IN THE SUPREME COURT OF INDIA

At New Delhi.

Civil Appeal No. 1437/2019

(Article 136 of the Constitution of India, 1950 read with

Order XXI Rule I of the Supreme Court Rules, 2013)

Indian Premier Bank Pvt Ltd … Appellant

v.

Wakanda Investment Corporation … Respondent

Written Submissions on behalf of the Appellant,

A41

i
 TABLE OF CONTENTS

TABLE OF AUTHORITIES ..........................................................Error! Bookmark not defined.

STATEMENT OF JURISDICTION ..............................................Error! Bookmark not defined.

STATEMENT OF FACTS ........................................................................................................ vi7

ISSUES RAISED........................................................................................................................... x

SUMMARY OF ARGUMENTS .....................................................Error! Bookmark not defined.

ARGUMETNS ADVANCED ....................................................................................................... 1

I. BOMBAY HIGH COURT HAS JURISDICTION UNDER SECTION 34 OF THE

ARBITRATION AND CONCILIATION ACT 1996 ..................................................................... 1

[A] THE VENUE AND SEAT OF ARBITRATION IS SAME --------------------------------------------------- 1

[B] BOMBAY HIGH COURT HAS JURISDICTION TO DECIDE THIS MATTER ------------------------------ 2

IIA. THE BANK DID NOT WAIVE ITS RIGHT TO OBJECT TO THE JURISDICTION OF
TRIBUNAL TO DETERMINE THE RESTITUTION CLAIM. ................................................... 2

[A] THE ARBITRATION AND CONCILIATION ACT 1996 WOULD BE APPLIED IN THIS MATTER -------- 3

[B] PROCEDURE OF ARBITRATION WOULD BE GOVERNED BY THE LCIA RULES ----------------------- 3

IIB. JURISDICTION OF TRIBUNAL OVER THE RESTITUTION CLAIM ............................. 3

[A] THE RESTITUTION CLAIM IS OUTSIDE THE SCOPE OF ARBITRATION ------------------------------- 4

[B] THE PARTIES NEVER INTENDED TO ARBITRATE UPON CLAIM OF SUCH NATURE ----------------- 4

IIIA. THE BANK WAS ENTITLED TO CONTEST THE JURISDCTION OF THE

TRIBUNAL .................................................................................................................................... 5

[A] THE TRIBUNAL HAD INHERENT LACK OF JURISDICTION--------------------------------------------- 5

[B] THE TORT CLAIM BY WIC DOES NOT FALL WITHIN THE SCOPE OF CLAUSE 20 OF EDA. ---------- 5

[C] THE PROCEEDINGS UNDER SECTION 16 AND 30 ARE NOT RELATED TO EACH OTHER. ----------- 6

IIIB. THE TRIBUNAL DID NOT HAVE THE JURISDICTION TO DETERMINE THE TORT
CLAIM ............................................................................................................................................ 7
ii
 [A]THE TORT CLAIM DOES NOT FALL WITHIN THE SCOPE OF CLAUSE 20.----------------------------- 7

