Bombay High Court
Avitel Post Studioz Ltd.And 3 Ors vs Hsbc Pi Holdings (Mauritius) Ltd on 5 May, 2017
Author: Manjula Chellur
Bench: Manjula Chellur, G.S. Kulkarni
1 APP-155-16(J)
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO. 155 OF 2016
IN
ARBITRATION PETITION NO.690 of 2015
1 Avitel Post.Studioz Limited
Company incorporated under the
provisions of the Companies Act,1956
having its regd. Office at A-7, Vimal
Udyog Bhavan, Taikal wadi Road,
Opp. Starcity Cinema,
Mahim (W), Mumbai - 400016.
2 Pradeep Shantiprasad Jain
adult, Indian inhabitant, carrying on
business at A-7, Vimal Udyog Bhavan,
Taikal wadi Road,Opp. Starcity Cinema,
Mahim (W), Mumbai - 400016.
3 Siddhartha Pradeep Jain
adult, Indian inhabitant, carrying on
business at A-7, Vimal Udyog Bhavan,
Taikal wadi Road,Opp. Starcity Cinema,
Mahim (W), Mumbai - 400016.
4 Hrishi Pradeep Jain
adult, Indian inhabitant, carrying on
business at A-7, Vimal Udyog Bhavan,
Taikal wadi Road,Opp. Starcity Cinema,
Mahim (W), Mumbai - 400016. .. Appellants
Versus
Tilak
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2 APP-155-16(J)
HSBC PI Holdings (Mauritius) Ltd.
(previously named HPEIF Holding 1
Limited) a company incorporated under
provisions of laws of Mauritius and
having its registered office at
c/o.Multiconsult Limited,
Rogers House, 5 President John
Kennedy Street, Port Louis
Mauritius. .. Respondents
...
Mr.Pradeep Sancheti, Sr. Counsel a/w Mr.Simil Purohit,
Sanjay Agarwal, H.K. Sudhakara i/b Prompt Legal for the
appellants.
Mr.Nikhil Sakhardande a/w Priyanka Shetty, Uttara
Srinivasan i/b AZB and Partners for respondent.
CORAM: DR. MANJULA CHELLUR, CJ. &
G.S. KULKARNI, J.
RESERVED ON : 3rd APRIL, 2017
PRONOUNCED ON : 5th MAY, 2017.
JUDGMENT (Per Dr.MANJULA CHELLUR, CJ):
1 In brief, the background in which the present Appeal is filed is as under :
The appellants herein were the petitioners before the learned Single Judge who filed two petitions under Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:51 ::: 3 APP-155-16(J) Section 34 of the Arbitration and Conciliation Act, 1996 (for short "the Arbitration Act"), impugning Arbitral awards dated 27th September 2014 and 17th December 2012 in Arbitration Nos. 088 of 2012 and 690 of 2015 respectively.
2 In order to expand the business of the appellants, appellants intended to raise funds through private equity investors desirous of investing in the petitioners' company which was known for consistent profit making and dividend paying Company. An affiliate of the respondent's Company known as "HAV3" was an investor-cum-shareholder in the petitioner Company, therefore, had first right for further issuance of shares by the petitioner's company. On persuasion from respondent no.3 that further funds must be taken through them, the present respondent was introduced to them by HAV3. Though several offers came from different globally renowned Private Equity Funds for investing at a much higher valuation, the appellants had to heed to the demand of HAV3 since they had first right for further investment. The appellant no.1 is a Company incorporated Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:51 ::: 4 APP-155-16(J) under the provisions of the Companies Act, 1956 having its registered office at Mumbai. Respondent is a Company incorporated under the laws of Mauritius and has its registered office at Mauritius. The respondent is an Investment Holding Company for the Principal Investments Asia Division of HSBC. On 21st April 2011, the appellants and the respondents entered into Share Subscription Agreement (hereinafter referred to as "SSA"). Again on 6th May 2011, the first appellant, respondent and their promoters and HAV3 Holdings (Mauritius) Ltd, and their investors entered into a Share Holders Agreement (hereinafter referred to as "SHA"). 3 Respondent seems to have invoked arbitration agreements in SSA as well as SHA on 11 th May 2012. Singapore International Arbitration Centre (SIAC) was seized of Arbitration Nos.088 of 2012, 089 of 2012 respectively. In those proceedings, the respondent sought emergency reliefs under the relevant arbitration provisions of SIAC 2010 Rules. One Mr.Thio Shen Yi, S.C. was appointed as emergency arbitrator. An interim award in SSA and SHA Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:51 ::: 5 APP-155-16(J) arbitrations respectively came to be made on 28th and 29th May 2012, thereby freezing of the accounts of the appellants, requiring them to disclose to HSBC Mauritius all that information regarding their assets and deliver the said information came to be directed. The emergency arbitrator also allowed various expenses to be borne by the appellants. In this context, the respondent called upon the first appellant to make their share of payment towards the first tranche of deposit.
