CODE: W09R

U NIVERSITY MOOT COURT SELECTIONS, 2017

BEFORE

T HE HONOURABLE SUPREME COURT OF INDIA

Civil Appeal no. 08/2017

Tel ShodhanLimited (TSL),........PETITIONERS
V

Govt. of Rajasthan& ORS....

....RESPONDENT

A LONG WITH
Civil Appeal no. 19/2017
Man Power Supply Limited(MPSL),...PETITIONERS
V

OGX &ORS..........R ESPONDENT

A LONG WITH
Civil Appeal no. 309/2017.
Oil India Limited(OIL),.....
PETITIONERS
V

TelShodhanLimited(TSL).........R ESPONDENT
MEMORIAL FOR THE APPELLANT /PETITIONERS
-Table of Contents - - Respondent-

TABLE OF CONTENTS
Table of Contents........................................................................................................................I
Statement of Jurisdiction...........................................................................................................V
Statement of Facts....................................................................................................................VI
Arguments Presented.............................................................................................................VIII
Summary of Arguments...........................................................................................................IX
Arguments Advanced...............................................................................................................12
1. Whether the decision of the district court is per-in curium of laws enacted by the
Parliament and laws declared by the Supreme Court in relation to choosing the seat of
arbitration outside India, choice of law governing the proceedings, and substantive
laws of governing the contract?.................................................................................. 12
2. Whether the decision of the district court and action of the Government violates TSLs
fundamental right of trade and occupation guaranteed under Art. 19 of the
Constitution?................................................................................................................16
3. Whether MPSL can be made a party to arbitration proceedings?................................20
4. Whether the High Court was correct in not setting aside the application under S. 34 of
the Arbitration and Conciliation Act of 1996?.............................................................24

Prayer...29

1|Page
-Index of Authorities- - Respondent-

INDEX OF AUTHORITIES

CASES
25
Dozco India Ltd. v. Doosan Infracore Co. Ltd.,(2011) 6 S.C.C. 179....................................27
Addhar Mercantile Private Limited V. Shree Jagdamba Agrico Exports Pvt. Ltd,2015 S.C.C
Online Bom. 7752................................................................................................................18
Bharat Aluminium Corporation v. Kaiser Aluminium Services, (2012) 9 S.C.C. 552.............28
Bharat Aluminium Corporation v. Kaiser Aluminium Services,(2012) 9 S.C.C. 552..............29
Bharat Aluminium Corporation v. Kaiser Technical Services Inc.,(2012) 9 S.C.C. 552.........26
Bharat Starch Industries Ltd. v. Prudent International Shipping and Trading Co.Ltd, 1995
(34) D.R.J. 72.......................................................................................................................22
Bhatia International v. Bulk Trading S.A., (2002) 4 S.C.C. 105..............................................26
Dozco India (P) Ltd.v. Doosan Infracore Co. Ltd, (2011) 6 S.C.C. 179..................................24
Enercon (India) Ltd. v. Enercon Gmbh, (2014) 5 S.C.C. 1......................................................24
Gas Authority of India Ltd. v. Spie Capag, S.A. and Others, 1993 (27) D.R.J. 562................15
Harmony Innovation Shipping Lt. v. Gupta Coal India Ltd, (2015) 9 S.C.C. 172...................25
Heyman v. Darwins Ltd, (1942) A C 356 (A)...........................................................................15
Heyman v. Darwins Ltd, (1942) A.C 356 (A)..........................................................................16
HLS Asia Ltd. v. M/s. Geopetrol International Inc. &Ors,MANU/DE/5636/2012..................22
Jaipur Udhyog Ltd. V. Union Of India And Others,A.I.R. 1975 S.C.1056..............................17
Konkola Copper Mines v. Stewarts & Lloyds of India Ltd, (2013) 5 Bom CR 29...................23
Rakesh S. Kathotia & Anr v. Milton Global Ltd, MANU/MH/1681/2014...............................23
Reliance Industries Ltd. v. Enron Oil & Gas India Ltd.,(2002) 1 All E.R. (Comm.) 59.........28
Reliance Industries Ltd. v. Union of India,.(2014) 7 S.C.C. 603.............................................27
Reliance Industries Ltd. v. Union Of India.,(2014) 7 S.C.C. 603............................................27
Reliance Industries v. Union of India, (2014) 7 S.C.C. 603.....................................................24
Renusagar Power Co Ltd v. General Electric Company and Anotherr,(1984) 4 S.C.C. 679.. 16
Reva Electric Cars Co .(p) Ltd. v. Green Mobil., (2012) 2 S.C.C. 93......................................27
State Trading Corporation Of India Ltd & Others v. The Commercial Tax Officer,A.I.R1963
S.C. 1811..............................................................................................................................17
Sukanya Holdings Ltd. v. Jayesh H. Pandya, (2003) 5 S.C.C. 531.........................................15
TDM Infrastructure Pvt. Ltd. V UE Development India Ltd., (2008) 14 S.C.C. 271..............18
TDM Infrastructure Pvt. Ltd. v. UE Development India Private Ltd, (2008) 14 S.C.C. 271...16

2|Page
-Index of Authorities- - Respondent-

Telco Ltd. vs. State of Bihar, (2000)5 S.C.C 346......................................................................17

V. Rev. Mother Provincial v. State of Kerala and others, 1970 A.I.R. 2079............................17
Videocon Industries Limited v. Union of India, (2011) 6 S.C.C. 161.......................................16
Wales in Sul Amrica Cia National De Seguros SA v. Enesa Engenharia SA, (2012) 1 Lloyd's
Rep. 671...............................................................................................................................25
Whitworth Street Estates (Manchester) Ltd. v. James Miller & Partners Ltd., [1969] 1 W.L.R.
377........................................................................................................................................26
Yograj Infrastructure Ltd. v. Ssang Yong Engg. & Construction Co. Ltd, (2011) 9 S.C.C. 735.
..............................................................................................................................................25
Zee Tele Films Ltd.(M/S) v. Union Of India,A.I.R. 2005 S.C. 2677........................................19

OTHER AUTHORITIES

1 L.M.Singhavi, constitution of India 945 (3rd ed. 2013).........................................................19

1Durga Das Basu,Shorter Constitution of India311,(14thed 2011)..........................................18
1L.M.Singhavi,Constitution of India 945 (3rd ed.2013)...........................................................19
1L.M.Singhvi,Constitution of India947(3rded 2013)................................................................18
A Aritical Study Of Fundamental Rights Available To Corporate Bodies With Reference To
Leading Case ,( Oct. 24, 2013)Https://Researchersclub.Wordpress.Com/2013/10/24/A-
Critical-Study-Of-Fundamental-Rights-Available-To-Corporate-Bodies-With-Reference-
To-Leading-Cases/...............................................................................................................16
A Critical study of Fundamental Rights Available to Corporate Bodies With Reference to
Leading Cases (oct.24,2013),Https://Researchersclub.Wordpress.Com/2013/10/24/A-
Critical-Study-Of-Fundamental-Rights-Available-To-Corporate-Bodies-With-Reference-
To-Leading-Cases/...............................................................................................................16
India: Can Two Indian Parties Opt For A Foreign Seat Of Arbitration: An Unresolved
Question!
(sep.20,2016),http://www.mondaq.com/india/x/528408/Arbitration+Dispute+Resolution/C
an+Two+Indian+Parties+Opt+For+A+oreign+Seat+Of+Arbitration+An+Unresolved+Ques
tion........................................................................................................................................17
India: Whether two Indian Parties Can Choose a Foreign Seat and Exclude The Applicability
Of Part I Of The Arbitration And Conciliation Act, 1996( Aug. 20, 2015),.........................18
Moot Proposition......................................................................................................................17
Pellet, The Normative Dilemma: Will and Consent in International Law-making,
12 Australian Yrbk Intl L (1992) 22, at 3746. There are, however, contrary views to this

