University Moot Court Selection (Winter Edition, 2019)

W-01
DR. RAM MANOHAR LOHIYA NATIONAL LAW UNIVERSITY,
LUCKNOWUNIVERSITY MOOT COURT SELECTION (WINTER EDITION, 2019)

BEFORE,
THE HON’BLE SUPREME COURT OF INDIA

ARBITRATION PETITION NO. 226/2015AND ARBITRATION PETITION NO. 74/2016

UNDER SECTION 11 OF THE ARBITRATION AND CONCILIATION ACT, 1996

INDIAN NATIONAL CONSTRUCTION CORPORATION LIMITED...........….. PETITIONER

V

VALENTINA SPA & ANR……………………………………..........................RESPONDENTS

clubbed with

SPECIAL LEAVE PETITION (C) NO. 18443/2018 UNDER ART 136 OF THE
CONSTITUTION OF INDIA

INDIAN NATIONAL CONSTRUCTION CORPORATION LIMITED...........….. APPELLANT

V

VALENTINA SPA & ANR……………………………………..........................RESPONDENTS

clubbed with

SPECIAL LEAVE PETITION (C) NO. 17248/2018 UNDER ART 136 OF THE
CONSTITUTION OF INDIA

INDIAN NATIONAL CONSTRUCTION CORPORATION LIMITED...........….. APPELLANT

V

VALENTINA SPA & ANR……………………………………..........................RESPONDENTS

UPON SUBMISSION TO THE HON’BLE SUPREME COURT OF INDIA

MEMORIAL FILED ON BEHALF OF THE RESPONDENTS

Memorial filed on behalf of the Respondents 1

 University Moot Court Selection (Winter Edition, 2019)

TABLE OF CONTENTS

LIST OF ABBREVIATIONS .................................................................................................... IV

INDEX OF AUTHORITIES ....................................................................................................... V
STATEMENT OF JURISDICTION ...................................................................................... VIII
STATEMENT OF FACTS ......................................................................................................... IX
STATEMENT OF ISSUES ........................................................................................................ XI
SUMMARY OF ARGUMENTS .............................................................................................. XII
ARGUMENTS ADVANCED ....................................................................................................... 1
I :ARBITRATION PETITION NO. 226/2015AND ARBITRATION PETITION NO.
74/2016 ....................................................................................................................................... 1
(1.1) That the hon’ble supreme court does not have the jurisdiction to entertain the petition
under section 11 of the act in so far as it relates to the appointment of an arbitrator under the
off- shore contracts. ................................................................................................................ 1
(1.1.1) The meaning of off shore contract in the present context ....................................... 1
(1.1.2)Scope of international commercial arbitration ........................................................ 1
(1.2) That the arbitration proceedings cannot be consolidated to appoint a common
tribunal consisting of a sole arbitrator .................................................................................... 3
(1.2.1) Designated parties to the contract .......................................................................... 3
(1.2.2) Subject matter of the contracts ................................................................................ 4
(1.2.3)Arbitration clause present in the contracts .............................................................. 5
(1.2.4) Composition of arbitral tribunal ............................................................................. 5
II. SPECIAL LEAVE PETITION (C) NO. 18443/2018 ........................................................ 6

(2.1) It is humbly submitted that in the cases where the arbitrator has been appointed by a
particular court under section 11 of the indian arbitration and conciliation act 1996, the
mandate of the tribunal need not be extended by the same court ........................................... 6
(2.1.1) That section 2(1)(e) of the arbitration and conciliation act 1996 does not recognize
supreme court as a “court” ................................................................................................ 6
(2.1.2) Section 11 of the arbitration and concilation act of 1996 does not come under the
scope of section 42 of the arbitration and conciliation act of 1996 ................................. 11

Memorial filed on behalf of the Respondents II

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(2.1.3) That the seat of arbitration was explicitly mentioned to be the high court of bombay
as mentioned in annexure 1 which gives the high court of bombay the exclusive jurisdiction
to hear the proceeding of extension of the arbitral award dated 23.03.2018. ................. 12
(2.1.4) That the function carried out by court under section 11 (6) cannot be challenged
under article 136 of the constitution of india.................................................................... 13
III. SPECIAL LEAVE PETITION (C) NO. 17248/2018 .................................................... 15
(3.1) The counsel humbly submits that the award dated 22 march 2018 is not liable to be set
aside under s. 34 of the act. §¶ .............................................................................................. 15
(3.1.1) The award is not contrary to the public policy of the country and is not subject to
the ground of patent illegality. .......................................................................................... 15
(3.1.2) The award cannot be held to be patently illegal ....................................................... 17
(3.2)The Court, under section 34, cannot ascertain whether the maintenance and agreement
was a paper contract .............................................................................................................. 17
(3.2.1) The Supreme Court cannot interfere with the award on merits ............................ 18
(3.2.2) The Supreme Court cannot interfere with a speaking award................................ 19
(3.2.3) The Maintenance Services Agreement is a valid contract binding on both parties
........................................................................................................................................... 19
Prayer ........................................................................................................................................ XIV

