VIDEOCON INDUSTRIES LTD. versus UNION OF INDIA AND ANR.

Citation: [2011] 8 S.C.R. 569 · Decided: 11-05-2011 · Supreme Court of India · Bench: R.V. RAVEENDRAN · Disposal: Appeal(s) allowed

Cited by 5 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

• 
(2011] 8 S.C.R. 569 
VIDEOCON INDUSTRIES LTD. 
v. 
UNION OF INDIA AND ANR. 
(Civil Appeal No. 4269 of 2011) 
MAY 11, 2011 
[R.V. RAVEENDRAN AND G.S. SINGHVI, JJ.] 
A 
B 
Arbitration and Conciliation Act, 1996 -
s. 9 -
Jurisdiction for entertaining petition uls. 9 -
Seat of 
arbitration - Production Sharing Contract (PSC) - Dispute C 
between the parties -
Matter referred to arbitral tribunal 
under clause 34.3 of PSC -
In terms of clause 34.12 of 
the PSC, the seat of arbitration was Kuala Lumpur, 
Malaysia -
However, due to outbreak of epidemic SARS, 
the arbitral tribunal decided to hold its sittings first at D 
Amsterdam and then at London and the parties did not 
object to this - Partial award passed - Respondent No. 1 
challenged the partial award by filing a petition in the High 
Court of Malaysia at Kuala Lumpur -
Thereafter, the 
respondents made request to the tribunal to conduct the . E 
remaining arbitral proceedings at Kuala Lumpur, but the 
request was rejected and it was declared that the remaining 
arbitral proceedings will be held in London - At that stage, 
the respondents filed application uls.9 of the Act in Delhi 
High Court for stay of the arbitral proceedings - Appellant 
F 
objected to the maintainability of the application and 
pleaded that the Courts in India did not have the 
jurisdiction to entertain challenge to the arbitra/ award -
Delhi High Court overruled the objection of the appellant 
and held that the said High Court had the jurisdiction to 
entertain the petition filed uls.9 - On appeal, held: As per G 
the terms of agreement, the seat of arbitration was Kuala 
Lumpur- If the parties wanted to amend clause 34.12, they 
could have done so only by written instrument which W?S 
569 
H 
570 
SUPREME COURT REPORTS 
[2011) 8 S.C.R. 
A required to be signed by all of them - Admittedly, neither 
there was any agreement .between the parties to the PSC 
to shift the juridical seat of arbitration from Kuala Lumpur 
to London nor any written instrument was signed by them 
for amending clause 34.12 - Mere change in the physical 
B venue of the hearing from Kuala Lumpur to Amsterdam 
and London did not amount to change in the juridical seat 
of arbitration -
In cases of international commercial 
arbitrations held out of India provisions of Part I of the Act 
would apply unless the parties by agreement, express or 
c implied, exclude all or any of its provisions - In that case 
the laws or rules chosen by the parties would prevail - In 
the p(esent case, 
the parties had agreed that 
notwithstanding Clause 33. 1, the arbitration agreement 
contained in Clause 34 of PSC shall be governed by laws 
0 of England - This necessarily implies that the parties had 
agreed to exclude the provisions of Part I of the Act - As 
a corollary, the Delhi High Court did not have the 
jurisdiction to entertain the petition filed by the respondents 
uls.9 of the Act and the mere fact that the appellant had 
E earlier filed similar petitions was not sufficient to clothe that 
High Court with the jurisdiction to entertain the petition filed 
by the respondents -- English Arbitration Act, 1996 - ss.3 
and 53. 
A Production Sharing Contract (PSC) was executed 
F between re~pondent No.1-Government of India on the 
one hand and a consortium of four companies 
consisting of Oil and Natural Gas Corporation Limited, 
Videocon Petroleum Limited, Command Petroleum 
(India) Private Limited and Ravva Oil (Singapore) 
G Private Limited (hereinafter referred to as "the 
Contractor'') in terms of which the latter was granted 
an exploration licence and mining lease to explore and 
produce the hydro carbon resources owned by 
respondent No.1. Subsequently, Cairn Ener:gy U.K. was 
H subst!tuted in place of Command Petroleum (India) 
• 
• VIDEOCON INDUSTRIES LTD. v. UNION OF INDIA 571 
AND ANR. 
Private Limited and the name of the Videocon 
A 
Petroleum Limited was changed to Petrocon India 
Limited, which merged the appellant -
Videocon 
Industries Limited. 
In 2000, disputes arose between the respondents 
B 
and the contractor with respect to correctness of 
certain cost recoveries and profit. Sinoe the parties 
could not resolve their disputes amicably, the same 
were referred to the arbitral tribunal under clause 34.3 
of the said PSC. The arbitral tribunal fixed the date of 
hearing at Kuala Lumpur (Malaysia), but due to 
C 
outbreak of epidemic SARS, the arbitral tribunal shifted 
the venue of its sittings to Amsterdam in the

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