3|Page
-Index of Authorities- - Respondent-

line of reasoning within the new scholarship: see, e.g., Chodosh, An Interpretive Theory
of International Law, 28 Vanderbilt J Transnatl L (1995) 973, at 10521056 (Chodosh
proposes 4/5 quorum of states adopting a treaty provision before it can be elevated into a
customary norm....................................................................................................................14

4|Page
-Statement of Jurisdiction - - Respondent-

STATEMENT OF JURISDICTION
The petitioner humbly submits this memorandum for three petitions filed before this
Honourable Supreme Court, which has been posted for final hearing by the Honourable
courts. The first petition invokes the jurisdiction of this Honourable court over the district
courts decision and regarding the Art. 19 of. The Constitution of India. The second petition
is regarding the matter that whether a sub-contractor can be made a party to the arbitral
proceedings or not. The third petition deals with the jurisdiction of this court upon the section
34 of the arbitration and conciliation act, 1996, whether Honourable court have the
jurisdiction over the matters of the arbitration being held in different country and that to
being governed by the laws of that country.
This memorandum set forth the facts, contentions and the arguments on behalf of the
appellant/respondant.

5|Page
-Statement of Fact - - Respondent-

STATEMENT OF FACTS
I. In Rajasthan, Petroleum Exploration & Development activities have gained momentum
after the largest oil discovery Mangla in 2004 in Barmer-Sanchore Basin in last three decades
of the country. Presently, exploration for Oil, Gas & CBM (Coalbed Methane) is underway in
12 Blocks of Rajasthan by National/Multinational Companies against 21 blocks carved out
covering about 65ooo sq. km area. Rajasthan has about 1,50,000 sq. km on-land area under 4
petroliferrous basins. Thus, Rajasthan has the maximum on-land area of the country available
for exploration.
II. For Petroleum Exploration & Development (PED) the state government signed a
multiparty Petroleum Exploration & Development Agreement (PEDA) with Desert Land
Petroleum Resource Corporation (DLPRC), OGX Petrleo e Gs Participaes S.A.
(OGX), Tel Shodhan Limited (TSL), and Oil India Limited (OIL). All the parties are
jointly known as Barmer-Bikaner Basin Consortium (Consortium). DLPRC is a residence
company of United Kindom, OGX is Brazilian publicly listed oil and gas company, TSL is a
company registered under the Companies Act, 1956 and Oil India Limited (OIL) is a
Government of India enterprise. III. PEDA, inter alia, provided for resolution of disputes
between the parties by way of arbitration to be administered by International Chambers of
Commerce (ICC) in London, England, under laws of the United Kingdom. The Clause
19(1) provides that Law of the United Kingdom and international customary commercial
laws will be applicable on disputes arising out of agreement between the parties.
IV. In terms of the agreement, man power supply agreement was executed between DLPRC
and Man Power Supply Limited (MPSL), a company registered under the Companies Act,
2013 and engaged in supplying semi-skilled and skilled workers. This agreement also
contained an arbitration clause having seat of arbitration in ICC, London. The man power
supplied by MPSL is used for the Consortium works but payment was made by DLPRC only.
V. In 2016, TSL initiated an arbitration proceeding in ICC, London against OIL and the
Government of Rajasthan. The issue was related to encashment of Bank Guarantees and
deduction of Service Tax on the services provided under the PEDA by TSL to OIL and State
of Rajasthan. On receipt of arbitration proceeding notice, the Govt. of Rajasthan filed an
antiarbitration injunction suit before the District Court, Jaipur. However, OIL agreed to get
involved in arbitration proceeding in London. The Govt. of Rajasthan contended that the
agreement between the Govt., OIL and TSL pertaining to applicability of law of foreign
country on dispute arising out of the agreement and on arbitration proceedings is void under
Section 23 of Indian Contract Act as it is against the public policy of the nation. The court
6|Page
-Statement of Fact - - Respondent-

granted the injunction in favour of the Government and also declared the arbitration clause
and Clause 19(1) void as it is applicable on disputes between Govt. of Rajasthan, OIL and
TSL only. The court observed that under the public policy of the country Indian nationals are
not permitted to derogate from Indian law.
IV. Meanwhile, OGX initiated arbitration proceedings against DLPRC and MPSL for
compensation for damage occurred due to negligence of workers. The damage was allegedly
caused by the workers engaged by DLPRC through MPSL. In response to it, MPSL filed an
injunction suit before District Court with contention that MPSL does not have any direct
relation with OGX, and there isnt any arbitration agreement between them. It argued that
merely because workers of MPSL are engaged for consortium as whole does not bring MPSL
into the ambit of disputes under PEDA.
VII. The District Court rejected the suit filed by MPSL on the ground that seat of arbitration
is outside India thus such suit cannot be entertained by Indian courts. Further, the court ruled
that there is no prohibition under law in making sub-contractors like MPSL a party in
arbitration proceeding between leading parties of a contract. Aggrieved, MPSL also filed an
SLP before the Supreme Court.
VIII. Before the Supreme Court decided the above SLPs, arbitrators of ICC, London issued
an award in the proceeding between TSL and OIL. The award was in the favour of TSL.
Taking note of the legal proceeding between TSL and the Govt. of Rajasthan, OIL filed an
application under Sec. 34 of the Arbitration and Conciliation Act, 1996 for setting aside the
award. High Court of Rajasthan rejected the application of OIL and ruled that there is no bar
under the Indian law in deciding the seat of arbitration outside India and applicability of
foreign law on Indian nationals in international commercial arbitration wherein at least one
party is foreign national or company. OIL filed a regular appeal before the Supreme Court
against the decision of High Court, which has been admitted by the Supreme Court.

7|Page
-Prayer- -Respondent-

ARGUMENTS PRESENTED
CASE- I
CIVIL APPEAL NO. 08/2017
TEL SHODHAN LIMITED (TSL) V.GOVT. OF RAJASTHAN & ORS
I. WHETHER THE DECISION OF THE DISTRICT COURT IS PER-IN CURIUM OF
LAWS ENACTED BY THE PARLIAMENT AND LAWS DECLARED BY THE
SUPREME COURT IN RELATION TO CHOOSING THE SEAT OF
ARBITRATION OUTSIDE INDIA, CHOICE OF LAW GOVERNING THE
PROCEEDINGS, AND SUBSTANTIVE LAWS OF GOVERNING THE
CONTRACT?
II. WHETHER THE DECISION OF THE DISTRICT COURT AND ACTION OF THE
GOVERNMENT VIOLATES TSLSFUNDAMENTAL RIGHT OF TRADE AND
OCCUPATION GUARANTEED UNDER ART. 19 OF THE CONSTITUTION?