4 On 17th December 2012, the Arbitral Tribunal passed an unanimous partial award in the SSA arbitration holding jurisdictional challenge of the appellants against them and declared that Indian law was not governing the law of arbitration, and it was Singapore law that governed the arbitration agreements. It also opined that allegations of fraud and/or complicated issues of fact and law also be arbitrated under Singapore law. It also held that Arbitral Tribunal at Singapore had jurisdiction to adjudicate the dispute arising under the SSA between the petitioner and the Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:51 ::: 6 APP-155-16(J) respondent. Similarly, on 15th March 2013, the Arbitral Tribunal passed an unanimous award in SHA arbitration by rejecting the challenge of the appellants so far as the jurisdictional challenge and declared that Singapore law determines the jurisdiction of the tribunal based on Section 11 of the Singapore International Arbitration Act read with Article 34 of Model Law. It further opined that Singapore law takes into its fold the arbitrability of disputes including the issues of fraud, and proceeded to hold that the claims made by the respondent against the appellants were not contrary to Singapore public policy, therefore, such claims were arbitrable. A final award came to be made in both the matters.
5 The respondents herein filed Arbitration Petition No.1062 of 2012 before this Court, inter alia, seeking various interim measures against the appellants herein which was seriously opposed by the appellants on various grounds including the ground of maintainability of the said Arbitration Petition filed under Section 9 of the Arbitration Act. The Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:51 ::: 7 APP-155-16(J) learned Single Judge granted interim relief in favour of the respondent Company by an order and judgment dated 22 nd January 2014 by which learned Single Judge restrained the appellants from withdrawing the amounts retained in the Corporation Bank to an extent of 60 Million US $. Though a Special Leave Petition came to be filed impugning the said judgment and order of the learned Single Judge before the Apex Court, on raising objection by the respondents herein that an Appeal was permissible under Section 37(1)(a) of the Arbitration Act, the appellants hereunder withdrew the said Special Leave Petition seeking liberty to challenge the impugned order by way of Appeal before the Division Bench of this High Court. The said prayer was allowed. An Appeal No.190 of 2014 was preferred before the Division bench of this Court, impugning the judgment in Arbitration Petition No.1062 of 2012. The said Appeal was partly allowed and substituted the operative part of the learned Single Judge by directing the appellants herein to deposit the short-fall in the Corporation Bank account of the petitioners so as to maintain the balance only to an extent of 30 Million US $ within a Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:51 ::: 8 APP-155-16(J) period of four weeks from the date of order dated 31 st July 2014. Rest of the directions in the judgment dated 22 nd January 2014 were sustained. Said judgment and order dated 31st July 2014 is under challenge before the Supreme Court and the Special Leave Petition is pending. 6 Arguments on behalf of the appellants addressed by learned Senior counsel Mr.Pradeep Sancheti before the learned Single Judge as well as before this Court mainly refer to clauses 15, 16, 16.1.2, 16.1.6, 16.4, 16.1.7 and also 16.4 of the SSA agreement. According to him, though clause 16 provides for a reference of dispute to arbitration at Singapore International Arbitration Centre (SIAC) which has to be considered in accordance with the Rules in force at SIAC, seat of arbitration being at Singapore, however, by virtue of clause 16.1.6, there is a waiver of such right by the parties to apply to any Court of law to determine any preliminary point of law or review or any question of law, and/or merits. He also