[B] THE TORT CLAIM PRECEDED THE CONTRACT -------------------------------------------------------- 7

[C]THE TORT CLAIM BY THE WIC IS NOT RELATED TO THE AGREEMENT BETWEEN TWO PARTIES -- 8

[IIIC] THE TRIBUNA’S CONCLUSION THAT THE TORT CLAIM IS GOVERNED BY

WAKANDAN LAW IS CONTRARY TO THE PUBLIC POLICY. ............................................ 9

[A] THE AWARD OF ARBITRATION TRIBUNAL WAS AGAINST THE PUBLIC POLICY. ------------------- 9

[B] DOCTRINE OF DOUBLE ACTIONABILITY IS A FUNDAMENTAL POLICY OF INDIA. ----------------- 9

IIID. THE TRIBUNAL’S AWARD OF THE DAMAGES UNDER SECTION 4 AND 18 OF

THE 2006 ACT WAS CONTRARY TO PUBLIC POLICY. ...................................................... 11

[A] THERE IS VIOLATION OF PRINCIPAL OF NATURAL JUSTICE ---------------------------------------- 11

[B] THE PROVISION TO INCLUDE TREBLE DAMAGES IS UNREASONABLE ----------------------------- 11

[C] THE DAMAGES ARE PUNITIVE IN NATURE ----------------------------------------------------------- 12

iii
 TABLE OF AUTHORITIES

CASES
(2009)5 SCC 212 -------------------------------------------------------------------------------------------- xix
A v. B [2017] EWHC 3417 (Comm) [40]. --------------------------------------------------------------- xi
Alan Redfern et al., ‘Redfern and Hunter on International Arbitration’ (OUP 2009) --------------- x
Associate Builders v. Delhi Development Authority, (2015) 3 SCC 49 ---------------------- xvii, xix
Bharat Aluminium Co. v. Kaiser Aluminium Technical Service, (2012) 9 SCC 648. -------------- x
Bharat Heavy Electrical Pvt. Ltd. v. Assam State Electricity Board (1989) SCC OnLine Gau 138.
-------------------------------------------------------------------------------------------------------------- xiv
Bharti Airtel Limited v. Union of India, 231 (2016) DLT 71 ---------------------------------------- xvii
BMW of North America Inc. v. Gore 517 U.S. 559 (1996) ------------------------------------------- xix
CDC v Akzo, [2015] QB 906. ------------------------------------------------------------------------------ xv
Delhi Transport Corporation v. DTC Mazdoor Union 1991 AIR 101, 1990 SCR Supl. (1) 142 xix
Donohue v.Armco Inc & Ors [2001] UKHL 64 --------------------------------------------------------- xv
Dozco India (P) Ltd. v. Doosan Infracore Co. Ltd., (2011) 6 SCC 179 ------------------------------ ix
Ethiopian Oilseeds and Pulses Export Corp v. Rio Del Mar Foods, [1990] 1 Lloyd’s Rep 86. --xii
Fiona Trust & Holding Corp v Privalov, [2007] UKHL 40 -------------------------------------------xii
Indian Performing Right Society ... vs Debashis Patnaik And Ors. MIPR 2007 (1) 323, 2007
(34) PTC 201 Del------------------------------------------------------------------------------------------ xx
Ledgard v. Bull (1886) I.L.R. 9 All. 191 ----------------------------------------------------------------- xiii
Lion Engineering Consultants v. State of M. P. (2018) 16 SCC 758. ------------------------------- xiv
Mangilal vs Pramod And Anr. on 8 January, 1988 2 (1988) ACC 306 ------------------------------ xx
Michael Wilson & Partners v. Emmott, [2018] EWHCA Civ 51. ------------------------------------ xv
Ram Harakh Singh v mumtaz Hussain ------------------------------------------------------------------- xiii
Ryanair Ltd v Esso Italiana Srl [2015] 1 All ER (Comm --------------------------------------------- xvi
Shashoua v Sharma, [2009] EWHC Comm -------------------------------------------------------------- ix
Sojuznefteexport v. JOC Oil Ltd, XV Y.B. Comm. Arb. 384 (Bermuda Ct. App. 1989) (1990 - xiii
Ssangyong Engineering & Construction Co. Ltd. v. National Highways Authority of India
(NHAI Civil Appeal No. 4779 of 2019 -------------------------------------------------------------- xvii
Swastik Gas Private Limited vs Indian Oil Corporation Limited, (2013) SCC Online SC 564 -- ix
iv
Tracer Research Corp v National Environmental Services Company --------------------------------xii
Union of India v. Salween Timber Construction, 1969 (2) SCR 224 --------------------------------- xv
Zenith Drug & Allied Agencies Pvt. Ltd. v. M/s. Nicholas Piramal India Ltd., 2019 SCC OnLine
SC 946 ------------------------------------------------------------------------------------------------------ ix
STATUTES
Arbitration and Conciliation Act 1996 ------------------------------------------------------------------- xiv
Indian Contract Act 1872 ---------------------------------------------------------------------------------- xiii
RULES
LCIA Rules 2014 --------------------------------------------------------------------------------------------- xi

v
 STATEMENT OF JURISDICTION
Civil Appeal no. 1437 of 2019

1. The appellants have approached this Hon’ble court under article 136 of the Constitution
of India, 1950. subsequently leave has been granted by the court.
2. The respondent humbly submits to the jurisdiction of this Hon’ble court.

