LexTDM INFRASTRUCTURE PRIVATE LIMITED versus UE DEVELOPMENT INDIA PRIVATE LIMITED
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(2008] 8 S.C.R 775 TDM INFRASTRUCTURE PRIVATE LIMITED A v. UE DEVELOPMENT INDIA PRIVATE LIMITED (Arbitration Application No. 2 of 2008) MAY 14, 2008 B [5.8. SINHA,J] ,. ARBITRATION AND CONCILIATION ACT, 1996: ss. 2(1)(f)(iii), 11(5),(a) and 28 - International Commer- cial Arbitration - Connotation of - Appointment of arbitrator - c Both parties to arbitration agreement registered under Indian Companies Act - HELD: A company incorporated in India can only have Indian nationality for purpose of the Act- Once both the Companies are incorporated in India and, thus, have been 7 domiciled in India, arbitration agreement entered into by and D -1- between the parties would not be an international commercial arbitration agreement and question of applicability of clause (iii) of s. 2(1 )(f) would not arise - In the instant case, Supreme Court. has no jurisdiction to appoint arbitrator - UNCITRAL Model Law on International Commercial Arbitration (1985). E INTERPRETATION OF STATUTES." Determination of jurisdiction - HELD: An interpretation """· should ensure certainty in determination of jurisdiction as to I which court should a disputant approach for appointment of F an arbitrator u/s 11 of 1996 Act - In a matter involving deter- mination of jurisdiction of a court, certainty must prevail which cannot be determined by entering into a disputed question of fact - Arbitration and Conciliation Act, 1996 - s. 11. V VR.N.M. Subbayya Chettiar v. Commissioner of In- G ,..... come Tax, Madras 1950 SCR 961; and McLeod and Com- I pany Ltd. v. State of Orissa and Others (1984) 1 SCC 434 - held inapplicable. 775 H 776 SUPREME COURT REPORTS [2008] 8 S.C.R. A Subbayya Chettiar v. IT Commissioner, Madras AIR 1951 r SC 101; and Central Bank of India Ltd. v. Ram Narain AIR 1955 SC 36...: referred to. De Beers Consolidated Mines Limited v. Howe (Surveyor B of Taxes) (1906) AC 455; Unit Construction Co. Ltd. v. Bui- lock 1960 AC 35'1 - referred to. Russell on Arbitration, 23rd edition, page 357- referred to. ~ ORl.GINAL CIVIL JURISDICTION: Arbitration Petition No. 2 of 2008 ~ c Sumeef Kachwah, Ashok Sagar, Dharmendra, Anuradha Sharma and Meenaks~1i Aron~ for the Appellant. Dhyan Chinappa and Gaurav Agrawal for the Respondent. D The following Order of the Court was delivered 1. The parties hereto are companies registered and in- \ ..,... corporated under the Companies Act, 1956 (for short "the Act"). Directors and shareholders of the petitioner - company, how- ever, are said to be residents of Malaysia. The Board of Direc- E tors of the petitioner also sits at Malaysia. 2. A contract for rehabilitation and upgrading was awarded to the respondent by the National Highway Authority of India. Respondent subcontracted a portion thereof to the petitioner by three letters of awards dated 12.04.2002, 24.05.2002 and ,,.._ F ' 29.08.2002. However, for the purpose of present petition, we are con- cerned with the second and third letters of award. The parties entered into those contracts containing an arbitration clause, G which read as under: "If the parties fail to settle the question, dispute or differ- • __..., I ence through negotiations, the same shall be referred to Arbi- tration as per the provisions of the Indian Arbitration Act, 1940 and the rules made thereunder and any statutory modifications H or re-enactment thereof that may be made from time to time --l. I TOM INFRASTRUCTURE PVT LTD. v. UE 777 DEVELOPMENT INDIA PVT. LTD. and actually in force at the time of reference. The cost of arbi- A tration shall be borne by the parties in the ratio to be agreed upon by the parties. The venue of the Arbitration shall be New Delhi. The language to be used in the arbitration proceedings shall be English." 3. Disputes and differences having arisen between the B parties, the said arbitration agreement was resorted to, where- for a notice dated 22.03.2007 was served by the petitioner through its solicitors M/s. Shook Lin & Bok. A nominee was proposed. In response thereto, the respondent herein through its solicitors Mis. Shearn Delamare & Co. also proposed its C nominee by a letter dated 18.04.2007. Respondent, however, proposed amendments to the original dispute resolution and arbitration clause by suggesting change of venue of the arbitra- tion to Kuala Lumpur, Malaysia in stead and place of New Delhi and that the disputes be arbitrated in terms of the Malaysian D
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