ENERCON (INDIA) LTD vs. ENERCON GMBH

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

Appellants VERSUS Enercon GMBH & Anr. ...Respondents With CIVIL APPEAL NO.2087 OF 2014 (Arising out of SLP (C) No. 10906 of 2013) J U D G M E N T SURINDER SINGH NIJJAR, J. 1. Leave granted. JUDGMENT 2. These civil appeals have been filed against the order th and judgment dated 5 October, 2012, passed by the Bombay High Court in CWP Nos.7804 of 2009 and 7636 of 2009. The Bombay High Court by the impugned order dismissed both the aforesaid Civil Writ Petitions. 3. Appellants No.2 and 3 (members of the Mehra family) 1 Page 1 and the Respondent No.1 (a company incorporated under the laws of Germany, having its registered office at Aurich, Germany) entered into a joint venture

which can be briefly noticed: JUDGMENT Share Holding Agreement:

entered into a Share Holding Agreement (“SHA”) with the Respondent No.1. In terms of the SHA, the Respondent No. 1 was to hold 51% shares of the Appellant No. 1-Company, and the Appellant Nos. 2 and 3, collectively, were to hold 49% shares. 2 Page 2 Technical Know How Agreement:

JUDGMENT Supplementary Shareholding Agreements: 6. The SHA was subsequently amended by two Supplementary Share Holding Agreements (“SSHAs”)

the said SSHAs, the shareholding of Respondent No. 1 in the Appellant No. 1-Company increased to 56% whilst the shareholding of the Appellant Nos. 2 and 3 was reduced to 44%. 3 Page 3

7. A Supplementary Technical Know-How Agreement

there were discussions between the parties about the JUDGMENT possibility of a further agreement which would cover

May, 2006, these negotiations were recorded in a document titled “Heads of Agreement”. Agreed Principles:

Respondent No. 1 entered into what is known as the 4 Page 4 "Agreed Principles" for the use and supply of the windmill technology. The second page of the Agreed

D. Amendment to Existing Share Holding Agreement. The above agreements will be made to the

executed.”

th 10. On the same day, i.e. 29 September, 2006, Intellectual Property License Agreement (“IPLA”) was JUDGMENT executed between the parties. It appears that Appellant No.2 has signed the IPLA on behalf of the Appellants No. 2 and 3. However, the Appellants have contended that this IPLA is not a concluded contract. According to the Appellants, the draft IPLA was initialled by Appellant No.2 only for the purpose of identification, with the clear understanding that the said draft still contained certain discrepancies which had to be brought in line 5 Page 5 with the Agreed Principles. Thus, the case of the Appellant is that the draft IPLA was not a concluded contract . On the other hand, Respondent No.1 has

various e-mails/letters addressed to each other for substantiating their respective stands. It would be useful to notice here some of the emails and other communication exchanged between the parties: E-mails, letters & Text message: i. 30.09.2006 : A handwritten letter was addressed by Appellant No.2 to Dr. Wobben, Chairman of Respondent No. 2. In this letter, Appellant No.2 admits signing the JUDGMENT IPLA. The fact that IPLA does not provide for E-82 model is also referred to in this letter. ii. 02.10.2006: Dr. Wobben, Chairman of Respondent No.2, addressed a letter to Appellant No.2, stating therein his offer to acquire 6% of Equity shares of the Appellant No.1 Company which were being held by the Mehra Family, for 40 million Euros. iii. 04.10.2006 : Email by one Ms. Nicole Fritsch, on 6 Page 6 behalf of Respondent no.1, wherein it was inter alia stated as follows: “…we will do our utmost to prepare/adapt the agreements

stated that he wishes to buy 12% of shares held JUDGMENT by Appellant No.2 for 40 million Euros. vi. 03.11.2006 : E-mail written by the Appellant No.2 to Dr. Wobben, wherein the aforesaid offer of acquisition of shares of the Appellant No.1 company was rejected. Further, Appellant No.2 wrote that it would be a prudent exercise to put together the IPLA and the relevant amendments to the SHA in good shape, so that Agreed 7 Page 7 Principles get reflected in the documents at the time of their signing. Appellant No.2 also highlighted certain discrepancies between IPLA

Appellant No.2, wherein she apologised for the delay in sending outstanding drafts of the “ Final IPLA, Shareholding Agreement, and other Successive Agreements” . It was also mentioned that there are some discrepancies in the contracts and the Agreed Principles for which the Respondent has to discuss the matter internally. viii. 01.01.2007 : Ms. Fritsch wrote an email to the JUDGMENT Appellant No.2, wherein it was stated that the Respondent No.2 would be sending the revised drafts of the outstanding contracts to the Appellants, so as to let Appellant No.2 and their lawyers verify those drafts. ix. 29.01.2007 : Ms. Fritsch forwarded the amended SHA of 1994, Corporate Name User Agreement, and Successive Technology Licence Agreement 8 Page 8 to Appellant No.2. x. 31.01.2007 : An email was sent to Respondent No.1 by the Appellant No.1, wherein it was

Agreed Principles. 11. The Appellants claim that Respondent No.1, in February, 2007, unilaterally decided to stop all shipments of supplies to India in order to pressurize them to sell the share holding as desired by Dr. Wobben. However in March, 2007, after discussions between the parties, Respondent No.1 resumed supplies. Thereafter, the supplies were stopped once JUDGMENT again in July, 2007. This was followed by institution of the following legal proceedings: LITIGATION: 12. We may notice only those proceedings between the parties that have a bearing on the issues arising before us. 9 Page 9 Derivative Suit: 13. Appellants No.2 and 3 filed a derivative suit (in Civil

resumption of supplies, parts and components. In this suit, Respondent No.1 has taken out an Application under Section 45 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Indian Arbitration Act, 1996’). The Bombay Suit and the Application under Section 45 of the Indian Arbitration st Act, 1996 are pending disposal. On 31 October, 2007, the Bombay High Court, by an interim order without prejudice to the individual contentions of JUDGMENT the parties, directed the Respondent No.1 to resume the supplies to Appellant No.1 until further orders. It appears that initially the supplies were resumed in compliance of the aforesaid order. However, the Appellants claim that the Respondent no.1 after sometime stopped the supplies again. Thereafter, a Contempt Petition was filed before the Bombay High Court at the instance of the Appellants for non- 10 Page 10 compliance of the aforesaid order by Respondent No.1. This contempt petition is pending adjudication. Nomination of Arbitrator : th 14. On 13 March, 2008, a letter was sent on behalf of the Respondent No. 1 to the Appellant Nos. 2 and 3, wherein the Respondent No. 1 invoked the arbitration agreement, contained in Clause 18.1 of the IPLA. The letter nominates Mr. V.V. Veedor QC as the licensors’ arbitrator. It inter-alia stated that “Enercon and WPG are happy to allow EIL to nominate its arbitrator and for the two party (sic) nominated arbitrators to select the third arbitrator, subject to consultation with the JUDGMENT parties. The third arbitrator will act as the Chairman of the Tribunal.” In the aforesaid letter, the Respondent No.1 also identified the issues that require determination through arbitration. Arbitration Claim Form: th 15. On 27 March, 2008, “Arbitration Claim Form” was issued by the Respondents seeking several 11 Page 11 declaratory reliefs in relation to the IPLA from the High Court of Justice, Queens Bench Division, Commercial Court, United Kingdom (“the English High Court”). The

nd annexed to the letter dated 2 April, 2008 sent by the UK Solicitors of Respondent No.1 to the Appellants. st 16. Meanwhile on 31 March, 2008, a letter was addressed by the Appellant No.2 on behalf of himself and Appellant No.3, in response to letter of th Respondent No.1 dated 13 March, 2008, wherein it was stated that since the draft IPLA was not a concluded contract , there is no question of a valid JUDGMENT arbitration agreement between the parties and as such, there is no question of nominating any arbitrator. 17. In response to the aforesaid, a letter was addressed by the UK Solicitors of Respondent to the Appellants nd on 2 April, 2008, stating therein that in the event the Appellants do not nominate their arbitrator within 7 12 Page 12 days of the receipt of the said letter, the Respondents shall proceed under Section 17(2) of the English Arbitration Act, 1996 to appoint their nominee

rd 3 April, 2008 in Daman. The Arbitration Claim Form which had been filed before the English High Court was also served on the Appellant No.1 in Daman th on 4 April, 2008. Daman Suit: th 18. On 8 April, 2008, the Appellants filed Regular Suit No. 9 of 2008 (Daman Suit) before the Court of Civil Judge, Sr. Division, “Daman Trial Court” seeking, inter JUDGMENT alia, a declaration to the effect that the draft IPLA was not a concluded contract and correspondingly there was no arbitration agreement between the parties to th the draft IPLA. On the same day, i.e. 8 April, 2008, the Daman Trial Court passed an order in the favour of the Appellants, wherein the Respondents were directed to maintain status quo with regard to the proceedings initiated by them before the English 13 Page 13 High Court. th 19. Meanwhile on 11 April, 2008, Appellant No.1,

th 24 May, 2008, Mr. Justice B.P. Jeevan Reddy intimated to the Solicitors of the Appellants that the arbitrators felt that there were inherent defects in the arbitration clause contained in the draft IPLA and therefore, the same was unworkable. The letter also expressed the inability of the arbitrators to appoint the th third arbitrator. On 5 August, 2008, a joint letter was addressed by both the nominated arbitrators, wherein it was reiterated that they are unable to appoint the JUDGMENT third and presiding arbitrator. 20. Thereafter, the Respondents filed an Application under Section 45 of the Indian Arbitration Act in the Daman Suit. On the other hand, the Appellants moved an Application for interim injunction ex-parte in the same suit, seeking to restrain Respondents from pursuing the proceedings they had initiated in the 14 Page 14 English High Court (anti-arbitration injunction). The Daman Court dismissed the Application under Section th 45 of the Indian Arbitration Act, 1996 on 5 January,

th arbitration injunction was allowed on 9 January, 2009. Both the aforesaid orders of the Daman Trial Court were challenged by the Respondents by filing four appeals before the District Court of Daman (“Daman Appellate Court”). Daman Appellate Court : 21. The Daman Appellate Court allowed all the appeals th of the Respondents by order dated 27 August, 2009 JUDGMENT and set aside both the orders of the Daman Trial Court. The anti-arbitration injunction was vacated, and the Application under Section 45 of the Indian Arbitration Act, 1996 was allowed. The aforesaid order th dated 27 August, 2009 was challenged by the Appellants herein by filing two writ petitions before the High Court of Bombay, viz. Writ Petition No. 7636 of 2009, filed in respect of the anti-arbitration 15 Page 15 injunction and Writ Petition No. 7804 of 2009, filed in respect of Section 45 of the Indian Arbitration Act.

Bombay High Court : th ordered that the status quo order dated 8 April, 2008, passed by the Daman Trial Court be th continued in Writ Petition No. 7636 of 2009. On 9 September, 2009, the Bombay High Court continued the stay of the reference under Section 45 of the Indian Arbitration Act until the next date of hearing. In the course of hearing of the both writ petitions, the th Bombay High Court, on 25 January, 2010, directed that the interim order(s) granted earlier be continued JUDGMENT until further orders. English Proceedings: 23. In spite of the aforesaid interim order(s), the Respondents filed Arbitration Claim Form 2011 Folio No.1399 before the English High Court, under Section 18 of the English Arbitration Act, 1996 for the constitution of an Arbitral Tribunal under the 16 Page 16 provisions of IPLA. The following two grounds were raised by the Respondents:- A. that the anti-arbitration injunction passed by the

petitions before the Bombay High Court. th 24. On 25 November, 2011, the English High Court passed an order in form of an anti-suit injunction that had the effect of restraining the Appellants from prosecuting/arguing the writ petitions before the Bombay High Court. The Appellants were restrained from approaching the Bombay High Court to clarify whether ad-interim stay granted by it was in place. JUDGMENT th Meanwhile, on 15 February, 2012, the English High Court passed an ex-parte freezing injunction restraining the Appellant No.1 from disposing of its assets in excess of 90 Million Euros. rd On 23 March, 2012, the English High Court (Eder, 25. J.) delivered its judgment, wherein the freezing injunction was discharged. It was inter-alia held in 17 Page 17 Paragraph 51 of the judgment that anti-arbitration injunction of the Bombay High Court was in force. On th 27 March, 2012, the English High Court discharged

here some of these undertakings: (i) to apply forthwith to the Bombay High Court to have the hearing of the Writ Petitions expedited and to take all reasonable and necessary steps within its power to have the writ petitions concluded as expeditiously as possible; (ii) until the determination of the Application filed by the Respondents in the English High Court, not to seek further directions in relation to JUDGMENT prayer (c) of the Writ Petition No.7636 of 2009 – which is a prayer for interim relief. 26. The Appellants took necessary steps for an expeditious listing and hearing of the writ petitions th before the Bombay High Court. However on 11 June, 2012, the Respondents filed an Application before the English High Court for constituting an Arbitral Tribunal. 18 Page 18 th On 26 June, 2012, since the High Court had not disposed of early hearing Application of the Appellants, the Appellants approached this Court by

