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Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 895 OF 2014
(Arising out of S.L.P. (C) No. 49!8 of 2010)

World Sport Group (Mauritiu! Ltd" # App$lla%t
Versus
MSM Sat$llit$ (Si%&apor$! Pt$" Ltd" #
R$po%d$%t
" # $ % & E N '
A. (. PA'NAI() ".
L$a'$ &ra%t$d"
(" T)i i a% app$al a&ai%t t)$ ord$r dat$d *+",-"(,*,
o. t)$ Di'iio% /$%0) o. t)$ /o12a3 Hi&) Court i%
App$al (Lod&i%&! No"456 o. (,*,"
F*+ts7
5" T)$ .a0t '$r3 2ri$.l3 ar$ t)at o% 5,"**"(,,+ t)$
/oard o. Co%trol .or Cri08$t i% I%dia (.or )ort 9/CCI:!
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i%'it$d t$%d$r .or IPL (I%dia% Pr$1i$r L$a&u$! M$dia
Ri&)t .or a p$riod o. t$% 3$ar .ro1 (,,; to (,*+ o%
a <orld<id$ 2ai" A1o%&t t)$ t$%d$r u21itt$d=
t)$ 2id o. World Sport Group I%dia (.or )ort 9WSG
I%dia:! <a a00$pt$d 23 /CCI" /3 a pr$>2id
arra%&$1$%t= )o<$'$r= t)$ r$po%d$%t <a to &$t
t)$ 1$dia ri&)t .or t)$ u2>0o%ti%$%t .or t)$ p$riod
.ro1 (,,; to (,*," A00ordi%&l3= o% (*",*"(,,; /CCI
a%d t)$ r$po%d$%t $%t$r$d i%to a M$dia Ri&)t
Li0$%$ A&r$$1$%t .or t)$ p$riod .ro1 (,,; to (,*(
.or a u1 o. US?(+6"4, 1illio%" A.t$r t)$ .irt IPL
$ao%= t)$ /CCI t$r1i%at$d t)$ a&r$$1$%t dat$d
(*",*"(,,; 2$t<$$% /CCI a%d t)$ r$po%d$%t .or t)$
I%dia% u2>0o%ti%$%t a%d 0o11$%0$d %$&otiatio%
<it) WSG I%dia" O% *6",5"(,,-= t)$ r$po%d$%t .il$d
a p$titio% u%d$r S$0tio% - o. t)$ Ar2itratio% a%d
Co%0iliatio% A0t= *--@ (.or )ort 9t)$ A0t:! a&ai%t t)$
/CCI 2$.or$ t)$ /o12a3 Hi&) Court pra3i%& .or
i%Au%0tio% a&ai%t t)$ /CCI .ro1 a0ti%& o% t)$
t$r1i%atio% l$tt$r dat$d *6",5"(,,- a%d .or
pr$'$%ti%& /CCI .ro1 &ra%ti%& t)$ ri&)t u%d$r t)$
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a&r$$1$%t dat$d (*",*"(,,; to a%3 t)ird part3"
Purua%t to t)$ %$&otiatio% 2$t<$$% /CCI a%d WSG
I%dia= /CCI $%t$r$d i%to a% a&r$$1$%t <it) t)$
app$lla%t <)$r$u%d$r t)$ 1$dia ri&)t .or t)$ I%dia%
u2>0o%ti%$%t .or t)$ p$riod (,,- to (,*+ <a
a<ard$d to t)$ app$lla%t .or a 'alu$ o. R"6=+-*",;
0ror$" To op$rat$ t)$ 1$dia ri&)t i% I%dia= t)$
app$lla%t <a r$Buir$d to $$8 a u2>li0$%$$ <it)i%
$'$%t3 t<o )our" T)ou&)= t)i ti1$ p$riod <a
$Ct$%d$d t<i0$= t)$ app$lla%t <a %ot a2l$ to &$t a
u2>li0$%$$" T)$r$a.t$r= t)$ app$lla%t 0lai1$d to
)a'$ allo<$d 1$dia ri&)t i% I%dia to )a'$ lap$d
a%d t)$% .a0ilitat$d o% (4",5"(,,-= a %$< M$dia
Ri&)t Li0$%$ A&r$$1$%t 2$t<$$% t)$ /CCI a%d t)$
r$po%d$%t .or t)$ I%dia% u2>0o%ti%$%t .or t)$ a1$
0o%tra0t 'alu$ o. R"6=+-*",; 0ror$" /CCI a%d WSG
I%dia= )o<$'$r= <$r$ to 0o%ti%u$ <it) t)$ R$t o. t)$
World 1$dia ri&)t"
6" O% (4",5"(,,-= t)$ app$lla%t a%d t)$ r$po%d$%t
alo $C$0ut$d t)$ D$$d .or Pro'iio% o. Fa0ilitatio%
S$r'i0$ ()$r$i%a.t$r r$.$rr$d to a 9t)$ Fa0ilitatio%
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D$$d:! <)$r$u%d$r t)$ r$po%d$%t <a to pa3 a u1
o. R"6(4 0ror$ to t)$ app$lla%t a .a0ilitatio% .$$"
Clau$ - o. t)$ Fa0ilitatio% D$$d dat$d (4",5"(,,-
2$t<$$% t)$ app$lla%t a%d t)$ r$po%d$%t <a titl$d
9Go'$r%i%& La<: a%d r$ad a .ollo<7
D9. %OVE,NIN% LA-
T)i D$$d )all 2$ &o'$r%$d 23 a%d 0o%tru$d
i% a00orda%0$ <it) t)$ la< o. E%&la%d a%d
Wal$= <it)out r$&ard to 0)oi0$ o. la<
pri%0ipl$" All a0tio% or pro0$$di%& arii%& i%
0o%%$0tio% <it)= tou0)i%& upo% or r$lati%& to
t)i D$$d= t)$ 2r$a0) t)$r$o. a%dEor t)$ 0op$
o. t)$ pro'iio% o. t)i S$0tio% )all 2$
u21itt$d to t)$ I%t$r%atio%al C)a12$r o.
Co11$r0$ (t)$ DC)a12$rF! .or .i%al a%d
2i%di%& ar2itratio% u%d$r it Rul$ o.
Ar2itratio%= to 2$ )$ld i% Si%&apor$= i% t)$
E%&li) la%&ua&$ 2$.or$ a i%&l$ ar2itrator
<)o )all 2$ a r$tir$d Aud&$ <it) at l$at t$%
3$ar o. 0o11$r0ial $Cp$ri$%0$" T)$
ar2itrator )all 2$ $l$0t$d 23 1utual
a&r$$1$%t o. t)$ Parti$= or= i. t)$ Parti$
0a%%ot a&r$$= t)$% 23 tri8i%& .ro1 a lit o.
ar2itrator uppli$d 23 t)$ C)a12$r" I. t)$
Parti$ ar$ u%a2l$ to a&r$$ o% t)$ ar2itrator=
t)$ C)a12$r )all 0)oo$ o%$ .or t)$1" T)$
ar2itratio% )all 2$ a 0o%.id$%tial pro0$$di%&=
0lo$d to t)$ &$%$ral pu2li0" T)$ ar2itrator
)all a$ t)$ 0ot o. t)$ ar2itratio% a&ai%t
t)$ loi%& part3" I% additio%= t)$ pr$'aili%&
part3 i% a%3 ar2itratio% or l$&al pro0$$di%&
r$lati%& to t)i D$$d )all 2$ $%titl$d to all
r$ao%a2l$ $Cp$%$ (i%0ludi%&= <it)out
li1itatio%= r$ao%a2l$ attor%$3: .$$!"
Not<it)ta%di%& t)$ .or$&oi%&= t)$ ar2itrator
1a3 r$Buir$ t)at u0) .$$ 2$ 2or%$ i% u0)
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ot)$r 1a%%$r a t)$ ar2itrator d$t$r1i%$ i
r$Buir$d i% ord$r .or t)i ar2itratio% pro'iio%
to 2$ $%.or0$a2l$ u%d$r appli0a2l$ la<" T)$
ar2itrator )all iu$ a <ritt$% opi%io% tati%&
t)$ $$%tial .i%di%& a%d 0o%0luio% upo%
<)i0) t)$ ar2itrator: a<ard i 2a$d" T)$
ar2itrator )all )a'$ t)$ po<$r to $%t$r
t$1porar3 r$trai%i%& ord$r a%d pr$li1i%ar3
a%d p$r1a%$%t i%Au%0tio%" No part3 )all 2$
$%titl$d or p$r1itt$d to 0o11$%0$ or
1ai%tai% a%3 a0tio% i% a 0ourt o. la< <it)
r$p$0t to a%3 1att$r i% diput$ u%til u0)
1att$r )all )a'$ 2$$% u21itt$d to
ar2itratio% a )$r$i% pro'id$d a%d t)$% o%l3
.or t)$ $%.or0$1$%t o. t)$ ar2itrator: a<ardG
pro'id$d= )o<$'$r= t)at prior to t)$
appoi%t1$%t o. t)$ ar2itrator or .or r$1$di$
2$3o%d t)$ Auridi0tio% o. a% ar2itrator= at a%3
ti1$= a%3 part3 1a3 $$8 $Buita2l$ r$li$. i% a
0ourt o. 0o1p$t$%t Auridi0tio% i% Si%&apor$=
or u0) ot)$r 0ourt t)at 1a3 )a'$ Auridi0tio%
o'$r t)$ Parti$= <it)out t)$r$23 <ai'i%& it
ri&)t to ar2itratio% o. t)$ diput$ or
0o%tro'$r3 u%d$r t)i $0tio%" THE PARTIES
HERE/H WAIVE THEIR RIGHT TO JURH TRIAL
WITH RESPECT TO ALL CLAIMS AND ISSUES
ARISING UNDER= IN CONNECTION WITH=
TOUCHING UPON OR RELATING TO THIS DEED=
THE /REACH THEREOF ANDEOR THE SCOPE OF
THE PROVISIONS OF THIS SECTION= WHETHER
SOUNDING IN CONTRACT OR TORT= AND
INCLUDING ANH CLAIM FOR FRAUDULENT
INDUCEMENT THEREOF"F
4" T)$ r$po%d$%t 1ad$ t)r$$ pa31$%t totali%&
R"*(4 0ror$ to t)$ app$lla%t u%d$r t)$ Fa0ilitatio% D$$d
duri%& (,,- a%d did %ot 1a8$ t)$ 2ala%0$ pa31$%t"
I%t$ad= o% (4",@"(,*,= t)$ r$po%d$%t <rot$ to t)$
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app$lla%t r$0i%di%& t)$ Fa0ilitatio% D$$d o% t)$ &rou%d
t)at it <a 'oida2l$ o% a00ou%t o. 1ir$pr$$%tatio% a%d
.raud" O% (4",@"(,*,= t)$ r$po%d$%t alo .il$d Suit
No"*;@- o. (,*, .or inter alia a d$0laratio% t)at t)$
Fa0ilitatio% D$$d <a 'oid a%d .or r$0o'$r3 o. R"*(4
0ror$ alr$ad3 paid to t)$ app$lla%t" O% (;",@"(,*,= t)$
app$lla%t a0ti%& u%d$r Clau$ - o. t)$ Fa0ilitatio% D$$d
$%t a r$Bu$t .or ar2itratio% to ICC Si%&apor$ a%d t)$ ICC
iu$d a %oti0$ to t)$ r$po%d$%t to .il$ it a%<$r to t)$
r$Bu$t .or ar2itratio%" I% t)$ 1$a%<)il$= o% 5,",@"(,*,=
t)$ r$po%d$%t .il$d a $0o%d uit= Suit No"*;(; o. (,*,=
2$.or$ t)$ /o12a3 Hi&) Court a&ai%t t)$ app$lla%t .or
inter alia a d$0laratio% t)at a t)$ Fa0ilitatio% D$$d tood
r$0i%d$d= t)$ app$lla%t <a %ot $%titl$d to i%'o8$ t)$
ar2itratio% 0lau$ i% t)$ Fa0ilitatio% D$$d" T)$ r$po%d$%t
alo .il$d a% appli0atio% .or t$1porar3 i%Au%0tio% a&ai%t
t)$ app$lla%t .ro1 0o%ti%ui%& <it) t)$ ar2itratio%
pro0$$di%& 0o11$%0$d 23 t)$ app$lla%t u%d$r t)$ a$&i
o. ICC"
@" O% ,-",;"(,*,= t)$ l$ar%$d Si%&l$ Jud&$ o. t)$
/o12a3 Hi&) Court di1i$d t)$ appli0atio% .or
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t$1porar3 i%Au%0tio% o. t)$ r$po%d$%t a3i%& t)at it
<ould 2$ .or t)$ ar2itrator to 0o%id$r <)$t)$r t)$
Fa0ilitatio% D$$d <a 'oid o% a00ou%t o. .raud a%d
1ir$pr$$%tatio% a%d t)at t)$ ar2itratio% 1ut=
t)$r$.or$= pro0$$d a%d t)$ Court 0ould %ot i%t$r'$%$ i%
1att$r &o'$r%$d 23 t)$ ar2itratio% 0lau$" T)$
r$po%d$%t 0)all$%&$d t)$ ord$r o. t)$ l$ar%$d Si%&l$
Jud&$ 2$.or$ t)$ Di'iio% /$%0) o. t)$ /o12a3 Hi&) Court
a%d 23 t)$ i1pu&%$d ord$r= t)$ Di'iio% /$%0) o. t)$
/o12a3 Hi&) Court allo<$d t)$ app$al= $t aid$ t)$
ord$r o. t)$ l$ar%$d Si%&l$ Jud&$ a%d pa$d a% ord$r o.
t$1porar3 i%Au%0tio% r$trai%i%& t)$ ar2itratio% 23 ICC"
A&&ri$'$d= t)$ app$lla%t )a .il$d t)i app$al"
Cont.ntions on /.0*1f of t0. *22.11*nt3
+" Mr" I"I" V$%u&opal= l$ar%$d $%ior 0ou%$l .or t)$
app$lla%t= u21itt$d t)at t)$ Di'iio% /$%0) o. t)$ Hi&)
Court .ail$d to appr$0iat$ t)at t)$ /o12a3 Hi&) Court )ad
%o Auridi0tio% to pa a% ord$r o. i%Au%0tio% r$trai%i%& a
.or$i&% $at$d i%t$r%atio%al ar2itratio% at Si%&apor$
2$t<$$% t)$ parti$= <)o <$r$ %ot r$id$%t o. I%dia" I%
t)i 0o%t$Ct= )$ r$.$rr$d to Clau$ - o. t)$ Fa0ilitatio%
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D$$d <)i0) tipulat$d t)at a%3 part3 1a3 $$8 $Buita2l$
r$li$. i% a 0ourt o. 0o1p$t$%t Auridi0tio% i% Si%&apor$= or
u0) ot)$r 0ourt t)at 1a3 )a'$ Auridi0tio% o'$r t)$
parti$" H$ u21itt$d t)at o% t)$ pri%0ipl$ o. Co1it3 o.
Court= t)$ /o12a3 Hi&) Court )ould )a'$ r$.u$d to
i%t$r.$r$ i% t)$ 1att$r a%d )ould )a'$ allo<$d t)$
parti$ to r$ol'$ t)$ir diput$ t)rou&) ICC ar2itratio%=
u2A$0t to t)$ Auridi0tio% o. t)$ Si%&apor$ 0ourt i%
a00orda%0$ <it) Clau$ - o. t)$ Fa0ilitatio% D$$d"
;" Mr" V$%u&opal %$Ct u21itt$d t)at t)$ Di'iio%
/$%0) o. t)$ Hi&) Court .ail$d to appr$0iat$ t)at u%d$r
S$0tio% 64 o. t)$ A0t= t)$ Court $iJ$d o. a% a0tio% i% a
1att$r i% r$p$0t o. <)i0) t)$ parti$ )a'$ 1ad$ a%
a&r$$1$%t r$.$rr$d to i% S$0tio% 66 )a to r$.$r t)$
parti$ to ar2itratio%= u%l$ it .i%d t)at t)$ a&r$$1$%t
r$.$rr$d to i% S$0tio% 66 i %ull a%d 'oid= i%op$rati'$ or
i%0apa2l$ o. 2$i%& p$r.or1$d" H$ u21itt$d t)at t)$
a&r$$1$%t r$.$rr$d to i% S$0tio% 66 o. t)$ A0t i 9a%
a&r$$1$%t i% <riti%& .or ar2itratio%: a%d= t)$r$.or$= u%l$
t)$ Court .i%d t)at t)$ a&r$$1$%t i% <riti%& .or
ar2itratio% i %ull a%d 'oid= i%op$rati'$ or i%0apa2l$ o.
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2$i%& p$r.or1$d= t)$ Court <ill %ot $%t$rtai% a diput$
0o'$r$d 23 t)$ ar2itratio% a&r$$1$%t a%d r$.$r t)$ parti$
to t)$ ar2itratio%" I% upport o. t)i u21iio%= )$ r$li$d
o% t)$ d$0iio% o. t)i Court i% Chloro Controls India
Private Limited v. Seven Trent Water Purification Inc. &
Ors. K((,*5! * SCC @6*L"
-" Mr" V$%u&opal u21itt$d t)at t)$ Di'iio% /$%0) o.
t)$ Hi&) Court= i%t$ad o. $Ca1i%i%& <)$t)$r t)$
a&r$$1$%t i% <riti%& .or ar2itratio% <a %ull a%d 'oid=
i%op$rati'$ or i%0apa2l$ o. 2$i%& p$r.or1$d= )a )$ld t)at
t)$ $%tir$ Fa0ilitatio% D$$d <a 'itiat$d 23 .raud a%d
1ir$pr$$%tatio% a%d <a= t)$r$.or$= 'oid" H$
'$)$1$%tl3 u21itt$d t)at it <a .or t)$ ar2itrator to
d$0id$ <)$t)$r t)$ Fa0ilitatio% D$$d <a 'oid o% a00ou%t
o. .raud a%d 1ir$pr$$%tatio% a )a 2$$% ri&)tl3 )$ld 23
t)$ l$ar%$d Si%&l$ Jud&$ a%d it <a %ot .or t)$ Court to
pro%ou%0$ o% <)$t)$r t)$ Fa0ilitatio% D$$d <a 'oid o%
a00ou%t o. .raud a%d 1ir$pr$$%tatio%" H$ r$.$rr$d to
Arti0l$ @(6! o. t)$ ICC Rul$ o. Ar2itratio% <)i0) p$r1it
t)$ Ar2itral Tri2u%al to 0o%ti%u$ to $C$r0i$ Auridi0tio%
a%d adAudi0at$ t)$ 0lai1 $'$% i. t)$ 1ai% 0o%tra0t i
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all$&$d to 2$ %ull a%d 'oid or %o%>$Cit$%t 2$0au$ t)$
ar2itratio% 0lau$ i a% i%d$p$%d$%t a%d diti%0t
a&r$$1$%t" H$ u21itt$d t)at t)i pri%0ipl$ o.
Kompetenz Kompetenz )a 2$$% r$0o&%iJ$d i% S$0tio% *@
o. t)$ A0t u%d$r <)i0) t)$ Ar2itral Tri2u%al )a t)$
0o1p$t$%0$ to rul$ o% it o<% Auridi0tio% a%d o% t)i
poi%t r$li$d o% ational Insurance Co. Ltd. v. !o"hara
Pol#fa$ Pvt. Ltd" K((,,-! * SCC (@+L a%d %eva &lectric Car
Compan# Private Ltd. v. 'reen (o$il K((,*(! ( SCC -5L"
H$ u21itt$d t)at a a 0orollar3 to t)i pri%0ipl$= Court
)a'$ alo )$ld t)at u%l$ t)$ ar2itratio% 0lau$ it$l.=
apart .ro1 t)$ u%d$rl3i%& 0o%tra0t= i aail$d a 'itiat$d
23 .raud or 1ir$pr$$%tatio%= t)$ Ar2itral Tri2u%al <ill
)a'$ Auridi0tio% to d$0id$ all iu$ i%0ludi%& t)$ 'alidit3
a%d 0op$ o. t)$ ar2itratio% a&r$$1$%t" H$ u21itt$d
t)at i% t)$ pr$$%t 0a$= t)$ ar2itratio% 0lau$ it$l. <a
%ot aail$d a 'itiat$d 23 .raud or 1ir$pr$$%tatio%" I%
upport o. t)i ar&u1$%t= )$ r$li$d o% t)$ d$0iio% o. t)$
Hou$ o. Lord i% Premium afta Products Ltd. v. )ili
Shippin" Compan# Ltd. & Ors. K(,,+L UIHL 6,L= t)$
d$0iio% o. t)$ Supr$1$ Court o. U%it$d Stat$ i% !uc*e#e
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Chec* Cashin"+ Inc. v. ,ohn Carde"na et al K46@ US 66,
((,,@!L a%d t)$ d$0iio% o. t)i Court i% !ranch (ana"er=
(a"ma Leasin" and )inance Ltd. & -nr. v. Potluri
(adhavilata & -nr. K((,,-! *, SCC *,5L"
*," Mr" V$%u&opal u21itt$d t)at t)$ Di'iio% /$%0) o.
t)$ Hi&) Court r$li$d o% t)$ d$0iio% i% . %adha*rishnan
v. (aestro &n"ineers & Ors. K((,*,! * SCC +(L to )old t)at
$riou all$&atio% o. .raud 0a% o%l3 2$ $%Buir$d 23 a
Court a%d %ot 23 a% ar2itrator= 2ut t)$ Di'iio% /$%0)
.ail$d to appr$0iat$ t)at i% . %adha*rishnan v. (aestro
&n"ineers & Ors. (upra! t)i Court r$li$d o% -$dul Kadir
Shamsuddin !u$ere v. (adhav Pra$ha*ar Oa* KAIR *-@(
SC 6,@L i% <)i0) it <a o2$r'$d t)at it i o%l3 a part3
a&ai%t <)o1 a .raud i all$&$d <)o 0a% r$Bu$t t)$
Court to i%Buir$ i%to t)$ all$&atio% o. .raud i%t$ad o.
allo<i%& t)$ ar2itrator to d$0id$ o% t)$ all$&atio% o.
.raud" I% t)$ pr$$%t 0a$= t)$ r$po%d$%t )a all$&$d
.raud a&ai%t t)$ app$lla%t a%d t)u it <a .or t)$
app$lla%t to 1a8$ a r$Bu$t to t)$ Court to d$0id$ o% t)$
all$&atio% o. .raud i%t$ad o. r$.$rri%& t)$ a1$ to t)$
ar2itrator= a%d %o u0) r$Bu$t )a 2$$% 1ad$ 23 t)$
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app$lla%t" H$ .urt)$r u21itt$d t)at i% a%3 0a$ t)$
Aud&1$%t o. t)i Court i% . %adha*rishnan v. (aestro
&n"ineers & Ors. (upra! <a r$%d$r$d i% t)$ 0o%t$Ct o.
do1$ti0 ar2itratio% i% r$.$r$%0$ to t)$ pro'iio% o.
S$0tio% ; o. t)$ A0t" H$ u21itt$d t)at t)$ la%&ua&$ o.
S$0tio% 64 o. t)$ A0t= <)i0) appli$ to a% i%t$r%atio%al
ar2itratio%= i u2ta%tiall3 di..$r$%t .ro1 t)$ la%&ua&$ o.
S$0tio% ; o. t)$ A0t a%d it <ill 2$ 0l$ar .ro1 t)$ la%&ua&$
o. S$0tio% 64 o. t)$ A0t t)at u%l$ t)$ ar2itratio%
a&r$$1$%t i %ull a%d 'oid= i%op$rati'$ or i%0apa2l$ o.
2$i%& p$r.or1$d= t)$ parti$ <ill )a'$ to 2$ r$.$rr$d to
ar2itratio% 23 t)$ Court" I% t)$ pr$$%t 0a$= t)$
r$po%d$%t )a %ot 1ad$ out t)at t)$ ar2itratio%
a&r$$1$%t i %ull a%d 'oid= i%op$rati'$ or i%0apa2l$ o.
2$i%& p$r.or1$d"
**" Mr" V$%u&opal u21itt$d t)at t)$ Hi&) Court )a
ta8$% a 'i$< t)at Clau$ - .or$0lo$ a% op$% trial i% a
0ourt o. la< $C0$pt to t)$ $Ct$%t p$r1itt$d t)$r$i% a%d
t)$ parti$ )a'$ to %$0$aril3 u21it t)$1$l'$ to a
0o%.id$%tial pro0$$di%& <)i0) i 0lo$d to t)$ &$%$ral
pu2li0" H$ u21itt$d t)at t)$ /o12a3 Hi&) Court t)u
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app$ar to )a'$ )$ld t)at Clau$ - i oppo$d to pu2li0
poli03 a%d= i% parti0ular= S$0tio% (5 a%d (; o. t)$ I%dia%
Co%tra0t A0t= *;+(" H$ u21itt$d t)at i% a%3 0a$ t)$
ar2itratio% a&r$$1$%t 0o%tai%$d i% Clau$ - o. t)$
Fa0ilitatio% D$$d 0a%%ot 2$ )$ld to 2$ oppo$d to pu2li0
poli03 a%d 'oid u%d$r S$0tio% (5 a%d (; o. t)$ I%dia%
Co%tra0t A0t= *;+(" T)i <ill 2$ 0l$ar .ro1 EC0$ptio% * o.
S$0tio% (; o. t)$ I%dia% Co%tra0t A0t= *;+(= <)i0) a3
t)at t)$ $0tio% )all %ot r$%d$r ill$&al a 0o%tra0t= 23
<)i0) t<o or 1or$ p$ro% a&r$$ t)at a%3 diput$ <)i0)
1a3 ari$ 2$t<$$% t)$1 i% r$p$0t o. a%3 u2A$0t or 0la
o. u2A$0t )all 2$ r$.$rr$d to ar2itratio% a%d t)at o%l3
t)$ a1ou%t a<ard$d i% u0) ar2itratio% )all 2$
r$0o'$ra2l$ i% r$p$0t o. t)$ diput$ o r$.$rr$d" H$
$Cplai%$d t)at u%d$r t)$ A1$ri0a% La<= i% a uit .or
0o11o% la< <)$r$ t)$ 'alu$ o. 0lai1 i 1or$ t)a% US?(,=
t)$ ri&)t to Aur3 trial i pr$$r'$d a%d t)i appli$ $'$% i%
r$latio% to 0lai1 .or 2r$a0) o. 0o%tra0t a%d .or t)i
r$ao%= t)$ parti$ 1ad$ a pro'iio% i% Clau$ - o. t)$
Fa0ilitatio% D$$d <ai'i%& t)$ir ri&)t to Aur3 trial <it)
r$p$0t to all 0lai1 a%d iu$ arii%& u%d$r= i%
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Page 14
0o%%$0tio% <it)= tou0)i%& upo% or r$lati%& to t)$
Fa0ilitatio% D$$d" H$ u21itt$d t)at t)i pro'iio% i%
Clau$ - o. t)$ Fa0ilitatio% D$$d 0a%%ot= t)$r$.or$= 2$
)$ld to 2$ oppo$d to pu2li0 poli03"
*(" Mr" V$%u&opal %$Ct u21itt$d t)at t)$ 0ruC o. t)$
0a$ o. t)$ r$po%d$%t i $t out i% it l$tt$r dat$d
(4",@"(,*, to t)$ app$lla%t i% <)i0) it <a all$&$d t)at
.in vie/ of the false misrepresentations and fraud pla#ed
$# WS'( the deed is voida$le at the option of our client
and thus our client rescinds the deed /ith immediate
effect:" I% ot)$r <ord= t)$ r$po%d$%t: 0a$ i t)at it
<a i%du0$d to $%t$r i%to t)$ Fa0ilitatio% D$$d o% a00ou%t
o. t)$ 1ir$pr$$%tatio% 23 t)$ app$lla%t a%d <a l$d to
2$li$'$ t)at it <a pa3i%& t)$ .a0ilitatio% .$$ to t)$
app$lla%t to allo< t)$ ri&)t o. t)$ app$lla%t u%d$r a%
all$&$d a&r$$1$%t dat$d (5",5"(,,- to lap$= 2ut t)$
r$po%d$%t u2$Bu$%tl3 di0o'$r$d t)at t)$r$ <a %o
a&r$$1$%t dat$d (5",5"(,,- a%d t)$ ri&)t o. t)$
app$lla%t )ad 0o1$ to a% $%d o% (6",5"(,,-" H$
u21itt$d t)at t)$ app$lla%t )a d$%i$d t)$$ all$&atio%
o. t)$ r$po%d$%t i% it a..ida'it>i%>r$pl3 .il$d 2$.or$ t)$
14
Page 15
/o12a3 Hi&) Court a%d t)at t)$r$ <a %o .al$
r$pr$$%tatio% a%d .raud a all$&$d 23 t)$ r$po%d$%t"
H$ u21itt$d t)at t)$ Fa0ilitatio% D$$d <a $C$0ut$d 23
t)$ $%ior $C$0uti'$ o. t)$ parti$ a%d i% t)$ 0a$ o.
r$po%d$%t= it <a i&%$d 23 Mi0)a$l Gri%do%= Pr$id$%t=
I%t$r%atio%al= So%3 Pi0tur$ T$l$'iio%= a%d t)$ app$lla%t
a%d t)$ r$po%d$%t )ad $%t$r$d i%to t)$ Fa0ilitatio% D$$d
a.t$r 0o%ulti%& t)$ir port 1$dia $Cp$rt a%d a.t$r a lot
o. %$&otiatio%" H$ u21itt$d t)at i% .a0t a Pr$ R$l$a$
<a iu$d 23 t)$ r$po%d$%t o% (5",6"(,*,= <)i0) <ill
&o to )o< t)at t)$r$ <a %o 1ir$pr$$%tatio% a%d .raud
23 t)$ app$lla%t 2$.or$ t)$ Fa0ilitatio% D$$d <a i&%$d
23 t)$ parti$= a%d t)u t)$ $%tir$ 0a$ o. t)$ r$po%d$%t
t)at t)$ Fa0ilitatio% D$$d <a 'itiat$d 23
1ir$pr$$%tatio% a%d .raud i .al$"
*5" Mr" V$%u&opal .i%all3 u21itt$d t)at it <ill 2$ 0l$ar
.ro1 t)$ la%&ua&$ o. t)$ l$tt$r dat$d (4",@"(,*, o. t)$
r$po%d$%t to t)$ app$lla%t t)at a00ordi%& to t)$
r$po%d$%t t)$ Fa0ilitatio% D$$d <a 'oida2l$ at t)$
optio% o. t)$ r$po%d$%t" H$ u21itt$d t)at u%d$r
S$0tio% 64 o. t)$ A0t= t)$ Court <ill )a'$ to r$.$r t)$
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Page 16
parti$ to t)$ ar2itratio% u%l$ it .i%d t)at t)$ ar2itratio%
a&r$$1$%t i 9%ull a%d 'oid:" H$ ar&u$d t)at a%
a&r$$1$%t <)i0) i 'oida2l$ at t)$ optio% o. o%$ o. t)$
parti$ i %ot t)$ a1$ a t)$ a&r$$1$%t <)i0) i 'oid
a%d= t)$r$.or$= t)$ Di'iio% /$%0) o. t)$ Hi&) Court
)ould )a'$ r$.$rr$d t)$ parti$ to ar2itratio% i%t$ad o.
r$trai%i%& t)$ ar2itratio%" A00ordi%& to Mr" V$%u&opal=
t)i i a .it 0a$ i% <)i0) t)i Court )ould $t aid$ t)$
i1pu&%$d ord$r o. t)$ Di'iio% 2$%0) o. t)$ Hi&) Court
a%d r$tor$ t)$ ord$r o. t)$ l$ar%$d Si%&l$ Jud&$ o. t)$
Hi&) Court"
Cont.ntions on /.0*1f of t0. r.s2on4.nt7
*6" I% r$pl3= Mr" Gopal Su2ra1a%iu1= l$ar%$d $%ior
0ou%$l app$ari%& .or t)$ r$po%d$%t= u21itt$d t)at
t)$ Di'iio% /$%0) o. t)$ /o12a3 Hi&) Court )a
ri&)tl3 r$trai%$d t)$ ar2itratio% pro0$$di%& u%d$r t)$
a$&i o. ICC a t)$ Fa0ilitatio% D$$d= <)i0) alo
0o%tai% t)$ ar2itratio% a&r$$1$%t i% Clau$ -= i 'oid
2$0au$ o. .raud a%d 1ir$pr$$%tatio% 23 t)$
app$lla%t" H$ u21itt$d t)at S$0tio% 64 o. t)$ A0t
1a8$ it 0l$ar t)at t)$ Court <ill %ot r$.$r t)$ parti$
16
Page 17
to ar2itratio% i. t)$ ar2itratio% a&r$$1$%t i %ull a%d
'oid= i%op$rati'$ or i%0apa2l$ o. 2$i%& p$r.or1$d a%d
a t)$ r$po%d$%t )a ta8$% t)$ pl$a t)at t)$
Fa0ilitatio% D$$d= <)i0) 0o%tai%$d t)$ ar2itratio%
a&r$$1$%t= i %ull a%d 'oid o% a00ou%t o.
1ir$pr$$%tatio% a%d .raud= t)$ Court <ill )a'$ to
d$0id$ <)$t)$r t)$ Fa0ilitatio% D$$d i%0ludi%& t)$
ar2itratio% a&r$$1$%t i% Clau$ - <a 'oid o% a00ou%t
o. .raud a%d 1ir$pr$$%tatio% 23 t)$ app$lla%t" H$
u21itt$d t)at t)$ r$po%d$%t .il$d t)$ .irt uit i% t)$
/o12a3 Hi&) Court (Suit No"*;@- o. (,*,! .or
d$0lari%& t)$ Fa0ilitatio% D$$d a %ull a%d 'oid 2ut i%
t)$ aid uit= t)$ app$lla%t did %ot .il$ a <ritt$%
tat$1$%t a%d i%t$ad iu$d t)$ %oti0$ .or ar2itratio%
o%l3 to .rutrat$ t)$ .irt uit a%d i% t)$ 0ir0u1ta%0$
t)$ r$po%d$%t <a 0o1p$ll$d to .il$ t)$ $0o%d uit
(Suit No"*;(; o. (,*,! .or a% i%Au%0tio% r$trai%i%& t)$
ar2itratio%"
*4" Mr" Su2ra1a%iu1 u21itt$d t)at S$0tio% - o. t)$
Cod$ o. Ci'il Pro0$dur$= *-,; (.or )ort 9t)$ CPC:!
0o%.$r upo% t)$ 0ourt Auridi0tio% to tr3 all 0i'il uit
17
Page 18
$C0$pt uit <)i0) ar$ $it)$r $Cpr$l3 or i1pli$dl3
2arr$d" H$ u21itt$d t)at t)$ /o12a3 Hi&) Court=
t)$r$.or$= )ad t)$ Auridi0tio% to tr3 2ot) t)$ .irt uit
a%d t)$ $0o%d uit a%d t)$r$ <a %o $Cpr$ or
i1pli$d 2ar i% S$0tio% 64 o. t)$ A0t r$trai%i%& t)$
/o12a3 Hi&) Court to tr3 t)$ .irt uit a%d t)$ $0o%d
uit" H$ u21itt$d t)at i% I%dia a <$ll a i% E%&la%d=
Court )a'$ po<$r to iu$ i%Au%0tio% to r$trai%
parti$ .ro1 pro0$$di%& <it) ar2itratio% pro0$$di%& i%
.or$i&% 0ou%tri$" I% upport o. t)i u21iio%= )$
r$li$d o% V.O. Tractoroe0port+ (osco/ v. Tarapore &
Compan# and -nr" K(*-@-! 5 SCC 4@(L a%d Oil and
atural 'as Commission v. Western Compan# of orth
-merica K(*-;+! * SCC 6-@L" H$ alo r$li$d o% Ru$l
o% Ar2itratio%= para +>,4@= +>,4;= a%d Cla0ton
&n"ineerin" v. T0m ola1 2 es "az Kutao Ktf K(,**L
EWHC 564 (COMM"!"
*@" Mr" Su2ra1a%iu1 r$l3i%& o% t)$ d$0iio% o. t)i Court
i% Chloro Controls India Private Limited v. Seven Trent
Water Purification Inc. & Ors. (upra! u21itt$d t)at
S$0tio% 64 o. t)$ A0t 0at a% o2li&atio% o% t)$ 0ourt to
18
Page 19
d$t$r1i%$ t)$ 'alidit3 o. t)$ a&r$$1$%t at t)$
t)r$)old it$l. 2$0au$ t)i i a% iu$ <)i0) &o$ to
t)$ root o. t)$ 1att$r a%d a d$0iio% o% t)i iu$ <ill
pr$'$%t a .util$ $C$r0i$ o. pro0$$di%& 2$.or$ t)$
ar2itrator" H$ u21itt$d t)at u%d$r S$0tio% 64 o. t)$
A0t t)$ Court i r$Buir$d to 0o%id$r %ot o%l3 a
0)all$%&$ to t)$ ar2itratio% a&r$$1$%t 2ut alo a
$riou 0)all$%&$ to t)$ u2ta%ti'$ 0o%tra0t
0o%tai%i%& t)$ ar2itratio% a&r$$1$%t" H$ 0it$d t)$
d$0iio% o. t)i Court i% S(S Tea &states 3P4 Ltd. v.
Chandmari Tea Co. 3P4 Ltd. K((,**! *6 SCC @@L i%
upport o. t)i ar&u1$%t" H$ u21itt$d t)at t)$
0o%t$%tio% o% 2$)al. o. t)$ app$lla%t t)at t)$ Court
)a to d$t$r1i%$ o%l3 <)$t)$r t)$ ar2itratio%
a&r$$1$%t 0o%tai%$d i% t)$ 1ai% a&r$$1$%t i 'oid i=
t)$r$.or$= %ot 0orr$0t"