vi
 STATEMENT OF FACTS

Parties to the Dispute

Indian Premier Bank Pvt. Ltd. is a private Limited bank owned by three businessmen and
incorporated in India with offices in Bangalore and Delhi. It has unusual business model to offer
attractive deposit rates and loans to high risk investments.
Wakanda Investment Corporation [“WIC”]is a sovereign wealth Fund created by the government
of Wakanda. It was created by Wakanda Investment Corporation Act 2013 with the aim of
investing the assets entrusted to it with a view to generate attractive returns for the long-term
benefit and welfare of the citizens of Wakanda. The head WIC is directly appointed by the Prime
Minister of Wakanda.
Invitation to the Leading Banks
WIC invited various leading banks to find suitable investment opportunities to invest the money
entrusted by the government of Wakanda. Indian Premier Bank was one of the banks who were
shortlisted for final selection. The promoters of bank advised the officials of WIC to invest a
minimum of £100 million in an exotic equity derivative product.
The Equity Derivative Agreement
The bank was successful to convince the officials of WIC to invest £100 million in the equity
derivative product. This product involved client making an upfront payment to bank in return to
notional exposure to certain publicly shares which can be chosen by the client itself. The shares
chosen by the party needs to attain a strike price, failing which would lead to losing the whole
money invested by the party.
On 18th October 2014, the bank and WIC entered into an Equity Derivative Agreement [“EDA”].
The EDA had a term of 30 months which meant that the sum payable to the WIC would be
dependent on the share price of three underliers on maturity date, ie 18 April 2017.
Clause 19 of the EDA read as follows:
The agreement shall be governed by the Indian law.
Clause 20 of the EDA read as follows:
1) Any dispute arising under or out of this agreement shall be referred to and resolved by
arbitration.
2) The venue of arbitration shall be Mumbai, India
vii
 3) For the avoidance of doubt, the law governing the arbitration agreement in this clause 20
shall be Indian law and the Indian Arbitration and Conciliation Act, 1996 shall be
applicable.
Measures Taken by U.S.A.
The underliers chosen by the WIC were heavily exposed to the USA economy, which lead to
reduction in the price of the shares of the underliers due to protectionist measures taken by the
U.S.A. government. On April 18 2017, the bank confirmed that none of the underliers chosen by
the WIC reached the strike price and accordingly nothing was payable to the WIC. This led to a
direct loss of £100 million to the WIC.
The Arbitration Proceedings
On 18 August 2017, the WIC served a request for arbitration on the bank for two claims. The first
claim was that the agreement entered between WIC and Bank was void as WIC lacked capacity
under Wakandan law to enter into such an agreement. The second claim made by the WIC was
that the bank was liable for using unfair trade practices in persuading WIC to enter into an
agreement. Another application was also filed by the WIC in the city civil court in Bangalore to
seek certain interim measures against the bank under section 9 of the Arbitration and Conciliation
Act 1996. The court granted relief to the WIC ex parte.
The tribunal gave its final award on 5 June 2018 and decided that:
1) Tribunal have jurisdiction as it is mentioned in the clause 20 of the agreement.
2) The agreement between the WIC and Bank is void due to incapacity of one party to enter
into a contract.
3) The appropriate rule of law to apply is the governing law of the country where the alleged
loss or damage happened, which is Wakanda.
4) The WIC is entitled to damages of £2 million under section 4 and further a sum of £6
million under section 18 of the Arbitration and Conciliation Act 1996.
The Bombay High Court Proceedings
On 19 June 2018, the bank filed an application in the Bombay High Court challenging the award
under section 34 of the 1996 act. The bank contended that the tribunal had no jurisdiction to
determine any claim made by WIC.
The Commercial Division, Bombay High Court, on 19 October 2018, held that as to banks claim
a) Bank is entitled to contest the tribunal’s jurisdiction under section 34; b) The Bombay High
viii
court have exclusive jurisdiction to deal with all the applications arising out the arbitration
agreement as the seat of arbitration was Mumbai.
The WIC appealed to the Commercial Appellate Division, which allowed the appeal and set aside
the earlier decision. It held that any application under section 34 could be made to only City Civil
Court, Bangalore as Bombay High court don’t have jurisdiction to hear this matter.
The Present Petitions
Bank filed a petition seeking special leave to appeal to the Supreme Court. The Supreme Court
granted leave. Hence, the appeals will now be heard by this Hon’ble court.

ix
 ISSUES RAISED
I.
Did the Bombay High Court have jurisdiction to determine Bank’s application under section 34?
II.
Did the bank waive its objection to the tribunal’s jurisdiction to determine the restitution claim
by failing to raise it in the Response?
III.
If not, did the tribunal have jurisdiction to determine the claim?
IV,
Was the bank entitled to contest the jurisdiction of the Tribunal for the first time in its
application under section 34, not having done so in the Response, Statement of Defence or at any
other stage in the arbitration?
V.
If so, did the Tribunal have Jurisdiction to determine the claim?
VI.
Was the Tribunal’s conclusion that the tort claim is governed by Wakandan law contrary to
public policy?

x
 SUMMARY OF ARGUMENTS

I. BOMBAY HIGH COURT HAS JURISDICTION UNDER SECTION 34 OF THE

ARBITRATION AND CONCILIATION ACT 1996

Section 34 in part 1 of the act provides for differentiation between the Subject matter of a suit
and Subject matter of the arbitration. law governing the venue and law governing the contract
are the same and law governing the arbitration agreement and venue are same. Parties to an
agreement can choose a neutral place to decide over the disputes arising out of an agreement.
The place decided by the parties in the present case is Mumbai but the cause of action arise in
Bangalore. It can be said that Mumbai was merely a neutral seat of the arbitration and there
was no relation with cause of action.

II A. THE BANK DID NOT WAIVE ITS RIGHT TO OBJECT TO THE JURISDICTION
OF TRIBUNAL TO DETERMINE THE RESTITUTION CLAIM.

The bank used the right to challenge the jurisdiction and reserved its right in the response sent
to the WIC. Article 16(2) clearly states that there would be no objection to the arbitral tribunal
once there is submission of statement of defense by the parties. bank did not forfeit its right to
raise objection as the phrase ‘as early as possible’ does not have any substantive value and it
won’t lead to any sanctions if it is not followed.

