Seat of Arbitration I

Before 3-Judges in Mankatsu Impex Private Limited v. AirVisual Limited, [Arbitration Petition No. 32 of 2018] it was submitted, i) declaration by 3-Judges in BGS Soma [Later Bench], to the effect 3-Judges in Hardy Exploration [Earlier Bench] did not declare ‘good law’, may not tantamount to an overriding of Hardy Exploration and ii) 3-Judges in BGS Soma ought to have imagined a Larger Bench. Mankatsu Impex held, “we are not inclined to go into the question on the correctness of BGS Soma or otherwise“. The facts and circumstances have caused us to wait. 

The Amendment Act, 2015 has added a Proviso to Section 2(2) as per which, certain provisions of Part I have been made applicable to International Commercial Arbitrations even if the ‘place’ of arbitration is outside India. It is pertinent to note that Section 11 is not included in the Proviso and accordingly, Section 11 has no application to International Commercial Arbitrations with a ‘seat’ outside India.

The ‘seat’ of Arbitration, a vital aspect, determines the applicable law when deciding the Arbitration Proceedings and Arbitration Procedure as well as judicial review over the Arbitration Award. The situs is not just about where an institution is based or where the hearings will be held. But it is all about which Court would have the supervisory power over the Arbitration Proceedings. The intention as to the ‘seat’ of Arbitration should be determined from clauses in the Arbitration Agreement and the conduct of the parties.

On a plain reading of the Arbitration Agreement it is clear that, laws of Hong Kong shall govern the Arbitration Proceedings as well as have power of judicial review over the Arbitration Award.

The seeking of appointment of an Arbitrator under Section 11(6) is dismissed. It is open to approach Hong Kong International Arbitration Centre for appointment of the Arbitrator.”

Hon’ble Justice R. Banumathi, Mankatsu Impex Private Limited v. AirVisual Limited, [Arbitration Petition No. 32 of 2018].