submitted the aspect of 'Curial Law' by referring to clause 16.4 of the SSA, contending that it is distinct from the other Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:51 ::: 9 APP-155-16(J) two aspects i.e. proper law governing the contract or the law governing the substantive rights of the parties under the contract and the law of arbitration agreement. His main argument is that during the continuance of the proceedings, Curial Law operates and the authority of such Courts ceases once the proceedings are concluded. Therefore, clause 16.4 of SSA, according to learned Senior Counsel cannot be understood to mean that the parties had waived their right to challenge the award under Section 34 of the Arbitration Act of 1996 since it was not in the realm of Curial Law. He submits such contention by placing reliance on 16.1.6 of the agreement. It is argued that provision of Part I to challenge any award was not excluded per se. Therefore, according to him, challenge against an arbitral award though was protected under clause 16.1.6, the same is not over-ridden by clause 16.4. Therefore, this Court had entertained the appeal filed by the appellants under Section 37(1)(a) of the Arbitration Act by which the appellants had impugned the order and judgment delivered by the learned Single Judge under Section 9 of the Arbitration Act. He also contends that Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:51 ::: 10 APP-155-16(J) since provisions of Appeal under Section 37(1)(a) was applicable to the proceedings filed by the appellants, the proceedings u/s.34 of the Arbitration act impugning the arbitral award which falls under Part I of the Arbitration Act is also permissible. It is further contended that Section 9 of the Arbitration Act would actually fall within the purview of Curial Law, therefore, the judgment though between the same parties cannot be applied to the facts of this case. With reference to the decision in Bharat Aluminium Company Vs. Kaiser Aluminum Technical Services Inc, 1 law laid down is prospective in nature and since the agreements entered into between the parties herein were entered prior to the pronouncement of the said judgment, the said judgment would not apply to the facts of the case. He further contends that Bhatia International Vs. Bulk Trading S.A, 2 would apply to the facts of the case, wherein the provisions of Part I, Arbitration Act of 1996 were held equally applicable to International Commercial Arbitrations held outside India. Similarly, the cases of Reliance Industries Ltd & Anr Vs. 1(2012) 9 SCC 552, 2(2002) 4 SCC 105, Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:51 ::: 11 APP-155-16(J) Union of India,1 and National Thermal Power Corporation Ltd. Vs. Singer Company & Ors,2 would not be applicable to the present case. He also contended that in the facts of the present case, there was no controversy as to the applicable law being different on different aspects since the proceedings at Singapore have been concluded. Therefore, the Indian Courts can adjudicate the present issue. 7 The respondent's stand before the learned Single Judge as well as before us is that both the agreements SSA and SHA were entered into between the parties prior to 6 th September 2012 i.e. the date of the judgment of the Apex Court in Bharat Aluminum Company (supra). They place reliance upon clauses 15, 16.1, 16.1.1, 16.1.2, 16.1.3, 16.1.4, 16.1.5, 16.1.6, 16.1.7 and 16.4 of SSA and clauses 18.1, 19.1, 19.3 and 19.4 of SHA agreement. According to them, express exclusion of Part I of the Act, save and except Section 9 of the Arbitration Act, 1996 and reading of clauses 16.1.6 of SSA and 19.1 of SHA permit challenge to the award on certain 1(2014) 7 SC 603, 2(1992) 3 SCC 551 Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:51 ::: 12 APP-155-16(J) grounds to the extent permitted by law of the seat of arbitration and those clauses further indicate that parties contractually intended that the award has to be challenged at the seat of the arbitration alone.
