
structured and held in accordance with the Rules of Arbitration 
of the Indian Council of Arbitration. The result of such 
proceedings would inevitably be an arbitration award, regardless 
of the nomenclature used by the parties. It is difficult to interpret 
the words 'arbitration result' other than meaning an arbitration 
award. [Para 7) (93-A-B] 
Comparative International Commercial Arbitration, 
Julian D. M. Lew, Loukas A. Mistelis, et al., (Kluwer Law 
International 2003) pp. 627-662; International 
Arbitration, Nigel Blackaby, Constantine Partasides, et al., 
Redfern and Hunter 6th edn (© Kluwer Law 
International; Oxford University Press 2015) pp. 501-
568; International Commercial Arbitration, Emmanuel 
Gaillard and John Savage (eds), Fouchard Gaillard 
Goldman (Kluwer Law International 1999) pp. 735 -
780 - referred to. 
1.3 The arbitration result in the instant case has all the 
elements and ingredients of an arbitration award. The 'arbitration 
result' in the first part of Clause 14 of the contract must mean an 
H arbitration award given by the arbitral panel of the Indian Council 
M/S CENTROTRADE MINERALS & METAL INC. v. 
HINDUSTAN COPPER LTD. 
of Arbitration. The plain language of Clause 1

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