Memorial filed on behalf of the Respondents III

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LIST OF ABBREVIATIONS

ABBREVIATION FULL FORM

SCC Supreme Court Cases

Art. Article

INCCL Indian national construction corporation limited

Hon’ble Honorable

SC Supreme Court

HC High Court

Co Company

Ltd Limited

Corp Corporation

MoU Memorandum Of Understanding

Annex Annexure

Edn Edition

Ent Entry

Sch Schedule

Hon’ble Honorable

Anr Another

& And

PSU Public Sector Undertaking

Memorial filed on behalf of the Respondents IV

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INDEX OF AUTHORITIES

Cases

 Ador Samia (P.) Ltd. v. Peekay Holdings Ltd., (1999) 8 S.C.C. 572...................................... 14
 BCCI v. Kochi Cricket Pvt. Ltd., 2018 SCC onLine SC 232................................................... 16
 Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2016) 4 S.C.C. 126. . 13
 Bharat Coking Coal Ltd. v. Annapurna Construction,(2008) 6 S.C.C. 732. ............................ 7
 BrikramKishoreParida v. Penudhar Jena, A.I.R. 1976 Orissa 4. .......................................... 20
 Enercon (India) Ltd. v. Enercon Gmbh., (2014) 5 S.C.C. 1. .................................................. 13
 F.C.I. v. A.M. Ahmed & Co., (2001) 10 S.C.C. 532. .............................................................. 10
 Garhwal Mandal Vikas Nigam Ltd. v. Krishna Travel Agency, (2008) 6 S.C.C. 74. ............. 10
 Garhwal Mandal Vikas Nigam Ltd. v. Krishna Travel Agency, (2008) 6 S.C.C. 741 .............. 7
 Godara Construction Company v. State of Rajasthan And Anr., A.I.R 2004 Raj. 66. ........... 12
 Guru Nanak Foundation v. Rattan Singh & Sons, (1981) 4 S.C.C. 634................................... 7
 H.B.M. Print Ltd. v. Scantrans India (P.) Ltd., (2009) 17 S.C.C. 338. .................................. 11
 H.I.I. life care limited v. Happy Lectricals, (2018) SCC Online D.L. 9814. .......................... 12
 Hindustan Construction Co. Ltd. v. Governor of Orissa, A.I.R. 1995 SC 2189. ................... 18
 Hyder Consulting v. Governor for the state, 2007 (1) Arb LR 244 (Ori)............................... 19
 Indu Engg.& Textiles Ltd. v. DDA, (2001) 5 S.C.C. 691. ..................................................... 18
 Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited and
Ors., Civil Appeal Nos. 5370-5371 Of 2017. ......................................................................... 13
 Jatinder Nath v. Chopra Land Developers (P.) Ltd., (2007) 11 S.C.C. 453. ......................... 10
 Jindal Vijayanagar Steel v. Jindal Praxair Oxygen Co. Ltd., (2006) 11 S.C.C. 521. .............. 9
 Khaleel ahmed dakhani v. hatti gold mines, (2000) 3 S.C.C. 755. ......................................... 12
 Konkan Railway Corporation Ltd. and Anr. v. Rani Construction (P.) Ltd., 2001 (1) AWC 59
(SC). ........................................................................................................................................ 14
 Konkan Railway Corporation Ltd. v. Mehul Construction Co, (2000) 7 S.C.C 201. ............. 14
 M/S. Duro Felguera S.A v. M/S. Gangavaram Port Limited, (2017) 9 S.C.C. 729. ................. 4