8 By placing reliance on Bhatia International (supra), respondent's counsel argued that unless the parties by agreement, express or implied terms had excluded all or any of Part I of the Arbitration Act, in the case of International Commercial arbitrations held out of India, the provisions of Part I would apply. According to them, since the parties had categorically excluded Part I as stated above, the petitions filed under Section 34 of the Arbitration Act are not maintainable.
9 Reference is made to judgment of learned Single Judge in Arbitration Petition No.1062/12 between the same parties in a proceedings under Section 9 of the Arbitration Act. Appeal No.190 of 2014 came to be filed against the judgment of learned Single Judge in Arbitration Petition Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:51 ::: 13 APP-155-16(J) No.1062 of 2012. The Division Bench after referring to various provisions of the agreements SSA and SHA, opined that parties have either by express terms or by implication agreed that the law for arbitration shall be the Rules of SIAC i.e. laws of Singapore.
10 It is contended that by clause 16 of SSA and clause 19 of SHA, the parties expressly had agreed to exclude Part I of Arbitration Act, except Section 9 therefore, there is implied exclusion of applicability of Part I of Arbitration and Conciliation Act, 1996 because the juridical seat of Arbitration under SSA and SHA being Singapore and said proceedings being conducted as per SIAC rules, laws of Singapore. 11 The respondent also placed reliance on Section 5 of Singapore Act, Part II of the Singapore Act, and so also Model Law applicable to International Arbitrations in Singapore to substantiate their arguments as stated above. According to them, under Article 34 of the Model Law, with reference to application for setting aside arbitral award could Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:52 ::: 14 APP-155-16(J) be made only by an application in accordance with said article, but not under any of the provisions of Part I of the Arbitration and Conciliation Act, 1996, since Section 9 has been excluded by necessary implication in terms of the agreement.
12 It is contended that since juridical seat of arbitration is in another country, the provisions of the arbitration law of that country which deal with challenges to an arbitral award, mandatorily such provisions will alone apply. Therefore, they contend that the challenge to the award cannot be under Section 34 of the Arbitration Act. According to respondent, the terms of two agreements SSA and SHA providing facility of challenge to the arbitral award to the extent permitted by the law at the seat of arbitration would clearly indicate that parties intended at the time of agreement that challenge to the award could be only at the seat of arbitration, Singapore.
Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:52 ::: 15 APP-155-16(J) 13 Reference is made to Special Leave Petition which came to be withdrawn with a permission to file an appeal under Section 37(1)(a) of the Arbitration Act before the Division Bench which could mean that the petitioners - appellants were entitled to file these two petitions under Section 34 of the Act since the Appeal is a continuation of the original proceedings is also stand of the appellants. 14 Learned Single Judge by referring to clause 15 of the agreement opined that arbitration proceedings being held at Singapore in accordance with International Arbitration Rules, the agreement to arbitrate at Singapore has a closer and real connection with the place where the parties had chosen to arbitrate. Therefore, held arbitration agreement would be governed by law of Singapore and not law of India. He further held that law laid down in Sumitomo Heavy Industries Ltd Vs. ONGC Ltd,1 and National Thermal Power Corporation Ltd Vs. Singer Company & ors, 2 would squarely be applicable to the facts of the present case. 1(1998) 1 SCC 305 2(1992) 3 SCC 551 Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:52 ::: 16 APP-155-16(J) 15 By referring to earlier proceedings, with reference to clause 16.4 of the agreement, learned Judge was of the opinion that the argument of the appellants that clause 16.4 of the petition did not oust Indian law, cannot be accepted. 16 Learned counsel for the appellants relied upon Sumitomo Heavy Industries Ltd Vs. ONGC Ltd (supra), National Thermal Power Corporation Ltd. Vs. Singer Company & Ors (supra).