nd Court vide order /judgment dated 22 June, 2012, requested the Bombay High Court to take up the writ nd petitions for hearing on 2 July, 2012. Resumption of Writ Petitions before Bombay High Court: 27. The hearing of the writ petitions in the Bombay High nd rd Court resumed on 2 July, 2012. On 3 July, 2012, the English High Court passed an order by consent, th adjourning the Respondents’ Application dated 11 JUDGMENT June, 2012, until after the Bombay High Court delivers judgment in the writ petitions, and also vacating the rd th th hearing listed for 3 -4 July, 2012. On 5 October, 2012, the Bombay High Court dismissed the writ petitions by the order/judgment impugned before us, wherein it has been, inter alia, held as under: A. The scope of the enquiry under the Writ Petition No.7804 of 2009 is restricted to the existence of the arbitration agreement and not the main underlying 19 Page 19 contract (which can be challenged before the Arbitral Tribunal); B. Prima facie, there is an arbitration agreement; C. The curial law of the arbitration agreement is India;

location; E. London is not the seat ; F. English Courts have concurrent jurisdiction since the venue of arbitration is London. English Proceedings : th 28. On 5 October, 2012, the English Solicitors of Respondent No.1 addressed a letter to the English Solicitors of Appellant No.1, in relation to re-listing of th their Application dated 11 June, 2012 for appointment of a third arbitrator/re-constitution of the JUDGMENT Arbitral Tribunal. In October, 2012, the parties communicated with each other for getting Applications of both the parties listed, which, apart from the th Application dated 11 June, 2012, included the following: A. An Application notice issued by Appellant No.1 on th 16 October, 2012: i. for a declaration that the undertaking given by 20 Page 20 Appellant No.1 as set out in Appendix A to the th order dated 27 March, 2012 do not prevent it from filing a Special Leave Petition before the

ii. if the undertakings (contrary to Appellant No.1’s contention), do prevent Appellant No.1 from filing Special Leave Petitions before the Supreme Court of India or pursuing the same, then, a variation of the Undertakings to permit such Special Leave Petitions to be filed and, if leave be granted, to permit such appeals to be pursued. JUDGMENT B. An Application notice issued by the Respondents on th 17 October, 2012 for: i. a declaration that Appellant No.1 would be breaching the Undertakings by filing Special Leave Petitions to the Indian Supreme Court. ii. an anti-suit injunction to restrain Appellant No.1 from filing Special Leave Petitions; and iii. expedition for the hearing of the Respondent’s 21 Page 21 th Application issued on 11 June, 2012. 29. In the aforesaid Applications, the English High Court

“Paragraph 32: There are two critical issues with which the Damman (sic) Court and the Bombay High Court have been concerned. First, is there a binding arbitration agreement? Secondly, is the seat of the putative arbitration in London? What has arisen out of the Bombay High Court decision in addition is the question whether there is room for a supervisory jurisdiction in the English Courts where the seat is not in England under the provisions of s.2(4) of the English Arbitration Act.” “Paragraph 60: If the Supreme Court of India were, in due course, to consider that the Bombay High Court was wrong in its conclusion as to the seat of the arbitration or that there was a prima facie valid arbitration or that the English Court had concurrent supervisory jurisdiction, it would be a recipe for confusion and injustice if, in the meantime, the English Court were to conclude that England was the seat of the putative arbitration, and to assume jurisdiction over EIL and the putative arbitration, and to conclude that there was a valid arbitration agreement, whether on the basis of a good arguable case or the balance of probabilities. Further, for it to exercise its powers, whether under s.2(1) or 2(4) or s.18 of the Arbitration Act in appointing a third arbitrator, would create real problems, should the Supreme Court decide differently. JUDGMENT Paragraph 61: These are the very circumstances which courts must strive to avoid in line with a multitude of decisions of high authority, from the Abidin Daver (1984) AC 398 onwards, including E.I. Dupont de Nemours v. Agnew [1987] 2 Lloyd’s Rep 22 Page 22

rd th 30. From 3 December to 14 December, 2012, the learned counsel for the parties made efforts to finalize a draft of the Form of Order and the accompanying undertaking(s) to be submitted to the English High Court; and ultimately, parties agreed to a short hearing before the English High Court. After a th hearing, on 19 December, 2012 the parties again made efforts to finalize the Form of Order. Ultimately th on 15 February, 2013, the English High Court passed JUDGMENT th an order declaring that the undertakings given on 27 March, 2012 (dealt with earlier in Para 25 of this judgment) do not prevent the defendant (Appellant herein) from filing and pursuing the Special Leave Petitions and, if leave be granted, the Substantive Appeals. The English High Court further ordered the Appellant No.1 herein to give some fresh undertaking which will supersede and replace the undertakings 23 Page 23 th given earlier on 27 March, 2012. These undertakings restrain the Appellants herein from seeking an injunction against the Respondents save if this Court

seek an injunction restraining the Respondents from pursuing proceedings instituted in the English High Court against the Appellant on various grounds enumerated in the said undertakings. 31. Thereafter in February, 2013, the order/judgment th dated 5 October, 2012 passed by the Bombay High Court was challenged in this court by way of present appeals. JUDGMENT Submissions: 32. We have heard the learned senior counsel for the parties. I. Re: Concluded Contract: 33. The first submission of Mr. Rohinton Nariman is that there can be no arbitration agreement in the absence 24 Page 24 of a concluded contract . It was submitted that IPLA is not a concluded contract since it is not in consonance with the Agreed Principles. It was submitted that the

the IPLA and the Agreed Principles. These JUDGMENT discrepancies have been accepted to be present by th the Respondents in the letter dated 24 November, 2006. In fact, the Respondents have never contended that IPLA is in accordance with the Agreed Principles. The Respondents have by their letters th th dated 29 October, 2006 and 24 November, 2006 accepted the primacy of the Agreed Principles. 25 Page 25 34. Further, the Appellants have relied upon the correspondence prior and subsequent to the signing of the IPLA to demonstrate that there is no concluded

correspondence subsequent to the IPLA except to submit that the same refers to agreements other than the IPLA. This, according to the learned senior counsel, is incorrect in view of the fact that email th dated 24 November, 2006 refers to “final IPLA”. According to Mr. Nariman, the outstanding contracts had to be in consonance with the Agreed Principles; therefore, there is no plausible explanation as to why only the IPLA should not be in consonance with the JUDGMENT Agreed Principles. The subsequent correspondence, therefore, necessarily refers to all the four agreements mentioned in the Agreed Principles. 35. Mr. Nariman also pointed out that the reliance upon prior contracts/agreements or correspondence is not permissible to determine whether IPLA is concluded or not. On the contrary, subsequent correspondence and 26 Page 26 contracts can be looked into for the purpose of determining whether the substantive contract containing arbitration agreement is concluded or not. He relied on Godhra Electricity Co. Ltd. And Anr. 1 Vs. The State of Gujarat and Anr. According to Mr. Nariman, subsequent correspondence in this regard clearly demonstrates the unconcluded nature of the IPLA. 36. Mr. Nariman submitted that under Clause 12 of the IPLA, the duration of the IPLA was till the expiry of the last of the patents, and since the patents portfolio was absent, the duration of IPLA could not be ascertained. He pointed out that the Respondents have wrongly JUDGMENT contended that the IPLA has been concluded as the parties have duly signed the same. According to Mr. Nariman, mere signing of a document will not make it a concluded document, if in law, the contract is not concluded . In this context, reliance was placed upon 2 British Electrical vs. Patley Pressings, Harvey 1 (1975) 1 SCC 199 2 [1953] 1 WLR 280 27 Page 27 3 4 vs. Pratt, Bushwall vs. Vortex, Kollipara vs. 5 Aswathanarayana and Dresser Rand vs. Bindal 6 Agro.

37. As noticed above, the primary submission of the Appellants, is that IPLA is not a concluded contract . It was then submitted that since there is no concluded contract , there is no question of an arbitration agreement coming into existence. In any event, the challenge to the existence of the substantive agreement is a matter required to be determined by the Court seized of the matter in the exercise of JUDGMENT jurisdiction under Section 45 of the Indian Arbitration Act, 1996. Reliance was placed upon Chloro Controls (I) Pvt. Ltd. Vs. Severn Trent Water 7 Purification Inc. & Ors . According to Mr. Nariman, it is no longer open to contend that the question whether the contract is concluded or not can 3 [1965] 1 W.L.R. 1025 4 [1976] 1 WLR 591 5 (1968) 3 SCR 387 6 (2006) 1 SCC 751 7 (2013) 1 SCC 641 28 Page 28 be gone into by the Arbitral Tribunal. III. Re: Un-workability of Arbitration Agreement 38. It was submitted that Clause 18.1 of the IPLA is

Indian Arbitration Act, 1996. It was submitted that the High Court has held that “each of the licensors (Respondents) has to appoint an arbitrator and the licensee (Appellant No.1) is to appoint one arbitrator ……………………………. making it in all three arbitrators”. As such, the High Court has misread Clause 18.3 of the IPLA to mean that each of the licensors (Respondent No.1 and Respondent No.2) has a right to appoint an arbitrator and that the Appellant JUDGMENT No.1 also has the right to appoint an arbitrator. The construction of Clause 18.1 of the IPLA in the aforesaid manner, according to learned senior counsel, is contrary to the expressed terms of Clause 18.1 in the light of the definition of licensor and licensors contained therein as well as certain other provisions of the IPLA. Mr. Nariman also pointed out that the Respondents, however, have not sought to sustain the 29 Page 29 aforesaid reasoning of the High Court. 39. He further submitted that even though an arbitration

omission, nonetheless, such an exercise would not permit the Court to rewrite the clause. In support of the submissions, he relied upon Shin Satellite Public 8 Co. Ltd. Vs. Jain Studio Ltd. He also submitted that the reconstruction of the arbitration clause in the present case cannot be achieved without doing violence to the language to the arbitration clause; and that this would not be permissible in law. For this proposition, reliance was placed upon Bushwall Vs. JUDGMENT Vortex (supra). He submitted that the submissions made by the Respondents fly in the face of Section 45 of the Indian Arbitration Act, 1996 which does not permit the Court to make a reference to arbitration if the arbitration agreement relied upon is incapable of being performed. IV. Re: Seat of Arbitration. 8 (2006) 2 SCC 628 30 Page 30 40. Mr. Nariman submitted that for the purposes of fixing the seat of arbitration the Court would have to determine the territory that will have the closest and

Indian Arbitration Act, 1996 are to apply; substantive law of the contract is Indian law; law governing the arbitration is Indian Arbitration law; curial law is that of India; Patents law is that of India; IPLA is to be acted upon in India; enforcement of the award is to be done under the Indian law; Joint Venture Agreement between the parties is to be acted upon in India; relevant assets are in India. Therefore, applying the ratio of law in ‘ Naviera Amazonica Peruana S.A. JUDGMENT Vs. Compania Internacional De Seguros Del 9 Peru ’, the seat of arbitration would be India. The submission is also sought to be supported by the Constitution Bench decision of this Court in “ Bharat 10 Aluminium Company Vs. Kaiser Aluminium (“ BALCO ”). Mr. Nariman submitted that the interpretation proposed by the Respondents that the 9 1988 (1) Lloyd’s Rep 116 10 (2012) 9 SCC 552 31 Page 31 venue London must be construed as seat is absurd. Neither party is British, one being German and the other being Indian. He submits that the Respondents

be interpreted as making London the seat of arbitration it would: (a) make the English Act applicable when it is not chosen by the parties; (b) would render the parties’ choice of the Indian Arbitration Act, 1996 completely nugatory and otiose. It would exclude the application of Chapter V of the Indian Arbitration Act, 1996 i.e. the curial law provisions and Section 34 of the Indian Arbitration Act, 1996. On the other hand, interpretation propounded JUDGMENT by the Appellants would give full and complete effect to the entire clause as it stands. 41. Mr. Nariman also submitted that there are even more clear indicators within the arbitration clause which show that the parties intended to be governed only by the Indian Arbitration Act, 1996. The clause uses the word Presiding Arbitrator and not Chairman; this 32 Page 32 language is expressly used in Sections 11 and 29 of the Indian Arbitration Act, 1996 as distinct from Section 30 of the English Arbitration Act, 1996.