B. JURISDICTION OF TRIBUNAL OVER THE RESTITUTION CLAIM.

The request claimed by the WIC regarding EDA being void does not have any substantive
value as it was clearly stated that only Indian Law would apply to govern the agreement. It is
submitted that the claim of restitution is beyond the scope of arbitration agreement. The
wording arising under is considered narrow in contrast to the wording “arising out of” the
contract. On denying the validity of EDA, the WIC cannot seek claim under arbitration
agreement as it is also invalid.

III A. THE BANK WAS ENTITLED TO CONTEST THE JURISDCTION OF THE

TRIBUNAL
xi
 There was no objection regarding the jurisdiction of the tribunal from bank’s side. 1 The bank
did not object to the jurisdiction in statement of defense, response or at any stage of the
arbitration proceeding. the argument that the subject matter is not arbitrable can be challenged
as the inherent lack of jurisdiction. The LCIA rules govern the procedure of the arbitration but
the claim being out of the scope of EDA is not anywhere governed by the LCIA rules and the
Indian law which is the substantive law governing the present arbitration agreement.

B. THE TRIBUNAL DID NOT HAVE THE JURISDICTION TO DETERMINE THE TORT
CLAIM.

The tribunal did not have jurisdiction to determine the tort claim as arbitration agreement is
also invalidated due to agreement being void ab initio. The clause 20 of the agreement is
written in a way which negates the possibility of including any claim other than contractual
claims. In the present agreement between the Bank and WIC, the duty of obligation breached
is not governed by the agreement between the parties.

C. THE TRIBUNAL’S CONCLUSION THAT THE TORT CLAIM IS GOVERNED BY

WAKANDAN LAW IS CONTRARY TO THE PUBLIC POLICY.

The public policy is considered one of the fundamental policies in India. In the present case,
there is violation of public policy. The award of the arbitration tribunal did not follow the
notions of the justice as tort is a civil branch of law in India and it is not actionable. The
decision given by the tribunal was in contravention to the double actionability doctine and was
solely based on the principle of ‘lex loci delicti.’

D. THE TRIBUNAL’S AWARD OF THE DAMAGES UNDER SECTION 4 AND 18 OF

THE 2006 ACT WAS CONTRARY TO PUBLIC POLICY.

The award of damages of £8 million given by the tribunal are contrary to the public policy.
The application of doctrine of double actionability would lead to the bank not liable to pay
damages to the WIC. the treble damages of £2 million ordered by the tribunal are not anywhere
supported by any Indian statue. there is no loss occurred by WIC under tort. Hence, it is

1
17(2), fact on record.
xii
summited that the award of £8 million is punitive in nature and it would be unreasonable if the
plaintiff is directed to pay as there is no loss suffered by the WIC.

xiii
 ARGUMETNS ADVANCED

I. BOMBAY HIGH COURT HAS JURISDICTION UNDER SECTION 34 OF THE ARBITRATION AND

CONCILIATION ACT 1996

1. Section 20(1) and 20(3) of the Arbitration and Conciliation act, 1996 provides for distinction
between Seat and Venue of the arbitration.2 The Supreme Court of India held in the case of Swastik
Gas Private Limited v. Indian Oil Corporation Limited that the jurisdiction of a court would be
determined by the subject matter of the arbitration.3 Section 34 in part 1 of the act provides for
differentiation between the Subject matter of a suit and Subject matter of the arbitration. 4 There
are two reasons which can support claim of the bank that Bombay High Court has jurisdiction in
this matter. First, the seat and venue of the arbitration is same in this case. [A] and second, the
courts of the place where seat of arbitration is situated have the jurisdiction over the disputes
arising out of that arbitration. [B]

[A] THE VENUE AND SEAT OF ARBITRATION IS SAME

2. The venue of arbitration in this case is Mumbai. The Supreme Court of India laid down some
conditions regarding the distinction between seat and arbitration in the case of Union of India v.
Hardy Exploration and Production (India) Inc. The conditions being, law governing the venue and
law governing the contract are the same and law governing the arbitration agreement and venue
are same. Since the law governing the contract is Indian Law and the venue of arbitration is in
Mumbai, the seat of arbitration would be Mumbai.5 The Supreme court held that if the law
governing the arbitration agreement and venue are same then the seat and venue would be same.6

3. There are judgements given by various courts of our country in which it has been held that the
venue and seat of the arbitration are same. According to the facts of the present case, the law

2
Shashoua v Sharma, [2009] EWHC Comm
3
Swastik Gas Private Limited vs Indian Oil Corporation Limited, (2013) SCC Online SC 564
4
Zenith Drug & Allied Agencies Pvt. Ltd. v. M/s. Nicholas Piramal India Ltd., 2019 SCC OnLine SC 946
5
Point 8, Fact-on-record
6
Dozco India (P) Ltd. v. Doosan Infracore Co. Ltd., (2011) 6 SCC 179
1
 governing the arbitration agreement is Indian Law so we can apply the test laid down in the above
cases.7

[B] BOMBAY HIGH COURT HAS JURISDICTION TO DECIDE THIS MATTER

4. The court of a place has the exclusive jurisdiction over the disputes arising out of an arbitration
proceeding of same place.8 In the landmark judgement of Indus mobile distribution Private Ltd v.
Datawind Innovations Private Ltd. it was held that the parties to an agreement can choose a neutral
place to decide over the disputes arising out of an agreement. It was held that the court of that
place would have exclusive jurisdiction even if the cause of action does not arise in that place.
Here the venue of arbitration was Mumbai, which was decided by both the parties. Hence, it can
be said that the Bombay High Court has exclusive jurisdiction to decide this matter.