*+" Mr" Su2ra1a%iu1 %$Ct u21itt$d t)at i% 0a$ <)$r$
all$&atio% o. .raud ar$ pri1a .a0i$ 1ad$ out= t)$
Audi0ial tr$%d i% I%dia )a 2$$% to )a'$ t)$1
adAudi0at$d 23 t)$ Court" I% t)i 0o%t$Ct= )$ r$.$rr$d
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to t)$ d$0iio% o. t)i Court i% -$dul Kadir
Shamsuddin !u$ere v. (adhav Pra$ha*ar Oa* (upra!=
5ar#ana Telecom Ltd. v. Sterlite Industries 3India4 Ltd"
K(*---! 4 SCC @;;L a%d . %adha*rishnan v. (aestro
&n"ineers & Ors. (upra!" I% r$pl3 to t)$ u21iio% o.
Mr" V$%u&opal t)at it <a o%l3 t)$ parti$ a&ai%t
<)o1 t)$ all$&atio% ar$ 1ad$ <)o 0a% i%it o% t)$
all$&atio% 2$i%& d$0id$d 23 t)$ Court= Mr"
Su2ra1a%iu1 u21itt$d t)at i% t)$ d$0iio% o. t)$
Madra Hi&) Court i% 5.'. Oomor Sait v. O -slam Sait
K((,,*! 5 CTC (@- (Mad!L r$.$rr$d to i% .
%adha*rishnan v. (aestro &n"ineers & Ors. (upra! t)$
ituatio% <a r$'$r$"
*;" Mr" Su2ra1a%iu1 %$Ct u21itt$d t)at t)$ .a0t i% t)i
0a$ pri1a .a0i$ $ta2li) t)at a &ra'$ .raud <a
pla3$d 23 t)$ app$lla%t %ot o%l3 upo% t)$ r$po%d$%t
2ut alo o% t)$ /CCI" H$ ar&u$d t)at t)$ Fa0ilitatio%
D$$d ulti1at$l3 d$al <it) 1$dia ri&)t 2$lo%&i%& to
t)$ /CCI a%d it )a 2$$% )$ld 23 t)i Court i% (6s 7ee
Tele )ilms Ltd. & -nr. v. 8nion of India & Ors" KAIR (,,4
SC (@++L t)at /CCI i a pu2li0 2od3" H$ u21itt$d t)at
20
Page 21
t)$ Di'iio% /$%0) o. t)$ /o12a3 Hi&) Court )a=
t)$r$.or$= ri&)tl3 ta8$% t)$ 'i$< t)at t)$ diput$ i%
t)i 0a$ 0a%%ot 2$ 8$pt outid$ t)$ pur'i$< o. t)$
I%dia% Court a%d i. ar2itratio% i allo<$d to &o o%
<it)out /CCI= t)$ i%t$r$t o. /CCI <ill 2$ ad'$r$l3
a..$0t$d" H$ u21itt$d t)at )a'i%& r$&ard to t)$
1a&%itud$ o. .raud all$&$d i% t)$ pr$$%t 0a$= t)$
diput$ <$r$ i%0apa2l$ o. 2$i%& ar2itrat$d" R$l3i%&
o% !ooz -llen & 5amilton v. S!I 5ome )inance K((,**!
4 SCC 45(L= 5ar#ana Telecom Ltd. v. Sterlite Industries
3India4 Ltd" (Supra!= India 5ousehold and 5ealthcare
Ltd. v. L' 5ousehold and 5ealthcare Ltd. K((,,+! 4 SCC
4*,L a%d . %adha*rishnan v. (aestro &n"ineers &
Ors. (upra!= )$ u21itt$d t)at u0) all$&atio% o.
.raud 0a% o%l3 2$ i%Buir$d i%to 23 t)$ 0ourt a%d %ot 23
t)$ ar2itrator"
Fin4ings of t0. Court7
*-" T)$ Bu$tio% t)at <$ )a'$ to d$0id$ i <)$t)$r t)$
Di'iio% /$%0) o. t)$ /o12a3 Hi&) Court 0ould )a'$
pa$d t)$ ord$r o. i%Au%0tio% r$trai%i%& t)$ ar2itratio% at
Si%&apor$ 2$t<$$% t)$ parti$" A 'ariou 0o%t$%tio%
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)a'$ 2$$% rai$d 23 Mr" V$%u&opal= l$ar%$d 0ou%$l .or
t)$ app$lla%t= i% upport o. t)$ 0a$ o. t)$ app$lla%t t)at
t)$ Di'iio% /$%0) o. t)$ /o12a3 Hi&) Court 0ould %ot
)a'$ pa$d t)$ ord$r o. i%Au%0tio% r$trai%i%& t)$
ar2itratio% at Si%&apor$= <$ 1a3 d$al <it) $a0) o. t)$$
0o%t$%tio% $parat$l3 a%d r$0ord our .i%di%&" W)il$
r$0ordi%& our .i%di%&= <$ <ill alo d$al <it) t)$
u21iio% 1ad$ 23 Mr" Gopal Su2ra1a%iu1 o% 2$)al. o.
r$po%d$%t i% r$pl3 to t)$ 0o%t$%tio% o. Mr" V$%u&opal"
W$ <ill alo 0o%id$r t)$ 0orr$0t%$ o. t)$ .i%di%& o. t)$
Di'iio% /$%0) o. t)$ /o12a3 Hi&) Court $parat$l3"
(," W$ ar$ u%a2l$ to a00$pt t)$ .irt 0o%t$%tio% o. Mr"
V$%u&opal t)at a Clau$ - o. t)$ Fa0ilitatio% D$$d
pro'id$ t)at a%3 part3 1a3 $$8 $Buita2l$ r$li$. i% a
0ourt o. 0o1p$t$%t Auridi0tio% i% Si%&apor$= or u0) ot)$r
0ourt t)at 1a3 )a'$ Auridi0tio% o'$r t)$ parti$= t)$
/o12a3 Hi&) Court )ad %o Auridi0tio% to $%t$rtai% t)$
uit a%d r$trai% t)$ ar2itratio% pro0$$di%& at Si%&apor$
2$0au$ o. t)$ pri%0ipl$ o. Co1it3 o. Court" I% /la08:
La< Di0tio%ar3= 4
t)
Editio%= Judi0ial Co1it3= )a 2$$%
$Cplai%$d i% t)$ .ollo<i%& <ord7
22
Page 23
DJudi0ial 0o1it3" T)$ pri%0ipl$ i% a00orda%0$
<it) <)i0) t)$ 0ourt o. o%$ tat$ or
Auridi0tio% <ill &i'$ $..$0t to t)$ la< a%d
Audi0ial d$0iio% o. a%ot)$r= %ot a a 1att$r
o. o2li&atio%= 2ut out o. d$.$r$%0$ a%d
r$p$0t"F
T)u= <)at i 1$a%t 23 t)$ pri%0ipl$ o. D0o1it3F i t)at
0ourt o. o%$ tat$ or Auridi0tio% <ill &i'$ $..$0t to t)$
la< a%d Audi0ial d$0iio% o. a%ot)$r tat$ or Auridi0tio%=
%ot a a 1att$r o. o2li&atio% 2ut out o. d$.$r$%0$ a%d
1utual r$p$0t" I% t)$ pr$$%t 0a$ %o d$0iio% o. a 0ourt
o. .or$i&% 0ou%tr3 or %o la< o. a .or$i&% 0ou%tr3 )a 2$$%
0it$d o% 2$)al. o. t)$ app$lla%t to 0o%t$%d t)at t)$ 0ourt
i% I%dia out o. d$.$r$%0$ to u0) d$0iio% o. t)$ .or$i&%
0ourt or .or$i&% la< 1ut %ot au1$ Auridi0tio% to
r$trai% ar2itratio% pro0$$di%& at Si%&apor$" O% t)$
ot)$r )a%d= a )a 2$$% ri&)tl3 u21itt$d 23 Mr"
Su2ra1a%iu1= u%d$r S$0tio% - o. t)$ CPC= t)$ 0ourt i%
I%dia )a'$ Auridi0tio% to tr3 all uit o. a 0i'il %atur$
$C0$pti%& uit o. <)i0) 0o&%iJa%0$ i $it)$r $Cpr$l3 or
i1pli$dl3 2arr$d" T)u= t)$ appropriat$ 0i'il 0ourt i% I%dia
)a Auridi0tio% to $%t$rtai% t)$ uit a%d pa appropriat$
ord$r i% t)$ uit 23 'irtu$ o. S$0tio% - o. t)$ CPC a%d
23
Page 24
Clau$ - o. t)$ Fa0ilitatio% D$$d pro'idi%& t)at 0ourt i%
Si%&apor$ or a%3 ot)$r 0ourt )a'i%& Auridi0tio% o'$r t)$
parti$ 0a% 2$ approa0)$d .or $Buita2l$ r$li$. 0ould %ot
out t)$ Auridi0tio% o. t)$ appropriat$ 0i'il 0ourt
0o%.$rr$d 23 S$0tio% - o. t)$ CPC" W$ .i%d t)at i% para @6
o. t)$ plai%t i% Suit No"*;(; o. (,*, .il$d 2$.or$ t)$
/o12a3 Hi&) Court 23 t)$ r$po%d$%t= it i tat$d t)at t)$
Fa0ilitatio% D$$d i% <)i0) t)$ ar2itratio% 0lau$ i
i%0orporat$d 0a1$ to 2$ $C$0ut$d 23 t)$ d$.$%da%t at
Mu12ai a%d t)$ .raudul$%t i%du0$1$%t o% t)$ part o. t)$
d$.$%da%t r$ulti%& i% t)$ plai%ti.. $%t$ri%& i%to t)$
Fa0ilitatio% D$$d too8 pla0$ i% Mu12ai a%d t)$ r$0iio%
o. t)$ Fa0ilitatio% D$$d o% t)$ &rou%d t)at it <a i%du0$d
23 .raud o. d$.$%da%t )a alo 2$$% iu$d .ro1 Mu12ai"
T)u= t)$ 0au$ o. a0tio% .or .ili%& t)$ uit aro$ <it)i% t)$
Auridi0tio% o. t)$ /o12a3 Hi&) Court a%d t)$ /o12a3
Hi&) Court )ad t$rritorial Auridi0tio% to $%t$rtai% t)$ uit
u%d$r S$0tio% (, o. t)$ CPC"
(*" A%3 0i'il 0ourt i% I%dia <)i0) $%t$rtai% a uit=
)o<$'$r= )a to .ollo< t)$ 1a%dat$ o. t)$ l$&ilatur$ i%
24
Page 25
S$0tio% 66 a%d 64 i% C)apt$r I o. Part II o. t)$ A0t= <)i0)
ar$ Buot$d )$r$i%2$lo<7
9C5-PT&% I
NE- 5O,( CONVEN'ION A-A,$S
44" $.finition" I% t)i C)apt$r= u%l$ t)$
0o%t$Ct ot)$r<i$ r$Buir$= D.or$i&% a<ardF
1$a% a% ar2itral a<ard o% di..$r$%0$
2$t<$$% p$ro% arii%& out o. l$&al
r$latio%)ip= <)$t)$r 0o%tra0tual or %ot=
0o%id$r$d a 0o11$r0ial u%d$r t)$ la< i%
.or0$ i% I%dia= 1ad$ o% or a.t$r t)$ **t) da3 o.
O0to2$r= *-@, >
(a! i% purua%0$ o. a% a&r$$1$%t i% <riti%&
.or ar2itratio% to <)i0) t)$ Co%'$%tio% $t
.ort) i% t)$ Firt S0)$dul$ appli$= a%d
(2! i% o%$ o. u0) t$rritori$ a t)$ C$%tral
Go'$r%1$%t= 2$i%& ati.i$d t)at
r$0ipro0al pro'iio% )a'$ 2$$% 1ad$
1a3= 23 %oti.i0atio% i% t)$ O..i0ial
GaJ$tt$= d$0lar$ to 2$ t$rritori$ to <)i0)
t)$ aid Co%'$%tio% appli$"
45" Po6.r of 7u4i+i*1 *ut0orit8 to r.f.r
2*rti.s to *r/itr*tion"> Not<it)ta%di%&
a%3t)i%& 0o%tai%$d i% Part I or i% t)$ Cod$ o.
Ci'il Pro0$dur$= a Audi0ial aut)orit3= <)$%
$iJ$d o. a% a0tio% i% a 1att$r i% r$p$0t o.
<)i0) t)$ parti$ )a'$ 1ad$ a% a&r$$1$%t
r$.$rr$d to i% $0tio% 66= )all= at t)$ r$Bu$t
o. o%$ o. t)$ parti$ or a%3 p$ro% 0lai1i%&
t)rou&) or u%d$r )i1= r$.$r t)$ parti$ to
ar2itratio%= u%l$ it .i%d t)at t)$ aid
25
Page 26
a&r$$1$%t i %ull a%d 'oid= i%op$rati'$ or
i%0apa2l$ o. 2$i%& p$r.or1$d"F
T)$ la%&ua&$ o. S$0tio% 64 o. t)$ A0t Buot$d a2o'$
1a8$ it 0l$ar t)at %ot<it)ta%di%& a%3t)i%& 0o%tai%$d i%
Part I or i% t)$ Cod$ o. Ci'il Pro0$dur$= a Audi0ial aut)orit3=
<)$% $iJ$d o. a% a0tio% i% a 1att$r i% r$p$0t o. <)i0)
t)$ parti$ )a'$ 1ad$ a% a&r$$1$%t r$.$rr$d to i%
S$0tio% 66= )all= at t)$ r$Bu$t o. o%$ o. t)$ parti$ or
a%3 p$ro% 0lai1i%& t)rou&) or u%d$r )i1= r$.$r t)$
parti$ to ar2itratio%= u%l$ it .i%d t)at t)$ aid
a&r$$1$%t i %ull a%d 'oid= i%op$rati'$ or i%0apa2l$ o.
2$i%& p$r.or1$d" T)u= $'$% i.= u%d$r S$0tio% - r$ad <it)
S$0tio% (, o. t)$ CPC= t)$ /o12a3 Hi&) Court )ad t)$
Auridi0tio% to $%t$rtai% t)$ uit= o%0$ a r$Bu$t i 1ad$
23 o%$ o. t)$ parti$ or a%3 p$ro% 0lai1i%& t)rou&) or
u%d$r )i1 to r$.$r t)$ parti$ to ar2itratio%= t)$ /o12a3
Hi&) Court <a o2li&$d to r$.$r t)$ parti$ to ar2itratio%
u%l$ it .ou%d t)at t)$ a&r$$1$%t r$.$rr$d to i% S$0tio%
66 o. t)$ A0t <a %ull a%d 'oid= i%op$rati'$ or i%0apa2l$ o.
2$i%& p$r.or1$d" I% t)$ pr$$%t 0a$= t)$ app$lla%t 1a3
%ot )a'$ 1ad$ a% appli0atio% to r$.$r t)$ parti$ to
26
Page 27
ar2itratio%= 2ut S$0tio% 64 o. t)$ A0t do$ %ot r$.$r to a%3
appli0atio% a u0)" I%t$ad= it r$.$r to t)$ r$Bu$t o.
o%$ o. t)$ parti$ or a%3 p$ro% 0lai1i%& t)rou&) or u%d$r
)i1 to r$.$r t)$ parti$ to ar2itratio%" I% t)i 0a$= t)$
app$lla%t 1a3 %ot )a'$ 1ad$ a% appli0atio% to r$.$r t)$
parti$ to ar2itratio% at Si%&apor$ 2ut )a .il$d a% a..ida'it
i% r$pl3 to t)$ %oti0$ o. 1otio% a%d )a tat$d i%
para&rap) 5= 6 a%d 4 o. t)i a..ida'it t)at t)$ d$.$%da%t
)ad alr$ad3 i%'o8$d t)$ ar2itratio% a&r$$1$%t i% t)$
Fa0ilitatio% D$$d a%d t)$ ar2itratio% pro0$$di%& )a'$
0o11$%0$d a%d t)at t)$ uit <a a% a2u$ o. t)$ pro0$
o. 0ourt" T)$ app$lla%t )ad t)u 1ad$ a r$Bu$t to r$.$r
t)$ parti$ to ar2itratio% at Si%&apor$ <)i0) )ad alr$ad3
0o11$%0$d"
((" S$0tio% 64 o. t)$ A0t Buot$d a2o'$ alo 1a8$ it
0l$ar t)at $'$% <)$r$ u0) r$Bu$t i 1ad$ 23 a part3= it
<ill %ot r$.$r t)$ parti$ to ar2itratio%= i. it .i%d t)at t)$
a&r$$1$%t i %ull a%d 'oid= i%op$rati'$ or i%0apa2l$ o.
2$i%& p$r.or1$d" A t)$ '$r3 la%&ua&$ o. S$0tio% 64 o.
t)$ A0t 0lari.i$ t)$ <ord Da&r$$1$%tF <ould 1$a% t)$
a&r$$1$%t r$.$rr$d to i% S$0tio% 66 o. t)$ A0t" Clau$ (a!
27
Page 28
o. S$0tio% 66 o. t)$ A0t r$.$r to Dan a"reement in /ritin"
for ar$itration to /hich the Convention set forth in the
)irst Schedule applies.F T)$ Firt S0)$dul$ o. t)$ A0t $t
out t)$ di..$r$%t Arti0l$ o. t)$ N$< Hor8 Co%'$%tio% o%
t)$ R$0o&%itio% a%d E%.or0$1$%t o. For$i&% Ar2itral
A<ard= *-4;" Arti0l$ II o. t)$ N$< Hor8 Co%'$%tio% i
$Ctra0t$d )$r$i%2$lo<7
D*" Ea0) Co%tra0ti%& Stat$ )all r$0o&%iJ$ a%
a&r$$1$%t i% <riti%& u%d$r <)i0) t)$ parti$
u%d$rta8$ to u21it to ar2itratio% all or a%3
di..$r$%0$ <)i0) )a'$ ari$% or <)i0) 1a3
ari$ 2$t<$$% t)$1 i% r$p$0t o. d$.i%$d l$&al
r$latio%)ip= <)$t)$r 0o%tra0tual or %ot=
0o%0$r%i%& a u2A$0t>1att$r 0apa2l$ o.
$ttl$1$%t 23 ar2itratio%"
(" T)$ t$r1 Da&r$$1$%t i% <riti%&F )all
i%0lud$ a% ar2itral 0lau$ i% a 0o%tra0t or a%
ar2itratio% a&r$$1$%t= i&%$d 23 t)$ parti$
or 0o%tai%$d i% a% $C0)a%&$ o. l$tt$r or
t$l$&ra1"
5" T)$ 0ourt o. a Co%tra0ti%& Stat$= <)$%
$iJ$d o. a% a0tio% i% a 1att$r i% r$p$0t o.
<)i0) t)$ parti$ )a'$ 1ad$ a% a&r$$1$%t
<it)i% t)$ 1$a%i%& o. t)i arti0l$= )all= at t)$
r$Bu$t o. o%$ o. t)$ parti$= r$.$r t)$ parti$
to ar2itratio%= u%l$ it .i%d t)at t)$ aid
a&r$$1$%t i %ull a%d 'oid= i%op$rati'$ or
i%0apa2l$ o. 2$i%& p$r.or1$d"F
28
Page 29
It <ill 2$ 0l$ar .ro1 0lau$ *= ( a%d 5 o. t)$ N$< Hor8
Co%'$%tio% a $t out i% t)$ Firt S0)$dul$ o. t)$ A0t t)at
t)$ a&r$$1$%t r$.$rr$d to i% S$0tio% 66 o. t)$ A0t i a%
a&r$$1$%t i% <riti%& u%d$r <)i0) t)$ parti$ u%d$rta8$ to
u21it to ar2itratio% all or a%3 di..$r$%0$ <)i0) )a'$
ari$% or <)i0) 1a3 ari$ 2$t<$$% t)$1" T)u= t)$ 0ourt
<ill d$0li%$ to r$.$r t)$ parti$ to ar2itratio% o%l3 i. it .i%d
t)at t)$ ar2itratio% a&r$$1$%t i %ull a%d 'oid= i%op$rati'$
or i%0apa2l$ o. 2$i%& p$r.or1$d"
(5" A00ordi%& to Mr" Su2ra1a%iu1= )o<$'$r= a t)$ 1ai%
a&r$$1$%t i 'oida2l$ o% a00ou%t o. .raud a%d
1ir$pr$$%tatio% 23 t)$ app$lla%t= 0lau$ - o. t)$ 1ai%
a&r$$1$%t <)i0) 0o%tai% t)$ ar2itratio% a&r$$1$%t i%
<riti%& i alo %ull a%d 'oid" I% upport o. )i u21iio%=
)$ 0it$d t)$ d$0iio% o. t)i Court i% S(S Tea &states 3P4
Ltd. v. Chandmari Tea Co. 3P4 Ltd. (upra!" Para&rap) *(
a%d *5 o. t)$ Aud&1$%t o. t)i Court i% S(S Tea &states
3P4 Ltd. v. Chandmari Tea Co. 3P4 Ltd. (upra! ar$ Buot$d
)$r$i%2$lo<7
D*(" W)$% a 0o%tra0t 0o%tai% a% ar2itratio%
a&r$$1$%t= it i a 0ollat$ral t$r1 r$lati%& to
t)$ r$olutio% o. diput$= u%r$lat$d to t)$
29
Page 30
p$r.or1a%0$ o. t)$ 0o%tra0t" It i a i. t<o
0o%tra0tMo%$ i% r$&ard to t)$ u2ta%ti'$
t$r1 o. t)$ 1ai% 0o%tra0t a%d t)$ ot)$r
r$lati%& to r$olutio% o. diput$M)ad 2$$%
roll$d i%to o%$= .or purpo$ o. 0o%'$%i$%0$"
A% ar2itratio% 0lau$ i t)$r$.or$ a%
a&r$$1$%t i%d$p$%d$%t o. t)$ ot)$r t$r1 o.
t)$ 0o%tra0t or t)$ i%tru1$%t" R$ulta%tl3=
$'$% i. t)$ 0o%tra0t or it p$r.or1a%0$ i
t$r1i%at$d or 0o1$ to a% $%d o% a00ou%t o.
r$pudiatio%= .rutratio% or 2r$a0) o. 0o%tra0t=
t)$ ar2itratio% a&r$$1$%t <ould ur'i'$ .or
t)$ purpo$ o. r$olutio% o. diput$ arii%&
u%d$r or i% 0o%%$0tio% <it) t)$ 0o%tra0t"
*5" Si1ilarl3= <)$% a% i%tru1$%t or d$$d o.
tra%.$r (or a do0u1$%t a..$0ti%& i11o'a2l$
prop$rt3! 0o%tai% a% ar2itratio% a&r$$1$%t= it
i a 0ollat$ral t$r1 r$lati%& to r$olutio% o.
diput$= u%r$lat$d to t)$ tra%.$r or
tra%a0tio% a..$0ti%& t)$ i11o'a2l$ prop$rt3"
It i a i. t<o do0u1$%tMo%$ a..$0ti%& t)$
i11o'a2l$ prop$rt3 r$Buiri%& r$&itratio% a%d
t)$ ot)$r r$lati%& to r$olutio% o. diput$
<)i0) i %ot 0o1puloril3 r$&it$ra2l$Mar$
roll$d i%to a i%&l$ i%tru1$%t" T)$r$.or$=
$'$% i. a d$$d o. tra%.$r o. i11o'a2l$
prop$rt3 i 0)all$%&$d a %ot 'alid or
$%.or0$a2l$= t)$ ar2itratio% a&r$$1$%t <ould
r$1ai% u%a..$0t$d .or t)$ purpo$ o.
r$olutio% o. diput$ arii%& <it) r$.$r$%0$ to
t)$ d$$d o. tra%.$r"F
I% t)$ a.or$aid 0a$= t)i Court )a )$ld t)at i. t)$
do0u1$%t 0o%tai%i%& t)$ 1ai% a&r$$1$%t i %ot .ou%d to
2$ dul3 ta1p$d= $'$% i. it 0o%tai% ar2itratio% 0lau$= it
0a%%ot 2$ a0t$d upo% 2$0au$ S$0tio% 54 o. t)$ Sta1p
A0t 2ar t)$ aid do0u1$%t .ro1 2$i%& a0t$d upo%= 2ut i.
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Page 31
t)$ do0u1$%t i .ou%d to 2$ dul3 ta1p$d 2ut %ot
r$&it$r$d t)ou&) r$Buir$d to 2$ 0o1puloril3 r$&it$r$d=
t)$ 0ourt 0a% a0t upo% t)$ ar2itratio% a&r$$1$%t <)i0) i
a 0ollat$ral t$r1 o. t)$ 1ai% a&r$$1$%t a%d i a'$d 23
t)$ pro'io to S$0tio% 6- o. t)$ R$&itratio% A0t" T)u= a
p$r t)$ a.or$aid d$0iio% o. t)i Court i% S(S Tea &states
3P4 Ltd. v. Chandmari Tea Co. 3P4 Ltd. (upra!= t)$ 0ourt
<ill )a'$ to $$ i% $a0) 0a$ <)$t)$r t)$ ar2itratio%
a&r$$1$%t i alo 'oid= u%$%.or0$a2l$ or i%op$rati'$ alo%&
<it) t)$ 1ai% a&r$$1$%t or <)$t)$r t)$ ar2itratio%
a&r$$1$%t ta%d apart .ro1 t)$ 1ai% a&r$$1$%t a%d i
%ot %ull a%d 'oid"
(6" T)$ Hou$ o. Lord )a $Cplai%$d t)i pri%0ipl$ o.
$para2ilit3 i% Premium afta Products Ltd. v. )ili Shippin"
Compan# Ltd. & Ors. (upra! t)u7
D*+" T)$ pri%0ipl$ o. $para2ilit3 $%a0t$d i%
$0tio% + 1$a% t)at t)$ i%'alidit3 or
r$0iio% o. t)$ 1ai% 0o%tra0t do$ %ot
%$0$aril3 $%tail t)$ i%'alidit3 or r$0iio%
o. t)$ ar2itratio% a&r$$1$%t" T)$ ar2itratio%
a&r$$1$%t 1ut 2$ tr$at$d a a Dditi%0t
a&r$$1$%tF a%d 0a% 2$ 'oid or 'oida2l$ o%l3
o% &rou%d <)i0) r$lat$ dir$0tl3 to t)$
ar2itratio% a&r$$1$%t" O. 0our$ t)$r$ 1a3
2$ 0a$ i% <)i0) t)$ &rou%d upo% <)i0) t)$
1ai% a&r$$1$%t i i%'alid i id$%ti0al <it)
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t)$ &rou%d upo% <)i0) t)$ ar2itratio%
a&r$$1$%t i i%'alid" For $Ca1pl$= i. t)$
1ai% a&r$$1$%t a%d t)$ ar2itratio%
a&r$$1$%t ar$ 0o%tai%$d i% t)$ a1$
do0u1$%t a%d o%$ o. t)$ parti$ 0lai1 t)at
)$ %$'$r a&r$$d to a%3t)i%& i% t)$ do0u1$%t
a%d t)at )i i&%atur$ <a .or&$d= t)at <ill 2$
a% atta08 o% t)$ 'alidit3 o. t)$ ar2itratio%
a&r$$1$%t" /ut t)$ &rou%d o. atta08 i %ot
t)at t)$ 1ai% a&r$$1$%t <a i%'alid" It i
t)at t)$ i&%atur$ to t)$ ar2itratio%
a&r$$1$%t= a a Dditi%0t a&r$$1$%tF= <a
.or&$d" Si1ilarl3= i. a part3 all$&$ t)at
o1$o%$ <)o purport$d to i&% a a&$%t o%
)i 2$)al. )ad %o aut)orit3 <)at$'$r to
0o%0lud$ a%3 a&r$$1$%t o% )i 2$)al.= t)at i
a% atta08 o% 2ot) t)$ 1ai% a&r$$1$%t a%d
t)$ ar2itratio% a&r$$1$%t"
*;" O% t)$ ot)$r )a%d= i. (a i% t)i 0a$! t)$
all$&atio% i t)at t)$ a&$%t $C0$$d$d )i
aut)orit3 23 $%t$ri%& i%to a 1ai% a&r$$1$%t
i% t$r1 <)i0) <$r$ %ot aut)oriJ$d or .or
i1prop$r r$ao%= t)at i %ot %$0$aril3 a%
atta08 o% t)$ ar2itratio% a&r$$1$%t" It <ould
)a'$ to 2$ )o<% t)at <)at$'$r t)$ t$r1 o.
t)$ 1ai% a&r$$1$%t or t)$ r$ao% .or <)i0)
t)$ a&$%t 0o%0lud$d it= )$ <ould )a'$ )ad %o
aut)orit3 to $%t$r i%to a% ar2itratio%
a&r$$1$%t" E'$% i. t)$ all$&atio% i t)at
t)$r$ <a %o 0o%0lud$d a&r$$1$%t (.or
$Ca1pl$= t)at t$r1 o. t)$ 1ai% a&r$$1$%t
r$1ai%$d to 2$ a&r$$d! t)at i %ot
%$0$aril3 a% atta08 o% t)$ ar2itratio%
a&r$$1$%t" I. t)$ ar2itratio% 0lau$ )a 2$$%
a&r$$d= t)$ patti$ <ill 2$ pr$u1$d to )a'$
i%t$%d$d t)$ Bu$tio% o. <)$t)$r t)$r$ <a a
0o%0lud$d 1ai% a&r$$1$%t to 2$ d$0id$d 23
ar2itratio%"F
32
Page 33
(4" Appl3i%& t)$ pri%0ipl$ o. $para2ilit3 to t)$ .a0t o.
t)i 0a$= t)$ r$po%d$%t r$0i%d$d t)$ Fa0ilitatio% D$$d
23 %oti0$ dat$d (4",@"(,*, to t)$ app$lla%t o% t)$
.ollo<i%& &rou%d tat$d i% t)$ aid %oti0$ 23 it la<3$r7
D*" R$.$r$%0$ i 1ad$ to t)$ D$$d .or t)$
Pro'io% o. Fa0ilitatio% S$r'i0$ dat$d Mar0)
(4= (,,- (t)$ DD$$dF! 2$t<$$% World Sport
Group (Mauritiu! Li1it$d (DWSGMF! a%d our
0li$%t" U%d$r t)$ D$$d= <)i0) i t3l$d a a
.a0ilitatio% a&r$$1$%t= our 0li$%t a&r$$d to
pa3 WSGM D.a0ilitatio%F .$$ .or t)$
D.a0ilitatio%F $r'i0$ tat$d t)$r$u%d$r to
)a'$ 2$$% pro'id$d 23 WSGM" T)$
u%d$rl3i%& 0o%id$ratio% .or t)$ pa31$%t 23
our 0li$%t to WSGM= i% .a0t <$r$ t)$
r$pr$$%tatio% 1ad$ 23 WSGM t)at 7 (a!
WSGM= )ad $C$0ut$d i% I%dia (D/CCIF!
<)$r$u%d$r WSGM )ad 2$$% u%.$tt$r$d
Glo2al M$dia Ri&)t (Dt)$ aid ri&)tF!=
i%0ludi%& t)$ I%dia% Su20o%ti%$%t (i1pl3i%&
t)$r$23 a %atural 0orollar3 t)at t)$ $arli$r
M$dia Ri&)t a&r$$1$%t dat$d Mar0) *4=
(,,- 2$t<$$% WSGM a%d /CCI alo%& <it) it
r$tri0ti'$ 0o%ditio% )ad 2$$% 1utuall3
t$r1i%at$d!G (2! WSGM 0ould t)$r$a.t$r
r$li%Bui) t)$ M$dia Ri&)t .or t)$ I%dia%
Su20o%ti%$%t i% .a'our o. our 0li$%t .or aid
'alua2l$ 0o%id$ratio% to $%a2l$ our 0li$%t to
$%t$r i%to a dir$0t a&r$$1$%t <it) /CCIG (0!
t)$ aid ri&)t <$r$ u2iti%& <it) WSGM at
t)$ ti1$ o. $C$0utio% o. t)$ D$$d= i"$= Mar0)
(4= (,,-G a%d (d! WSGM )ad r$li%Bui)$d
t)o$ ri&)t i% .a'our o. /CCI to $%a2l$ /CCI
a%d our 0li$%t to $C$0ut$ a dir$0t M$dia Ri&)t
Li0$%$ A&r$$1$%t .or t)$ I%dia%
Su20o%ti%$%t"
33
Page 34
(" /CCI )a r$0$%tl3 2rou&)t to t)$ att$%tio%
o. our 0li$%t t)at t)$ Glo2al M$dia Ri&)t
a&r$$1$%t 2$t<$$% WSGM a%d /CCI dat$d
Mar0) (5= (,,- do$ %ot $Cit a%d i% t$r1 o.
Clau$ *5"4 o. t)$ a&r$$1$%t dat$d Mar0) *4=
(,,-= a.t$r $Cpir3 o. t)$ (
%d
$Ct$%io% t)$
1$dia ri&)t )ad auto1ati0all3 r$'$rt$d to
/CCI at 5 a"1" o% Mar0) (6= (,,- a%d t)u at
t)$ ti1$ o. $C$0utio% o. t)$ D$$d= WSGM did
%ot )a'$ a%3 ri&)t to r$li%Bui) a%dEor to
.a0ilitat$ t)$ pro0ur$1$%t o. I%dia
Su20o%ti%$%t 1$dia ri&)t .or t)$ IPL .ro1
/CCI a%d t)u %o .a0ilitatio% $r'i0$ 0ould
)a'$ 2$$% pro'id$d 23 WSGM"
5" I% 'i$< o. t)$ a2o'$= it i $'id$%t t)at t)$
r$pr$$%tatio% 23 WSGM t)at WSGM
r$li%Bui)$d it I%dia% Su20o%ti%$%t 1$dia
ri&)t .or t)$ IPL i% .a'our o. our 0li$%t to pa3
t)$ D.a0ilitatio%F .$$ u%d$r t)$ D$$d"
6" Ta8i%& 0o&%iJa%0$ o. t)$ a1$= /CCI:
Go'$r%i%& 0ou%0il at it 1$$ti%& )$ld at
Mu12ai= I%dia o% Ju%$ (4= (,*, appropriat$l3
$C$0ut$d a% a1$%d1$%t to M$dia Ri&)t
Li0$%$ A&r$$1$%t dat$d Mar0) (4= (,,-
2$t<$$% /CCI a%d our 0li$%t 23 d$l$ti%&= i%t$r
alia= 0lau$ *,"6 t)$r$o."
4" O% it part= a%d i% 'i$< o. t)$ .al$
r$pr$$%tatio% a%d .raud pla3$d 23 WSGM=
t)$ D$$d i 'oida2l$ at t)$ optio% o. our 0li$%t
a%d t)u our 0li$%t r$0i%d t)$ D$$d <it)
i11$diat$ $..$0t"F
T)$ &rou%d ta8$% 23 r$po%d$%t to r$0i%d t)$ Fa0ilitatio%
D$$d t)u i t)at t)$ app$lla%t did %ot )a'$ a%3 ri&)t to
r$li%Bui) a%dEor to .a0ilitat$ t)$ pro0ur$1$%t o. I%dia%
34
Page 35
u20o%ti%$%t 1$dia ri&)t .or t)$ IPL .ro1 /CCI a%d %o
.a0ilitatio% $r'i0$ 0ould )a'$ 2$$% pro'id$d 23 t)$
app$lla%t a%d t)$r$.or$ t)$ r$pr$$%tatio% 23 t)$
app$lla%t t)at t)$ app$lla%t r$li%Bui)$d it I%dia%
u20o%ti%$%t 1$dia ri&)t .or t)$ IPL i% .a'our o. t)$
r$po%d$%t .or <)i0) t)$ app$lla%t )ad to 2$ paid t)$
.a0ilitatio% .$$ u%d$r t)$ d$$d <a .al$ a%d a00ordi%&l3
t)$ Fa0ilitatio% D$$d <a 'oida2l$ at t)$ optio% o. t)$
r$po%d$%t o% a00ou%t o. .al$ r$pr$$%tatio% a%d .raud"
T)i &rou%d o. 0)all$%&$ to t)$ Fa0ilitatio% D$$d do$ %ot
i% a%3 1a%%$r a..$0t t)$ ar2itratio% a&r$$1$%t 0o%tai%$d
i% Clau$ - o. t)$ Fa0ilitatio% D$$d= <)i0) i i%d$p$%d$%t
o. a%d $parat$ .ro1 t)$ 1ai% Fa0ilitatio% D$$d a%d do$
%ot &$t r$0i%d$d a 'oid 23 t)$ l$tt$r dat$d (4",@"(,*,
o. t)$ r$po%d$%t" T)$ Di'iio% /$%0) o. t)$ /o12a3
Hi&) Court= t)$r$.or$= 0ould %ot )a'$ r$.u$d to r$.$r t)$
parti$ to ar2itratio% o% t)$ &rou%d t)at t)$ ar2itratio%
a&r$$1$%t <a alo 'oid alo%& <it) t)$ 1ai% a&r$$1$%t"
(@" Mr" Gopal Su2ra1a%iu1: 0o%t$%tio%= )o<$'$r= i
alo t)at t)$ ar2itratio% a&r$$1$%t <a i%op$rati'$ or
i%0apa2l$ o. 2$i%& p$r.or1$d a all$&atio% o. .raud 0ould
35
Page 36
2$ $%Buir$d i%to 23 t)$ 0ourt a%d %ot 23 t)$ ar2itrator"
T)$ aut)oriti$ o% t)$ 1$a%i%& o. t)$ <ord 9inoperative
or incapa$le of $ein" performed: do %ot upport t)i
0o%t$%tio% o. Mr" Su2ra1a%iu1" T)$ <ord 9inoperative
or incapa$le of $ein" performed: i% S$0tio% 64 o. t)$ A0t
)a'$ 2$$% ta8$% .ro1 Arti0l$ II (5! o. t)$ N$< Hor8
Co%'$%tio% a $t out i% para (( o. t)i Aud&1$%t"
R$d.$r% a%d Hu%t$r o% I%t$r%atio%al Ar2itratio% (Fi.t)
Editio%! pu2li)$d 23 t)$ OC.ord U%i'$rit3 Pr$ )a
$Cplai%$d t)$ 1$a%i%& o. t)$$ <ord 9inoperative or
incapa$le of $ein" performed: u$d i% t)$ N$< Hor8
Co%'$%tio% at pa&$ *6;= t)u7
DAt .irt i&)t it i di..i0ult to $$ a
diti%0tio% 2$t<$$% t)$ t$r1
9i%op$rati'$: a%d 9i%0apa2l$ o. 2$i%&
p$r.or1$d:" Ho<$'$r= a% ar2itratio%
0lau$ i i%op$rati'$ <)$r$ it )a 0$a$d
to )a'$ $..$0t a a r$ult= .or $Ca1pl$= o.
a .ailur$ 23 t)$ parti$ to 0o1pl3 <it) a
ti1$ li1it= or <)$r$ t)$ parti$ )a'$ 23
t)$ir 0o%du0t i1pli$dl3 r$'o8$d t)$
ar2itratio% a&r$$1$%t" /3 0o%trat= t)$
$Cpr$io% 9i%0apa2l$ o. 2$i%&
p$r.or1$d: app$ar to r$.$r to 1or$
pra0ti0al ap$0t o. t)$ prop$0ti'$
ar2itratio% pro0$$di%&" It appli$= .or
$Ca1pl$= i. .or o1$ r$ao% it i
i1poi2l$ to $ta2li) t)$ ar2itral
tri2u%al"F
36
Page 37
(+" Al2$rt Ja% Va% D$% /$r& i% a% arti0l$ titl$d DT)$
N$< Hor8 Co%'$%tio%= *-4; N A% O'$r'i$<F pu2li)$d i%
t)$ <$2it$ o. ICCA K<<<"ar2itratio%>
i00a"or&E1$diaE,E*(*(4;;6((+-;,E%$<O3or8O0o%'$%tio%O
o.>*-4;Oo'$r'i$<"pd.L= r$.$rri%& to Arti0l$ II(5! o. t)$ N$<
Hor8 Co%'$%tio%= tat$7
DT)$ <ord Dnull and voidF 1a3 2$
i%t$rpr$t$d a r$.$rri%& to t)o$ 0a$
<)$r$ t)$ ar2itratio% a&r$$1$%t i
a..$0t$d 23 o1$ i%'alidit3 ri&)t .ro1 t)$
2$&i%%i%&= u0) a la08 o. 0o%$%t du$ to
1ir$pr$$%tatio%= dur$= .raud or
u%du$ i%.lu$%0$"
T)$ <ord DinoperativeF 0a% 2$ aid to
0o'$r t)o$ 0a$ <)$r$ t)$ ar2itratio%
a&r$$1$%t )a 0$a$d to )a'$ $..$0t=
u0) a r$'o0atio% 23 t)$ parti$"
T)$ <ord Dincapa$le of $ein"
performedF <ould $$1 to appl3 to t)o$
0a$ <)$r$ t)$ ar2itratio% 0a%%ot 2$
$..$0ti'$l3 $t i%to 1otio%" T)i 1a3
)app$% <)$r$ t)$ ar2itratio% 0lau$ i
too 'a&u$l3 <ord$d= or ot)$r t$r1 o.
t)$ 0o%tra0t 0o%tradi0t t)$ parti$:
i%t$%tio% to ar2itrat$= a i% t)$ 0a$ o.
t)$ o>0all$d 0o>$Bual .oru1 $l$0tio%
0lau$" E'$% i% t)$$ 0a$= t)$ 0ourt
i%t$rpr$t t)$ 0o%tra0t pro'iio% i% .a'our
o. ar2itratio%"F
37
Page 38
(;" T)$ 2oo8 .%eco"nition and Conferment of )orei"n
-r$itral -/ards; - 'lo$al Commentar# on the e/ <or*
Convention= 23 Iro%8$= Na0i1i$%to= $t al"($d"! ((,*,! at
pa&$ ;( a37
DMot aut)oriti$ )old t)at t)$ a1$
0)ool o. t)ou&)t a%d approa0)$
r$&ardi%& t)$ t$r1 null and void alo
appl3 to t)$ t$r1 inoperative a%d
incapa$le of $ein" performed"
Co%$Bu$%tl3= t)$ 1aAorit3 o. aut)oriti$
do %ot i%t$rpr$t t)$$ t$r1 u%i.or1l3=
r$ulti%& i% a% u%.ortu%at$ la08 o.
u%i.or1it3" Wit) t)at 0a'$at= <$ )all
&i'$ a% o'$r'i$< o. t3pi0al $Ca1pl$
<)$r$ ar2itratio% a&r$$1$%t <$r$ )$ld
to 2$ (or %ot to 2$! i%op$rati'$ or
i%0apa2l$ o. 2$i%& p$r.or1$d"
T)$ t$r1 inoperative r$.$r to 0a$
<)$r$ t)$ ar2itratio% a&r$$1$%t )a
0$a$d to )a'$ $..$0t 23 t)$ ti1$ t)$
0ourt i a8$d to r$.$r t)$ parti$ to
ar2itratio%" For $Ca1pl$= t)$ ar2itratio%
a&r$$1$%t 0$a$ to )a'$ $..$0t i. t)$r$
)a alr$ad3 2$$% a% ar2itral a<ard or a
0ourt d$0iio% <it) res 1udicata $..$0t
0o%0$r%i%& t)$ a1$ u2A$0t 1att$r a%d
parti$" Ho<$'$r= t)$ 1$r$ $Cit$%0$ o.
1ultipl$ pro0$$di%& i %ot u..i0i$%t to
r$%d$r t)$ ar2itratio% a&r$$1$%t
i%op$rati'$" Additio%all3= t)$ ar2itratio%
a&r$$1$%t 0a% 0$a$ to )a'$ $..$0t i.
t)$ ti1$ li1it .or i%itiati%& t)$ ar2itratio%
or r$%d$ri%& t)$ a<ard )a $Cpir$d=
pro'id$d t)at it <a t)$ parti$: i%t$%t %o
lo%&$r to 2$ 2ou%d 23 t)$ ar2itratio%
a&r$$1$%t du$ to t)$ $Cpiratio% o. t)i
ti1$ li1it"
38
Page 39
Fi%all3= $'$ral aut)oriti$ )a'$ )$ld t)at
t)$ ar2itratio% a&r$$1$%t 0$a$ to )a'$
$..$0t i. t)$ parti$ <ai'$ ar2itratio%"
T)$r$ ar$ 1a%3 poi2l$ <a3 o. <ai'i%&
a ri&)t to ar2itrat$" Mot 0o11o%l3= a
part3 <ill <ai'$ t)$ ri&)t to ar2itrat$ i.= i%
a 0ourt pro0$$di%&= it .ail to prop$rl3
i%'o8$ t)$ ar2itratio% a&r$$1$%t or i. it
a0ti'$l3 puru$ 0lai1 0o'$r$d 23 t)$
ar2itratio% a&r$$1$%t"F
(-" T)u= t)$ ar2itratio% a&r$$1$%t do$ %ot 2$0o1$
Di%op$rati'$ or i%0apa2l$ o. 2$i%& p$r.or1$dF <)$r$
all$&atio% o. .raud )a'$ to 2$ i%Buir$d i%to a%d t)$ 0ourt
0a%%ot r$.u$ to r$.$r t)$ parti$ to ar2itratio% a
pro'id$d i% S$0tio% 64 o. t)$ A0t o% t)$ &rou%d t)at
all$&atio% o. .raud )a'$ 2$$% 1ad$ 23 t)$ part3 <)i0)
0a% o%l3 2$ i%Buir$d i%to 23 t)$ 0ourt a%d %ot 23 t)$
ar2itrator" . %adha*rishnan v. (aestro &n"ineers & Ors.
(upra! a%d -$dul Kadir Shamsuddin !u$ere v. (adhav
Pra$ha*ar Oa* (upra! <$r$ d$0iio% r$%d$r$d i% t)$
0o%t$Ct o. do1$ti0 ar2itratio% a%d %ot i% t)$ 0o%t$Ct o.
ar2itratio% u%d$r t)$ N$< Hor8 Co%'$%tio% to <)i0)
S$0tio% 64 o. t)$ A0t appli$" I% t)$ 0a$ o. u0)
ar2itratio% 0o'$r$d 23 t)$ N$< Hor8 Co%'$%tio%= t)$
Court 0a% d$0li%$ to 1a8$ a r$.$r$%0$ o. a diput$
39
Page 40
0o'$r$d 23 t)$ ar2itratio% a&r$$1$%t o%l3 i. it 0o1$ to
t)$ 0o%0luio% t)at t)$ ar2itratio% a&r$$1$%t i %ull a%d
'oid= i%op$rati'$ or i%0apa2l$ o. 2$i%& p$r.or1$d= a%d %ot
o% t)$ &rou%d t)at all$&atio% o. .raud or
1ir$pr$$%tatio% )a'$ to 2$ i%Buir$d i%to <)il$ d$0idi%&
t)$ diput$ 2$t<$$% t)$ parti$"
5," W$ 1a3 %o< 0o%id$r t)$ 0orr$0t%$ o. t)$ .i%di%&
o. t)$ Di'iio% /$%0) o. t)$ Hi&) Court i% t)$ i1pu&%$d
Aud&1$%t" T)$ Di'iio% /$%0) o. t)$ Hi&) Court )a )$ld
t)at t)$ Fa0ilitatio% D$$d <a part o. $'$ral a&r$$1$%t
$%t$r$d i%to a1o%&t di..$r$%t parti$ 0o11$%0i%& .ro1
(4",5"(,,- a%d= t)$r$.or$= 0a%%ot 2$ 0o%id$r$d a ta%d
apart a&r$$1$%t 2$t<$$% t)$ app$lla%t a%d t)$
r$po%d$%t a%d o 0o%id$r$d t)$ Fa0ilitatio% D$$d a
0o%trar3 to pu2li0 poli03 o. I%dia 2$0au$ it i li%8$d <it)
t)$ .i%a%0$= .u%d a%d ri&)t o. t)$ /CCI= <)i0) i a
pu2li0 2od3" T)i approa0) o. t)$ Di'iio% /$%0) o. t)$
Hi&) Court i %ot i% 0o%o%a%0$ <it) t)$ pro'iio% o.
S$0tio% 64 o. t)$ A0t= <)i0) 1a%dat$ t)at i% t)$ 0a$ o.
ar2itratio% a&r$$1$%t 0o'$r$d 23 t)$ N$< Hor8
Co%'$%tio%= t)$ Court <)i0) i $iJ$d o. t)$ 1att$r <ill
40
Page 41
r$.$r t)$ parti$ to ar2itratio% u%l$ t)$ ar2itratio%
a&r$$1$%t i %ull a%d 'oid= i%op$rati'$ or i%0apa2l$ o.
2$i%& p$r.or1$d" I% 'i$< o. t)$ pro'iio% o. S$0tio% 64
o. t)$ A0t= t)$ Di'iio% /$%0) o. t)$ Hi&) Court <a
r$Buir$d to o%l3 0o%id$r i% t)i 0a$ <)$t)$r Clau$ - o.
t)$ Fa0ilitatio% D$$d <)i0) 0o%tai%$d t)$ ar2itratio%
a&r$$1$%t <a %ull a%d 'oid= i%op$rati'$ or i%0apa2l$ o.
2$i%& p$r.or1$d"
5*" T)$ Di'iio% /$%0) o. t)$ Hi&) Court )a .urt)$r )$ld
t)at Clau$ - o. t)$ Fa0ilitatio% D$$d i%o.ar a it
r$tri0t$d t)$ ri&)t o. t)$ parti$ to 1o'$ t)$ 0ourt .or
appropriat$ r$li$. a%d alo 2arr$d t)$ ri&)t to trial 23 a
Aur3 <a 'oid .or 2$i%& oppo$d to pu2li0 poli03 a
pro'id$d i% S$0tio% (5 o. t)$ I%dia% Co%tra0t A0t= *;+(
a%d <a alo 'oid .or 2$i%& a% a&r$$1$%t i% r$trai%t o.
t)$ l$&al pro0$$di%& i% 'i$< o. S$0tio% (; o. t)$ aid A0t"
Parlia1$%t )a 1ad$ t)$ Ar2itratio% a%d Co%0iliatio% A0t=
*--@ pro'idi%& do1$ti0 ar2itratio% a%d i%t$r%atio%al
ar2itratio% a a 1od$ o. r$olutio% o. diput$ 2$t<$$%
t)$ parti$ a%d EC0$ptio% * to S$0tio% (; o. t)$ I%dia%
Co%tra0t A0t= *;+( 0l$arl3 tat$ t)at S$0tio% (; )all %ot
41
Page 42
r$%d$r ill$&al a 0o%tra0t= 23 <)i0) t<o or 1or$ p$ro%
a&r$$ t)at a%3 diput$ <)i0) 1a3 ari$ 2$t<$$% t)$1 i%
r$p$0t o. a%3 u2A$0t or 0la o. u2A$0t )all 2$ r$.$rr$d
to ar2itratio% a%d t)at o%l3 t)$ a1ou%t a<ard$d i% u0)
ar2itratio% )all 2$ r$0o'$ra2l$ i% r$p$0t o. t)$ diput$
o r$.$rr$d" Clau$ - o. t)$ Fa0ilitatio% D$$d i 0o%it$%t
<it) t)i poli03 o. t)$ l$&ilatur$ a r$.l$0t$d i% t)$
Ar2itratio% a%d Co%0iliatio% A0t= *--@ a%d i a'$d 23
EC0$ptio% * to S$0tio% (; o. t)$ I%dia% Co%tra0t A0t= *;+("
T)$ ri&)t to Aur3 trial i %ot a'aila2l$ u%d$r I%dia% la<"
T)$ .i%di%& o. t)$ Di'iio% /$%0) o. t)$ Hi&) Court=
t)$r$.or$= t)at Clau$ - o. t)$ Fa0ilitatio% D$$d i oppo$d
to pu2li0 poli03 a%d i 'oid u%d$r S$0tio% (5 a%d (; o.
t)$ I%dia% Co%tra0t A0t= *;+( i 0l$arl3 $rro%$ou"
5(" T)$ Di'iio% /$%0) o. t)$ Hi&) Court )a alo )$ld
t)at a all$&atio% o. .raud a%d $riou 1alpra0ti0$ o%
t)$ part o. t)$ app$lla%t ar$ i% iu$= it i o%l3 t)$ 0ourt
<)i0) 0a% d$0id$ t)$$ iu$ t)rou&) .urt)$ra%0$ o.
Audi0ial $'id$%0$ 23 $it)$r part3 a%d t)$$ iu$ 0a%%ot
2$ prop$rl3 &o%$ i%to 23 t)$ ar2itrator" A <$ )a'$
alr$ad3 )$ld= S$0tio% 64 o. t)$ A0t do$ %ot pro'id$ t)at
42
Page 43
t)$ 0ourt <ill %ot r$.$r t)$ parti$ to ar2itratio% i. t)$
all$&atio% o. .raud )a'$ to 2$ i%Buir$d i%to" S$0tio% 64
pro'id$ t)at o%l3 i. t)$ 0ourt .i%d t)at t)$ ar2itratio%
a&r$$1$%t i %ull a%d 'oid= i%op$rati'$ or i%0apa2l$ o.
2$i%& p$r.or1$d= it <ill d$0li%$ to r$.$r t)$ parti$ to
ar2itratio%"
55" T)$ Di'iio% /$%0) o. t)$ Hi&) 0ourt )a .urt)$r
)$ld t)at i%0$ t)$ $arli$r uit (Suit No"*;@- o. (,*,! <a
p$%di%& i% 0ourt i%0$ (4",@"(,*, a%d t)at uit <a i%t$r>
0o%%$0t$d a%d i%t$r>r$lat$d <it) t)$ $0o%d uit (Suit
No"*;(; o. (,*,!= t)$ 0ourt 0ould %ot allo< plitti%& o. t)$
1att$r a%d diput$ to 2$ d$0id$d 23 t)$ 0ourt i% I%dia i%
t)$ .irt uit a%d 23 ar2itratio% a2road i% r$&ard to t)$
$0o%d uit a%d i%'it$ 0o%.li0ti%& '$rdi0t o% t)$ iu$
<)i0) ar$ i%t$r>r$lat$d" T)i r$ao%i%& adopt$d 23 t)$
Di'iio% /$%0) o. t)$ /o12a3 Hi&) Court i% t)$ i1pu&%$d
Aud&1$%t i ali$% to t)$ pro'iio% o. S$0tio% 64 o. t)$ A0t
<)i0) do$ %ot $1po<$r t)$ 0ourt to d$0li%$ a r$.$r$%0$
to ar2itratio% o% t)$ &rou%d t)at a%ot)$r uit o% t)$ a1$
iu$ i p$%di%& i% t)$ I%dia% 0ourt"
43
Page 44
56" W$ 1a8$ it 0l$ar t)at <$ )a'$ %ot $Cpr$$d a%3
opi%io% o% t)$ diput$ 2$t<$$% t)$ app$lla%t a%d t)$
r$po%d$%t a to <)$t)$r t)$ Fa0ilitatio% D$$d <a
'oida2l$ or %ot o% a00ou%t o. .raud a%d 1ir$pr$$%tatio%"
Clau$ - o. t)$ Fa0ilitatio% D$$d tat$ inter alia t)at all
a0tio% or pro0$$di%& arii%& i% 0o%%$0tio% <it)= tou0)i%&
upo% or r$lati%& to t)$ Fa0ilitatio% D$$d= t)$ 2r$a0)
t)$r$o. a%dEor t)$ 0op$ o. t)$ pro'iio% o. t)$ S$0tio%
)all 2$ u21itt$d to t)$ ICC .or .i%al a%d 2i%di%&
ar2itratio% u%d$r it Rul$ o. Ar2itratio%" T)i ar2itratio%
a&r$$1$%t i% Clau$ - i <id$ $%ou&) to 2ri%& t)i diput$
<it)i% t)$ 0op$ o. ar2itratio%" To Buot$ %edfern -nd
5unter On International -r$itration (Fi.t) Editio% pa&$ *56
para ("*6*!
DW)$r$ all$&atio% o. .raud i% t)$
pro0ur$1$%t or p$r.or1a%0$ o. a 0o%tra0t
ar$ all$&$d= t)$r$ app$ar to 2$ %o r$ao%
.or t)$ ar2itral tri2u%al to d$0li%$
Auridi0tio%"F
H$%0$= it )a 2$$% ri&)tl3 )$ld 23 t)$ l$ar%$d Si%&l$ Jud&$
o. t)$ /o12a3 Hi&) Court t)at it i .or t)$ ar2itrator to
d$0id$ t)i diput$ i% a00orda%0$ <it) t)$ ar2itratio%
a&r$$1$%t"
44
Page 45
54" For t)$ a.or$aid r$ao%= <$ allo< t)$ app$al= $t
aid$ t)$ i1pu&%$d Aud&1$%t o. t)$ Di'iio% /$%0) o. t)$
Hi&) Court a%d r$tor$ t)$ ord$r o. t)$ l$ar%$d Si%&l$
Jud&$" T)$ parti$ )all 2$ar t)$ir o<% 0ot"

"""""#####""#########"J"
(A" I" Pat%ai8!

#""""####""#########""J"
(Fa88ir Mo)a1$d I2ra)i1 Iali.ulla!
N$< D$l)i=
Ja%uar3 (6= (,*6"
45
Page 1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
ARBITRATION PETITION NO. 34 OF 2013
Swiss Timing Limited Petitioner
Versus
Organising Committee,
Commonwealth Games 2010, Delhi. .es!ondent
J U D G E M E N T
SURINDER SINGH NIJJAR,J.
1. This is a !etition under Se"tion 11#$% read with
Se"tion 11#&% o' the (r)itration and Con"iliation ("t, 1**&
#hereina'ter re'erred to as +the (r)itration ("t,%, with a
!ra-er to a!!oint the nominee ar)itrator o' the
es!ondent and to 'urther "onstitute the ar)itral tri)unal,
)- a!!ointing the !residing ar)itrator in order to
ad.udi"ate the dis!utes that ha/e arisen )etween the
!arties.
2. The rele/ant 'a"ts as set out in the (r)itration Petition are
1
Page 2
as under01
3. The Petitioner is a "om!an- dul- in"or!orated under the
laws o' Swit2erland, ha/ing its registered o''i"e in
Corg3mont, Swit2erland. The res!ondent is the
Organising Committee, Commonwealth Games, 2010. 4t is
a so"iet- registered under the So"ieties egistration ("t,
15&0 #hereina'ter re'erred to as +the Organising
Committee,%, esta)lished 'or the !rimar- !ur!ose o'
!lanning, organising and deli/ering the Commonwealth
Games, 2010 Delhi #hereina'ter re'erred to as
+Commonwealth Games,% and ha/ing its registered o''i"e
in 6ew Delhi, 4ndia.
4. The !etitioner entered into an agreement
dated 11
th
7ar"h, 2010 with the res!ondent 'or !ro/iding
timing, s"ore and result s-stems #+TS s-stems8ser/i"es,%
as well as su!!orting ser/i"es re9uired to "ondu"t the
Commonwealth Games. (""ording to the !etitioner,
Clause 11.1 o' the a'oresaid agreement sti!ulated the
'ees, as set out in S"hedule :, whi"h shall )e !aid to the
2
Page 3
!etitioner 'or !er'orman"e o' the o)ligations "ontained in
the agreement. The a'oresaid S"hedule : gi/es details o'
the amounts whi"h were to )e !aid, in instalments, )- the
Organising Committee. The ser/i"e !ro/ider8Petitioner
was to su)mit monthl- ta; in/oi"es, detailing the
!a-ments to )e made )- the Organising Committee.
These in/oi"es were to )e !aid within :0 da-s o' the end
o' the month in whi"h the ta; in/oi"es were re"ei/ed )-
the Organising Committee. (ll !a-ments were to )e made
in Swiss <ran"s, unless the !arties agree otherwise in
writing. Clause 11.= !ro/ides that on the date o' the
agreement, the ser/i"e !ro/ider must !ro/ide the
Per'orman"e >an? Guarantee to the Organising
Committee to se"ure the !er'orman"e o' its o)ligations
under the agreement. Certain other o)ligations are
enumerated in the other "lauses, whi"h are not ne"essar-
to )e noti"ed 'or the !ur!oses o' the de"ision o' the
!resent !etition.
5. 4t is also noteworth- that in "onsideration o' the
3
Page 4
!etitioner@s ser/i"es as sti!ulated in the agreement, the
!etitioner was to re"ei/e a total amount o' CA<
2$,**0,00081#Swiss <ran"s Twent- <our 7illion 6ine
Aundred and 6inet- Thousand onl-%. 4t was also !ro/ided
in S"hedule : that !a-ment o' the =B o' the total ser/i"e
'ees was to )e made u!on "om!letion o' the
Commonwealth Games. (""ordingl-, the !etitioner sent
the in/oi"e 6o. ::=C$ dated 2C
th
O"to)er, 2010 'or the
!a-ment o' CA< 1,2$*,=00 #Swiss <ran"s One 7illion Two
Aundred <ort- 6ine Thousand <i/e Aundred onl-%. This
re!resents the remaining =B whi"h was to )e !aid u!on
"om!letion o' the Commonwealth Games
on 2C
th
O"to)er, 2010. The !etitioner had also !aid to the
Organising Committee a sum o' s. 1=,00,00081
#46 1.= million% as Darnest 7one- De!osit #D7D%, 'or
su""ess'ull- "om!leting the TS ser/i"es as !ro/ided in
the agreement.
6. (""ording to the !etitioner, the res!ondent de'aulted in
ma?ing the !a-ment without an- .usti'ia)le reasons. 6ot
4
Page 5
onl- the amount was not !aid to the !etitioner, the
res!ondent sent a letter dated 1=
th
De"em)er, 2010
as?ing the !etitioner to e;tend the >an? Guarantee till
:1
st
Eanuar-, 2011. The !etitioner in'ormed the
res!ondent that the >an? Guarantee had alread- )een
terminated and released on "om!letion o' the
Commonwealth Games in O"to)er, 2010. 4t is also the
"ase o' the !etitioner that there is no !ro/ision in the
ser/i"e agreement 'or e;tension o' the >an? Guarantee.
The !etitioner reiterated its "laim 'or the a'oresaid
amount. Through letter dated 2&
th
Eanuar-, 2011, the
!etitioner demanded re!a-ment o' s. 1= la?hs
de!osited as D7D. 4nstead o' ma?ing the !a-ment to the
!etitioner and other "om!anies, the res!ondent issued a
Press Communi9u3 on 2
nd
<e)ruar-, 2011 de"laring
that !art !a-ments to nine 'oreign /endors, in"luding the
!etitioner, ha/e )een withheld 'or +non1!er'orman"e o'
the "ontra"t,. The !etitioner is said to ha/e !rotested
against the a'oresaid "ommuni9u3 through letter dated $
th
<e)ruar-, 2011. 4t was reiterated that the !etitioner had
5
Page 6
satis'a"toril- !er'ormed the o)ligations in the ser/i"e
agreement o' 11
th
7ar"h, 2010. Sin"e the res!ondent was
dis!uting its lia)ilit- to !a- the amounts, the !etitioner
ser/ed a 'ormal Dis!ute 6oti'i"ation on the res!ondent
under Clause :5 o' the agreement.
7. The !etitioner 'urther !oints out that on C
th
<e)ruar-,
2011, the res!ondent "alled u!on the !etitioner to 'ul'il its
alleged outstanding o)ligations under the agreement
in"luding handing o/er o' the Lega"- >oards, "om!letion
o' the 'ormalities o' the material, whi"h were re9uired to
)e shi!!ed out and to 'ul'il "ertain other re9uirements as
set out in its earlier e1mails in order to !re!are the
+agreement "losure re!ort,. The res!ondent also stated
that the- were not addressing the issue o' in/o?ing the
Dis!ute esolution Clause as the- were interested in
settling the dis!ute ami"a)l-. The !etitioner !leads that
the res!ondent 'ailed in its "ommitment 'or !a-ments
towards ser/i"es rendered, not onl- towards the
!etitioner )ut also towards other international "om!anies
6
Page 7
'rom (ustralia, >elgium, Dngland, <ran"e, German-, 4tal-,
the 6etherlands and Swit2erland, whi"h had !ro/ided
/arious ser/i"es to the res!ondent at the Commonwealth
Games. 4t also a!!ears that "olle"ti/e letters were written
on )ehal' o' /arious "om!anies )- the am)assadors o' the
"on"erned "ountries, to the <inan"e 7inister o' 4ndia
indi"ating the de'ault in !a-ments o' the amounts due.
The !etitioners, there'ore, "laim that the- were le't with
no alternati/e )ut to in/o?e ar)itration as !ro/ided under
Clause :5.& o' the agreement. The !etitioners ha/e
nominated the ar)itrator on its )ehal' namel- Eusti"e S.6.
Varia/a, 'ormer Eudge o' the Su!reme Court o' 4ndia. (
noti"e to this e''e"t was ser/ed on the res!ondent through
a "ommuni"ation dated 22
nd
(!ril, 201:. Sin"e no
res!onse was re"ei/ed a reminder was issued on 2*
th
7a-,
201:. F!on su"h 'ailure, the !etitioners ha/e 'iled the
!resent !etition.
. 4n the "ounter a''ida/it all the a/erments made )- the
!etitioners ha/e )een denied, as )eing in"orre"t in 'a"ts
7
Page 8
and in law. The res!ondents ha/e raised two !reliminar-
o).e"tions, whi"h are as 'ollows01
#i% The !etitioner has not 'ollowed the dis!ute
resolution me"hanism as e;!ressl- !ro/ided in the
agreement dated 11
th
7ar"h, 2010. 6o e''orts
ha/e )een made )- the !etitioner to see?
resolution o' the dis!ute as !ro/ided under Clause
:5. On the other hand, the res!ondent through
numerous "ommuni"ations in/ited the !etitioner
'or ami"a)le resolution o' the dis!ute. The
res!ondent relies on "ommuni"ations dated :
rd
Eanuar-, 2011, *
th
Eanuar-, 2011, 10
th
Eanuar-, 2011, 1
st
<e)ruar-, 2011
and 2
nd
<e)ruar-, 2011.
#ii% The "ontra"t stands /itated and is void ab initio in
/iew o' Clauses 2*, :0 and :$ o' the (greement
dated 11
th
7ar"h, 2010. Aen"e, the !etitioner is
not entitled to an- !a-ment whatsoe/er in res!e"t
o' the "ontra"t and is lia)le to reim)urse the
8
Page 9
!a-ments alread- made. There'ore, there is no
)asis to in/o?e ar)itration "lause.
The res!ondent !oints out that a "om)ined
reading o' Clause 2* and Clause :$ would show
that the !etitioner had warranted that it will ne/er
engage in "orru!t, 'raudulent, "ollusi/e or "oer"i/e
!ra"ti"es in "onne"tion with the agreement. The
!etitioner would )e lia)le to indemni'- the
es!ondent against all losses su''ered or in"urred
as a result o' an- )rea"h o' the agreement or an-
negligen"e, unlaw'ul "ondu"t or wil'ul mis"ondu"t.
The res!ondent ma- terminate the agreement
whene/er it determines that the !etitioner had
engaged in an- "orru!t, 'raudulent, "ollusi/e or
"oer"i/e !ra"ti"e in "onne"tion with the
agreement. The res!ondent see?s to esta)lish the
a'oresaid non1lia)ilit- "lause on the )asis o'
registration o' Criminal Case )eing CC 6o. 22 o'
2011 under Se"tion 1201>, read with Se"tions $20,
$2C, $55 and $CC 4PC and Se"tion 1:#2% read with
9
Page 10
Se"tion 1:#1%#d% o' the Pre/ention o' Corru!tion
("t against Suresh Galmadi, the then Chairman o'
the Organising Committee and other o''i"ials o'
the res!ondent alongwith some o''i"ials o' the
!etitioner, namel- 7r. S. Chianese, Sales H
7ar?eting 7anager, 7r. Christo!he >ertaud,
General 7anager and 7r. E. S!iri, 7ulti S!orts
D/ents H Sales 7anager.