if the interpretation propounded by the Respondents is accepted, it would lead to utter chaos, confusion and unnecessary complications. This would result in absurdity because the Indian Arbitration Act, 1996 would apply to the process of appointment under Section 11; English Arbitration Act, 1996 would apply to the arbitration proceedings (despite the choice of the parties to apply Chapter V to the Part I of the Indian Arbitration Act, 1996); challenge to the award JUDGMENT would be under English Arbitration Act, 1996 and not under the Part I of the Indian Arbitration Act, 1996; Indian Arbitration Act, 1996 (Section 48) would apply to the enforcement of the award. 43. Lastly, it was submitted by Mr. Nariman that provisions of Section 18 of the English Arbitration Act, 1996 are derogable and in any event the parties have chosen the Indian Court for constitution of Arbitral 33 Page 33 Tribunal. V. Re: Anti Suit Injunction

since the seat of arbitration is India, the Courts of England would have no jurisdiction. Appellants rely upon Oil & Natural Gas Commission Vs. Western 11 Company of North America . Reliance was also placed upon Modi Entertainment Network & Anr. 12 Vs. W.S.G. Cricket Pte. Ltd. , in support of the submission that in exercising discretion to grant an anti-suit injunction, the Court must be satisfied that the defendant is amenable to the personal jurisdiction JUDGMENT of the Court and that if the injunction is declined the ends of justice will be defeated. The Court is also required to take due notice of the principle of comity of Courts, therefore, where more than one forum is available, the Court would have to examine as to which is forum conveniens . 11 1987 SCR (1) 1024 12 (2003) 4 SCC 341 34 Page 34 45. According to Mr. Nariman, all the tests which authorise the Indian Courts to exercise jurisdiction to grant the necessary relief, as laid down are being

Respondents since London is only a venue . Therefore, an injunction ought to be issued restraining the Respondents from pursuing proceedings before the English Court. Mr. Nariman pointed out that the Respondents have given up the contention that Indian and English Courts have concurrent jurisdiction. JUDGMENT 46. Reliance is placed on the judgment of this Court in 13 Harshad Chiman Lal Modi Vs. DLF Universal , in support of the submission that since Respondent No.1 has share holding in a company which has registered office within the territorial limits of the Daman Court, therefore relief can be necessarily granted to the Appellants for restraining Respondent No.1 for 13 (2005) 7 SCC 791 35 Page 35 proceeding in the English Courts. It was also pointed out that Respondent No.1 has approached the Company Law Board under Section 397 of the

Madras High Court against the orders passed by the Intellectual Property Appellate Board, revoking patents in the name of Dr. Wobben in India. Therefore, it has already submitted to the jurisdiction of Courts in India. Mr. Nariman, however, points out that in view of the th orders of the English Court dated 15 February, 2013, restraining the Appellants from seeking an injunction against the Respondents save if this Court determines the seat of the arbitration is India, the Appellants shall JUDGMENT not seek any injunction from this Court, unless this Court determines that the seat of arbitration is in India. Respondents’ Submissions: 47. Dr. Abhishek Manu Singhvi, learned senior counsel, appeared for Respondents No.1 and 2. Dr. Singhvi 36 Page 36 submitted that the over-riding principle for the Courts in Arbitration is to see whether there is an intention to arbitrate. According to Dr. Singhvi, the

to concern itself with. The court in this case, according to Dr. Singhvi, is not required to determine whether there is a concluded contract , under the Indian Contract Act, 1872. The court has to see whether there is a valid Arbitration Agreement. Dr. Singhvi emphasised that it is for the arbitrator to decide the question with regard to the formation of the underlying contract (IPLA). Further, learned senior counsel submitted that the JUDGMENT status of IPLA will not nullify the arbitration clause. The Respondent, according to the learned senior 48. counsel, has to establish the existence of arbitration agreement. Dr. Singhvi, in this context, relied upon Section 7 of the Indian Arbitration Act, 1996 which has three constituents, viz. (i) Intention to arbitrate; (ii) Existence of a dispute; (iii) Existence of some legal 37 Page 37 relationship. Further, it was submitted that an agreement under Section 7 of the Indian Arbitration Act, 1996 does not require any offer and acceptance.

Arbitration Act, 1996 is a drastic departure since the Arbitral Tribunal can rule on its own jurisdiction. Further, it was submitted under Section 16(a) of the Indian Arbitration Act, 1996 the existence of the arbitration clause in the contract would be treated as an agreement independent of the contract. Learned senior counsel also brought to our attention Section 45 of the Indian Arbitration Act, 1996 and its interpretation by this court in Chloro Controls India JUDGMENT Pvt. Ltd. v. Severn Trent Water Purification Inc (supra) . In the aforesaid case, this Court, in Para 120, relied upon the earlier judgment of National Insurance Company Ltd. V. Bhogara Polyfab Pvt. 14 Ltd. , and categorised the issues that have to be decided under Section 45 as follows: A. The issues which the Chief Justice/his designate will have to decide: the question as to whether there is 14 (2009) 1 SCC 267 38 Page 38 an arbitration agreement. B. The issues which the Chief Justice/his designate may choose to decide or leave them to be decided by the Arbitral Tribunal: the question as to whether

claim. C. The issues which the Chief Justice/his designate should leave exclusively to the Arbitral Tribunal. The question concerning the merits or any claim involved in the arbitration. 50. Dr. Singhvi then submitted that leaving aside the question of un-workability of the arbitration clause for the moment, the intention of the parties in the instant case may be determined from the following clauses of IPLA: “17 GOVERNING LAW 17.1 This Agreement and any dispute of claims arising out of or in connection with its subject matter are governed by and construed in accordance with the Law of India. JUDGMENT 18. DISPUTES AND ARBITRATION 18.1 All disputes, controversies or differences which may arise between the Parties in respect of this Agreement including without limitation to the validity, interpretation, construction performance and enforcement or alleged breach of this Agreement, the Parties shall, in the first instance, attempt to resolve such dispute, controversy or difference through mutual consultation. If the dispute, controversy or difference is not resolved through mutual consultation within 30 days after 39 Page 39

18.2 * 18.3 A proceedings in such arbitration shall be conducted in English. The venue of the arbitration proceedings shall be in London. The arbitrators may (but shall not be obliged to) award costs and reasonable expenses (including reasonable-fees of counsel) to the Party (ies) that substantially prevail on merit. The provisions of Indian Arbitration and Conciliation Act, 1996 shall apply. The reference of any matter, dispute or claim or arbitration pursuant to this Section 18 or the continuance of any arbitration proceedings consequent thereto or both will in no way operate as a waiver of the obligations of the parties to perform their respective obligations under this Agreement.” JUDGMENT 51. Dr. Singhvi also drew our attention to the fact that the Heads of the Agreement have been accepted to be final and binding and that the parties have irrevocably accepted the Arbitration Agreement contained in Clause 18. It was also brought to our notice that the said document has been signed by the Appellant No.1 and Respondent No.1. 40 Page 40 52. Learned Senior Counsel also submitted that an arbitration agreement would include the following: a. Intention to arbitrate;

C. Some law (i.e. proper law) to settle the Disputes (which in this case is Indian Law) D. Does the arbitration clause cover all disputes or is there a carve out? In this case the clause covers all disputes. E. Substantive Law to Arbitrate. Here it is the Indian Arbitration Act, 1996. It was further submitted that since all the essential elements of the arbitration are present, clumsy drafting will not make any difference in interpretation of the Arbitration clause. JUDGMENT 53. The next submission of Dr. Singhvi, broadly put, is that the arbitration clause is not un-workable. The crucial question in this context is not whether the Arbitration Clause could be differently drafted, but the clause has to be seen in the manner it has been drafted. Dr. Singhvi submitted that in fact there is no mismatch between different parts of the clause. The clause, according to Dr. Singhvi, talks of three 41 Page 41 arbitrators: one by the licensee, one by the licensor. The implication is that the third one is to be appointed by the two arbitrators. Dr. Singhvi submits that the

by the draftsman. This can be supplied by the Court to make the arbitration clause workable. 54. It was further submitted that the missing sentence in the arbitration clause can be supplied with the aid of some of the provisions of the Indian Arbitration Act, 1996. In this context, learned senior counsel brought to our attention Sections 10 (1) and (2) read with JUDGMENT section 11 of the Indian Arbitration Act, 1996. Section 10 (1) and 2 read as: “10. Number of arbitrators. (1) The parties are free to determine the number of arbitrators, provided that such number shall not be an even number. (2) Failing the determination referred to in sub- section (1), the arbitral tribunal shall consist of a sole arbitrator.” Section 11(1) & (2) reads as: Appointment of arbitrators. 42 Page 42 (1) A person of any nationality may be an arbitrator, unless otherwise agreed by the parties.

object underlying Sections 10 and 11 is to avoid failure in appointment of arbitrators. In fact, the Respondents tried to avoid the failure by making a concession to let the third arbitrator to be the Presiding Arbitrator. The th Letter/email dated 13 March, 2008 clearly demonstrates this intention of Respondents. It was also submitted that the Appellant is determined to avoid the arbitration. Dr. Singhvi submitted that there exists a manifest intention to refer disputes JUDGMENT to arbitration and even if there is lacuna it can be cured. Furthermore, according to Dr. Singhvi, the number of arbitrators is only machinery and, therefore, its failure cannot affect the Arbitration Clause. Learned senior counsel relied upon the law laid down in MMTC v. Sterlite Industries (India) 15 Ltd., Shin Satellite Public Co. Ltd. v. Jain 15 AIR 1997 SC 605 Para 8-13 43 Page 43 Studios Ltd., (supra) Visa International Ltd. v. 16 Continental Resources (USA) Ltd., Jagdish 17 Chander v. Ramesh Chander & Ors., Smt. Rukmanibai Gupta v. Collector, Jabalpur & 18 19 Ors., and Nandan Biometrix Ltd. v. D.I. Oils. After taking us through the afore cited cases, Dr. Singhvi submitted that the parties in the instant case had expressed an intention to arbitrate and that there is no contrary intention. 56. The next submission of Dr. Singhvi is that the IPLA is final. It was submitted that IPLA was to succeed the Know How Agreement that contained an Arbitration Clause. Learned Senior counsel brought to our JUDGMENT attention following provisions of the Heads of Agreement on a Proposed IPLA dated 23.05.2006: “1.6 The Parties have discussed intensively the most appropriate structure and arrangements reflected in the draft IPLA dated 22, May 2006 attached as ANNEX 1 (“Draft IPLA”). This draft IPLA expresses the final views of the parties and provides for detailed terms whereunder Enercon will make available to EIL the benefit of all its technology including patents, design rights, copyrights, trademarks and know how 16 (2009) 2 SCC 55, Paras 24-25 17 (2007) 5 SCC 719, pp. 7-8 18 (1980) 4 SCC 556, pp. 6-7 19 (2009) 4 SCC 495 , pp. 26-30 & 40 44 Page 44 relating to the Products, including but not limited to: …………………………………………………………………….” “3. GOVERNING LAW AND JURISDICTION

3.3 The parties irrevocably agree that Clause 18 of the proposed draft IPLA shall apply to settle any dispute or claim that arises out or in connection with this memorandum of understanding and negotiations relating to the proposed IPLA.” “4.1 This Heads of Agreement represents the good faith intentions of the parties to proceed with the proposed IPLA on the basis of the Draft IPLA but is not legally binding and creates no legal obligations on either party. Its sole purpose is to set out the principles on which the parties intend in good faith to negotiate legally definitive agreements.” JUDGMENT 57. Learned Senior Counsel also pointed out the email sent on 27.06.2006 by Nicole Fritsch on behalf of Respondents to the Appellant No.2 and also the email sent by Appellant No.2 on 16.09.2006 to Nicole Fritsch in context of the submission that IPLA is final. These emails have already been noticed in the earlier part of this judgment. 45 Page 45 58. It was also pointed out that the Appellant by his th letter dated 30 September, 2006 expressly admitted to having signed the IPLA. Thus, it was submitted that

now a presumption of validity in favour of IPLA being a concluded contract , reliance was sought to be placed upon Grasim Industries Ltd. & Anr. v. Agarwal 20 Steel and J.K. Jain v. Delhi Development 21 Authority. 59. Dr. Singhvi also brought to our notice that the execution and finality of the IPLA is also demonstrated by the fact that first page of Heads of Agreement JUDGMENT rd dated 23 May, 2006 reads as “A PROPOSED INTELLECTUAL PROPERTY LICENSE AGREEMENT.” Whereas, the word proposed or draft is conspicuously th absent in the IPLA dated 29 September, 2006. This, according to the learned senior counsel, shows that the IPLA was a concluded contract . Dr. Singhvi th further submitted that on 29 September, 2006 three 20 (2010) 1 SCC 83, p6 21 (1995) 6 SCC 571 46 Page 46 drafts, viz. Successive Technical Transfer Agreement, Name Use License Agreement and amendments to the existing Shareholders Agreement were ready and

negotiated. Admittedly, none of these agreements were initialled, let alone signed by the parties. This, according to Dr. Singhvi, is a clear indication that the parties were aware of the documents that were to be finalised between them and also of the documents that were required to be executed. This fact was also relied upon to support the contention that IPLA is a final and concluded agreement that was knowingly and willingly executed by Appellant No.2. To add JUDGMENT credibility to this submission, learned senior counsel pointed out that ‘E-82 Model’ is expressly excluded from the product description in the IPLA. This according to Dr. Singhvi, is a deviation from the earlier agreement, and it has been acknowledged by the Appellant. Dr. Singhvi also pointed out the difference as to the provision of royalty between the IPLA and earlier draft to support his contention. 47 Page 47 60. The next set of submissions made by Dr. Singhvi relate to the seat of arbitration. Learned senior