CASE II
CIVIL APPEAL NO. 19/2017
MAN POWER SUPPLY LIMITED (MPSL) V.OGX & ORS
III. WHETHER MPSL CAN BE MADE A PARTY TO ARBITRATION
PROCEEDINGS?

CASE III
CIVIL APPEAL NO. 309/2017.
OIL INDIA LIMITED (OIL) V. TEL SHODHAN LIMITED(TSL)
IV. WHETHER THE HIGH COURT WAS CORRECT IN NOT SETTING ASIDE THE
APPLICATION UNDER S. 34 OF THE ARBITRATION AND CONCILIATION
ACT OF 1996?

8|Page
-Prayer- -Respondent-

SUMMARY OF ARGUMENTS
I. Whether the decision of the district court is per-in curium of laws enacted by the
Parliament and laws declared by the Supreme Court in relation to choosing the
seat of arbitration outside India, choice of law governing the proceedings, and
substantive laws of governing the contract?
Specifically prohibits the agreements/contracts entered into by any Indian party of which the
object is unlawful. Since the Arbitration Clause would circumvent the laws of India and
defeat the provisions of law, and also denude the Courts of this country of their jurisdiction.
The arbitration clause is unlawful, illegal and unenforceable due to the following reasons:The
arbitration clause provides for the seat of arbitration to be outside India i.e. London. The
agreement between the parties have become an agreement between two Indian parties and
thus such an exclusion of the jurisdiction and contracting out part I of the Act.Since defendant
and the plaintiff are two Indian companies, they cannot, by any stretch of imagination,
exclude the applicability or the operation of Indian law, by contract or otherwise. The
Supreme Court has, in a number of cases, held that two domestic parties cannot by agreement
or otherwise contract out of the municipal laws of India. Any clause providing for the same is
illegal and unenforceable.

II. Whether the decision of the district court and action of the Government violates
TSLs fundamental right of trade and occupation guaranteed under Art. 19 of
the Constitution?
Fundamental rights can only claim against the state and judiciary also comes under the
definition of article 12 of the Indian constitution. So here TSL can also claim fundamental
rights against district court. Action of the Government and the decision of the District Court
violate the TSLS fundamental right of trade and occupation guaranteed under Article 19(1)
(g) of the Constitution because there is no restriction for choosing foreign seat of arbitration.
It doesnt go against public policy.

Also courts do not have any jurisdiction to pass interim order in case where seat of arbitration
is located outside India. A person must be held to have access to justice if his right in any
manner whether to carry on business is infringed or there is threat to his liberty. Clause 6 of
art.19, however, places a restriction that nothing would prevent the state from making
reasonable restrictions in exercise of the right in interest of the general public. It talks about
reasonable restrictions but in this case restriction was unreasonable because there are

9|Page
-Prayer- -Respondent-

precedents in which courts have allowed parties to choose seat of arbitration in foreign
country and also parties can deviate from domestic law and this deviation in no manner
violates the public policy. Arbitration agreement is not against any public policy as contented
by the defendant.Here, TSL is also free to choose arbitration seat and choose foreign law.

III.Whether MPSL can be made a party to arbitration proceedings?

It does occasionally happen that the claim is made against or by someone who is not
originally named as a party. These may create some difficult situations, but certainly, they are
not absolute obstructions to law/the arbitration agreement. Arbitration, thus, could be possible
between a signatory to an arbitration agreement and a third party.It may be the result of
implied or specific consent or judicial determination. Normally, the parties to the arbitration
agreement calling for arbitral reference should be the same as those to an action. But this
general concept is subject to exceptions which are that when a third party, i.e. non-signatory
party, is claiming or is sued as being directly affected through a party to the arbitration
agreement and there are principal and subsidiary agreements. Group of Companies
Doctrine. This doctrine has developed in the international context, whereby an arbitration
agreement entered into by a company, being one within a group of companies, can bind its
non- signatory affiliates or sister or parent concerns

IV. Whether the High Court was correct in not setting aside the application under S.
34 of the Arbitration and Conciliation Act of 1996?

This is my humble contention that the high court was correct in not setting aside the
application under section 34 of the arbitration and conciliation act of 1996. As per the
precedent set by this honble supreme court of India in the case of bharat aluminium v. kaiser
aluminium services inc.1 The part I and part II of this act are mutually exclusive of each other,
part I deal with the arbitral proceedings held in India and also the arbitral award given by the
Indian tribunals and as section 34 of this act falls in the part I of this act, therefore, the
applicability of section 34 is only limited to awards made in India and not outside the India.
In case where the parties have not expressly stated as which law will be governing the
contract, after analyzing the various factors, we have reached at this conclusion that those
proceeding to be governed by the law of the place at which arbitration was being held.

1Bharat Aluminium Corporation v. Kaiser Technical Services Inc. (2012) 9 S.C.C. 552.
10 | P a g e
-Prayer- -Respondent-

In this case also parties have excluded the part I of the arbitration act, 1996, in the absence of
express agreement, there is a prima facia presumption that the parties intend the curial law to
be the law of the seat of the arbitration i.e. the place at which the arbitration is to take place 2
and so by this way Indian courts will have no jurisdiction upon the arbitral award passed by
the international chamber of commerce in the present case and so high court was correct in
not setting aside the arbitral award under section 34 of the arbitration act, 1996.
In the present case there is no information regarding the substantive law governing the
contract between the parties, so we will be presuming that the English laws are only
governing the contract, all the three law governing are of U.K.

ARGUMENTS ADVANCED
I. Whether the decision of the district court is per-in curium of laws enacted by the
Parliament and laws declared by the Supreme Court in relation to choosing the

2Reliance Industries Ltd. v. Union Of India (2014) 7 S.C.C. 603.

11 | P a g e
-Prayer- -Respondent-

seat of arbitration outside India, choice of law governing the proceedings, and
substantive laws of governing the contract?

1.1Whether the decision of the district court is per-in curium of laws enacted by the
Parliament in relation to choosing the seat of arbitration outside India, choice of law
governing the proceedings, and substantive laws of governing the contract?

Under section 23 of the Indian Contract Act, 1872-

Specifically prohibits the agreements/contracts entered into by any Indian party of which the
object is unlawful. Since the Arbitration Clause would circumvent the laws of India and
defeat the provisions of law, and also denude the Courts of this country of their jurisdiction,
the objective of the Arbitration Clause is unlawful and therefore is liable to be declared null
and void. An agreement contrary to the provisions of law would be unenforceable and that it
would not be permissible to any person to rely upon the contract the making of which the law
prohibits. A contract forbidden by law cannot become valid even if the parties act according
to the contract.
The execution of the Assignment Agreement has made it legally impossible for the parties to
seek redressal of their disputes in accordance with the Arbitration Clause since the essence of
the jurisdiction of the arbitration tribunal does not exist anymore.
The Arbitration Clause has become illegal, void and unenforceable. Hence, the disputes
between the parties cannot be decided in accordance with the Arbitration Clause.

The arbitration clause is unlawful, illegal and unenforceable due to the following reasons:
The arbitration clause provides for the seat of arbitration to be outside India i.e. London. The
agreement between the parties have become an agreement between two Indian parties and
thus such an exclusion of the jurisdiction and contracting out part I of the Act, when the said
part is applicable to the Indian parties is clearly against the public policy which is
impermissible in law and the same is required to be held unenforceable. The said clause
contained in the agreement dated is also against the provisions of Section 23 of the Act as it
has unlawful object of taking away the power of the Courts to adjudicate upon the disputes,
which otherwise fall within the jurisdiction of the courts.