5. It was held in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services that a place has
been given the designation of seat to avoid the dispute regarding the jurisdiction of courts.9 The
place decided by the parties in the present case is Mumbai but the cause of action arise in
Bangalore. It can be said that Mumbai was merely a neutral seat of the arbitration and there was
no relation with cause of action.

IIA. THE BANK DID NOT WAIVE ITS RIGHT TO OBJECT TO THE JURISDICTION
OF TRIBUNAL TO DETERMINE THE RESTITUTION CLAIM.
6. The bank responded to the claims made by the WIC when it requested for the arbitration. In the
statement of defense, it used the right to challenge the jurisdiction and reserved its right in the
response sent to the WIC.10

7. There are mainly two reasons which can support the claim of bank that it did not waive its right to
object to the jurisdiction of the tribunal to determine the restitution claim. The first one being that
Arbitration and Conciliation Act 1996 would be applied in this matter [A] and second one is that

7
Sharma (n3).
8
Alan Redfern et al., ‘Redfern and Hunter on International Arbitration’ (OUP 2009)
9
Bharat Aluminium Co. v. Kaiser Aluminium Technical Service, (2012) 9 SCC 648.
10
Point 14, Facts-on-record
2
 the rules of London Court of Arbitration (LCIA) would govern the procedure in which the
arbitration would be conducted. [B]

[A] THE ARBITRATION AND CONCILIATION ACT 1996 WOULD BE APPLIED IN

THIS MATTER

8. Article 16(2) clearly states that there would be no objection to the arbitral tribunal once there is
submission of statement of defense by the parties. Furthermore, the clause 20(5) of the agreement
signed by both the parties clearly states that there would be application of Arbitration and
Conciliation Act 1996 in the arbitration proceedings. Hence, if the rule applied in the arbitration
proceeding is Arbitration and Conciliation act 1996, it can be said that the provisions of this act
would overrule if there is any contravention with the arbitration rules.

[B] PROCEDURE OF ARBITRATION WOULD BE GOVERNED BY THE LCIA RULES

9. According to the facts of this case, it has been stated that the conduct of the arbitration proceedings
would be governed by the LCIA rules.11 It can be proved that the bank acted in accordance with
the rules of LCIA. Hence, the LCIA rules would govern the statement of Defense, Request and
response. Article 23.3 of LCIA rules states that “a party can object to jurisdiction of the arbitral
tribunal as early as possible but the objection should not later than the time for its statement of
defense.”12 We can prove that bank did not forfeit its right to raise objection as the phrase ‘as early
as possible’ does not have any substantive value and it won’t lead to any sanctions if it is not
followed.13

10. Therefore, it can be stated that bank is neither in contravention to Arbitration and Conciliation Act
1996 nor to the LCIA rules. Hence, the bank did not waive its right to object to the jurisdiction of
tribunal to determine the restitution claim.

IIB. JURISDICTION OF TRIBUNAL OVER THE RESTITUTION CLAIM

11
Point 14, Facts-on-record
12
LCIA Rules 2014, art 23.3
13
A v. B [2017] EWHC 3417 (Comm) [40].
3
 The request claimed by the WIC regarding EDA being void does not have any substantive
value as it was clearly stated that only Indian Law would apply to govern the agreement.
11. It has been mentioned in the agreement that the dispute would be resolved by arbitration14 Hence,
it is submitted that the arbitration tribunal does not have jurisdiction over the claim of restitution
made by the WIC for two reasons. First being that the restitution claim is outside the scope of
agreement signed by the parties [A]. Second being that the parties never intended to arbitrate upon
claim of such nature [B].

[A] THE RESTITUTION CLAIM IS OUTSIDE THE SCOPE OF ARBITRATION

12. It has been mentioned in the clause 20 of the EDA that “any dispute arising out of this agreement
shall be referred to and resolved by arbitration.”15 In the case of Tracer Research Corp v. National
Environment Services Company.16 it was held that the term ‘arising out’ is considered narrow
clause in terms of its scope and if an arbitration clause has narrow wording, it can cover matters
dealing with the interpretation of the agreement. The wording arising under is considered narrow
in contrast to the wording “arising out of” the contract. 17 Hence, the claim for restitution neither
arises under not out of the agreement. Therefore, it is submitted that the claim of restitution is
beyond the scope of arbitration agreement.