The terms that are normally used to denote seat are “ venue ”, “place ” or “ seat ”. According to the learned senior counsel, the court cannot adopt a semantic approach. It was also submitted that under sub sections (1), (2) and (3) of Section 20 of Arbitration Act, 1996 the term ‘place’ connotes different meanings. Under Section 20(1), place means seat of arbitration, whereas under section 20(3), place would mean venue . Therefore, the expression “the venue of JUDGMENT arbitration proceedings” will have reference only to the seat of arbitration. It was submitted that all the surrounding circumstances would also show that parties intended to designate England as the seat of arbitration. 61. It was also submitted that all the proceedings between the parties would indicate that there is 48 Page 48 nothing to indicate India as the choice of the seat of arbitration. Learned senior counsel relied upon 22 Shashoua v. Sharma , Dozco India Pvt. Ltd. V. 23 Doosan Infracore Company Ltd. Videocon 24 Industries v. Union of India, Yograj Infrastructure Ltd. V. Ssang Yong Engineering 25 and Construction Ltd. National Agricultural Coop. Marketing Federation India (supra). 62. It was further submitted that three potential laws that govern an arbitration agreement are as follows : 1. The proper law of the contract ; 2. The law governing the arbitration agreement ; 3. The law governing the conduct of the arbitration also known as curial law or lex arbitri. JUDGMENT 63. Reliance was placed upon the following except of Naviera Amazonica Peruana SA ( supra): “……..in the majority of cases all three will be same but (1) will often be different from (2) and (3). And occasionally, but rarely, (2) may also differ from (3).” 22 (2009) 2 LLR 376 23 (2011) 6 SCC 179 (Paras 4,15 and 18) 24 (2011) 6 SCC 161 (Paras 3 and Paras 20 to 23) 25 (2011) 9 SCC 735 (Paras 46-52) 49 Page 49 64. The next submission of Dr. Singhvi is that law of the seat dictates the curial law, and that the proper law of the arbitration agreement does not overwhelm law of

important to determine the seat . If place is designated then curial law will be that of such place. Dr. Singhvi relied on the ratio of Naviera and submitted that the proper law, law of arbitration and the curial law have all been expressly mentioned in the present case. It was also submitted that in the present case London as venue has to be interpreted having conferred London the status of seat , unless some contrary intention has been expressed. JUDGMENT 65. According to Dr. Singhvi, closest connection test is completely irrelevant when the parties have specified all the three laws applicable in a contract. Further, close connection test is to be applied only when nothing has been mentioned in the agreement. The effort of the court is always to find the essential 50 Page 50 26 venue . He relied upon Dicey, Morris & Collins to submit that in most cases, seat is sufficiently indicated by the country chosen as the place of the arbitration.

66. Dr. Singhvi relied heavily on the ratio of the law laid down in Naviera (supra). Reliance was also placed 27 upon the cases of C vs. D. and Union of 28 India v/s McDonnel. He also relied upon the ratio of Balco in support of the submission that London is the seat of arbitration. Particular reference was made to Paras 75,76, 96, 100, 104, 113, 116 and 117 of BALCO’s judgment to submit that since the seat is JUDGMENT outside India, only those provisions of Part I of the Indian Arbitration Act, 1996 will be applicable, which are not inconsistent with the English Law, i.e., English Arbitration Act, 1996. Anti-Suit injunction: 67. Dr. Singhvi submitted that the prayer of Appellants 26 Dicey, Morris & Collins Fifteenth Edition at 16-035. 27 (2007) 2 Lloyd’s Law Reports 367 28 (19993) 2 Lloyd’s Rep 48 51 Page 51 for an anti suit injunction is subject to determination by this court that the seat is India. Dr. Singhvi, however, argued that such an injunction be denied

grant of such an injunction. The Respondents relied upon the judgment of this court in Modi Entertainment Network v. W.S.G. Cricket Pte. Ltd. (supra) to submit that the present case does not fall within any, let alone all, of the parameters set out in the aforesaid case that determine the grant of an anti-suit injunction. 68. Mr. C.U. Singh, learned senior advocate, appeared JUDGMENT for Respondent no.2. Mr. Singh adopts the submissions made before this court by Dr. Singhvi. Besides, Mr. Singh submitted that after the enactment of the Indian Arbitration Act, 1996 the distinction between the seat and the venue has blurred. The term that has been used by the Parliament is ‘place’ which denotes the place of physical sitting of the Arbitral Tribunal. This is the place which governs the curial 52 Page 52 law. However, Arbitrators have been given the flexibility to hold meetings anywhere. He also relied upon the judgment of this court in Chloro (supra)

(i) Is the IPLA a valid and concluded contract ? JUDGMENT (ii) Is it for the Court to decide issue No. (i) or should it be left to be considered by the Arbitral Tribunal? (iii) Linked to (i) and (ii) is the issue whether the Appellants can refuse to join arbitration on the plea that there is no concluded IPLA? (iv) Assuming that the IPLA is a concluded contract ; is the Arbitration Clause 18.1 vague and unworkable, as observed by both the Arbitrators i.e. Mr. V.V. Veeder QC and Mr.

53 Page 53 Justice B.P. Jeevan Reddy? (v) In case the arbitration clause is held to be workable, is the seat of arbitration in London or in India?

jurisdiction for taking such measures as required in support of the arbitration as the venue for the arbitration proceedings is London? (vii) Linked to (v) & (vi) is the issue whether the Appellants are entitled for an anti-suit injunction? These, of course, are only broad based issues; many other supplementary questions will have to be examined in order to give a definitive determination. JUDGMENT Our Conclusions : Issues (i), (ii) and (iii) 70. Is the IPLA a valid and a concluded contract ? Is it for the Court to decide this issue or have the parties intended to let the arbitral tribunal decide it? 54 Page 54 71. The Bombay High Court upon consideration of the factual as well as the legal issues has concluded that “there can be no escape for the Appellants from the

a strong circumstance in arriving at a prima facie conclusion as enunciated in Shin-Etsu Chemicals Co. Ltd.’s case for referring the parties to arbitration.” 72. The Daman Trial Court on the basis of the material on record came to the conclusion that IPLA was not a concluded contract for the want of free consent, and was executed due to undue influence, fraud, JUDGMENT misrepresentation and mistake. It further held that the plaintiffs (the Appellants herein) would suffer heavy economic loss if the arbitration is held at London. These findings were reversed by the Daman Appellate Court. It was held that since IPLA has been signed by the parties, there was a valid arbitration agreement for reference of the disputes to arbitration. It was also held that assuming that there was some defect in the 55 Page 55 methodology for appointment of the arbitrators that would not come in the way of enforcement of the arbitration agreement. The Daman Appellate Court

(plaintiffs) could not raise a grievance as regards the jurisdiction of the English Courts. 73. Mr. R.F. Nariman, learned senior counsel, appearing for the Appellants has vehemently argued that there is neither a concluded IPLA between the parties nor is there a legally enforceable arbitration agreement. In any event, the arbitration can not proceed as the JUDGMENT arbitration clause itself is unworkable. As noticed earlier, learned senior counsel has submitted that in the absence of a concluded contract , there can be no arbitration agreement. In short, the submission is that there can be no severability of the arbitration clause from the IPLA. Since the IPLA is not a concluded contract there can be no arbitration agreement. 56 Page 56 74. On the other hand, Dr. Singhvi has submitted, as noticed earlier, that the intention of the parties to arbitrate is clear. Even if the existence of the main

clause. The submission of Dr. Singhvi is that the absence of IPLA will not nullify the arbitration clause. 75. We find considerable merit in the submissions made by Dr. Singhvi. It cannot be disputed that there is a legal relationship between the parties of a long standing. Section 44 of the Indian Arbitration Act, 1996 applies to arbitral awards of differences between persons arising out of legal proceedings. Such a JUDGMENT relationship may be contractual or not, so long it is considered as commercial under the laws in force in India. Further, that legal relationship must be in pursuance of an agreement, in writing, for arbitration, to which the New York Convention applies. The court can decline to make a reference to arbitration in case it finds that the arbitration agreement is null and void , inoperative or incapable of being performed. There are 57 Page 57 no pleadings to that effect in the plaint. The Daman Trial Court findings that the contract is null and void and not based on free consent were rendered in the

advantage of his friendship with Mr. Yogesh Mehra. But that seems to be more of a sulk than a genuine grievance. Even if one accepts the truth of such a statement, the same is not reflected in the pleadings. Therefore, no serious note could be taken of that statement at this stage. The Daman Appellate Court upon reconsideration of the pleadings found that there is no plea to the effect that the agreement is null, void or incapable of being performed. Justice Savant has JUDGMENT not examined the pleadings as the issue with regard to the underlying contract has been left to be examined by the Arbitral Tribunal. Before us also, it is not the plea of the Appellants that the arbitration agreement is without free consent , or has been procured by coercion, undue influence, fraud, misrepresentation or was signed under a mistake . In other words, it is not claimed that the agreement is 58 Page 58 null and void , inoperative and incapable of being performed as it violates any of the provisions under Sections 14, 15, 16, 17, 18, 19, 19A and 20 of the

containing the arbitration clause/agreement, is not a concluded contract. This, in our opinion, would not fall within the parameters of an agreement being “null and void, inoperative or incapable of being performed” , in terms of Sections 14, 15, 16, 17, 18, 19 and 20 of the Indian Contract Act, 1872. These provisions set out the impediments, infirmities or eventualities that would render a particular provision of a contract or the whole contract void or voidable. JUDGMENT Section 14 defines free consent ; Section 15 defines coercion in causing any person to enter into a contract. Section 16 deals with undue influence. Fraud in relation to a contract is defined under Section 17; whereas misrepresentation is defined and explained under Section 18. Section 19 states that “w hen consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement is a contract 59 Page 59 voidable at the option of the party whose consent was so caused”. Section 19A gives the party who was unduly influenced to enter into a contract an option similar to the one provided by the preceding section. Section 20 makes an agreement void where both the parties thereto are under a mistake as to a matter of fact. In our opinion, all the aforesaid eventualities refer to fundamental legal impediments. These are the defences to resist a claim for specific performance of a concluded contract ; or to resist a claim for damages for breach of a concluded contract . We agree with Savant, J. that the issue as to whether there is a concluded contract between the parties can be left to the Arbitral Tribunal, though not for the same reasons. JUDGMENT 76. In our opinion, all the issues raised by the Appellants about the non-existence of a concluded contract pale into insignificance in the face of “Heads of Agreement rd on the proposed IPLA dated 23 May, 2006”. Clause 3 of the Heads of Agreement provides as under:- “3. Governing Law and Jurisdiction 3.1 This paragraph is legally binding. 60 Page 60 3.2 This Heads of Agreement is (and all negotiations and any legal agreements prepared in connection with the IPLA shall be) governed by and construed in accordance with the law of Germany.

