Supply agreement
Jagdish
(Querist) 25 March 2013
This query is : Resolved
A Ltd company wants to enter into supply agreement with B Ltd. The registered office of B Ltd is at Korea and principal place of business at Gurgaon. B Ltd is subsidiary of C Ltd. Now, in the agreement, the reference is given about the place of business of Gurgaon but not of registered office i.e. Korea. So rules of Arbitration and Conciliation Act, 1996 will prevail or rules of international chamber of commerce will prevail? And if dispute arise C Ltd will come into the picture or B Ltd.?
Advocate M.Bhadra
(Expert) 25 March 2013
You can enter into an agreement as per provision of Arbitration and Conciliation Act, 1996 with party added C Ltd in India.Please read the recent Judgement.:----
A restriction placed by a constitution bench of the Supreme Court on the jurisdiction of Indian courts in matters of international arbitration is reported by the Hindu:
In a judgment which is expected to boost foreign investment, the Supreme Court, on Thursday, held that Indian courts have no jurisdiction to pass interim orders in foreign arbitration awards between an Indian company and a foreign company under the provisions of the Indian Arbitration and Conciliation Act, 1996.
Disposing of a batch of appeals, a five-judge Constitution Bench, comprising Chief Justice S. H. Kapadia and Justices D. K. Jain, S. S. Nijjar, Ms. Ranjana Desai and J. S. Khehar, said, “if the arbitration agreement is found or held to provide for a seat/place of arbitration outside India, then the provision that the Arbitration Act, 1996, would govern the arbitration proceedings would not make Part I (relating to domestic arbitration) of the Arbitration Act, 1996, applicable or enable Indian courts to exercise supervisory jurisdiction over the arbitration or the award.”
In the Bhatia International case, the Supreme Court, in 2002, had held that Part I of the Arbitration Act, dealing with the power of a court to grant interim relief, could be applied to arbitration disputes with a foreign seat unless the parties specifically opted out of such an arrangement. As a result, various High Courts had entertained appeals and were passing interim orders against such awards. The present Constitution Bench judgment overrules the 2002 ruling.
Writing the judgment for the Bench, Mr. Justice Nijjar said, “We are of the considered opinion thhat Part I of the Arbitration Act, 1996, would have no application to International Commercial Arbitration held outside India. Therefore, such awards would only be subject to the jurisdiction of the Indian courts when the same are sought to be enforced in India in accordance with the provisions contained in Part II of the Arbitration Act, 1996.”
Raj Kumar Makkad
(Expert) 25 March 2013
In the given case only B company shall come into picture and not C or its registered office as the place of work has already been mentioned thereto as Gurgaon. India law shall prevail in the given case. Arbitration and conciliation Act shall prevail over any other Act if not contrary agreed thereto.