!. 4t is 'urther the "ase o' the res!ondent that due to the
!enden"- o' the "riminal !ro"eedings in the trial "ourt,
the !resent !etition ought not to )e entertained. 4n "ase
the ar)itration !ro"eeding "ontinues simultaneousl- with
the "riminal trial, there is real danger o' "on'li"ting
"on"lusions )- the two 'ora, leading to unne"essar-
"on'usion.
10. 4 ha/e heard the learned "ounsel 'or the !arties.
11. The su)missions made in the !etition as well as in the
10
Page 11
"ounter a''ida/it ha/e )een reiterated )e'ore me )- the
learned "ounsel. 4 ha/e gi/en due "onsideration to the
su)missions made )- the learned "ounsel 'or the !arties.
12. The learned "ounsel 'or the !etitioners has relied on
an unre!orted Order o' this Court dated 11
th
(!ril, 2012 in
M"# N$##%& 'S()&*+,%-./0 L)/. Vs. O,1-.&*&.1 C233&).
C2332.(+-%)4 G-3+. 2010, wherein the dis!ute in
almost identi"al "ir"umstan"es ha/e )een re'erred to
ar)itration.
13. On the other hand, learned "ounsel 'or the res!ondent
has relied on a .udgment o' this Court in N.
R-/4-5,&#4.-. Vs. M-+#),2 E.1&.++,# 6 O,#.
1
Ae
has also relied u!on G$,$ G,-.)4 S-4+7 S)4-.
M++,14-) V-.-,-# Vs. V+/ P,-5-#4 6 O,#.
2
elian"e is
also !la"ed on I./&- H2$#+42%/ -./ H+-%)48-,+ L)/.
V#. LG H2$#+42%/ -./ H+-%)48-,+ L)/.
:
1
(2010) 1 SCC 72
2
#201:% C SCC &22
3
200C #=% SCC =10
11
Page 12
14. The !ro"edure 'or Dis!ute esolution has )een
!ro/ided in Clause :5 o' the agreement, whi"h is as
under01
93. D&#:$)+ R+#2%$)&2.
:5.1 4' a dis!ute arises )etween the !arties out o'
or relating to this (greement #a +D&#:$)+,%, an-
!art- see?ing to resol/e the Dis!ute must do so
stri"tl- in a""ordan"e with the !ro/isions o' this
"lause. Com!lian"e with the !ro/isions o' this
"lause is a "ondition !re"edent to see?ing a
resolution o' the Dis!ute at the ar)itral tri)unal
"onstituted in a""ordan"e with this "lause :5.
:5.2 During a Dis!ute, ea"h !art- must "ontinue
to !er'orm its o)ligations under this (greement.
:5.: ( !art- see?ing to resol/e the Dis!ute must
noti'- the e;isten"e and nature o' the Dis!ute to
the other !art- #9)4+ N2)&;&8-)&2.,%. F!on
re"ei!t o' the 6oti'i"ation the Parties must use
their res!e"ti/e reasona)le endea/ours to
negotiate to resol/e the Dis!ute )- dis"ussions
)etween Delhi 2010 #or a !erson it nominates% and
the Ser/i"e Pro/ider #or a !erson it nominates%. 4'
the Dis!ute has not )een resol/ed within 10
>usiness Da-s o' re"ei!t o' the 6oti'i"ation #or
su"h other !eriod as agreed in writing )- the
!arties% then the !arties must re'er the Dis!ute to
the Chairman o' Delhi 2010 and the Chie'
D;e"uti/e O''i"er or its e9ui/alent% o' the Ser/i"e
Pro/ider.
:5.$ 4' the Dis!ute has not )een settled within =
>usiness Da-s o' re'erral under Clause :5.:, the
Dis!ute shall )e settled )- ar)itration in
12
Page 13
a""ordan"e with the 'ollowing "lauses.
:5.= <or an- dis!ute arising a'ter :1 Eul-, 2010,
the rele/ant !eriod in "lause :5.: is $5 hours and
the rele/ant !eriod in "lause :5.$ is 2$ hours.
:5.& The Dis!ute shall )e re'erred to a tri)unal
"onsisting o' three (r)itrators, one to )e
nominated )- ea"h !art-, with the !residing
(r)itrator to )e nominated )- the two ar)itrators
nominated )- the !arties. The (r)itrators shall )e
retired .udges o' the Su!reme Court or Aigh Courts
o' 4ndia. Aowe/er, the Presiding (r)itrator shall )e
a retired Su!reme Court Eudge.
:5.C The !la"e o' ar)itration shall )e 6ew Delhi.
(ll ar)itration !ro"eedings shall )e "ondu"ted in
Dnglish in a""ordan"e with the !ro/isions o' the
(r)itration and Con"iliation ("t, 1**& as amended
'rom time to time.
:5.5 The ar)itration award will )e 'inal and )inding
u!on the !arties, and ea"h !art- will )ear its own
"osts o' ar)itration and e9uall- share the 'ees o'
the ar)itral tri)unal unless the ar)itral tri)unal
de"ides otherwise.
:5.* This "lause :5 will not a''e"t ea"h !art-@s
rights to see? interlo"utor- relie' in a "ourt o'
"om!etent .urisdi"tion.,
15. 4 am una)le to agree with the su)mission made )- the
learned "ounsel 'or the res!ondent that the !etitioner has
not satis'ied the "ondition !re"edent under Clause :5.:.
( !erusal o' the "orres!onden"e !la"ed on the re"ord o'
13
Page 14
the !etition "learl- shows that not onl- the !etitioner )ut
e/en the am)assadors o' the /arious go/ernments had
made "onsidera)le e''orts to resol/e the issue without
ha/ing to ta?e re"ourse to 'ormal ar)itration. 4t is onl-
when all these e''orts 'ailed, that the !etitioner
"ommuni"ated to the res!ondent its intention to
"ommen"e ar)itration )- letter 8noti"e dated 22
nd
(!ril,
201:. This was !re"eded )- letters dated $
th
<e)ruar-,
2011, 1$
th
7ar"h, 2011 and 20
th
(!ril, 2011 whi"h "learl-
re'le"t the e''orts made )- the !etitioner to resol/e
dis!utes through dis"ussions and negotiations )e'ore
sending the noti"e in/o?ing ar)itration "lause.
16. 4t is e/ident 'rom the "ounter a''ida/it 'iled )- the
res!ondents that the dis!utes ha/e arisen )etween the
!arties out of or relating to the agreement dated 11
th
7ar"h, 2010. On the one hand, the res!ondent dis!utes
the "laims made )- the !etitioner and on the other, it
ta?es the !lea that e''orts were made to ami"a)l- !ut a
+closure to the agreement,. 4, there'ore, do not
14
Page 15
'ind an- merit in the su)mission o' the res!ondent that
the !etition is not maintaina)le 'or non1"om!lian"e with
Clause :5.: o' the Dis!ute esolution Clause.
17. The se"ond !reliminar- o).e"tion raised )- the
res!ondent is on the ground that the "ontra"t stands
/itiated and is /oid1a)1initio in /iew o' Clauses 2*, :0 and
:$ o' the agreement dated 11
th
7ar"h, 2010. 4 am o' the
"onsidered o!inion that the a'oresaid !reliminar-
o).e"tion is without an- su)stan"e. Fnder Clause 2*, )oth
sides ha/e gi/en a warrant- not to indulge in "orru!t
!ra"ti"es to indu"e e;e"ution o' the (greement. Clause
:$ em!owers the Organising Committee to terminate the
"ontra"t a'ter de"iding that the "ontra"t was e;e"uted in
)rea"h o' the underta?ing gi/en in Clause 2* o' the
Contra"t. These are allegations whi"h will ha/e to )e
esta)lished in a !ro!er 'orum on the )asis o' the oral and
do"umentar- e/iden"e, !rodu"ed )- the !arties, in
su!!ort o' their res!e"ti/e "laims. The o).e"tion ta?en is
to the manner in whi"h the grant o' the "ontra"t was
15
Page 16
mani!ulated in 'a/our o' the !etitioner. The se"ond
ground is that the rates "harged )- the !etitioner were
e;or)itant. >oth these issues "an )e ta?en "are o' in the
award. Certainl- i' the res!ondent is a)le to !rodu"e
su''i"ient e/iden"e to show that the similar ser/i"es "ould
ha/e )een !ro"ured 'or a lesser !ri"e, the ar)itral tri)unal
would ta?e the same into a""ount whilst "om!uting the
amounts !a-a)le to the !etitioner. (s a !ure 9uestion o'
law, 4 am una)le to a""e!t the /er- )road !ro!osition that
whene/er a "ontra"t is said to )e void-ab-initio, the Courts
e;er"ising .urisdi"tion under Se"tion 5 and Se"tion 11 o'
the (r)itration ("t, 1**& are rendered !owerless to re'er
the dis!utes to ar)itration.
1. Aowe/er, the res!ondent has !la"ed strong relian"e
on the .udgment o' this Court in N. R-/4-5,&#4.-.
'#$:,-0. 4n that "ase, dis!utes had arisen )etween the
a!!ellant and the res!ondent, who were !artners in a 'irm
?nown as 7aestro Dngineers. The a!!ellant had retired
'rom the 'irm. Su)se9uentl-, the a!!ellant alleged that
16
Page 17
he "ontinued to )e a !artner. The res!ondent 'iled a Ci/il
Suit see?ing a de"laration that the a!!ellant is not a
!artner o' the 'irm. 4n this suit, the a!!ellant 'iled an
a!!li"ation under Se"tion 5 o' the (r)itration ("t see?ing
re'eren"e o' the dis!ute to the ar)itration. The !lea was
re.e"ted )- the trial "ourt and the Aigh Court in Ci/il
e/ision. This Court also re.e"ted the !ra-er o' the
a!!ellant 'or re'eren"e o' the dis!ute to ar)itration. This
Court 'ound that su).e"t matter o' the dis!ute was within
the am)it o' the ar)itration "lause. 4t was held as under 0
+1$. The learned "ounsel 'or the res!ondents
'urther argued that the su).e"t1matter o' the
suit )eing OS 6o. =2& o' 200& was a di''erent
one and it was not within the am)it o' the
ar)itration "lause o' the !artnershi! deed
dated C1$1200: and that the !artnershi! deed
had "eased to e;ist a'ter the 'irm was
re"onstituted due to the alleged retirement o'
the a!!ellant. There'ore, the trial "ourt was
.usti'ied in not re'erring the matter to the
ar)itrator.
1=. The a!!ellant had on the other hand
"ontended that the su).e"t1matter o' the suit
was within the am)it o' the ar)itration "lause
sin"e a""ording to him the dis!ute related to
his retirement and the settlement o' his dues
a'ter he was deemed to ha/e retired a""ording
17
Page 18
to the res!ondents. <urther, it was his
"ontention that the !artnershi! deed dated &1
121200= was not a /alid one as it was not
'ramed in "om!lian"e with the re9uirements
under the Partnershi! ("t, 1*:2. There'ore,
the argument o' the res!ondents that the
su).e"t1matter o' the suit did not 'all within the
am)it o' the ar)itration "lause o' the original
!artnershi! deed dated C1$1200: "annot )e
sustained. Ie are in agreement with the
"ontention o' the a!!ellant to this e''e"t.
1&. 4t is "lear 'rom a !erusal o' the
do"uments that there was a "lear dis!ute
regarding the re"onstitution o' the !artnershi!
'irm and the su)se9uent deed 'ramed to that
e''e"t. The dis!ute was relating to the
"ontinuation o' the a!!ellant as a !artner o'
the 'irm, and es!e"iall- when the res!ondents
!ra-ed 'or a de"laration to the e''e"t that the
a!!ellant had "eased to )e a !artner o' the
'irm a'ter his retirement, there is no dou)t in
our mind that the dis!ute s9uarel- 'ell within
the !ur/iew o' the ar)itration "lause o' the
!artnershi! deed dated C1$1200:. There'ore,
the ar)itrator was "om!etent to de"ide the
matter relating to the e;isten"e o' the original
deed and its /alidit- to that e''e"t. Thus, the
"ontention that the su).e"t1matter o' the suit
)e'ore the 4st (dditional Distri"t 7unsi'' Court
at Coim)atore was )e-ond the !ur/iew o' the
ar)itration "lause, "annot )e a""e!ted.,
1!. Aa/ing 'ound that the su).e"t matter o' the suit was
within the .urisdi"tion o' the ar)itration, it was held that
18
Page 19
the dis!utes "an not )e re'erred to ar)itration. This Court
a!!ro/ed the 'inding o' the Aigh Court that sin"e the "ase
relates to allegations o' 'raud and serious mal!ra"ti"es on
the !art o' the res!ondents, su"h a situation "an onl- )e
settled in "ourt through 'urtheran"e o' detailed e/iden"e
)- either !arties and su"h a situation "an not )e !ro!erl-
gone into )- the ar)itrator. 4n m- o!inion, the a'oresaid
o)ser/ations runs "ounter to the ratio o' the law laid down
)- this Court in H&./$#)-. P+),2%+$3 C2,:.. L)/. Vs.
P&.58&)< M&/(-< P+),2%+$3#
4
, wherein this Court in
Paragra!h 1$ o)ser/ed as 'ollows0
+4' in an agreement )etween the !arties )e'ore the
"i/il "ourt, there is a "lause 'or ar)itration, it is
mandator- 'or the "i/il "ourt to re'er the dis!ute to
an ar)itrator. 4n the instant "ase the e;isten"e o'
an ar)itral "lause in the agreement is a""e!ted )-
)oth the !arties as also )- the "ourts )elow.
There'ore, in /iew o' the mandator- language o'
Se"tion 5 o' the ("t, the "ourts )elow ought to
ha/e re'erred the dis!ute to ar)itration.,
20. 4n m- o!inion, the o)ser/ations in H&./$#)-.
P+),2%+$3 C2,:.. L)/. '#$:,-0 la-s down the "orre"t
law. (lthough, re'eren"e has )een made to the a'oresaid
4
(2003) 6 SCC 503
19
Page 20
o)ser/ations in N. R-/4-5,&#4.-. '#$:,-0 )ut the same
ha/e not )een distinguished. ( Two Eudge >en"h o' this
Court in P. A.-./ G-=-:-)4& R-=$ 6 O,#. Vs. P.V.G.
R-=$ 'D+-/0 6 O,#.
5
, had earlier "onsidered the s"o!e o'
the !ro/isions "ontained in Se"tion 5 and o)ser/ed as
'ollows01
+. 4n the matter )e'ore us, the ar)itration
agreement "o/ers all the dis!utes )etween the
!arties in the !ro"eedings )e'ore us and e/en
more than that. (s alread- noted, the ar)itration
agreement satis'ies the re9uirements o' Se"tion C
o' the new ("t. The language o' Se"tion 5 is
!erem!tor-. 4t is, there'ore, o)ligator- 'or the
Court to re'er the !arties to ar)itration in terms
o' their ar)itration agreement. 6othing
remains to )e de"ided in the original a"tion or the
a!!eal arising there'rom. There is no 9uestion o'
sta- o' the !ro"eedings till the ar)itration
!ro"eedings "on"lude and the award )e"omes
'inal in terms o' the !ro/isions o' the new ("t. (ll
the rights, o)ligations and remedies o' the !arties
would now )e go/erned )- the new ("t in"luding
the right to "hallenge the award. The "ourt to
whi"h the !art- shall ha/e re"ourse to "hallenge
the award would )e the "ourt as de'ined in "lause
#e% o' Se"tion 2 o' the new ("t and not the "ourt to
whi"h an a!!li"ation under Se"tion 5 o' the new
("t is made. (n a!!li"ation )e'ore a "ourt under
Se"tion 5 merel- )rings to the "ourt@s noti"e that
the su).e"t1matter o' the a"tion )e'ore it is the
su).e"t1matter o' an ar)itration agreement. This
5
(2000) 4 SCC 539
20
Page 21
would not )e su"h an a!!li"ation as "ontem!lated
under Se"tion $2 o' the ("t as the "ourt tr-ing the
a"tion ma- or ma- not ha/e had .urisdi"tion to tr-
the suit to start with or )e the "om!etent "ourt
within the meaning o' Se"tion 2#e% o' the new
("t.,
21. This .udgment was not e/en )rought to the noti"e o'
the Court in N. R-/4-5,&#4.-. '#$:,-0. 4n m- o!inion,
.udgment in N. R-/4-5,&#4.-. '#$:,-0 is per incuriam
on two grounds0 <irstl-, the .udgment in H&./$#)-.
P+),2%+$3 C2,:.. L)/. '#$:,-0 though re'erred has not
)een distinguished )ut at the same time is not 'ollowed
also. The .udgment in P. A.-./ G-=-:-)4& R-=$ 6 O,#.
'#$:,-0 was not e/en )rought to the noti"e o' this Court.
There'ore, the same has neither )een 'ollowed nor
"onsidered. Se"ondl-, the !ro/ision "ontained in Se"tion
1& o' the (r)itration ("t, 1**& were also not )rought to
the noti"e )- this Court. There'ore, in m- o!inion, the
.udgment in N. R-/4-5,&#4.-. '#$:,-0 does not la-
down the "orre"t law and "an not )e relied u!on.
22. (s noti"ed a)o/e, the attention o' this Court was not
21
Page 22
drawn to the !ro/ision "ontained in Se"tion 1& o' the
(r)itration ("t, 1**& in the "ase o' N. R-/4-5,&#4.-.
'#$:,-0. Se"tion 1& !ro/ides that the (r)itral Tri)unal
would )e "om!etent to rule on its own .urisdi"tion
in"luding ruling on an- o).e"tion with regard to e;isten"e
or /alidit- o' the ar)itration agreement. The (r)itration
("t em!hasises that an ar)itration "lause whi"h 'orms
!art o' a "ontra"t shall )e treated as an agreement
independent o' the other terms o' the "ontra"t. 4t 'urther
!ro/ides that a de"ision )- the (r)itral Tri)unal that the
"ontra"t is null and void shall not entail ipso jure the
in/alidit- o' the ar)itration "lause. The a'oresaid
!ro/ision "ame u! 'or "onsideration )- this Court in
T2/-< H23+# 6 I.;,-#),$8)$,+ P>). L)/. Vs.
L$/4&-.- I3:,2>+3+.) T,$#) 6 A.,.
6

23. 4n the a'oresaid "ase, the designated Eudge o' the
Pun.a) H Aar-ana Aigh Court had re'used to re'er the
dis!utes to ar)itration. The Aigh Court had a""e!ted the
6
2013 (7) SCALE 327: 2013 (2) Arb. LR 241 (SC)
22
Page 23
!lea that sin"e the underl-ing "ontra"t was /oid, the
ar)itration "lause !erished with it. The .udgment o' the
Aigh Court was "hallenged in this Court, )- 'iling a S!e"ial
Lea/e Petition. >e'ore this Court it was su)mitted )- the
a!!ellant that the Aigh Court treated the a!!li"ation
under Se"tion 11#&% o' the (r)itration ("t as i' it was
de"iding a suit )ut without addu"ing e/iden"e. el-ing on
SBP 6 C2. Vs. P-)+% E.1&.++,&.1 L)/., it was su)mitted
that the Aigh Court was onl- re9uired to "ondu"t a
!reliminar- en9uir- as to whether there was a /alid
ar)itration agreementJ or whether it was a stale "laim. On
the other hand, it was su)mitted )- the res!ondents that
on"e the Aigh Court had 'ound the main agreement to )e
/oid, the "ontents thereo' in"luding the ar)itration "lause
are also rendered /oid.
24. This Court re.e"ted the a'oresaid su)mission o' the
res!ondents with the 'ollowing o)ser/ations 0
+1:. Ie ha/e "are'ull- "onsidered the su)missions
made on )ehal' o' the res!e"ti/e !arties and we
are o' the /iew that the learned designated Eudge
23
Page 24
e;"eeded the )ounds o' his .urisdi"tion, as
en/isaged in S>P H Co. #su!ra%. 4n our /iew, the
learned designated Eudge was not re9uired to
underta?e a detailed s"rutin- o' the merits and de1
merits o' the "ase, almost as i' he was de"iding a
suit. The learned Eudge was onl- re9uired to
de"ide su"h !reliminar- issues su"h as .urisdi"tion
to entertain the a!!li"ation, the e;isten"e o' a
/alid ar)itration agreement, whether a li/e "laim
e;isted or not, 'or the !ur!ose o' a!!ointment o'
an ar)itrator. >- the im!ugned order, mu"h more
than what is "ontem!lated under Se"tion 11#&% o'
the 1**& ("t was sought to )e de"ided, without
an- e/iden"e )eing addu"ed )- the !arties. The
issue
regarding the "ontinued e;isten"e o' the
ar)itration agreement, notwithstanding the main
agreement itsel' )eing de"lared /oid, was
"onsidered )- the C1Eudge >en"h in S>P H Co.
#su!ra% and it was held that an ar)itration
agreement "ould stand inde!endent o' the main
agreement and did not ne"essaril- )e"ome otiose,
e/en i' the main agreement, o' whi"h it is a !art, is
de"lared /oid.
1$. The same reasoning was ado!ted )- a
mem)er o' this >en"h #S.S. 6i..ar, E.%, while
de"iding the "ase o' e/a Dle"tri" Car Com!an-
Pri/ate Limited Vs. Green 7o)il K#2012% 2 SCC *:L,
wherein the !ro/isions o' Se"tion 1&#1% in the
)a"?dro! o' the do"trine o' ?om!eten2 ?om!eten2
were "onsidered and it was inter alia held that
under Se"tion 1&#1%, the legislature ma?es it "lear
that while "onsidering an- o).e"tion with regard to
the e;isten"e or /alidit- o' the ar)itration
agreement, the ar)itration "lause, whi"h 'ormed
!art o' the "ontra"t, had to )e treated as an
agreement inde!endent o' the other terms o' the
24
Page 25
"ontra"t. e'eren"e was made in the said
.udgment to the !ro/isions o' Se"tion 1&#1%#)% o'
the 1**& ("t, whi"h !ro/ides that e/en i' the
ar)itral tri)unal "on"ludes that the "ontra"t is null
and /oid, it should not result, as a matter o' law, in
an automati" in/alidation o' the ar)itration "lause.
4t was also held that Se"tion 1&#1%#a% o' the 1**&
("t !resumes the e;isten"e o' a /alid ar)itration
"lause and mandates the same to )e treated as an
agreement inde!endent o' the other terms o' the
"ontra"t. >- /irtue o' Se"tion 1&#1%#)% o' the 1**&
("t, the ar)itration "lause "ontinues to )e
en'or"ea)le, notwithstanding a de"laration that
the "ontra"t was null and /oid.
25. Gee!ing in /iew the a'oresaid o)ser/ations made )-
this Court, 4 see no reason to a""e!t the su)mission made
)- the learned "ounsel 'or the res!ondents that sin"e a
"riminal "ase has )een registered against the Chairman o'
the Organising Committee and some other o''i"ials o' the
!etitioner, this Court would ha/e no .urisdi"tion to ma?e a
re'eren"e to ar)itration.
26. (s noti"ed a)o/e, the "on"e!t o' se!ara)ilit- o' the
ar)itration "lause8agreement 'rom the underl-ing "ontra"t
has )een statutoril- re"ognised )- this "ountr- under
Se"tion 1& o' the (r)itration ("t, 1**&. Aa/ing !ro/ided
25
Page 26
'or resolution o' dis!utes through ar)itration, !arties "an
not )e !ermitted to a/oid ar)itration, without satis'-ing
the Court that it will )e just and in the interest of all the
parties not to !ro"eed with the ar)itration. Se"tion = o'
the (r)itration ("t !ro/ides that the Court shall not
inter/ene in the ar)itration !ro"ess e;"e!t in a""ordan"e
with the !ro/isions "ontained in Part 4 o' the (r)itration
("t. This !oli"- o' least interference in ar)itration
!ro"eedings re"ognises the general !rin"i!le that the
'un"tion o' Courts in matters relating to ar)itration is to
support arbitration process. ( "on.oint reading o' Se"tion
= and Se"tion 1& would ma?e it "lear that all matters
in"luding the issue as to whether the main "ontra"t was
void/voidable "an )e re'erred to ar)itration. Otherwise, it
would )e a hand- tool a/aila)le to the uns"ru!ulous
!arties to a/oid ar)itration, by raising the bogey of the
underlying contract being void.
27. 4 am o' the o!inion that whene/er a !lea is ta?en to
a/oid ar)itration on the ground that the underl-ing
26
Page 27
"ontra"t is /oid, the Court is re9uired to as"ertain the true
nature o' the de'en"e. O'ten, the terms +void, and
+voidable, are "on'used and used loosely and
interchangeably with ea"h other. There'ore, the Court
ought to e;amine the !lea )- ?ee!ing in mind the
rele/ant statutor- !ro/isions in the 4ndian Contra"t ("t,
15C2, de'ining the terms +void, and +voidable,. Se"tion
2, the inter!retation "lause de'ines some o' the rele/ant
terms as 'ollows01
+2#g% (n agreement not en'or"ea)le )- law is
said to )e /oidJ
2#h% (n agreement en'or"ea)le )- law is a
"ontra"tJ
2#i% (n agreement whi"h is en'or"ea)le )- law at
the o!tion o' one or more o' the !arties
thereto, )ut not at the o!tion o' the other or
others, is a /oida)le "ontra"tJ
2#.% ( "ontra"t whi"h "eases to )e en'or"ea)le )-
law )e"omes /oid when it "eases to )e
en'or"ea)le.,
The a'oresaid "lauses "learl- delineate and di''erentiate
)etween term +void, and +voidable,. Se"tion 2#.% "learl-
27
Page 28
!ro/ides as to when a voidable "ontra"t would rea"h the
stage o' )eing void. Fndou)tedl-, in "ases, where the Court
"an "ome to a "on"lusion that the "ontra"t is /oid without
re"ei/ing an- e/iden"e, it would )e .usti'ied in de"lining
re'eren"e to ar)itration )ut su"h "ases would )e 'ew and
isolated. These would )e "ases where the Court "an readil-
"on"lude that the "ontra"t is void u!on a meaning'ul reading
o' the "ontra"t do"ument itsel'. Some e;am!les o' where a
"ontra"t ma- 'all in this "ategor- would )e 01
#a% Ihere a "ontra"t is entered into )- a !erson, who
has not attained the age o' ma.orit- #Se"tion 11%J
#)% Ihere )oth the !arties are under a mista?e as to
a matter o' 'a"t essential to the agreement
#Se"tion 1*%J
#"% Ihere the "onsideration or o).e"t o' the "ontra"t
is 'or)idden )- law or is o' su"h a nature that, i'
!ermitted, it would de'eat the !ro/isions o' an-
law or where the o).e"t o' the "ontra"t is to
indulge in an- immoral a"ti/it- or would )e
o!!osed to !u)li" !oli"-. Glaring e;am!les o' this
28
Page 29
would )e where a "ontra"t is entered into )etween
the !arties 'or running a !rostitution ra"?et,
smuggling drugs, human tra''i"?ing and an- other
a"ti/ities 'alling in that "ategor-.
#d% Similarl-, Se"tion :0 renders wagering "ontra"ts
as /oid. The onl- e;"e!tion to this is )etting on
horse ra"ing. 4n the "ir"umstan"es noted a)o/e, it
ma- not )e ne"essar- 'or the Court to ta?e an-
'urther e/iden"e a!art 'rom reading the "ontra"t
do"ument itsel'. There'ore, whilst e;er"ising
.urisdi"tion under Se"tion 11#&% o' the (r)itration
("t, the Court "ould de"line to ma?e a re'eren"e
to ar)itration as the "ontra"t would )e patently
void.
2. Aowe/er, it would not )e !ossi)le to shut out
ar)itration e/en in "ases where the de'en"e ta?en is that
the "ontra"t is voidable. These would )e "ases whi"h are
"o/ered under the "ir"umstan"es narrated in Se"tion 12 M
unsoundness o' mindJ Se"tion 1$ M a)sen"e o' 'ree
29
Page 30
"onsent, i.e. where the "onsent is said to )e /itiated as it
was o)tained )- Coer"ion #Se"tion 1=%, Fndue 4n'luen"e
#Se"tion 1&%, <raud #Se"tion 1C% or 7isre!resentation
#Se"tion 15%. Su"h a "ontra"t will onl- )e"ome void when
the !art- "laiming la"? o' 'ree "onsent is a)le to !ro/e the
same and thus rendering "ontra"t void. This indeed is the
!ro/ision "ontained in Se"tion 2#.% o' the 4ndian Contra"t
("t. 4n e;er"ising !owers under Se"tion 11#&% o' the
(r)itration ("t, the Court has to ?ee! in /iew the
!ro/isions "ontained in Se"tion 5 o' the (r)itration ("t,
whi"h !ro/ides that a re'eren"e to ar)itration shall )e
made i' a !art- a!!lies not later than when su)mitting his
'irst statement on the su)stan"e o' the dis!ute. 4n
"ontrast, Se"tion $= o' the a'oresaid ("t permits the Court
to de"line re'eren"e to ar)itration in "ase the Court 'inds
that the agreement is null and void, inoperative or
incapable of being performed.
2!. To shut out ar)itration at the initial stage would
destro- the /er- !ur!ose 'or whi"h the !arties had
30
Page 31
entered into ar)itration. <urthermore, there is no inherent
ris? o' !re.udi"e to an- o' the !arties in !ermitting
ar)itration to !ro"eed simultaneousl- to the "riminal
!ro"eedings. 4n an e/entualit- where ultimatel- an award
is rendered )- ar)itral tri)unal, and the "riminal
!ro"eedings result in "on/i"tion rendering the underl-ing
"ontra"t void, ne"essar- !lea "an )e ta?en on the )asis o'
the "on/i"tion to resist the execution/enforcement o' the
award. Con/ersel-, i' the matter is not re'erred to
ar)itration and the "riminal !ro"eedings result in an
a"9uittal and thus lea/ing little or no ground 'or "laiming
that the underl-ing "ontra"t is void or voidable, it would
ha/e the wholl- undesira)le result o' dela-ing the
ar)itration. There'ore, 4 am o' the o!inion that the Court
ought to a"t with "aution and "ir"ums!e"tion whilst
e;amining the !lea that the main "ontra"t is void or
voidable. The Court ought to de"line re'eren"e to
ar)itration onl- where the Court "an rea"h the "on"lusion
that the "ontra"t is void on a meaning'ul reading o' the
"ontra"t do"ument itsel' without the re9uirement o' an-
31
Page 32
'urther !roo'.

30. 4n the !resent "ase, it is !leaded that the manner in
whi"h the "ontra"t was made )etween the !etitioner and
the res!ondent was in/estigated )- the C>4. (s a !art o'
the in/estigation, the C>4 had sei2ed all the original
do"uments and the re"ord 'rom the o''i"e o' the
res!ondent. ('ter in/estigation, the "riminal "ase CC
6o.22 o' 2011 has )een registered, as noti"ed earlier. 4t is
"laimed that in the e/ent the Chairman o' the Organising
Committee and the other o''i"ials who mani!ulated the
grant o' "ontra"t in 'a/our o' the res!ondent are 'ound
guilt- in the "riminal trial, no amount would )e !a-a)le to
the !etitioner. There'ore, it would )e a!!ro!riate to await
the de"ision o' the "riminal !ro"eedings )e'ore the
ar)itral tri)unal is "onstituted to go into the alleged
dis!utes )etween the !arties. 4 am una)le to a""e!t the
a'oresaid su)mission made )- the learned "ounsel 'or the
res!ondents, 'or the reasons stated in the !re/ious
!aragra!hs. The )alan"e o' "on/enien"e is tilted more in
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Page 33
'a/our o' !ermitting the ar)itration !ro"eedings to
"ontinue rather than to )ring the same to a grinding halt.
31. 4 must also noti"e here that the de'en"e o' the
"ontra"t )eing void is now1a1da-s ta?en routinel- along
with the other usual grounds, to a/oid8dela- re'eren"e to
ar)itration. 4n m- o!inion, su"h ground needs to )e
summaril- re.e"ted unless there is "lear indi"ation that
the de'en"e has a reasona)le "han"e o' su""ess. 4n the
!resent "ase, the !lea was ne/er ta?en till the !resent
!etition was 'iled in this Court. Darlier, the res!ondents
were onl- im!ressing u!on the !etitioners to su!!l-
"ertain in'ormation. There'ore, it would )e a!!ro!riate,
let the (r)itral Tri)unal e;amine whether there is an-
su)stan"e in the !lea o' 'raud now sought to )e raised )-
the res!ondents.
32. The es!ondent also relied on the .udgment o' this
Court in I./&- H2$#+42%/ -./ H+-%)48-,+ L)/. #su!ra%,
wherein the a!!li"ation under se"tion 11 #&% o' the
33
Page 34
(r)itration ("t was dismissed. This "ase, howe/er, will not
"ome in the wa- o' re'erring the matter to ar)itration
sin"e it is "learl- distinguisha)le 'rom the !resent "ase. 4n
I./&- H2$#+42%/ -./ H+-%)48-,+ L)/. #su!ra%, the
su)stanti/e8underl-ing "ontra"t "ontaining the ar)itration
"lause was entered into )- the !arties on 05.0=.200$. This
agreement, howe/er, was !re"eded )- a 7emorandum o'
Fnderstanding #+7oF,% dated 1.11.200:. 4t was "ontended
)- the es!ondent that )oth the (greement and the 7oF
are /itiated )- 'raud whi"h was 'ru"ti'ied )- a "riminal
"ons!ira"- hat"hed )etween o''i"ials re!resenting the
Petitioner and es!ondent therein. This Court also noti"ed
that the "on"erned o''i"ials o' the es!ondent had )een
"on/i"ted and senten"ed to undergo im!risonment )- the
Gorean Criminal Court. The said 7oF was also "ontended
)- the es!ondent to )e in "ontra/ention o' the laws o'
Gorea. 4t was 'urther noti"ed that the es!ondent 'iled a
suit in the 7adras Aigh Court against the Petitioner,
where)- the Aigh Court /ide interim order dated
0&.10.200= issued an in.un"tion and there)- restrained
34
Page 35
the Petitioner therein to a"t dire"tl- or indire"tl- on the
)asis o' 7oF and the (greement dated 05.0=.200$, and to
deri/e an- other )ene'it )ased u!on the said 7oF and the
li"ense agreement in an- manner whatsoe/er. This
interim order, the "ourt noti"ed, was "on'irmed )- an
order dated 21.01.200&J against whi"h no a!!eal was 'iled
)- the Petitioner. The Court, rel-ing u!on A Treatise on
Law Governing njunctions )- S!elling and Lewis,
"on"luded that this in.un"tion order ha/ing not )een
"hallenged )- the Petitioner has )e"ome 'inal and also
that this order restrains the in/o"ation o' the ar)itration
agreement "ontained in (greement dated 05.0=.200$.
There'ore, the Court de"lined to re'er the matter to
ar)itration. (nother 'a"tor that weighed with Court in
dismissing the Petition, it a!!ears, is that the Petitioner
did not "on'orm to the !ro"edure "on"erning a!!ointment
o' the (r)itrator )e'ore 'iling the Petition under Se"tion 11
#&%.
33. This "ase is "learl- distinguisha)le and hen"e is not
35
Page 36
a!!li"a)le into the 'a"ts and "ir"umstan"es o' the !resent
"ase )e"ause o' the 'ollowing reasons0 <irstl-, there has
)een no "on/i"tion in the !resent "ase, though the trial
has )een going on against the o''i"ials o' )oth the !arties.
Se"ondl-, there is no in.un"tion or an- other order
restraining the Petitioner 'rom in/o?ing the (r)itration
Clause. Lastl-, all the "onditions !re"edent 'or in/o?ing
the ar)itration "lause ha/e )een satis'ied )- the
Petitioner, as o)ser/ed earlier.
34. The res!ondent had relied on the .udgment o' this
Court in G$,$ G,-.)4 S-4+7 S)4-. M++,14-) V-.-,-#
Vs. V+/ P,-5-#4 6 O,#.
C
This .udgment reiterates the
normal rule whi"h was stated )- the Constitution >en"h o'
this Court in M.S.S4+,&;; Vs. S)-)+ 2; M-/,-# in relation
to the simultaneous !rose"ution o' the "riminal
!ro"eeding with the "i/il suit. 4n the a'oresaid "ase, the
Constitution >en"h had o)ser/ed as 'ollows01
+1$. 4t was said that the simultaneous
!rose"ution o' these matters will em)arrass the
a""used. )ut we "an see that the simultaneous
!rose"ution o' the !resent "riminal !ro"eedings
7
#201:% C SCC &22
36
Page 37
out o' whi"h this a!!eal arises and the "i/il suits
will em)arrass the a""used. Ie ha/e there'ore to
determine whi"h should )e sta-ed.
1=. (s )etween the "i/il and the "riminal
!ro"eedings we are o' the o!inion that the
"riminal matters should )e gi/en !re"eden"e.
There is some di''eren"e o' o!inion in the Aigh
Courts o' 4ndia on this !oint. 6o hard1and1'ast rule
"an )e laid down )ut we do not "onsider that the
!ossi)ilit- o' "on'li"ting de"isions in the "i/il and
"riminal "ourts is a rele/ant "onsideration. The law
en/isages su"h an e/entualit- when it e;!ressl-
re'rains 'rom ma?ing the de"ision o' one "ourt
)inding on the other, or e/en rele/ant, e;"e!t 'or
"ertain limited !ur!oses, su"h as senten"e or
damages. The onl- rele/ant "onsideration here is
the li?elihood o' em)arrassment.
1&. (nother 'a"tor whi"h weighs with us is that a
"i/il suit o'ten drags on 'or -ears and it is
undesira)le that a "riminal !rose"ution should
wait till e/er-)od- "on"erned has 'orgotten all
a)out the "rime. The !u)li" interests demand that
"riminal .usti"e should )e swi't and sureJ that the
guilt- should )e !unished while the e/ents are still
'resh in the !u)li" mind and that the inno"ent
should )e a)sol/ed as earl- as is "onsistent with a
'air and im!artial trial. (nother reason is that it is
undesira)le to let things slide till memories ha/e
grown too dim to trust.
This, howe/er, is not a hard1and1'ast rule. S!e"ial
"onsiderations o)taining in an- !arti"ular "ase
might ma?e some other "ourse more e;!edient
and .ust. <or e;am!le, the "i/il "ase or the other
"riminal !ro"eeding ma- )e so near its end as to
ma?e it ine;!edient to sta- it in order to gi/e
!re"eden"e to a !rose"ution ordered under
37
Page 38
Se"tion $C&. >ut in this "ase we are o' the /iew
that the "i/il suits should )e sta-ed till the "riminal
!ro"eedings ha/e 'inished.,
35. The !ur!ose o' the a'oresaid solitar- rule is to a/oid
em)arrassment to the a""used. 4n "ontrast, the 'indings
re"orded )- the ar)itral tri)unal in its award would not )e
)inding in "riminal !ro"eedings. D/en otherwise, the
Constitution >en"h in the a'oresaid "ase has "learl- held
that no hard and 'ast rule "an )e laid down that "i/il
!ro"eedings in all matters ought to )e sta-ed when
"riminal !ro"eedings are also !ending. (s 4 ha/e indi"ated
earlier in "ase the award is made in 'a/our o' the
!etitioner herein, the res!ondents will )e at li)ert- to
resist the en'or"ement o' the same on the ground o'
su)se9uent "on/i"tion o' either the Chairman or the
o''i"ials o' the "ontra"ting !arties.
36. 4t must also noti"e here that the Petitioners relied
u!on an earlier order o' this "ourt in the "ase o' M"#
N$##%& 'S(&)*+,%-./0 L)/. '#$:,-0. The a'oresaid order,
38
Page 39
howe/er, seems to ha/e )een !assed on a "onsensus
)etween the learned "ounsel 'or the !arties. This is
e/ident 'rom the 'ollowing o)ser/ations in the a'oresaid
order0
+4n /iew o' the a'oresaid order, learned senior
"ounsel 'or )oth the !arties ha/e agreed that the
!arties ha/e agreed that the matter ought to )e
re'erred to (r)itration. Aowe/er, 7r. Go!al
Su)ramaniam, learned senior "ounsel a!!earing
'or the es!ondent, su)mits that serious issued
would arise whi"h are "urrentl- under
in/estigation o' the C>4, whi"h ma- ultimatel-
"ulminate into "ertain "on"lusions whi"h "ould
result in the in/alidation o' the "ontra"t 'rom
in"e!tion.
Ae has, howe/er, /er- 'airl- stated that there
would )e no im!ediment 'or the ar)itral Tri)unal
to loo? into all the issues in"luding the allegations
whi"h are !ending with the C>4 in in/estigation.
4 am o' the o!inion that the su)mission made )-
the learned senior "ounsel is in a""ordan"e with
the law settled, not onl- )- this Court, )ut in other
.urisdi"tions also "on"erning the international
"ommer"ial ar)itrations.,
The a'oresaid e;"er!t "learl- shows that 7r. Go!al
Su)ramaniam, had /er- 'airl- agreed to !ro"eed with
ar)itration. The de"ision o' this Court in M"# N$##%&
'S(&)*+,%-./0 L)/. #su!ra% has not laid down an- law.
39
Page 40
37. (s noti"ed earlier, the !etitioners ha/e alread-
nominated Aon@)le 7r. Eusti"e S.6. Varia/a, <ormer Eudge
o' this Court, ha/ing his o''i"e at ead-mone- 7ansion,
2
nd
'loor, 6e;t to (?)arall-s, Veer 6ariman oad, <ort,
7um)ai M $00 001, as their ar)itrator. 4 here)- nominate.
Aon@)le 7r. Eusti"e >.P. Singh, <ormer Eudge o' this Court,
8o (1C, 6eeti >agh, :rd <loor, 6ew Delhi M 110 0$*, as
the se"ond (r)itrator and Aon@)e 7r. Eusti"e Guldi! Singh,
<ormer Eudge o' this Court, 8o A.6o. 55, Se"tor 10(,
Chandigarh M 1&0 010, as the Chairman o' the (r)itral
Tri)unal, to ad.udi"ate the dis!utes that ha/e arisen
)etween the !arties, on su"h terms and "onditions as the-
deem 'it and !ro!er.
3. The egistr- is dire"ted to "ommuni"ate this order to
the Chairman o' the (r)itral Tri)unal, as well as, to the
Se"ond (r)itrator to ena)le them to enter u!on the
re'eren"e and de"ide the matter as e;!editiousl- as
!ossi)le.
40
Page 41
3!. The (r)itration Petition is a""ordingl- allowed with no
order as to "osts.

???????????J.
@S$,&./+, S&.14 N&==-,A
N+( D+%4&B
M-< 2, 2014
41
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ARBP1062.12
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO. 1062 OF 2012
HSBC PI Holding !M"#$i%i#& 'i(i%)d &
!*$)+io#l, n"()d HPEIF Holding 1 &
'i(i%)d&- " .o(*"n, in.o$*o$"%)d #nd)$ &
%/) *$o+iion o0 %/) l"1 o0 M"#$i%i# "nd&
/"+ing i% $)gi%)$)d o00i.) "% &
.2o. M#l%i.on#l% 'i(i%)d- Rog)$ Ho#)- &
3 P$)id)n% Jo/n 4)nn)d, S%$))%- Po$% &
'o#i- M"#$i%i# & 5.. P)%i%ion)$
6ERSUS
1. A+i%)l Po% S%#dio7 'i(i%)d- &
" .o(*"n, in.o$*o$"%)d #nd)$ %/) &
*$o+iion o0 %/) Co(*"ni) A.%- 1836 &
"nd /"+ing i% $)gi%)$)d o00i.) "% A9:- &
6i("l Ud,og B/"+"n- T"i;"l <"di Ro"d- &
O**oi%) S%"$.i%, Cin)("- M"/i( !<)%&&
M#(="i > ?00 016 &
2. P$"d))* S/"n%i*)$/"d J"in &
=)ing " .i%i7)n o0 Indi"- ."$$,ing o#% &
=#in) "% A9:- 6i("l Ud,og B/"+"n- &
T"i;"l <"di Ro"d- O**oi%) S%"$.i%, &
Cin)("- M"/i( !<)%& M#(="i > ?00 016&
@. Sidd/"$%/" P$"d))* J"in &
=)ing " .i%i7)n o0 Indi"- ."$$,ing o#% &
=#in) "% A9:- 6i("l Ud,og B/"+"n- &
T"i;"l <"di Ro"d- O**oi%) S%"$.i%, &
Cin)("- M"/i( !<)%& M#(="i > ?00 016&
?. H$i/i P$"d))* J"in &
=)ing " .i%i7)n o0 Indi"- ."$$,ing o#% &
=#in) "% A9:- 6i("l Ud,og B/"+"n- &
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ARBP1062.12
T"i;"l <"di Ro"d- O**oi%) S%"$.i%, &
Cin)("- M"/i( !<)%& M#(="i > ?00 016& 5.. R)*ond)n%
Dr. Virendra Tulzapurkar, Senir Adv!a"e, a/#. $r.%.&.Seervai, Senir Adv!a"e,
$r.%ik'il Sak'ardande, $r.R'an Ra(ad'ak)'*a, $r.Adip +*er, $r.Ankur
,a)'*ap, $r.A*u)' A-ar#ala, i/.. A/B 0 Par"ner) 1r "'e Pe"i"iner.
$r.$ukul R'a"-i, Senir Adv!a"e, a/#. $r./u.en Be'ramkamdin, $r.Su(a*
,an"a#ala, $r.San(a* A-ar#al, $r.%iran(an 2a-'ela, $r.Saurav ,ripal,
$r.&.Sud'akar, i/.. Pand*a 0 3. 1r "'e Re)pnden").
$r.Sunil 3'avan, i/.. $/).$ulla 0 $ulla 0 3rai-ie Blun" and 3are 1r "'e
3rpra"in Bank.
CORAM A R.D. DHANU4A- J.
RESERVED ON : 06
th
DECEMBER, 2013
PRONOUNCED ON : 22
nd
JANUARY, 2014
JUDGMENT A
B* "'i) pe"i"in 1iled under )e!"in 9 1 "'e Ar.i"ra"in and 3n!ilia"in A!",
1996, pe"i"iner )eek) an rder and dire!"in a-ain)" re)pnden") " dep)i" mnie)
" "'e e4"en" 1 "'e !laim) 1 "'e pe"i"iner under S'are Su.)!rip"in A-reemen"
and S'are &lder) A-reemen" in!ludin- "'e inve)"men" 1 appr4ima"el* 5S6 60
millin and !)" and/r in "'e al"erna"ive " prvide ade7ua"e and )a"i)1a!"r*
)e!uri"* in re-ard " "'e !laim) 1 "'e pe"i"iner. Pe"i"iner al) !laim) di)!l)ure
1 all "'e a))e"), mne*), .ank dep)i") and a!!un") 'eld .* "'e re)pnden")
)in-l* r (in"l* and/r )everall* in!ludin- .u" n" limi"ed " "'e a!!un") #i"'
3rpra"in Bank .* an a11idavi". Pe"i"iner )eek) in(un!"in re)"rainin- "'e
re)pnden") 1rm dealin- #i"' "'eir a))e") in!ludin- .ank a!!un") #i"'
3rpra"in Bank. Sme 1 "'e relevan" 1a!") 1r "'e purp)e 1 de!idin- "'i)
pe"i"in are a) under 89
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ARBP1062.12
2 ;a< Pe"i"iner i) a !mpan* in!rpra"ed under "'e la#) 1
$auri"iu) and 'a) i") re-i)"ered 11i!e a" $auri"iu). Pe"i"iner i) a
inve)"men" 'ldin- !mpan* 1r "'e prin!ipal inve)"men") A)ia Divi)in
1 &SB3. Re)pnden" n.1 i) a !mpan* in!rpra"ed under "'e
prvi)in) 1 3mpanie) A!", 1956 and 'a) i") re-i)"ered 11i!e a"
$um.ai. Avi"el +ndia i) a paren" !mpan* in "'e Avi"el =rup and 'ld
100> )'are in Avi"el &ldin-) ?imi"ed. Avi"el &ldin-) ?imi"ed in "urn
'ld 100> Avi"el P)" S"udiz @/ ??3.
;.< +" i) "'e !a)e 1 "'e pe"i"iner "'a" "'e )aid Avi"el =rup
repre)en"ed " "'e &SB3 and "'e pe"i"iner "'a" i" #a) "'e
en"i"* re)pn)i.le 1r 95> 1 "'e Avi"el =rupA) p)" 1irm
)ervi!e) and pera"in). T'e re)pnden") repre)en"ed " "'e
pe"i"iner "'a" "'e Avi"el =rup #a) a" a ver* advan!ed )"a-e
1 1inali)in- a !n"ra!" #i"' "'e Bri"i)' Brad!a)"in-
3rpra"in ;BB3< and 'ad in 1a!" alread* )i-ned a $B5
#i"' "'e BB3 " !nver" "'e BB3A) 1ilm li.rar* 1rm 2D " :D
#'i!' !n"ra!" #a) a!!ep"ed " -enera"e a revenue 1 5S6 :00
millin in "'e 1ir)" p'a)e. Avi"el =rup re7uired an inve)"men"
1 5S6 60 millin " pur!'a)e "'e e7uipmen" 1r Avi"el P)"
S"udiz @/ ??3 )pe!iall* " ena.le Avi"el Du.ai " )ervi!e "'e
BB3 3n"ra!", #'i!' #a) re7uired " .e in pla!e .e1re
e4e!u"in 1 "'e !n"ra!".
;!< Bn 12
"'
De!em.er, 2010, Avi"el +ndia "'ru-'
$r.C-e)' =ardia )en" a e9mail " $r.Pra"eek =ar-, 1rmer
empl*ee 1 &SB3 and a""a!'ed preliminar* due dili-en!e
repr" !mple"ed .* Avi"el +ndia. +" #a) )"a"ed "'a" "'e Avi"el
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ARBP1062.12
#a) in advan!ed )"a-e) 1 ne-"ia"in) #i"' "'e BB3 1r "'e
!nver)in 1 i") e4i)"in- 2D li.rar* " :D. +" #a) )"a"ed "'a"
"'e ""al )ize 1 "'e )aid ppr"uni"* #a) e)"ima"ed .e"#een
5S 6 1 " 5S 6 1.: .illin, "'e 1ir)" p'a)e 1 !nver)in #a)
e4pe!"ed " *ield revenue) 1 appr4ima"el* 5S 6 :00 millin
1ll#ed .* a )e!nd p'a)e 1 1ur"'er 5S 6 :00 millin.
;d< Bn 10
"'
Eanuar*, 2011 re)pnden" n.: )en" an e9mail "
&ea"' /arin, $ana-in- Dire!"r, &ead 1 Prin!ipal
+nve)"men"), A)ia9Pa!i1i!, Dire!"r Avi"el +ndia, Dire!"r
Avi"el $auri"iu), )"a"in- "'a" a) 1ar a) BB3 $5 and e9mail
!rre)pnden!e, 'e 'ad a)ked 'i) Du.ai 11i!e " )!an and e9
mail i" " 'im ) "'a" #'en 'e mee") "'e $ana-in- Dire!"r 1
&SB3, 'e !uld )'# i" " 'im n 'ard !p*.
;e< Bn 11
"'
Eanuar*, 2011 re)pnden" n.: )en" e9mail "
$r./arin 1 &SB3 )"a"in- "'a" 'e 'ad $B5 #i"' "'e BB3 and
1e# e9mail !rre)pnden!e #i"' "'em and en7uired a) " #'en
$r./arin #uld like " )ee "')e d!umen"). T'ere #ere
mee"in-) 'eld n 19
"'
April, 2011 .e"#een re)pnden" and
&SB3 and a per)n !laimed " .e $r.E'n ?in#d, BB3A)
3'ie1 Te!'nl-* B11i!er. +" i) "'e !a)e 1 "'e pe"i"iner "'a" i"
#a) )u.)e7uen"l* di)!vered "'a" a per)n #' #a)
in"rdu!ed " $r.An"'n* Bern.aum 1 &SB3 a) $r.E'n
?in#d 1 BB3 #a) n" #i"' 'im. A!!rdin- " "'e
pe"i"iner in "'e )aid mee"in-, i" #a) $r.An"'n* Bern.aum
!n!luded "'a" n "'e .a)i) 1 "'e mee"in-, 'e apprved "'e
deal and re!mmended 'i) &SB3 "eam " d ) a) #ell.
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;1< Bn 21
)"
April, 2011, pe"i"iner, re)pnden" n.1 and
prm"er) in!ludin- re)pnden" n). 2 " D en"ered in" a
S'are Su.)!rip"in A-reemen" ;'ereina1"er re1erred " a) "'e
)aid ASSAA<. Sme 1 "'e relevan" !lau)e) 1 "'e )aid )'are)
)u.)!rip"in a-reemen" are e4"ra!"ed a) under 89
3lau)e 15
15. =BVFR%+%= ?A2
T'i) A-reemen" )'all .e -verned .* and !n)"rued
in a!!rdan!e #i"' "'e la#) 1 "'e Repu.li! 1 +ndia
#i"'u" re-ard " appli!a.le !n1li!" 1 ?a#) prin!iple).
3lau)e 16
16. D+SP5TF RFSB?5T+B%
16.1 Ar.i"ra"in
16.1.1An* di)pu"e, !n"rver)* r !laim ari)in- u" 1 r
in !nne!"in #i"' "'i) A-reemen", in!ludin- an* 7ue)"in
re-ardin- i") e4i)"en!e, validi"*, in"erpre"a"in, .rea!' r
"ermina"in )'all .e re1erred " and 1inall* re)lved .*
.indin- ar.i"ra"in a" "'e Sin-apre +n"erna"inal
Ar.i"ra"in 3en"re ;GS+A3G< in a!!rdan!e #i"' "'e
Sin-apre +n"erna"inal Ar.i"ra"in Rule) in 1r!e a" "'e
da"e 1 "'i) A-reemen" ;GRule)G<, #'i!' Rule) are deemed
" .e in!rpra"ed .* re1eren!e in" "'i) !lau)e and a) ma*
.e amended .* "'e re)" 1 "'i) !lau)e.
16.1.2T'e )ea" 1 ar.i"ra"in )'all .e Sin-apre ...
16.1.6T'e par"ie) #aive an* ri-'" " appl* " an* !ur" 1
la# and/r "'er (udi!ial au"'ri"* " de"ermine an*
preliminar* pin" 1 la# and/r revie# an* 7ue)"in 1
la# and/r "'e meri"), in ) 1ar a) )u!' #aiver ma* .e
validl* made. T'e par"ie) )'all n" .e deemed, '#ever,
" 'ave #aived an* ri-'" " !'allen-e an* a#ard n "'e
-rund "'a" "'e "ri.unal la!ked )u.)"an"ive (uri)di!"in
and/r "'e -rund 1 )eriu) irre-ulari"* a11e!"in- "'e
"ri.unal, "'e pr!eedin-) r "'e a#ard " "'e e4"en"
all#ed .* "'e la# 1 "'e )ea" 1 "'e ar.i"ra"in.
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16.1.H%"'in-, in "'i) 3lau)e 16.1 )'all .e !n)"rued a)
preven"in- an* par"* 1rm )eekin- !n)erva"r* r in"erim
relie1 in an* !ur" 1 !mpe"en" (uri)di!"in ...
16.D Appli!a"in 1 Ar.i"ra"in A!"
Save 1r )e!"in 9, Par" + 1 "'e +ndian Ar.i"ra"in
and 3n!ilia"in A!", 1996 ;G"'e Ar.i"ra"in A!"G<, "'e
prvi)in) 1 Par" + 1 "'e Ar.i"ra"in A!" )'all n" appl*
" "'e "erm) 1 "'i) A-reemen".G
G 6. Repre)en"a"in), 2arran"ie) and 5nder"akin-).
6.2 T'e Prm"er) 'ere.* (in"l* and )everall*
repre)en" , #arran" and under"ake " "'e +nve)"r "'a" 8
6.2.1 T'e in1rma"in prvided " "'e +nve)"r
prir " and durin- "'e prepara"in and ne-"ia"in 1 "'i)
A-reemen" #a) prvided .* "'e 3mpan* and "'e
Prm"er) and i") and/r repre)en"a"ive) and advi)r) in
-d 1ai"' and i) "rue, a!!ura"e and n" mi)leadin-, ..... G
;-< Bn 10
"'
$a*, 2011, "'e en"ire inve)"men" pr!eed) 1
5S 6 60 millin #a) re!eived 1rm "'e pe"i"iner .*
re)pnden" n.1 #'i!' #a) ru"ed " Avi"el Du.ai "'ru-'
Avi"el $auri"iu). Bn 11
"'
$a*, 2011 pe"i"iner, re)pnden"
n.1 and "'eir prm"er) and &AV: &ldin-) ;$auri"iu)< and
"'eir inve)"r en"ered in" a S'are &lder) A-reemen"
;'ereina1"er re1erred " a) "'e )aid AS&AA<.
;'< 3lau)e 1I.1 1 "'e )aid a-reemen" prvide) "'a" "'e
)ame )'all .e -verned .* and !n)"rued in a!!rdan!e #i"'
"'e la#) 1 Repu.li! 1 +ndia #i"'u" re-ard " appli!a.le
!n1li!" ?a#) prin!iple). 3lau)e 19.1 prvide) 1r ar.i"ra"in
a" Sin-apre +n"erna"inal Ar.i"ra"in 3en"re in a!!rdan!e
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#i"' S+A3 Admini)"ered Ar.i"ra"in Rule) in 1r!e. 3lau)e
19.D prvided "'a" )ave 1r )e!"in 9 1 Par" 1 1 "'e +ndian
Ar.i"ra"in and 3n!ilia"in A!", 1996, "'e prvi)in) 1 Par" +
1 "'e Ar.i"ra"in A!" )'all n" appl* " "'e "erm) 1 "'a"
a-reemen"..
;i< Bn 1
)"
Eune, 2011, re)pnden" n.: )en" an e9mail "
$r./arin, +nve)"r dire!"r 1 re)pnden" n.1 #' #a)
appin"ed .* "'e pe"i"iner )"a"in- "'a" re)pnden" n.: #a) in
?ndn #i"' BB3 per)n and "'e* #ere )!'eduled " !me "
Du.ai in "'e "'ird #eek 1 Eune 1r in)pe!"in and i" #a)
'pe1ul "'a" "'e* #uld )i-n "'e !n"ra!" and )"ar" "'e
prdu!"in .* end 1 Eune 1r )ure, plu) minu) ne #eek. +"
#a) in1rmed "'a" 'e #a) 'eadin- .a!k " ?ndn 1r "'ree
da*) 1r )i-nin- 'i) )ide 1 "'e BB3 !n"ra!".
;(< Bn :
rd
Eune, 2011, $r.C-e)' =ardia )en" e9mail "
Pra"ik =ar- and in1rmed "'a" Sidd'ar"'a 'ad vi)i"ed BB3 and
in1rmed "'a" "'e ma!'iner* #uld .e in pla!e .* mid 1 Eune.
BB3 11i!ial) #ere )!'edule " !me and vi)i" Du.ai 1a!ili"*
p)" 15
"'
1 Eune and "'eren "'e !n"ra!" #uld .e )i-ned.
T'e* e4pe!"ed " 'ave "'e prdu!"in up and runnin- .* 15
"'
Eul*. Bn 2
nd
Au-u)", 2011, re)pnden" n.: in1rmed "'e
pe"i"iner "'a" "'e BB3 !n"ra!" 'ad .een !n!luded.
;k< +" i) !a)e 1 "'e pe"i"iner "'a" n I
"'
@e.ruar*, 2012, "'e
audi"r) 1 Avi"el Du.ai P23 re)i-ned )in!e Eain) prm"er)
1 Avi"el Du.ai re1u)ed " all# $r.Viren ?d'a 1 P23 "
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repr" "'e )"a"u) 1 "'e P#3 !i"ed )eriu) !n!ern) ver "'e
au"'en"i!i"* 1 Avi"el Du.aiA) ke* !u)"mer) and )upplier) and
P#3 'ad in)u11i!ien" in1rma"in " veri1* "'e 1inan!ial re!rd
1 Avi"el Du.ai. +n "'e )aid le""er, "'e audi"r !n!luded "'a" i"
#a) re)i-nin- .e!au)e i" 'ad in)u11i!ien" eviden!e " ."ain
!m1r" n Avi"el Du.aiA) 1inan!ial )"a"emen" and "'e* #ere
al) una.le " pla!e an* relian!e n mana-emen"A)
repre)en"a"in) #'i!' 1rm a ke* elemen" 1 "'e audi" pr!e)).
;l< Bn 9
"'
April, 2012, "'e nminee dire!"r 1 "'e pe"i"iner
$r./arin en-a-ed F 0 C and ,P$= Du.ai n .e'al1 1 Avi"el
$auri"iu) " !ndu!" an independen" inve)"i-a"in in" "'e
!ir!um)"an!e) )urrundin- P#3A) re)i-na"in 1 "'e audi"rA)
1 Avi"el Du.ai. Su!' appin"men" #a) re)i)"ed .* re)pnden"
n.:. +" i) "'e !a)e 1 "'e pe"i"iner "'a" n 10
"'
April, 2012,
re)pnden") unila"erall* prdu!ed a repr" 1 ,$P= +ndia "
"r* " preven" an inve)"i-a"in in" P#3A) re)i-na"in and "'e
rea)n) 1r i".
;m< Bn 12
"'
April, 2012 Bard mee"in- 1 re)pnden" n.1
and re)pnden" n.2 in #'i!' re)pnden" n.2 in1rmed "'e
.ard 1 re)pnden" n.1 "'a" "'ere #a) n 1ur"'er #rk .ein-
dne 1r BB3. Re)pnden" n.2 denied "'e re7ue)" 1 "'e
dire!"r 1 "'e pe"i"iner 1r a 1ull and prper inve)"i-a"in "
.e !arried u" in" "'e re)i-na"in 1 P#3A) , "'e audi"r 1
re)pnden" n.1 and pa))ed a re)lu"in " "'a" e11e!".
;n< Bn 12
"'
9 15
"'
April, 2012, F0CA) and ,P$= Du.aiA)
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)u.mi""ed a repr" -ivin- preliminar* 1indin-) #'i!'
)uppr"ed "'e !n!ern) rai)ed .* P#3 and )'#ed "'a" "'ere
#ere real !n!ern) ver "'e le-i"ima!* 1 "'e Avi"el =rupA)
.u)ine)). Avi"el Du.aiA) 11i!e) appeared " .e !l)ed. Avi"el
Du.aiA) ke* )upplier) &i-'end and Di-i"al @u)in and a"lea)"
ne ,inden u" 1 "# n" in!ludin- "'e BB3 ke* !u)"mer)
did n" )eem " .e le-i"ima"e r independen". A""emp") "
l!a"e "'e purpr"ed .u)ine)) premi)e) 1 &i-'end and Di-i"al
@u)in 'ad 1ailed. A!!rdin- " "'e pe"i"iner, in "'e )aid
repr" variu) "'er mi)repre)en"a"in) 1 "'e Avi"el =rup
#ere pin"ed u".
;< Bn 1
)"
$a*, 2012 $).Sara' Ene), =eneral 3un)el a"
BB3 .* 'er e9mail " "'e pe"i"iner !n1irmed "'a" BB3 'ad
n" en"ered in" a !n"ra!" #i"' Avi"el 1r "'e !nver)in 1 2D
ar!'ive " :D ar!'ive and !n1irmed "'a" $r.?in#d did n"
a""end an* mee"in- 1 an* kind and 'ad n kn#led-e 1 an*
)u!' prp)al #i"' "'e nminee dire!"r 1 "'e pe"i"iner and
#i"' "'e re)pnden"). +" i) )"a"ed "'a" n 19
"'
April, 2011 1rm
D.:0 p.m. $r.?in#d #a) in mee"in-) #i"' mem.er) 1 BB3
S"a11.
;p< +" i) "'e !a)e 1 "'e pe"i"iner "'a" in "'e mn"' 1 April
J $a*, 2012 pe"i"iner reali)ed "'a" "'e purpr"ed BB3
!n"ra!" #a) a )'am and #a) )e" up .* "'e re)pnden") "
indu!e "'e pe"i"iner in" inve)"in- in" re)pnden" n.1.
Pe"i"iner al) !ame " kn# "'a" Purple Pa))in repre)en"ed
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kvm
10/95
ARBP1062.12
.* "'e Eain) " .e a ke* !u)"mer 1 Avi"el +ndia appeared "
.e a 1ake !u)"mer #'i!' !mpan* #a) di))lved n 2:
rd
%vem.er, 2010 and #a) n" in e4i)"en!e a" "'e "ime "'e
pe"i"iner inve)"ed in Avi"el +ndia. T'e Eain) repre)en"ed,
#arran"ed and under"k "'a" Purple Pa))in #a) "'e )le
ma"erial !u)"mer 1 Avi"el +ndia #i"' .u)ine)) #r"'
appr4ima"el* 5S 6 1IH millin. +" i) "'e !a)e 1 "'e
pe"i"iner "'a" u" 1 "'e amun" re!eived .* Avi"el Du.ai
1rm "'e pe"i"iner, a"lea)" a.u" 5S 6 51 millin #ere n"
u)ed 1r pur!'a)e 1 e7uipmen" " )uppr" "'e BB3 3n"ra!"
r in an* #a* " )uppr" an* "'er le-i"ima"e .u)ine))
pera"in). Remainin- 5S 6 9 millin !uld n" .e "ra!ed.
T')e amun") #ere !redi"ed " "'e a!!un" 1 Eain) and/r
"'eir 1amil* !n!ern.
;7< Bn 11
"'
$a*, 2012, "'e pe"i"iner invked "#
ar.i"ra"in) under "'e SSA and "'e S&A, .ein- S+A3
Ar.i"ra"in %. 0II and 099 and )u-'" emer-en!* relie1)
under "'e emer-en!* ar.i"ra"in prvi)in) 1 S+A3 2010
Rule). Bn 1D
"'
$a*, 2012, S+A3 appin"ed $r.T'i S'en Ci
S.3. a) emer-en!* ar.i"ra"r.