Under section 28 of the Indian Contract Act, 1872-

12 | P a g e
-Prayer- -Respondent-

The said arbitration clause in the present form also violates the provisions of Section 28 of
the Indian Contract Act as it restrains the parties from exercising their legal rights under the
laws of India. Contract, in simple words, is a binding legal agreement that is enforceable in a
court of law. That is, a contract is an exchange of promises for the breach of which the law
will provide a remedy. The law relating to contracts is to be found in the Indian Contract Act
1872.
2. Whether the decision of the district court is per-in curium of laws declared by the
Supreme Court in relation to choosing the seat of arbitration outside India, choice of
law governing the proceedings, and substantive laws of governing the contract?

2.1 That agreement is void

The Arbitration Clause provides for the seat of arbitration to be outside India i.e. London
Article. The Arbitration Clause which provides that the seat of arbitration to be outside India
(i.e. London) is also illegal and unenforceable under the laws of India. As per the provisions
of the Arbitration Act.
Two Indian residents or companies incorporated in India entering into a contract must be
governed by the laws in force in India and the intention of the legislature while enacting the
Act was also that two Indian companies cannot be permitted to derogate from Indian laws.
This principle is a part of the public policy of India. Any provision in the contract attempting
to avoid the applicability of laws of India is unlawful and unenforceable. The parties cannot
enter into a contract so as to have the seat of arbitration outside India.
Since defendant and the plaintiff are two Indian companies, they cannot, by any stretch of
imagination, exclude the applicability or the operation of Indian law, by contract or
otherwise. The Supreme Court has, in a number of cases, held that two domestic parties
cannot by agreement or otherwise contract out of the municipal laws of India. Any clause
providing for the same is illegal and unenforceable.
Two Indian parties cannot by agreement or otherwise (in all the above three cases) agree to
any law other than Indian laws. Further, considering that the Maintenance Contract is
between two Indian parties, the Contract was signed in India and the performance of the
contract was in India, adjudication proceedings, including arbitration can only be held in
India and in no other country. If one party to the alleged contract is contending that it is void
ab initio (because for example the making of such a contract is illegal), the arbitration clause
cannot operate, for on this view the clause itself also is void3.
2.2 Indian parties cannot derogate from domestic law.-
3Heyman v. Darwins Ltd, (1942) A C 356 (A).
13 | P a g e
-Prayer- -Respondent-

Under section 5
Section 5pertains to only Part I of the Act and the subject matter of the present suit would fall
within Part II, being international in character4. Section 5 of the A & C Act can come into
play only when existence of a valid arbitration agreement is established. Institution of such a
suit by the respondent no.1 would constitute an action pending before the judicial authority
necessitating the invocation of Section 45 of the A & C Act, if one of the parties makes a
request to refer the matter for arbitration. In such cases, the court must see whether the
arbitration agreement is valid, operative and capable of being performed, before referring the
parties to arbitration. An exclusion of the jurisdiction and contracting out part I of the Act,
when the said part is applicable to the Indian parties is clearly against the public policy which
is impermissible in law and the same is required to be held unenforceable.
Difference between International Commercial Arbitration and international customary
commercial arbitration.
Gas Authority of India Ltd. v. Spie Capag, S.A. and Others, 1993 (27) DRJ 5625 at page
586 and 587 wherein the learned Single Judge of this court explains what constitutes the
international commercial arbitrationInternational Commercial Arbitration Agreements under
the aforesaid provision. Each contracting State is under an obligation to recognise and
enforce an arbitration agreement having a foreign element, therefore, the prime object of the
New York Convention was to ensure the recognition and enforcement of the commercial
arbitration agreements having international features and the resultant foreign awards arising
there from and in customary international law some national element is there. It can be
thought of as composed of a general communal acceptance (on the part of the community of
states in the international system as a whole) rather than the expressed will of individual
states6. So from agreement it can be construed that state law will be applicable.The well-
settled position in law-English and Indian that questions or issues which pertain to the
existence, validity or effect (scope) of an arbitration agreement contained in the underlying
commercial Contract are matters which relate to the jurisdiction of the Arbitrator and are not

4Sukanya Holdings Ltd. v. Jayesh H. Pandya, (2003) 5 S.C.C. 531.

5Gas Authority of India Ltd. v. Spie Capag, S.A. and Others, 1993 (27) D.R.J. 562.
6Pellet, The Normative Dilemma: Will and Consent in International Law-making,
12 Australian Yrbk Intl L (1992) 22, at 3746. There are, however, contrary views to this line
of reasoning within the new scholarship: see, e.g., Chodosh, An Interpretive Theory of
International Law, 28 Vanderbilt J Transnatl L (1995) 973, at 10521056 (Chodosh
proposes 4/5 quorum of states adopting a treaty provision before it can be elevated into a
customary norm
14 | P a g e
-Prayer- -Respondent-

within the competence of the Arbitrator however widely worded the Arbitration agreement
may be but these have to be decided by the Court in an application under s.33
Renusagar Power Co Ltd v. General Electric Company and Another (1984) 4 SCC 6797at
page 723 para 50 wherein the Supreme Court has analysed the enactment of the 1940 Act and
analysed the provisions relating to foreign award and how the foreign trade gained the
importance and the Act of 1940 recognising the international commercial arbitration was
aimed at facilitating the international trade. Heyman v. Darwins Ltd, (1942) A C 356 (A)8
Viscount Simon L.C. also stated the law as to the circumstances under which an arbitration
clause in a commercial contract would become unenforceable thus: - Similarly, if one party to
the alleged contract is contending that it is void ab initio (because for example the making of
such a contract is illegal), the arbitration clause cannot operate, for on this view the clause
itself also is void."
TDM Infrastructure Pvt. Ltd. v. UE Development India Private Ltd, (2008) 14 SCC
2719wherein the Supreme Court has held that the when both the parties to the arbitration
agreement are registered as companies in India, it is a case of domestic arbitration and the
provisions of section 2 (1) (f) of the Arbitration and Conciliation Act 1996 cannot be invoked
in such a case. This judgment was relied upon in order to support the plea that two Indian
parties cannot fall within the ambit of the international commercial arbitration and thus
cannot exclude the applicability of the part I of the arbitration and Conciliation Act.
Videocon Industries Limited v. Union of India, (2011) 6 SCC 16110was relied upon to show
how proper law of contract, lex arbitri and curial law operates in an international commercial
arbitration and further that the facts in the present case are distinguishable from that of
Videocon's case and in the present case two Indian parties cannot be relegated to arbitrate in
the foreign court excluding Indian laws altogether.