[B] THE PARTIES NEVER INTENDED TO ARBITRATE UPON CLAIM OF SUCH NATURE

13. The claim made by the WIC was not anywhere mentioned in the agreement signed by both the
parties. If there was intention on their part to bring this claim, they should have added it in the
agreement itself. The values of clarity sense hold that there is a need on part of the parties to bring
claim of certain nature within the ambit of exclusive jurisdiction clause by categorically and
expressly mentioning it in the agreement.18 In the present case, it is nowhere mentioned about
restitution claim in the agreement.19 Therefore, it is submitted that parties never intended to include
the claim of such nature in their agreement.

14
8, Fact on record
15
ibid.
16
Tracer Research Corp v National Environmental Services Company
17
Ethiopian Oilseeds and Pulses Export Corp v. Rio Del Mar Foods, [1990] 1 Lloyd’s Rep 86.
18
Fiona Trust & Holding Corp v Privalov, [2007] UKHL 40
19
8, fact on record.
4
14. It is also claimed by the WIC that the arbitration agreement is invalid. It was held in
Sojuznefteexport v. JOC Oil Ltd, XV Y.B. Comm20 that whenever the contract is non-existent, the
arbitration clause cannot be applied in those agreements. If the claim made by the WIC regarding
the incapacity is accepted then there was no contract in first place.21 On denying the validity of
EDA, the WIC cannot seek claim under arbitration agreement as it is also invalid.

IIIA. THE BANK WAS ENTITLED TO CONTEST THE JURISDCTION OF THE

TRIBUNAL
15. There was no objection regarding the jurisdiction of the tribunal from bank’s side.22 The bank did
not object to the jurisdiction in statement of defense, response or at any stage of the arbitration
proceeding. Therefore, it is submitted that there can be challenge before the court under section 34
of the Arbitration and Conciliation Act 1996 for several reasons. first: the tribunal had an inherent
lack of jurisdiction [A]. Second: the tort claim of WIC does not fall under the ambit of clause 20
of the agreement signed by the parties [B]. Third: the proceedings under sections 16 and 34 are
different [C].

[A] THE TRIBUNAL HAD INHERENT LACK OF JURISDICTION

16. In the present case, the tort claim is not maintainable hence, the challenge can be allowed during
the proceeding filed under section 34 of the Arbitration and Conciliation Act 1996 even if the issue
is not raised on the tribunal under section 16 which empowers the tribunal to rule. In the case of
Ram Harakh Singh v mumtaz Hussain that the objection to the matter which can affect the
jurisdiction can be challenged at any stage.23 In this regard, the argument that the subject matter is
not arbitrable can be challenged as the inherent lack of jurisdiction.24

[B] THE TORT CLAIM BY WIC DOES NOT FALL WITHIN THE SCOPE OF CLAUSE 20 OF EDA.

20
Sojuznefteexport v. JOC Oil Ltd, XV Y.B. Comm. Arb. 384 (Bermuda Ct. App. 1989) (1990
21
section 11, Indian Contract Act 1872
22
17(2), fact on record.
23
Ram Harakh Singh v mumtaz Hussain
24
Ledgard v. Bull (1886) I.L.R. 9 All. 191
5
17. A tort claim can be arbitrable if it is related to and arises out of the contract, ie the tort claim arises
out of the terms of contract or is consequential upon breach thereof.25 In the present case, the terms
of the contract does not include any provision for occurrence of tort claim filed by WIC and it arise
solely due to the 2006 act.26 It is hereby submitted that the tort claim does not come under the
ambit of clause 20 of the agreement. The LCIA rules govern the procedure of the arbitration but
the claim being out of the scope of EDA is not anywhere governed by the LCIA rules and the
Indian law which is the substantive law governing the present arbitration agreement.27

[C] THE PROCEEDINGS UNDER SECTION 16 AND 30 ARE NOT RELATED TO EACH OTHER.

18. In the case of Lion Engineering Consultants v. State of M.P. it was held that the proceedings
conducted under section 34 and section 16 of the Arbitration and Conciliation Act 1996 are
independent of each other.28 The procedure of arbitration laid down in section 16(2) of the
agreement does not prohibit a new application under section 34 of the act because clause (2)(a)(iv)
of section 34 of the act allows the courts to set aside a decision which is outside the scope of the
arbitration and both the proceedings are independent of each other.29

25
Bharat Heavy Electrical Pvt. Ltd. v. Assam State Electricity Board (1989) SCC OnLine Gau 138.
25
Citation 2, facts on record.
26
Clause 20, fact on record.
27
Ibid.
28
Lion Engineering Consultants v. State of M. P. (2018) 16 SCC 758.
29
Arbitration and Conciliation Act 1996, S. 34(2)(a)(iv).
6
 IIIB. THE TRIBUNAL DID NOT HAVE THE JURISDICTION TO DETERMINE THE
TORT CLAIM
19. The WIC claimed that the bank indulged in unfair practices to persuade it to enter into the
agreement.30 It is submitted that the tribunal did not have jurisdiction to determine the tort claim
as arbitration agreement is also invalidated due to agreement being void ab initio. There arise
multiple arguments to prove that the tribunal did not have the jurisdiction to determine the tort
claim. The first argument is that the tort claim does not fall within the scope of clause 20[A].
Second being that the tort claim preceded the contract[B]. The Third submission being tort claim
by WIC is not anyway related to agreement entered by both parties[C].