;r< Bn 15
"'
$a*, 2012, re)pnden") rai)ed .(e!"in .e1re
"'e learned ar.i"ra"r "'a" "'e (inder 1 S&A and SSA #a)
n" p))i.le under la#, !mmn appli!a"in 1r in"erim relie1
#a) n" valid, "'e appin"men" 1 "'e emer-en!* ar.i"ra"r
#a) .(e!"ina.le and alle-ed "'a" 'e 'ad a dire!" !n1li!" 1
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kvm
11/95
ARBP1062.12
in"ere)" a) 'e 'ad made up 'i) mind re-ardin- "'e ur-en!* 1
relie1). Bn 1H
"'
$a*, 2012 re)pnden") 1iled 61 pa-e) #i"ne))
)"a"emen" 1 $r.C-e)' =ardia in "'e emer-en!* ar.i"ra"in
.u" did n" di)pu"e "'e !'allen-e n meri"). Bn 1H
"'
$a*,
2012, S+A3 re(e!"ed "'e !'allen-e 1 "'e re)pnden") " "'e
appin"men" 1 "'e emer-en!* ar.i"ra"r.
;)< Bn 2I
"'
and 29
"'
$a*, 2012, "'e re)pnden") appeared
under pr"e)". T'e learned emer-en!* ar.i"ra"r made in"erim
a#ard n 2I
"'
$a*, 2012 in SSA ar.i"ra"in and n 29
"'
$a*,
2012 in S&A Ar.i"ra"in in"er alia 1reezin- "'e a!!un") 1 "'e
re)pnden"), " re7uire "'em " di)!l)e " &SB3 $auri"iu)
in1rma"in 1 "'eir a))e"), and " deliver up "'e re7ue)"ed
in1rma"in. +n "'e )aid in"erim a#ard 1 SSA, "'e learned
emer-en!* ar.i"ra"r 'a) prvided 1r variu) e4pen)e)
all#ed " .e )pen" .* "'e re)pnden"). Bn 29
"'
$a*, 2012 "'e
adv!a"e) 1 "'e pe"i"iner 1r#arded "'e p'" !p* 1 "'e
SSA in"erim a#ard re7ue)"in- 3rpra"in Bank, $an-alre
" 1reeze "'e .ank a!!un") 1 "'e re)pnden") in "erm 1 "'e
SSA in"erim a#ard.
;"< Bn :1
)"
$a*, 2012, "'e Sin-apre +n"erna"inal
Ar.i"ra"in 3en"re ;S+A3< in1rmed "'e re)pnden" n.1 "'a"
"'e ""al e)"ima"ed !)") 1 "'e SSA Fmer-en!* Ar.i"ra"in
#a) a" Sin-apre Dllar 11,H5,5::/9 and "'e prvi)inal
e)"ima"e !)" 1 "'e S&A Fmer-en!* Ar.i"ra"in #a) a"
Sin-apre Dllar H,:9,:9D.1: and !alled upn re)pnden" n.1
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kvm
12/95
ARBP1062.12
" make "'eir )'are 1 pa*men" "#ard) "'e 1ir)" "ran!'e 1
dep)i" .ein- Sin-apre Dllar 2,05,H1I.2I and Sin-apre
dllar 1,29,:9:.9H and in1rmed "'a" in "'e even" "'e pe"i"iner
and re)pnden" n). 2 " D 1ailed " pa* "'eir )'are 1 "'e
advan!e), "'e re)pnden" n.1 #uld .e re7uired " pa* "'e
#'le 1 "'e advan!e).
;u< Bn 1I
"'
Eune, 2012, re)pnden") 1iled "# appli!a"in)
.e1re "'e emer-en!* ar.i"ra"r " va!a"e and/r mdi1* "'e
in"erim a#ard). Bn 22
nd
Eune, 2012 and 2H
"'
Eune, 2012,
S'iva(i Park and $andvi Bran!' 1 "'e 3rpra"in Bank
#r"e a le""er " ea!' 1 "'e re)pnden") 1reezin- "'e .ank
a!!un") 1 "'e re)pnden"). Bn :
rd
Eul*, 2012, upn an
appli!a"in .* "'e pe"i"iner, leave #a) -ran"ed 1 "'e
Sin-apre &i-' 3ur" " en1r!e "'e in"erim a#ard pa))ed in
"'e SSA and S&A ar.i"ra"in) a) i1 i" #a) an rder 1 "'e
Sin-apre &i-' 3ur". % ne appeared 1r "'e re)pnden")
.e1re "'e Sin-apre &i-' 3ur". Bn 12
"'
, 16
"'
and 1H
"'
Eul*,
2012, "'e rder) pa))ed .* Sin-apre &i-' 3ur" en1r!in-
"'e in"erim a#ard) #ere )erved n "'e re)pnden"). Bn 16
"'
Eul*, 2012, re)pnden") 1iled a #ri" pe"i"in a-ain)"
3rpra"in Bank in "'i) !ur" ;1500 1 2012< in"er alia
pra*in- 1r de91reezin- 1 "'e a!!un") 1 "'e re)pnden") #i"'
"'e 3rpra"in Bank.
;v< Bn 1H
"'
Eul*, 2012, "'e !un)el 1 "'e re)pnden") )en" a
le""er " "'e emer-en!* ar.i"ra"r )eekin- #i"'dra#al 1 "'e
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kvm
1:/95
ARBP1062.12
appli!a"in " va!a"e and/r mdi1* "'e in"erim a#ard. T'e
emer-en!* ar.i"ra"r -ave dire!"in "'a" "'e 'earin- #uld
pr!eed a) )!'eduled. Bn 2H
"'
Eul*, 2012, "'e emer-en!*
ar.i"ra"r pa))ed amendmen" " "'e in"erim a#ard S&A and
SSA a#ard .a)ed n )u.)e7uen" even") and -ran"ed 1ur"'er
relie1) " "'e pe"i"iner.
;#< Bn :0
"'
Eul*, 2012, "'e pe"i"iner in"ervened in "'e 2ri"
Pe"i"in %. 1500 1 2012. T'e Divi)in Ben!' 1 "'i) !ur"
dire!"ed "'a" 1reeze 1 "'e a!!un") " !n"inue "ill :
rd
Au-u)",
2012 5 p.m. r "ill an earlier va!a"in 1 "'e 1reeze .* "'e
Sin-le Eud-e in "'e )e!"in 9 pe"i"in 1iled .* "'e pe"i"iner
and di)p)ed 1 "'e )aid #ri" pe"i"in. Pe"i"iner 1iled "'i)
pe"i"in n "'e )ame da*. Bn :
rd
Au-u)", 2012, "'e learned
Sin-le Eud-e 1 "'i) !ur" dire!"ed "'e 3rpra"in Bank "
all# "'e #i"'dra#al 1 R).1 !rre) .* "'e re)pnden") n r
.e1re 9
"'
Au-u)", 2012 and dire!"ed "'e re)pnden") n" "
#i"'dra# 1ur"'er amun" 1rm "'e 3rpra"in Bank un"il
1ur"'er rder).
;4< Re)pnden") )u.mi""ed "# a11idavi") in "'i)
pr!eedin-) )eekin- " 11er )e!uri"* " "'e pe"i"iner alle-in-
"'a" )u.)idiar* 1 re)pnden" n.1 in Du.ai 'ad plan" and
ma!'iner* 1 5S 6 10: millin and )u.mi""ed valua"in repr"
1 ne $/).S.,.Sin-' and A))!ia"e). T'e li)" 1 alle-ed plan"
and ma!'iner* in "'e valua"in in "'e valua"in repr" '#ever
di)!l)ed nl* mvea.le !mpu"er e7uipmen". T'e
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kvm
1D/95
ARBP1062.12
re)pnden") #i"'dra# "'e )aid a11idavi").
;*< Pur)uan" " variu) in"erim rder) pa))ed .* "'i) !ur"
1rm "ime " "ime, re)pnden" n.1 'a) .een all#ed "
#i"'dra# variu) amun") 1rm "'e 3rpra"in Bank )u.(e!"
" "'eir 1urni)'in- a!!un") and )u.(e!" " "'eir under"akin-
"'a" "'e* #uld .rin- .a!k "'e amun" #i"'dra#n in "'e even"
"'i) !ur" dire!") "'em " d ). +n "'e mean#'ile S+A3 )en"
reminder) " make pa*men" "#ard) "'e 1ir)" "ran!'e dep)i"
1r ."' "'e SSA emer-en!* ar.i"ra"in and S&A emer-en!*
ar.i"ra"in " "'e re)pnden").
;z< Bn 1H
"'
De!em.er, 2012, "'e Ar.i"ral Tri.unal pa))ed a
unanimu) 1inal par"ial a#ard in "'e SSA ar.i"ra"in
di)mi))in- "'e (uri)di!"inal !'allen-e 1 re)pnden"). +n "'e
)aid SSA (uri)di!"in a#ard, "'e Tri.unal in"er alia de!lared
"'a" ;a< +ndian la# #a) n" "'e -vernin- la# 1 "'e ar.i"ra"in
a-reemen" and i" #a) Sin-apre ?a# "'a" -vern) "'e
ar.i"ra"in a-reemen", ;.< under Sin-apre ?a#, alle-a"in) 1
1raud and/r !mpli!a"ed i)ue) 1 1a!" and la# are ar.i"ra.le
and ;!< "'e Ar.i"ral Tri.unal 'a) (uri)di!"in " ad(udi!a"e "'e
di)pu"e) ari)in- under "'e SSA .e"#een "'e pe"i"iner and "'e
re)pnden"). T'e re)pnden") 'ave n" !'allen-ed "'e )aid
(uri)di!"inal a#ard ) 1ar. Bn 15
"'
Eanuar*, 201:, pe"i"iner
1iled an addi"inal a11idavi" .rin-in- n re!rd "'e SSA
(uri)di!"in a#ard da"ed 1H
"'
De!em.er, 2012 in "'i)
pr!eedin-).
::: Downloaded on - 22/06/2014 13:22:14 :::
kvm
15/95
ARBP1062.12
;aa< B* an rder da"ed 2:
rd
Eanuar*, 201:, pa))ed .* "'e
Sin-le Eud-e 1 "'i) !ur", "'i) !ur" dire!"ed "'e 3rpra"in
Bank " remi" a )um 1 Sin-apre Dllar) ::5,000/9 " S+A3
"#ard) arrear) 1 !n"ri.u"in 1 ar.i"ra"in 1ee) 1 "'e
re)pnden"). Bn :0
"'
Eanuar*, 201:, Divi)in Ben!' 1 "'i)
!ur" a!!ep"ed "'e under"akin- 1 re)pnden" n.1 and dire!"ed
re)pnden" n.1 " dep)i" a )um 1 R).1.D0 !rre) e7uivalen"
" :,:5,000 Sin-apre Dllar) #i"' "'e 3rpra"in Bank in a
)epara"e 1i4ed dep)i" "#ard) arrear) 1 !n"ri.u"in 1
ar.i"ra"in 1ee) " .e paid .* re)pnden" n.1 " S+A3 and
dire!"ed "'a" "'e )aid amun" )'all n" .e remi""ed " S+A3 "ill
1inal di)p)al 1 "'e ar.i"ra"in pe"i"in. T'e )aid rder i)
pa))ed #i"'u" pre(udi!e " "'e ri-'") and !n"en"in) 1
par"ie) keepin- all !n"en"in) pen.
;..< Bn 15
"'
$ar!', 201:, "'e Ar.i"ral Tri.unal pa))ed a
unanimu) par"ial a#ard in S&A ar.i"ra"in di)mi))in- "'e
(uri)di!"inal !'allen-e 1 "'e re)pnden") and de!lared "'a"
Sin-apre la# de"ermine) "'e (uri)di!"in 1 "'e Tri.unal and
.a)ed n )e!"in 11 1 "'e Sin-apre +n"erna"inal Ar.i"ra"in
A!" read #i"' Ar"i!le :D 1 "'e $del ?a#, Sin-apre ?a#
-vern) "'e ar.i"ra.ili"* 1 di)pu"e), i))ue) 1 1raud are
ar.i"ra.le under Sin-apre ?a# and ar.i"ra"in 1 "'e
pe"i"inerA) !laim) are n" !n"rar* " Sin-apre pu.li! pli!*
and "'a" "'e pe"i"inerA) !laim) are ar.i"ra.le. +" i) al) 'eld
"'a" "'e re)pnden") 'ad n" prved "'eir alle-a"in 1
::: Downloaded on - 22/06/2014 13:22:14 :::
kvm
16/95
ARBP1062.12
ille-ali"* 1 "'e S&A and even i1 "'e S&A #a) ille-al, i" #uld
.e in)u11i!ien" " deprive "'e Tri.unal 1 (uri)di!"in #in- "
"'e prin!iple 1 )epara.ili"* en)'rined in Ar"i!le 16 1 "'e
$del ?a#.
;!!< Bn 22
nd
Eul*, 201:, pe"i"iner re!eived a le""er 1rm
F!nmi! B11en!e 2in- ;FB2< in1rmin- "'em "'a" a K3L
Summar* Repr" #i"' re)pe!" " "'e !mplain" 1iled .* i"
a-ain)" "'e re)pnden") #a) 1iled #i"' "'e Addi"inal
$e"rpli"an $a-i)"ra"e DH
"'
3ur", $um.ai. Bn 1
)"
Au-u)",
201:, re)pnden" n.1 1iled addi"inal a11idavi" .rin-in- n
re!rd "'e 1inal repr" 1iled .* "'e FB2 #i"' "'e $a-i)"ra"e
3ur".
;dd< Bn :
rd
%vem.er, 201:, "'e Ar.i"ral Tri.unal pa))ed a
unanimu) 1inal a#ard ;e4!ludin- !ur")< in "'e S&A
ar.i"ra"in a#ardin- all "'e !laim) 1 "'e pe"i"iner. +n ) 1ar
a) SSA ar.i"ra"in i) !n!erned, 1inal 'earin- .e1re "'e
Ar.i"ral Tri.unal "k pla!e n D
"'
" 6
"'
%vem.er, 201:.
:. $r.R'a"-i, learned )enir !un)el appearin- n .e'al1 1 "'e re)pnden")
rai)ed preliminar* .(e!"in) a.u" "'e main"aina.ili"* 1 "'i) pe"i"in 1iled under
)e!"in 9 1 "'e Ar.i"ra"in and 3n!ilia"in A!", 1996. +" i) )u.mi""ed "'a" "'e
pe"i"iner 'a) made )eriu) alle-a"in) 1 1raud and 1raudulen" repre)en"a"in
a-ain)" re)pnden") in "'e ar.i"ra"in pr!eedin-) .e1re "'e Ar.i"ral Tri.unal and
al) in "'i) pr!eedin-). Sin!e )eriu) alle-a"in) 1 1raud and 1raudulen"
repre)en"a"in !ann" .e de!ided .* Ar.i"ral Tri.unal and )u!' alle-a"in) are
in!apa.le 1 )e""lemen" .* ar.i"ra"in under la# 1 +ndia, under )e!"in DI ;2< ;a<
::: Downloaded on - 22/06/2014 13:22:14 :::
kvm
1H/95
ARBP1062.12
1 "'e Ar.i"ra"in and 3n!ilia"in A!", 1996, )u!' a#ard ad(udi!a"in- upn )u!'
alle-a"in) i) n" en1r!ea.le under "'e ?a# 1 +ndia. +n"erim mea)ure) applied
under )e!"in 9 i) in aid 1 1inal relie1. Sin!e a#ard i")el1 !ann" .e en1r!ed
under )e!"in DI;2< ;a< 1 "'e A!", "'i) pe"i"in 1r in"erim mea)ure) "'u) i) n"
main"aina.le.
S#=(iion o0 D$.T#l7"*#$;"$- l)"$n)d )nio$ .o#n)l "**)"$ing on
=)/"l0 o0 %/) *)%i%ion)$ on %/) *$)li(in"$, o=B).%ion $"i)d =, M$.Ro/"%gi-
l)"$n)d )nio$ .o#n)l "**)"$ing 0o$ %/) $)*ond)n% "nd "lo on ()$i% o0
*)%i%ion A9
D. +" i) "'e !a)e 1 "'e pe"i"iner "'a" re)pnden") 'ad repre)en"ed " "'e
pe"i"iner "'a" "'e Avi"el =rup #a) a" a ver* advan!ed )"a-e 1 1inalizin- a
!n"ra!" #i"' "'e Bri"i)' Brad!a)"in- 3rpra"in ;BB3< and 'ad )i-ned $B5
#i"' "'e )aid !mpan* " !nver" "'e BB3A) 1ilm li.rar* 1rm 2D " :D #'i!'
!n"ra!" #a) e4pe!"ed " -enera"e a revenue 1 5S6 :00 millin in "'e 1ir)" p'a)e
and ul"ima"el* ver 5S 6 1 Billin. T'e re)pnden") re7uired an inve)"men" 1
5S6 60 millin " pur!'a)e "'e e7uipmen") 1r Avi"el P)" S"udiz @/ ??3
)pe!i1i!all* " ena.le Avi"el Du.ai " )ervi!e "'e BB3 3n"ra!" #'i!' #a)
re7uired " .e in pla!e .e1re e4e!u"in 1 "'e !n"ra!". Re)pnden" al)
repre)en"ed "'a" "'e Avi"el =rup 'ad "'e .ene1i" 1 num.er 1 ma"erial !n"ra!")
#i"' "'ree main !u)"mer) #' #ere #r"' in ""al appr4ima"el* 5S 6 65I
millin " Avi"el =rup. T'e pe"i"iner inve)"ed 5S 6 60 millin a!!rdin-l*
#'i!' inve)"men" #a) re!eived 1rm "'e pe"i"iner and #a) ru"ed " Avi"el Du.ai
"'ru-' Avi"el $auri"iu). Bn 21
)"
April, 2011 pe"i"iner and re)pnden" n.1
en"ered in" )'are )u.)!rip"in a-reemen". T'e pe"i"iner )u.)!ri.ed H.I> 1
e7ui"* !api"al 1 re)pnden" n.1.
::: Downloaded on - 22/06/2014 13:22:14 :::
kvm
1I/95
ARBP1062.12
5. Bn 11
"'
$a*, 2011, pe"i"iner and 1
)"
re)pnden" )i-ned S'are'lder)
A-reemen". Bn 2
nd
Au-u)", 2011, :
rd
re)pnden" in1rmed "'e pe"i"iner "'a" BB3
!n"ra!" 'ad .een !n!luded. Pe"i"iner )u.)e7uen"l* !ame " kn# "'a" "'e
amun" inve)"ed .* "'e pe"i"iner #a) !redi"ed " "'e a!!un" 1 "'e re)pnden".
T'e )aid BB3 'ad n" en"ered in" an* !n"ra!" #i"' Avi"el 1r "'e !nver)in 1
2D ar!'ive " :D ar!'ive.
6. Bn 11
"'
$a*, 2012, pe"i"iner invked "# ar.i"ra"in a-reemen") under "'e
)aid "# a-reemen") .ein- S+A3 a-reemen" n. 0II and 099 and )u-'"
emer-en!* relie1) under "'e prvi)in) 1 S+A3 Rule), 2010. S+A3 appin"ed
$r.T'i S'en Ci S.3. a) emer-en!* ar.i"ra"r. T'e re)pnden") pr"e)"ed a-ain)"
"'e ar.i"ra"in n 5
"'
$a*, 2012 n variu) -rund) #i"'u" -ivin- an* an)#er n
"'e meri") 1 "'e !'ar-e) 1 "'e pe"i"iner. Be1re "'e Ar.i"ral Tri.unal, "'e
re)pnden") al) rai)ed a plea 1 alle-a"in) 1 1raud and/r !mpli!a"ed i))ue 1
1a!" and la#) and 1 ar.i"ra.ili"* under +ndian la# and "'a" "'e Ar.i"ral Tri.unal
did n" 'ave (uri)di!"in " de!ide )u!' alle-a"in). +" #a) al) pleaded "'a" "'e
par"ie) #ere -verned .* +ndian la# and n" Sin-apre ?a#.
H. Bn 1H
"'
De!em.er, 2012, "'e Ar.i"ral Tri.unal pa))ed unanimu) 1inal
par"ial a#ard in "'e SSA Ar.i"ra"in ;SSA (uri)di!"inal a#ard< di)mi))in- "'e
(uri)di!"inal !'allen-e 1 "'e re)pnden"). T'e Ar.i"ral Tri.unal de!lared "'a" ;a<
+ndian la# #a) n" "'e -vernin- la# 1 "'e ar.i"ra"in a-reemen", i" #a)
Sin-apre ?a#) "'a" -vern) "'e ar.i"ra"in a-reemen" ;.< under Sin-apre ?a#,
alle-a"in) 1 1raud and/r !mpli!a"ed i))ue) 1 1a!" and la# are ar.i"ra.le and ;!<
"'e Ar.i"ral Tri.unal 'a) (uri)di!"in " ad(udi!a"e "'e di)pu"e) ari)in- under "'e
SSA .e"#een "'e pe"i"iner and "'e re)pnden").
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kvm
19/95
ARBP1062.12
I. Bn 15
"'
$ar!', 201:, Ar.i"ral Tri.unal pa))ed unanimu) par"ial a#ard in
"'e S&A ar.i"ra"in ;KS&A (uri)di!"inal a#ardL< and "k )imilar vie# di)mi))in-
"'e (uri)di!"inal !'allen-e 1 "'e re)pnden").
9. Bn :
rd
%vem.er, 201:, Ar.i"ral Tri.unal pa))ed a unanimu) 1inal a#ard
e4!ludin- !)" in "'e S&A ar.i"ra"in a#ardin- 1 "'e !laim 1 "'e pe"i"iner. Bn D9
6
"'
%vem.er, 201:, 1inal 'earin- in "'e SSA ar.i"ra"in .e1re "'e Ar.i"ral
Tri.unal "k pla!e a" Sin-apre. A#ard i) a#ai"ed. Re)pnden") 'ave n"
!'allen-ed an* 1 "'e (uri)di!"inal a#ard) re1erred " a1re)aid. T'e Ar.i"ral
Tri.unal 'a) al) -ran"ed in"erim mea)ure) in 1avur 1 "'e pe"i"iner and a-ain)"
"'e re)pnden") n 2I
"'
and 29
"'
$a*, 2012.
10. +" i) )u.mi""ed "'a" "'e i))ue a) " #'e"'er alle-a"in 1 1raud r 1raudulen"
repre)en"a"in !an .e re1erred " Ar.i"ral Tri.unal r n" 'a) .een alread* de!ided
.* "'e Ar.i"ral Tri.unal in "'e ar.i"ral pr!eedin-) .e"#een "'e )ame par"ie) in "'e
)ame ma""er .* de!larin- ) in (uri)di!"inal a#ard da"ed 1H
"'
De!em.er, 2012.
T'e Ar.i"ral Tri.unal 'a) al) 'eld "'a" ?a# 1 Sin-apre #ill appl* and n"
+ndian ?a#. Preliminar* .(e!"in) rai)ed .* "'e re)pnden") in "'i) pr!eedin-)
#a) )pe!i1i!all* rai)ed .e1re "'e Ar.i"ral Tri.unal #'i!' .(e!"in) 'a) .een
)pe!i1i!all* ne-a"ived .* "'e Ar.i"ral Tri.unal n "'e i))ue 1 ar.i"ra.ili"* a) #ell
a) (uri)di!"in and !ann" .e a-i"a"ed in "'i) pr!eedin-). Re)pnden") n" 'avin-
!'allen-ed (uri)di!"inal a#ard rendered .* "'e Ar.i"ral Tri.unal #'i!' i) .indin-
n "'e par"ie) and are "'u) e)"pped 1rm rai)in- )u!' plea in "'i) pr!eedin-)
1iled .* "'e pe"i"iner under )e!"in 9 1 "'e A!".
11. Dr.Tulzapurkar pla!ed relian!e n "'e (ud-men" 1 "'i) !ur" in !a)e 1
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kvm
20/95
ARBP1062.12
Indo-Pharma Pharmaceutical or!" Pri#ate Limited #"$ Pharmaceutical
Com%an& o' India repr"ed in ()** +,-. /om$L$R$ *0 in )uppr" 1 'i) )u.mi))in
"'a" i))ue 1 ar.i"ra.ili"* and (uri)di!"in rai)ed .* "'e re)pnden") .e1re "'e
Ar.i"ral Tri.unal 'avin- .een re(e!"ed and !n!luded !ann" .e a-i"a"ed in "'i)
pr!eedin-) .ein- .arred .* la# 1 e)"ppel. T'e ?earned Sin-le Eud-e in "'e
a1re)aid !a)e 'eld "'a" i1 "'e ?earned Eud-e 'im)el1 #a) en"i"led " de!ide "'e
i))ue 1 prir !n"inuu) u)er, "'e ?earned Eud-e #uld 'ave !me " a !n"rar*
de!i)in. &#ever, "'e ?earned Eud-e 'eld "'a" )in!e "'e )aid i))ue 'ad alread*
.een de!ided .* "'e Re-i)"rar 1 Trade $ark) in a previu) lis .e"#een "'e par"ie)
#'i!' de!i)in 'ad .e!me 1inal, "'e )aid i))ue !uld n" .e rai)ed in "'e )ui" and
"'e )aid de!i)in #a) re7uired " .e re)pe!"ed.
12. ?earned )enir !un)el pla!ed relian!e n "'e (ud-men" 1 "'e Supreme
3ur" in !a)e 1 1o%e Plantation" Ltd$ #"$ Talu! Land /oard2 Peermade and
another repr"ed in +())). 3 SCC 3)- and in par"i!ular para-rap' ;26< in )uppr"
1 'i) )u.mi))in "'a" "'e prin!iple) 1 e)"ppel and re) (udi!a"a are .a)ed n
pu.li! pli!* and (u)"i!e. 2'en "'e pr!eedin-) .e"#een "'e par"ie) 'ave a""ained
1inali"* n !er"ain i))ue), par"ie) are .und .* "'e (ud-men" and are e)"pped 1rm
7ue)"inin- i". Para-rap' ;26< 1 "'e )aid (ud-men" read) "'u) 89
26. +" i) )e""led la# "'a" prin!iple) 1 e)"ppel and re)
(udi!a"a are .a)ed n pu.li! pli!* and (u)"i!e. D!"rine 1 re)
(udi!a"a i) 1"en "rea"ed a) a .ran!' 1 "'e la# 1 e)"ppel
"'u-' "'e)e "# d!"rine) di11er in )me e))en"ial par"i!ular).
Rule 1 re) (udi!a"a preven") "'e par"ie) " a (udi!ial
de"ermina"in 1rm li"i-a"in- "'e )ame 7ue)"in ver a-ain
even "'u-' "'e de"ermina"in ma* even .e demn)"ra"ed
#rn-. 2'en "'e pr!eedin-) 'ave a""ained 1inali"*, par"ie)
are .und .* "'e (ud-men" and are e)"pped 1rm 7ue)"inin-
i". T'e* !ann" li"i-a"e a-ain n "'e )ame !au)e 1 a!"in nr
!an "'e* li"i-a"e an* i))ue #'i!' #a) ne!e))ar* 1r de!i)in in
"'e earlier li"i-a"in. T'e)e "# a)pe!") are A!au)e 1 a!"in
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kvm
21/95
ARBP1062.12
e)"ppelA and Ai))ue e)"ppelA. T'e)e "# "erm) are 1 !mmn
la# ri-in. A-ain n!e an i))ue 'a) .een 1inall* de"ermined,
par"ie) !ann" )u.)e7uen"l* in "'e )ame )ui" advan!e
ar-umen") r addu!e 1ur"'er eviden!e dire!"ed " )'#in- "'a"
i))ue #a) #rn-l* de"ermined. T'eir nl* remed* i) "
appra!' "'e 'i-'er 1rum i1 availa.le. T'e de"ermina"in 1
"'e i))ue .e"#een "'e par"ie) -ive) ri)e ", a) n"ed a.ve, an
i))ue e)"ppel. +" pera"e) in an* )u.)e7uen" pr!eedin-) in
"'e )ame )ui" in #'i!' "'e i))ue 'ad .een de"ermined. +" al)
pera"e) in )u.)e7uen" )ui") .e"#een "'e )ame par"ie) in #'i!'
"'e )ame i))ue ari)e). Se!"in 11 1 "'e 3P3 !n"ain)
prvi)in) 1 re) (udi!a"a .u" "'e)e are n" e4'au)"ive 1 "'e
-eneral d!"rine 1 re) (udi!a"a. ?e-al prin!iple) 1 e)"ppel
and re) (udi!a"a are e7uall* appli!a.le in pr!eedin-) .e1re
admini)"ra"ive au"'ri"ie) a) "'e* are .a)ed n pu.li! pli!*
and (u)"i!e.
1:. ?earned )enir !un)el pla!ed relian!e n "'e (ud-men" 1 "'e Supreme
3ur" in !a)e 1 /hanu 4umar Jain #"$ Archana 4umar and another repr"ed in
+5--3. ( SCC *,* in )uppr" 1 'i) )u.mi))in "'a" "'ere i) a.)lu"e .ar in rela"in
" i))ue) #'i!' are alread* de!ided .e"#een "'e par"ie) 1rm a-i"a"in- "'e )ame in
"'e la"er pr!eedin-) .e"#een "'e )ame par"ie). Para-rap') 29 " :2 1 "'e )aid
(ud-men" read) "'u) 89
29.T'ere i) a di)"in!"in .e"#een Ai))ue e)"ppelA and Are)
(udi!a"aA MSee T'da* v. T'da*,
:0. Re) (udi!a"a de.ar) a !ur" 1rm e4er!i)in- i") (uri)di!"in
" de"ermine "'e li) i1 i" 'a) a""ained 1inali"* .e"#een "'e
par"ie) #'erea) "'e d!"rine i))ue e)"ppel i) invked a-ain)"
"'e par"*. +1 )u!' an i))ue i) de!ided a-ain)" 'im, 'e #uld .e
e)"pped 1rm rai)in- "'e )ame in "'e la""er pr!eedin-. T'e
d!"rine 1 re)9(udi!a"a !rea"e) a di11eren" kind 1 e)"ppel viz
F)"pper B* A!!rd.
:1. +n a !a)e 1 "'i) na"ure, '#ever, "'e d!"rine 1 Ai))ue
e)"ppelA a) al) A!au)e 1 a!"in e)"ppelA ma* ari)e. +n
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kvm
22/95
ARBP1062.12
T'da* ;)upra< ?rd Dipl!k 'eld 8
G....G!au)e 1 a!"in e)"ppelG i) "'a" #'i!' preven") a par"* "
an a!"in 1rm a))er"in- r den*in-, a) a-ain)" "'e "'er par"*,
"'e e4i)"en!e 1 a par"i!ular !au)e 1 a!"in, "'e nn9e4i)"en!e
r e4i)"en!e 1 #'i!' 'a) .een de"ermined .* a !ur" 1
!mpe"en" (uri)di!"in in previu) li"i-a"in .e"#een "'e )ame
par"ie). +1 "'e !au)e 1 a!"in #a) de"ermined " e4i)", i.e.,
(ud-men" #a) -iven n i", i" i) )aid " .e mer-ed in "'e
(ud-men"....+1 i" #a) de"ermined n" " e4i)", "'e un)u!!e))1ul
plain"i11 !an n ln-er a))er" "'a" i" de)N 'e i) e)"pped per
rem (udi!a"am.G
:2. T'e )aid di!"a #a) 1ll#ed in Bar.er v. S"a11rd)'ire
3un"r* 3un!il, . A !au)e 1 a!"in e)"ppel ari)e) #'ere in
"# di11eren" pr!eedin-) iden"i!al i))ue) are rai)ed, in #'i!'
even", "'e la""er pr!eedin-) .e"#een "'e )ame par"ie) )'all .e
deal" #i"' )imilarl* a) #a) dne in "'e previu) pr!eedin-).
+n )u!' an even" "'e .ar i) a.)lu"e in rela"in " all pin")
de!ided )ave and e4!ep" alle-a"in 1 1raud and !llu)in. MSee
3. ;a minr< v. &a!kne* ?ndn Bru-' 3un!il, .
1D. Dr. Tulzapurkar pla!ed relian!e n "'e (ud-men" 1 "'e Supreme 3ur" in
!a)e 1 I"h6ar Dutt #"$ Land Ac7ui"ition Collector and another repr"ed in
+5--3. * SCC ()- n "'e i))ue 1 e)"ppel rai)ed .* "'e pe"i"iner. Para-rap') 1I
" 21 1 "'e )aid (ud-men" read) "'u) 89
1I. +n "'e Re1eren!e 3ur" r 1r "'a" ma""er "'e &i-' 3ur"
e4er!i)in- i") appella"e (uri)di!"in under Se!"in 5D 1 "'e A!"
!uld n" 'ave deal" #i"' "'e )aid 7ue)"in. T'e prin!iple 1
re) (udi!a"a i) )pe!ie) 1 "'e prin!iple 1 e)"ppel. 2'en a
pr!eedin- .a)ed n a par"i!ular !au)e 1 a!"in 'a) a""ained
1inali"*, "'e prin!iple 1 re) (udi!a"a )'all 1ull* appl*.
19. Re1eren!e in "'i) re-ard ma* .e made " 2ade and
@r)*"' n Admini)"ra"ive ?a#, 9"' Fd., p-. 2D:, #'erein i" i)
)"a"ed8
GBne )pe!ial varie"* 1 e)"ppel i) re) (udi!a"a. T'i)
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kvm
2:/95
ARBP1062.12
re)ul") 1rm "'e rule, #'i!' preven") "'e par"ie) " a
(udi!ial de"ermina"in 1rm li"i-a"in- "'e )ame 7ue)"in
ver a-ain even "'u-' "'e de"ermina"in i)
demn)"ra.l* #rn-. F4!ep" in pr!eedin-) .* #a* 1
appeal, "'e par"ie) .und .* "'e (ud-men" are e)"pped
1rm 7ue)"inin- i". A) .e"#een ne an"'er "'e* ma*
nei"'er pur)ue "'e )ame !au)e 1 a!"in a-ain, nr ma*
"'e* a-ain li"i-a"e an* i))ue #'i!' #a) an e))en"ial
elemen" in "'e de!i)in. T'e)e "# a)pe!") are )me"ime)
di)"in-ui)'ed a) A!au)e 1 a!"in e)"ppelA and Ai))ue
e)"ppel.A
20. +n Ho*) Pl"n%"%ion '%d. v. T"l#; '"nd Bo"$d- "'i)
3ur" .)erved ;S33 p.611, para :1<
G:1. ?a# n re) (udi!a"a and e)"ppel i) #ell
under)"d in +ndia and "'ere are ample au"'ri"a"ive
prnun!emen") .* variu) !ur") n "'e)e )u.(e!"). A)
n"ed a.ve, "'e plea 1 re) (udi!a"a, "'u-' "e!'ni!al, i)
.a)ed n pu.li! pli!* in rder " pu" an end " li"i-a"in.
+" i), '#ever, di11eren" i1 an i))ue #'i!' 'ad .een
de!ided in an earlier li"i-a"in a-ain ari)e) 1r
de"ermina"in .e"#een "'e )ame par"ie) in a )ui" .a)ed n
a 1re)' !au)e 1 a!"in r #'ere "'ere i) !n"inuu) !au)e
1 a!"in. T'e par"ie) "'en ma* n" .e .und .* "'e
de"ermina"in made earlier i1 in "'e mean#'ile, la# 'a)
!'an-ed r 'a) .een in"erpre"ed di11eren"l* .* a 'i-'er
1rum.G
21. +n AT'e D!"rine 1 Re) Eudi!a"aA 2
nd
Fdi"in .* =er-e
Spen!er B#er and Turner, i" i) )"a"ed 8
GA (udi!ial de!i)in i) deemed 1inal, #'en i" leave)
n"'in- " .e (udi!iall* de"ermined r a)!er"ained
"'erea1"er, in rder " render i" e11e!"ive and !apa.le 1
e4e!u"in, and i) a.)lu"e, !mple"e, and !er"ain, and
#'en i" i) n" la#1ull* )u.(e!" " )u.)e7uen" re)!i))in,
revie#, r mdi1i!a"in .* "'e "ri.unal #'i!' prnun!ed
i"...G
15. ?earned )enir !un)el pla!ed relian!e n "'e (ud-men" 1 "'e Supreme
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kvm
2D/95
ARBP1062.12
3ur" in !a)e 1 Ar8un Sin9h #"$ :ohindra 4umar and other" repr"ed in AIR
();< SC ))0 n "'e i))ue 1 e)"ppel/re) (udi!a"a. Para-rap' ;11< 1 "'e )aid
(ud-men" read) "'u) 89
11. T'a" "'e 7ue)"in 1 1a!" #'i!' ar)e in "'e "#
pr!eedin-) #a) iden"i!al #uld n" .e in du.". B1 !ur)e,
"'e* #ere n" in )u!!e))ive )ui") ) a) " make "'e prvi)in)
1 ). 11 1 "'e 3ivil Pr!edure 3de appli!a.le in "erm). T'a"
"'e )!pe 1 "'e prin!iple 1 re) (udi!a"a i) n" !n1ined "
#'a" i) !n"ained in ). 11 .u" i) 1 mre -eneral appli!a"in i)
al) n" in di)pu"e. A-ain, re) (udi!a"a !uld .e a) mu!'
appli!a.le " di11eren" )"a-e) 1 "'e )ame )ui" a) " 1indin-) n
i))ue) in di11eren" )ui"). +n "'i) !nne!"in #e #ere re1erred "
#'a" "'i) 3ur" )aid in Sa"*ad'*an =')al v. Sm. Dera(in
De.i #'ere Da) =up"a, E. )peakin- 1r "'e 3ur" e4pre))ed
'im)el1 "'u) 8
GT'e prin!iple 1 re) (udi!a"a i) .a)ed n "'e need 1
-ivin- a 1inali"* " (udi!ial de!i)in). 2'a" i" )a*) i) "'a"
n!e a re) i) (udi!a"a, i" )'all n" .e ad(ud-ed a-ain.
Primaril* i" applie) a) .e"#een pa)" li"i-a"in and 1u"ure
li"i-a"in. 2'en a ma""er 9 #'e"'er n a 7ue)"in 1 1a!" r
n a 7ue)"in 1 la# 9 'a) .een de!ided .e"#een "#
par"ie) in ne )ui" r pr!eedin- and "'e de!i)in i) 1inal,
ei"'er .e!au)e n appeal #a) "aken " a 'i-'er !ur" r
.e!au)e "'e appeal #a) di)mi))ed, r n appeal lie),
nei"'er par"* #ill .e all#ed in a 1u"ure )ui" r pr!eedin-
.e"#een "'e )ame par"ie) " !anva)) "'e ma""er
a-ain............................ T'e prin!iple 1 re) (udi!a"a
applie) al) a) .e"#een "# )"a-e) in "'e )ame li"i-a"in "
"'i) e4"en" "'a" a !ur", #'e"'er "'e "rial !ur" r a 'i-'er
!ur" 'avin- a" an earlier )"a-e de!ided a ma""er in ne
#a* #ill n" all# "'e par"ie) " re9a-i"a"e "'e ma""er
a-ain a" a )u.)e7uen" )"a-e 1 "'e )ame pr!eedin-).G
16. Dr.Tulzapurkar, learned )enir !un)el "'en )u.mi") "'a" "'e i))ue 1
ar.i"ra.ili"* 'a) " .e de!ided .* "'e la#, -vernin- ar.i"ra"in a-reemen" and n"
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kvm
25/95
ARBP1062.12
"'e la# -vernin- "'e main !n"ra!". Relian!e i) pla!ed n "'e (ud-men" 1 "'e
Supreme 3ur" in !a)e 1 Sumitomo 1ea#& Indu"trie" Ltd$ #"$ ONGC Ltd$ and
other" repr"ed in +()),. ( SCC 0-3. Para-rap') D, 5, I " 11 are relevan" #'i!'
read) "'u) 89
D. Bn 26"' Eul*, 1995, "'e 1ir)" re)pnden" 1iled in "'e &i-'
3ur" a" Bm.a* a pe"i"in pra*in- "'a" "'e )e!nd re)pnden"
.e dire!"ed, under Se!"in 1D 1 "'e +ndian Ar.i"ra"in A!",
19D0, " 1ile "'e a#ard in "'a" !ur". T'e 1ir)" re)pnden"
)u.mi""ed "'a" "'e a#ard #a) invalid, unen1r!ea.le and lia.le
" .e )e" a)ide under "'e prvi)in) 1 "'e )aid A!". T'e
learned Eud-e, a) a1re)"a"ed, all#ed "'e pe"i"in.
5. T'e de!i)in rendered .* P""er, E. in "'e 3mmer!ial
3ur" i) 1 )me impr"an!e .e!au)e "'e (uri)di!"in 1 "'e
Fn-li)' !ur") #a) di)!u))ed. T'e learned Eud-e )aid 8
GBe1re )"a"in- m* rea)n) 1r "'a" !n!lu)in and "'en
"urnin- " "'e G1ru)"ra"inG ar-umen", and .e!au)e
7ue)"in) 'ave ari)en a) " #'e"'er Fn-li)' la# r +ndian
la# i) apprpria"e " .e applied a" variu) )"a-e) 1 "'i)
appli!a"in, + prp)e .rie1l* " adver" " "'e variu) la#)
p"en"iall* appli!a.le " "'e variu) a)pe!") 1 "'e ar.i"ral
rela"in)'ip #'i!' ma* 1all 1r !n)idera"in in !a)e) 1
"'i) kind.
;1< T'e prper la# 1 "'e underl*in- !n"ra!", i.e. "'e la#
-vernin- "'e !n"ra!" #'i!' !rea"e) "'e )u.)"an"ive
ri-'") and .li-a"in) 1 "'e par"ie) u" 1 #'i!' "'e
di)pu"e 'a) ari)en.
;2< T'e prper la# 1 "'e ar.i"ra"in a-reemen", i.e. "'e
la# -vernin- ri-'") and .li-a"in) 1 "'e par"ie) ari)in-
1rm "'eir a-reemen" " ar.i"ra"e and, in par"i!ular, "'eir
.li-a"in " )u.mi" "'eir di)pu"e) " ar.i"ra"in and "
'nur an a#ard. T'i) in!lude) in"er alia 7ue)"in) a) "
"'e validi"* 1 "'e ar.i"ra"in a-reemen", "'e validi"* 1
"'e n"i!e 1 ar.i"ra"in, "'e 3n)"i"u"in 1 "'e "ri.unal
and "'e 7ue)"in #'e"'er an a#ard lie) #i"'in "'e
(uri)di!"in 1 "'e ar.i"ra"r.
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kvm
26/95
ARBP1062.12
;:< T'e prper la# 1 "'e re1eren!e, i.e. "'e la#
-vernin- "'e !n"ra!" #'i!' re-ula"e) "'e individual
re1eren!e " ar.i"ra"in. T'i) i) an a-reemen" )u.)idiar*
" .u" )epara"e 1rm "'e ar.i"ra"in a-reemen" i")el1,
!min- in" e11e!" .* "'e -ivin- 1 a n"i!e 1 ar.i"ra"in
1rm #'i!' pin" a ne# )e" 1 mu"ual .li-a"in) in
rela"in " "'e !ndu!" 1 "'e re1eren!e ari)e upn line)
!anva))ed in "'e Bremer Vul!an S!'i11.au and
$a)!'inen1a.rik v. Su"' +ndia S'ippin- 3rpra"in a"
p. 26: and develped .* $r. Eu)"i!e $u)"ill ;a) 'e "'en
#a)< in Bla!k 3la#)n +n"erna"inal ?"d. v. Paper#rk
2ald'19A)!'a11en.ur- . T'a" la# -vern) "'e 7ue)"in
#'e"'er .* rea)n 1 )u.)e7uen" !ir!um)"an!e "'e par"ie)
'ave .een di)!'ar-ed ;#'e"'er .* repudia"in r
1ru)"ra"in< 1rm "'eir .li-a"in " !n"inue #i"' "'e
re1eren!e 1 "'e individual di)pu"e, #'ile leavin- in"a!"
"'e !n"inuu) a-reemen" " re1er 1u"ure di)pu"e)
pur)uan" " "'e ar.i"ra"in a-reemen".
;D< T'e !urial la#, i.e. "'e la# -vernin- "'e ar.i"ra"in
pr!eedin-) "'em)elve), "'e manner in #'i!' "'e
re1eren!e i) " .e !ndu!"ed. +" -vern) "'e pr!edural
p#er) and du"ie) 1 "'e ar.i"ra"r), 7ue)"in) 1
eviden!e and "'e de"ermina"in 1 "'e prper la# 1 "'e
!n"ra!".
+n re)pe!" 1 man* ar.i"ra"in), "'e appli!a.le la# #ill .e
"'e )ame in all 1ur !a)e). ;1< #ill u)uall* .e de!i)ive a)
" ;2<, in "'e a.)en!e 1 an e4pre)) !n"rar* !'i!eN ;2<
and ;:< #ill ver* rarel* di11er. &#ever, a) " ;D<, i" i) n"
un!mmn " en!un"er "'e in!iden!e 1 a di11eren"
!urial la# in !a)e) #'ere "'e par"ie) 'ave made an
e4pre)) !'i!e 1r ar.i"ra"in ;1re7uen"l* in ?ndn< in a
(uri)di!"in divr!ed 1rm "'e (uri)di!"in #i"' #'i!' "'e
!n"ra!" in ;1< 'a) m)" real !nne!"in.
+n "'i) !a)e, a) " ;1<, "'e par"ie) 'ave made an e4pre))
!'i!e 1 +ndian la# a) "'e prper la# 1 "'e !n"ra!". A)
" ;2<, i" )eem) " me likel* ;al"'u-' i" i) n" ne!e))ar*
1inall* " de!ide< "'a" "'e prper la# 1 "'e ar.i"ra"in
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a-reemen" i) )imilarl* +ndian la#, )in!e "'e ar.i"ra"in
a-reemen" i) par" 1 "'e )u.)"an!e 1 "'e underl*in-
!n"ra!" and "'e "erm) 1 3lau)e 1H.1 are !lear in "'a"
re)pe!". A) " ;:<, i" ma""er) n" 1r "'e purp)e) 1 "'i)
appli!a"in #'e"'er "'e -vernin- la# i) Fn-li)' r
+ndian la#, .e!au)e $r. Dunnin- 'a) !n!eded .e1re me
"'a" "'ere i) n ma"erial di11eren!e .e"#een "'e "# ) 1ar
a) appli!a.le " "'e d!"rine 1 1ru)"ra"in upn #'i!' 'e
relie) ;)ee al) par. H 1 "'e a11idavi" 1 $r. $a(umdar "
"'a" e11e!".<
A) " ;D<, "'e !urial la#, i" )eem) " me plain "'a" i" i) "'e
la# 1 Fn-land. T'ere i), i" i) "rue, n e4pre)) !'i!e 1
!urial la#. &#ever, "'ere i) a !lear re7uiremen" "'a" "'e
ar.i"ra"in pr!eedin-) .e 'eld in ?ndn. +n "'e a.)en!e
1 e4pre)) a-reemen", "'ere i) a )"rn- prima 1a!ie
pre)ump"in "'a" "'e par"ie) in"end "'e !urial la# " .e
"'e la# 1 "'e G)ea"G 1 "'e ar.i"ra"in, i.e. "'e pla!e a"
#'i!' "'e ar.i"ra"in i) " .e !ndu!"ed, n "'e -rund
"'a" i) "'e !un"r* m)" !l)el* !nne!"ed #i"' "'e
pr!eedin-) 9 )ee $u)"ill and B*d, 2nd ed., p. 6D.G
I. +n Bank $ella" v. &elliniki Te!'niki S.A. , "'e 3ur"
1 Appeal )aid "'a" "'e 1undamen"al prin!iple #a) "'a" in
"'e a.)en!e 1 an* !n"ra!"ual prvi)in " "'e !n"rar*,
G"'e pr!edural ;r !urial< la# -vernin- ar.i"ra"in)G
#a) "'a" 1 "'e 1rum 1 "'e ar.i"ra"in, )in!e "'i) #a) "'e
)*)"em 1 la# #i"' #'i!' "'e a-reemen" " ar.i"ra"e in
"'e par"i!ular 1rum #uld 'ave i") !l)e)" !nne!"in.
Par"ie) " in"erna"inal ar.i"ra"in) mi-'" #ell !')e
?ndn a) a !nvenien" neu"ral 1rum and GFn-li)' la#
#ill, a) "'e !urial la#, appl* " "'e !ndu!" 1 "'e
ar.i"ra"inN and "'e par"ie) #ill, .* 'ldin- "'eir
ar.i"ra"in 'ere, )u.(e!" "'em)elve) 1r "'a" purp)e "
Fn-li)' la#....G ;Fmp'a)i) )upplied.<
9. +n %aviera Amazni!a Peruana S.A. v. 3mpania
+n"erna"inal De Se-ur) Del Pen" , ?rd Eu)"i!e ,err
)ummari)ed "'e )"a"e 1 "'e relevan" (uri)pruden!e "'u) 8
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GA. All !n"ra!") #'i!' prvide 1r ar.i"ra"in and !n"ain
a 1rei-n elemen" ma* invlve "'ree p"en"iall* relevan"
)*)"em) 1 la#. ;1< T'e la# -vernin- "'e )u.)"an"ive
!n"ra!". ;2< T'e la# -vernin- "'e a-reemen" " ar.i"ra"e
and "'e per1rman!e 1 "'a" a-reemen". ;:< T'e la#
-vernin- "'e !ndu!" 1 "'e ar.i"ra"in. +n "'e ma(ri"* 1
!a)e) all "'ree #ill .e "'e )ame. Bu" ;1< #ill 1"en .e
di11eren" 1rm ;2< and ;:<. And !!a)inall*, .u" rarel*, ;2<
ma* al) di11er 1rm ;:<.G
&e )aid, "Prima facie, i.e. in "'e a.)en!e 1 )me e4pre)) and
!lear prvi)in " "'e !n"rar*, i" mu)" 1ll# "'a" an
a-reemen" "'a" the curial or procedural law of an arbitration
i) " .e "'e la# 1 O 'a) "'e !n)e7uen!e "'a" O i) al) " .e
"'e G)ea"G 1 "'e ar.i"ra"in. T'e le4 1ri i) "'en "'e la# 1 O,
and a!!rdin-l* O i) "'e a-reed 1rum 1 "'e ar.i"ra"in. A
1ur"'er !n)e7uen!e i) "'en "'a" "'e Courts which are
competent to control or assist the arbitration are "'e 3ur")
e4er!i)in- (uri)di!"in a" OG. T'e learned Eud-e .)erved "'a"
"'ere #a) n rea)n in "'er* #'i!' pre!luded Gpar"ie) "
a-ree "'a" an ar.i"ra"in )'all .e 'eld a" a pla!e r in !un"r*
O .u" )u.(e!" " the procedural laws 1 CG ;Fmp'a)i)
)upplied.<
10. +n "'e ?a# and Pra!"i!e 1 3mmer!ial Ar.i"ra"in in
Fn-land, Se!nd Fdi"in .* $u)"ill and B*d, "'ere i) a
!'ap"er n GT'e appli!a.le la# and "'e (uri)di!"in 1 "'e
!ur"G. 5nder "'e )u."i"le, G?a#) =vernin- T'e Ar.i"ra"inG,
i" i) )aid,
GAn a-reed re1eren!e " ar.i"ra"in invlve) "# -rup) 1
.li-a"in). T'e 1ir)" !n!ern) "'e mu"ual .li-a"in) 1 "'e
par"ie) " )u.mi" 1u"ure di)pu"e), r an e4i)"in- di)pu"e "
ar.i"ra"in, and " a.ide .* "'e a#ard 1 a "ri.unal
!n)"i"u"ed in a!!rdan!e #i"' "'e a-reemen". +" i) n#
1irml* e)"a.li)'ed "'a" "'e ar.i"ra"in a-reemen" #'i!'
!rea"e) "'e)e .li-a"in) i) a )epara"e !n"ra!", di)"in!"
1rm "'e )u.)"an"ive a-reemen" in #'i!' i" i) u)uall*
em.edded, !apa.le 1 )urvivin- "'e "ermina"in 1 "'e
)u.)"an"ive a-reemen" and )u)!ep"i.le 1 prema"ure
"ermina"in .* e4pre)) r implied !n)en", r .*
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repudia"in r 1ru)"ra"in, in mu!' "'e )ame manner a) in
mre rdinar* 1rm) 1 !n"ra!". Sin!e "'i) a-reemen" 'a) a
di)"in!" li1e 1 i") #n, i" ma* in prin!iple .e -verned .* a
prper la# 1 i") #n, #'i!' need n" .e "'e )ame a) "'e
la# -vernin- "'e )u.)"an"ive !n"ra!".
The second group of obligations, consisting of what
is generally referred to as the 'curial law' of the
arbitration, concerns the manner in which the parties and
the arbitrator are required to conduct the reference of a
particular dispute. A!!rdin- " "'e Fn-li)' "'er* 1
ar.i"ra"in, "'e)e rule) are " .e a)!er"ained .* re1eren!e "
"'e e4pre)) r implied "erm) 1 "'e a-reemen" " ar.i"ra"e.
T'i) .ein- ), i" #ill .e 1und in "'e -rea" ma(ri"* 1 !a)e)
"'a" "'e curial law, i.e. the law governing the conduct, of
the reference, i) "'e )ame a) "'e la# -vernin- "'e
.li-a"in " ar.i"ra"e. +" i), '#ever, pen " "'e par"ie) "
)u.mi", e4pre))l* r .* impli!a"in, "'e !ndu!" 1 "'e
re1eren!e " a di11eren" la# 1rm "'e ne -vernin- "'e
underl*in- ar.i"ra"in a-reemen". In such a case, the court
loos first at the arbitration agreement to see whether the
dispute is one which should be arbitrated, and which has
validly been made the sub!ect of the reference" it then loos
to the curial law to see, how that reference should be
conducted" and then returns to the first law in order to give
effect to the resulting award.
44444 44444 44444
+" ma* "'ere1re .e )een "'a" pr.lem) ari)in- u" 1
an ar.i"ra"in ma*, a" lea)" in "'er*, !all 1r "'e appli!a"in
1 an* ne r mre 1 "'e 1ll#in- la#) 9
1. T'e prper la# 1 "'e !n"ra!", i.e. "'e la# -vernin- "'e
!n"ra!" #'i!' !rea"e) "'e )u.)"an"ive ri-'") 1 "'e par"ie),
in re)pe!" 1 #'i!' "'e di)pu"e 'a) ari)en.
2. T'e prper la# 1 "'e ar.i"ra"in a-reemen", i.e. "'e la#
-vernin- "'e .li-a"in 1 "'e par"ie) " )u.mi" "'e
di)pu"e) " ar.i"ra"in, and " 'nur an a#ard.
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:. The curial law, i.e. the law governing the conduct of the
individual reference.
44444 44444 44444
;1< The proper law of the arbitration agreement governs
the validity 1 "'e ar.i"ra"in a-reemen", "'e 7ue)"in
#'e"'er a di)pu"e lie) #i"'in "'e )!pe 1 "'e ar.i"ra"in
a-reemen"N "'e validi"* 1 "'e n"i!e 1 ar.i"ra"inN "'e
3n)"i"u"in 1 "'e "ri.unalN "'e 7ue)"in #'e"'er an a#ard
lie) #i"'in "'e (uri)di!"in 1 "'e ar.i"ra"rN "'e 1rmal
validi"* 1 "'e a#ardN "'e 7ue)"in #'e"'er "'e par"ie) 'ave
.een di)!'ar-ed 1rm an* .li-a"in " ar.i"ra"e 1u"ure
di)pu"e).
2. The curial law governs" the manner in which the
reference is to be conducted" the procedural powers and
duties of the arbitrator" questions of evidence" the
determination of the proper law of the contract.
:. T'e prper la# 1 "'e re1eren!e -vern)8 "'e 7ue)"in
#'e"'er "'e par"ie) 'ave .een di)!'ar-ed 1rm "'eir
.li-a"in " !n"inue #i"' "'e re1eren!e 1 "'e individual
di)pu"e.
44444 44444 44444
+n "'e a.)en!e 1 e4pre)) a-reemen", "'ere i) a )"rn-
prima facie 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 be conducted, on the
ground that that is the country most closely connected with
the proceedings. #o in order to determine the curial law in
the absence of an e$press choice by the parties it is first
necessary to determine the seat of the arbitration, by
construing the agreement to arbitrate.
;Fmp'a)i) )upplied.<
11. T'e !n!lu)in "'a" #e rea!' i) "'a" "'e !urial la#
pera"e) durin- "'e !n"inuan!e 1 "'e pr!eedin-) .e1re "'e
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ar.i"ra"r " -vern "'e pr!edure and !ndu!" "'ere1. T'e
!ur") admini)"erin- "'e !urial la# 'ave "'e au"'ri"* "
en"er"ain appli!a"in) .* par"ie) " ar.i"ra"in) .ein-
!ndu!"ed #i"'in "'eir (uri)di!"in 1r "'e purp)e 1 en)urin-
"'a" "'e pr!edure "'a" i) adp"ed in "'e pr!eedin-) .e1re "'e
ar.i"ra"r !n1rm) " "'e re7uiremen") 1 "'e !urial la# and
1r relie1) in!iden"al "'ere". Su!' au"'ri"* 1 "'e !ur")
admini)"erin- "'e !urial la# !ea)e) #'en "'e pr!eedin-)
.e1re "'e ar.i"ra"r are !n!luded.
1H. +" i) )u.mi""ed "'a" "'e la# -vernin- "'e ar.i"ra"in a-reemen" i) "'e la# 1
Sin-apre ."' .e!au)e "'e par"ie) 'ave !')en Sin-apre a) "'e )ea" 1 ar.i"ra"in
and .e!au)e "'e par"ie) 'ave e4pre))l* e4!luded "'e appli!a.ili"* 1 +ndian la# a)
"'e -vernin- la# 1 "'e Ar.i"ra"in A-reemen". Sin!e "'e a-reemen" " ar.i"ra"e
'a) a !l)er and mre real !nne!"in #i"' "'e pla!e #'ere "'e par"ie) 'ave !')en
" ar.i"ra"e "'an "'e pla!e 1 "'e la# 1 "'e underl*in- !n"ra!". T'e ar.i"ra"in
a-reemen" i) -verned .* "'e la# 1 "'a" pla!e. T'i) p)i"in i) !lear 1rm "'e
de!i)in 1 "'e Supreme 3ur" in %harat &luminium Co. 'td. (s. )aiser
&luminium Technical #ervices Inc, repr"ed in 2012 ;9< S33 552, para-rap') 111
" 11H. +n para-rap' 11D, "'e Supreme 3ur" relied n "'e de!i)in 1 "'e PueenQ)
Ben!' Divi)in, 3mmer!ial 3ur" ;Fn-land< in #ulame*ica CIT +acional ,e
#eguros #& v. -nesa -ngenharia #& . -nesa repr"ed in M201:R 1 2.?.R. 102 in
#'i!' !a)e i" #a) .)erved "'a" )in!e "'e )ea" 1 "'e ar.i"ra"in i) ?ndn,
Fn-land, i" ne!e))aril* !arried #i"' i" "'e Fn-li)' 3ur"Q) )upervi)r* (uri)di!"in
ver "'e ar.i"ra"in pr!e)). T'i) #a) .)erved " immedia"el* e)"a.li)' a )"rn-
!nne!"in .e"#een "'e ar.i"ra"in a-reemen" i")el1 and "'e la# 1 Fn-land, and
"'a" i" #a) 1r "'i) rea)n "'a" re!en" au"'ri"ie) 'ad laid )"re)) upn "'e l!a"in)
1 "'e )ea" 1 "'e ar.i"ra"in a) an impr"an" 1a!"r in de"erminin- "'e prper la# 1
"'e ar.i"ra"in a-reemen". @ur"'er, +n /harat Aluminium !#*$"&- i" i) made !lear
"'a" "'e +ndian Ar.i"ra"in A!" i) S)ea" !en"ri!Q. +" i) "'ere1re )u.mi""ed "'a" .*
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rea)n 1 )pe!i1i! e4!lu)in 1 "'e appli!a"in 1 "'e +ndian Ar.i"ra"in A!" e4!ep"
Se!"in 9, and in vie# 1 "'e )ea" 1 "'e ar.i"ra"in .ein- Sin-apre, "'ere i) a
!lear !n"rar* in"en"in " appl* "'e la# 1r "'e main !n"ra!" " "'e ar.i"ra"in
a-reemen", and "'e la# -vernin- "'e ar.i"ra"in a-reemen" i) "'ere1re "'e la# 1
Sin-apre. T'e !n"en"in 1 "'e Re)pnden") "'a" .* rea)n 1 #'a" i) )"a"ed in
para-rap' 19H in "'e BA?3B (ud-men", "'e la# de!lared "'erein i) pr)pe!"ive i)
un"ena.le. 2'a" i) made pr)pe!"ive i) "'e la# laid d#n "'erein .* #'i!' "'e
earlier de!i)in) 1 "'e Supreme 3ur" in %hatia International /01102 3 #C 415
and (enture 6lobal -ngineering ;200I< D S33 190, are ver ruled. T'e BA?3B
(ud-men" al) de!lare) "'e la# ;"'er "'an "'e la# )e" u" in "'e )aid "# ver
ruled (ud-men")< viz. in "'e a.)en!e 1 an* e4pre)) !'i!e a) " "'e la# -vernin-
"'e ar.i"ra"in a-reemen", "'e la# 1 "'e )ea" #ill .e "'e -vernin- la# 1 "'e
ar.i"ra"in a-reemen". +" i) )u.mi""ed "'a" "'i) de!lara"in 1 la# i) n" made
pr)pe!"ive and !ann" .e pr)pe!"ive. 2'a" i) made pr)pe!"ive i) "'e de!i)in
"'a" Par" + 1 "'e Ar.i"ra"in A!", in!ludin- Se!"in 9 "'ere1, de) n" appl* "
ar.i"ra"in) 'eld u")ide +ndia. T'e de!lara"in 1 "'e Supreme 3ur" 1 la# n all
"'er a)pe!") i) n" pr)pe!"ive. T'e a1re)aid p)i"in i) !lear 1rm "'e
in"erpre"a"in 1 "'e BA?3B (ud-men" .* "'e Divi)in Ben!' 1 "'i) &nA.le
3ur" in "'e !a)e 1 4on!ola Co%%er :ine" +PLC. V"$ Ste6art" = Llo&d" o'
India repr"ed in 5-(0 +3. /om CR 5).
1I. ?earned )enir !un)el pla!ed relian!e n "'e (ud-men" 1 "'e Supreme
3ur" in !a)e 1 National Thermal Po6er Cor%oration #"$ Sin9er Com%an& and
other" repr"ed in +())5. 0 SCC 33( in )uppr" 1 "'e )u.mi))in "'a" )in!e "'ere
#a) n e4pre)) !'i!e 1 la# -vernin- "'e !n"ra!" a) a #'le r "'e ar.i"ra"in
a-reemen" a) )u!', a pre)ump"in ma* ari)e "'a" "'e la# 1 !un"r* #'ere "'e
ar.i"ra"in i) a-reed " .e 'eld i) "'e prper la# 1 "'e ar.i"ra"in a-reemen". +" i)
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)u.mi""ed "'a" )in!e par"ie) 'ave e4pre))l* e4!luded prvi)in) 1 +ndia e4!ludin-
)e!"in 9 1 "'e Ar.i"ra"in and 3n!ilia"in A!", 1996, la# 1 Sin-apre #uld
appl* " "'e ar.i"ra"in a-reemen" and n" la# 1 +ndia. Para-rap') 2: " 26 1 "'e
)aid (ud-men" read) "'u) 89
2:. T'e prper la# 1 "'e ar.i"ra"in a-reemen" i) nrmall*
"'e )ame a) "'e prper la# 1 "'e !n"ra!". +" i) nl* in
e4!ep"inal !a)e) "'a" i" i) n" ) even #'ere "'e prper la# 1
"'e !n"ra!" i) e4pre))l* !')en .* "'e par"ie). 2'ere,
'#ever, "'ere i) n e4pre)) !'i!e 1 "'e la# -vernin- "'e
!n"ra!" a) a #'le, r "'e ar.i"ra"in a-reemen" a) )u!', a
pre)ump"in ma* ari)e "'a" "'e la# 1 "'e !un"r* #'ere "'e
ar.i"ra"in i) a-reed " .e 'eld i) "'e prper la# 1 "'e
ar.i"ra"in a-reemen". Bu" "'a" i) nl* a re.u""a.le
pre)ump"in. See Di!e*, Vl +, p.5:9N )ee "'e .)erva"in in
2'i"#r"' S"ree" F)"a"e) $an!'e)"er< ?"d. v. Eame) $iller 0
Par"ner) ?"d. .
2D. T'e validi"*, e11e!" and in"erpre"a"in 1 "'e ar.i"ra"in
a-reemen" are -verned .* i") prper la#. Su!' la# #ill
de!ide #'e"'er "'e ar.i"ra"in !lau)e i) #ide enu-' " !ver
"'e di)pu"e .e"#een "'e par"ie). Su!' la# #ill, al) rdinaril*
de!ide #'e"'er "'e ar.i"ra"in !lau)e .ind) "'e par"ie) even
#'en ne 1 "'em alle-e) "'a" "'e !n"ra!" i) vid, r vida.le
r ille-al r "'a" )u!' !n"ra!" 'a) .een di)!'ar-ed .* .rea!'
r 1ru)"ra"in. See &e*man and Anr. v. Dar#in), ?"d. . T'e
prper la# 1 ar.i"ra"in #ill al) de!ide #'e"'er "'e
ar.i"ra"in !lau)e #uld e7uall* appl* " a di11eren" !n"ra!"
.e"#een "'e )ame par"ie) r .e"#en ne 1 "')e par"ie) and a
"'ird par"*.
25. T'e par"ie) 'ave "'e 1reedm " !')e "'e la#
-vernin- an in"erna"inal !mmer!ial ar.i"ra"in a-reemen".
T'e* ma* !')e "'e )u.)"an"ive la# -vernin- "'e ar.i"ra"in
a-reemen" a) #ell a) "'e pr!edural la# -vernin- "'e !ndu!"
1 "'e ar.i"ra"in. Su!' !'i!e i) e4er!i)ed ei"'er e4pre))l* r
.* impli!a"in. 2'ere "'ere i) n e4pre)) !'i!e 1 "'e la#
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-vernin- "'e !n"ra!" a) a #'le, r "'e ar.i"ra"in a-reemen"
in par"i!ular, "'ere i), in "'e a.)en!e 1 an* !n"rar*
indi!a"in, a pre)ump"in "'a" "'e par"ie) 'ave in"ended "'a"
"'e prper la# 1 "'e !n"ra!" a) #ell a) "'e la# -vernin- "'e
ar.i"ra"in a-reemen" are "'e )ame a) "'e la# 1 "'e !un"r* in
#'i!' "'e ar.i"ra"in i) a-reed " .e 'eld. Bn "'e "'er 'and,
#'ere "'e prper la# 1 "'e !n"ra!" i) e4pre))l* !')en .* "'e
par"ie), a) in "'e pre)en" !a)e, )u!' la# mu)", in "'e a.)en!e 1
an unmi)"aka.le in"en"in " "'e !n"rar*, -vern "'e
ar.i"ra"in a-reemen" #'i!', "'u-' !lla"eral r an!illar* "
"'e main !n"ra!", i) never"'ele)) a par" 1 )u!' !n"ra!".
26. 2'erea), a) )"a"ed a.ve, "'e prper la# 1 ar.i"ra"in
;i.e., "'e )u.)"an"ive la# -vernin- ar.i"ra"in< de"ermine) "'e
validi"*, e11e!" and in"erpre"a"in 1 "'e ar.i"ra"in a-reemen",
"'e ar.i"ra"in pr!eedin-) are !ndu!"ed, in "'e a.)en!e 1
an* a-reemen" " "'e !n"rar*, in a!!rdan!e #i"' "'e la# 1
"'e !un"r* in #'i!' "'e ar.i"ra"in i) 'eld. Bn "'e "'er 'and,
i1 "'e par"ie) 'ave )pe!i1i!all* !')en "'e la# -vernin- "'e
!ndu!" and pr!edure 1 ar.i"ra"in, "'e ar.i"ra"in
pr!eedin-) #ill .e !ndu!"ed in a!!rdan!e #i"' "'a" la# )
ln- a) i" i) n" !n"rar* " "'e pu.li! pli!* r "'e manda"r*
re7uiremen") 1 "'e la# 1 "'e !un"r* in #'i!' "'e ar.i"ra"in
i) 'eld. +1 n )u!' !'i!e 'a) .een made .* "'e par"ie),
e4pre))l* r .* ne!e))ar* impli!a"in, "'e pr!edural a)pe!" 1
"'e !ndu!" 1 ar.i"ra"in ;a) di)"in-ui)'ed 1rm "'e
)u.)"an"ive a-reemen" " ar.i"ra"e< #ill .e de"ermined .* "'e
la# 1 "'e pla!e r )ea" 1 ar.i"ra"in. 2'ere, '#ever, "'e
par"ie) 'ave, a) in "'e in)"an" !a)e, )"ipula"ed "'a" "'e
ar.i"ra"in .e"#een "'em #ill .e !ndu!"ed in a!!rdan!e #i"'
"'e +33 Rule), "')e rule), .ein- in man* re)pe!") )el19
!n"ained r )el19re-ula"in- and !n)"i"u"in- a !n"ra!"ual
!de 1 pr!edure, #ill -vern "'e !ndu!" 1 "'e ar.i"ra"in,
e4!ep" in)1ar a) "'e* !n1li!" #i"' "'e manda"r*
re7uiremen") 1 "'e prper la# 1 ar.i"ra"in, r 1 "'e
pr!edural la# 1 "'e )ea" 1 ar.i"ra"in. See "'e .)erva"in
1 ,err, ?E. in Bank $ella" v. &elliniki Te!'niki SA. . See al)
3rai-, Park and Paul))n, +n"erna"inal 3'am.er 1
3mmer!e Ar.i"ra"in, 2nd ed. ;1990<. T )u!' an e4"en" "'e
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apprpria"e !ur") 1 "'e )ea" 1 ar.i"ra"in, #'i!' in "'e
pre)en" !a)e are "'e !mpe"en" Fn-li)' !ur"), #ill 'ave
(uri)di!"in in re)pe!" 1 pr!edural ma""er) !n!ernin- "'e
!ndu!" 1 ar.i"ra"in. Bu" "'e verridin- prin!iple i) "'a" "'e
!ur") 1 "'e !un"r* #')e )u.)"an"ive la#) -vern "'e
ar.i"ra"in a-reemen" are "'e !mpe"en" !ur") in re)pe!" 1 all
ma""er) ari)in- under "'e ar.i"ra"in a-reemen", and "'e
(uri)di!"in e4er!i)ed .* "'e !ur") 1 "'e )ea" 1 ar.i"ra"in i)
merel* !n!urren" and n" e4!lu)ive and )"ri!"l* limi"ed "
ma""er) 1 pr!edure. All "'er ma""er) in re)pe!" 1 "'e
ar.i"ra"in a-reemen" 1all #i"'in "'e e4!lu)ive !mpe"en!e 1
"'e !ur") 1 "'e !un"r* #')e la#) -vern "'e ar.i"ra"in
a-reemen". See $u)"il 0 B*d, 3mmer!ial Ar.i"ra"in, 2nd
ed.N Allen Red 1ern and $ar"in &un"er, ?a# 0 Pra!"i!e 1
+n"erna"inal 3mmer!ial Ar.i"ra"in, 19I6N Ru))el n
Ar.i"ra"in, T#en"ie"' ed., 19I2N 3'e)'ire 0 %r"'A) Priva"e
+n"erna"inal ?a#, eleven"' ed. ;19IH<.
19. ?earned )enir !un)el pla!ed relian!e n !lau)e 16.D 1 "'e )'are
)u.)!rip"in a-reemen" and )u.mi") "'a" par" + i) "'u) e4pli!i"l* e4!luded e4!ep"
)e!"in 9 and "'u) "'e la# -vernin- "'e ar.i"ra"in in n !a)e #uld .e +ndian
Ar.i"ra"in A!" e4!ep" )e!"in 9. +" i) )u.mi""ed "'a" (ud-men" 1 Supreme 3ur"
in !a)e 1 National Thermal Po6er Cor%oration +"u%ra. #uld )7uarel* appl* "
"'e 1a!") 1 "'i) !a)e. $* a""e"nin i) invi"ed " "'e )u.mi))in) made .* par"ie)
.e1re "'e Ar.i"ral Tri.unal n "'e i))ue 1 ar.i"ra.ili"* and (uri)di!"in and "'e
1indin-) rendered "'ere1 .* "'e Ar.i"ral Tri.unal.
20. Dr.Tulzapurkar pla!ed relian!e n "'e (ud-men" 1 "'e Divi)in Ben!' 1
"'i) 3ur" in !a)e 1 4on!ola Co%%er :ine" +PLC. #"$ Ste6art" and Llo&d" o'
India Limited repr"ed in +5-(0. 3 /CR 5) )uppr" 1 'i) )u.mi))in "'a" "'u-'
)ea" 1 ar.i"ra"in #a) a" Sin-apre, '#ever in vie# 1 "'e par"ie) 'avin- a-reed
" appl* )e!"in 9 1 "'e Ar.i"ra"in and 3n!ilia"in A!", 1996, "'i) pe"i"in 1iled
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in "'i) !ur" under )e!"in 9 i) main"aina.le. +" i) )u.mi""ed "'a" "'i) !ur" 'a)
in"erpre"ed "'e (ud-men" 1 "'e Supreme 3ur" in !a)e 1 /harat Aluminium
Com%an& +"u%ra. and 'a) 'eld "'a" "'e en"ire (ud-men" 1 "'e Supreme 3ur"
#uld n" appl* #i"' pr)pe!"ive e11e!". +n ) 1ar a) appli!a.ili"* 1 "'e -vernin-
la# 1 ar.i"ra"in a-reemen" .a)ed n )ea" 1 "'e ar.i"ra"in i) !n!erned, i" i) 'eld
.* "'e Supreme 3ur" "'a" )ea" 1 "'e ar.i"ra"in #uld de"ermine "'e -vernin-
la# 1 "'e ar.i"ra"in a-reemen". +" i) )u.mi""ed "'a" "'e la# i) de!lared .* "'e
Supreme 3ur" in "'e )aid (ud-men" a) i" )"d. +n "'i) !a)e, e4pre)) !'i!e i)
made, )ea" 1 "'e ar.i"ra"in #uld -vern "'e la# 1 ar.i"ra"in a-reemen".
21. +" i) "'ere1re )u.mi""ed "'a" "'e la# -vernin- "'e ar.i"ra"in a-reemen"
.e"#een "'e par"ie) in "'e pre)en" !a)e i) "'e la# 1 Sin-apre and i" i) an admi""ed
p)i"in "'a" under "'e Sin-apre la# "'e Ar.i"ral Tri.unal !an de!ide !laim)
invlvin- alle-a"in) 1 1raud. +" i) "'ere1re )u.mi""ed "'a" "'e !n"en"in 1 "'e
Re)pnden") "'a" "'e pe"i"in under Se!"in 9 i) n" main"aina.le i) n" !rre!" and
i) lia.le " .e re(e!"ed.
22. A) re-ard) "'e Pe"i"inerQ) ri-'" " ."ain relie1) under Se!"in 9 in "'e
pre)en" !a)e, "'e )ame i) .a)ed n "# premi)e). @ir)", "'e emer-en!* ar.i"ra"r
'a) pa))ed an in"erim a#ard da"ed 2I
"'
$a* 2012 'ldin- "'a" pr"e!"ive rder) are
re7uired " .e pa))ed. T'e )aid in"erim a#ard 'a) n" .een !'allen-ed .* "'e
Re)pnden"). T'e i))ue "'ere1re 'a) .een de!ided .* a !mpe"en" 1rum and "'i)
de!i)in 'a) .e!me 1inal and .indin- n "'e par"ie). Bn "'e .a)i) 1 "'e prin!iple)
1 i))ue e)"ppel "'e )aid de!i)in i) .indin- and "'e Re)pnden") are n" en"i"led
" re9a-i"a"e "'e 7ue)"in a) " #'e"'er "'e Pe"i"iner i) en"i"led " an* pr"e!"ive
rder. T'e )e!nd premi)e i) "'a" independen"l* 1 "'e in"erim a#ard pa))ed .* "'e
Ar.i"ral 1rum, "'e Pe"i"iner 'a) made u" a !a)e 1r -ran" 1 relie1) under Se!"in
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9 1 "'e +ndian Ar.i"ra"in A!".
2:. Dr.Tulzapurkar, "'en )u.mi") "'a" )e!"in D6 read #i"' )e!"in DI;2< ;a< 1
"'e Ar.i"ra"in and 3n!ilia"in A!", 1996 !learl* indi!a"e) "'a" "'e 1rei-n a#ard
#uld n" .e en1r!ea.le i1 )u.(e!" ma""er 1 ar.i"ra"in #a) in!apa.le 1 de!i)in
1 ar.i"ra"r. +" i) )u.mi""ed "'a" )me 1 "'e di)pu"e) #'i!' !an .e e4!lu)ivel*
"ried nl* .* !ur") r .* !er"ain au"'ri"*, even .* a-reemen" )u!' di)pu"e) !anA"
.e re1erred " ar.i"ra"in and/r are in!apa.le 1 de!i)in .* ar.i"ra"in. +1 "'e
Ar.i"ral Tri.unal 'a) de!ided an* i))ue) #'i!' are in!apa.le 1 de!i)in 1
ar.i"ra"r, )u!' 1rei-n a#ard #uld n" .e en1r!ea.le under )e!"in DI;2< ;a<
read #i"' )e!"in D6 1 "'e Ar.i"ra"in A!". +" i) )u.mi""ed .* "'e learned )enir
!un)el "'a" )e!"in DI ;2< ;a< de) n" re1er " "'e pr!eedin-) #'i!' !an .e
de!ided in .e""er #a* .* !ivil !ur". +" i) )u.mi""ed "'a" in a -iven !a)e, !ur" ma*
!me " a !n!lu)in #'ile appin"in- ar.i"ra"r r re1errin- par"ie) " ar.i"ra"in
"'a" "'u-' di)pu"e i) !apa.le 1 ar.i"ra"in, in "'e 1a!") 1 a par"i!ular !a)e, i"
#uld .e mre apprpria"e r prper i1 "'e )u.(e!" ma""er 1 "'e ar.i"ra"in
a-reemen" i) de!ided .* "'e !ivil !ur" and n" .* an ar.i"ra"r. +" i) )u.mi""ed "'a"
)e!"in DI;2< ;a< de) n" !n"empla"e a )i"ua"in #'e"'er i" #uld .e le))
!mpe"en" r le)) e11e!"ive " de!ide "'e ma""er "'u-' )u.(e!" ma""er 1 ar.i"ra"in
.* a !ivil !ur" r .* an ar.i"ra"r.
2D. Dr.Tulzapurkar )u.mi") "'a" i" #a) "'e !a)e 1 "'e pe"i"iner .e1re "'e
Ar.i"ral Tri.unal and in "'i) pr!eedin-) "'a" !n)en" 1 "'e pe"i"iner #a)
."ained .* mi)9repre)en"a"in .* "'e re)pnden") #'i!' amun"ed " 1raud and
n "'a" -rund "'e pe"i"iner applied 1r re1und 1 "'e mne* inve)"ed. 3laim 1
"'e pe"i"iner #a) .* #a* 1 dama-e). +" i) )u.mi""ed "'a" i" i) n" "'e .(e!"in 1
"'e re)pnden") "'a" )u!' !laim 1 dama-e) ari)e) u" 1 ar.i"ra"in a-reemen" i)
in!apa.le 1 ad(udi!a"in .* ar.i"ra"r. +" i) )u.mi""ed "'a" )u.(e!" ma""er 1
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ar.i"ra"in i) relevan" and n" alle-a"in) made .* par"ie) a-ain)" ea!' "'er. +1
)u.(e!" ma""er i) in!apa.le 1 ar.i"ra"in, ma""er !ann" .e re1erred " ar.i"ra"in
even .* !n)en" 1 par"ie). Fven i1 alle-a"in 1 1raud r 1raudulen" repre)en"a"in
are made )u!' alle-a"in) !an )"ill .e de!ided .* "'e Ar.i"ral Tri.unal. T'ere i)
di11eren!e .e"#een "'e )u.(e!" ma""er in !apa.le 1 ad(udi!a"in .* ar.i"ra"in and
alle-a"in) made .* par"ie) a-ain)" ea!' "'er rela"in- " 1raud r 1raudulen"
repre)en"a"in. +" i) )u.mi""ed "'a" )u!' alle-a"in) #uld n" de!ide "'e
appli!a.ili"* 1 )e!"in DI ;2< ;a<. Fven in +ndian ?a#, "'ere i) n a.)lu"e rule
"'a" i1 alle-a"in) 1 1raud are made, ar.i"ra"r !ea)ed " .e !apa.le 1 ad(udi!a"in-
)u!' !laim .a)ed n )u!' alle-a"in) and "'u) )u!' !a)e #uld n" 1all under
)e!"in DI;2< ;a<.
25. Dr.Tulzapurkar invi"ed m* a""en"in " (ud-men" 1 "'e Supreme 3ur" in
!a)e 1 N$Radha!ri"hnan #"$ :ae"tro >n9ineer" and other" repr"ed in +5-(-. (
SCC *5 in )uppr" 1 'i) )u.mi))in "'a" under )e!"in I 1 "'e Ar.i"ra"in and
3n!ilia"in A!", 1996, a !ur" r (udi!ial au"'ri"* 'a) di)!re"in " re1er r n" "
re1er "'e par"ie) " ar.i"ra"in even i1 )u.(e!" ma""er 1 "'e )ui" #a) #i"'in "'e
(uri)di!"in 1 ar.i"ra"in i1 !ur" !me) " "'e !n!lu)in "'a" !n)iderin- "'e
alle-a"in) made .* "'e par"ie) r "'e i))ue #'i!' !uld .e prperl* deal" #i"' .*
"'e !ivil !ur" and n" .* an ar.i"ra"r. Relian!e i) pla!ed n para-rap') 15 " 21,
2: " 26 #'i!' read) a) under 89
15. T'e appellan" 'ad n "'e "'er 'and !n"ended "'a" "'e
)u.(e!" ma""er 1 "'e )ui" #a) #i"'in "'e am.i" 1 "'e
ar.i"ra"in !lau)e )in!e a!!rdin- " 'im "'e di)pu"e rela"ed "
'i) re"iremen" and "'e )e""lemen" 1 'i) due) a1"er 'e #a)
deemed " 'ave re"ired a!!rdin- " "'e re)pnden"). @ur"'er,
i" #a) 'i) !n"en"in "'a" "'e par"ner)'ip deed da"ed 6
"'
1
De!em.er, 2005 #a) n" a valid ne a) i" #a) n" 1ramed in
!mplian!e #i"' "'e re7uiremen") under "'e Par"ner)'ip A!".
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T'ere1re, "'e ar-umen" 1 "'e re)pnden") "'a" "'e )u.(e!"
ma""er 1 "'e )ui" did n" 1all #i"'in "'e am.i" 1 "'e ar.i"ra"in
!lau)e 1 "'e ri-inal par"ner)'ip deed da"ed H
"'
1 April,
200:, !ann" .e )u)"ained. 2e are in a-reemen" #i"' "'e
!n"en"in 1 "'e appellan" " "'i) e11e!".
16. +" i) !lear 1rm a peru)al 1 "'e d!umen") "'a" "'ere #a)
a !lear di)pu"e re-ardin- "'e re!n)"i"u"in 1 "'e par"ner)'ip
1irm and "'e )u.)e7uen" deed 1ramed " "'a" e11e!". T'e
di)pu"e #a) rela"in- " "'e !n"inua"in 1 "'e appellan" a) a
par"ner 1 "'e 1irm, and e)pe!iall* #'en "'e re)pnden")
pra*ed 1r a de!lara"in " "'e e11e!" "'a" "'e appellan" 'ad
!ea)ed " .e a par"ner 1 "'e 1irm a1"er 'i) re"iremen", "'ere i)
n du." in ur mind "'a" "'e di)pu"e )7uarel* 1ell #i"'in "'e
purvie# 1 "'e ar.i"ra"in !lau)e 1 "'e par"ner)'ip deed da"ed
H
"'
1 April, 200:. T'ere1re, "'e Ar.i"ra"r #a) !mpe"en" "
de!ide "'e ma""er rela"in- " "'e e4i)"en!e 1 "'e ri-inal deed
and i") validi"* " "'a" e11e!". T'u) "'e !n"en"in "'a" "'e
)u.(e!" ma""er 1 "'e )ui" .e1re "'e 1
)"
Addl. Di)"ri!" $un)i1
3ur" a" 3im.a"re #a) .e*nd "'e purvie# 1 "'e ar.i"ra"in
!lau)e, !ann" .e a!!ep"ed.
1H. &avin- 1und "'a" "'e )u.(e!" ma""er 1 "'e )ui" #a)
#i"'in "'e (uri)di!"in 1 "'e Ar.i"ra"r, #e n# pr!eed "
de!ide #'e"'er "'e Ar.i"ra"r #a) !mpe"en" " deal #i"' "'e
di)pu"e rai)ed .* "'e par"ie).
1I. T'e learned 3un)el 1r "'e appellan" !n"ended "'a" "'e
&i-' 3ur" #a) #rn- in i") in"erpre"a"in 1 "'e !lau)e
Gdi11eren!e 1 pininG and 'eld "'a" i" did n" mean di)pu"e
under "'e A!". T'i), in ur vie#, !ann" .e )u)"ained.
Di11eren!e 1 pinin lead) " di)pu"e, and i" i) ver* di11i!ul"
" ima-ine "'a" di11eren!e 1 pinin and di)pu"e) are an
al"-e"'er di11eren" "'in- in "'e !ir!um)"an!e) leadin- " "'i)
!a)e.
19. T'e appellan" 'ad !i"ed a !a"ena 1 (udi!ial
prnun!emen") " !n"end "'a" #'en "'ere i) an e4pre))
prvi)in " "'a" e11e!", "'e !ivil !ur") are .und " re1er "'e
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ma""er " an Ar.i"ra"r in !a)e 1 an* di)pu"e) ari)in- .e"#een
"'e par"ie). T'e appellan" 'ad rai)ed variu) i))ue) rela"in- "
mi)apprpria"in 1 1und) and malpra!"i!e) n "'e par" 1 "'e
re)pnden") and "'e alle-a"in) " "'a" e11e!" 'ave .een made
in "'e n"i!e )en" " "'e re)pnden") and )u.)e7uen"l* in i")
#ri""en )"a"emen" 1iled .e1re "'e !ivil !ur".
20. T'e learned 3un)el 1r "'e re)pnden") n "'e "'er
'and ar-ued "'a" #'en a !a)e invlve) )u.)"an"ial 7ue)"in)
rela"in- " 1a!") #'ere de"ailed ma"erial eviden!e ;."'
d!umen"ar* and ral< needed " .e prdu!ed .* ei"'er
par"ie), and )eriu) alle-a"in) per"ainin- " 1raud and
malpra!"i!e) #ere rai)ed, "'en "'e ma""er mu)" .e "ried in !ur"
and "'e Ar.i"ra"r !uld n" .e !mpe"en" " deal #i"' )u!'
ma""er) #'i!' invlved an ela.ra"e prdu!"in 1 eviden!e "
e)"a.li)' "'e !laim) rela"in- " 1raud and !riminal
mi)apprpria"in.
21. +n ur pinin, "'e !n"en"in 1 "'e re)pnden")
rela"in- " "'e (uri)di!"in 1 "'e Ar.i"ra"r " de!ide a di)pu"e
per"ainin- " a ma""er 1 "'i) prpr"in )'uld .e up'eld, in
vie# 1 "'e 1a!") and !ir!um)"an!e) 1 "'e !a)e. T'e &i-'
3ur" in i") impu-ned (ud-men" 'a) ri-'"l* 'eld "'a" )in!e "'e
!a)e rela"e) " alle-a"in) 1 1raud and )eriu) malpra!"i!e) n
"'e par" 1 "'e re)pnden"), )u!' a )i"ua"in !an nl* .e )e""led
in !ur" "'ru-' 1ur"'eran!e 1 de"ailed eviden!e .* ei"'er
par"ie) and )u!' a )i"ua"in !an n" .e prperl* -ne in" .*
"'e Ar.i"ra"r.
2:. T'e learned 3un)el appearin- n .e'al1 1 "'e
re)pnden") n "'e "'er 'and !n"ended "'a" "'e appellan" 'ad
made )eriu) alle-a"in) a-ain)" "'e re)pnden" alle-in- "'a"
"'e* 'ad manipula"ed "'e a!!un") and de1rauded "'e appellan"
.* !'ea"in- "'e appellan" 1 'i) due), "'ere.* #arnin- "'e
re)pnden") #i"' )eriu) !riminal a!"in a-ain)" "'em 1r "'e
alle-ed !mmi))in 1 !riminal 11en!e). +n "'i) !nne!"in,
relian!e #a) pla!ed in a de!i)in 1 "'i) 3ur" in "'e !a)e 1
A?dul 4adir Sham"uddin /u?ere #$ :adha# Pra?ha!ar Oa!
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and Anr$ $A%5/S3/0:6:/1961 8 A+R 1962 S3 D06 in #'i!'
"'i) 3ur" under para 1H 'eld a) under8
7 48. There is no doubt that where serious allegations of
fraud are made against a party and the party who is
charged with fraud desires that the matter should be tried
in open court, that would be a sufficient cause for the court
not to order an arbitration agreement to be filed and not to
mae the reference....9.
+n ur vie# and rel*in- n "'e a1re)aid .)erva"in) 1
"'i) 3ur" in "'e a1re)aid de!i)in and -in- .* "'e ra"i 1
"'e a.ve men"ined !a)e, "'e 1a!") 1 "'e pre)en" !a)e de)
n" #arran" "'e ma""er " .e "ried and de!ided .* "'e
Ar.i"ra"r, ra"'er 1r "'e 1ur"'eran!e 1 (u)"i!e, i" )'uld .e
"ried in a !ur" 1 la# #'i!' #uld .e mre !mpe"en" and
'ave "'e mean) " de!ide )u!' a !mpli!a"ed ma""er invlvin-
variu) 7ue)"in) and i))ue) rai)ed in "'e pre)en" di)pu"e.
2D. T'i) vie# 'a) .een 1ur"'er enun!ia"ed and a11irmed .*
"'i) 3ur" in "'e de!i)in 1 1ar&ana Telecom Ltd$ #$ Sterlite
Indu"trie" +India. Ltd$ $A%5/S3/0D01/19998 A+R 1999 S3
2:5D #'erein "'i) 3ur" under para D .)erved8
73. #ub:section /42 of #ection ; provides that where the
!udicial authority before whom an action is brought in a
matter, will refer the parties to arbitration the said matter
in accordance with the arbitration agreement. This,
however, postulates, in our opinion, that what can be
referred to the &rbitrator is only that dispute or matter
which the &rbitrator is competent or empowered to
decide.9
25. T'e learned 3un)el 1r "'e re)pnden" 1ur"'er
ela.ra"ed 'i) !n"en"in !i"in- "'e de!i)in 1 "'e &i-' 3ur"
1 Eudi!a"ure a" $adra) in "'e !a)e 1 Oomor Sait 1G #$
A"iam Sait #'erein i" #a) 'eld8
'Power of civil court to refuse to stay of suit in view of
arbitration clause on e$istence of certain grounds
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available under 4<31 &ct continues to be available under
4<<= &ct as well and the civil court is not prevented from
proceeding with the suit despite an arbitration clause if
dispute involves serious questions of law or complicated
questions of fact ad!udication of which would depend upon
detailed oral and documentary evidence.
Civil Court can refuse to refer matter to arbitration
if complicated question of fact or law is involved or where
allegation of fraud is made.
&llegations regarding clandestine operation of
business under some other name, issue of bogus bills,
mani%ulation o' account"2 carr&in9 on similar business
without consent of other partner are serious allegations of
fraud, misrepresentations etc., and there'ore a%%lication
'or re'erence to Ar?itrator i" lia?le to ?e re8ected$@
2e are in !n)nan!e #i"' "'e a.vere1erred de!i)in
made .* "'e &i-' 3ur" in "'e ma""er !n!erned.
26. +n "'e pre)en" di)pu"e 1a!ed .* u), "'e appellan" 'ad
made )eriu) alle-a"in) a-ain)" "'e re)pnden") alle-in-
'im " !mmi" malpra!"i!e) in "'e a!!un" .k) and
manipula"e "'e 1inan!e) 1 "'e par"ner)'ip 1irm, #'i!', in
ur pinin, !ann" .e prperl* deal" #i"' .* "'e Ar.i"ra"r.
A) )u!', "'e &i-' 3ur" #a) (u)"i1ied in di)mi))in- "'e
pe"i"in 1 "'e appellan" " re1er "'e ma""er " an Ar.i"ra"r.
+n "'i) !nne!"in, i" i) relevan" " re1er "'e .)erva"in
made .* "'e &i-' 3ur" in i") impu-ned (ud-men"8
K T'e a.ve de!i)in )7uarel* applie) " "'e 1a!") 1 "'e
pre)en" !a)e. +n "'e pre)en" !a)e a) #ell "'ere i) alle-a"in
1 runnin- rival 1irm, in"er1eren!e #i"' "'e )m"'
admini)"ra"in 1 "'e 1irm. A) alread* )"a"ed )in!e "'e )ui"
'a) .een 1iled 1r de!lara"in " de!lare "'a" "'e revi)in
pe"i"iner i) n" a par"ner #i"' e11e!" 1rm 1I.11.2005, and
1r !n)e7uen"ial in(un!"in re)"rainin- "'e pe"i"iner 1rm
di)"ur.in- "'e )m"' 1un!"inin- 1 "'e 1ir)" re)pnden"
1irm, "'e i))ue rela"e) " "'e !au)e) #'i!' !mpelled "'e
re)pnden") " e4pel "'e revi)in pe"i"iner 1rm "'e
par"ner)'ip 1irm and "'e ne!e))i"* " re!n)"i"u"e "'e 1irm
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kvm
D:/95
ARBP1062.12
.* en"erin- in" a 1re)' par"ner)'ip deed. T'ere1re )u!'
i))ue) invlve de"ailed eviden!e #'i!' !uld .e dne nl*
.* a !ivil !ur"....L
26. Dr.Tulzapurkar )u.mi") "'a" (ud-men" 1 "'e Supreme 3ur" in !a)e 1
N$Radha!ri"hnan +"u%ra. 'a) .een in"erpre"ed .* "'e (ud-men" 1 3al!u""a &i-'
3ur" in !a)e 1 Ram 4i"han :imani and another #"$ Go#erdhan Da" :imani
and other" in Ar.i"ra"in Pe"i"in %. 126 1 2010 .* (ud-men" da"ed H
"'
April,
2010 and i" i) 'eld "'a" i" i) a" "'e di)!re"in 1 "'e !ur" under )e!"in I " re1er
"'e par"ie) " ar.i"ra"in r n" even i1 "'e )u.(e!" ma""er 1 "'e )ui" i) !vered .*
ar.i"ra"in a-reemen", i1 "'e !ur" !me) " "'e !n!lu)in "'a" "'e )ame )'all .e
apprpria"el* deal" #i"' .* "'e !ivil !ur". Relevan" para-rap') 1 "'e )aid
(ud-men" read) "'u) 89
T'e pe"i"iner) re1er " "'e A.dul ,adir !a)e #'ere
n"#i"')"andin- "'e earlier .)erva"in) "'a" #'ere )eriu)
alle-a"in) 1 1raud and malpra!"i!e 'ad .een levelled "'e
per)n a-ain)" #'m )u!' alle-a"in) 'ad .een made #uld
pre1er a "rial in pen 3ur", "'e Supreme 3ur" 1und, a) a
ma""er 1 1a!", "'a" "'e alle-a"in) in "'a" !a)e #ere n" 1 )u!'
)eriu) na"ure "'a" #uld #arran" "'e re1u)al 1 a re1eren!e.
T'e 3ur" .)erved, in"er alia, a) 1ll#)8
KTTTeven "'u-' 7ue)"in) rela"in- " a!!un") #'i!'
mi-'" invlve mi)!ndu!" amun"in- even " di)'ne)"*
n "'e par" 1 )me par"ner mi-'" ari)e in "'e ar.i"ra"in
pr!eedin-) and even !a)e) #'ere mral di)'ne)"* r
mral mi)!ndu!" i) a""ri.u"ed " ne par"* r "'e "'er
mi-'" .e re1erred " ar.i"ra"in. +" )eem) " u) "'a" ever*
alle-a"in "endin- " )u--e)" r impl* mral di)'ne)"*
r mral mi)!ndu!" in "'e ma""er 1 keepin- a!!un")
#uld n" amun" " )u!' )eriu) alle-a"in 1 1raud a)
#uld impel a 3ur" " re1u)e " rder "'e ar.i"ra"in
a-reemen" " .e 1iled and re1u)e " make a
re1eren!eTT.L
+n "'e &ar*ana Tele!m ?"d. ma""er re1erred " in %.
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kvm
DD/95
ARBP1062.12
Rad'akri)'nan, "'e Supreme 3ur" !n)idered a !redi"rQ)
pe"i"in 1r #indin- up 1 a !mpan* under Se!"in) D::, D:D
and D:9 1 "'e 3mpanie) A!", 1956. A) i) #ell kn#n, "'e
pra*er in a !redi"rQ) #indin- up pe"i"in i) 1r a dire!"in "'a"
"'e !mpan* .e #und up. +" #a) in )u!' !n"e4" "'a" "'e
Supreme 3ur" 'eld "'a" n"#i"')"andin- Se!"in I 1 "'e
1996 A!", "'e prvi)in "'ere1 p)"ula"ed "'a" #'a" !an .e
re1erred " ar.i"ra"in #a) nl* a di)pu"e r a ma""er #'i!' "'e
ar.i"ral "ri.unal #a) !mpe"en" r emp#ered " de!ide.
+mpli!i" in )u!' e4pre))in #a) "'e ar.i"ral "ri.unal #uld n"
.e !mpe"en" r emp#ered " "ake up a 7ue)"in a) "
#'e"'er "'e !mpan* #a) lia.le " .e #und up.
+" i), '#ever, n" ne!e))ar* " delve in" )u!' a)pe!" 1
"'e ma""er. %. Rad'akri)'nanQ) (ud-men" re1erred " "'e
&ar*ana Tele!m ?"d. de!i)in " dra# )uppr" 1rm "'e
)e!nd )en"en!e 1 "'e 1ur"' para-rap' 1 "'e repr".
2'a" i) 1 impr"an!e i) "'a" "'e %. Rad'akri)'nan
(ud-men" 'a) n# re!-ni)ed "'a" n"#i"')"andin- "'e
manda"e in )e!"in I 1 "'e 1996 A!" and "'e u)e 1 "'e #rd
K)'allL "'erein a) pp)ed " "'e #rd Kma*L a) u)ed in
Se!"in :D 1 "'e 19D0 A!", "'ere #uld .e an elemen" 1
di)!re"in availa.le " 3ur" #'ile !n)iderin- a pe"i"in "
e11e!"ivel* )"a* r )"ul"i1* "'e pr-re)) 1 a )ui" #'ere "'e
i))ue) r likel* i))ue) #ere !vered .* an ar.i"ra"in
a-reemen". Fven -in- .* "'i) "e)", a )eriu) alle-a"in 1
1raud r malpra!"i!e 'a) " .e made and i" i) nl* "'e
e4!ep"inal !a)e) #'i!' are re7uired " .e re"ained in 3ur"
and n" )en" " ar.i"ra"in n "'e rea)nin- !n"ained in "'e %.
Rad'akri)'nanQ) !a)e "'a" Ki" !ann" .e prperl* deal" #i"' .*
"'e Ar.i"ra"r.L
T'u-' "'ere i) a !'ar-e 1 malpra!"i!e and "'u-'
"'ere i) a !'ar-e 1 "'e re)pnden") 'avin- )ip'ned 11 1und),
i" de) n" appear "'a" )u!' !'ar-e) are )u!' "'a" "'e ar.i"ra"r
r "'e ar.i"ral "ri.unal #uld n" .e a.le " addre)) "'e )ame.
T'e e4"en" 1 ral r d!umen"ar* eviden!e "'a" #uld .e
ne!e))ar* " deal #i"' likel* i))ue) in "'e re1eren!e i) n" )u!'
"'a" #arran" "'e e4er!i)e 1 "'e e4"rardinar* di)!re"in #'i!'
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kvm
D5/95
ARBP1062.12
'a) n# .een re!-ni)ed, " ne-a"e "'e manda"e 1 "'e 1996
A!" in "'e pre)en" !a)e.
+n an* even", Se!"in 2H 1 "'e 1996 A!" permi") an
ar.i"ra"r r ar.i"ral "ri.unal " )eek "'e a))i)"an!e 1 "'e 3ur"
in "'e even" "'e ar.i"ra"r r ar.i"ral "ri.unal i) 1a!ed #i"' an*
pr.lem rela"in- " eviden!e .ein- re!eived.
+" i) al) " .e n"i!ed "'a" "'e na"ure 1 "'e alle-a"in)
made 'erein i) n" unu)ual -in- .* "'e di)pu"e) "'a" ari)e in
par"ner)'ip 1irm). A) 'a) .een n"i!ed in A.dul ,adir , i"
#uld nl* .e a )eriu) alle-a"in 1 1raud "'a" #uld impel
"'e 3ur" " re1u)e a par"* )eekin- re1eren!e " - "
ar.i"ra"in. T'e %. Rad'akri)'nan (ud-men" !ann" .e read "
impl* "'a" upn ever* alle-a"in 1 1raud r malpra!"i!e .ein-
made "'ere !an n ln-er .e an* ad(udi!a"in 1 )u!' ma""er)
in an ar.i"ra"in re1eren!e. %. Rad'akri)'nan 'a) " .e read "
impl* "'a" an e4!ep"in ma* .e made " "'e -eneral rule #'en
i" appear) " 3ur" "'a" a ma""er invlvin- )eriu) !'ar-e) #i"'
'eav* d!umen"ar* and ral eviden!e ma* n" .e re1erred "
ar.i"ra"in n"#i"')"andin- "'e di)pu"e) .ein- !vered "'ere.*.
2H. Dr.Tulzapurkar )u.mi") "'a" "'e Supreme 3ur" in !a)e 1
N$Radha!ri"hnan +"u%ra. 'a) apprved "'e vie#) "aken .* "'e :adra" 1i9h
Court in !a)e 1 1$G$Oomor Sait #"$ O$A"lam Sait +5--(. 0 CTS 5;) in #'i!' i"
i) 'eld "'a" p#er 1 !ivil !ur" " re1u)e " )"a* 1 )ui" in vie# 1 ar.i"ra"in
!lau)e n e4i)"en!e 1 !er"ain -rund) availa.le under "'e 19D0 A!" !n"inue) " .e
availa.le under "'e 1996 A!" a) #ell and "'e !ivil !ur" i) n" preven"ed 1rm
pr!eedin- #i"' "'e )ui" de)pi"e an ar.i"ra"in !lau)e i1 di)pu"e invlve) )eriu)
7ue)"in) 1 la# r !mpli!a"ed 7ue)"in) 1 1a!" ad(udi!a"in 1 #'i!' #uld
depend upn de"ailed ral and d!umen"ar* eviden!e. +" i) )u.mi""ed "'a" "'e
(ud-men" in !a)e 1 N$Radha!ri"hnan +"u%ra. i) n" an au"'ri"* n "'e
prp)i"in "'a" n!e alle-a"in 1 1raud i) made .* "'e par"*, n )u!' ma""er !an
.e re1erred " ar.i"ra"in a" all. +" i) )u.mi""ed "'a" (ud-men" 1 "'e Supreme 3ur"
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kvm
D6/95
ARBP1062.12
re1u)in- " re1er "'e par"ie) " ar.i"ra"in #a) .a)ed n "'e )pe!i1i! 1a!") 1 "'a"
ma""er a) i) apparen" 1rm "'e (ud-men" i")el1. Dr.Tulzapurkar )u.mi") "'a" 1a!")
1 ea!' !a)e 'a) " .e !n)idered #'ile e4er!i)in- (uri)di!"in 1 "'e !ur" r
(uri)di!"inal au"'ri"* under )e!"in I 1 "'e Ar.i"ra"in A!". Su!' di)!re"in
#'i!' !an .e e4er!i)ed .* "'e !ur" r (udi!ial au"'ri"* !ann" .e impr"ed in
)e!"in DI;2< ;a< 1 "'e Ar.i"ra"in A!" "'er#i)e i" #uld .e amun" " e4pandin-
)!pe 1 )e!"in DI ;2< ;a< #'ile en1r!in- 1 an a#ard. Bn "'i) i))ue, "'e learned
)enir !un)el pla!ed relian!e n "'e (ud-men" 1 "'e Supreme 3ur" in !a)e 1
A?dul 4adir Sham"uddin /u?ere #"$ :adha# Pra?ha!ar Oa! and another
repr"ed in AIR ();5 SC <-; and in par"i!ular para-rap') 12, 1:, 16 and 1H #'i!'
read "'u) 89
12. Re. ;D<. 2e n# "urn " "'e 7ue)"in 1 1raud. T'e
!n"en"in n .e'al1 1 "'e appellan" in "'i) !nne!"in i) "'a"
)eriu) alle-a"in) 1 1raud 'ave .een made a-ain)" 'im and
"'ere1re "'i) i) n" a !a)e #'i!' )'uld .e re1erred "
ar.i"ra"in Su.9)e!"in ;D< 1 )e!"in 20 la*) d#n "'a" #'ere
n )u11i!ien" !au)e i) )'#n, "'e !ur" )'all rder "'e
a-reemen" " .e 1iled and make an rder 1 re1eren!e " "'e
ar.i"ra"r. +" i) "'ere1re pen " a !ur" under "'i) )u.9)e!"in,
#'ere )u11i!ien" !au)e i) )'#n n" " rder "'e a-reemen" "
.e 1iled and n" " make a re1eren!e " "'e ar.i"ra"r. T'e
#rd) 1 "'i) )u.9)e!"in leave a #ide di)!re"in in "'e !ur"
" !n)ider #'e"'er an rder 1r 1ilin- "'e a-reemen" )'uld
.e made and a re1eren!e made a!!rdin-l*. +" i) nei"'er
ne!e))ar* nr de)ira.le " la* d#n in -eneral "erm) #'en
#uld .e )u11i!ien" !au)e #'i!' #uld en"i"le a !ur" " re1u)e
" rder "'e a-reemen" " .e 1iled and "'u) re1u)e " make an
rder 1 re1eren!e. T'e !ur" #ill 'ave " de!ide n "'e 1a!")
1 ea!' !a)e #'e"'er )u11i!ien" !au)e 'a) .een made u" 1r
n" rderin- "'e a-reemen" " .e 1iled and n" makin- "'e
rder 1 re1eren!e.
1:. ?earned !un)el 1r "'e appellan", '#ever, !n"end)
"'a" )eriu) alle-a"in 1 1raud 'a) .een -enerall* 'eld .*
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kvm
DH/95
ARBP1062.12
!ur") " .e a )u11i!ien" -rund 1r n" rderin- "'e a-reemen"
" .e 1iled and n" makin- "'e re1eren!e. &e relie) in "'i)
!nne!"in n "'e leadin- !a)e 1 Ru))el v. Ru))el . T'a" #a) a
!a)e 1 par"ner)'ip .e"#een "# .r"'er) !n"ainin- an
ar.i"ra"in !lau)e. Bne 1 "'e .r"'er) -ave n"i!e " "'e "'er
1r di))lvin- "'e par"ner)'ip. T'e "'er .r"'er "'ereupn
.ru-'" an a!"in alle-in- variu) !'ar-e) 1 1raud and
!laimin- "'a" "'e n"i!e )'uld .e de!lared vid and n
annun!emen" 1 "'e di))lu"in 1 par"ner)'ip )'uld .e
all#ed. T'ereupn "'e .r"'er #' #a) !'ar-ed #i"' 1raud
mved "'a" "'e ma""er .e re1erred " ar.i"ra"in under "'e
ar.i"ra"in !lau)e. T'a" #a) re)i)"ed and "'e !ur" 'eld "'a" Gin
a !a)e #'ere 1raud i) !'ar-ed, "'e !ur" #ill in -eneral re1u)e
" )end "'e di)pu"e " ar.i"ra"in i1 "'e par"* !'ar-ed #i"' "'e
1raud de)ire) a pu.li! in7uir*. Bu" #'ere "'e .(e!"in "
ar.i"ra"in i) .* "'e par"* !'ar-in- "'e 1raud, "'e !ur" #ill n"
ne!e))aril* a!!ede " i", and #ill never d ) unle)) a prima
1a!ie !a)e 1 1raud i) prved. G
16. T'e prin!iple 1 "'e)e !a)e) 'a) al) .een 1ll#ed in
+ndia #i"' re1eren!e " !a)e) !min- under )e!"in) 20 and :D
1 "'e A!". ;See, $a'ara(a Sir $a'indra 3'andra %and* v. &.
V. ?# 0 3., ?"d. A+R192D3alH96 , %ar)in-' Pra)ad
B.na v. D'anra( $ill) ;+. ?. R. ;19D2< 21 Pa"na 5DD<, 5nin
1 +ndia v. @irm Vi)'vad'a ='ee V*par $andal , Sud'an-)u
B'a""a!'ar(ee v. Ruplek'a Pi!"ure) 8 A+R195D3al2I1.
1H. T'ere i) n du." "'a" #'ere )eriu) alle-a"in) 1 1raud
are made a-ain)" a par"* and "'e par"* #' i) !'ar-ed #i"'
1raud de)ire) "'a" "'e ma""er )'uld .e "ried in pen !ur", "'a"
#uld .e a )u11i!ien" !au)e 1r "'e !ur" n" " rder an
ar.i"ra"in a-reemen" " .e 1iled and n" " make "'e
re1eren!e. Bu" i" i) n" ever* alle-a"in impu"in- )me kind 1
di)'ne)"*, par"i!ularl* in ma""er) 1 a!!un"), #'i!' #uld
.e enu-' " di)p)e a !ur" " "ake "'e ma""er u" 1 "'e
1rum #'i!' "'e par"ie) "'em)elve) 'ave !')en. T'i) " ur
mind i) !lear even 1rm "'e de!i)in in Ru))elA) !a)e . +n "'a"
!a)e "'ere #ere alle-a"in) 1 !n)"ru!"ive and a!"ual 1raud .*
ne .r"'er a-ain)" "'e "'er and i" #a) in "')e !ir!um)"an!e)
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kvm
DI/95
ARBP1062.12
"'a" "'e !ur" made "'e .)erva"in) " #'i!' #e 'ave re1erred
a.ve. Fven ), "'e learned ma)"er 1 "'e Rll) al) .)erved
in "'e !ur)e 1 "'e (ud-men" a" p. DH6 a) 1ll#) 89
G2'* )'uld i" .e ne!e))aril* .e*nd "'e purvie# 1 "'i)
!n"ra!" " re1er " an ar.i"ra"in 7ue)"in) 1 a!!un",
even #'en "')e 7ue)"in) d invlve i) !ndu!"
amun"in- even " di)'ne)"* n "'e par"* 1 )me par"ner
U + d n" )ee i". + d n" )a* "'a" in man* !a)e #'i!' +
#ill !me " in "'e )e!nd .ran!' 1 "'e !a)e .e1re "'e
3ur". T'e 3ur" ma* n", in "'e e4er!i)e 1 i") di)!re"in,
re1u)e " in"er1ereN .u" i" de) n" appear " me " 1ll#
1 ne!e))i"* "'a" "'i) !lau)e #a) n" in"ended " appl* "
all 7ue)"in), even in!ludin- 7ue)"in) ei"'er impu"in-
mral di)'ne)"* r mral mi)!ndu!" " ne r "'er 1
"'e par"ie). G
2e are !learl* 1 pinin "'a" merel* .e!au)e )me
alle-a"in) 'ave .een made "'a" a!!un") are n" !rre!" r
"'a" !er"ain i"em) are e4a--era"ed and ) n "'a" i) n" enu-'
" indu!e "'e !ur" " re1u)e " make a re1eren!e " ar.i"ra"in.
+" i) nl* in !a)e) 1 alle-a"in) 1 1raud 1 a )eriu) na"ure
"'a" "'e !ur" #ill re1u)e a) de!ided in Ru))elA) !a)e " rder
an ar.i"ra"in a-reemen" " .e 1iled and #ill n" make a
re1eren!e. 2e ma* in "'i) !nne!"in re1er " $ini1ie v. T'e
Rail#a* Pa))en-er) A))uran!e 3mpan* . T'ere "'e 7ue)"in
#a) #'e"'er !er"ain pr!eedin-) )'uld .e )"a*edN and i" #a)
'eld "'a" n"#i"')"andin- "'e 1a!" "'a" "'e i))ue and "'e
eviden!e in )uppr" 1 i" mi-'" .ear upn "'e !ndu!" 1 a
!er"ain per)n) and 1 "')e #' a""ended 'im and ) mi-'"
invlve a 7ue)"in )imilar " "'a" 1 1raud r n 1raud, "'a" #a)
n -rund 1r re1u)in- )"a*. +" i) nl* #'en )eriu) alle-a"in)
1 1raud are made #'i!' i" i) de)ira.le )'uld .e "ried in pen
!ur" "'a" a !ur" #uld .e (u)"i1ied in re1u)in- " rder "'e
ar.i"ra"in a-reemen" " .e 1iled and in re1u)in- " make a
re1eren!e.
2I. ?earned )enir !un)el pla!ed relian!e n "'e (ud-men" 1 "'e Supreme
3ur" in !a)e 1 /ooA Allen and 1amilton Inc$ #"$ S/I 1ome Binance Limited
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kvm
D9/95
ARBP1062.12
and other" repr"ed in +5-((. 3 SCC 305 and in par"i!ular para-rap') 20, :2 " D2
in )uppr" 1 'i) )u.mi))in "'a" #'a" di)pu"e) !ann" .e re1erred " ar.i"ra"in
and #uld n" .e ar.i"ra.le and in )uppr" 1 "'e )u.mi))in "'a" !ur" 'a) " )ee
#'e"'er )u.(e!" ma""er 1 "'e )ui" i) ar.i"ra.le and n" "'e alle-a"in) #'e"'er
ar.i"ra.le r n". Para-rap') 20, :2 " D2 1 "'e )aid (ud-men") read) "'u) 89
20. Bn "'e !n"en"in) ur-ed "'e 1ll#in- 7ue)"in) ari)e 1r
ur !n)idera"in8
;i< 2'e"'er "'e )u.(e!" ma""er 1 "'e )ui" 1ell #i"'in "'e )!pe
1 "'e ar.i"ra"in a-reemen" !n"ained in 3lau)e 16 1 "'e
dep)i" a-reemen"U
;ii< 2'e"'er "'e Appellan" 'ad )u.mi""ed 'i) 1ir)" )"a"emen" n
"'e )u.)"an!e 1 "'e di)pu"e .e1re 1ilin- "'e appli!a"in under
Se!"in I 1 "'e A!"U
;iii< 2'e"'er "'e appli!a"in under Se!"in I #a) lia.le " .e
re(e!"ed a) i" #a) 1iled nearl* 20 mn"') a1"er en"erin-
appearan!e in "'e )ui"U
;iv< 2'e"'er "'e )u.(e!" ma""er 1 "'e )ui" i) Aar.i"ra.leA, "'a" i)
!apa.le 1 .ein- ad(udi!a"ed .* a priva"e 1rum ;ar.i"ral
"ri.unal<N and #'e"'er "'e &i-' 3ur" u-'" " 'ave re1erred
"'e par"ie) " "'e )ui" " ar.i"ra"in under Se!"in I 1 "'e A!"U
Re8 Pue)"in ;iv<
:2. T'e na"ure and )!pe 1 i))ue) ari)in- 1r !n)idera"in
in an appli!a"in under Se!"in 11 1 "'e A!" 1r appin"men"
1 ar.i"ra"r), are 1ar narr#er "'an "')e ari)in- in an
appli!a"in under Se!"in I 1 "'e A!", )eekin- re1eren!e 1
"'e par"ie) " a )ui" " ar.i"ra"in. 2'ile !n)iderin- an
appli!a"in under Se!"in 11 1 "'e A!", "'e 3'ie1 Eu)"i!e r
'i) de)i-na"e #uld n" em.ark upn an e4amina"in 1 "'e
i))ue 1 Aar.i"ra.ili"*A r apprpria"ene)) 1 ad(udi!a"in .* a
priva"e 1rum, n!e 'e 1ind) "'a" "'ere #a) an ar.i"ra"in
a-reemen" .e"#een r amn- "'e par"ie), and #uld leave "'e
i))ue 1 ar.i"ra.ili"* 1r "'e de!i)in 1 "'e ar.i"ral Tri.unal. +1
"'e ar.i"ra"r #rn-l* 'ld) "'a" "'e di)pu"e i) ar.i"ra.le, "'e
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a--rieved par"* #ill 'ave " !'allen-e "'e a#ard .* 1ilin- an
appli!a"in under Se!"in :D 1 "'e A!", rel*in- upn Su.9
Se!"in 2;.<;i< 1 "'a" )e!"in.
::. Bu" #'ere "'e i))ue 1 Aar.i"ra.ili"*A ari)e) in "'e !n"e4"
1 an appli!a"in under Se!"in I 1 "'e A!" in a pendin- )ui",
all a)pe!") 1 ar.i"ra.ili"* 'ave " .e de!ided .* "'e !ur"
)eized 1 "'e )ui", and !ann" .e le1" " "'e de!i)in 1 "'e
Ar.i"ra"r. Fven i1 "'ere i) an ar.i"ra"in a-reemen" .e"#een
"'e par"ie), and even i1 "'e di)pu"e i) !vered .* "'e ar.i"ra"in
a-reemen", "'e !ur" #'ere "'e !ivil )ui" i) pendin-, #ill re1u)e
an appli!a"in under Se!"in I 1 "'e A!", " re1er "'e par"ie) "
ar.i"ra"in, i1 "'e )u.(e!" ma""er 1 "'e )ui" i) !apa.le 1
ad(udi!a"in nl* .* a pu.li! 1rum r "'e relie1 !laimed !an
nl* .e -ran"ed .* a )pe!ial !ur" r Tri.unal.
:D. T'e "erm Aar.i"ra.ili"*A 'a) di11eren" meanin-) in di11eren"
!n"e4"). T'e "'ree 1a!e") 1 ar.i"ra.ili"*, rela"in- " "'e
(uri)di!"in 1 "'e ar.i"ral "ri.unal, are a) under8
;i< #'e"'er "'e di)pu"e) are !apa.le 1 ad(udi!a"in and
)e""lemen" .* ar.i"ra"inU T'a" i), #'e"'er "'e di)pu"e),
'avin- re-ard " "'eir na"ure, !uld .e re)lved .* a
priva"e 1rum !')en .* "'e par"ie) ;"'e ar.i"ral "ri.unal<
r #'e"'er "'e* #uld e4!lu)ivel* 1all #i"'in "'e dmain
1 pu.li! 1ra ;!ur")<.
;ii< 2'e"'er "'e di)pu"e) are !vered .* "'e ar.i"ra"in
a-reemen"U T'a" i), #'e"'er "'e di)pu"e) are enumera"ed
r de)!ri.ed in "'e ar.i"ra"in a-reemen" a) ma""er) " .e
de!ided .* ar.i"ra"in r #'e"'er "'e di)pu"e) 1all under
"'e Ae4!ep"ed ma""er)A e4!luded 1rm "'e purvie# 1 "'e
ar.i"ra"in a-reemen".
;iii< 2'e"'er "'e par"ie) 'ave re1erred "'e di)pu"e) "
ar.i"ra"inU T'a" i), #'e"'er "'e di)pu"e) 1all under "'e
)!pe 1 "'e )u.mi))in " "'e ar.i"ral "ri.unal, r
#'e"'er "'e* d n" ari)e u" 1 "'e )"a"emen" 1 !laim
and "'e !un"er !laim 1iled .e1re "'e ar.i"ral "ri.unal. A
di)pu"e, even i1 i" i) !apa.le 1 .ein- de!ided .*
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ar.i"ra"in and 1allin- #i"'in "'e )!pe 1 ar.i"ra"in
a-reemen", #ill n" .e Aar.i"ra.leA i1 i" i) n" enumera"ed
in "'e (in" li)" 1 di)pu"e) re1erred " ar.i"ra"in, r in "'e
a.)en!e 1 )u!' (in" li)" 1 di)pu"e), de) n" 1rm par"
1 "'e di)pu"e) rai)ed in "'e pleadin-) .e1re "'e ar.i"ral
"ri.unal.
:5. Ar.i"ral "ri.unal) are priva"e 1ra !')en vlun"aril* .*
"'e par"ie) " "'e di)pu"e, " ad(udi!a"e "'eir di)pu"e) in pla!e
1 !ur") and "ri.unal) #'i!' are pu.li! 1ra !n)"i"u"ed under
"'e la#) 1 "'e !un"r*. Fver* !ivil r !mmer!ial di)pu"e,
ei"'er !n"ra!"ual r nn9!n"ra!"ual, #'i!' !an .e de!ided .*
a !ur", i) in prin!iple !apa.le 1 .ein- ad(udi!a"ed and
re)lved .* ar.i"ra"in unle)) "'e (uri)di!"in 1 ar.i"ral
"ri.unal) i) e4!luded ei"'er e4pre))l* r .* ne!e))ar*
impli!a"in. Ad(udi!a"in 1 !er"ain !a"e-rie) 1 pr!eedin-)
are re)erved .* "'e ?e-i)la"ure e4!lu)ivel* 1r pu.li! 1ra a) a
ma""er 1 pu.li! pli!*. 3er"ain "'er !a"e-rie) 1 !a)e),
"'u-' n" e4pre))l* re)erved 1r ad(udi!a"in .* a pu.li! 1ra
;!ur") and Tri.unal)<, ma* .* ne!e))ar* impli!a"in )"and
e4!luded 1rm "'e purvie# 1 priva"e 1ra. 3n)e7uen"l*,
#'ere "'e !au)e/di)pu"e i) inar.i"ra.le, "'e !ur" #'ere a )ui"
i) pendin-, #ill re1u)e " re1er "'e par"ie) " ar.i"ra"in, under
Se!"in I 1 "'e A!", even i1 "'e par"ie) mi-'" 'ave a-reed
upn ar.i"ra"in a) "'e 1rum 1r )e""lemen" 1 )u!' di)pu"e).
:6. T'e #ell re!-nized e4ample) 1 nn9ar.i"ra.le
di)pu"e) are8 ;i< di)pu"e) rela"in- " ri-'") and lia.ili"ie) #'i!'
-ive ri)e " r ari)e u" 1 !riminal 11en!e)N ;ii< ma"rimnial
di)pu"e) rela"in- " divr!e, (udi!ial )epara"in, re)"i"u"in 1
!n(u-al ri-'"), !'ild !u)"d*N ;iii< -uardian)'ip ma""er)N ;iv<
in)lven!* and #indin- up ma""er)N ;v< "e)"amen"ar* ma""er)
;-ran" 1 pr.a"e, le""er) 1 admini)"ra"in and )u!!e))in
!er"i1i!a"e<N and ;vi< evi!"in r "enan!* ma""er) -verned .*
)pe!ial )"a"u"e) #'ere "'e "enan" en(*) )"a"u"r* pr"e!"in
a-ain)" evi!"in and nl* "'e )pe!i1ied !ur") are !n1erred
(uri)di!"in " -ran" evi!"in r de!ide "'e di)pu"e).
:H. +" ma* .e n"i!ed "'a" "'e !a)e) re1erred " a.ve rela"e
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" a!"in) in rem. A ri-'" in rem i) a ri-'" e4er!i)a.le a-ain)"
"'e #rld a" lar-e, a) !n"ra)"ed 1rm a ri-'" in per)nam
#'i!' i) an in"ere)" pr"e!"ed )lel* a-ain)" )pe!i1i!
individual). A!"in) in per)nam re1er " a!"in) de"erminin-
"'e ri-'") and in"ere)") 1 "'e par"ie) "'em)elve) in "'e )u.(e!"
ma""er 1 "'e !a)e, #'erea) a!"in) in rem re1er " a!"in)
de"erminin- "'e "i"le " prper"* and "'e ri-'") 1 "'e par"ie),
n" merel* amn- "'em)elve) .u" al) a-ain)" all per)n) a"
an* "ime !laimin- an in"ere)" in "'a" prper"*.
3rre)pndin-l*, (ud-men" in per)nam re1er) " a (ud-men"
a-ain)" a per)n a) di)"in-ui)'ed 1rm a (ud-men" a-ain)" a
"'in-, ri-'" r )"a"u) and (ud-men" in rem re1er) " a (ud-men"
"'a" de"ermine) "'e )"a"u) r !ndi"in 1 prper"* #'i!'
pera"e) dire!"l* n "'e prper"* i")el1. ;Vide8 Bla!kA) ?a#
Di!"inar*<.
:I. =enerall* and "radi"inall* all di)pu"e) rela"in- " ri-'")
in per)nam are !n)idered " .e amena.le " ar.i"ra"inN and
all di)pu"e) rela"in- " ri-'") in rem are re7uired " .e
ad(udi!a"ed .* !ur") and pu.li! "ri.unal), .ein- un)ui"ed 1r
priva"e ar.i"ra"in. T'i) i) n" '#ever a ri-id r in1le4i.le
rule. Di)pu"e) rela"in- " )u.9rdina"e ri-'") in per)nam
ari)in- 1rm ri-'") in rem 'ave al#a*) .een !n)idered " .e
ar.i"ra.le.
:9. T'e A!" de) n" )pe!i1i!all* e4!lude an* !a"e-r* 1
di)pu"e) a) .ein- n" ar.i"ra.le. Se!"in) :D;2<;.< and DI;2< 1
"'e A!" '#ever make i" !lear "'a" an ar.i"ral a#ard #ill .e )e"
a)ide i1 "'e !ur" 1ind) "'a" G"'e )u.(e!"9ma""er 1 "'e di)pu"e i)
n" !apa.le 1 )e""lemen" .* ar.i"ra"in under "'e la# 1r "'e
"ime .ein- in 1r!e.G
D0. Ru))ell n Ar.i"ra"in M22nd Fdi"inR .)erved "'u)
Mpa-e 2I, para 2.00HR8
K %" all ma""er are !apa.le 1 .ein- re1erred " ar.i"ra"in. A)
a ma""er 1 Fn-li)' la# !er"ain ma""er) are re)erved 1r "'e
!ur" alne and i1 a "ri.unal purpr") " deal #i"' "'em "'e
re)ul"in- a#ard #ill .e unen1r!ea.le. T'e)e in!lude ma""er)
#'ere "'e "*pe 1 remed* re7uired i) n" ne #'i!' an ar.i"ral
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"ri.unal i) emp#ered " -ive.L
T'e )u.)e7uen" edi"in 1 Ru))ell M2:rd Fdi"in, pa-e DH0,
para I.0D:R R merel* .)erve) "'a" Fn-li)' la# de) re!-nize
"'a" "'ere are ma""er) #'i!' !ann" .e de!ided .* mean) 1
ar.i"ra"in.
D1. $u)"ill and B*d in "'eir ?a# and Pra!"i!e 1
3mmer!ial Ar.i"ra"in in Fn-land M2nd 9 19I9 Fdi"inR, 'ave
.)erved "'u)8
+n pra!"i!e "'ere1re, "'e 7ue)"in 'a) n" .een #'e"'er a
par"i!ular di)pu"e i) !apa.le 1 )e""lemen" .* ar.i"ra"in, but
whether it ought to be referred to arbitration or #'e"'er i" 'a)
-iven ri)e " an en1r!ea.le a#ard. % du." 1r "'i) rea)n,
Fn-li)' la# 'a) never arrived a" a -eneral "'er* 1r
di)"in-ui)'in- "')e di)pu"e) #'i!' ma* .e )e""led .*
ar.i"ra"in 1rm "')e #'i!' ma* n". ....
Se!nd, "'e "*pe) 1 remedie) #'i!' "'e ar.i"ra"r !an a#ard
are limi"ed .* !n)idera"in) 1 pu.li! pli!* and .* "'e 1a!"
"'a" 'e i) appin"ed .* "'e par"ie) and n" .* "'e )"a"e. @r
e4ample, 'e !ann" imp)e a 1ine r a "erm 1 impri)nmen",
!mmi" a per)n 1r !n"emp" r i))ue a #ri" 1 )u.penaN nr
!an 'e make an a#ard which is binding on third parties or
affects the public at large, such as a !udgment in rem a-ain)" a
)'ip, an a))e))men" 1 "'e ra"ea.le value 1 land, a divr!e
de!ree, a #indin-9up rder....
;Fmp'a)i) )upplied<
$u)"ill and B*d in "'eir 2001 3mpanin Vlume " "'e 2nd
Fdi"in 1 !mmer!ial Ar.i"ra"in, .)erve "'u) ;pa-e H:<8
K $an* !mmen"arie) "rea" i" a) a4ima"i! "'a" ArealA ri-'"),
that is rights which are valid as against the whole world,
cannot be the sub!ect of private arbitration, al"'u-' )me
a!kn#led-e "'a" )u.rdina"e ri-'") in per)nam derived 1rm
"'e real ri-'") ma* .e ruled upn .* ar.i"ra"r). T'e
!nven"inal vie# i) "'u) "'a", 1r e4ample, ri-'") under a
pa"en" li!en!e ma* .e ar.i"ra"ed, .u" "'e validi"* 1 "'e
underl*in- pa"en" ma* n"..... An ar.i"ra"r #')e p#er) are
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derived 1rm a priva"e a-reemen" .e"#een A and B plainl* 'a)
n (uri)di!"in " .ind an*ne el)e .* a de!i)in n #'e"'er a
pa"en" i) valid, 1r n9ne el)e 'a) manda"ed 'im " make )u!'
a de!i)in, and a de!i)in #'i!' a""emp"ed " d ) #uld .e
u)ele)). L ;Fmp'a)i) )upplied<
D2. T'e di)"in!"in .e"#een di)pu"e) #'i!' are !apa.le 1
.ein- de!ided .* ar.i"ra"in, and "')e #'i!' are n", i)
.ru-'" u" in "'ree de!i)in) 1 "'i) 3ur". +n >aryana
Telecom 'imited v. #terlite Industries India 'td. 1999 ;5< S33
6II, "'i) 3ur" 'eld8
D. Su.9)e!"in ;1< 1 Se!"in I prvide) "'a" "'e (udi!ial
au"'ri"* .e1re #'m an a!"in i) .ru-'" in a ma""er, #ill
re1er "'e par"ie) " ar.i"ra"in "'e )aid ma""er in a!!rdan!e
#i"' "'e ar.i"ra"in a-reemen". T'i), '#ever, p)"ula"e), in
ur pinin, "'a" #'a" !an .e re1erred " "'e ar.i"ra"r i)
nl* "'a" di)pu"e r ma""er #'i!' "'e ar.i"ra"r i) !mpe"en"
r emp#ered " de!ide.
5. T'e !laim in a pe"i"in 1r #indin- up i) n" 1r
mne*. T'e pe"i"in 1iled under "'e 3mpanie) A!" #uld
.e " "'e e11e!", in a ma""er like "'i), "'a" "'e !mpan* 'a)
.e!me !mmer!iall* in)lven" and, "'ere1re, )'uld .e
#und up. T'e p#er " rder #indin- up 1 a !mpan* i)
!n"ained under "'e 3mpanie) A!" and i) !n1erred n "'e
!ur". &n arbitrator, notwithstanding any agreement
between the parties, #uld 'ave n (uri)di!"in " rder
#indin- up 1 a !mpan*. T'e ma""er #'i!' i) pendin-
.e1re "'e &i-' 3ur" in #'i!' "'e appli!a"in #a) 1iled .*
"'e pe"i"in 'erein #a) rela"in- " #indin- up 1 "'e
3mpan*. That could obviously not be referred to
arbitration and, "'ere1re, "'e &i-' 3ur", in ur pinin
#a) ri-'" in re(e!"in- "'e appli!a"in.