7Renusagar Power Co Ltd v. General Electric Company and Anotherr,(1984) 4 S.C.C. 679.
8Heyman v. Darwins Ltd, (1942) A.C 356 (A).
9TDM Infrastructure Pvt. Ltd. v. UE Development India Private Ltd, (2008) 14 S.C.C. 271.
10Videocon Industries Limited v. Union of India, (2011) 6 S.C.C. 161.
15 | P a g e
-Prayer- -Respondent-

II. Whether the decision of the district court and action of the Government violates
TSLs fundamental right of trade and occupation guaranteed under Art. 19 of
the Constitution?
It is humbly submitted that the decision of the District court and action of the Government
does not violates TSLs fundamental right of trade and occupation guaranteed under Article
19(1) (g) of the Indian Constitution. TSL, being a corporation does not have a fundamental
right under Art. 19.
Fundamental right under Article 19 available to citizens and not to a company:

In State Trading Corporation of India Ltd v. The commercial tax officer, Visakhapatnam 11
Supreme Court explained clearly that corporate bodies are juristic persons and so they cannot
be termed as citizens though they may be of Indian nationality due to incorporation in India.
Thus the court distinguished that corporate body being Indian national is entitled to civil
rights accruing from international law but such corporate body is not a citizen. Hence it is not
entitled to any particular right available only for citizen like that under Article 19.12

In Telco Ltd. vs. State of Bihar,13 it was held that a company is also not allowed to lay claim
to fundamental rights on the basis of its being an aggregation of citizens. Once a company or
a corporation is formed, the business of the company or corporation is not the business of the
citizens but that of the company or corporation formed as an incorporated body, and the rights
of the incorporated body must be judged on that footing and cannot be judged on the
assumption that they are the rights attributable to the business of individual citizens.

In case of Jaipur Udhyog Ltd. v. Union of India and others14and V. Rev. Mother Provincial
v. State of Kerala and others15court said that a company registered under the Companies Act
1956 not being a citizen is not entitled to claim enforcement of fundamental rights under
Article 19.16

11State Trading Corporation Of India Ltd & Others v. The Commercial Tax Officer,A.I.R1963
S.C. 1811.
12A Aritical Study Of Fundamental Rights Available To Corporate Bodies With Reference To Leading Case ,(
Oct. 24, 2013)Https://Researchersclub.Wordpress.Com/2013/10/24/A-Critical-Study-Of-Fundamental-Rights-
Available-To-Corporate-Bodies-With-Reference-To-Leading-Cases/.
13Telco Ltd. vs. State of Bihar, (2000)5 S.C.C 346.
14Jaipur Udhyog Ltd. V. Union Of India And Others,A.I.R. 1975 S.C.1056.
15V. Rev. Mother Provincial v. State of Kerala and others, 1970 A.I.R. 2079.
16A Critical study of Fundamental Rights Available to Corporate Bodies With Reference to
Leading Cases (oct.24,2013),Https://Researchersclub.Wordpress.Com/2013/10/24/A-Critical-
Study-Of-Fundamental-Rights-Available-To-Corporate-Bodies-With-Reference-To-Leading-
16 | P a g e
-Prayer- -Respondent-

Therefore, Counsel would like to submit that TSL is a company registered under the
Companies Act, 195617 and a company is a juristic person not a citizen it cant claim
fundamental right because the fundamental right conferred in article 19 of the constitution is
available only for citizen not a person.

Indian nationals are not permitted to choose foreign seat of arbitration and derogate from
Indian law:

It has been held by the Supreme Court that two Indian parties cannot choose seat of
arbitration outside India as it would be against the public policy of the country. The District
Court by holding that the Arbitration clause is void under the public policy of India did not
violate the fundamental right of TSL.

In case of TDM Infrastructure Pvt. Ltd. v UE Development India Ltd 18, where the Supreme
Court held that Indian nationals should not be permitted to derogate from Indian law as this is
part of the public policy of India. The decision in TDM Infrastructure was followed by the
Bombay High Court in Addhar Mercantile Private Limited v Shree Jagdamba Agrico
Exports Pvt. Ltd.19. In this case, the High Court directed the arbitrating Indian parties to
conduct their arbitration in India with Indian law as the substantive law of the contract even
though the parties had contractually agreed to "arbitration in India or Singapore" with
English law as the substantive law.20

It is well settled law that two Indian parties cannot exclude the applicability of mandatory
Indian substantive law as the same would be opposed to Indian public policy.The Hon'ble
Bombay High Court rejected the submission that the arbitration clause (seat of the arbitration
at Singapore and applicability of the English law to such proceedings) is workable stating that
both the parties are Indian and cannot derogate from the Indian law.21The parties between

Cases/.
17Moot Proposition.
18TDM Infrastructure Pvt. Ltd. V UE Development India Ltd., (2008) 14 S.C.C. 271.
19Addhar Mercantile Private Limited V. Shree Jagdamba Agrico Exports Pvt. Ltd,2015 S.C.C
Online Bom. 7752.
20India: Can Two Indian Parties Opt For A Foreign Seat Of Arbitration: An Unresolved Question!
(sep.20,2016),http://www.mondaq.com/india/x/528408/Arbitration+Dispute+Resolution/Can+Two+Indian+Parti
es+Opt+For+A+oreign+Seat+Of+Arbitration+An+Unresolved+Question.
21India: Whether two Indian Parties Can Choose a Foreign Seat and Exclude The
Applicability Of Part I Of The Arbitration And Conciliation Act, 1996( Aug. 20, 2015),
http://www.mondaq.com/india/x/415868/Arbitration+Dispute+Resolution/Whether+Two+Ind
ian+Parties+Can+Choose+A+Foreign+Seat+For+Arbitration+And+Exclude+The+Applicabil
17 | P a g e
-Prayer- -Respondent-

whom the dispute arose, are both Indian parties and the contract which had the effect of
compelling them to resort to arbitration by foreign arbitrators and thereby impliedly
excluding the remedy available to them under the ordinary law of India should be held to be
opposed to public policy....".22

PEDA, inter alia, provided for resolution of disputes between the parties by way of arbitration
to be administered by International Chambers of Commerce (ICC) in London, England,
under laws of the United Kingdom. The Clause 19(1) provides that Law of the United
Kingdom and international customary commercial laws will be applicable on disputes arising
out of agreement between the parties. 23
The arbitration agreement was null and void and it was against the public policy and so the
governments action and decision of district court was correct there was no violation of
fundamental rights of TSL under article 19(1)(g). Action of state was justifiable.

III. State has power to restrict any business on reasonable grounds:

In Zee Tele films ltd.(M/S) v. Union of India24article 19(1)(g) guarantees to all citizens the
fundamental right to practice any profession or to carry any trade ,occupation or business and
such a right can only be regulated by the state by virtue of article 19(6) of the constitution .25

The state has the power to regulate or restrict any business on the ground specified in clause
(6).26 Right to freedom as enshrined in article 19 of the constitution, though fundamental right
is not an absolute right and is always subject to reasonable restrictions which may be imposed
in the larger interest of society. freedom of profession , trade and business as contemplated by
clause (1)(g) of article 19 of the Indian constitution is always subject to the limits as may be
imposed by the state in the interests of public welfare. 27The right to enter into a contract

ity+Of+Part+I+Of+The+Arbitration+And+Conciliation+Act+1996.
22India: Whether Two Indian Parties Can Choose A Foreign Seat And Exclude The Applicability Of Part I Of
The Arbitration And Conciliation Act, 1996( Aug. 20, 2015),
http://www.mondaq.com/india/x/415868/Arbitration+Dispute+Resolution/Whether+Two+Indian+Parties+Can+
Choose+A+Foreign+Seat+For+Arbitration+And+Exclude+The+Applicability+Of+Part+I+Of+The+Arbitration
+And+Conciliation+Act+1996
23 moot proposition.
24Zee Tele Films Ltd.(M/S) v. Union Of India,A.I.R. 2005 S.C. 2677.
25 1L.M.Singhvi,Constitution of India947(3rded 2013).
261Durga Das Basu,Shorter Constitution of India311,(14thed 2011).
271 L.M.Singhavi, constitution of India 945 (3rd ed. 2013).
18 | P a g e
-Prayer- -Respondent-

relating to property or business is a fundamental rights guaranteed by article 19(1) (g) but
rights arising under a contract are not fundamental rights guaranteed by our constitution.28