77. A bare perusal of this clause makes it abundantly clear that the parties have irrevocably agreed that clause 18 of the proposed IPLA shall apply to settle any dispute or claim that arises out of or in connection with this Memorandum of Understanding and negotiations relating to IPLA. It must also be noticed here that the relationship between the parties formally

JUDGMENT entered into the first SHA and TKHA. Even under that

disputes by arbitration. The TKHA also contained an identically worded arbitration clause, under Article XIX. This intention to arbitrate has continued without waiver. In the face of this, the question of the concluded contract becomes irrelevant, for the purposes of making the reference to the Arbitral 61 Page 61 Tribunal. It must be clarified that the doubt raised by the Appellant is that there is no concluded IPLA, i.e. the substantive contract. But this can have no effect

to resolve all the disputes through Arbitration. Parties can not be permitted to avoid arbitration, without satisfying the Court that it would be just and in the interest of all the parties not to proceed with arbitration. Furthermore in arbitration proceedings, courts are required to aid and support the arbitral process, and not to bring it to a grinding halt . If we were to accept the submissions of Mr. Nariman, we would be playing havoc with the progress of the JUDGMENT arbitral process. This would be of no benefit to any of the parties involved in these unnecessarily complicated and convoluted proceedings. 78. In the facts of this case, we have no hesitation in concluding that the parties must proceed with the Arbitration. All the difficulties pointed out by Mr. Rohinton Nariman can be addressed by the Arbitral 62 Page 62 Tribunal. 79. Further, the arbitration agreement contained in

differences concerning the legal relationship between the parties. It would include the disputes arising in respect of the IPLA with regard to its validity, interpretation, construction, performance, enforcement or its alleged breach . Whilst interpreting the arbitration agreement and/or the arbitration clause, the court must be conscious of the overarching policy of least intervention by courts or judicial authorities in matters covered by the Indian JUDGMENT Arbitration Act, 1996. In view of the aforesaid, it is not possible for us to accept the submission of Mr. Nariman that the arbitration agreement will perish as the IPLA has not been finalised . This is also because the arbitration clause (agreement) is independent of the underlying contract, i.e. the IPLA containing the arbitration clause. Section 16 provides that the Arbitration clause forming part of a contract shall be 63 Page 63 treated as an agreement independent of such a contract.

necessity to ensure that the intention of the parties to resolve the disputes by arbitration does not evaporate into thin air with every challenge to the legality, validity, finality or breach of the underlying contract. The Indian Arbitration Act, 1996, as noticed above, under Section 16 accepts the concept that the main contract and the arbitration agreement form two independent contracts. Commercial rights and obligations are contained in the underlying, JUDGMENT substantive, or the main contract. It is followed by a second contract, which expresses the agreement and the intention of the parties to resolve the disputes relating to the underlying contract through arbitration. A remedy is elected by parties outside the normal civil court remedy. It is true that support of the National Courts would be required to ensure the success of arbitration, but this would not detract from the 64 Page 64 legitimacy or independence of the collateral arbitration agreement, even if it is contained in a contract, which is claimed to be void or voidable or

JUDGMENT 65 Page 65 The aforesaid reasoning has also been approved by a two Judge bench of this Court in T oday Homes and Infrastructure Pvt. Ltd. vs. Ludhiana Improvement

In view of the aforesaid, we are not inclined to accept the submission of Mr. Nariman that Arbitration Agreement will perish as the IPLA has not been finalised . 30 2013 (7) SCALE 327 66 Page 66 Issue (iv) 82. We now come to the next issue that even if there is a

unworkable? Both the Arbitrators, as noticed above, are of the opinion that the parties cannot proceed to arbitration as the arbitration clause is unworkable. The Bombay High Court has taken the view that the arbitration clause is workable as two Arbitrators are to be appointed by the licensors and one by the licensee. We are not inclined to agree with the aforesaid finding/conclusion recorded by the High Court. Respondent No.1 is the licensor and Respondent No.2 JUDGMENT is undoubtedly 100% shareholder of Respondent No.1, but that is not the same as being an independent licensor. It would also be relevant to point out here that before this Court the Respondent has not even tried to support the aforesaid conclusion of the High Court. 83. In our opinion, the Courts have to adopt a pragmatic 67 Page 67 approach and not a pedantic or technical approach while interpreting or construing an arbitration agreement or arbitration clause. Therefore, when

workable within the permissible limits of the law, without stretching it beyond the boundaries of recognition. In other words, a common sense approach has to be adopted to give effect to the intention of the parties to arbitrate. In such a case, the court ought to adopt the attitude of a reasonable business person, having business common sense as well as being equipped with the knowledge that may be peculiar to the business venture. The arbitration JUDGMENT clause cannot be construed with a purely legalistic mindset, as if one is construing a provision in a statute. We may just add here the words of Lord Diplock in The Antaios Compania Neviera SA v 31 Salen Rederierna AB , which are as follows: “If detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business common sense, it must be made to yield to business common sense.” 31 [1985] 1 AC 191 68 Page 68 We entirely agree with the aforesaid observation. This view of ours is also supported by the following judgments which were relied upon by Dr. Singhvi:

alia held that: “25…. No party can be allowed to take advantage of inartistic drafting of arbitration clause in any agreement as long as clear intention of parties to go for arbitration in case of any future disputes is evident from the agreement and material on record including surrounding circumstances. 26. What is required to be gathered is the intention of the parties from the surrounding circumstances including the conduct of the parties and the evidence such as exchange of correspondence between the parties….” Similar position of law was reiterated in Nandan Biomatrix Ltd. (supra), wherein this court observed JUDGMENT inter alia as under: 28. This Court in Rukmanibai Gupta v. Collector, Jabalpur has held (at SCC p. 560, para 6) that what is required to be ascertained while construing a clause is “whether the parties have agreed that if disputes arise between them in respect of the subject-matter of contract such dispute shall be referred to arbitration, then such an arrangement would spell out an arbitration agreement”. 69 Page 69

(original emphasis supplied) 30. The Court is required, therefore, to decide whether the existence of an agreement to refer the dispute to arbitration can be clearly ascertained in the facts and circumstances of the case. This, in turn, may depend upon the intention of the parties to be gathered from the correspondence exchanged between the parties, the agreement in question and the surrounding circumstances. What is required is to gather the intention of the parties as to whether they have agreed for resolution of the disputes through arbitration. What is required to be decided in an application under Section 11 of the 1996 Act is: whether there is an arbitration agreement as defined in the said Act.” 84. It is a well recognized principle of arbitration JUDGMENT jurisprudence in almost all the jurisdictions, especially those following the UNCITRAL Model Law, that the Courts play a supportive role in encouraging the arbitration to proceed rather than letting it come to a grinding halt . Another equally important principle recognized in almost all jurisdictions is the least intervention by the Courts. Under the Indian Arbitration Act, 1996, Section 5 specifically lays down 70 Page 70 that : “Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall

submission of Dr. Singhvi that the arbitration clause as it stands cannot be frustrated on the ground that it is unworkable. 85. Dr. Singhvi has rightly submitted that the un- workability in this case is attributed only to the machinery provision. And the arbitration agreement, otherwise, fulfils the criteria laid down under Section 44 of the Indian Arbitration Act, 1996. Given that two JUDGMENT Arbitrators have been appointed, the missing line that “the two Arbitrators appointed by the parties shall appoint the third Arbitrator” can be read into the arbitration clause. The omission is so obvious that the court can legitimately supply the missing line. In these circumstances, the Court would apply the officious bystander principle, as explained by MacKinnonn, LJ in 71 Page 71 32 Shirlaw v. Southern Foundries, to interpret the clause. In Shirlaw , it was held that:

In construing an arbitration clause, it is not necessary to employ the strict rules of interpretation which may be necessary to construe a statutory provision. The court would be well within its rights to set right an obvious omission without necessarily leaving itself open to the criticism of having reconstructed the clause. JUDGMENT Further, we find support in this context from the following extract of Halsbury’s Laws of England (Vol. 13, Fourth Edition, 2007 Reissue): “The words of a written instrument must in general be taken in their ordinary or natural sense notwithstanding the fact that such a construction may appear not to carry out the purpose which it might otherwise be supposed the parties intended to carry out; but if the provisions and expressions are contradictory, and there are grounds, appearing on the face of the instrument, affording proof of the real 32 [1937 S. 1835] 72 Page 72

86. Mr. Rohinton Nariman had very fairly submitted that it is permissible for the Court to construe the arbitration clause in a particular manner to make the same workable when there is a defect or an omission in it. His only caveat was that such an exercise would not permit the Court to re-write the contract. In our opinion, in the present case, the crucial line which seems to be an omission or an error can be inserted by the Court. In this context, we find support from JUDGMENT judgment of this court in Shin Satellite Public Co. Ltd. (supra) , wherein the ‘offending part’ in the arbitration clause made determination by the arbitrator final and binding between the parties and declared that the parties have waived the rights to appeal or an objection against such award in any jurisdiction. The Court, inter-alia, held that such an objectionable part is clearly severable being 73 Page 73 independent of the dispute that has to be referred to be resolved through arbitration. By giving effect to the arbitration clause, the court specifically noted that the

‘interpretative process’, the Court is rewriting the contract which is in the nature of ‘ novatio’ (sic). The intention of the parties is explicit and clear; they have agreed that the dispute, if any, would be referred to an arbitrator. To that extent, therefore, the agreement

separated and severed by using a 'blue pencil'.” JUDGMENT 87. There is another reason which permits us to take the aforesaid view and accept the submission made by Dr. Singhvi that while construing the arbitration agreement/clause the same can be construed to make it workable, as such an approach is statutorily provided for. For this submission, Dr. Singhvi has rightly relied upon the provision contained in Sections 10 and 11 of the Indian Arbitration Act, 1996. The 74 Page 74 object of these two provisions is to avoid failure of the arbitration agreement or the arbitration clause if contained in contract. Under Section 10(1), there is

an even number. The arbitration clause in this case provides that the arbitral tribunal shall consist of three arbitrators. Further, it must also be noticed that the Respondents have been trying to seek adjudication of disputes by arbitration. As noted earlier, the th Respondent No.2 in its email dated 13 March, 2008 clearly offered that the third and the presiding arbitrator be appointed by the respective arbitrators of the Appellants and the Respondents. On the other JUDGMENT hand, the attitude of the Appellants is to avoid arbitration at any cost. 88. In this context, reliance placed by Dr. Singhvi upon MMTC Limited (supra) is justified. In MMTC, the provisions contained in Sections 10(1) and (2) of the Indian Arbitration Act, 1996 have been held to be machinery provisions by this Court. It was further held 75 Page 75 that the validity of an arbitration agreement does not depend on the number of arbitrators specified therein. The Court declined to render the arbitration

Mr. Rohinton Nariman had rightly not even emphasised that the arbitration agreement itself is illegal. The learned sr. counsel only emphasised that the arbitrators having expressed the view that the arbitration clause is unworkable, the parties ought not to be sent to the arbitration. Similarly, other provisions contained in Sections 8, 11 and 45 of the Indian Arbitration Act, 1996 are machinery provisions to ensure that parties can proceed to arbitration provided they JUDGMENT have expressed the intention to Arbitrate. This intention can be expressed by the parties, as specifically provided under Section 7 of the Indian Arbitration Act, 1996 by an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement. Such intention can even be expressed in the pleadings of the parties such as statements of claim and defence, in which the existence of the agreement is alleged by one party and not denied by the other. In view of the 76 Page 76 above, we are of the opinion that the parties can be permitted to proceed to arbitration.

Issue No. V/Re: Seat i.e., is the ‘ seat’ of arbitration in London or in India. This is necessarily so as the location of the seat will determine the Courts that will have exclusive jurisdiction to oversee the arbitration proceedings. Therefore, understandably, much debate has been generated before us on the question whether the use of the phrase “ venue shall be in London” actually refers to designation of the seat of arbitration in London. JUDGMENT 90. We find much substance in the submissions of Mr. Nariman that there are very strong indicators to suggest that the parties always understood that the seat of arbitration would be in India and London would only be the “ venue ” to hold the proceedings of arbitration. We find force in the submission made by learned senior counsel for the Appellants that the facts 77 Page 77 of the present case would make the ratio of law laid down in Naviera Amazonica Peruana S.A. (supra) applicable in the present case. Applying the closest

Indian Arbitration Act, 1996 would apply to the arbitration proceedings. By making such a choice, the parties have made the curial law provisions contained in Chapters III, IV, V and VI of the Indian Arbitration Act, 1996 applicable. Even Dr. Singhvi had submitted that Chapters III, IV, V and VI would apply if the seat of arbitration is in India. By choosing that Part I of the Indian Arbitration Act, 1996 would apply, the parties have made a choice that the seat of arbitration JUDGMENT would be in India. Section 2 of the Indian Arbitration Act, 1996 provides that Part I “shall apply where the place of arbitration is in India”. In Balco , it has been categorically held that Part I of the Indian Arbitration Act, 1996, will have no application, if the seat of arbitration is not in India. In the present case, London is mentioned only as a “ venue” of arbitration which, in our opinion, in the facts of this case can not be read as 78 Page 78 the “ seat ” of arbitration. 91. We are fortified in taking the aforesaid view since all

same time contained a clause providing that the JUDGMENT arbitration would be governed by the English law and the procedural law of arbitration shall be the English law. The Court of Appeal summarised the state of the jurisprudence on this topic. Thereafter, the conclusions which arose from the material were summarised as follows: “All contracts which provide for arbitration and contain a foreign element may involve three potentially relevant systems of law: ( 1 ) the law governing the substantive contract; ( 2 ) the law 79 Page 79

formulations, including the third, is that they elide the distinction between the legal localisation of arbitration on the one hand and the appropriate or convenient geographical locality for hearings of the arbitration on the other hand. 92. On the facts of the case, it was observed in Naviera Amazonica case (supra) that since there was no contest on Law 1 and Law 2, the entire issue turned on Law 3, “the law governing the conduct of the JUDGMENT arbitration”. This is usually referred to as the curial or procedural law, or the lex fori . Thereafter, the Court approvingly quoted the following observation from Dicey & Morris on the Conflict of Laws (11th Edn.): “English Law does not recognise the concept of a delocalised arbitration or of arbitral procedures floating in the transnational firmament, unconnected with any 80 Page 80 municipal system of law”. It is further held that “accordingly every arbitration must have a ‘seat’ or ‘locus arbitri’ or ‘forum’ which subjects its procedural