29. Dr Tulzapurkar invi"ed m* a""en"in " variu) e9mail) n re!rd 1 "'e
pr!eedin-) in )uppr" 1 'i) )u.mi))in "'a" "'e pe"i"iner 'ad inve)"ed 5S 6 60
millin in re)pnden" %.1 !mpan* .a)ed n "'e repre)en"a"in) made .* "'e
re)pnden") #'i!' in!luded "'e deal #i"' Bri"i)' Brad!a)"in- 3rpra"in
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;BB3<, re)pnden" %.1 'avin- "'e .ene1i" 1 num.er 1 ma"erial !n"ra!") #i"'
par"ie) )u!' a) ,inden &ldin-) S.P.3. ;,inden<, S"ra"e-i! Pu.li!i"* 0
Adver"i)in- 2?? ;SPA3<, Purple Pa))in Prdu!"in) ?imi"ed ;Purple Pa))in<
#r"' appr4ima"el* 5SD 6 H5I " "'e Avi"el -rup e"!. ?earned )enir !un)el
al) invi"ed m* a""en"in " "'e !rre)pnden!e n re!rd re-ardin- "')e !n"ra!")
and par"ie) pre9inve)"men") and p)"9inve)"men").
:0. Dr Tulzapurkar )u.mi") "'a" "'e amun") inve)"ed .* "'e pe"i"iner #ere
"ran)1erred " "'e .ank a!!un") .* Avi"el Du.ai n 10
"'
$a* 2011. Bu" 1 5) 6 60
millin, a" lea)" 6 51 millin 'ad !ir!ula"ed .a!k " re)pnden" %.: #' i) "'e )n
1 re)pnden" %.2 and .r"'er 1 re)pnden" %.D a) 'e #a) "'e )le )i-na"r* "
"'e !mpanie) " #'m "')e amun") #ere !redi"ed and #ere n" u)ed "
pur!'a)e "'e e7uipmen" 1r "'e BB3 !n"ra!" a) #a) repre)en"ed " "'e pe"i"iner.