17 Learned counsel appearing for the respondents relies upon Bhatia International Vs. Bulk Trading S.A (supra), Harmony Innovation Shipping Limited Vs. Gupta Coal India Limited & Anr,1 Reliance Industries Ltd & Anr Vs. Union of India (supra) and Reliance Infrastructure Ltd. Mumbai Vs. Roadway Solution (I) Pvt.Ltd, Pune 2 1(2015) 9 SCC 173, 2 2016(3) Mh.L.J Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:52 ::: 17 APP-155-16(J) 18 It would be relevant to point out the relevant clauses of agreements between the parties. In order to understand the controversy and the jurisdiction issue raised in these matters, one has to refer to Share Subscription Agreement (SSA) dated 21st April 2011 and the relevant clauses are clauses 15, 16.1, 16.1.1, 16.1.2, 16.1.6, 16.1.7, 16.4.
"Clause 15
15. GOVERNING LAW This Agreement shall be governed by an construed in accordance with the laws of the Republic of India without regard to applicable conflict of Laws principles.
Clause 16
16. DISPUTE RESOLUTION 16.1 Arbitration 16.1.1 Any dispute, controversy or claim arising out of or in connection with this Agreement, including any question regarding its existence, validity, interpretation, breach of termination shall be referred to and finally resolved by binding arbitration at the Singapore International Arbitration Centre ("SIAC") in accordance with the Singapore International Arbitration Rules in force at the date of this Agreement ("Rules"), which Rules are deemed to be incorporated by reference into this clause and as may be amended by the rest of this clause.
16.1.2 The seat of arbitration shall be at Singapore......
Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:52 ::: 18 APP-155-16(J) 16.1.6 The parties waive any right to apply to any court of law and/or other judicial authority to determine any preliminary point of law and/or review any question of law and/or the merits, in so far as waiver may be validly made. The parties shall not be deemed, however, to have waived any right to challenge any award on the ground that the tribunal lacked substantive jurisdiction and/or the ground of serious irregularity affecting the tribunal, the proceedings or the award to the extend allowed by the law of the seat of the arbitration.
16.1.7 Nothing, in this Clause 16.1 shall be construed as preventing any party from seeking conservatory or interim relief in any court of competent jurisdiction ...
16.4 Application of Arbitration Act Save for section 9, Part I of the Indian Arbitration and Conciliation Act, 1996 ("the Arbitration Act"), the provisions of Part I of the Arbitration Act shall not apply to the terms of this Agreement."
19 Similarly, by virtue of Shareholders Agreement (SHA) dated 6th May 2011, parties entered into several terms of understanding and the relevant clauses are 18.1, 19.1 and 19.4.
"Clause 18.1 of the said agreement provides that the same shall be governed by and construed in accordance with the laws of Republic of India without regard to applicable conflict Laws principles.
Clause 19.1 provides for arbitration at Singapore International Arbitration Centre in accordance with SIAC Administered Arbitration Rules in force.
Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:52 ::: 19 APP-155-16(J) Clause 19.4 provided that save for section 9 of Part I of the Arbitration Act shall not apply to the terms of that agreement."
20 National Thermal Power Corporation Ltd. Vs. Singer Company (supra), is relied upon by appellants counsel by placing reliance on paras 23 - 25 & 27. It is contended that the normal practice would be the proper law of the arbitration agreement is generally the same as the proper law of the contract, and only in exceptional cases, it need not be so where the proper law of the contract is expressly chosen by the parties. According to him, a presumption would arise where there is no express choice of the law governing the contract as a whole or the arbitration agreement as such, and in such event, presumption may arise that the law of the country where the arbitration is agreed to be held is the proper law of the arbitration agreement. He also contends that so far as the validity of the arbitration agreement, including the effect and the interpretation are governed by its proper law, and such law will decide whether the arbitration clause is wide enough to cover the dispute between the Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:52 ::: 20 APP-155-16(J) parties. He also stresses upon the fact that parties have freedom to choose the law governing an International Commercial Arbitration Agreement, and further contends that where the proper law of the contract is expressly chosen by the parties, such law must, in the absence of an unmistakable intention to the contrary, govern the arbitration agreement which, though collateral or ancillary to the main contract, nevertheless a part of such contract. When proper law of the contract between the parties expressly stipulated to be the laws in force in a particular country and exclusive jurisdiction of the Courts at a particular place, the parties not having chosen expressly or by implication a law different from Indian Law in regard to the agreement contained in the arbitration clause, the proper law governing the arbitration clause is indeed the laws in India.