“Where the parties have failed to choose the law governing the arbitration proceedings, those proceedings must be considered, at any rate prima facie, as being governed by the law of the country in which the arbitration is held, on the ground that it is the country most closely connected with the proceedings.” The aforesaid classic statement of the conflict of law rules as quoted in Dicey & Morris on the Conflict of Laws (11th Edn.), Vol. 1, was approved by the House of Lords in James Miller & Partners Ltd. v. Whitworth Street Estates (Manchester) 33 Ltd. Mustill, J. in Black Clawson International Ltd. v. JUDGMENT 34 Papierwerke Waldhof-Aschaffenburg A.G. , a little later characterised the same proposition as “the law of the place where the reference is conducted, the lex fori”. The position of law in India is the same. The Court in Naviera Amazonica , also, recognised 93. 33 [1970] 1 Lloyd’s Rep. 269; [1970] A.C.583 34 [1981] 2 Lloyd’s Rep. 446 at P. 453 81 Page 81 the proposition that “there is equally no reason in theory which precludes parties to agree that an arbitration shall be held at a place or in country X but

decision as it would create enormous unnecessary complexities. Finally it is pointed out that it is necessary not to confuse the legal seat of arbitration with the geographically convenient place or places for holding hearings. In the present case, Dr.Singhvi, it seems to us, is confusing the geographically convenient place , which is London, with the legal seat which, in our opinion, is undoubtedly India. JUDGMENT 94. Further, on examination of the facts in Naviera Amazonica case , the Court of Appeal observed that there is nothing surprising in concluding that these parties intended that any dispute under this policy should be arbitrated in London. But it would always be open to the Arbitral Tribunal to hold hearings in Lima if this was thought to be convenient, even though the seat or forum of the arbitration would remain in 82 Page 82 London. In the present case, with the utmost ease, “London” can be replaced by India, and “Lima” with London.

Indian laws, in our considered opinion, the parties would not have intended to have created an exceptionally difficult situation, of extreme complexities, by fixing the seat of arbitration in London. In view of the above, we are unable to accept the submissions made by Dr. Singhvi that in this case, the term “ venue” ought to be read as seat. JUDGMENT 96. We are also unable to accept the submission made by Dr. Singhvi that in this case the venue should be understood as reference to place in the manner it finds mention in Section 20(1), as opposed to the manner it appears in Section 20(3), of the Indian Arbitration Act, 1996. Such a submission cannot be accepted since the parties have agreed that Curial law would be the Indian Arbitration Act, 1996. 83 Page 83 97. In Balco , it has been clearly held that concurrent jurisdiction is vested in the Courts of seat and venue , only when

judgments of different jurisdictions, as all courts in India would follow the Indian Law. Thus, the reliance placed by D. Singhvi on Balco in this context is misplaced. 98. It is correct that, in virtually all jurisdictions, it is an accepted proposition of law that the seat normally carries with it the choice of that country’s arbitration/Curial law. But this would arise only if the Curial law is not specifically chosen by the parties. JUDGMENT Reference can be made to Balco (supra) , wherein this Court considered a number of judgments having a bearing on the issue of whether the venue is to be treated as seat . However, the court was not required to decide any controversy akin to the one this court is considering in the present case. The cases were examined only to demonstrate the difficulties that the court will face in a situation similar to the one which 84 Page 84 was considered in Naviera Amazonica (supra) . 99. We also do not agree with Dr. Singhvi that parties

Singhvi do not support the proposition canvassed. In fact, the judgment in the case Braes of Doune Wind Farm (Scotland) Limited Vs. Alfred 35 McAlpine Business Services Limited , has considered a situation very similar to the factual situation in the present case. 100. In Braes of Doune, the English & Wales High JUDGMENT Court considered two Applications relating to the first award of an arbitrator. The award related to an EPC (engineering, procurement and construction) contract th dated 4 November, 2005 (the EPC contract) between the claimant (the employer) and the defendant (the contractor), whereby the contractor undertook to carry out works in connection with the provision of 36 35 [2008]EWHC 426 (TCC) 85 Page 85 WTGs at a site some 18 km from Stirling in Scotland. This award dealt with enforceability of the clauses of the EPC contract which provided for liquidated

whilst the defendant sought, in effect, a declaration that the court had no jurisdiction to entertain such an Application and for leave to enforce the award. The Court considered the issue of jurisdiction which arose out of application of Section 2 of the English Arbitration Act, 1996 which provides that: “ 2. Scope of application of provisions .—(1) The provisions of this Part apply where the seat of the arbitration is in England and Wales or Northern Ireland.” JUDGMENT 101. The Court notices the singular importance of determining the location of juridical seat in terms of Section 3, for the purposes of Section 2, in the following words of Akenhead, J.: “ 15 . I must determine what the parties agreed was the ‘ seat ’ of the arbitration for the purposes of Section 2 of the Arbitration Act, 1996 . This means by Section 3 what the parties agreed was the ‘juridical’ seat . The word ‘juridical’ is not an irrelevant word or a word to be ignored in ascertaining what the ‘ seat ’ is. It means and connotes the administration of 86 Page 86 justice so far as the arbitration is concerned. It implies that there must be a country whose job it is to administer, control or decide what control there is to be over an arbitration.” (emphasis supplied)

of the arbitration was in Scotland, the English courts would have no jurisdiction to entertain an Application for leave to appeal. The contractor argued that the seat of the arbitration was Scotland whilst the employer argued that it was England. There were to be two contractors involved with the project. The material clauses of the EPC contract were: “1.4.1. The contract shall be governed by and construed in accordance with the laws of England and Wales and, subject to Clause 20.2 (Dispute Resolution), the parties agree that the courts of England and Wales have exclusive jurisdiction to settle any dispute arising out of or in connection with the contract. JUDGMENT ( a ) … any dispute or difference between the parties to this agreement arising out of or in connection with this agreement shall be referred to arbitration. ( b ) Any reference to arbitration shall be to a single arbitrator … and conducted in accordance with the Construction Industry Model Arbitration Rules, February 1998 Edn., subject to this clause (Arbitration Procedure)…. 87 Page 87

arbitration rules known colloquially as the “CIMAR Rules”. Rule 1 of the aforesaid Rules provided that: “ 1.1. These Rules are to be read consistently with the Arbitration Act, 1996 (the Act), with common expressions having the same meaning.” “ 1.6. ( a ) a single arbitrator is to be appointed, and ( b ) the seat of the arbitration is in England and Wales or Northern Ireland.” The Court was informed by the parties in arguments that the Scottish Court’s powers of control or intervention would be, at the very least, seriously circumscribed by the parties’ JUDGMENT agreement in terms as set out in para 6 of the judgment. It was further indicated by the counsel that the Scottish Court’s powers of intervention might well be limited to cases involving such extreme circumstances as the dishonest procurement of an award. In construing the EPC, the Court relied upon the principles stated by the Court of Appeal in Naviera Amazonica Peruana S.A. 88 Page 88 104. Upon consideration of the entire material, the Court formed the view that it does have jurisdiction to entertain an Application by either party to the

reasons for the decision: “( a ) One needs to consider what, in substance, the parties agreed was the law of the country which would juridically control the arbitration. ( b ) I attach particular importance to Clause 1.4.1. The parties agreed that essentially the English (and Welsh) courts have ‘exclusive jurisdiction’ to settle disputes. Although this is ‘subject to’ arbitration, it must and does mean something other than being mere verbiage. It is a jurisdiction over disputes and not simply a court in which a foreign award may be enforced. If it is in arbitration alone that disputes are to be settled and the English courts have no residual involvement in that process, this part of Clause 1.4.1 is meaningless in practice. The use of the word ‘jurisdiction’ suggests some form of control. JUDGMENT ( c ) The second part of Clause 1.4.1 has some real meaning if the parties were agreeing by it that, although the agreed disputes resolution process is arbitration, the parties agree that the English court retains such jurisdiction to address those disputes as the law of England and Wales permits. The Arbitration Act, 1996 permits and requires the court to entertain applications under Section 69 for leave to appeal against awards which address disputes which have been referred to arbitration. By allowing such applications and then addressing the relevant questions of law, the court will settle such disputes; even if the application is refused, the court will be applying its jurisdiction under the Arbitration Act, 89 Page 89 1996 and providing resolution in relation to such disputes.

( e ) Looked at in this light, the parties’ express agreement that the ‘ seat ’ of arbitration was to be Glasgow, Scotland must relate to the place in which the parties agreed that the hearings should take place. However, by all the other references the parties were agreeing that the curial law or law which governed the arbitral proceedings … establish that, prima facie and in the absence of agreement otherwise, the selection of a place or seat for an arbitration will determine what the curial law or ‘lex fori’ or ‘lex arbitri’ will be, [we] consider that, where in substance the parties agree that the laws of one country will govern and control a given arbitration, the place where the arbitration is to be heard will not dictate what the governing or controlling law will be. JUDGMENT ( f ) In the context of this particular case, the fact that, as both parties seemed to accept in front of me, the Scottish courts would have no real control or interest in the arbitral proceedings other than in a criminal context, suggests that they can not have intended that the arbitral proceedings were to be conducted as an effectively ‘delocalised’ arbitration or in a 90 Page 90 ‘transnational firmament’, to borrow Kerr, L.J.’s words in Naviera Amazonica.

105. In our opinion, Mr. Nariman has rightly relied upon the ratio in Braes of Doune case (supra). Learned senior counsel has rightly pointed out that unlike the situation in Naviera Amazonica (supra), in the present case all the three laws: (i) the law governing the substantive contract; (ii) the law governing the agreement to arbitrate and the JUDGMENT performance of that agreement (iii) the law governing the conduct of the arbitration are Indian. Learned senior counsel has rightly submitted that the curial law of England would become applicable only if there was clear designation of the seat in London. Since the parties have deliberately chosen London as a venue, as a neutral place to hold the meetings of arbitration only, it cannot be accepted that London is the seat of 91 Page 91 arbitration. We find merit in the submission of Mr. Nariman that businessmen do not intend absurd results. If seat is in London, then challenge to the

and VI; Section 11 would be applicable for appointment of arbitrator in case the machinery for appointment of arbitrators agreed between the parties breaks down. This would be so since the ratio laid down in Bhatia will apply, i.e., Part I of the Indian Arbitration Act, 1996 would apply even though seat of arbitration is not in India. This position has been reversed in Balco , but only prospectively. Balco th would apply to the agreements on or after 6 JUDGMENT September, 2012. Therefore, to interpret that London has been designated as the seat would lead to absurd results. 106. Learned senior counsel has rightly submitted that in fixing the seat in India, the court would not be faced with the complications which were faced by the English High Court in the Braes of Doune (supra). In 92 Page 92 that case, the court understood the designation of the seat to be in Glasgow as venue, on the strength of the other factors intimately connecting the arbitration to

connecting it to England, the only reasonable conclusion is that the parties have chosen London, only as the venue of the arbitration. All the other connecting factors would place the seat firmly in India. 107. The submission made by Dr. Singhvi would only be worthy of acceptance on the assumption that London is the seat . That would be to put the cart JUDGMENT before the horse. Surely, jurisdiction of the courts can not be rested upon unsure or insecure foundations. If so, it will flounder with every gust of the wind from different directions. Given the connection to India of the entire dispute between the parties, it is difficult to accept that parties have agreed that the seat would be London and that venue is only a misnomer. The parties having chosen the Indian Arbitration Act, 1996 93 Page 93 as the law governing the substantive contract, the agreement to arbitrate and the performance of the agreement and the law governing the conduct of the

permitted to compel EIL to litigate in England. This would unnecessarily give rise to the undesirable consequences so pithily pointed by Lord Brandon and 36 Lord Diplock in Abidin Vs. Daver . It was to avoid such a situation that the High Court of England & Wales, in Braes of Doune , construed a provision designating Glasgow in Scotland as the seat of the arbitration as providing only for the venue of the arbitration. JUDGMENT 108. At this stage, it would be appropriate to analyse the reasoning of the Court in Braes of Doune in support of construing the designated seat by the parties as making a reference only to the venue of arbitration. In that case, the Court held that there was no supplanting of the Scottish law by the English law, as both the seat under Section 2 and the “ juridical seat ” under Section 3, were held to be in 36 [1984] AC 398 94 Page 94 England. It was further concluded, as observed earlier, that where in substance the parties agreed that the laws of one country will govern and control a

be. 109. In Braes of Doune , detailed examination was undertaken by the court to discern the intention of the parties as to whether the place mentioned refers to venue or the seat of the arbitration. The factual situation in the present case is not as difficult or complex as the parties herein have only designated London as a venue . Therefore, if one has to apply the JUDGMENT reasoning and logic of Akenhead, J., the conclusion would be irresistible that the parties have designated India as the seat . This is even more so as the parties have not agreed that the courts in London will have exclusive jurisdiction to resolve any dispute arising out of or in connection with the contract, which was specifically provided in Clause 1.4.1 of the EPC Contract examined by Akenhead, J. in Braes of 95 Page 95 Doune . In the present case, except for London being chosen as a convenient place/ venue for holding the meetings of the arbitration, there is no other factor