[A]THE TORT CLAIM DOES NOT FALL WITHIN THE SCOPE OF CLAUSE 20.

20. There is a need on part of the court to examine the intention of the parties to know whether a
tortious claim can fall under the ambit of an arbitration agreement.31 According to the landmark
judgement of CDC v Akzo, no party can have intention to include tortious claim when it is entering
into the arbitration agreement. The clause 20 of the agreement is written in a way which negates
the possibility of including any claim other than contractual claims. It was held by Judge M in the
case of Domansa & ors v Derin Shipping and Trading Co Inc,32 that the parties should explicitly
provide for including non-contractual claims in their agreement.

[B] THE TORT CLAIM PRECEDED THE CONTRACT

21. In the case of Donohue v.Armco Inc & Ors.33 that the parties do not intend to include claims
preceding the contract while using the phrase ‘ arising out of’ in an arbitration contract. The parties
would have mentioned about the tortious claim if they envisaged to govern by the arbitration
clause.34 The reasoning for this is that parties need to comply before any contract on the subject is
drawn up. In the present agreement between the Bank and WIC, the duty of obligation breached
is not governed by the agreement between the parties. Hence, the tort claim filed by the WIC does
not fall within the scope of clause 20 of the EDA.

30
13, Fact on record.
31
Michael Wilson & Partners v. Emmott, [2018] EWHCA Civ 51.
32
CDC v Akzo, [2015] QB 906.
33
Donohue v.Armco Inc & Ors [2001] UKHL 64
34
Union of India v. Salween Timber Construction, 1969 (2) SCR 224
7
 [C]THE TORT CLAIM BY THE WIC IS NOT RELATED TO THE AGREEMENT BETWEEN TWO PARTIES

22. There is a need to determine whether the statutory tort claimed by the WIC is directly related to
the claim that parties would have contracted and the claim would have fall within the scope of the
arbitration clause.35 This determination test was laid down in the case of Ryanair Ltd v Esso
Italiana Srl. In the present case, the clause 19 and 20 of the agreement are the standard forms of
agreement followed by the bank.36 The clause 19 of the agreement explicitly talks about agreement
being governed by the Indian law. In such case there is no possibility that parties can assume the
disputes arising out of an agreement being governed by the law of some other country (Wakanda
in this case). Thus, it cannot be assumed that the parties to the contract had intention to include the
tort claim within the scope of clause 20 of the agreement.

23. Even if we rely on the position of common law which was earlier relied for construction of
individual terms in the clause of the agreement, the tortious liability claimed by the WIC still falls
outside the scope of clause 20 of the EDA.

35
Ryanair Ltd v Esso Italiana Srl [2015] 1 All ER (Comm
36
8,fact on record.
8
 [IIIC] THE TRIBUNAL’S CONCLUSION THAT THE TORT CLAIM IS GOVERNED BY
WAKANDAN LAW IS CONTRARY TO THE PUBLIC POLICY.
24. The public policy is considered one of the fundamental policies in India. It was held in Bharti
Airtel Limited v. Union of India that the public policy is fundamental to Indian justice and
morality.37 If there is violation of public policy, it means that it is the contravention of the basic
notions of the Indian law.38 In the present case, there is violation of public policy and it can be
proved by two reasons. first one being that the award of the arbitration tribunal was against the
public policy of India [A]. second being the use of doctrine of double actionability in India to
determine the choice of law rule when tort is committed abroad and if there is violation under tort
it means that there is contravention to the public policy [B].

[A] THE AWARD OF ARBITRATION TRIBUNAL WAS AGAINST THE PUBLIC POLICY.

25. An award can be said to be contrary to basic justice when it shocks the basic conscience of the
courts in the country.39 It is hereby submitted that the award of the arbitration tribunal did not
followed the notions of the justice as tort is a civil branch of law in India and it is not actionable
per se. The application of doctrine of double actionability would lead to the bank not liable to pay
damages to the WIC. The decision of tribunal in accordance with the section 4 of the 2006 act of
Wakanda is not binding on the bank as it blatant violation of principle of justice and have the
potential to shock the conscience of the court. Therefore, it is submitted that the award of the
arbitration tribunal is in contravention to the public policy of India.

[B] DOCTRINE OF DOUBLE ACTIONABILITY IS A FUNDAMENTAL POLICY OF INDIA.