21 Appellants' counsel also banks upon Sumitomo Heavy Industries Ltd Vs. ONGC Ltd (supra). This was a case where parties to the contract/agreement belonging to different countries agreed upon that arbitrability of the Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:52 ::: 21 APP-155-16(J) dispute to be determined in terms of the law governing the arbitration agreement and the arbitration proceeding has to be conducted in accordance with the curial law and after rendering of the award, enforcement thereof has to be again in accordance with the law governing the arbitration agreement. Learned counsel for the appellants places reliance on paragraph no.10 of the said judgment to contend that the law governing the contract creating substantive rights of the parties in respect of which the dispute has arisen, the proper law of the arbitration agreement, the law governing the obligation of the parties to submit the disputes to arbitration and to honour the award must be the Curial law i.e. the law governing the conduct of the individual reference. He further emphasizes that where there is absence of express agreement, a strong presumption arises that parties intended the curial law to be the law of the 'seat'of the arbitration. According to him, the enforcement process is entirely different since it is subsequent to and independent of the proceedings before the arbitrator since the need to challenge the award arises only if it is being enforced.
Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:52 ::: 22 APP-155-16(J) 22 Respondent's counsel drew our attention to Bhatia International Vs. Bulk Trading S.A,(supra), paragraph no.32 wherein their Lordships opined that provisions of Part I would apply to all arbitrations and to all proceedings relating thereto when such arbitration is held in India. The provisions of Part I would compulsorily apply and parties are free to deviate only to extent permitted by the derogable provisions of Part I. In case, international arbitrations were held outside India, provisions of Part I would apply unless the parties by agreement, express or by implication, exclude all or any of its provisions. In such situation, depending on the terms of agreement, the laws/ rules/regulations agreed upon by the parties would prevail. Therefore, it was opined that any provision from Part I which is contrary to or excluded by that law or rules will not be applicable.
23 In Harmony Innovation Shipping Limited Vs. Gupta Coal India Limited & Anr, (supra) the litigation was in respect of foreign seated international commercial arbitration. The issue arose was whether judgment referred Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:52 ::: 23 APP-155-16(J) in Bharat Aluminium Company Vs. Kaiser Aluminum Technical Services Inc (supra), would apply. Their Lordships in unequivocal terms opined that since there was ample material indicating the intention of the parties through various phrases used in the arbitration agreement, with regard to seat of arbitration, who should be arbitrators and the contract to be governed and construed according to which law, therefore, opined that the seat of arbitration will be at London, and further opined that the contract be governed and construed according to the English law. They further opined that the clauses in the arbitration agreement should be looked into to understand whether a particular clause in question is substantial arbitration clause or a curial/procedural one. Ultimately, opined that law laid down in Bharat Aluminium Company Vs. Kaiser Aluminum Technical Services Inc (supra) is not applicable to agreements entered into prior to 6th September 2012 (date of decision of said case), and opined that the law rendered in Bhatia International Vs. Bulk Trading S.A (supra) is applicable. They further opined that the clear unambiguous terms/clauses stipulated in the Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:52 ::: 24 APP-155-16(J) arbitration agreement clearly points out juridical seat being London and ouster of jurisdiction of Indian Courts. 24 So far as Reliance Industries Ltd & Anr Vs. Union of India (supra), in this case, the Apex Court in detail referred to the law which would be applicable to the filing of the award, enforcement of award, and also the law which provides for setting aside the agreement to arbitrate and the performance of parties.
