LexMANKASTU IMPEX PRIVATE LIMITED versus AIRVISUAL LIMITED
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A B C D E F G H 565 MANKASTU IMPEX PRIVATE LIMITED v. AIRVISUAL LIMITED (Arbitration Petition (Civil) No. 32 of 2018) MARCH 05, 2020 [R. BANUMATHI, A. S. BOPANNA AND HRISHIKESH ROY, JJ.] Arbitration and Conciliation Act, 1996 – ss.9, 11 – International Commercial Arbitration seated outside India – Petitioner-company (incorporated in India) is in the business of supply of air purifiers, air quality monitors etc. – Respondent- company (incorporated in Hong Kong) is in the business of manufacture, sale of air quality monitors, air quality information – Memorandum of Understanding (MoU) entered into between the parties – Respondent agreed to sell to the petitioner the complete line of it’s air quality monitors products for onward sale and appointed it as an exclusive distributor for the products for sale within India – Petitioner received a letter from CEO of one IQAir AG inter alia stating that IQAir AG has acquired all technology, associated assets of the respondent and that it will not assume any of respondent’s contracts or legal obligations – Petitioner eventually issued notice invoking arbitration clause in Clause 17 of the MoU – Filed petition u/s.9 seeking directions against respondent and IQAir AG to honour the terms and conditions of the MoU – Pending – Present petition filed u/s.11(6) seeking appointment of Sole Arbitrator u/Clause 17 – Held: Words in Clause 17.1 do not suggest that the seat of arbitration is in New Delhi – Clause 17.2 of the MoU stipulates that the dispute arising out of or relating to it shall be referred to and finally resolved by the arbitration administered in Hong Kong – Words in Clause 17.2 that “arbitration administered in Hong Kong” is an indicia that the seat of arbitration is at Hong Kong – Once the parties have chosen “Hong Kong” as the place of arbitration to be administered in Hong Kong, laws of Hong Kong would govern the arbitration – If the arbitration agreement is found to have seat of arbitration outside India, then the Indian Courts cannot exercise supervisory jurisdiction over the award or pass [2020] 4 S.C.R. 565 565 A B C D E F G H 566 SUPREME COURT REPORTS [2020] 4 S.C.R. interim orders, thus in the present case in order to enable the parties to avail interim relief, Clause 17.3 that parties have agreed that they may seek interim relief for which Delhi Courts would have jurisdiction, appears to have been added – Since the arbitration is seated at Hong Kong, the petition filed by the petitioner u/s.11(6) is not maintainable and is dismissed – Open to the petitioner to approach Hong Kong International Arbitration Centre for appointment of arbitrator, if they so desire – Arbitration and Conciliation Amendment Act, 2015. Arbitration and Conciliation Act, 1996 – s.2(1)(f) – International Commercial Arbitration – Factors to be fulfilled for – Held: Three factors ought to be fulfilled-(i) arbitration; (ii) considered as commercial under the laws in force in India; and (iii) at least one of the parties is national or habitual resident in any country other than India. Arbitration and Conciliation Act, 1996 – Proviso to s.2(2) & ss.9, 27, 37 – Held: By 2015 Amendment Act, a proviso has been added to s.2(2) as per which, certain provisions of Part-I of the Act i.e. ss.9, 27, 37(1)(a) and 37(3) have been made applicable to “International Commercial Arbitrations” even if the place of arbitration is outside India – Arbitration and Conciliation Amendment Act, 2015. Arbitration and Conciliation Act, 1996 – International Commercial Arbitration seated outside India – Proviso to s.2(2), s.11 – Applicability of s.11 – Held: s.11 is not included in proviso to s.2(2) and thus, it has no application to International Commercial Arbitrations seated outside India – Arbitration and Conciliation Amendment Act, 2015. Dismissing the petition, the Court HELD: 1.1 As per Section 2(1)(f) of the Arbitration and Conciliation Act, 1996, to be an “International Commercial Arbitration”, three factors ought to be fulfilled-(i) arbitration; (ii) considered as commercial under the laws in force in India; and (iii) at least one of the parties is national or habitual resident in any country other than India. As per Section 2(2), Part-I shall apply where the place of arbitration is in India. If the A B C D E F G H 567 “International Commercial Arbitration” is seated in India, then Part-I of the Act shall apply. [Paras 15, 16][574-C-D] 1.2 Significance of the seat of arbitration is that it determines the applicable
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