110. We also do not find much substance in the submission of Dr. Singhvi that the agreement of the parties that the arbitration proceedings will be governed by the Indian Arbitration Act, 1996 would not be indicative of the intention of the parties that the seat of arbitration is India. An argument similar to the argument put forward before us by Dr. Singhvi was rejected in C vs. D by the Court of Appeal in England as well as by Akenhead, J. in Braes of Doune . Underlying reason for the conclusion in both the cases was that it would be rare for JUDGMENT the law of the arbitration agreement to be different from the law of the seat of arbitration. 37 111. C v. D the Court of Appeal in England was examining an appeal by the defendant insurer from the judgment of Cooke, J. granting an anti-suit injunction preventing it from challenging an arbitration award in the US courts. The insurance policy provided that “any dispute arising

96 Page 96 under this policy shall be finally and fully determined in London, England under the provisions of the English Arbitration Act, 1950 as amended”. However, it was

the State of New York….” A partial award was made in favour of the claimants. It was agreed that this partial award is, in English law terms, final as to what it decides. The defendant sought the tribunal’s withdrawal of its findings. The defendant also intimated its intention to apply to a Federal Court applying the US Federal Arbitration Law governing the enforcement of arbitral award, which was said to permit vacatur of an award where arbitrators have manifestly disregarded JUDGMENT the law. It was in consequence of such an intimation that the claimant sought and obtained an interim anti-suit injunction. The Judge held that parties had agreed that any proceedings seeking to attack or set aside the partial award would only be those permitted by the English law. It was not, therefore, permissible for the defendant to bring any proceedings in New York or elsewhere to attack the 97 Page 97 partial award. The Judge rejected the arguments to the effect that the choice of the law of New York as the proper law of the contract amounted to an agreement

that the separate agreement to arbitrate contained in Condition V(o) of the policy was itself governed by New York Law so that proceedings could be instituted in New York. The Judge granted the claimant a final injunction. 112. The Court of Appeal noticed the submission on behalf of the defendant as follows: “14. The main submission of Mr Hirst for the defendant insurer was that the Judge had been wrong to hold that the arbitration agreement itself was governed by English law merely because the seat of the arbitration was London. He argued that the arbitration agreement itself was silent as to its proper law but that its proper law should follow the proper law of the contract as a whole, namely, New York law, rather than follow from the law of the seat of the arbitration, namely, England. The fact that the arbitration itself was governed by English procedural law did not mean that it followed that the arbitration agreement itself had to be governed by English law. The proper law of the arbitration agreement was that law with which the agreement had the most close and real connection; if the insurance policy was governed by New York law, the law with which the arbitration agreement had its closest and most real JUDGMENT 98 Page 98 connection was the law of New York. It would then follow that, if New York law permitted a challenge for manifest disregard of the law, the court in England should not enjoin such a challenge.”

JUDGMENT 99 Page 99 17. It follows from this that a choice of seat for the arbitration must be a choice of forum for remedies seeking to attack the award.” (emphasis supplied)

seat of the arbitration was in England and accordingly entertained the challenge to the award. 114. The cases relied upon by Dr. Singhvi relate to the phrase “arbitration in London” or expressions similar thereto. The same cannot be equated with the term “ venue of arbitration proceedings shall be in London.” Arbitration in London can be understood to include venue as well as seat; but it would be rather stretching the imagination if “ venue of arbitration shall be in JUDGMENT London” could be understood as “ seat of arbitration shall be London,” in the absence of any other factor connecting the arbitration to London. In spite of Dr. Singhvi’s seemingly attractive submission to convince us, we decline to entertain the notion that India would not be the natural forum for all remedies in relation to the disputes, having such a close and intimate 100 Page 100 connection with India. In contrast, London is described only as a venue which Dr. Singhvi says would be the natural forum.

seat instead of venue , as the parties had agreed that the ICC Rules would apply to the arbitration proceedings. In Shashoua, the ratio in Naviera and Braes Doune has been followed. In this case, the Court was concerned with the construction of the shareholders’ agreement between the parties, which provided that “the venue of the arbitration shall be London, United Kingdom”. It provided that the arbitration proceedings should be conducted in English JUDGMENT in accordance with the ICC Rules and that the governing law of the shareholders’ agreement itself would be the law of India. The claimants made an Application to the High Court in New Delhi seeking interim measures of protection under Section 9 of the Indian Arbitration Act, 1996, prior to the institution of arbitration proceedings. Following the commencement of the arbitration, the defendant and the joint venture 101 Page 101 company raised a challenge to the jurisdiction of the Arbitral Tribunal, which the panel heard as a preliminary issue. The Tribunal rejected the jurisdictional objection. 116.The Tribunal then made a costs award ordering the defendant to pay $140,000 and £172,373.47. The English Court gave leave to the claimant to enforce the costs award as a judgment. The defendant applied to the High Court of Delhi under Section 34(2)( a )( iv ) of the Arbitration Act, 1996 to set aside the costs award. The claimant had obtained a charging order, which had been made final, over the defendant’s property in UK. The defendant applied to the Delhi High Court for an JUDGMENT order directing the claimants not to take any action to execute the charging order, pending the final disposal of the Section 34 petition in Delhi seeking to set aside the costs award. The defendant had sought unsuccessfully to challenge the costs award in the Commercial Court under Section 68 and Section 69 of the English Arbitration Act, 1996 and to set aside the order giving leave to enforce the award. 102 Page 102 117.Examining the fact situation in the case, the Court observed as follows:

Although, ‘ venue ’ was not synonymous with ‘ seat ’, in an arbitration clause which provided for arbitration to be conducted in accordance with the Rules of the ICC in Paris (a supranational body of rules), a provision that ‘the venue of arbitration shall be London, United Kingdom’ did amount to the designation of a juridical seat ….” JUDGMENT In para 54, it is further observed as follows: “There was a little debate about the possibility of the issues relating to the alleged submission by the claimants to the jurisdiction of the High Court of Delhi being heard by that Court, because it was best fitted to determine such issues under the Indian law. Whilst I found this idea attractive initially, we are persuaded that it would be wrong in principle to allow this and that it would create undue practical problems in any event. On the basis of what I have already decided, England is the seat of the arbitration and since this carries with it something akin to an exclusive jurisdiction clause, as a matter of principle the foreign court should not decide matters which are for this Court to decide in the 103 Page 103 context of an anti-suit injunction .” (emphasis supplied) If the aforesaid observations are applied to the facts

jurisdiction over the disputes between the parties. 118.In Shashoua case (supra), Cooke, J. concluded that London is the seat , since the phrase “ venue of arbitration shall be London, U.K.” was accompanied by the provision in the arbitration clause for arbitration to be conducted in accordance with the Rules of ICC in Paris (a supranational body of rules). It was also noted by Cooke, J. that “the parties have not simply provided for the location of hearings to be in JUDGMENT London……” In the present case, parties have not chosen a supranational body of rules to govern the arbitration; Indian Arbitration Act, 1996 is the law applicable to the arbitration proceedings. 119.Also, in Union of India v. McDonnell Douglas Corpn. , the proposition laid down in Naviera Amazonica Peruana S.A. was reiterated. In this case, the agreement provided that: 104 Page 104

120.Construing the aforesaid clause, the Court held as follows: “On the contrary, for the reasons given, it seems to me that by their agreement the parties have chosen English law as the law to govern their arbitration proceedings, while contractually importing from the Indian Act those provisions of that Act which are concerned with the internal conduct of their arbitration and which are not inconsistent with the choice of English arbitral procedural law.” 121.The same question was again considered by the High Court of Justice, Queen’s Bench Division, Commercial Court (England) in SulameRica CIA Nacional De JUDGMENT Seguros SA v. Enesa Engenharia SA - Enesa . The Court noticed that the issue in this case depends upon the weight to be given to the provision in Condition 12 of the insurance policy that “the seat of the arbitration shall be London, England.” It was observed that this necessarily carried with it the English Court’s supervisory jurisdiction over the arbitration process. It was observed that “this follows from the express 105 Page 105 terms of the Arbitration Act, 1996 and, in particular, the provisions of Section 2 which provide that Part I of the Arbitration Act, 1996 applies where the seat of the

connection between the arbitration agreement itself and the law of England. It is for this reason that recent authorities have laid stress upon the locations of the seat of the arbitration as an important factor in determining the proper law of the arbitration agreement.” The Court thereafter makes a reference to the observations made in C v. D by the High Court as well as the Court of Appeal. The observations made in paragraph 12 have particular relevance JUDGMENT which are as under: “In the Court of Appeal, Longmore, L.J., with whom the other two Lord Justices agreed, decided (again obiter) that, where there was no express choice of law for the arbitration agreement, the law with which that agreement had its closest and most real connection was more likely to be the law of the seat of arbitration than the law of the underlying contract. He referred to Mustill, J. (as he then was) in Black Clawson International Ltd. v. Papierwerke Waldhof- Aschaffenburg A.G. as saying that it would be a rare case in which the law of the arbitration agreement was not the same as the law of the place or seat of the arbitration. Longmore, L.J. also referred to the speech of Lord Mustill (as he had then become) in 106 Page 106

‘that an agreement to arbitrate will normally have a closer and more real connection with the place where the parties have chosen to arbitrate, than with the place of the law of the underlying contract, in cases where the parties have deliberately chosen to arbitrate, in one place, disputes which have arisen under a contract governed by the law of another place’. ( C case , Bus LR p. 854, para 26)” JUDGMENT 122.Upon consideration of the entire matter, it was observed in SulameRica supra that “In these circumstances it is clear to me that the law with which the agreement to arbitrate has its closest and most real connection is the law of the seat of arbitration, namely, the law of England”. It was thereafter concluded by the High Court that the English law is the proper law of the agreement to arbitrate. 107 Page 107 The aforesaid observations make it abundantly clear that the submissions made by Dr. Singhvi cannot be supported either in

have any application. 123.We also do not find any merit in the submission of Dr. Singhvi that the close and the most intimate connection test is wholly irrelevant in this case. It is true that the parties have specified all the three laws. But the Court in these proceedings is required to determine the seat of the arbitration, as the Respondents have taken the plea that the term JUDGMENT “ venue ” in the arbitration clause actually makes a reference to the “ seat ” of the arbitration. 124.It is accepted by most of the experts in the law relating to international arbitration that in almost all the national laws, arbitrations are anchored to the seat /place/situs of arbitration. Redfern and Hunter on th International Arbitration (5 Edn., Oxford University 108 Page 108 Press, Oxford/New York 2009) , in para 3.54 concludes that “the seat of the arbitration is thus intended to be its centre of gravity.” In Balco , it is further noticed

