Implied Exclusion of Part I of the Arbitration Act I

Posted on by Rudrajyoti Nath Ray

Hon’ble Justice Dipak Misra, while attempting to clear a “maze” has perhaps created yet another in Harmony Innovation Shipping Limited v. Gupta Coal India Limited, [Civil Appeal No. 610 of 2015] (“Harmony”). “The Court could have settled the issue of foreign seated Arbitrations Pre-BALCO once and for all.”

Please note: “From the many Post-Bhatia Cases dealing with implied exclusion, only two propositions became relatively well-established: (1) the choice of a foreign proper law, in the absence of a foreign seat of Arbitration, does not impliedly exclude Part I (Citation Infowares, Indtel Technical Services); and (2) the choice of a foreign seat of Arbitration combined with the choice of a foreign lex arbitri or (perhaps) foreign proper law does impliedly exclude Part I (Dozco)” (See, V. Niranjan, “Reliance v Union of India: Implied Exclusion of Part I of the Arbitration Act”).

In Harmony a fine issue came up for thought: The judgment of the Constitution Bench in BALCO was delivered on 06.09.2012. Let us suppose there is an Arbitration Agreement executed prior to that date. However, an addendum is executed between the parties after the pronouncement in BALCO. “Would the execution of the addendum attract the principles laid down in BALCO and oust the jurisdiction of the Indian Courts?” We shall have to wait for another day, another matter for an answer.

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