25 In Reliance Infrastructure Ltd. Mumbai Vs. Roadway Solution (I) Pvt.Ltd, Pune (supra), it was held that the parties to the agreement having agreed to a place of arbitration for all disputes arising out of the said agreement shall be subject to jurisdiction of Mumbai Court. Since no challenge was made to said terms and clauses of agreement, therefore, such terms and clauses are binding on the parties. 26 Going through the above decisions, terms of two agreements SSA and SHA, one has to see what happens in the Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:52 ::: 25 APP-155-16(J) present case with reference to the terms of two agreements in the light of above judgments.
27 So far as factual situation in the earlier proceedings, learned Single Judge as well as Division Bench in the proceedings filed under Section 9 of Arbitration Act opined that in the light of jurisdictional award and interim award being made by Arbitral Tribunal between the same parties arising out of the same agreement in the arbitration proceedings at Singapore determines the jurisdiction of the Arbitral Tribunal, and in the partial award dated 17 th December 2012, it is declared that the parties are governed by Singapore law in terms of arbitration agreement. 28 In the present case, after detail discussion of the judgment of the Single Judge and Division Bench in the earlier proceedings, learned Single Judge was justified in opining that there is finality so far as interpretation of some clauses of SSA and SHA. On perusal of the terms of agreement, clause 16.1.2 clearly mentions that the seat of Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:52 ::: 26 APP-155-16(J) arbitration shall be Singapore. 16.1.6 - First Part clearly indicate that parties have waived their right to apply to any Court of law for determination on any preliminary point of law/review any question of law and merits only in so far as such waiver. They further agree that such waiver shall not be deemed to have included waiver of right to challenge any award on the ground that the Tribunal lacks substantive jurisdiction or the grounds of serious irregularity affecting the Tribunal, the proceedings or the award to the extend allowed by the law of the seat of arbitration. In other words, since the seat of arbitration was Singapore, the parties reserve right to challenge award on the ground that the Tribunal lacks substantive jurisdiction or there exists serious irregularity affecting the proceedings, etc alone.
29 16.4 clearly indicate application of Arbitration Act of 1996. It clearly says except for the purpose of Section 9, provisions of Part I of Indian Arbitration and Conciliation Act, 1996 shall not apply to the terms of the agreement. From reading of the above terms, it is crystal clear that seat of Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:52 ::: 27 APP-155-16(J) arbitration is at Singapore and the parties have waived the right to apply to any Court of law with regard to preliminary point of law as indicated at 16.1.6 except right to challenge award on the ground that the Tribunal lacks jurisdiction, etc. Definitely, this does not mean that the provisions of Part-I of Arbitration Act shall apply to the terms of the agreement.
30 So far as SHA is concerned, the agreement shall be governed by the laws of Republic of India without regard to applicable conflict of laws principles. Clause 19.1 refers to arbitration at SIAC in accordance with the SIAC administered arbitration Rules that were in force. Again, clause 19.4 provides that except invoking provisions of section 9 of Arbitration and Conciliation Act, 1996, the entire Part-I of the 1996 Act is not applicable. Therefore, reading both the agreements with reference to the above clauses, it is crystal clear that 16.4 of SSA can be considered as an amendment to 16.1.1, and 16.1.6 carves out exception to an exception. Reading of clause 16.4 along with clause 19 of SSA and 19.4 Tilak ::: Uploaded on - 08/05/2017 ::: Downloaded on - 09/05/2017 00:17:52 ::: 28 APP-155-16(J) of SHA, there is no scope to understand the terms agreed between the parties otherwise. In other words, except invoking provisions of Section 9 of Arbitration Act, the entire Part I of Arbitration Act of 1996 (Indian Law) is expressly excluded, thereby any challenge made under Section 34 cannot be entertained in terms of law applicable in India. Parties have expressly excluded application of Part I of 1996 Act, except provisions of Section 9 of Part I of Arbitration Act, 1996.
31 In view of the above discussion and reasoning, we find no good ground raised in the arguments of the appellants warranting interference with the opinion expressed by the learned Single Judge while dismissing Arbitration Petition No.690 of 2015 and 757 of 2015.
32 Accordingly, Appeal is dismissed. No order as to costs.
(G.S.KULKARNI, J) (CHIEF JUSTICE)
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