:1. ?earned )enir !un)el pin"ed u" 1ll#in- in)"an!e) in )uppr" 1
alle-a"in) 1 )ip'nin- 11 1und) .* "'e re)pnden").
;i< Bn $a* 15, 2011 Avi"el Du.aiQ) A!!un" #a) de.i"ed in "'e
amun" 1 5SD 6 millin ;appr4. +%R :: !rre)< #'i!' #a) !redi"ed "
an a!!un" 'eld in "'e name 1 &i-'end. +" 'a) .een di)!vered "'a" in
1a!" Re)pnden" %. : i) "'e )le )i-na"r* 1 &i-'endA) Du.ai a!!un")N
;ii< Bn $a* 2:, 2011 "'e Avi"el Du.ai A!!un" #a) de.i"ed in "'e
amun" 1 5SD 12.22 millin ;appr4 +%R 6H !rre)< #'i!' #a)
!redi"ed a-ain " &i-'end and 'en!e Re)pnden" %. : a!!un"N
;iii< Bn Eune 9, 2011, "'e Avi"el Du.ai A!!un" #a) de.i"ed in "'e
amun" 1 5SD 10 millin ;appr4. +%R 55 !rre)< #'i!' #a) !redi"ed
" &i-'end and 'en!e Re)pnden" %. :A) a!!un". Bn Eul* 2H, 2011 "'i)
amun" #a) "ran)1erred " a .ank a!!un" in "'e name 1 Di-i"al @u)in.
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Re)pnden" %. : i) "'e )le )i-na"r* 1 Di-i"al @u)inA) Du.ai a!!un"
a) #ellN
;iv< n Eune 1:, 2011 and Eune 1D, 2011, Avi"el Du.ai paid 5SD 15
millin ;appr4. +%R I: !rre)< " Di-i"al @u)in and 'en!e Re)pnden"
%. :. T'e)e 1und) #ere "'en paid n "'e 3ral"n, and "'u) pu" #i"'in
"'e !n"rl 1 $r. B.an +di!ullaN
;v< n @e.ruar* 2:, 2012 "'e Avi"el Du.ai A!!un" #a) de.i"ed in "'e
amun" 1 5SD I millin ;appr4. +%R DD !rre)< #'i!' #a) al)
!redi"ed " &i-'end and 'en!e Re)pnden" %. :A) a!!un".
:2. $r R'a"-i, learned )enir !un)el appearin- 1r re)pnden") pp)ed "'e
pe"i"in n "'e i))ue 1 main"aina.ili"* a) #ell a) n meri"). +" i) )u.mi""ed "'a" "'e
Pe"i"iner i) merel* a di)-run"led )'are'lder in "'e Re)pnden" %.1 3mpan*
and i) n" a !redi"r in an* re)pe!". +") remedie), "'ere1re, lie in "'e realm 1 "'e
+ndian 3mpanie) A!", 1956, i1 a" all. T'e inve)"men" 1 "'e Pe"i"iner !ea)ed "
'ave "'e K!'ara!"er 1 mne*L and #a) "ran)1rmed in" K!api"alL 1 Re)pnden"
%.1 3mpan* upn "'e all"men" 1 )'are) " i". T'e Pe"i"iner i) e11e!"ivel*
)eekin- re1und 1 "'e mne* paid .* i" J i.e. !nver)in 1 "'e a))e") 1 "'e
!mpan* .a!k in" "'e )'are )u.)!rip"in mne* 1 "'e Pe"i"iner. +" i) )u.mi""ed
"'a" "'i) i) n" permi))i.le in la#. ?earned !un)el pla!ed relian!e n "'e
Eud-men" 1 Supreme 3ur" in !a)e 1 1indu"tan Le#er >m%lo&ee" Union #$
1undu"tan Leter Ltd$ +())3. Su%% +(. SCC <)) and in par"i!ular para-rap' D9 in
)uppr" 1 'i) )u.mi))in "'a" a )'are'lder 'a) n ri-'") in "'e a))e") 1 "'e
!mpan* and !an nl* )eek ri-'") in "'e !a)e 1 li7uida"in 1 "'e !mpan*.
::. ?earned )enir !un)el )u.mi") "'a" "'e pre)en" pe"i"in i) n" main"aina.le
)in!e "'e en"ire !au)e 1 a!"in rai)ed .* "'e Pe"i"iner i) .a)ed n "'e alle-ed
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1raudulen" !ndu!" 1 "'e Re)pnden". +" i) )u.mi""ed "'a" an* ma""er rela"in- "
"'e 7ue)"in 1 1raud in n" ar.i"ra.le and 'a) " .e de!ided .* "'e !ivil !ur". +"
i) )u.mi""ed "'a" ma""er) rela"in- " 1raud !ann" .e re1erred " ar.i"ra"in.
?earned )enir !un)el pla!ed relian!e n "'e Eud-men" 1 Supreme 3ur" in !a)e
1 N$ Radha!ri"hnan #$ :ae"tro >n9ineer" +5-(-. ( SCC *5. T'e relevan"
pr"in 1 "'e )aid Eud-men" read) "'u) 8
C(*$ 1a#in9 'ound that the "u?8ect-matter o' the "uit 6a" 6ithin the
8uri"diction o' the ar?itrator, we now proceed to decide whether the
arbitrator was competent to deal with the dispute raised by the parties.
5($ In our opinion, the contention of the respondents relatin9 to the
8uri"diction o' the ar?itrator to decide a di"%ute %ertainin9 to a matter
o' thi" %ro%ortion "hould ?e u%held, in view of the facts and
circumstances of the case. The >igh Court in its impugned !udgment has
rightly held that since the case relates to allegations of fraud and serious
malpractices on the part of the respondents, such a situation can onl& ?e
"ettled in court through furtherance of detailed evidence by either
parties and such a situation can not be properly gone into by the
arbitrator.
:D. +" i) )u.mi""ed "'a" "'ere i) (uri)di!"inal .ar in "'e ma""er rela"in- " 1raud
.ein- de!ided .* an ar.i"ra"r and "'e )ame !an .e )e""led nl* .* a 3ur". +" i)
)u.mi""ed "'a" "'e Supreme 3ur" !learl* 'eld "'a" "'e i))ue rela"in- " 1raud
rela"e) " "'e (uri)di!"in 1 "'e ar.i"ra"r. +" al) 'eld "'a" "'e ma""er !uld nl* .e
)e""led in 3ur" "'ere.* pre!ludin- an* p))i.ili"* 1 re1errin- "'e ma""er "
ar.i"ra"in.

:5. ?earned )enir !un)el pla!ed relian!e n "'e Eud-men" 1 "'i) 3ur" in !a)e
1 Gold"tar :etal Solution" #$ Dattarao Ga8anan 4a#tan!ar in Ar?$ A%%eal
No$(5 o' 5-(0 dt$ (0D-0D5-(0$ Relevan" pr"in 1 "'e )aid Eud-men" read) "'u) 8
7? In my prima:facie view, the learned counsel appearing for @As.
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6oldstar is right in his submissions that in view of such serious
allegations of fraud, fabrication and manipulation which are prima
facie demonstrable on record, even if there e$isted any arbitration
agreement between @r.)avtanar and @As.6oldstar, the learned
,istrict Budge could not have granted by interim measures under
section < as such serious allegations could be ad!udicated by a civil
court. In my view, the learned counsel is right in his submission that
though the learned ,istrict Budge referred to the !udgment of the
#upreme Court in case of +.*adharishnan /supra2 however
overlooed the law laid down by the #upreme Court in the said
!udgment ?. @r.)adam, the learned senior counsel in my view is right
in his submission that in view of such serious allegations which were
prima facie demonstrable, such issue could not be left open to be
decided by the &rbitral Tribunal9
:6. ?earned )enir !un)el al) pla!ed relian!e n "'e Eud-men" 1 Divi)in
Ben!' 1 "'i) 3ur" in !a)e 1 :S: Satelite #$ orld S%ort Grou% 5-(( Su%%
/om CR < and al) "'e Eud-men" 1 learned Sin-le Eud-e 1 "'i) 3ur" in !a)e 1
I#or& Pro% 1otel" #$ Nu"li Ne#ille adia 5-(( +5. /om CR 33) and )u.mi") "'a"
i" 'a) .een 'eld "'a" "'e .ar 1 ar.i"ra"in in !a)e) 1 1raud i) n" re)"ri!"ed "
in)"an!e) 1 Se!"in I, i.e. )"a* 1 )ui") alne .u" al) applied " !a)e) 1 Se!"in
11. +" i) )u.mi""ed "'a" a 3ur" #' re1u)e " appin" an ar.i"ra"r in "'e !a)e 1
i))ue) rela"in- " 1raud, "'e )ame l-i! u-'" " appl* in !a)e 1 Se!"in :D and DI
1 "'e A!". +" i) )u.mi""ed "'a" rule rela"in- " re1eren!e " ar.i"ra"in i)
manda"r* and n" di)!re"inar*. Relian!e i) pla!ed n "'e Eud-men" 1 Supreme
3ur" in !a)e 1 1indu"tan Petroleum #$ Pin! cit& mid6a& Petroleum" +5--0. ;
SCC 3-0 para-rap' 1D$
:H. +" i) )u.mi""ed "'a" Bn!e "'e 3ur" 1ind) "'a" )u.)"an"ial i))ue) 1 1raud,
mi)repre)en"a"in e"!. are rai)ed n "'e 1a!") 1 a -iven !a)e, "'e 3ur" 'a) n
di)!re"in #'a")ever. +" #ill, in )u!' a )i"ua"in re1u)e ar.i"ra"in #'e"'er i" i) a
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!a)e under Se!"in 11 1 "'e A!", r a !a)e under Se!"in I 1 "'e A!" and )imilarl*
in a !a)e under Se!"in 9 #'i!' i) .a)ed n an ar.i"ra"in #'e"'er in +ndia r
a.rad. +ndian la#, i" i) )u.mi""ed, de) n" all# ar.i"ra"in in re)pe!" 1 ma""er)
rela"in- " 1raud e"!. T'e in)"an" pe"i"in i) reple"e #i"' alle-a"in) 1 1raud and
de!ep"in.
:I. +" i) )u.mi""ed .* "'e learned )enir !un)el "'a" "'e -vernin- la# 1 "'e
!n"ra!" i) +ndian ?a#. T'e Sin-apre ar.i"ra"in "ri.unal 'ad n au"'ri"* "
appl* an* "'er la# and !l"'e i")el1 #i"' (uri)di!"in " ar.i"ra"e upn ma""er)
#'ere e4"en)ive 1raud i) pleaded. Din- i" in "'e -ui)e 1 Sla# 1 "'e a-reemen"Q i)
#'ll* impermi))i.le. ?a# 1 "'e a-reemen", unle)) )pe!i1ied " "'e !n"rar*, #ill
1ll# "'e -vernin- la# 1 "'e !n"ra!". A Se!"in 9 ari)in- 1rm pr!eedin-)
#'i!' are in'eren"l* la!kin- in (uri)di!"in .e1re "'e Sin-apre "ri.unal i)
#i"'u" an* le-) " )"and upn. +" i) like an in"erim in(un!"in under Brder :9 in
"'e a.)en!e 1 a )ui".
:9. $r R'a"-i, learned )enir !un)el di)"in-ui)'ed "'e Eud-men") relied upn
.* Dr Tulzapurkar n "'e i))ue 1 1raud #'e"'er !an .e re1erred " ar.i"ra"in r
n" in!ludin- "'e Eud-men" 1 Supreme 3ur" in !a)e 1 /ooA Allen 1amilton
;)upra< and "'e Eud-men" 1 3al!u""a &i-' 3ur" in !a)e 1 Ram 4i"han :imani
;)upra<.
D0. ?earned )enir !un)el "'en )u.mi") "'a" a) per "'e la# laid d#n .* "'e
Supreme 3ur" in "'e !a)e 1 ar.i"ra"in, i" i) p))i.le " 'ave D di11eren" kind) 1
la#)8
;1< Prper la# 1 "'e underl*in- !n"ra!", i.e. "'e la# -vernin- "'e
)u.)"an"ive ri-'") 1 "'e par"ie) under "'e !n"ra!"N
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;2< T'e prper la# 1 "'e ar.i"ra"in a-reemen", i.e. in"er alia "'e la#
rela"in- " "'e ar.i"ra.ili"* 1 "'e di)pu"e, "'e validi"* 1 "'e
a-reemen" e"!.
;:< T'e prper la# 1 "'e re1eren!e. 2e are n" pre)en"l* !n!erned
#i"' "'i) la#.
;D< T'e !urial la#8 i.e. "'e la# rela"in- " "'e pr!edure 1 "'e
ar.i"ra"in.
34. ?earned )enir !un)el pla!ed relian!e n "'e Eud-men" 1 Supreme !ur" in
!a)e 1 Sumitomo 1ea#& Indu"trie" #$ ONGC +()),. ( SCC 0-3 and #uld
)u.mi" "'a" a) per a-reemen" .e"#een "'e par"ie), "'e la# -vernin- "'e a-reemen"
i) +ndian la#. Relian!e i) pla!ed n !lau)e 15 1 "'e S&A #'i!' read) a) under 8
745. 6C(-*+I+6 '&DE This &greement shall be governed by and
construed in accordance with the laws of the *epublic of India without regard to
applicable conflict of 'aws principles.9
30. ?earned )enir !un)el pla!ed relian!e n "'e Eud-men" in !a)e 1 NTPC #$
Sin9er = Co$ +())5. 0 SCC 33(E and in par"i!ular para-rap' 2: #'i!' read) "'u) 8
7 0F. The proper law of the arbitration agreement is normally the same
as the proper law of the contract. It is only in e$ceptional cases that it
is not so even where the proper law of the contract is e$pressly chosen
by the parties. Dhere, however, there is no e$press choice of the law
governing the contract as a whole, or the arbitration agreement as
such, a presumption may arise that the law of the country where the
arbitration is agreed to be held is the proper law of the arbitration
agreement. %ut that is only a rebuttable presumption.9

D:. ?earned )enir !un)el pla!ed relian!e n !lau)e 16.D 1 "'e a-reemen" and
#uld )u.mi" "'a" "'e )aid !lau)e de) n" u)" +ndian la# .u" merel* u)") par" 1
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par" + 1 "'e Ar.i"ra"in A!". &en!e even lkin- a" 3lau)e 16.D 1 "'e SSA ;and
)ame !lau)e in S&A<, "'e la# 1 Ar.i"ra"in i) +ndian ?a#. Rel*in- n Eud-men"
1 %TP3 ;)upra<, i" i) )u.mi""ed "'a" even "'e )aid ma""er, "'e par"ie) 'ad a-reed "
u)" "'e +ndian Ar.i"ra"in A!", 19D0 and in )pi"e 1 )u!' e4!lu)in, "'e 3ur" 'eld
in "'a" !a)e "'a" "'e appli!a.le la# 1 ar.i"ra"in #uld .e +ndian la# .e!au)e "'e
)u.)"an"ive la# #a) +ndian ?a#. $r R'a"-i, learned )enir !un)el di)"in-ui)'ed
"'e Eud-men" in !a)e 1 /harat Aluminium com%an& +5-(5. ) SCC 335 and
#uld )u.mi" "'a" "'e )aid Eud-men" #a) dealin- nl* #i"' "'e !urial la# i.e. la#
rela"in- " pr!edure and de) n" 'ld "'a" la#. T'e la# 1 ar.i"ra"in a-reemen"
i) de"ermined .* "'e !un"r* 1 ar.i"ra"in. ?earned )enir !un)el "'en )u.mi")
"'a" a))umin- "'a" an* a#ard i) pa))ed .* "'e Ar.i"ral Tri.unal, "'e )ame #uld
inevi"a.l* 'ave " .e .ru-'" " +ndia and )u.(e!"ed " "'e +ndian le-al pr!e))
.e1re "'e )ame !an .e e4e!u"ed. T'e nl* #a* a 1rei-n a#ard !an .e e4e!u"ed i)
i1 "'e !ndi"in) 1 en1r!ea.ili"* laid d#n .* Se!"in DI 1 "'e Ar.i"ra"in and
3n!ilia"in A!", 1996 are me". T'e relevan" par" 1 "'e Se!"in read) a) under8
7#ection 3;. Conditions for enforcement of foreign awards
/02 -nforcement of an arbitral award may also be refused if the Court
finds thatE
/a2 the sub!ect:matter of the difference is not capable of settlement
by arbitration under the la6 o' India" or
/b2 the enforcement of the award would be contrary to the public
policy of India.9
DD. +" i) )u.mi""ed "'a" "'e i))ue 1 ar.i"ra.ili"* i) " .e de!ided a) per +ndian
la# a) re7uired .* "'e Se!"in. +1 "'e i))ue !ann" .e )en" " ar.i"ra"in, a) per "'e
la# 1 +ndia, "'e )ame !ann" .e en1r!ed in +ndia ei"'er. +" 1ll#) "'a" i1 1inal
relie1 !ann" .e -iven in a ma""er ;i.e. "'e a#ard !ann" .e 1inall* en1r!ed<, n
in"erim rder !an .e pa))ed in "'a" re-ard ei"'er. T'i) i) al) "'e ra"i 1 "'i) 3ur"
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in "'e (ud-men" 1 =ld)"ar. Sin!e an i))ue 1 1raud i) n" !apa.le 1 )e""lemen"
"'ru-' ar.i"ra"in under "'e la# 1 +ndia, an A#ard .a)ed n i))ue) 1 1raud
!ann" .e en1r!ed ei"'er.
D5. ?earned )enir !un)el pla!ed relian!e n "'e Eud-men" 1 Supreme 3ur"
in !a)e 1 India 1ou"ehold 1ealthcare #$ LG 1ou"ehold 1ealthcare +5--*. 3
SCC 3(-. Relevan" para-rap' 1 "'e )aid Eud-men" read) "'u) 8
KT...It is also no doubt true that where e$istence of an arbitration
agreement can be found, apart from the e$istence of the original
agreement, the courts would construe the agreement in such a manner
so as to uphold the arbitration agreement. >owever, when a question
of fraud is raised, the same has to be considered differently. Graud, as
is well nown, vitiates all solemn acts. & contract would mean a valid
contract" an arbitration agreement would mean an agreement which
is enforceable in law.L ;Para 10<
D6. $r R'a"-i di)"in-ui)'ed "'e Eud-men" 1 Supreme 3ur" in !a)e 1 /ooA
Allen and 1amilton ;)upra< and pla!ed relian!e n para-rap' :9 1 "'e )aid
Eud-men" #'i!' read) "'u) 8
7F<. The &ct does not specifically e$clude any category of disputes as
being not arbitrable. #ections F3/02/b2 and 3;/02 of the &ct however
mae it clear that an arbitral award will be set aside if the court finds
that 7the sub!ect:matter of the dispute is not capable of settlement by
arbitration under the law for the time being in force9.
DH. Relian!e i) al) pla!ed n para 1rm La6 and Practice o' commercial
Ar?itration in >n9land +5
nd
>dn$ (),). #'i!' i) e4"ra!"ed a) under 8
7 In practice therefore, the question has not been whether a
particular dispute is capable of settlement by arbitration, but whether
it ought to be referred to arbitration or whether it has given rise to an
enforceable award. +o doubt for this reason, -nglish law has never
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arrived at a general theory for distinguishing those disputes which may
be settled by arbitration from those which may not.9
3;. ?earned )enir !un)el )u.mi") "'a" "'e Eud-men" 1 Supreme 3ur" in !a)e
1 Phuchand >F%ort #$ OOO Patriot +5-((. (- SCC 0-- i) verruled in "'e
Eud-men" 1 Shree Lal :ahal #$ Pro9etto Grano nl* " "'e e4"en" "'a" a pa"en"
ille-ali"* de) n" amun" " )me"'in- !n"rar* " "'e 1undamen"al pli!* 1
+ndian ?a#. +" i) )u.mi""ed "'a" "'e 1undamen"al pli!* 1 +ndian la# i) "'a"
ma""er) rela"in- " 1raud u-'" n" " .e re1erred " ar.i"ra"in. +n "'i) vie# 1 "'e
ma""er, "'e a#ard #uld al) .e 'i" .* Se!"in DI ;2<;.< 1 "'e A!". +" i) )e""led
la# "'a" #'en a )"a"u"e manda"e) "'a" a par"i!ular "'in- 'a) " .e dne in ne #a*,
i" mu)" .e dne in "'a" #a* r n" a" all. Bn!e "'e )"a"u"e re7uire) "'e 1ilin- 1
.(e!"in) under Se!"in DI 1 "'e Ar.i"ra"in A!", "'e Pe"i"iner !ann" .e
all#ed " !ir!umven" "'a" .* 1ilin- a Se!"in 9 Pe"i"in.
3<. $r R'a"-i, learned )enir !un)el "'en )u.mi") "'a" "'e relian!e pla!ed .*
"'e pe"i"iner n "'e Sin-apre a#ard n (uri)di!"in i) inadmi))i.le and irrelevan"
in "'e li-'" 1 e4pre)) #rdin- 1 Se!"in DI;2<;a< #'i!' re7uire) "'e a#ard " .e
!apa.le 1 )e""lemen" a) per +ndian la#. $r R'a"-i di)"in-ui)'ed "'e variu)
Eud-men") relied upn .* Dr Tulzapurkar n "'e i))ue 1 e)"ppel and )u.mi") "'a"
"'e .ar 1 i))ue e)"ppel !ann" ari)e 1r "# rea)n). @ir)", "'e pre)en" !a)e i) a
pure 7ue)"in 1 la# and "'e d!"rine 1 e)"ppel !an never appl* " a pure
7ue)"in 1 la# r " a (uri)di!"inal 7ue)"in. Se!ndl*, "'e d!"rine 1 e)"ppel
#uld re7uire "'e i))ue " 'ave .een 1inall* de!ided. +n "'e pre)en" !a)e, "'e i))ue
'a) n" .een 1inall* de!ided a) "'e par"* in #')e 1avur "'e a#ard 'a) .een
pa))ed 'a) n" !')en " en1r!e "'e a#ard.
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50. ?earned )enir !un)el pla!ed relian!e n "'e Eud-men" 1 Supreme 3ur"
in !a)e 1 Dadu Da&alu #$ :ahant Ram Ni6a" +5--,. (( SCC *30$ Relevan"
para-rap' 1 "'e )aid Eud-men" #'i!' i) relied upn .* "'e learned )enir !un)el
read) "'u) 8
C De, however, are not unmindful of the principles of estoppel, waiver
and res !udicata are procedural in nature and, thus, the same will have
no application in a case where !udgment has been rendered wholly
without !urisdiction or issues involve only pure questions of law. -ven
in such cases, the principle of issue estoppel will have no role to play.9

51. +" i) )u.mi""ed "'a" 1r "'ere " .e an e)"ppel, "'e de!i)in u-'" " 'ave
a!'ieved 1inali"*. A1"er all, e)"ppel i) a pr!edural rule .a)ed n e7ui"* #'ere.* a
par"* #' 'a) all#ed an rder " - un!'allen-ed !ann" la"er .e 'eard " ur-e
a-ain)" i". &#ever, in "'e pre)en" !a)e, "'e ar.i"ral a#ard 'a) n" .e!me 1inal. +n
1a!", a) per la#, "'e a#ard i) merel* an in!'a"e d!umen" #'i!' 'a) n le-al
e11e!" "ill i" i) )u-'" " .e en1r!ed. T'i) 3ur", in "'e !a)e 1 Jindal Dru9" #$
No& Valle"ina >n9 SPA Ital& +5--5. 0 /om CR 33< 'a) 'eld unlike a dme)"i!
a#ard #'erein an a--rieved par"* !an 1ile .(e!"in) under Se!"in :D 1 "'e A!",
"'e )!'eme 1 a 1rei-n a#ard i) di11eren". +n "'e !a)e 1 a 1rei-n a#ard, "'e
a--rieved per)n i) n" re7uired " !'allen-e "'e )ame unle)) "'e 3ur" 1ind) i"
en1r!ea.le upn a Pe"i"in 1iled .* a per)n in #')e 1avur "'e a#ard i) made.
+" i) )u.mi""ed "'a" even i1 "'e Re)pnden") #i)'ed " !'allen-e "'e a#ard n an*
-rund, i" !uld n" 'ave dne ) in an* independen" Pe"i"in. An* pe"i"in
)eekin- " !'allen-e a 1rei-n a#ard #uld n" .e main"aina.le.
52. ?earned )enir !un)el "'en )u.mi") "'a" "'e in"erim emer-en!* a#ard i)
al) inadmi))i.le. +" i) )u.mi""ed "'a" "'e Pe"i"iner i) )impl* )eekin- " en1r!e
"'e emer-en!* a#ard pa))ed .* "'e ar.i"ral "ri.unal n 2I
"'
$a* 2012 and 29
"'
$a* 2012. T'e Pe"i"iner, ra"'er "'an )eekin- en1r!emen" 1 "'e a#ard under
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Se!"in DI 1 "'e A!", i) )eekin- " en1r!e i" !ir!ui"u)l* under Se!"in 9 1 "'e
A!". B* invkin- Se!"in 9, "'e Pe"i"iner i) )eekin- " .*pa)) "'e manda"r*
!ndi"in) 1 en1r!ea.ili"* re7uired .* Se!"in DI 1 "'e A!". +" i) )u.mi""ed "'a"
"'i) i) impermi))i.le in la#. Relian!e i) pla!ed n "'e Eud-men" 1 Del'i &i-'
3ur" in !a)e 1 1BCL #$ UOI O:P <;< o' 5--) dt$ (,D-,D5--) in #'i!' i" i)
'eld "'a" n pe"i"in under Se!"in 9 !an .e 1iled " e4e!u"e an a#ard. +" i)
)u.mi""ed "'a" "ill "'e Pe"i"iner )eek) en1r!emen" 1 "'e a#ard under Se!"in DI
1 "'e A!", "'e Re)pnden" #ill n" 'ave an* !!a)in " a))ail i") !rre!"ne)) r
validi"*. +n "'i) vie# 1 "'e ma""er, "'e Pe"i"iner !ann" .e all#ed " rel* n an
a#ard "'a" 'a) .* n mean) a""ained 1inali"*. +" i) merel* an in!'a"e d!umen"
#'i!' !an .e en1r!ed nl* in a!!rdan!e #i"' la#, prvided i" mee") "'e "e)" 1
Se!"in DI 1 "'e A!".
5:. $r R'a"-i, learned )enir !un)el )u.mi") "'a" "'e Pe"i"iner 'ad 1iled a
3riminal !mplain"/@+R #i"' "'e F!nmi! B11en!e 2in- ;SFB2Q< n 2:
rd
April
201:. T'e !mplain" #a) .a)i!all* a reprdu!"in 1 "'e pre)en" pe"i"in and
in!lude) all "'e ma"erial alle-a"in) "'a" #ere made a" "'e "ime 1 "'e 'earin-. T'e
FB2 inve)"i-a"ed "'e en"ire alle-ed in!iden", e4amined all "'e relevan" paper) and
al) re!rded "'e )"a"emen") 1 variu) per)n). A1"er !n!ludin- an e4'au)"ive
in7uir* ;1r alm)" : mn"')< i" 1und "'a" "'ere #a) n meri" n "'e !laim) 1 "'e
Pe"i"iner and 'a) 1iled a !l)ure repr" under Se!"in 1H: 3rP3 #'i!' i) pendin-
.e1re "'e $a-i)"ra"e. T'e relevan" par" 1 "'e repr" read) a) under8
7 The comprehensive investigations revealed that >#%C PI >oldings
was not induced to invest under the prete$t of any %%C contract,
&vitel 6roup has utiliHed the amount invested for purchase of
@achineryAbusiness, the alleged customers and suppliers are
genuine, no forged documents were found or made available by
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Complainant as alleged, alleged meeting at 'ondon was indeed set up
by @r. Bohn #mith, an intermediary broer and >#%C PI ,ivision
officials, there is no evidence that &vitel has sent any invitation for
setting up of meeting of >#%C officials with @r. Bohn 'inwood, CTC
of %%C and @r. Bohn #mith was not portrayed as an official of %%C,
the accused company has issued and delivered shares representing
8.;I of their share capital as per the understandingAagreement and
completed the deal.9
5D. +" i) )u.mi""ed "'a" even "'u-' "'ere i) n 1inal de"ermina"in n "'e repr"
.* "'e $a-i)"ra"e, "'ere i) n !n"rar* repr" ei"'er. +n 1a!", "'e FB2 repr" i) "'e
nl* an independen" repr" .* a )"a"u"r* au"'ri"* and i" u-'" " .e -iven -rea"
#ei-'" .* "'i) 3ur". 2'ile "'e repr" ma* n" .e de"ermina"ive 1 "'e i))ue a"
'and, i" i) !er"ainl* pre)ump"ivel* !rre!". ?earned )enir !un)el di)"in-ui)'ed
"'e Eud-men" 1 Supreme !ur" in !a)e 1 Vi"hnu Dutt Sharma #$ Da&a Sa%ra
+5--). (0 SCC *5) and pla!ed relian!e n Se!"in 5 1 "'e Fviden!e A!" and
)u.mi") "'a" all "'e 1indin-) 1 FB2 repr" are dire!"l* in i))ue in "'e pre)en" !a)e
and 'en!e "'e )ame !an .e prved in "'e 3ur". +" i) )u.mi""ed "'a" in "'e pre)en"
!a)e, i" i) ver* impr"an" " n"e "'a" "'e Pe"i"iner 'a) n" pla!ed an* ma"erial
.e1re "'e !ur" and 'a) advan!ed n ar-umen" #'a")ever " )'# '# r #'*
"'e 1indin-) in "'e FB2 repr" are ina!!ura"e r in!rre!". T'ere i), in 1a!" a
deemed admi))in .* "'e Pe"i"iner 1 "'e 1indin-) in "'e FB2 Repr" #'i!' #a)
pla!ed n "'e re!rd 1 "'i) 3ur" .* an a11idavi" 1iled a) 1ar .a!k a) in Au-u)"
201:. +n ) 1ar a) e9mail 1rm ne 1 "'e re)pnden") in Au-u)" 2011 )"a"in- "'a"
BB3 !n"ra!" 'ad .een )i-ned, i" i) )u.mi""ed "'a" "'i) email i) en"irel* irrelevan"
)in!e i" #a) )en" a1"er "'e e4e!u"in 1 "'e !n"ra!". +" i) n" p))i.le 1r "'e
Pe"i"iner) " !n"end "'a" "'e* relied n an* email r repre)en"a"in 1 "'e
::: Downloaded on - 22/06/2014 13:22:16 :::
kvm
6H/95
ARBP1062.12
Re)pnden" a1"er "'e e4e!u"in 1 "'e a-reemen"). +" i) elemen"ar* "'a" an* alle-ed
mi)repre)en"a"in #'i!' indu!ed "'e Pe"i"iner " en"er in" a !n"ra!" mu)" 'ave
.een made .e1re "'e !n"ra!" i) en"ered in" and n" a1"er.
55. +n ) 1ar a) alle-a"in re-ardin- !n"ra!") #i"' Purple Pa))in) Prdu!"in)
?"d. i) !n!erned, i" i) )u.mi""ed "'a" in "'e Pe"i"iner) due9dili-en!e repr" da"ed
1D
"'
Eanuar* 2011, #'ere "'e Pe"i"iner i")el1 )e") u" "'eir K.a)e !a)e 1inan!ial)L
n "'e .a)i) 1 #'i!' "'e* 'ad made "'e inve)"men"). T'e )aid .a)e !a)e 1inan!ial)
)'# .u)ine)) 1 Anima"in i) nn9e4i)"en" n" nl* 1r "'e *ear 2011 .u" "'ere
#a) n p"en"ial .u)ine)) e4pe!"ed 1r "'e 1ll#in- *ear). @ur"'er, "'e Pe"i"iner)
a1re)aid due9dili-en!e repr" )pe!i1i!all* men"in) KAnima"in .u)ine)) J
a))umed n !a)' 1l#) 1rm "'e anima"in .u)ine))L. A!!rdin-l*, "'e Pe"i"iner
!ann" !laim "'a" "'e* 'ave relied n "'e Purple Pa))in 3n"ra!") and al) !ann"
)u.mi" "'a" "'ere #a) an* mi)repre)en"a"in in re)pe!" 1 Purple Pa))in.
56. ?earned )enir !un)el )u.mi") "'a" &AV: !n"inue) " 'ld a.u" 10 > in
"'e Re)pnden" %.1 3mpan*. +" 'a) never 1iled an* !mplain" 1r an*
mi)mana-emen" r an* 1raudulen" !ndu!" .* "'e Re)pnden"). +n 1a!", nne 1 "'e
"'er )'are'lder) ;'ldin- 92.2>< 'ave ever !mplained 1 an* mi)mana-emen".
T'e Pe"i"iner i) "'e nl* )'are'lder #' i) )eekin- a re1und 1 i") inve)"men"
#'ile )imul"aneu)l* )eekin- " re"ain i") )'are). +" i) )u.mi""ed "'a" "'i) !ndu!"
i) !mple"el* ine7ui"a.le and u-'" n" " .e !ndned .* "'i) 3ur".
5H. +n ) 1ar a) alle-a"in re-ardin- p)" a-reemen" !ndu!" 1 "'e re)pnden")
i) !n!erned, i" i) )u.mi""ed "'a" "'e Pe"i"iner i) merel* a )'are'lder in "'e
!mpan* 1rm "'e da"e 1 all"men" 1 )'are) " i". ,eepin- a)ide an* i))ue in
rela"in " 1raudulen" mi)repre)en"a"in, "'e Pe"i"iner i) merel* in "'e )ame
::: Downloaded on - 22/06/2014 13:22:16 :::
kvm
6I/95
ARBP1062.12
p)i"in a) an* "'er )'are'lder #' alle-e) "'a" "'e 1und) 1 "'e !mpan* are
.ein- mi)u)ed. T'e Pe"i"iner 'a) "'e ri-'" " 1ile a Pe"i"in under Se!"in :9H/:9I
1 "'e 3mpanie) A!", alle-in- ppre))in and/r mi)mana-emen" 1 "'e !mpan*.
T'e 3mpan* ?a# Bard ;3?B<, under Se!"in D02 1 "'e 3mpanie) A!", 'a)
1ull p#er) " -ran" relie1 " )u!' di)-run"led S'are'lder. &#ever, "'e Pe"i"iner
i) a#are "'a" i" !ann" !r)) "'e "'re)'ld 'urdle 1 'avin- 10> 1 "'e )'are) 1
"'e !mpan* .e1re a pe"i"in under Se!"in :9H/:9I 1 "'e 3mpanie) A!" !an .e
main"ained. +n ) 1ar a) alle-a"in re-ardin- 1raud in re)pe!" 1 BB3 !n"ra!" i)
!n!erned, i" i) )u.mi""ed "'a" "'ere #a), in 1a!", n )u--e)"in "'a" "'ere #a) an
alm)" !n!luded BB3 !n"ra!".
5I. ?earned )enir !un)el )u.mi") "'a" a )u.)idiar* 1 &SB3 Bank Pl! ;"'e
paren" 1 Pe"i"iner<, namel* &AV: 'ad inve)"ed a )um 1 10 millin 5SD in 1r
10> 1 "'e Re)pnden" %.1 3mpan*. @r "'i) purp)e, i" 'ad !ndu!"ed a due
dili-en!e 1rm $a* 2009 "ill $ar!' 2010 ;1r mre "'an 10 mn"')< #i"' "'e
a))i)"an!e 1 leadin- and ren#ned pr1e))inal 1irm) in!ludin- Frn)" 0 Cun- ;F
0 C<, Ar*an Bu)ine)) 3n)ul"an") and 3li11rd 3'an!e. &AV: #a) admi""edl* an
a11ilia"e 1 "'e Pe"i"iner a" "'e "ime i" made "'e inve)"men". A) n da"e, Fven
"'u-' "'e Pe"i"inerQ) Paren" 'a) alle-edl* dive)"ed i") )'are 1rm &AV:, i"
!n"inue) " re"ain a.u" 20> )'are) in &AV: and &AV: 0 "'e Pe"i"iner)
!n"inue " .e a11ilia"e). T'i) due dili-en!e #a) !ndu!"ed 1r 5 mn"') 1rm
De!em.er 2010 and April 2011. A ""al )um 1 R). : !rre) r ) #a) paid .* "'e
Re)pnden" "#ard) "'i) due dili-en!e. +" i) )u.mi""ed "'a" 5SD :00,000 #a) paid
"#ard) )"ru!"urin- 1ee), 5SD :0D,665 "#ard) re9im.ur)emen" 1 1ee) paid "
in"erna"inal la#*er) and a )um 1 R). 25,:5,000 paid " "'e +ndian la#*er). +" i)
)u.mi""ed "'a" "'ere i) n men"in 1 BB3 !n"ra!" in "'e SSA r S&A en"ered in"
.e"#een "'e par"ie) r in "'e di)!l)ure le""er #'i!' #a) pur)uan" " and 1rm) par"
::: Downloaded on - 22/06/2014 13:22:16 :::
kvm
69/95
ARBP1062.12
1 "'e SSA. T'e S&A #a) )i-ned .* "'e pe"i"iner a1"er "'e di)!l)ure le""er #a)
-iven n 6
"'
$a* 2011. ?earned )enir !un)el )u.mi") "'a" in n !ir!um)"an!e),
i" !an .e .elieved "'a" "'e pe"i"iner 'ad relied n BB3 !n"ra!" " en"er in" "'e
SSA and S&A.
59. ?earned )enir !un)el pla!ed relian!e n email da"ed 1I
"'
Eanuar* 2011
addre))ed .* $r &ea"' /arin, repre)en"in- "'e pe"i"iner " 'i) !llea-ue) in
&SB3 in )uppr" 1 "'e alle-a"in) "'a" "'e pe"i"iner #a) a#are "'a" "'e
e7uipmen" #'i!' #a) .ein- pur!'a)ed #a) alread* rdered .* "'e re)pnden")
and "'e* 'ad alread* paid "'e earlier in)"allmen". T'e pe"i"iner 'ad a!!ep"ed "'a"
"'e re)pnden") #uld .e u)in- )u!' e7uipmen") re-ardle)) 1 an* BB3 !n"ra!".