26. In the cases where there is tort committed outside India, the Indian courts apply the common law
principle derived from the judgements of the court of UK. Under the common law principle, it was
held in the case of Phillips v. Eyre. that the doctrine of double actionability would be applied when
there are various claims put forth under the tort law. The case of Mauritius Holdings v. Unitech
Limited laid down the method of interpretation of the Fundamental policy of Indian law.
According to this judgement, the fundamental policy should be interpreted in a manner that is

37
Bharti Airtel Limited v. Union of India, 231 (2016) DLT 71
38
Ssangyong Engineering & Construction Co. Ltd. v. National Highways Authority of India (NHAI Civil Appeal
No. 4779 of 2019
39
Associate Builders v. Delhi Development Authority, (2015) 3 SCC 49
9
includes only substantive and fundamental legislative policies. The principle of double actionabiity
means that the tort claim by the WIC should be actionable in the lex loci delicti and lex fori. Thus,
the decision given by the tribunal was in contravention to the double actionability doctine and was
solely based on the principle of ‘lex loci delicti’.

10
 IIID. THE TRIBUNAL’S AWARD OF THE DAMAGES UNDER SECTION 4 AND 18 OF
THE 2006 ACT WAS CONTRARY TO PUBLIC POLICY.
27. The award of damages of £8 million given by the tribunal are contrary to the public policy because
of several reasons. First: There is violation of principal of natural justice[A].

28. Second: The provision to include treble damages is completely unreasonable [B]. Third: The
damages are punitive in nature [C].

[A] THERE IS VIOLATION OF PRINCIPAL OF NATURAL JUSTICE

29. . The most important principle of natural justice, “audi alteram partem” has been violated in the
present case. The principle of natural justice is regarded as the essence of Indian Judicial system
and they come under the fundamental policy of India.40 There was an obligation on the arbitration
tribunal to adjudicate according to the principle of natural justice.41

30. There should be equal opportunity given to both the parties in every case. The infringement of this
leads to the violation of principal of ‘audi alteram partem’. In the present case, the court awarded
damages of £2 million to the WIC without hearing the bank’s side which clearly violates the
principle of natural justice means there is violation of fundamental policy of India.

[B] THE PROVISION TO INCLUDE TREBLE DAMAGES IS UNREASONABLE

31. The damages, if given by a court should be reasonable and determined on the degree of
reprehensibility of conduct.42 In the present case even if we assume that damages are allowed, the
quantum of the damages cannot be justified. In the case of re destruction of private and public
properties v. state of AP.43 the Supreme Court laid down some certain guidelines which needs to
be adopted to assess the damages. The guidelines are: “Exemplary damages may be awarded to an
extent not greater than twice the amount of the damages liable to be paid.”

40
Delhi Transport Corporation v. DTC Mazdoor Union 1991 AIR 101, 1990 SCR Supl. (1) 142
41
Associate Builders v. Delhi Development Authority, (2015) 3 SCC 49
42
BMW of North America Inc. v. Gore 517 U.S. 559 (1996)
43
(2009)5 SCC 212
11
32. In the present case, the treble damages of £2 million ordered by the tribunal are not anywhere
supported by any Indian statue. The tribunal while awarding the damages of £2 million gave the
reasoning that it would act as the deterrence which in our humble opinion is unjust and
unreasonable.

[C] THE DAMAGES ARE PUNITIVE IN NATURE

33. The damages awarded in torts are generally compensatory in nature, there are only few exceptions
in which punitive damages are awarded.44 The main aim to award damages to a person is to put
the plaintiff in the same position as if the tort has not been committed.45 According to the ratio
given by the judges in the landmark judgement of Common Cause v. Union of India.46 the very
nature of the compensation paid in tort law is compensatory ie “the damages are awarded to the
parties to compensate for the losses caused on account of violation of interest of one person.”

34. In the present case, there is no loss occurred by WIC under tort. Hence, it is summited that the
award of £8 million is punitive in nature and it would be unreasonable if the plaintiff is directed to
pay as there is no loss suffered by the WIC.

35. Hence, it is humbly submitted that the Tribunal’s award of damages under section 4 and 18 of the
2006 Act was contrary to the public policy.

44
Mangilal vs Pramod And Anr. on 8 January, 1988 2 (1988) ACC 306
45
Indian Performing Right Society ... vs Debashis Patnaik And Ors. MIPR 2007 (1) 323, 2007 (34) PTC
201 Del
46

12
 PRAYER
Wherefore in light of the issues raised, arguments advanced and authorities cited, it is humbly
prayed that this Honourable Court may be pleased to adjudge and declare that:
[I] The Bombay High Court had the jurisdiction to determine the Bank’s application under
section 34;
[II – A] The Bank did not waive its objection to the Tribunal’s jurisdiction to determine
the
restitution claim by failing to raise it in the Response;
[II – B] The Tribunal did not have jurisdiction to determine the restitution claim;
[III – A] The Bank was entitled to contest the jurisdiction of the Tribunal for the first time
in
its application under section 34;
[III – B] The Tribunal did not have jurisdiction to determine the tort claim;
[III – C] The Tribunal’s conclusion that the tort claim is governed by Wakandan law was
contrary to public policy;
[III – D] The Tribunal’s award of damages under sections 4 and/or 18 of the 2006 Act was
contrary to public policy;
And pass any other order that this Honorable Court may deem fit in the interests of justice,
equity and good conscience.
All of which is humbly prayed,
A41
Counsel for the Appellant.

13