My Lord, Two Companies, incorporated in India, can Arbitrate outside India?
It is clear, there can be more than one ratio decidendi to a Judgment. Jacobs v. London County Council, (1950) 1 All ER 737 has been followed in State of Gujarat v. M.P. Jadeja, (2013) 2 SCC 300 and in Shayara Bano v. Union of India, (2017) 9 SCC 1.
The elusive expression ‘public policy’ appearing in Section 23 of The Indian Contract Act, 1872 is a relative concept capable of modification in tune with the strides made by mankind in science and law [Gherulal Parakh, 1959 Supp (2) SCR 406; Murlidhar Aggarwal v. State of U.P., (1974) 2 SCC 472]. Is there anything in the ‘public policy of India’ which interdicts the party autonomy of two Indian persons referring their disputes to Arbitration outside India? Atlas Export Industries v. Kotak & Co., (1999) 7 SCC 61 found, there is nothing in either Section 23 or Section 28 of The Indian Contract Act, 1872 which interdicts two Indian parties from getting their disputes Arbitrated outside India. Party autonomy has been held to be the brooding and guiding spirit of Arbitration [Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2016) 4 SCC 126; Centrotrade Minerals & Metal Inc. v. Hindustan Copper Ltd., (2017) 2 SCC 228]. Nothing stands in the way of party autonomy in designating a ‘seat’ of Arbitration outside India even when both parties happen to be Indian nationals.
– Hon’ble Justic R.F. Nariman, Pasl Wind Solutions Private Limited v. GE Power Conversion India Private Limited, [Civil Appeal No. 1647 of 2021].