In case of Obayya puary v. Member secretary ,Karnataka state pollution control board
,Banglore29 court said that freedom of trade and business as contemplated by clause(1)(g) of
the article 19 of the constitution is always subject to the limits .As may be imposed by the
state in the interest of public welfare.30

In present case Govt. of Rajasthan and District Court had imposed reasonable restriction on
TSL because that arbitration agreement was against public policy so the action of government
of Rajasthan and decision of court was correct and reasonable. State has power to impose
restriction on any business on the ground specified in clause (6) of article 19 of the
Constitution of India. State may impose restrictions whenever it thinks fit that the act is
against public policy. In this case if district court allows TSL to arbitrate at foreign seat by
foreign law then it will go against the rule of law and that goes against public policy because
every law is made for public welfare and when it violates public policy will surely affected
the citizens.

281Durga das basu,Shorter constitution of india318(14th ed 2011.).

29Obayyapuary v. Member Secretary, Karnataka State Pollution Control Board, Banglore,
A.I.R. 1999Kant.157(165).
301L.M.Singhavi,Constitution of India 945 (3rd ed.2013).
19 | P a g e
-Prayer- -Respondent-

III. Whether MPSL can be made a party to arbitration proceedings?

Normally, arbitration takes place between the persons who have, from the outset, been parties
to both the arbitration agreement as well as the substantive contract underlining that
agreement. But, it does occasionally happen that the claim is made against or by someone
who is not originally named as a party. These may create some difficult situations, but
certainly, they are not absolute obstructions to law/the arbitration agreement. Arbitration,
thus, could be possible between a signatory to an arbitration agreement and a third party. If
we see the fact of the case there was no obligation made by the MPSL regarding workers
used for consortium. This means MPSL impliedly consented for that.
In a recent decision in Chloro Controls (I) P. Ltd. v. Severn Trent Water Purification
Inc(2013) 1 SCC 64131, the Supreme Court has observed that "reference of even non-
signatory parties to arbitration agreement can be made. It may be the result of implied or
specific consent or judicial determination. Normally, the parties to the arbitration agreement
calling for arbitral reference should be the same as those to an action. But this general
concept is subject to exceptions which are that when a third party, i.e. non-signatory party, is
claiming or is sued as being directly affected through a party to the arbitration agreement and
there are principal and subsidiary agreements, and such third party is signatory to a subsidiary
agreement and not to the mother or principal agreement which contains the arbitration clause,
then depending upon the facts and circumstances of the given case, it may be possible to say
that even such third party can be refereed to arbitration.
Group of Companies Doctrine. This doctrine has developed in the international context,
whereby an arbitration agreement entered into by a company, being one within a group of
companies, can bind its non- signatory affiliates or sister or parent concerns, if the
circumstances demonstrate that the mutual intention of all the parties was to bind both the
signatories and the non-signatory affiliates.
Where various agreements constitute a composite transaction. Court can refer disputes to
arbitration existing between signatory or non-signatory parties if: (1) all ancillary agreements
between them are relatable to principal agreement, and (2) performance of one agreement is
so intrinsically interlinked with other agreements that they are incapable of being beneficially
performed without performance of others or severed from the rest i.e.

31Chloro Controls P. Ltd. v. Severn Trent Water Purification Inc,(2013) 1 S.C.C. 641.
20 | P a g e
-Prayer- -Respondent-

In the Delhi case of, Bharat Starch Industries Ltd. v. Prudent International Shipping and
Trading Co.Ltd1995 (34) DRJ 7232though the MOU in that case was not signed by a party,
the subsequent correspondence showed that it had accepted the MOU. These facts are clearly
distinguishable.
Non-signatory party, is claiming or sued as being directly affected through a party to the
arbitration agreement and there are principal and subsidiary agreements, and such third party
is signatory to a subsidiary agreement, but not to the principal agreement containing the
arbitration clause, then depending on the facts of a given case, it may be possible to hold that
even such party can be referred to arbitration.

Although the individual members of the Consortium may not have been party to the contract
which contains the arbitration clause, they would be necessary parties to the arbitral
proceedings in light of the inter relationship between the Respondents as the members of the
Consortium. There was an umbrella agreement and other separate agreements thereunder,
performance of each depending on the performance of the other or others. In HLS Asia Ltd.
v. M/s. Geopetrol International Inc. &Ors. MANU/DE/5636/201233 Non-signatory party, is
claiming or sued as being directly affected through a party to the arbitration agreement and
there are principal and subsidiary agreements, and such third party is signatory to a subsidiary
agreement, but not to the principal agreement containing the arbitration clause, then
depending on the facts of a given case, it may be possible to hold that even such party can be
referred to arbitration.

The Court then gave the following illustrations where a non-signatory could also be made a
party to an arbitration proceeding by referring to Sir Michael J. Mustills book on the Law
and Practice of Commercial Arbitration in England:

1. The claimant was in reality always a party to the contract, although not named in it.

2. The claimant has succeeded by operation of law to the rights of the named party.

3. The claimant has become a part to the contract in substitution for the named party by
virtue of a statutory or consensual novation.

32Bharat Starch Industries Ltd. v. Prudent International Shipping and Trading Co.Ltd, 1995
(34) D.R.J. 72.
33HLS Asia Ltd. v. M/s. Geopetrol International Inc. &Ors,MANU/DE/5636/2012.
21 | P a g e
-Prayer- -Respondent-

4. The original party has assigned to the claimant either the underlying contract, together
with the agreement to arbitrate which it incorporates, or the benefit of a claim which has
already come into existence.

Non-signatory party, is claiming or sued as being directly affected through a party

to the arbitration agreement and there are principal and subsidiary agreements,
and such third party is signatory to a subsidiary agreement, but not to the principal
agreement containing the arbitration clause, then depending on the facts of a given
case, it may be possible to hold that even such party can be referred to arbitration.
This proposition has no relevance to the facts of our case 34.

It is also submitted that Section 23 of the Indian Contract Act, 1872 specifically prohibits the
agreements/contracts entered into by any Indian party of which the object is unlawful. Since
the Arbitration Clause would circumvent the laws of India and defeat the provisions of law,
and also denude the Courts of this country of their jurisdiction, the objective of the
Arbitration Clause is unlawful and therefore is liable to be declared null and void. So a party
may not be signatory to an agreement but its execution may directly be relatable to the main
contract even though claims through or under one of the main party to the agreement.

