Part I of the Indian Arbitration Act has no application when parties agree and conduct the Arbitration outside India. In IMAX Corporation v. M/s. E-City Entertainment India Pvt. Ltd., [Civil Appeal No. 3885 of 2017] parties agreed that all disputes, ‘shall be finally settled by Arbitration pursuant to the ICC Rules of Arbitration’. They did not choose a seat of Arbitration, presumably aware of Article 14(1) of the ICC Rules. Undoubtedly, ICC could well have chosen a venue in India. “The decision to exclude the applicability of Part I was taken when the ICC chose London after consulting the parties.”
Justice Bobde relied on his own judgment in Ashapura Minechem:
“The mere choosing of the juridical seat of Arbitration attracts the law applicable to such location. In other words it would not be necessary to specify which law would apply to the Arbitration, since the law of the particular country would apply ipso jure.”
“It is clear that the place of Arbitration determines the law that will apply to the Arbitration and related matters like challenges to the Award.”
Neither Ashapura Minechem nor IMAX is a case where a mere foreign seat was agreed upon. The choice of a foreign seat of Arbitration combined with the choice of a foreign lex arbitri or foreign proper law does impliedly exclude Part I. That is a much better proposition to go by.