In the short span of a decade that the Arbitration and Conciliation Act has been in force, the Supreme Court has gradually carved for itself a wider and wider role in various stages of arbitration proceedings. Its role in the appointment of arbitrators, granting interim injunctions and reviewing arbitral awards on grounds of public policy are a few examples.
Its 2002 decision in Bhatia International effectively extended the applicability of several provisions of Part I of the Arbitration Act to international commercial arbitrations outside
This decision is noteworthy not just for its adherence to Bhatia, but for its decision to allow an Indian company to invoke the Indian Arbitration Act against a foreign company under a contract that was governed by foreign law. INDTEL had entered into a Memorandum of Understanding with WS Atkins PLC, and submitted a joint tender for an Indian Railways Crashworthiness Project. Before a decision could be made on the tender, Atkins withdrew the joint bid and terminated the MoU. The MoU expressly designated English law, providing that “this Agreement, its construction, validity, and performance shall be governed by and constructed in accordance with the laws of
The Court held that it could. In Bhatia, it had held that Part I of the Act applied to international arbitrations outside
While the decision may be open to criticism for its interpretation of the Act, it does have the merit of certainty, since it is now clear that a contract will deprive Indian courts of jurisdiction in respect of arbitration matters only if it satisfies one of the two criteria outlined above. This decision is therefore likely to be welcomed and criticised in equal measure.