3.1 The District Court rejected the suit filed by MPSL on the ground that seat of
arbitration is outside India thus such suit cannot be entertained by Indian courts.
There can be no doubt that the law governing the contract between the parties is the Indian
law and this position was not disputed even by the Respondent. There is, however, a serious
dispute between the parties as to the law governing the arbitration agreement and what the
seat of arbitration is. The case of the Respondent is that since the parties had agreed that the
arbitration would take place in Singapore and it did in fact take place entirely in Singapore
and in no other place, there was an implied exclusion to the applicability of the Indian law to
the arbitration agreement. It is accordingly submitted that the procedure for challenge to the
Awards would be governed by the law of the seat i.e. the law applicable in Singapore and not
the Indian law. It is, however, contended that in case Konkola Copper Mines v. Stewarts &
Lloyds of India Ltd., (2013) 5 Bom CR 2935 that the judgment in Bhatia International
overruled the issue as to whether Part I would be attracted to foreign seated commercial
arbitration but the declaration of the law was itself not made prospective. Counsel humbly

34Rakesh S. Kathotia & Anr v. Milton Global Ltd, MANU/MH/1681/2014.

35Konkola Copper Mines v. Stewarts & Lloyds of India Ltd, (2013) 5 Bom CR 29.
22 | P a g e
-Prayer- -Respondent-

submitted that the place of arbitration as designated in the present case is London and
arbitration proceedings had been held there. So concluded that the proper law of the
arbitration agreement was the law of London and the applicability of Part I of the Act had
been excluded. Same issue decided in a case

The law governing the arbitration would be the law applicable to the seat of arbitration. He
also placed reliance on the decision in Reliance Industries v. Union of India (2014) 7 SCC
60336, on the facts in the present case, it is clear that this Court has already determined both
that the juridical seat of the arbitration is at London and that the arbitration agreement is
governed by English law. This being the case, it is not open to the Union of India to argue
that Part-I of the Arbitration Act, 1996 would be applicable. A Section 14 application made
under Part-I would consequently not be maintainable.

If the parties have exclusively chosen the Indian law i.e., All the other connecting factors
would place the seat firmly in India."Enercon (India) Ltd. v Enercon Gmbh (2014) 5 SCC
137. The contract provided that it would be subject to the Indian law, the venue of the
arbitration was London. However, the Court found on the facts of the case that the law
governing the contract, the law governing the arbitration agreement and the law of the
arbitration/curial law are all stated to be Indian. But this would arise only if the Curial law is
not specifically chosen by the parties." the law governing the arbitration will be Korean law
and the seat of arbitration will be Seoul in Korea, there will be no question of applicability of
Section 11(6) of the Act and the appointment of Arbitrator in terms of that provision and
decide that case in Indian court said in case Dozco India (P) Ltd. v. Doosan Infracore Co.
Ltd., (2011) 6 SCC 17938. In that view, my inferences are that: -- i) The clear language of
Articles 19 of the Distributorship Agreement between the parties in this case spell out a clear
agreement between the parties excluding Part I of the Act. ii) Since the interpretation of
Article 19 suggests that the law governing the arbitration will be London law and the seat of
arbitration will be Seoul in London, there will be no question of applicability of
Section 11(6) of the Act and the appointment of Arbitrator in terms of that provision." So
Indian court cant deal with this matter.

36Reliance Industries v. Union of India, (2014) 7 S.C.C. 603.

37Enercon (India) Ltd. v. Enercon Gmbh, (2014) 5 S.C.C. 1.
38Dozco India (P) Ltd.v. Doosan Infracore Co. Ltd, (2011) 6 S.C.C. 179.
23 | P a g e
-Prayer- -Respondent-

If the stipulations are noted by it are read and appreciated in the contextual perspective, "the
presumed intention" of the parties is clear as crystal that the juridical seat of arbitration would
be London.Harmony Innovation Shipping Lt. v. Gupta Coal India Ltd.(2015) 9 SCC
172.39If concerned with an agreement, which stipulated that the contract is to be governed and
construed according to the English Law and it and can be noted that there were ample
indication through various phrases like "arbitration in London to apply", arbitrators are to be
the Members of "London Arbitration Association" and the contract "to be governed and
construed according to the English Law".
Yograj Infrastructure Ltd. v. Ssang Yong Engg. & Construction Co. Ltd. (2011) 9 SCC
73540. All disputes, differences arising out of or in connection with the Agreement shall be
referred to arbitration. The arbitration proceedings shall be conducted in English in
Singapore in accordance with the Singapore International Arbitration Centre (SIAC) Rules
as in force at the time of signing of this Agreement. The arbitration shall be final and
binding.

Recently the Court of Appeals in England and Wales in Sul Amrica Cia National De
Seguros SA v. Enesa Engenharia SA (2012) 1 Lloyd's Rep. 67141 held that the proper law of
the arbitration agreement is to be determined by undertaking "a three stage enquiry into: (i)
express choice, (ii) implied choice, and (iii) closest and most real connection".

IV. Whether the High Court was correct in not setting aside the application under S.
34 of the Arbitration and Conciliation Act of 1996?
The defendant humbly submits that this regular civil suit has been filed to seek remedy under
section 34 of the Arbitration and Conciliation Act, 1996 [hereinafter 1996 Act]. The section
mentions about the setting aside of the arbitral award passed by an arbitral tribunal. It is
hereby argued by the counsel of defendants that the court has no power to grant relief under
Section 34 because firstly, no provision of the 1996 Act allow the Indian courts to interfere in
the matters of foreign arbitral proceeding or where the seat of arbitration decided by the
parties is in foreign [4.1]; and secondly in absence of any stipulation in the arbitration
agreement regarding by law of which country the parties would be governed by, it would be

39Harmony Innovation Shipping Lt. v. Gupta Coal India Ltd, (2015) 9 S.C.C. 172.
40Yograj Infrastructure Ltd. v. Ssang Yong Engg. & Construction Co. Ltd, (2011) 9 S.C.C.
735.
41Wales in Sul Amrica Cia National De Seguros SA v. Enesa Engenharia SA, (2012) 1
Lloyd's Rep. 671.
24 | P a g e
-Prayer- -Respondent-

presumed that the law of the country wherein the seat of arbitration is located would have
application [4.2]. Therefore, what follows is that, because there is no information about the
law governing the relations between the parties, the law of England will prevail because the
seat of arbitration is voluntarily decided by the parties to be in London, the capital of
England. The detail arguments follow.
[4.1] That the provisions of the Arbitration Act, 1996, bars the Indian Courts from
interfering in foreign arbitration proceedings, in case where the seat of
arbitration is outside the India.
Section 2(2) of the 1996 Act which reads as This part shall apply where the place of
arbitration is in India, makes it clear that the provision of part I do not apply where the
place of arbitration is outside the India. 42 This is analogous to Article 1(2) of the UNCITRAL
Model Law which provides that, The provisions of this Law...apply only if the place of
arbitration is in the territory of this State.As per the precedent set by this Honble Supreme
Court of India in the case of Bharat Aluminium v. Kaiser Aluminium Services Inc 43, the part
I and part II of this act are mutually exclusive of each other, part I deal with the arbitral
proceedings held in India and also the arbitral award given by the Indian tribunals and as
section 34 of this act falls in the part I of this act, therefore, the applicability of section 34 is
only limited to awards made in India and not outside the India.

