ANALYSIS

Supreme Court while addressing issues in present dispute has established many of its
standings by Overring case of “Bhatia International vs. Bulk Trading S.A” and “Venture
Global Engineering vs. Satyam Computer Services”.
The instant Judgement given by Supreme Court has established the meaning of word “only”
mentioned in section 2(2) of “Arbitration and Conciliation Act” in comparison with Article
1(2) of “UNICITRAL Model law”. the main issue arose in before the Judges was whether the
elimination of the phrase “only” from the Indian Laws gave birth to the understanding that
the application of Part I of the Act will occur even in some instances where the arbitration
was conducted in foreign Country. Previously Court in Bhatia International case had Given
different perspective in order to describe the phrase “only” but in instant case Court by its
logical understanding has overridden the Bhatiya’s decision and held that under
UNICETRAL Model Law the phrase “only” was applicable to restrict extra territoriality to
few Articles that is Article 8,9,35 and 36. But under Indian act there was no scope for extra
territoriality hence therefore it was felt as not important to add it to Indian Legislation.
Supreme Court has also helped in understanding of few differences in the applicability of
meaning. Court highlighted that the distinguishing part mentioned under section 2(7) of the
“Arbitration and Conciliation Act” and its wordings have only mentioned about
differentiation which exists that is domestic award from that of foreign award, not domestic
award from that of International Award. Court has observed clear difference between Part I
and Part II as it applied inn two different fields and it will never overlap
The next important issue dealt and addressed by the court here is applicability of section 34
of the Act. The agreement entered as Arbitration Agreement here has referred the Country
outside India as seat. The Court here gives clarity regarding the matter as to election of
another country as the place where arbitration needs to be conducted. If Arbitration
agreement provides that seat for conducting arbitration is in foreign country then even if the
Agreement states that “Arbitration and Conciliation Act” shall govern such proceedings then
too “Part I of the Act” would not be applicable. hence Part I of the is Applicable only to
Arbitrations who have their seat in India.
The Supreme Court in the judgement given in Bhatia International have already held that
“Part I of the Act” will be applicable to the Arbitral Award made in Countries which are non-
convention nations. This order of the court is set aside in the present case and supreme court
has finally confirmed that “Act leaves a lacuna for enforcement of non-convention awards”.
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By applying a logical mind court noticed that The courts in India don’t have any right to
provide Interim award where Arbitration seat or place is addressed to be outside India. Even
by the understanding of section 9 of the Act we can see that the section talks about interim
grants before and also during Arbitration Proceedings or after making arbitration award but
before enforcement in pursuance to S. 36 of the Act. Hence this understanding makes us clear
that Arbitral Proceeding before the award mentioned under section 36 can only be referred to
Arbitration Proceedings which occur in India. In other words suit or proceedings for interim
injunction cannot be maintained in India whose Arbitration seat is outside India.

CONCLUSION
The final decision given in this case has many positive as well as negative observations. It
has given positive implication for many Indian Investors, Business world where it has proved
helpful to broaden their opportunities and reduces possibility of interference of Indian Courts
in foreign seated Arbitration matters.
The only negative implication is that there are few questions which remain still as
unanswered that is the court has held that only in those Arbitration agreement or contracts
which have taken place after 6 /9/ 2012 i.e. “Part I of the Arbitration and Conciliation Act”
applies only to Arbitration proceedings seated outside India, if the Arbitration agreement has
been formed before 6 / 9/2012 then unless the parties have agreed otherwise Balco decision
will not be applicable. this has been done in order to avoid hardships that the parties would
face whose Arbitration agreement has been concluded based on view observed in Bhatia
International Judgement. Hence There will lot of confusion and hardships to maintain both
the regime by India courts.
From all the above observations we can be clear with regards to the intention of the court.
That is in case of governing law is not Indian and Proceedings take place outside India then
“Part I of The Arbitration and Conciliation Act” will not be applicable in such cases where as
the governing law is Indian and Arbitration is conducted in foreign country then Part I of This
Act will apply. Though Supreme Court has given its order as per its understanding but still
contacting parties need to take their governing laws more seriously in order to avoid future
conflicts. Special attention is needed to be given to Dispute Resolution Clause by considering
all the concerned matters regarded.

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