60. Dr.Tulzapurkar, learned )enir !un)el and $r.Sak'ardande, learned !un)el
appearin- 1r "'e pe"i"iner in re(inder )u.mi") "'a" in "'e )"a"emen" 1 !laim)
1iled .e1re "'e Ar.i"ral Tri.unal .* "'e pe"i"iner, n !laim i) made 1r re!ver*
1 e7ui"* )'are .u" i) made 1r dama-e) pr!eeded n "'e mi)repre)en"a"in made
.* "'e re)pnden") n BB3 !n"ra!" and "'er a!") 1 mi)repre)en"a"in re-ardin-
ma"erial !n"ra!" vendr) and )upplier). +" i) )u.mi""ed "'a" 1raud !mmi""ed .* "'e
re)pnden" i) vida.le. 5nder )e!"in :9H 1 "'e 3mpanie) A!", pe"i"iner !uld
n" 'ave !laimed dama-e) .e1re 3mpan* ?a# Bard. $* a""en"in i) invi"ed "
"'e )"a"emen" 1 !laim) 1iled .* "'e pe"i"iner .e1re "'e Ar.i"ral Tri.unal in "'i)
re-ard.
61. Dr.Tulzapurkar )u.mi") "'a" appli!a"in 1iled under )e!"in 9 1 "'e
Ar.i"ra"in A!" 1iled .* "'e pe"i"iner i) n" 1r en1r!emen" 1 "'e in"erim
emer-en!* a#ard .u" i) .a)ed n "'e !'i!e made .* "'e par"ie) under )e!"in 9 1
"'e Ar.i"ra"in A!". +n ) 1ar a) i))ue 1 due dili-en!e rai)ed .* $r.R'a"-i,
::: Downloaded on - 22/06/2014 13:22:16 :::
kvm
H0/95
ARBP1062.12
learned )enir !un)el appearin- 1r "'e re)pnden") i) !n!erned, m* a""en"in i)
invi"ed " variu) e9mail 1rmin- par" 1 "'e re!rd e4!'an-ed .e"#een "'e par"ie)
" demn)"ra"e "'a" "'e !n"ra!" #i"' BB3 #a) an i))ue even .e1re "'e e4e!u"in
1 "'e a-reemen" .e"#een "'e pe"i"iner and "'e re)pnden"). Fven a1"er )i-nin-
"'e a-reemen", pe"i"iner #a) en7uirin- a.u" BB3 !n"ra!" and 'ad permi""ed "'e
re)pnden" n.1 " u)e "'e e7uipmen") "ill BB3 !n"ra!" #a) )i-ned. +" i) pin"ed
u" "'a" "'e Purple Pa))in Prdu!"in) ?imi"ed #a) di))lved n 29
"'
%vem.er,
2010. +n)pi"e "'ere1, in "'e li)" 1 !n"ra!" a) n 21
)"
B!".er, 2011, "'e )aid
!n"ra!" #a) !n"inued " .e )'#n a) pendin- !n"ra!" #i"' "'e re)pnden"). +" i)
)u.mi""ed "'a" i1 "'e repr" 1 "'e FB2 !an .e !n)idered, "'en "'e (uri)di!"inal
a#ard 1 "'e ar.i"ral "ri.unal al) !an .e lked in". Dr.Tulzapurkar, learned
)enir !un)el di)"in-ui)'ed "'e (ud-men" 1 "'e Supreme 3ur" in !a)e repr"ed
in +5--,. (( SCC *30 n "'e -rund "'a" "# (ud-e) 1 "'e Supreme 3ur" did n"
n"i!ed "'e (ud-men" 1 "'e "'ree (ud-e) repr"ed in AIR ();- SC )<(. +" i)
)u.mi""ed "'a" "'e pe"i"iner i) rel*in- upn "'e (uri)di!"inal a#ard and n"
appl*in- 1r en1r!emen" 1 "'e )aid a#ard in "'i) pr!eedin-) 1iled under )e!"in
9 1 "'e Ar.i"ra"in A!". +1 "'e pe"i"iner #uld 'ave applied 1r en1r!emen" 1
"'e (uri)di!"inal a#ard, "'e .(e!"in under )e!"in DI;2< ;a< !uld 'ave .een
!n)idered .* "'i) !ur". ?earned )enir !un)el )u.mi") "'a" "'ere i) di11eren!e
.e"#een in!apa!i"* 1 "'e ar.i"ra"r " de!ide a) a-ain)" inapprpria"ene)) 1r an
ar.i"ra"r " de!ide. Bnl* )u!' di)pu"e #'i!' are .arred !ann" .e re1erred "
ar.i"ra"in. 2'e"'er di)pu"e) #'i!' are n" .arred and )'uld .e re1erred "
ar.i"ra"in r n" depend n "'e 1a!" 1 ea!' !a)e. Se!"in DI 1 "'e Ar.i"ra"in
A!" de) n" "alk 1 an* K!ann" - !a"e-r*L. T'e alle-a"in) 1 1raud are n"
in!apa!i"a"ed 1 ad(udi!a"in. ?earned )enir !un)el pla!ed relian!e n "'e
(ud-men" 1 "'e Divi)in Ben!' 1 "'i) !ur" in !a)e 1 4on!ola Co%%er :ine"
+PLC. +"u%ra.. +" i) )u.mi""ed "'a" la# 1 ar.i"ra"in a-reemen" i) e4!luded in )
::: Downloaded on - 22/06/2014 13:22:16 :::
kvm
H1/95
ARBP1062.12
1ar a) (ud-men" 1 "'e Supreme 3ur" in !a)e 1 NTPC i) !n!erned. ?earned
)enir !un)el )u.mi") "'a" in "'i) !a)e e4!ep" )e!"in 9 1 "'e Ar.i"ra"in A!",
prvi)in) 1 Par" 1 are e4!luded e4pre))l* under "'e a-reemen" en"ered in"
.e"#een "'e par"ie). ?earned )enir !un)el pla!ed relian!e n "'e (ud-men" 1
"'e Supreme 3ur" repr"ed in +5-(0. (( JT SC ,< and in par"i!ular para-rap') 25
" 2I "'ere1 " demn)"ra"e "'a" "'e (ud-men" 1 "'e Supreme 3ur" in !a)e 1
P/#l./"nd EC*o$% '%d. 'a) .een rever)ed .* "'ree Eud-e) repr"ed in +5-(0. ((
JT SC ,<. +" i) )u.mi""ed "'a" ar.i"ra.ili"* i))ue i) n" !vered under "'e pu.li!
pli!*. Alle-a"in) 1 1raud de) n" !me an* 1 "'e !a"e-rie) 1 pu.li! pli!*.
62. Dr.Tulzapurkar )u.mi") "'a" "'e relian!e pla!ed .* "'e re)pnden") n "'e
de!i)in 1 "'e Supreme 3ur" in Dadu Da&alu :aha"a?ha2 Jai%ur +Tru"t. V"
:ahant Ram Ni6a" and Anr$ +5--,. (( SCC *30 i) mi)pla!ed. +" i) )u.mi""ed "'a"
"'e prin!iple 1 i))ue e)"ppel i) appli!a.le in "'e !a)e 1 a 7ue)"in 1 1a!" r a
7ue)"in 1 la# r " a mi4ed 7ue)"in 1 1a!" and la#. T'ere i) n 7ue)"in 1
"'ere .ein- an* e)"ppel a-ain)" la#. +" i) )u.mi""ed "'a" "'e e)"ppel pera"e)
a-ain)" "'e re)pnden") and n" a-ain)" an* la#.
6:. +n ) 1ar a) (ud-men" 1 "'e Supreme 3ur" in !a)e 1 N$Radha!ri"hnan
+"u%ra. relied upn .* "'e re)pnden") i) !n!erned, i" i) )u.mi""ed "'a" "'e )aid
de!i)in de) n" la* d#n "'e prp)i"in !anva))ed .* "'e Re)pnden") viz. "'a"
n!e alle-a"in) 1 1raud are made "'e Ar.i"ra"r) are in!mpe"en" " de!ide "'e
ma""er re1erred " "'em. +" i) )u.mi""ed "'a" "'e Supreme 3ur" 'a) 'eld in "'e
)aid (ud-men" "'a" "'e 3ivil 3ur" #ill .e in a .e""er p)i"in " de!ide "'e
7ue)"in ra"'er "'an "'e Ar.i"ral Tri.unal. Dr.Tulzapurkar pla!ed relian!e n "'e
(ud-men" 1 "'e 3al!u""a &i-' 3ur" in !a)e 1 Ram 4i"han :imani = Anr$ V"$
Go#erdhan Da" :imani and Or"$ repr"ed in A$P$ No$ (5; o' 5-(- +Calcutta
::: Downloaded on - 22/06/2014 13:22:16 :::
kvm
H2/95
ARBP1062.12
1i9h Court. in )uppr" 1 "'e )ame i))ue.
6D. Bn "'e i))ue rai)ed .* $r.R'a"-i n "'e appli!a.ili"* 1 )e!"in DI;2< ;a<, i"
i) )u.mi""ed .* Dr.Tulzapurkar "'a" "'e 7ue)"in 1 "'e Ar.i"ral Tri.unal .ein- le))
)ui"a.le "'an a !ivil !ur" in de!idin- a ma""er invlvin- alle-a"in) 1 1raud i) n"
a -rund " .e 1und in Se!"in DI;2<;a< 1 "'e Ar.i"ra"in A!". 2'a" "'e )e!"in
)"a"e) i) "'a" "'e )u.(e!" ma""er 1 "'e di)pu"e )'uld .e in!apa.le 1 .ein- de!ided
.* "'e Ar.i"ral Tri.unal. +" i) nl* "')e !a)e) #'i!' !ann" .e de!ided .* "'e
ar.i"ra"r) "'a" !an .e )aid " .e !vered .* )e!"in DI;2<;a<. Relian!e i) pla!ed n
"'e (ud-men" 1 "'e Supreme 3ur" in !a)e 1 /ooA Allen = 1amilton V"$ S/I
1ome Binance Ltd$ +"u%ra. in #'i!' i" i) 'eld "'a" "'e ma""er in rem are n"
ar.i"ra.le #'erea) di)pu"e) rela"in- " ri-'") in per)nam are !n)idered " .e
amena.le " ar.i"ra"in. +" i) )u.mi""ed "'a" .ar !n"empla"ed under )e!"in DI;2<
;a< de) n" appl* and "'ere1re pe"i"iner i) en"i"led " rel* n "'e 1inal par"ial
a#ard n (uri)di!"in. Dr.Tulzapurkar, learned )enir !un)el rei"era"ed "'a" "'e
la# -vernin- "'e ar.i"ra"in a-reemen" i) "'e la# 1 Sin-apre and n" "'e la# 1
+ndia.
65. +n ) 1ar a) relian!e n "'e pinin 1 FB2 da"ed 22
nd
Eul*, 201: .* "'e
re)pnden") i) !n!erned, i" i) )u.mi""ed "'a" "'e pinin 1 "'e FB2 i) n"
.indin- n "'e $a-i)"ra"e, nr !an i" .e relied upn in a !ivil di)pu"e. +" i)
)u.mi""ed "'a" i" i) a )e""led p)i"in in la# "'a" "'e pinin 1 "'e pli!e 11i!er
makin- inve)"i-a"in i) n" .indin- n "'e $a-i)"ra"e and n"#i"')"andin- "'e
pinin " "'e !n"rar*, "'e $a-i)"ra"e !an rder 1ur"'er inve)"i-a"in. +" i) 1ur"'er
)u.mi""ed "'a" even a 1inal (ud-men" in a !riminal pr!eedin- i) n" .indin- n "'e
!ivil !ur" de!idin- "'e ma""er in a !ivil pr!eedin- and vi!e ver)a. +" i) "'ere1re
)u.mi""ed "'a" "'i) 3ur" #ill de!ide "'e pe"i"in under Se!"in 9 1 "'e Ar.i"ra"in
::: Downloaded on - 22/06/2014 13:22:16 :::
kvm
H:/95
ARBP1062.12
A!" independen" 1 "'e pinin 1 "'e FB2. T'e )aid pinin 'a), a) 1 n# n"
even .een a!!ep"ed .* "'e learned $a-i)"ra"e a" "'i) )"a-e. Dr.Tulzapurkar,
learned )enir !un)el )u.mi") "'a" "'e pe"i"iner 'a) made u" a !a)e 1r in"erim
mea)ure) and "'e )ame )'all .e -ran"ed a) pra*ed.
</)%/)$ *"$%i) 1)$) go+)$n)d =, l"1 o0 Sing"*o$) o$ =, l"1 o0 Indi" D
66. 3lau)e 15 1 "'e a-reemen" prvided "'a" "'e A-reemen" )'all .e -verned
.* and !n)"rued in a!!rdan!e #i"' "'e la#) 1 "'e Repu.li! 1 +ndia #i"'u"
re-ard " appli!a.le !n1li!" 1 ?a#) prin!iple). 3lau)e 16 1 "'e a-reemen"
prvided "'a" "'e di)pu"e )'all .e re1erred " and 1inall* re)lved .* .indin-
ar.i"ra"in a" "'e Sin-apre +n"erna"inal Ar.i"ra"in 3en"re in a!!rdan!e #i"' "'e
Sin-apre +n"erna"inal Ar.i"ra"in Rule) #'i!' Rule) are deemed " .e
in!rpra"ed .* re1eren!e in" "'i) !lau)e and a) ma* .e amended .* "'e re)" 1
"'i) !lau)e. 3lau)e 16.1.2 prvide) "'a" "'e )ea" 1 ar.i"ra"in )'all .e Sin-apre.
3lau)e 16.D prvided "'a" e4!ep" )e!"in 9, Par" + 1 "'e +ndian Ar.i"ra"in and
3n!ilia"in A!", 1996, "'e prvi)in) 1 Par" + 1 "'e Ar.i"ra"in A!" )'all n"
appl* " "'e "erm) 1 "'i) A-reemen".
6H. +" i) n" in di)pu"e "'a" "'e )ea" 1 "'e ar.i"ra"in #a) a" Sin-apre. T'e
ar.i"ra"in pr!eedin-) #ere 'eld a" Sin-apre. +n !a)e 1 S#(i%o(o H)"+,
Ind#%$i) '%d. !#*$"& i" i) 'eld .* "'e Supreme 3ur" "'a" "'e prper la# 1 "'e
ar.i"ra"in a-reemen", i.e. "'e la# -vernin- ri-'") and .li-a"in) 1 "'e par"ie)
ari)in- 1rm "'eir a-reemen" " ar.i"ra"e and, in par"i!ular, "'eir .li-a"in "
)u.mi" "'eir di)pu"e) " ar.i"ra"in and " 'nur an a#ard. T'i) in!lude) in"er alia
7ue)"in) a) " "'e validi"* 1 "'e ar.i"ra"in a-reemen", "'e validi"* 1 "'e n"i!e
1 ar.i"ra"in, "'e 3n)"i"u"in 1 "'e "ri.unal and "'e 7ue)"in #'e"'er an a#ard
::: Downloaded on - 22/06/2014 13:22:16 :::
kvm
HD/95
ARBP1062.12
lie) #i"'in "'e (uri)di!"in 1 "'e ar.i"ra"r. +" i) 'eld "'a" in ma(ri"* 1 !a)e) i" i)
1und "'a" "'e !urial la#, i.e. "'e la# -vernin- "'e !ndu!", 1 "'e re1eren!e, i) "'e
)ame a) "'e la# -vernin- "'e .li-a"in " ar.i"ra"e. +" i), '#ever, pen " "'e
par"ie) " )u.mi", e4pre))l* r .* impli!a"in, "'e !ndu!" 1 "'e re1eren!e " a
di11eren" la# 1rm "'e ne -vernin- "'e underl*in- ar.i"ra"in a-reemen". +n )u!'
a !a)e, "'e !ur" lk) 1ir)" a" "'e ar.i"ra"in a-reemen" " )ee #'e"'er "'e di)pu"e
i) ne #'i!' )'uld .e ar.i"ra"ed, and #'i!' 'a) validl* .een made "'e )u.(e!" 1
"'e re1eren!eN i" "'en lk) " "'e !urial la# " )ee, '# "'a" re1eren!e )'uld .e
!ndu!"edN and "'en re"urn) " "'e 1ir)" la# in rder " -ive e11e!" " "'e re)ul"in-
a#ard. +" i) 'eld "'a" in "'e a.)en!e 1 e4pre)) a-reemen", "'ere i) a )"rn- prima
1a!ie pre)ump"in "'a" "'e par"ie) in"end "'e !urial la# " .e "'e la# 1 "'e G)ea"G
1 "'e ar.i"ra"in, i.e. "'e pla!e a" #'i!' "'e ar.i"ra"in i) " .e !ndu!"ed, n "'e
-rund "'a" i) "'e !un"r* m)" !l)el* !nne!"ed #i"' "'e pr!eedin-). T'e !urial
la# pera"e) durin- "'e !n"inuan!e 1 "'e pr!eedin-) .e1re "'e ar.i"ra"r "
-vern "'e pr!edure and !ndu!" "'ere1. +" i) 'eld "'a" "'e !ur") admini)"erin-
"'e !urial la# 'a) "'e au"'ri"* " en"er"ain appli!a"in) .* par"ie) " ar.i"ra"in
.ein- !ndu!"ed #i"'in "'eir (uri)di!"in 1r "'e purp)e 1 en)urin- "'a" "'e
pr!edure "'a" i) adp"ed in "'e pr!eedin-) .e1re "'e ar.i"ra"r !n1rm) " "'e
re7uiremen") 1 "'e !urial la# and 1r relie1) in!iden"al "'ere".
6I. Pue)"in "'a" ari)e) 1r de"ermina"in i) #'e"'er in "'e 1a!") 1 "'i) !a)e "'e
la# -vernin- "'e ar.i"ra"in a-reemen" i) "'e la# 1 Sin-apre .e!au)e 1 "'e
a-reemen" .e"#een "'e par"ie) "'a" "'e )ea" 1 ar.i"ra"in #uld .e a" Sin-apre
and in vie# 1 "'e e4!lu)in 1 appli!a.ili"* 1 +ndian la# a) "'e -vernin- la# 1
ar.i"ra"in a-reemen" e4!ep" appli!a.ili"* 1 )e!"in 9 1 "'e Ar.i"ra"in and
3n!ilia"in A!".
::: Downloaded on - 22/06/2014 13:22:16 :::
kvm
H5/95
ARBP1062.12
69. +n !a)e 1 National Thermal Po6er Cor%oration +"u%ra. i" i) 'eld "'a" i1
"'ere i) n e4pre)) !'i!e 1 la# -vernin- "'e !n"ra!" a) a #'le r "'e
ar.i"ra"in a-reemen" a) )u!', a pre)ump"in ma* ari)e "'a" "'e la# 1 !un"r*
#'ere "'e ar.i"ra"in i) a-reed " .e 'eld i) "'e prper la# 1 "'e ar.i"ra"in
a-reemen". Par"ie) ma* !')e "'e )u.)"an"ive la# -vernin- "'e ar.i"ra"in
a-reemen" a) #ell a) "'e pr!edural la# -vernin- "'e !ndu!" 1 "'e ar.i"ra"in.
Su!' !'i!e i) e4er!i)ed ei"'er e4pre))l* r .* impli!a"in. +" i) 'eld "'a" #'ere
"'ere i) n e4pre)) !'i!e 1 "'e la# -vernin- "'e !n"ra!" a) a #'le, r "'e
ar.i"ra"in a-reemen" in par"i!ular, "'ere i), in "'e a.)en!e 1 an* !n"rar*
indi!a"in, a pre)ump"in "'a" "'e par"ie) 'ave in"ended "'a" "'e prper la# 1 "'e
!n"ra!" a) #ell a) "'e la# -vernin- "'e ar.i"ra"in a-reemen" are "'e )ame a) "'e
la# 1 "'e !un"r* in #'i!' "'e ar.i"ra"in i) a-reed " .e 'eld. +" i) 'eld "'a" "'e
prper la# 1 ar.i"ra"in, i.e. )u.)"an"ial la# 1 -vernin- ar.i"ra"in "'e validi"*,
e11e!" and in"erpre"a"in 1 "'e ar.i"ra"in a-reemen" are !ndu!"ed, in "'e a.)en!e
1 an* a-reemen" " "'e !n"rar* in a!!rdan!e #i"' la# 1 "'e !un"r* in #'i!'
"'e ar.i"ra"in i) 'eld. +1 )u!' !'i!e i) n" made .* "'e par"ie), e4pre))l* r .*
ne!e))ar* impli!a"in, "'e pr!edural a)pe!" 1 "'e !ndu!" 1 ar.i"ra"in ;a)
di)"in-ui)'ed 1rm "'e )u.)"an"ive a-reemen" " ar.i"ra"e< #ill .e de"ermined .*
"'e la# 1 "'e pla!e r )ea" 1 ar.i"ra"in. T'e 7ue)"in "'a" ari)e) in "'i)
pr!eedin-) i) "'a" in addi"in " "'e a-reemen" "'a" "'e di)pu"e, !n"rver)* r
!laim )'all .e re)lved .* .indin- ar.i"ra"in a" Sin-apre +n"erna"inal
Ar.i"ra"in 3en"re and )'all .e in a!!rdan!e #i"' Sin-apre +n"erna"inal
Ar.i"ra"in Rule), #'a" i) "'e e11e!" 1 "'e par"ie) 'avin- a-reed "'a" e4!ep"
)e!"in 9, Par" + 1 "'e +ndian Ar.i"ra"in and 3n!ilia"in A!" )'all n" appl* "
"'e "erm) 1 "'e a-reemen".
H0. +n !a)e 1 /harat Aluminium Co$ Ltd$ +"u%ra. Supreme 3ur" 'a) 'eld "'a"
::: Downloaded on - 22/06/2014 13:22:16 :::
kvm
H6/95
ARBP1062.12
+ndian Ar.i"ra"in A!" i) a )ea" !en"ri!. Divi)in Ben!' 1 "'i) 3ur" in !a)e 1
4on!ola Co%%er :ine" +PLC. +"u%ra. a1"er adver"in- " "'e (ud-men" 1 "'e
Supreme 3ur" in !a)e 1 /harat Aluminium Co$ Ltd$ +"u%ra. 'a) 'eld "'a" "'e
en"ire (ud-men" 1 "'e Supreme 3ur" in !a)e 1 /harat Aluminium Co$ Ltd$
+"u%ra. #uld n" appl* #i"' pr)pe!"ive e11e!". +" i) 'eld .* "'e Supreme 3ur"
"'a" a )ea" 1 ar.i"ra"in #uld de"ermina"e "'e -vernin- la# 1 ar.i"ra"in
a-reemen". Pla!in- relian!e n "'e (ud-men" in Sumitomo 1ea#& Indu"trie" Ltd$
+"u%ra.2 National Thermal Po6er Cor%oration +"u%ra.2 /harat Aluminium Co$
Ltd$ +"u%ra. and (ud-men" 1 Divi)in Ben!' in !a)e 1 4on!ola Co%%er :ine"
+PLC. +"u%ra.2 "'e )u.mi))in 1 Dr.Tulzapurkar i) "'a" in "'i) !a)e in vie# 1
e4pre))in !'i!e 1 "'e par"ie) " make a )ea" 1 ar.i"ra"in in Sin-apre, a )ea" 1
ar.i"ra"in #uld -vern "'e la# 1 ar.i"ra"in a-reemen" and under "'e Sin-apre
la#, Ari."ral Tri.unal !an de!ide "'e !laim) invlvin- alle-a"in) 1 1raud i1 an*.
+" i) )u.mi))in 1 Dr.Tulzapurkar "'a" in vie# 1 "'e e4pre)) a-reemen" .e"#een
"'e par"ie) "'a" e4!ep" )e!"in 9, n par" 1 par" ;+< #uld appl* al) !learl*
indi!a"e) "'a" Par" ;+< i) e4pre))l* e4!luded .* "'e a-reemen" .e"#een "'e par"ie)
e4!ep" "'e e4"en" 1 appli!a.ili"* 1 )e!"in 9. +" i) )u.mi""ed "'a" "'u) "'i)
pr!eedin-) under )e!"in 9 1 "'e Ar.i"ra"in and 3n!ilia"in A!", 1996 i) "'u)
main"aina.le in "'i) !ur" 1r "'e purp)e 1 -ran"in- in"erim mea)ure) "'u-' 1r
all "'er par"ie), "'e la# 1 Sin-apre #uld appl* " "'e ar.i"ra"in pr!eedin-).
T'e )u.mi))in 1 Dr.Tulzapurkar i) "'a" )in!e "'e par"ie) #ere -verned .* la#
1 Sin-apre, even i1 "'ere are an* alle-a"in) 1 1raud in )"a"emen" 1 !laim
.e1re "'e Ar.i"ral Tri.unal r in "'i) pr!eedin-) 1iled under )e!"in 9, under la#
1 Sin-apre, "'ere i) n .ar a-ain)" "'e ar.i"ra"r 1rm ad(udi!a"in- upn "'e
alle-a"in) 1 1raud. Per 3n"ra, "'e )u.mi))in 1 $r.R'a"-i, learned )enir
!un)el appearin- 1r "'e re)pnden") n "'i) i))ue i) "'a" under !lau)e 16.D 1 "'e
a-reemen", "'e )aid !lau)e de) n" u)" +ndian la# .u" merel* u)" par" 1 Par" +
::: Downloaded on - 22/06/2014 13:22:16 :::
kvm
HH/95
ARBP1062.12
1 Ar.i"ra"in A!". ?earned )enir !un)el pla!ed relian!e n "'e (ud-men" 1 "'e
Supreme 3ur" in !a)e 1 National Thermal Po6er Cor%oration +"u%ra. and i" i)
)u.mi""ed "'a" in)pi"e 1 )u!' e4!lu)in a-reed .* "'e par"ie), in "'a" ma""er,
Supreme 3ur" 'eld "'a" appli!a.le la# 1 ar.i"ra"in #uld .e +ndian la# .e!au)e
"'e )u.)"an"ial la# #uld .e +ndian la#. +" i) )u.mi""ed "'a" even i1 an* a#ard i)
pa))ed .* "'e Ar.i"ral Tri.unal a" Sin-apre, "'e )ame #uld 'ave " .e .ru-'" "
+ndia and )u.(e!"ed " +ndian le-al pr!e)) .e1re "'e )ame !uld .e e4e!u"ed and
"'u) +ndian la# #uld appl* and n" la# 1 Sin-apre.
H1. T'e )e!nd )u.mi))in 1 Dr.Tulzapurkar i) "'a" even i1 +ndian la# #uld
'ave .een made appli!a.le, "'ere i) n .ar a-ain)" an ar.i"ra"r " ad(udi!a"e upn
"'e alle-a"in) 1 1raud, 1r-er* and malpra!"i!e) e"!. ?earned )enir !un)el in
)uppr" 1 'i) )u.mi))in di)"in-ui)'ed "'e (ud-men" 1 "'e Supreme 3ur" in !a)e
1 N$Radha!ri"hnan +"u%ra. and #uld )u.mi" "'a" "'e !ur" 'a) " de!ide in "'e
1a!") 1 "'i) !a)e "'a" "'u-' "'e ar.i"ra"in a-reemen" e4i)" .e"#een "'e par"ie)
!n)iderin- "'e na"ure 1 di)pu"e #'i!' i) even i1 .a)ed n alle-a"in) 1 1raud,
1r-er* and malpra!"i!e, #'e"'er i" #uld .e mre !nvenien" and prper " re1er
)u!' di)pu"e/alle-a"in " ar.i"ra"in r i" #uld .e mre !nvenien" "'a" )u!'
di)pu"e i) de!ided .* a !ivil !ur". ?earned )enir !un)el )u.mi""ed "'a" in !a)e
1 N$Radha!ri"hnan +"u%ra. "'e Supreme 3ur" 'a) n" laid d#n an* la# " "'i)
e11e!" "'a" n )ner an* alle-a"in) 1 1raud r 1r-er* are made in an*
pr!eedin-) .e"#een "'e par"ie) #'i!' are -verned .* "'e ar.i"ra"in a-reemen",
ma""er !ann" .e re1erred " ar.i"ra"in a" all .u" 'a) " .e de!ided .* !ivil !ur"
nl*. +n )uppr" 1 "'i) )u.mi))in, Dr.Tulzapurkar, learned )enir !un)el pla!ed
relian!e n "'e (ud-men" 1 "'e $adra) &i-' 3ur" in !a)e 1 1$G$Oomor Sait #"$
O$A"lam Sait +5--(. 0 CTS 5;) #'i!' i) up'eld .* "'e Supreme 3ur" in !a)e 1
N$Radha!ri"hnan +"u%ra.$ Relian!e i) al) pla!ed n "'e (ud-men" 1 3al!u""a
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kvm
HI/95
ARBP1062.12
&i-' 3ur" in !a)e 1 Ram 4i"han :imani and another #"$ Go#erdhan Da"
:imani and other" in Ar.i"ra"in Pe"i"in %. 126 1 2010. Su.mi))in 1 "'e
learned )enir !un)el i) "'a" "'e 3al!u""a &i-' 3ur" 'a) in"erpre"ed "'e (ud-men"
1 "'e Supreme 3ur" in !a)e 1 N$Radha!ri"hnan +"u%ra. and 'a) ri-'"l* 'eld
"'a" "'ere i) a di)!re"in availa.le " "'e !ur" #'ile !n)iderin- a pe"i"in
invlvin- alle-a"in) 1 1raud r malpra!"i!e #'e"'er " re1er )u!' di)pu"e "
ar.i"ra"in r "'a" "'e )ame )'all .e de!ided .* a !ivil !ur". Variu) par") 1 "'e
(ud-men" 1 N$Radha!ri"hnan +"u%ra. are relied upn .* "'e learned )enir
!un)el in )uppr" 1 'i) )u.mi))in "'a" merel* .e!au)e "'ere are )u!' alle-a"in)
1 1raud, 1a.ri!a"in e"!., i" i) n" manda"r* n "'e par" 1 "'e !ur" " re1u)e "
re1er )u!' di)pu"e " ar.i"ra"in and/r " "r* )u!' di)pu"e nl* .* !ivil !ur".
Relian!e i) al) pla!ed .* "'e learned )enir !un)el in !a)e 1 /ooA Allen and
1amilton Inc$ #"$ S/I 1ome Binance Limited and other" +"u%ra. in )uppr" 1
'i) )u.mi))in "'a" !ur" 'a) " )ee #'e"'er )u.(e!" ma""er 1 "'e )ui" i) ar.i"ra.le
and n" "'e alle-a"in). +" i) )u.mi""ed "'a" nei"'er under "'e la# 1 Sin-apre nr
under +ndian la#, "'ere i) an* .ar a-ain)" an ar.i"ra"r " ad(udi!a"e upn "'e
alle-a"in) 1 1raud, 1r-er* and/r malpra!"i!e. 3ur" 'a) " )ee #'e"'er )u.(e!"
ma""er 1 ar.i"ra"in i) ar.i"ra.le and n" #'e"'er alle-a"in) are ar.i"ra.le r n".
Supreme 3ur" in "'e (ud-men" 1 "'e /ooA Allen and 1amilton Inc$ #"$ S/I
1ome Binance Limited and other" +"u%ra. 'a) in"erpre"ed "'e "erm ar.i"ra.ili"*
and 'a) 'eld "'a" #'e"'er "'e di)pu"e i) !apa.le 1 ad(udi!a"in and )e""led .*
ar.i"ra"in i) ne 1 "'e impr"an" a)pe!" rela"in- " (uri)di!"in 1 "'e ar.i"ral
"ri.unal. Relian!e i) al) pla!ed n "rea"ie) o' :u"till and /o&d in "'eir ?a# and
Pra!"i!e 1 3mmer!ial Ar.i"ra"in in Fn-land.
H2. Su.mi))in 1 $r.R'a"-i, learned )enir !un)el appearin- n .e'al1 1
"'e re)pnden") n "'e "'er 'and i) "'a" "'e (ud-men" in !a)e 1
::: Downloaded on - 22/06/2014 13:22:16 :::
kvm
H9/95
ARBP1062.12
N$Radha!ri"hnan +"u%ra. #uld )7uarel* appl* " "'e 1a!") 1 "'i) !a)e in #'i!'
Supreme 3ur" 'a) 'eld "'a" i1 "'e alle-a"in) 1 1raud, 1r-er* and 1a.ri!a"in are
made, "'u-' ar.i"ra"in a-reemen" e4i)", )u!' alle-a"in) !ann" .e )e""led in
ar.i"ra"in .u" !an .e )e""led nl* .* !ur". Relian!e i) al) pla!ed n "'e
(ud-men" 1 "'i) 3ur" in !a)e 1 Gold"tar :etal Solution" +"u%ra. and (ud-men"
1 "'e Divi)in Ben!' in !a)e 1 :S: Satelite +"u%ra.2 )u.mi))in 1 learned
)enir !un)el i) "'a" "'i) !ur" 'a) in"erpre"ed "'e (ud-men" 1 "'e Supreme 3ur"
in !a)e 1 N$Radha!ri"hnan +"u%ra. and 'a) 'eld "'a" n!e "'ere are )eriu)
alle-a"in) 1 1raud, 1r-er* and 1a.ri!a"in, "'e )ame !ann" .e de!ided .* "'e
ar.i"ra"r a" all "'u-' ar.i"ra"in a-reemen" e4i)" .e"#een "'e par"ie). ?earned
)enir !un)el )u.mi") "'a" in ) 1ar a) (ud-men" 1 "'e Supreme 3ur" in !a)e 1
/harat Aluminium !#*$"& i) !n!erned, i" i) 'eld .* "'e Supreme 3ur" "'a" "'e
)aid (ud-men" #uld appl* #i"' pr)pe!"ive e11e!" and in vie# 1 "'e 1a!" "'a" "'e
a-reemen" en"ered in" .e"#een "'e par"ie) i) prir " "'e da"e 1 prnun!emen"
1 "'e )aid (ud-men" .* "'e Supreme 3ur" in !a)e 1 /harat Aluminium !#*$"&-
merel* .e!au)e "'e )ea" 1 "'e ar.i"ra"in #a) a" Sin-apre, i" !ann" .e !n)"rued
"'a" par"ie) #uld .e -verned .* la# 1 Sin-apre and n" +ndian la#.
H:. +" i) n" in di)pu"e "'a" pe"i"iner 'ad invked ar.i"ra"in a-reemen" #'i!'
#a) 1rmin- par" 1 "'e a-reemen" en"ered in" .e"#een "'e par"ie). Bn peru)al 1
!lau)e 15 1 "'e a-reemen", i" i) !lear "'a" i" #a) n" in"ended .* "'e par"ie) "'a"
"'e +ndian la# #uld appl* " "'e main a-reemen" a) #ell a) " "'e ar.i"ra"in
a-reemen". Admi""edl* ar.i"ra"in pr!eedin-) #ere 'eld a" Sin-apre in
a!!rdan!e #i"' Sin-apre +n"erna"inal Ar.i"ra"in Rule). Re)pnden") 'ave
par"i!ipa"ed in "'e )aid pr!eedin-) .e1re "'e Ar.i"ral Tri.unal. +" i) al) n" in
di)pu"e "'a" "'e par"ie) 'ad a-reed "'a" "'e )ea" 1 ar.i"ra"in )'all .e a" Sin-apre.
+n m* vie#, a-reemen" " ar.i"ra"e a" Sin-apre 'a) a !l)er and real !nne!"in
::: Downloaded on - 22/06/2014 13:22:16 :::
kvm
I0/95
ARBP1062.12
#i"' "'e pla!e #'ere "'e par"ie) 'ad !')en " ar.i"ra"e. Ar.i"ra"in a-reemen"
#uld .e "'u) -verned .* "'e la# 1 Sin-apre and n" +ndian la#. +n m* vie#
prin!iple) 1 la# laid d#n .* "'e Supreme 3ur" in !a)e 1 Sumitomo 1ea#&
Indu"trie" Ltd$ +"u%ra. and in !a)e 1 National Thermal Po6er Cor%oration
+"u%ra.2 )'all .e )7uarel* appli!a.le " "'e 1a!") 1 "'i) !a)e. Eud-men" 1 "'e
Supreme 3ur" in !a)e 1 /harat Aluminium !#*$"&- 'a) .een in"erpre"ed .* "'e
Divi)in Ben!' 1 "'i) !ur" in !a)e 1 4on!ola Co%%er :ine" +PLC. +"u%ra. in
#'i!' i" i) 'eld .* "'e Divi)in Ben!' 1 "'i) !ur" "'a" "'e en"ire (ud-men" 1 "'e
Supreme 3ur" in !a)e 1 /harat Aluminium !#*$"&- #uld n" appl* #i"'
pr)pe!"ive e11e!". +" i) 'eld "'a" in ) 1ar a) appli!a.ili"* 1 "'e la# 1 -vernin-
.a)ed n ar.i"ra"in i) !n!erned, "'e )ea" 1 "'e ar.i"ra"in a-reemen" #uld
de"ermine "'e -vernin- la# 1 ar.i"ra"in a-reemen". +n "'i) !a)e al) "'e e4pre))
!'i!e 1 "'e par"ie) #a) "'a" )ea" 1 "'e ar.i"ra"in #uld .e a" Sin-apre and "'u)
in m* vie#, "'e )ea" 1 "'e ar.i"ra"in #uld -vern .* la# 1 a-reemen" i.e. la#
1 Sin-apre and n" +ndian la# in "'i) !a)e. + am re)pe!"1ull* .und .* "'e
(ud-men" 1 "'e Supreme 3ur" in !a)e 1 Sumitomo 1ea#& Indu"trie" Ltd$
+"u%ra.2 in !a)e 1 National Thermal Po6er Cor%oration +"u%ra. and (ud-men" 1
"'e Divi)in Ben!' 1 "'i) !ur" in !a)e 1 4on!ola Co%%er :ine" +PLC. +"u%ra.
#'i!' in m* vie# )7uarel* appl* " "'e 1a!") 1 "'i) !a)e.
HD. +n m* vie# (ud-men" 1 Supreme 3ur" in !a)e 1 National Thermal Po6er
Cor%oration +"u%ra. i) 1 n a))i)"an!e " "'e re)pnden") .u" a))i)" "'e !a)e 1
"'e pe"i"iner. +n vie# 1 "'e a1re)aid rea)n), + am 1 "'e vie# "'a" "'ere i) n
meri") 1 "'e )u.mi))in 1 "'e learned )enir !un)el 1r "'e re)pnden") "'a"
!lau)e 16.D 1 "'e a-reemen" de) n" u)" +ndian la#. +n m* vie# i))ue 1
ar.i"ra.ili"* 'a) " .e de!ided under "'e la# 1 ar.i"ra"in a-reemen" #'i!' i) la#
1 Sin-apre in "'i) !a)e and "'u) #'e"'er di)pu"e rai)ed .* "'e pe"i"iner #a)
::: Downloaded on - 22/06/2014 13:22:16 :::
kvm
I1/95
ARBP1062.12
ar.i"ra.le r n" #uld 'ave .een de!ided a) per la# 1 Sin-apre and n" a) per
+ndian ?a#. +n m* vie#, )in!e "'ere i) n di)pu"e "'a" alle-a"in) 1 1raud, 1r-er*
and 1a.ri!a"in e"!. !an .e de!ided under "'e la#) 1 Sin-apre .* "'e learned
"ri.unal, "'ere i) n meri" in "'e )u.mi))in 1 $r.R'a"-i, learned )enir !un)el
"'a" )u!' i))ue 'a) " .e de!ided nl* a) per +ndian la#.
H5. T'e ne4" )u.mi))in 1 $r.R'a"-i, n "'i) i))ue #a) "'a" i1 an* a#ard i)
pa))ed .* "'e ar.i"ral "ri.unal, "'e )ame #uld 'ave " .e .ru-'" in +ndia 1r
en1r!emen" and #uld .e )u.(e!"ed " "'e +ndian le-al pr!e)) and a) per +ndian
la#, )in!e alle-a"in) 1 1raud, 1a.ri!a"in and 1r-er* !ann" .e de!ided .*
ar.i"ra"r, )u!' a#ard #uld n" .e en1r!ea.le in +ndia under +ndian la#.
H6. +" i) n" in di)pu"e "'a" "'e ar.i"ral "ri.unal #'i!' 'a) 'eld 'earin- a"
Sin-apre and 'a) applied la#) 1 Sin-apre 'a) rendered a (uri)di!"inal a#ard in
"'i) ma""er. T'e ar.i"ral "ri.unal 'a) !n)idered "'e .(e!"in) rai)ed .* "'e
re)pnden") 'erein "'a" "'e ar.i"ral "ri.unal did n" 'ave (uri)di!"in " de!ide "'e
alle-a"in) " 1r-er*, 1raud and 1a.ri!a"in and 'a) rendered "'e (uri)di!"inal
a#ard 'ldin- "'a" under la# 1 Sin-apre, "'e ar.i"ral "ri.unal 'a) (uri)di!"in "
de!ide )u!' alle-a"in). Admi""edl* "'e re)pnden") 'ave n" !'allen-ed "'e )aid
(uri)di!"inal a#ard in an* pr!eedin-) a" Sin-apre under "'e la#) 1 Sin-apre.
Pue)"in "'a" ari)e) i) #'e"'er )u!' (uri)di!"inal a#ard !an .e relied upn in "'i)
pr!eedin-) .* "'e pe"i"iner in vie# 1 "'e re)pnden") n" 'avin- !'allen-ed "'e
)aid (uri)di!"inal a#ard re(e!"in- "'e plea 1 (uri)di!"in rai)ed .* "'e
re)pnden"), #i"'u" 1ilin- an appli!a"in 1r en1r!emen" 1 "'e )aid a#ard.
Pue)"in al) ari)e) i) "'a" #'e"'er pre)en" pe"i"in 1iled under )e!"in 9 1 "'e
Ar.i"ra"in and 3n!ilia"in A!", 1996 i) an appli!a"in 1r en1r!emen" 1 "'e
(uri)di!"inal a#ard, in"erim a#ard r i) )impli!i"r 1r in"erim mea)ure) a-ain)"
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I2/95
ARBP1062.12
"'e re)pnden") independen"l*. Su.mi))in 1 "'e re)pnden") i) "'a" i1 a) per la#
1 +ndia, i1 1inal relie1 !ann" .e en1r!ed in +ndia in vie# 1 "'e )u.(e!" ma""er 1
"'e di11eren!e .ein- n" !apa.le 1 )e""lemen" .* ar.i"ra"in under "'e la# 1 +ndia
r i1 en1r!emen" 1 "'e a#ard #uld .e !n"rar* " pu.li! pli!* 1 +ndia, in"erim
mea)ure) in "'a" )i"ua"in !an n" .e -ran"ed .* "'i) !ur" under )e!"in 9 1 "'e
A!".
HH. +" i) n" in di)pu"e "'a" under la# 1 Sin-apre, ar.i"ral "ri.unal 'a)
(uri)di!"in " de!ide "'e alle-a"in) 1 1raud, 1r-er* and 1a.ri!a"in in ar.i"ra"in
pr!eedin-). +n m* vie#, Dr. Tulzapurkar, learned )enir !un)el 1r "'e pe"i"iner
i) ri-'" in 'i) )u.mi))in "'a" "'e )u.(e!" ma""er 1 di11eren!e in "'e ar.i"ra"in
pr!eedin-) .e1re "'e ar.i"ral "ri.unal #a) !laim 1r dama-e) made .* "'e
pe"i"iner #'i!' #a) !apa.le 1 )e""lemen" .* ar.i"ra"in even under la# 1 +ndia.
T'e learned )enir !un)el i) ri-'" in 'i) )u.mi))in "'a" "'e )u.(e!" ma""er 1 "'e
di11eren!e i1 n" !apa.le .* )e""lemen" 1 ar.i"ra"in under "'e la#) 1 +ndia !ann"
.e en1r!ed in +ndia and n" "'e alle-a"in) 1 1raud, 1a.ri!a"in and 1r-er* e"!.
+n m* vie# "'ere i) n meri" in "'e )u.mi))in 1 $r.R'a"-i "'a" under la# 1
Sin-apre, alle-a"in) 1 1raud, 1r-er* and 1a.ri!a"in #a) n" !apa.le 1
)e""lemen" .* ar.i"ra"in. + am 1 "'e vie# "'a" "'e )u.(e!" ma""er 1 "'e re1eren!e
#a) #'e"'er pe"i"iner #a) en"i"led " !laim dama-e) 1rm "'e re)pnden") #'i!'
#a) !apa.le 1 )e""lemen" .* ar.i"ra"in even under la#) 1 +ndia. Be "'a" a) i"
ma*, )in!e n appli!a"in i) made .* "'e pe"i"iner 1r en1r!emen" 1 "'e
(uri)di!"inal a#ard, )u.mi))in 1 "'e learned !un)el 1r "'e re)pnden") "'a"
!ndi"in) 1 )e!"in DI ;2< ;a< and ;.< 1r en1r!emen" 1 1rei-n a#ard #uld
appl* " "'i) appli!a"in under )e!"in 9 1r in"erim mea)ure) 'a) n meri"). +n m*
vie# relian!e pla!ed .* $r.R'a"-i n para-rap' ;:9< 1 "'e (ud-men" 1 "'e
Supreme 3ur" in !a)e 1 /ooA Allen and 1amilton Inc$ +"u%ra. i) mi)pla!ed.
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I:/95
ARBP1062.12
HI. %e4" 7ue)"in "'a" ari)e) 1r !n)idera"in i) #'e"'er )u!' (uri)di!"inal
a#ard rendered .* "'e ar.i"ral "ri.unal .* appl*in- la#) 1 Sin-apre !an .e
re1erred " and relied upn .* "'e pe"i"iner in "'i) pr!eedin-) and i) .indin- n
"'e par"ie) r n".
H9. Dr.Tulzapurkar, learned )enir appearin- 1r pe"i"iner 'a) pre))ed in
)ervi!e "'e la# 1 e)"ppel n "'i) i))ue a-ain)" "'e re)pnden") and pla!ed
relian!e n )everal (ud-men") 1 Supreme 3ur" and (ud-men" 1 "'i) 3ur" n "'e
i))ue "'a" prin!iple) 1 e)"ppel and re) (udi!a"a are .a)ed n pu.li! pli!* and
(u)"i!e. Supreme 3ur" in !a)e 1 1o%e Plantation" Ltd$+"u%ra.2 /hanu 4umar
Jain +"u%ra.2 I"h6ar Dutt +"u%ra.2 Ar8un Sin9h +"u%ra. and "'i) !ur" in !a)e 1
Indo-Pharma Pharmaceutical or!" Pri#ate Limited 'a) !n)idered "'i) i))ue a"
len-"', relevan" para-rap') "'ere1 are 'i-'li-'"ed in earlier par" 1 "'i) (ud-men".
+" i) 'eld "'a" prin!iple) 1 e)"ppel and re) (udi!a"a are .a)ed n pu.li! pli!* and
(u)"i!e. +))ue 1 ar.i"ra.ili"* and (uri)di!"in 'avin- .een !n!luded !ann" .e
a-i"a"ed .* "'e )ame par"ie) in an"'er pr!eedin-) .ein- .arred .* la# 1
e)"ppel. +" pera"e) a) e)"ppel in an* )u.)e7uen" pr!eedin-) i1 in "'e earlier
pr!eedin-) .e"#een "'e par"ie), "'e i))ue 'ad .een de"ermined. +" i) 'eld "'a" re)
(udi!a"a !uld .e appli!a.le " di11eren" )"a-e) 1 "'e )ame )ui") a) " 1indin-) n
"'e i))ue).
I0. &avin- "aken a vie# "'a" la# 1 Sin-apre #uld appl* " "'e par"ie) in "'i)
pr!eedin-) and under la#) 1 Sin-apre, re)pnden") #uld 'ave remed* 1
!'allen-e "'e in"erim a#ard) .e1re "'e apprpria"e !ur" a" Sin-apre and "'e
re)pnden") n" 'avin- !'allen-ed "'e )aid (uri)di!"inal a#ard and in"erim a#ard,
in m* vie# "'e )aid (uri)di!"inal a#ard and in"erim a#ard made .* "'e ar.i"ral
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ID/95
ARBP1062.12
"ri.unal .e"#een "'e )ame par"ie) ari)in- u" "'e )ame a-reemen" in "'e ar.i"ra"in
pr!eedin-) 'ave .e!me 1inal and !n!lu)ive n "'e i))ue 1 (uri)di!"in and "'e
re)pnden") are .arred .* "'e prin!iple) 1 e)"ppel in re9a-i"a"in- "'e )ame i))ue
in "'i) pr!eedin-). T'e prin!iple) 1 la# laid d#n .* "'e Supreme 3ur" and
"'i) !ur" in variu) (ud-men") re1erred " a1re)aid .* "'e pe"i"iner are )7uarel*
appli!a.le " "'e 1a!") 1 "'i) !a)e and are .indin- n "'i) !ur". +n m* vie# "'ere
i) n meri" in "'e )u.mi))in 1 $r.R'a"-i, learned )enir !un)el "'a" "'e i))ue
rai)ed .* "'e re)pnden") #a) a pure 7ue)"in 1 la# and "'e d!"rine 1 "'e
e)"ppel !uld never appl* " )u!' 7ue)"in 1 la# r " a (uri)di!"inal 7ue)"in.
+n m* vie# "'e prin!iple) 1 i))ue e)"ppel i) i))ue appli!a.le in !a)e 1 7ue)"in
1 1a!" r a 7ue)"in 1 la# r " a mi4ed 7ue)"in 1 1a!" and la#. T'e e)"ppel
pera"e) a-ain)" "'e re)pnden") and n" a-ain)" an* la#.
I1. T'e ne4" 7ue)"in "'a" ari)e) 1r !n)idera"in i) even i1 )e!"in DI 1 "'e
Ar.i"ra"in A!" i) pre))ed in )ervi!e and #uld 'ave .een appli!a.le a" "'i) )"a-e,
#'e"'er alle-a"in) 1 1raud, 1r-er* and/r 1a.ri!a"in #ere !apa.le 1
ad(udi!a"in .* an ar.i"ra"r under +ndian la# r "'e )ame #uld .e pp)ed "
pu.li! pli!*.
I2. Relian!e i) pla!ed .* $r.R'a"-i, learned )enir !un)el in )uppr" 1 "'i)
i))ue n "'e (ud-men" 1 )upreme 3ur" in !a)e 1 N$Radha!ri"hnan +"u%ra.2
(ud-men" 1 "'i) !ur" in !a)e 1 Gold"tar :etal Solution" +"u%ra.2 in !a)e 1
:S: Satelite +"u%ra.2 , (ud-men" 1 "'i) !ur" in !a)e 1 I#or& Pro%ertie" +"u%ra.
and (ud-men" 1 Supreme 3ur" in !a)e 1 1indu"tan Petroleum #$ Pin! cit&
mid6a& Petroleum" +5--0. ; SCC 3-0. Dr.Tulzapukar, learned )enir !un)el n
"'e "'er 'and di)"in-ui)'ed "'e (ud-men" 1 "'e Supreme 3ur" in !a)e 1
N$Radha!ri"hnan +"u%ra. and "'er (ud-men") relied upn .* $r.R'a"-i,
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I5/95
ARBP1062.12
learned )enir !un)el n "'e -rund "'a" n la# i) laid d#n .* "'e Supreme
3ur" in !a)e 1 N$Radha!ri"hnan +"u%ra. "'a" i1 an* alle-a"in) 1 1raud, 1r-er*
and 1a.ri!a"in e"!. are made .* a par"*, )u!' alle-a"in) !ann" .e de!ided .* "'e
ar.i"ra"r a" all. +" i) )u.mi""ed "'a" in "'e 1a!") 1 "'a" !a)e "'e Supreme 3ur" 'a)
'eld "'a" i" i) a" "'e di)!re"in 1 "'e !ur" under Se!"in I " re1er "'e par"ie) "
ar.i"ra"in r n" even i1 "'e )u.(e!" ma""er 1 "'e )ui" i) !vered .* ar.i"ra"in
a-reemen", i1 "'e !ur" !me) " "'e !n!lu)in "'a" "'e )ame )'all .e
apprpria"el* deal" #i"' .* "'e !ivil !ur". Dr.Tulzapurkar, learned )enir !un)el
pla!ed relian!e n "'e (ud-men" 1 3al!u""a &i-' 3ur" and $adra) &i-' 3ur" in
)uppr" 1 "'i) )u.mi))in. ?earned )enir !un)el )u.mi""ed "'a" "'u-' par"ie)
are n" -verned .* +ndian la#, even i1 )e!"in DI i) applied a" "'i) )"a-e,
alle-a"in) 1 1r-er*, 1raud and 1a.ri!a"in e"!. are n" in!apa.le 1 ad(udi!a"in
.* an ar.i"ra"r r )u!' a#ard i) n" in !n1li!" #i"' pu.li! pli!*. %ne 1 "'e
(ud-men") relied upn .* $r.R'a"-i #uld .e appli!a.le " "'e 1a!") 1 "'i) !a)e.
Sin!e, ."' "'e par"ie) 'ave made de"ailed )u.mi))in) n "'e i))ue #'e"'er
alle-a"in) 1 1raud, 1r-er* and 1a.ri!a"in e"!. made in "'e pleadin-) in an
ar.i"ra"in pr!eedin-) !an .e de!ided .* an ar.i"ra"r r n" r i" !an .e de!ided
nl* .* a !ivil !ur" nl* under +ndian ?a#), + am dealin- #i"' "')e )u.mi))in)
al) in "'i) (ud-men". A!!rdin- " Dr.Tulzapurkar, learned )enir !un)el, even i1
+ndian la# i) appli!a.le " "'e par"ie) r even i1 )e!"in DI i) appli!a.le a" "'i)
)"a-e " "'i) appli!a"in under )e!"in 9, "'ere i) n la# laid d#n .* "'e Supreme
3ur" "'a" )u!' alle-a"in) 1 1raud, 1r-er* and 1a.ri!a"in !ann" .e de!ided .*
"'e ar.i"ra"r a" all. +" i) )u.mi""ed "'a" under +ndian la# al), "'ere i) n .ar
a-ain)" an ar.i"ra"r " de!ide )u!' alle-a"in). ?earned )enir !un)el pla!ed
relian!e n "'e (ud-men" 1 "'e Supreme 3ur" in !a)e 1 /ooA Allen 1amilton
+"u%ra..
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I6/95
ARBP1062.12
I:. A peru)al 1 (ud-men" 1 "'e Supreme 3ur" in !a)e 1 N$Radha!ri"hnan
+"u%ra. #uld indi!a"e "'a" "'e i))ue .e1re "'e Supreme 3ur" #a) #'e"'er "'e
)aid !a)e 1all) #i"'in "'e (uri)di!"in 1 "'e ar.i"ra"r and i1 i" #a), #'e"'er "'e
pr!edural re7uiremen") under Se!"in I;2< 1 "'e A!" 'ad .een !mplied #i"' "
"'e )a"i)1a!"in 1 "'e !ur" Supreme 3ur" !n)idered "'e )u.mi))in made .*
"'e re)pnden") "'a" #'en a !a)e invlve) )u.)"an"ial 7ue)"in) rela"in- " 1a!")
#'ere de"ailed ma"erial eviden!e #a) needed " .e prdu!ed .* ei"'er par"ie) and
)eriu) alle-a"in) per"ainin- " 1raud and malpra!"i!e #ere rai)ed, "'e ma""er mu)"
.e "ried in a !ur" and "'e ar.i"ra"r !uld n" .e !mpe"en" " deal #i"' )u!'
ma""er) #'i!' invlved an ela.ra"e prdu!"in 1 eviden!e " e)"a.li)' "'e !laim)
rela"in- " 1raud and !riminal mi)apprpria"in. +" i) 'eld .* "'e Supreme 3ur"
"'a" "'e !n"en"in 1 "'e re)pnden") rela"in- " "'e (uri)di!"in 1 "'e ar.i"ra"r "
de!ide a di)pu"e per"ainin- " a ma""er 1 "'a" prpr"in )'uld .e up'eld in vie#
1 "'e 1a!") and !ir!um)"an!e) 1 "'e !a)e. Su!' alle-a"in) !ann" .e prperl*
-ne in" .* "'e ar.i"ra"r. Supreme 3ur" 'a) 'eld "'a" in "'e 1a!") 1 "'a" !a)e i"
did n" #arran" "'e ma""er " .e "ried and de!ided .* "'e ar.i"ra"r, ra"'er 1r "'e
1ur"'eran!e 1 (u)"i!e, i" )'uld .e "ried in "'e !ur" 1 la# #'i!' !uld .e mre
!mpe"en" and 'ave a mean) " de!ide )u!' a !mpli!a"ed ma""er invlvin-
variu) 7ue)"in) and i))ue) rai)ed in "'e )aid di)pu"e. Supreme !ur" a-reed
#i"' "'e vie#) "aken .* "'e $adra) &i-' 3ur" in !a)e 1 1$G$Oomor Sait #"$
O$A"lam Sait +5--(. 0 CTS 5;). +n para-rap') 26 1 "'e )aid (ud-men" in !a)e 1
N$Radha!ri"hnan +"u%ra.2 i" i) 'eld "'a" in vie# 1 "'e )eriu) alle-a"in) made
a-ain)" "'e re)pnden") alle-in- "'em " !mmi" mal9pra!"i)e) in "'e a!!un"
.k) and manipula"e) "'e 1inan!e) 1 "'e par"ner)'ip 1irm, )u!' alle-a"in) !uld
n" .e prperl* rai)ed #i"' .e1re "'e ar.i"ra"r. +" i) 'eld "'a" )u!' i))ue)
invlved de"ailed eviden!e #'i!' !uld .e dne nl* .* a !ivil !ur". A peru)al 1
"'e (ud-men" 1 "'e Supreme 3ur" in !a)e 1 N$Radha!ri"hnan +"u%ra. minu"el*,
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IH/95
ARBP1062.12
+ am 1 "'e vie# "'a" i" #uld .e a" "'e di)!re"in 1 "'e !ur" in 1a!") 1 ea!' !a)e
" de!ide "'a" "'u-' ar.i"ra"in a-reemen" e4i)", #'e"'er )u!' di)pu"e) !uld .e
apprpria"el* deal" #i"' .* an ar.i"ra"r r .* a !ivil !ur" !n)iderin- "'e
)eriu)ne)) 1 "'e alle-a"in) made .* "'e par"ie) in "'e 1a!") 1 ea!' !a)e. T'e
)aid (ud-men" in m* vie# 'ld) "'a" i" i) a" "'e di)!re"in 1 "'e !ur" " re1er "'e
ma""er " ar.i"ra"in r #'e"'er "'e )ame !an .e de!ided .* "'e !ur" apprpria"el*
in "'e 1a!") 1 ea!' !a)e. T'e (ud-men" 1 "'e Supreme 3ur" in m* vie# i) .a)ed
n "'e 1a!") 1 "'a" !a)e a) i) !lear in para-rap') 21, 2: and 26 1 "'e )aid
(ud-men".
ID. 3al!u""a &i-' 3ur" 'a) in"erpre"ed "'e (ud-men" 1 "'e Supreme 3ur" in
!a)e 1 N$Radha!ri"hnan +"u%ra. and 'a) 'eld "'a" "'e N$Radha!ri"hnan +"u%ra.
(ud-men" !ann" .e read " impl* "'a" ever* alle-a"in 1 1raud 1r malpra!"i!e
.ein- made, "'ere !an n ln-er .e ad(udi!a"in 1 )u!' ma""er) in an ar.i"ra"in
re1eren!e. N$Radha!ri"hnan +"u%ra. 'a) " .e read " impl* "'a" an e4!ep"in
ma* .e made " "'e -eneral rule #'en i" appear) " !ur" "'a" a ma""er invlvin-
)eriu) !'ar-e) #i"' 'eav* d!umen"ar* and ral eviden!e ma* n" .e re1erred "
ar.i"ra"in n"#i"')"andin- "'e di)pu"e .ein- !vered "'ere.*. 3al!u""a &i-'
3ur" 'a) 'eld "'a" "'ere #uld .e elemen" 1 di)!re"in availa.le " !ur" #'ile
!n)iderin- "'e pe"i"in " )"a* r )"ul"i1* "'e pr-re)) 1 a )ui" #'ere "'e i))ue) r
likel* i))ue) #ere !vered .* an ar.i"ra"in a-reemen". +" i) 'eld "'a" even i1 a
)eriu) alle-a"in) 1 1raud r malpra!"i!e 'a) " .e made and i" i) nl* "'e
e4!ep"inal !a)e) #'i!' are re7uired " .e re"ained in !ur" and n" )en" "
ar.i"ra"in n "'e rea)nin- !n"ained in "'e %.Rad'akri)'nanA) !a)e "'a" Ki"
!ann" .e prper"* deal" #i"' .* "'e ar.i"ra"rL. +" i) 'eld "'a" "'u-' "'ere i) a
!'ar-e 1 malpra!"i!e and "'e re)pnden") 'avin- )ip'ned 1 1und), i" de) n"
appear "'a" )u!' !'ar-e) are )u!' "'a" "'e ar.i"ra"r r "'e ar.i"ral "ri.unal #uld
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II/95
ARBP1062.12
n" .e a.le " addre)) "'e )ame. T'e e4"en" 1 ral r d!umen"ar* eviden!e "'a"
#uld .e ne!e))ar* " deal #i"' like i))ue) in "'e re1eren!e i) n" )u!' "'a" #arran"
1 "'e e4er!i)e 1 "'e e4"ra rdinar* di)!re"in #'i!' 'a) n" .een re!-nized "
ne-a"e "'e manda"e 1 "'e 1996 A!" in "'e pre)en" !a)e. 5nder )e!"in 2H 1 "'e
Ar.i"ra"in A!", an ar.i"ra"r r "'e ar.i"ral "ri.unal !an )eek "'e a))i)"an!e 1 "'e
!ur" in "'e even" "'e ar.i"ra"r r "'e ar.iral "ri.unal i) 1a!ed #i"' an* pr.lem
rela"in- " eviden!e .ein- re!eived.
I5. +n m* vie#, Dr. Tulzapurkar, learned )enir !un)el appearin- 1r "'e
pe"i"iner i) ri-'" in 'i) )u.mi))in) "'a" (ud-men" in !a)e 1 N$ Radha!ri"hnan
+"u%ra. i) n" an au"'ri"* n "'e prp)i"in "'a" a) )n a) alle-a"in) 1 1raud
i) made .* an* par"*, n )u!' ma""er !an .e re1erred " ar.i"ra"in a" all. + am in
a-reemen" #i"' "'e vie# "aken .* "'e 3al!u""a &i-' 3ur" #'i!' 'a) deal" #i"'
and in"erpre"ed "'e (ud-men" 1 "'e Supreme 3ur" in "'e !a)e 1 N$
Radha!ri"hnan +"u%ra..
I6. +n ) 1ar a) (ud-men" 1 "'i) !ur" in !a)e 1 Gold"tar :etal Solution"
+"u%ra.2 :S: Satelite +"u%ra.2 I#or& Pro%ertie" 1otel" +"u%ra. relied upn .*
$r. R'a"-i, learned )enir !un)el appearin- 1r re)pnden" in )uppr" 1 'i)
)u.mi))in "'a" )u!' alle-a"in) 1 1raud and 1r-er* !uld n" .e re1erred "
ar.i"ra"in a" all "'u-' ar.i"ra"in a-reemen" e4i)") are !n!erned, a peru)al 1
"'e)e (ud-men") #uld indi!a"e "'a" "'ere #a) n i))ue rai)ed .* an* 1 "'e par"ie)
in "')e ma""er) #'e"'er in "'e 1a!") 1 "')e !a)e), i" #uld .e mre !nvenien"
and prper " de!ide "'e alle-a"in) .* a !ivil !ur" r .* an ar.i"ra"r. +n !a)e
1 =ld)"ar $e"al Slu"in) ;)upra<, "'i) !ur" a!!ep"ed "'e )u.mi))in) 1 "'e
re)pnden") "'a" in vie# 1 "'e )eriu) alle-a"in) #'i!' #ere prima 1a!ie
demn)"ra.le, )u!' i))ue !uld n" .e le1" pen " .e de!ided .* "'e ar.i"ral
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I9/95
ARBP1062.12
"ri.unal under )e!"in 9 1 "'e Ar.i"ra"in 0 3n!ilia"in A!". +n m* vie# "'e
(ud-men" 1 "'i) !ur" in "'e !a)e 1 =ld)"ar $e"al Slu"in) "'u) #uld n" .e
appli!a.le " 'e 1a!") 1 "'i) !a)e. +n m* vie# even i1 "'ere are an* )u!'
alle-a"in) made .* a par"*, ar.i"ral "ri.unal i) emp#ered " "ake a))i)"an!e 1
"'e !ur" under )e!"in 2H 1 "'e Ar.i"ra"in 0 3n!ilia"in A!", 1996 and "'u)
merel* .e!au)e )me alle-a"in) r 1raud r mal9pra!"i!e) made .* an* par"*,
!ur" !ann" )impl* re1u)e " re1er )u!' ma""er " ar.i"ra"in. 3ur" 'a) " de!ide
in "'e 1a!") 1 ea!' !a)e #'e"'er i" #uld .e apprpria"e and prper " deal #i"'
and ad(udi!a"e upn )u!' alle-a"in) .* a 3ivil 3ur" r .* an ar.i"ra"r. +n m*
vie#, "'ere i) n .ar prvided under Ar.i"ra"in and 3n!ilia"in A!" a-ain)"
ar.i"ra"r 1rm en"er"ainin- and/r de!idin- "'e i))ue 1 1raud, 1r-er*,
manipula"in e"!.
IH. +n "'i) !a)e, ar.i"ral "ri.unal, 'a) alread* rendered a (uri)di!"inal a#ard "'a"
under la#) 1 Sin-apre, ar.i"ral "ri.unal 'a) (uri)di!"in " deal #i"' )u!'
alle-a"in), 1raud, 1a.ri!a"in e"!. Bu" 1 "'e "# ma""er), in ne ma"er "'e ar.i"ral
"ri.unal 'a) alread* rendered 1inal a#ard and in "'e "'er ma""er, 1inal a#ard i)
a#ai"ed. +n m* vie#, "'u) "'ere i) n meri" in "'e )u.mi))in 1 $r. R'a"-i
learned )enir !un)el "'a" under +ndian la# )u!' alle-a"in) !uld n" .e de!ided
.* "'e ar.i"ral "ri.unal a" all r "'a" )u!' a#ard #uld .e in !n1li!" #i"' pu.li!
pli!* 1 +ndia.
II. Supreme 3ur" in "'e !a)e 1 /ooA Allen and 1amiltan +"u%ra. 'a) !arved
u" !a"e-rie) 1 di)pu"e #'i!' are nn ar.i"ra.le )u!' a) di)pu"e) rela"in- "
ri-'") and lia.ili"ie) -ivin- ri)e " r ari)in- u" 1 !riminal 11en!e), ma"rimnial
di)pu"e), !'ild !u)"d*, -uardian)'ip ma""er), in)lven!* and #indin- up ma""er),
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"e)"amen"ar* ma""er), evi!"in r "enan!* ma""er) e"!. Supreme 3ur" 'a) al)
'eld "'a" #'ere a !au)e/di)pu"e i) inar.i"ra.le, !ur" #'ere a )ui" i) pendin- #ill
re1u)e " re1er "'e par"ie) " ar.i"ra"in under )e!"in I 1 "'e A!", even i1 par"ie)
mi-'" 'ave a-reed upn ar.i"ra"in. +n m* vie#, !ur" 'a) " de!ide #'e"'er )u!'
alle-a"in) made .* "'e par"ie) !an .e re1erred " ar.i"ra"in r i" #uld .e mre
apprpria"e and !venan" " de!ide )u!' alle-a"in) .* !ur" i")el1 "'u-'
ar.i"ra"in a-reemen" e4i)"). Supreme 3ur" in "'e )aid (ud-men" did n" !arve
u" an* )u!' !a"e-r* 1 alle-a"in) under "'e !a"e-r* 1 nn ar.i"ra.le di)pu"e).
+n m* vie# Dr. Tulzapurkar i) ri-'" in pla!in- relian!e upn "'e (ud-men" 1 "'e
Supreme 3ur" in "'e !a)e 1 /ooA Allen +"u%ra.. + am re)pe!"1ull* .und .* "'e
)aid (ud-men".
I9. +n ) 1ar a) (ud-men" 1 "'i) !ur" in !a)e 1 Jindal Dru9" +"u%ra. relied
upn .* $r. R'a"-i, learned )enir !un)el "'a" unle)) pe"i"iner 1ile) an
appli!a"in 1r en1r!emen" 1 1rei-n a#ard in "'i) !ur", re)pnden") !ann"
!'allen-e "'e validi"* 1 )u!' a#ard i) !n!erned, in m* vie#, )in!e pre)en"
appli!a"in 1iled under )e!"in 9 1 "'e Ar.i"ra"in A!" .* "'e pe"i"iner i) n" 1r
en1r!emen" 1 "'e in"erim a#ard r (uri)di!"inal a#ard rendered .* "'e ar.i"ral
"ri.unal .u" "'e pe"i"iner )eek) in"erim mea)ure) a-ain)" "'e re)pnden"),
independen"l*, par"ie) .* a-reemen" 'avin- e4!luded "'e appli!a.ili"* 1 par" + 1
"'e ar.i"ra"in A!" e4!ep" )e!"in 9, "'e pe"i"iner i) "'u) en"i"led " invke )e!"in
9 1r in"erim mea)ure). +n m* vie# pe"i"iner 'a) n" .*pa))ed an* manda"r*
!ndi"in) 1 en1r!ea.ili"* re7uired .* )e!"in DI 1 "'e A!". Relian!e pla!ed n
"'e (ud-men" 1 "'i) 3ur" in !a)e 1 Jindal Dru9" +"u%ra. i) "'u) mi)pla!ed.
90. %e4" 7ue)"in "'a" ari)e) 1r !n)idera"in 1 "'i) !ur" i) #'e"'er repr")
)u.mi""ed .* e!nmi! 11en!e #in- !l)in- "'e !mplain" under )e!"in 1H: 1
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3riminal Pr!edure 3de !an .e relied upn in "'i) pr!eedin-) a) !n!lu)ive.
Su.mi))in 1 $r.R'a"-i learned )enir !un)el 1r "'e re)pnden" i) "'a" i" #a)
1und a1"er an e4'au)"ive en7uir* .* "'e F!nmi! B11en!e "'a" "'ere #a) n
meri" in "'e !mplain" 1 "'e pe"i"iner #'i!' #a) iden"i!al " "'e alle-a"in)
made in "'e ar.i"ra"in pr!eedin-) and "'ere .ein- n !n"rar* repr", )u!'
repr" i) pre)ump"ivel* !rre!". +n "'i) re-ard, Dr. Tulzapurkar pla!ed relian!e n
variu) (ud-men") re1erred in "'e earlier para-rap') 1 "'i) (ud-men" #'i!' are
)u-'" " .e di)"in-ui)'ed .* $r. R'a"-i learned )enir !un)el.
91. +" i) n" in di)pu"e "'a" learned $a-i)"ra"e 'a) n" a!!ep"ed "'e repr")
)u.mi""ed .* F!nmi! B11i!e 2in- ) 1ar.
92. +n m* vie# Dr Tulzapurkar learned )enir !un)el i) ri-'" in 'i) )u.mi))in
"'a" pinin 1 "'e pli!e 11i!er makin- inve)"i-a"in i) n" .indin- n "'e
$a-i)"ra"e and n"#i"')"andin- "'e pinin 1 "'e $a-i)"ra"e " "'e !n"rar*, "'e
$a-i)"ra"e !an rder 1ur"'er inve)"i-a"in. Similarl* even a 1inal (ud-men" in a
!riminal pr!eedin- i) n" .indin- n "'e !ivil !ur" de!idin- "'e ma""er in a !ivil
pr!eedin- and vi!e ver)a. +n m* vie#, even 1r "'e purp)e 1 !n)iderin-
appli!a"in under )e!"in 9 1 Ar.i"ra"in A!" 1996, "'i) 3ur" i) emp#ered "
de!ide "'e ma""er .a)ed n eviden!e prdu!ed .* ."' par"ie) 1r "'e purp)e 1
-ran"in- in"erim mea)ure) independen"l* irre)pe!"ive 1 "'e pinin 1 "'e
F!nmi! B11en!e 2in- " "'e !n"rar*. +" i) n" in di)pu"e "'a" "'e pinin 1
F!nmi! B11en!e 2in- 'a) n" even .een a!!ep"ed .* "'e learned $a-i)"ra"e a"
"'i) )"a-e. + am "'u) n" in!lined " !n)ider "'e !rre!"ne)) 1 "'e repr"
)u.mi""ed .* FB2 a" "'i) )"a-e.
9:. T'e ne4" )u.mi))in 1 $r R'a"-i learned )enir !un)el 1r "'e
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re)pnden" i) "'a" "'e pe"i"iner i) nl* a )'are'lder in re)pnden" %.1 !mpan*
and n" a !redi"r and i") inve)"men" in "'e re)pnden" 1 !mpan* !ea)ed " 'ave
"'e !'ara!"er 1 mne* and remed* 1 "'e pe"i"iner i1 an* #a) under "'e
prvi)in) 1 "'e 3mpanie) A!" 1956 i) !n!erned, n peru)al 1 "'e )"a"emen" 1
!laim 1iled .e1re "'e ar.i"ral "ri.unal and "'e pleadin-) 1iled in "'i) pr!eedin-) i"
i) !lear "'a" "'e !laim) made .* "'e pe"i"iner i) n" 1r re!ver* 1 e7ui"* )'are)
.u" i) 1r dama-e) n "'e premi)e "'a" "'e re)pnden" %.1 'ad mi)repre)en"ed "'e
pe"i"iner n BB3 !n"ra!" and 'ad !mmi""ed variu) "'er a!") 1
mi)repre)en"a"in re-ardin- ma"erial !n"ra!" vendr), )upplier) e"!. +n m* vie#,
relie1) !laimed in "'e ar.i"ra"in pr!eedin-) !uld n" .e )u.(e!" ma""er 1 "'e
pr!eedin-) under Se!"in :9H 1 "'e 3mpanie) A!". + am n" in!lined " a!!ep"
"'e )u.mi))in 1 $r R'a"-i learned )enir !un)el "'a" "'e !laim 1 "'e
pe"i"iner i) made a) a )'are'lder 1 re)pnden" %.1 !mpan* and n" a) a
!redi"r in an* re)pe!".
9D. %e4" )u.mi))in 1 $r R'a"-i learned )enir !un)el i) "'a" $/) &AV :
!n"inue) " 'ld a.u" 10> )'are) in "'e re)pnden" 1 !mpan* and nne 1 "'e
"'er )'are'lder) 'ldin- a.u" 92.2 > made an* !mplain" 1 an*
mi)mana-emen" a-ain)" re)pnden" %.1 !mpan*. $/) &AV : 'ad !ndu!"ed a
due dili-en!e 1r mre "'an 10 mn"') and "'e pe"i"iner 'ad !ndu!"ed due
dili-en!e 1r perid 1 5 mn"') .e1re e4e!u"in 1 "'e a-reemen" in 7ue)"in and
"'ere #a) n men"in 1 BB3 !n"ra!" in an* 1 "')e "# a-reemen"), pe"i"iner
a" "'i) )"a-e, !ann" make an* -rievan!e in re)pe!" 1 BB3 !n"ra!" 1r )eekin-
an* relie1.
95. Bn peru)al 1 3lau)e 6.: 1 "'e )aid SSA, i" i) revealed "'a" "'e )aid !lau)e
!learl* prvide) "'a" "'e pe"i"iner did n" 'ave an* ppr"uni"* " !ndu!" an
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e4"en)ive due dili-en!e in" Avi"el +ndia and 'ave relied upn "'e repre)en"a"in,
#arran"ie) and under"akin-) !n"ained in "'e a-reemen". 3rre)pnden!e pla!ed
n re!rd al) prima 1a!ie indi!a"e) "'a" a repre)en"a"in #a) made .* "'e
re)pnden") " "'e pe"i"iner "'a" "'e BB3 !n"ra!" #a) alm)" !n!luded, variu)
mee"in-) #ere 'eld " e4e!u"e BB3 !n"ra!" e"!. Sme 1 "'e)e !rre)pnden!e
#'i!' are n re!rd 1 "'i) pr!eedin- prima 1a!ie indi!a"e) "'a" an a))uran!e #a)
made " "'e pe"i"iner .* "'e re)pnden") "'a" pe"i"iner #uld .e all#ed "
peru)e "'e $B5, an* e9mail !rre)pnden!e .e"#een Avi"el and BB3. +" al)
prima 1a!ie indi!a"e) "'a" repre)en"a"in #a) made " "'e pe"i"iner "'a" Avi"el 'ad
re7uired "'e inve)"men" 1 "'e pe"i"iner " pur!'a)e e7uipmen" #'i!' #a)
ne!e))ar* 1r "'e BB3 !n"ra!" and "'a" "'e BB3 #a) un#illin- " en"er in" "'e
BB3 !n"ra!" un"il Avi"el 'ad in1a!" pur!'a)ed )u!' e7uipmen". T'e pe"i"iner
#a) makin- in7uirie) "ime and a-ain #i"' "'e re)pnden") even p)" inve)"men").
3rre)pnden!e anne4ed n re!rd al) prima 1a!ie indi!a"e) "'a" "'ere #a)
nei"'er an* mee"in- .e"#een "'e re)pnden") and BB3 a) alle-ed .* "'e
re)pnden") nr an* !n"ra!" #a) ever ne-"ia"ed .e"#een "'e re)pnden") and
BB3 and "'e )aid repre)en"a"in #a) 1al)e n "'e par" 1 "'e re)pnden") " indu!e
"'e pe"i"iner " inve)" 'u-e amun" in re)pnden" %.1 !mpan*.
96. Sme 1 "'e !rre)pnden!e n re!rd al) prima 1a!ie indi!a"e) "'a" even
"'ere #a) mi)repre)en"a"in n "'e par" 1 "'e re)pnden") in ) 1ar a) $/) Purple
Pa))in #' #a) )"a"ed " .e ne 1 leadin- !u)"mer 1 "'e re)pnden") #'i!'
en"i"* #a) alread* di))lved mu!' prir " "'e da"e 1 e4e!u"in 1 "'e a-reemen")
.e"#een "'e par"ie). +n m* prima 1a!ie vie# "'e alle-a"in) 1 "'e pe"i"iner "'a"
"'ere #a) 1al)e mi)repre)en"a"in) n "'e par" 1 "'e re)pnden" n variu) )u!'
i))ue) 'a) )u.)"an!e.
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9H. A peru)al 1 "'e re!rd al) prima 1a!ie indi!a"e) "'a" u" 1 5SD 60 millin
inve)"ed .* "'e pe"i"iner in re)pnden" %.1 a" lea)" 5SD 51 millin 'ad .een
!ir!ula"ed .a!k " re)pnden" %.: a) 'e #a) )le )i-na"r* 1 "'e !mpanie) "
#'m "')e amun") #ere !redi"ed and #a) n" u)ed " pur!'a)e "'e e7uipmen")
1r "'e BB3 !n"ra!" "'u-' repre)en"ed .* "'e re)pnden". De"ail) 1 ru"in-
)u!' amun") 'ave .een 'i-'li-'"ed in "'e earlier par" 1 "'i) Eud-men".
9I. +n m* vie#, #'e"'er &AV :, and "'er )'are'lder) !n!erned #' 'ad
al) inve)"ed )me amun" in re)pnden" %.1 'ave demanded an* re1und r made
an* -rievan!e a-ain)" re)pnden" %.1 r n" #uld n" a11e!" "'e !laim) made .*
"'e pe"i"iner #'i!' i) .a)ed n "'e 1al)e repre)en"a"in and 1r "'er rea)n).
99. +n m* vie# Dr Tulzapurkar learned )enir !un)el i) ri-'" in 'i) )u.mi))in
"'a" "'e 7ue)"in a) " #'e"'er "'e ar.i"ral "ri.unal .ein- le)) )ui"a.le r i" #uld
.e mre !nvenien" r apprpria"e 1r a !ivil !ur" " de!ide alle-a"in) 1 1raud
e"!., i) n" a -rund availa.le under Se!"in DI ;2<;a< 1 "'e Ar.i"ra"in A!". +n
m* vie#, nl* )u!' !a)e) #'i!' !ann" de!ided .* "'e ar.i"ra"r) !an .e !vered
.* Se!"in DI;2<;a<. +n m* vie# "'e di)pu"e rai)ed .* "'e pe"i"iner .e1re "'e
ar.i"ral "ri.unal rela"ed " "'e ri-'") 1 "'e pe"i"iner in per)nam and !uld .e
!n)idered .* "'e ar.i"ral "ri.unal and "'ere i) n .ar !n"empla"ed under Se!"in
DI ;2<;a< in "'e ar.i"ral "ri.unal ad(udi!a"in- upn )u!' di)pu"e. +n m* vie#,
pe"i"iner 'a) made u" a !a)e 1r in"erim mea)ure). +n ne 1 "'e ar.i"ra"in
pr!eedin- u" 1 "'e "# ar.i"ral "ri.unal 'a) alread* rendered a 1inal a#ard. +n
m* vie# pe"i"iner 'a) -d !'an!e) 1 )u!!eedin- in "'e ar.i"ra"in pr!eedin-).
+1 "'e in"erim mea)ure) are n" -ran"ed in 1avur 1 "'e pe"i"iner, even i1 pe"i"iner
)u!!eed) in ar.i"ra"in pr!eedin-), pe"i"iner #uld n" .e a.le " re!ver an*
amun" 1rm "'e re)pnden"). +n m* vie#, .alan!e 1 !nvenien!e i) in 1avur 1
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"'e pe"i"iner and a-ain)" "'e re)pnden").
100. Pur)uan" " "'e ad in"erim rder pa))ed .* "'i) 3ur", re)pnden") 'ave .een
alread* re)"rained 1rm #i"'dra#in- "'e amun" l*in- in "'e a!!un" 1 "'e
re)pnden") #i"' 3rpra"in .ank "'er "'an "'e amun" all#ed " .e
#i"'dra#n. T'e )aid rder i) in 1r!e )in!e :/I/2012. Re)pnden") 'ave n" 1iled
an* appeal a-ain)" "'e )aid rder. T'e re)pnden") 'ave rendered an under"akin-
" re"urn "'e amun" all#ed " .e #i"'dra#n .* "'i) 3ur" in "'i) pr!eedin-).
Re)pnden") 'ave al) n" paid 1ee) 1 "'e ar.i"ral "ri.unal. Pur)uan" " "'e rder
pa))ed .* Divi)in Ben!' n :0/01/201:, re)pnden" %.1 'a) .een dire!"ed "
dep)i" R). 1.D0 !re) e7uivalen" " :,:5,000 Sin-apre dllar) #i"' "'e
3rpra"in .ank in a )epara"e 1i4ed dep)i" "#ard) arrear) 1 !n"ri.u"in 1
ar.i"ra"in 1ee) " .e paid .* re)pnden" %.1 and 'a) dire!"ed "'a" "'e )aid rder
i) pa))ed #i"'u" pre(udi!e " ri-'") and !n"en"in) 1 "'e par"ie) keepin- all
!n"en"in) pen. + a!!rdin-l* pa)) "'e 1ll#in- rder.
101. Re)pnden") are re)"rained 1rm #i"'dra#in- "'e amun") re"ained .* "'e
3rpra"in Bank in "'e a!!un") 1 "'e re)pnden") " "'e e4"en" 1 5SD 60
millin. +n "'e even" 1 "'e .alan!e in "'e )aid a!!un") #i"' "'e 3rpra"in .ank
1 "'e re)pnden") le)) "'an 5SD 60 millin, re)pnden") are dire!"ed " dep)i"
"'e )'r"1all in "'e )aid a!!un" ) a) " main"ain "'e .alan!e 1 5SD 60 millin
#i"'in 1ur #eek) 1rm "da*.
102. Ar.i"ra"in pe"i"in i) di)p)ed 1 in a1re)aid "erm). % rder a) " !)").
10:. +n vie# 1 di)p)al 1 "'e ar.i"ra"in pe"i"in, 3'am.er Summn) n. 5H: 1
201: de) n" )urvive and i) a!!rdin-l* di)p)ed 1.