[4.2]That in the absence of the substantive law of contract the contract act of England
will govern the contract between the parties.
Section 48(1)(e) of 1996 Act also makes it clear that the only two countries would be
competent to suspend or annul or set aside the arbitral award made by the international
commercial arbitration: a) The courts of the country in which the award was madei.e. the
country where the seat of the arbitration has been decided by the parties in the arbitration
agreementand b)The courts of the country under the law of which the award was made i.e.
country whose law the parties have agreed in the arbitration agreement to be bound by. In
case where the parties have not expressly stated in the agreement as to which countrys law
will be governing the contract, the proceeding would be governed by the law of the place at
which arbitration was being held.44 The second one is only available if the first one is not
available.
4220 Bhatia International v. Bulk Trading S.A., (2002) 4 S.C.C. 105.
4321 Bharat Aluminium Corporation v. Kaiser Technical Services Inc.,(2012) 9 S.C.C. 552.
4422 Whitworth Street Estates (Manchester) Ltd. v. James Miller & Partners Ltd., [1969] 1
W.L.R. 377.
25 | P a g e
-Prayer- -Respondent-

Under the lawis the only reference to the procedural law of the country. It has no reference
to the substantive law of the contract between the parties. However, with the law having been
clarified herein, a foreign award cannot be aside on the ground that the Indian law governed
the substance of the dispute, what matters is the law which is governing the arbitration
agreement and in this case it was the law of the England that was governing the arbitration
agreement. Thus the remedy for the appellant to challenge the award moved in the arbitration
proceedings lies under the relevant provisions contained in the arbitration act, 1996 of
England.45 Part I of the arbitration and conciliation act, 1996 would not be applicable to the
arbitration agreement in the present case.46 The enforceability of the final award (as a foreign
award) in India can only be resisted on the ground of the public policy. The law which would
be applied to the filing of the award, awards enforcement and also to it is setting aside would
be the law that will be governing the arbitration agreement and the performance of that
agreement.47
In Reliance Industries Ltd. v. Union Of India., if the parties have chosen a foreign seat of
arbitration, then, in the absence of express agreement as to which law will govern them, there
is a prima facia presumption that the parties intend the curial law to be the law of the seat of
the arbitration i.e. the law of the place at which the arbitration is to take place.48
Consequently, it follows that Indian courts will have no jurisdiction upon the arbitral award
passed by the International Chamber of Commerce. In the present, therefore, Honble High
Court was correct in not setting aside, under section 34 of the 1996 Act, the arbitral award
passed by the ICC.
As mentioned in aforesaid issue, in absence of express mention in the arbitration agreement
as to law of which country, the parties be governed by, the country where seat of arbitration is
located is the determinative factor, and the law of such country would apply. When any of the
three lawis missing.
a). Substantive Law,
b). Curial Law, and
c) Law governing the Conduct of the Arbitration
as in the present case substantive law is missing, common rule is if the parties have chosen
any particular country as the seat of arbitration as in the present case is the London, then it is

4523 Reliance Industries Ltd. v. Union Of India.,(2014) 7 S.C.C. 603.

4624 Reva Electric Cars Co .(p) Ltd. v. Green Mobil., (2012) 2 S.C.C. 93.
4725 Dozco India Ltd. v. Doosan Infracore Co. Ltd.,(2011) 6 S.C.C. 179.
4826 Reliance Industries Ltd. v. Union of India,.(2014) 7 S.C.C. 603.
26 | P a g e
-Prayer- -Respondent-

presumed that the proper law or the substantive law that will be governing the contract will
also be of that country only where the seat of arbitration is situated.
In the present case there is no information regarding the substantive law governing the
contract between the parties, so we will be presuming that the English laws are only
governing the contract, all the three law governing are of U.K. the country where the seat of
arbitration is located, courts of that country only have the jurisdiction to accept the
application related to the arbitration matter, courts of that particular country only have the
control over the arbitral tribunals of that country.
Language of section 2(2) reads as: This part shall apply where place of arbitration is in
India. This line necessarily exclude application of part I to arbitration seated or held outside
India. Only if the agreement of the parties is construed to provide for the seat/place in
India, part I would be applicable of the arbitration act, 1996. If the agreement is held to
provide for a seat/place outside the India, part I would be inapplicable to the extent
inconsistent with the arbitration law of the seat, even if the agreement purports to provide that
the arbitration act, 1996 shall govern the proceedings.49 The expression under the law in
section 48(1)(e) was also inserted in the Geneva convention, which limited the jurisdiction to
set aside the award only to one country, namely, the courts of the country where the award
was made,50 this rest the confusion as to whether the courts of India have the jurisdiction to
set aside the arbitral award made by the arbitrator in the foreign country. Generally there are
four steps consisted in regulation of arbitration:
a) The commencement of arbitration;
b) The conduct of arbitration;
c) The challenge to the award; and
d) The recognition or enforcement of the award.

The sections in part I deals with all these stages, section 8 deals with the commencement,
section 3 to 33 deals with the conduct, section 34 deals with the challenge and section 35 and
36 deals with the recognition and enforcement of the award. Thus, if an arbitration takes
place in India, part I deals with all the stages of the arbitration. Whereas part Ii dont have
any provisions for the conduct and the challenge of an arbitral award decided by the foreign
court.
Now it is clear that the regulations related to the conduct of the arbitration and challenge to
the arbitral award can only be done by the courts of the country where the arbitration is being

49 Bharat Aluminium Corporation v. Kaiser Aluminium Services, (2012) 9 S.C.C. 552.

50 Reliance Industries Ltd. v. Enron Oil & Gas India Ltd.,(2002) 1 All E.R. (Comm.) 59.
27 | P a g e
-Prayer- -Respondent-

held. Such a court then has the power to annul or set aside the arbitral award. 51By accepting
this principle of territoriality, it is clear that the intention of the parliament was to segregate
the part I and part II. Therefore, any of the provisions of part I cannot be made applicable to
foreign awards.
In the present case, the law governing the arbitration agreement was given but there was no
reference regarding the substantive law governing the contract, as is given in Para III of the
statement of facts that the law governing the arbitration agreement is the law of the United
Kingdom, but there is no reference regarding the substantive law governing the contract
between the parties. In such case, it is importance to see the close connection of the
substantive law, which is the place where the arbitration is taking place, parties have
voluntarily agreed for the place of arbitration i.e. International Commercial Arbitration,
London.

51 Bharat Aluminium Corporation v. Kaiser Aluminium Services,(2012) 9 S.C.C. 552.

28 | P a g e
-Prayer- -Respondent-

Thus, the council would like to conclude the contentions and request the honourable court to
issue the direction for the properIn the light of arguments advanced and authorities cited,
the Appellants/ Petitioner humbly submit that the Honble Court may be pleased to
adjudge and declare that:

Prayer
In the light of arguments advanced and authorities cited, the Respondent humbly submits
that the Honble Court may be pleased to adjudge and declare that:

1. The SLP of the petitioner should not be entertained by this Honble Supreme
Court and applicability of foreign law is against the public policy and arbitration
agreement was wrong.

2. The SLP of the petitioner should not be entertained by this Honble Supreme
Court and declare the arbitration agreement null and void as that agreement was
against the public policy.

3. The SLP of the petitioner should not be entertained by this Honble Supreme
Court and seat of arbitration is outside India and proceeding can be initiated
against the sub- contractor like MPSL.

4. The Honourable High Court was correct in not setting aside the arbitral award
and therefore, the appeal of the appellant should be rejected and order them this
court cannot interfere as Honble dont have power to entertain this appeal.

Or any other order as it deems fit in the interest of equity, justice and good
conscience.
Sd/-

(Counsels for the Respondent)

29 | P a g e