Arbitrators are at liberty to hold meetings at a place which is of convenience to all concerned. This may become necessary as Arbitrators often come from different countries. Therefore, it may be convenient to hold all or some of the meetings of the arbitration in a location other than where the seat of arbitration is located. In Balco , the relevant passage from Redfern and Hunter, has been quoted which is as under: “The preceding discussion has been on the basis that there is only one ‘place’ of arbitration. This will be the place chosen by or on behalf of the parties; and it will be designated in the arbitration agreement or the terms of reference or the minutes of proceedings or in some other way as the place or ‘seat’ of the arbitration. This does not mean, however, that the Arbitral Tribunal must hold all its meetings or hearings at the place of arbitration. International commercial arbitration often involves people of many different nationalities, from many different countries. In these circumstances, it is by no means unusual for an Arbitral Tribunal to hold meetings—or even hearings—in a place other than the designated place of arbitration, either for its own convenience or for the convenience of the parties or their witnesses… It may be more convenient for an Arbitral Tribunal sitting in one country to conduct a JUDGMENT 109 Page 109

of India Vs. McDonald Duglas Corporation (supra) . 125.In the present case, even though the venue of arbitration proceedings has been fixed in London, it cannot be presumed that the parties have intended the seat to be also in London. In an International Commercial Arbitration, venue can often be different from the seat of arbitration. In such circumstances, the JUDGMENT hearing of the arbitration will be conducted at the venue fixed by the parties, but this would not bring about a change in the seat of the arbitration. This is precisely the ratio in Braes of Dounne . Therefore, in the present case, the seat would remain in India. 126.In Naviera Amazonica Peruana S.A. (supra) , the Court of Appeal observed that it would always be open 110 Page 110 to the Arbitral Tribunal to hold the hearings in Lima if this were thought to be convenient, even though the seat or forum of the arbitration would remain in London. Issue No. VI/ Re: Concurrent Jurisdicion: 127.Having held that the seat of arbitration is in India, in our opinion, the Bombay High Court committed an error in concluding that the Courts in England would have concurrent jurisdiction. Holding that the Courts in England and India will have concurrent jurisdiction, as observed on different occasions by Courts in different jurisdictions, would lead to unnecessary complications and inconvenience. This, in turn, would JUDGMENT be contrary to underlying principle of the policy of dispute resolution through arbitration. The whole aim and objective of arbitration is to enable the parties to resolve the disputes speedily, economically and finally. The kind of difficulties that can be caused by Courts in two countries exercising concurrent jurisdiction over the same subject matter have been very succinctly set down by Lord Brandon in 111 Page 111 Abdin Vs. Daveu (supra) – as follows:-

JUDGMENT 128.Once the seat of arbitration has been fixed in India, it would be in the nature of exclusive jurisdiction to exercise the supervisory powers over the arbitration. This view of ours will find support from the judgment of the Court of Appeal in England in recognizing the difficulties that the parties will face in case the Courts in India and England have concurrent jurisdiction. Cooke J. in his judgment in (1) Enercon GMBH (2) 112 Page 112 Wobben Properties GMBH Vs. Enercon (India) th Ltd., dated 30 November, 2012, (2012) EWHC 3711(Comm), observed as under:

15. It cannot, in my judgment, be right that both English and Indian courts should be free to reach inconsistent judgments on the same subject matter, whether or not the current ultimate result in India, which allows for an English court to appoint an arbitrator by virtue of s.2(4) of the English Act, will or will not involve any inconsistent judgment, and whether there is or is not a current issue estoppels which would debar Enercon from contending that London is the seat of the arbitration, which is its primary case, giving rise, as it says, to the court’s power to appoint an arbitrator under s.18 of the English Act by virtue of s.2(1) of that Act and by reference to s.3 of that Act. JUDGMENT xx xxx xx xxx xx 56. Comity and the avoidance of inconsistent judgments require that I should refrain from deciding matters which are possibly going to be decided further in India. It would be a recipe for confusion and injustice if I were not to do so. Issue estoppels is already said to arise on the question of the seat of arbitration and curial law, and that raises very difficult questions for the court to decide. If the stay was lifted, then I could decide the matter differently 113 Page 113 from Savant J. or from a later final decision on appeal in the Supreme Court of India, if that matter went ahead. The Indian courts are seised and should reach, in my judgment, a concluded decision, albeit on an expedited basis.

61. These are the very circumstances which courts must strive to avoid in line with a multitude of decisions of high authority, from the Abidin Daver [1984] AC 398 onwards, including E.I. Dupont de Nemours v. Agnew [1987]2 Lloyd’s Rep 585. The underlying rationale of Eder J.’s judgment leads inexorably, in my view, to the conclusion that the issues to be determined in India, which could otherwise fall to be determined here in England, must be decided first by the Indian courts and that, despite the delay and difficulties involved, the decision of the Indian Supreme Court should be awaited. JUDGMENT 62. It is also fair to point out in this context that, even if I were to decide the seat issue here on the basis of full argument (which I have not heard) 114 Page 114

63. Moreover, it would be a recipe for confusion and injustice, and to back it up with an anti-suit injunction would merely fan the flames for a continued battle, which is contrary to the principles of comity when the position is unclear and the agreement itself is governed by Indian law.” 129.In our opinion, these observations of Justice Cooke foresee the kind of intricate complexities that may arise in case the Courts of India and England were to exercise the concurrent jurisdiction in these matters. JUDGMENT 130.We are unable to agree with the conclusion reached by Justice Savant that the Courts in England would exercise concurrent jurisdiction in the matter. Having concluded that the seat of arbitration is in India, the conclusions reached by the Bombay High Court seem to be contrary in nature. In Paragraph 45, it is concluded that the law relating to arbitration agreement is the Indian Arbitration Act. Interpreting 115 Page 115 Clause 18.3, it is observed as follows:-

131.This conclusion is reiterated in Paragraph 46 in the following words:-

116 Page 116

133.Having said so, the High Court examines the question 117 Page 117 whether the English Courts can exercise jurisdictions in support of arbitration between the parties, in view of London being the venue for the arbitration meetings.

between the parties as regards the seat of the arbitration, having concluded in the earlier part of the judgment that the parties have intended the seat to be in India. This conclusion of the High Court is contrary to the observations made in Shashoua (supra) which have been approvingly quoted by this Court in Balco in (Paragraph 110). On the facts of the case, the Court held that the seat of the arbitration was in England and accordingly entertained the challenge to the award. JUDGMENT 38 134.In A Vs. B again the Court of Appeal in England observed that:- “…..an agreement as to the seat of an arbitration is analogous to an exclusive jurisdiction clause. Any claim for a remedy……as to the validity of an existing interim or final award is agreed to be made only in the courts of the place designated as the seat of arbitration.” (emphasis supplied) 38 [ 2007] 1 Lloyds Report 237 118 Page 118 135. In our opinion, the conclusion reached by Justice Savant that the Courts in England would have

therefore, not sustainable. The Courts in England have time and again reiterated that an agreement as to the seat is analogous to an exclusive jurisdiction clause. This agreement of the parties would include the determination by the court as to the intention of the parties. In the present case, Savant, J. having fixed the seat in India erred in holding that the courts in India and England would exercise concurrent jurisdiction. The natural forum for all remedies, in the JUDGMENT facts of the present case, is only India. Issue (vii)/Re: Anti-Suit Injunction: 136.Having held that the Courts in England would have concurrent jurisdiction, the Bombay High Court on the basis thereof concludes as follows:-

119 Page 119

137.The aforesaid conclusion again ignores the principle laid down by this Court in Oil & Natural Gas Commission Vs. Western Company of North America (supra) , wherein it is held as follows:-

138.Again in the case of Modi Entertainment Network & Anr. (supra), it was held that :- 120 Page 120

further observed that :- “24(2). In a case where more forums than one are available, the court in exercise of its discretion to grant anti-suit injunction will examine as to which is the appropriate forum (forum conveniens) having regard to the convenience of the parties and may grant anti-suit injunction in regard to proceedings which are oppressive or vexatious or in a forum non- conveniens.” 140.Examining these aspects, Eder, J. in fact also came to the conclusion that the anti-suit injunction granted by JUDGMENT the English Court needed at-least to be stayed during the pendency of proceedings in India. The reasons given by Eder, J. in support of the conclusions are as under:-

121 Page 121

per cent. This would be an indicator that the JUDGMENT Respondent No. 1 is actively carrying on business at Daman. This Court considered the expression “carries on business” as it occurs in Section 20 of the Civil Procedure Code in the case of Dhodha House Vs. 39 S.K. Maingi and observed as follows:- “46. The expression “carries on business” and the expression “personally works for gain” connote two different meanings. For the purpose of carrying on 39 (2006) 9 SCC 41 122 Page 122

142.The fact that Daman trial court has jurisdiction over the matter is supported by the judgment of this Court in Harshad Chiman Lal Modi (supra) , which was relied upon by Mr. Nariman. The following excerpt makes it very clear:- “16… ……..The proviso to Section 16, no doubt, states that though the court cannot, in case of immovable property situate beyond jurisdiction, grant a relief in rem still it can entertain a suit where relief sought can be obtained through the personal obedience of the defendant…… The principle on which the maxim was based was that the courts could grant relief in suits respecting immovable property situate abroad by enforcing their judgments by process in personam i.e. by arrest of the defendant or by attachment of his property.” JUDGMENT 143.This apart, we have earlier noticed that the main contract, the IPLA is to be performed in India. The 123 Page 123 governing law of the contract is the law of India. Neither party is English. One party is Indian, the other is German. The enforcement of the award will be in

India as the assets are situated in India. We have also earlier noticed that Respondent No.1 has not only participated in the proceedings in the Daman courts and the Bombay High Court, but also filed independent proceedings under the Companies Act at Madras and Delhi. All these factors would indicate that Respondent No.1 does not even consider the Indian Courts as forum-non-conveniens . In view of the above, we are of the considered opinion that the JUDGMENT objection raised by the Appellants to the continuance of the parallel proceedings in England is not wholly without justification. The only single factor which prompted Respondent No.1 to pursue the action in England was that the venue of the arbitration has been fixed in London. The considerations for designating a convenient venue for arbitration can not be understood as conferring concurrent jurisdiction on 124 Page 124 the English Courts over the arbitration proceedings or disputes in general. Keeping in view the aforesaid, we are inclined to restore the anti-suit injunction granted

144. For the reasons recorded above, Civil Appeal No.2087 of 2014 @ SLP (C) No.10906 of 2013 is dismissed. The findings recorded by the Appellate Court that the parties can proceed to arbitration are affirmed. The findings recorded by the Trial Court dismissing the Application under Section 45 are set aside. In other words, the Application filed by the Respondents for reference of the dispute to arbitration under Section 45 has been correctly allowed by the Appellate Court JUDGMENT as well as by the High Court. The findings of the High Court are affirmed to that extent. All the disputes arising between the parties in relation to the following agreements viz. SHA, TKHA, SSHAs and STKHA, Agreed Principles and IPLA, including the controversy as to whether IPLA is a concluded contract are referred to the Arbitral Tribunal for adjudication. 125 Page 125 145.In the normal circumstances, we would have directed the parties to approach the two learned arbitrators, namely Mr. V.V. Veeder, QC and Mr. Justice B.P.

in view the peculiar facts and circumstances of this case and the inordinate delay which has been caused due to the extremely convoluted and complicated proceedings indulged in by the parties, we deem it appropriate to take it upon ourselves to name the third arbitrator. A perusal of the judgment of Eder, J. gives an indication that a list of three names was provided from which the third arbitrator could possibly be appointed. The three names are Lord Hoffmann, Sir JUDGMENT Simon Tuckey and Sir Gordon Langley. We hereby appoint Lord Hoffmann as the third arbitrator who shall act as the Chairman of the Arbitral Tribunal. 146. In view of the above, Regular Civil Suit No. 9 of 2008, pending before the Court of Civil Judge, Senior Division, Daman; and the Application under Section 45 of the Arbitration Act, 1996 filed in the Civil Suit 126 Page 126 No.2667 of 2007 and Contempt Petition in relation to Civil Suit No.2667 of 2007 pending before the Bombay High Court at the instance of the Appellants are

rendered by the Arbitral Tribunal. This will not preclude the parties from seeking interim measures under Section 9 of the Indian Arbitration Act, 1996. 147. Civil Appeal No.2086 of 2014 @ SLP (C) No.10924 of 2013 is partly allowed as follows: a. The conclusion of the Bombay High Court that the seat of the arbitration is in India is upheld; JUDGMENT b. The conclusion that the English Courts would have concurrent jurisdiction is overruled and consequently set aside; c. The conclusion of the Bombay High Court that the anti-suit injunction granted by the Daman Trial Court has been correctly vacated by Daman Appellate Court is overruled and hence set aside. 127 Page 127 d. Consequently, the Respondents are restrained from proceeding with any of the actions the details of which have been given in the judgment

th of Justice Cooke dated 30 November, 2012. These matters include: All or any of the proceedings/ applications/ reliefs claimed by the Respondents in the Arbitration Claim 2011 Folio 1399, including but not limited to: (1) Application under Section 18 of the English Arbitration Act, 1996; JUDGMENT (2) Injunctions pursuant to Section 44 of the English Arbitration Act, 1996 and /or Section 37 of the Senior Courts Act, 1981. The Respondents are also restrained from approaching the English Courts for seeking any declaration/relief/clarification and/or to institute 128 Page 128 any proceedings that may result in delaying or otherwise affect the constitution of the arbitral tribunal and its proceedings thereafter.

proceed to arbitration in accordance with law. ………………………………..J. [Surinder Singh Nijjar] ……..…………………………………J. (Fakkir Mohamed Ibrahim Kalifulla] New Delhi February 14, 2014. JUDGMENT 129 Page 129