!R.D. DHANU4A- J.&
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1961 CJ (SC) 5
SUPREME COURT OF INDIA (FROM BOMBAY)
K. N. Wanchoo, K. C. Das Gupta, J. C. Shah, JJ
Abdul Kadir Shamsuddin Bubere
...Appellants
Versus
Madhav Prabhakar Oak
...Respondents

Civil Appeal No 305 of 1958, decided on 20 September 1961
(A) Arbitration Law - Arbitration Act, 1940, Section 20(1), Section 20(4) - Application
to file in Court arbitration agreement - Application to file in Court arbitration
agreement
Result: Appeal dismissed.
Eq. Citation: AIR 1962 SC 406, 1962 BLR 267, 1962 (1) SCJ 620, 1962 (3) SCR
702, 1962 (64) BLR 267

[+] Cases Referred (7)

JUDGEMENT

[+] Case Cited In (41)

WANCHOO, J. :

1. This is an appeal on a certificate granted by the Bombay High Court. An
application was filed under S. 20 of the Arbitration Act, No. X of 1940, (hereinafter
referred to as the Act) by the two respondents against the appellant praying that the
arbitration agreement dated February 27, 1953 may be filed in court, arbitration be
made accordingly, and thereafter a decree in terms of the award made by the
arbitrator be passed.

2. The circumstances in which the application was made were these. There is a
forest in village Done, which belonged to three persons, namely, Madhav Prabhakar
Oak, respondent No. 1, (hereinafter referred to as Oak), Babaji Chandrarao Rane,
uncle of the second respondent (hereinafter referred to as Babaji), Gajanan Babaji
Rane (hereinafter called. Gajanan). Oak had six annas share in the forest, Babaji
eight annas share and Gajanan two annas share. It may be mentioned that
Gajanan's share was purchased by the appellant in November 1944. On October 22,
1948, a partnership agreement was arrived at between Babaji, Oak and the
appellant for cutting the forest. The value of the forest for the three owners was fixed
at Rs. 60,000 which was to be divided amongst them according to their shares. The
work of cutting was to be done by the appellant who appears to be an experienced
forest contractor. Any income over and above the expenditure incurred in the cutting
and the value of the forest was to be divided equally amongst the three partners; if
there was any loss that was also to be borne equally by them. It appears, however,
that nothing was done in pursuance of this agreement, apparently because a suit
had been filed by two persons with whom there was an earlier agreement of 1939
about the cutting of this very forest. It appears also that in March 1951 Gajanan and
the appellant executed another document in which the price of Gajanan's share to be
paid by the appellant was raised. In May 1951 Babaji died. Consequently in May
1952 another agreement was executed between the appellant and the heirs of
Babaji, namely, Anant Yeshwant Rane respondent No. 2 (hereinafter referred to as
Anant), Ambikabai, widow of Babaji, Gajanan and his mother Devubai and Oak. This
agreement referred to the earlier agreement of 1948 and was obviously necessitated
on account of the death of Babaji. It confirmed that agreement and stated that it was
drawn up because of the necessity of Anant, Ambikabai and Devubai being made
parties to the settlement in the agreement of 1948. The consideration of Rs. 60,000
was divided between the owners and Rs. 51,000 was to go to Oak, Anant and
Ambikabai and the rest represented the price for which the appellant had purchase
the share of Gajanan and his mother Devubai. Nothing seems to have been done in
pursuance of this agreement either. In October 1952, another agreement was
entered into between the appellant, the two respondents and one Khan Bahadur
Divkar by which the cutting of the forest was assigned to Divkar for a sum of Rs,
1,00,000. This amount was to be divided between the appellant and the
respondents; Anant was to get Rs. 44,800, Oak Rs. 35,700 and the appellant Rs.
19,500. Divkar was unable to carry out his part of this agreement. Eventually on
February 27, 1953, an agreement was entered into between the appellant and the
two respondents as Divkar had not carried out his agreement. It was agreed
between the parties that the dispute with Divkar be got decided and the forest be cut
in accordance with the agreements of October 22, 1948 and May 5, 1952. The
operative part of this agreement also contained a term for arbitration in Cl. 6(4),
which is in these terms :-
"Should there be a dispute between the parties in connection with this
agreement or in connection with the agreements dated 22-10-1948 and 5-5-
1952 or regarding Khan Bahadur Divkar's money or the jungle cutting or export
or in any other way, the same should be got decided in accordance with the
current law by appointing arbitrators and through them."
3. It appears that thereafter the forest was cut by the appellant; but disputes appear
to have arisen between the parties to the last agreement of 1953; consequently
respondents Nos. 1 and 2 filed the application under S, 20 of the Act in August 1954.

4. The case put forward by the respondents in the application was that the appellant,
though he carried on the work of cutting the forest, did not carry out the terms of the
agreement of 1953 and showed the statements of accounts intermittently to the
respondents. It was alleged that the accounts were not made up to date, and in spite
of the respondent's demand that the accounts should be made up to date, the
appellant did not do so. The respondents also demanded that the goods remaining
to be sold should be disposed of with the consent of all; but this was also not agreed
to by the appellant. The statement of accounts shown to the respondent was not
complete and correct. The whole stock of goods was not to be found in the
statement of accounts and the debit items seemed to have been exaggerated and
were not correct; and consequently it was not possible to carry on the business of
partnership with the appellant and it was necessary to dissolve the partnership and
take accounts of the partnership. It was also said that the appointment of a receiver
had become necessary in order to protect the interest of the respondents and that an
injunction should be granted restraining the appellant from removing the stock in
balance so as to avoid misappropriation thereof pending the appointment of a
receiver. The respondents prayed that the agreement of February 1953 for referring
the dispute in connection with the agreements dated October 22, 1948 and February
27, 1953, between them and the appellant should be filed in court and necessary
directions made by the court.

5. The application was opposed by the appellant. The agreement of February27,
1953, was admitted by the appellant; but it was contended that no reference should
be made to the arbitrator and a number of grounds were urged in that connection. It
is not necessary for purposes of this appeal to refer to all the grounds in reply to the
application of the respondents. We shall only refer to those grounds which have
been urged before us and they are as below :-
(1) Ambikabai, widow of Babaji, admittedly had a share in the forest and as she
was not a party to the application there could be no reference to arbitration as
the whole dispute as to the forest would not be before the arbitrators.
(2) The respondents only desired in their application that the disputes arising
out of the agreements of October 22, 1948 and February 27, 1953 be referred
to arbitration but did not include the agreement of May 5, 1952, and therefore
no reference should be made as it would be a piecemeal reference resulting in
splitting up the cause of action.
(3) The dispute sought to be referred was not covered by the arbitration clause.
(4) The respondents had made allegations of fraud against the appellant in
their application and that was also a ground for not referring the dispute to
arbitration.
6. It may be mentioned that the respondents later applied for the appointment of a
receiver, and that application was allowed. Eventually, however, the trial court
dismissed the application under S, 20 on two main grounds, namely, (i) that all the
parties who were necessary in the matter of accounting were not parties to the
application under S. 20, and (ii) that there were allegations of fraud against the
appellant and therefore this was not a fit case to be referred to arbitration.

7. This was followed by an appeal to the High court by the present respondents.
The High court held that even though Ambikabai had a share in the forest and
was not a party to the application under S. 20 her interest was sufficiently
represented by Anant and therefore it could not be said that all the parties
interested in accounting would not be before the arbitrator, on the question of
fraud, the High Court took the view that the allegations made in this case were
not allegations of fraud at all and in any case were not such allegations of fraud
as would make it incumbent on the court to exercise its discretion in favour of
the appellant and refuse to refer the dispute to arbitration. An argument was
also raised before the High Court that thee appellant was challenging the very
existence of partnership between the parties and this question could not be
referred to arbitration. The High Court, however, repelled this contention and
held that the existence of the arbitration agreement was never challenged by
the appellant. It therefore allowed the appeal and ordered that the arbitration
agreement be filed in court and consequent proceedings be taken thereafter.
As judgement was of reversal, the amount involved was more than Rs. 10,000
and the order was a final order, the High Court granted a certificate; and that is
how the matter has come up before us.
8. Learned counsel for the appellant has urged four points before us, which we have
already indicated earlier. We propose to deal with these points one by one.

9. Re. (1)- It is urged that Ambikabai admittedly has a share in this forest and as she
is no party to the application under S, 20 no reference should be made, as the entire
dispute arising out of the agreements of October 22, 1948 and May 5, 1952, would
not be before the arbitrator. This argument found favour with the trial court but the
High Court repelled it holding that Ambikabai's interest was sufficiently represented
in arbitration proceedings by Anant. If that is so, there could be no objection on this
ground to the filing of the arbitration agreement; but even if that is not so, we are of
opinion that that is no ground in the circumstances of this case for not referring the
dispute to arbitration in accordance with the arbitration clause in the agreement of
February 27, 1953. Babaji had a brother Yeshwant and Anant is his son. It is not
disputed that Babaji was holding eight annas share in the forest on behalf of the
J oint family consisting of himself and his nephew Anant, and his personal share in it
was half, i.e., four annas. On his death his personal share would go to his widow
Ambikabai while Anant would have the remaining half. Anant appears to be the
eldest male member of the family now alive. Therefore, in a sense the High Court
was right in holding that Anant would represent the entire interest of the joint family
which consisted of eight annas share in this forest. But even if this was not so
because at one stage at any rate Ambikabai was also a party to the agreement of
May 5, 1952, we can see no reason why the dispute as between the appellant and
the respondents should not be referred to arbitration. The share of Ambikabai as we
have already stated above is not in dispute. Ambikabai was not a party to the
agreement of February 27, 1953, though she was a party to the agreement dated
May 5, 1952. The appellant was also a party to the earlier agreement of May 1952
and knew that Ambikabai had a share in this forest. Even so, he entered into the
agreement of February 27, 1953, with the two respondents and agreed to the
disputes between him and the respondents being referred to arbitration. We fall to
see how he can now say that the disputes between him and the respondents should
not be referred to arbitration because Ambikabai was not a party to the agreement of
February 1953. The reason why Ambikabai did not join in the application under S. 20
was that she was not a party to the agreement of February 1953 and could not
therefore apply under S,.20; but that is no reason why the dispute between the
appellant and the two respondents should not be referred to arbitration, particularly
when there is no dispute as to the share of Ambikabai in this forest. All that would
happen would be that the arbitrator would decide the dispute between the appellant
and the respondents and give an award leaving out the share of Ambikabai, the
extent of which is not in dispute. The matter might have been different if the share of
Ambikabai was in dispute; but as the share of Ambikabai and its extent are not in
dispute, the arbitrator can go into accounts and give an award with respect to the
parties before him, leaving out the four annas share of Ambikabai. We see no reason
why where parties entered into an arbitration agreement of this nature knowing full
well that there was another person who was interested but leaving her out, the court
should not send the parties to the forum chosen by them, even if the other person
who might be interested and whose share is not in dispute cannot be made party
before the arbitrator. We are therefore of opinion that even if Anant may not be able
to represent the interest of Ambikabai in the arbitration proceedings that will follow in
this case, that is no reason for not giving effect to the arbitration clause in the
agreement of February 27, 1953 as between the parties to that agreement. The
contention therefore of the appellant on this point must fail

10. Re. (2)- It is true that in the application under S.20 the respondents have asked
for the agreement of February 27, 1953 to be filed in court and the dispute in
connection with that agreement and the agreement of October 22, 1948 to be
referred to arbitration, and have not specifically asked for reference of the agreement
of May 5, 1952, even though it was included in the agreement of February 1953. But
as already indicated, the agreement of May 1952 is merely in confirmation of the
agreement of 1948 and when the arbitrator goes into the dispute between the parties
he will necessarily have to refer to the agreement of May 1952, so far as it is
relevant. The agreement of May 1952 had to be entered into because of the death of
Babaji. It is merely supplementary to the main agreement which is of October 22,
1948. In the circumstances when the dispute is referred to the arbitrator under the
agreement of February 1953, with respect to the agreement of October 1948, the
arbitrator will be entitled to look into the confirmatory agreement of 1952, for the
main agreement was that of October 1948. We agree with the view of the trial court
in this connection that the pleadings in muffasal courts cannot be considered too
strictly; even the trial court was prepared in case the matter should be referred to
arbitrator to ask the arbitrator to consider also the agreement of May 1952. The
agreement of May 1952 would have to be considered by any arbitrator who is going
into the dispute arising out of the agreement of October 1948. In the circumstances
we are of opinion that it cannot be said that the reference desired in this case is
piecemeal and splits up the cause of action. The contention of the appellant on this
score must also fail.

11. Re. (3)- The contention under this head is that the dispute sought to be referred
was not covered by the arbitration clause. We have already set out the arbitration
clause and as we read it we find it is of very wide import, It provides for reference to
arbitration of all disputes arising out of agreements of October 22, 1948, May 5, 1952
and February 27, 1953. It also provides for reference of all disputes arising out of the
jungle cutting or export or in any other way in view of this wide language of the
arbitration clause it cannot be possibly said that the dispute. which has been raised
in the present case is outside the terms of the arbitration clause. Reliance in this
connection was however placed on the opening words of Cl. 6 of the agreement of
February 1953, which say that the agreement was arrived at "without prejudice to the
contents of the letter sent by the first party (namely, the appellant) to the second and
third parties (namely, the respondents) on the date 7th of February, 1953, and
without the first party (namely, the appellant) withdrawing the said letter". This letter
contained certain contentions of the appellant based on the agreements between the
parties. These words do not in our opinion in any way cut down the wide amplitude
of the arbitration clause; at the best they can only mean that the appellant was free
to raise the contentions which he had raised in this letter for the decision of the
arbitrator. Nor do these words confine the agreement of February, 1953, only to the
dispute arising out of the agreement with Divkar as contended for on behalf of the
appellant. We are therefore of opinion that the dispute raised in this case is covered
by the arbitration clause, and the contention of the appellant in this behalf must also
fail.

12. Re. (4)- We now turn to the question of fraud. The contention on behalf of the
appellant in this connection is that serious allegations of fraud have been made
against him and therefore this is not a case which should be referred to arbitration.
Sub-section (4) of S. 20 lays down that where no sufficient cause is shown, the court
shall order the agreement to be filed and make an order of reference to the
arbitrator. It is therefore open to a court under this sub-section, where sufficient
cause is shown not to order the agreement to be flied and not to make a reference to
the arbitrator. The words of this sub-section leave a wide discretion in the court to
consider whether an order for filing the agreement should be made and a reference
made accordingly. It is neither necessary nor desirable to lay down in general terms
what would be sufficient cause which would entitle a court to refuse to order the
agreement to be filed and thus refuse to make an order of reference. The court will
have to decide on the facts of each case whether sufficient cause has been made
out for not ordering the agreement to be filed and not making the order of reference.

13. Learned counsel for the appellant however, contends that serious allegation of
fraud has been generally held by court to be a sufficient ground for not ordering the
agreement to be filed and not making the reference. He relies in this connection on
the leading case of Russell v. Russell (1880j 14 Ch D 471. That was a case of
partnership between two brothers containing an arbitration clause. One of the
brothers gave notice to the other for dissolving the partnership. The other brother
thereupon brought an action alleging various charges of fraud and claiming that the
notice should be declared void and no announcement of the dissolution of
partnership should be allowed. Thereupon the brother who was charged with fraud
moved that the matter be referred to arbitration under the arbitration clause. That
was resisted and the court held that "in a case where fraud is charged, the court will
in general refuse to send the dispute to arbitration if the party charged with the fraud
desires a public inquiry. But where the objection to arbitration is by the party
charging the fraud, the court will not necessarily accede to it, and will never do so
unless a prima facie case of fraud is proved".

14. This case certainly lays down that where allegations of fraud are made, the party
against whom such allegations are made may successfully resist the reference to
arbitration.

15. The principle of this case was followed in Osenton and Co. v. J ohnston, 1942 AC
130. In that case a firm of estate agents and surveyors resisted the reference to an
official referee under S. 89 of the J udicature Act of 1925. The decision of an official
referee could not be called in question by appeal or otherwise except on a point of
law as provided by S. 1 of the Administration of J ustice Act, 1932. The firm therefore
contended that as their professional reputation was involved the matter should not
be referred to the official referee and the House of Lords held that as the
professional reputation of the appellants was involved, that question should not be
left to the final decision without appeal of an official referee but should be tried before
the normal tribunal of a High Court with a jury.

16. The principle of these cases has also been followed in India with reference to
cases coming under Ss. 20 and 34 of the Act. (See, Manindra Chandra Nandy v. H.
V. Low and Co. Ltd., AIR 1924 Cal 796, Narsingh Prasad v. Dhanraj Mills, ILR 21
Pat 544 : (AIR1943 Pat 53), Union of India v. Firm Vishydha Ghee Vyopar Mandal,
ILR (1953) 1 All 423 : (AIR 1951 All 541) Sudhangsu Bhattacharjee v. Ruplekha
Pictures, AIR 1954 Cal 281.

17. There is no doubt that where serious allegations of fraud are made against a
party and the party who is charged with fraud desires that the matter should be tried
in open court, that would be a sufficient cause for the court not to order an arbitration
agreement to be filed and not to make the reference. But it is not every allegation
imputing some kind of dishonesty, particularly in matters of accounts, which would
be enough to dispose a court to take the matter out of the forum which the parties
themselves have chosen. This to our mind is clear even from the decision in
Russell's case (1880) 14 Ch D 471. In that case there were allegations of
constructive and actual fraud by one brother against the other and it was in those
circumstances that the court made the observations to which we have referred
above. Even so, the learned Master of the Rolls also observed in the course of the
judgment at p. 476 as follows.
"Why should it be necessarily beyond the purview of this contract to refer to an
arbitrator questions of account, even when those questions do involve
misconduct amounting even to dishonesty on the part of some partner ? I do
not see it. I do not say that in many cases which I will come to in the second
branch of the case before the Court, the Court may not, in the exercise of its
discretion, refuse to interfere; but it does not appear to me to follow of
necessity that this clause was not intended to apply to all questions, even
including questions either imputing moral dishonesty or moral misconduct to
one or other of the parties."
We are clearly of opinion that merely because some allegations have been
made that accounts are not correct or that certain items are exaggerated and
so on that is not enough to induce the court to refuse to make a reference to
arbitration. It is only in cases of allegations of fraud of a serious nature that the
court will refuse as decided in Russell's case (1880) 14 Ch D 471 to order an
arbitration agreement to be filed and will not make a reference. We may in this
connection refer to Minifie v. Railway Passengers Assurance Co., (1881) 44 LT
552. There the question was whether certain proceedings should be stayed;
and it was held that not withstanding the fact that the issue and the evidence in
support of it might bear upon the conduct of a certain person and of those who
attended him and so might involve a question similar to that of fraud or no
fraud, that was no ground for refusing stay. It is only when serious allegations
of fraud are made which it is desirable should be tried in open court that a court
would be justified in refusing to order the arbitration agreement to be filed and
in refusing to make a reference.
18. Let us therefore turn to the allegations in this case to see what their nature is.
These allegations are that (i) the accounts were not made up to date, and even on
demand by the respondents, the appellant did not bring them up to date; (ii) the
statements of accounts which were shown by the appellant were not complete and
did not appear to be correct; and (iii) the whole stock of goods was not to be found
therein and the debit items appeared to be exaggerated and incorrect. These were
the only allegations with respect to the accounts in the application and they do not in
our opinion amount to serious allegations of fraud against the appellant which would
necessitate that there should be a trial in open court. Such allegation as to the
correctness or otherwise of entries in the accounts are often made in accounts suits;
but they in our opinion are not such serious allegations of fraud as to induce a court
to order that the arbitration agreement should not be filed and no reference should
be made. Besides these allegations as to accounts the respondents also said that an
injunction should be granted restraining the appellant from removing the stock so as
to avoid misappropriation thereof pending the appointment of a receiver. That was
not an actual allegation of misappropriation; it merely said that the respondents were
afraid that there might be misappropriation in future unless an injunction was issued
and a receiver appointed. Further in the affidavit in support of the application for
appointment of receiver after referring to their own conclusions from the state of
accounts, the respondents said that they had not received the true and complete
account of the felling of the jungle, ready goods, the goods sold and the goods in
balance from the appellant. They also said that they suspected that on their
conclusions from the accounts supplied to them, there might be misappropriation of
the goods and of money. They further alleged that in the accounts shown to them,
the sale of charcoal was shown at a rate much lower than the prevailing market rate
and under these circumstances the respondents apprehended that if the work of the
sale of goods remained in the hand of the appellant the real price of the goods would
not be realised. There is no allegation, however, that in actual fact the appellant had
made secret profits by selling goods at a higher price and showing a lower price in
the account. The respondents pointed the entries in the account which owed the
lower rate of the sale price in support of their apprehension that if the work of sale of
goods remained in the hand of the appellant the real price would not in future be
realised. A perusal therefore of the application under S. 20 and the affidavit filed in
support of the application for appointment of receiver does not disclose any serious
allegations of fraud against the appellant. What it discloses is that the respondents
were not satisfied with the accounts submitted to them and were suspicious that they
did not disclose the true and complete state of affairs. Such allegations, as we have
already remarked are often made in account suits and if they were to be sufficient
ground for not referring an account suit to arbitration, on the ground of fraud, hardly
any arbitration agreement in a matter in which accounting would be necessary could
be referred to arbitration. That is why we emphasise that even in the leading case of
Russel, (1880) 14 Ch D 471, the learned Master of the Rolls was at pains to point
out that it could not necessarily be said in a case of accounts that no reference to
arbitration should be made, even though questions relating to accounts which might
involve misconduct amounting even to dishonesty on the part of some partner might
arise in the arbitration proceedings and even cases where moral dishonesty or moral
misconduct is attributed to one party or the other might be referred to arbitration. It
seems to us that every allegation tending to suggest or imply moral dishonesty or
moral misconduct in the matter of keeping accounts would not amount to such
serious allegation of fraud as would impel a court to refuse to order the arbitration
agreement to be filed and refuse to make a reference. Looking to the allegations
which have been made in this case we are of opinion that there are no such serious
allegations of fraud in this case as would be sufficient for the court to say that there
is sufficient cause for not referring the dispute to arbitration. This contention of the
appellant must also therefore fail.

19. The appeal therefore fails and is hereby dismissed with costs.
Appeal dismissed.

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