Memorial filed on behalf of the Respondents V

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 M/S. Larsen And Toubro Limited v. Mumbai Metropolitan Region,2016 SCC Online Bom.
13348......................................................................................................................................... 2
 MCD v. Jagan Nath Ashok Kumar,(1987) 4 S.C.C. 497. ....................................................... 19
 National Aluminium Co. Ltd. v. Pressteel & Fabrications (P) Ltd., (2004) 1 S.C.C. 540. ...... 7
 Neycer India Ltd. v. GMB Ceramics Ltd., (2002) 9 S.C.C. 489. ............................................ 10
 ONGC v. Saw Pipes, (2003) 5 S.C.C. 705. ............................................................................. 17
 ONGC v. Saw Pipes,(2003) 5 S.C.C. 705. .............................................................................. 17
 Rajasthan SEB v. Universal Petro Chemicals Ltd., (2009) 1 S.C.C. (Civ.) 770. ................... 10
 Reliance Industries Ltd. v. Union of India,2014 SCC OnLine SC 279. ................................. 13
 Renusagar Power Co. v. General Electric Co., (1994) 1 S.C.C. 644..................................... 16
 Shri Lal Mahal Ltd. v. ProgettoGranoSpA,(2014) 2 S.C.C. 433. ........................................... 16
 State of M.P. v. Saith and Skelton (P.) Ltd., (1972) 1 S.C.C. 702. ........................................... 7
 State of W.B. v. Associated Contractors, (2015) 1 S.C.C. 32. ........................................ 7, 8, 11
 Subbayya Chettiar v. I.T. Commissioner, AIR 1951 SC 101. .................................................. 2
 Swastik Gases (P.) Ltd. v. Indian Oil Corpn. Ltd., (2013) 9 S.C.C. 32. ................................. 10
 T.D.M. Infrastructure Private v. Ue Development India Pvt. Ltd., (2008) 14 S.C.C. 271. .. 2, 4
 U.P. Hotels v. U.P. SEB., (1989) 1 S.C.C. 359....................................................................... 19
 Union of India v Hindustan motors ltd., (1987) 3 S.C.C. 458. ............................................... 19
 Union of India v. Chief Justice of High Court of Judicature at Allahabad, 2001 (3) A.W.C.
1912......................................................................................................................................... 14
 Union of India v. M. S. Sachdeva, 2000 (4) A.W.C. 2743...................................................... 14
 Union of India v. Reliance Industries Limited and Others,2014 SCC OnLine Del. 7562...... 13
 Venture Global Engineering LLC and Ors v. Tech Mahindra Ltd. & Ors., (2017)13 SCALE
91 SC....................................................................................................................................... 18

Statutes

 Indian Arbitration Act, 1940§ 2. ............................................................................................... 7

 Indian Arbitration and Conciliation Act 1996, §34 cl. 2A. ...................................................... 5
 Indian Arbitration and Conciliation Act, 1996 § 11. .............................................................. 11
 Indian Arbitration and Conciliation Act, 1996 § 2 ................................................................... 7

Memorial filed on behalf of the Respondents VI

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 Indian Arbitration and Conciliation Act, 1996 § 31. ................................................................ 9

 Indian Arbitration and Conciliation Act, 1996 § 37. ................................................................ 9
 Indian Arbitration and Conciliation Act, 1996 §11. ................................................................. 1
 Indian Arbitration and Conciliation Act, 1996 §2 ................................................................ 1, 3
 Indian Arbitration and Conciliation Act, 1996. ........................................................................ 7
 Indian Arbitration and Conciliation Act, 1996§ 11 .................................................................. 3
 Indian Arbitration and Conciliation Act, 1996§ 31. ............................................................... 10
 Indian Arbitration and Conciliation Act,1996 § 34. ................................................................. 9
 Indian Arbitration and Conciliation Act,1996 § 9. ................................................................... 9
 Indian Const. art. 136. ............................................................................................................. 14
 Indian Const. art.136. ............................................................................................................ 8, 9
Other Authorities
 Pricewaterhousecoopers, splitting an EPC contract, International Best Legal Practice in Project
and Construction Agreements, (2016). ..................................................................................... 4

Memorial filed on behalf of the Respondents VII

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STATEMENT OF JURISDICTION

ARBITRATION PETITION NO. 226/2015 AND ARBITRATION PETITION NO. 74/2016

In the present appeal under § 11 of the Arbitration and Conciliation Act, 1996 concerning the
matter of INCCL v. Valentina and others, the respondent humbly submits to the Jurisdiction of
this Hon’ble Court.

_______________________________________________

SPECIAL LEAVE PETITION (C) NO. 18443/2018

In the present appeal under Article 136 of the Constitution of India concerning the matter of
INCCL v. Valentina Group, the respondent humbly submits to the Jurisdiction of this Hon’ble
Court.

_______________________________________________

SPECIAL LEAVE PETITION (C) NO. 17248/2018

In the present appeal under Article 136 of the Constitution of India concerning the matter of
INCCL v. Valentina Group, the respondent humbly submits to the Jurisdiction of this Hon’ble
Court.

_______________________________________________

Memorial filed on behalf of the Respondents VIII

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STATEMENT OF FACTS

THE PARTIES

1. Valentina SpA is a company incorporated in Italy and provides engineering, procurement and
construction services in India and other parts of the world.
2. Valentina India is a subsidiary of Valentina and registered in India under the Companies Act,
1956
3. Valentina Group is an associate entity incorporated in Italy and gives assistance to Valentina.
4. Indian National Construction Corporation Limited is a limited liability company registered in
India under the Companies Act, 1956 and is a Public Sector Undertaking (PSU) under the laws
of India

SIGNING AND PERFORMANCE OF CONTRACTS

5. Three on shore (between Valentina and INCCL) and three off shore Contracts (between
Valentina India and INCCL) were signed between INCCL and Valentina for the construction
of Greenfield Integrated Steel Plant.
6. Work commenced late on March 2013 and was completed late on 10thjune 2015 which was
out of the stipulated time period of 30 months.
7. INCCL was in favour of 10% price reduction of the total contract. Valentine disagreed and
several reconciliatory meetings were done but INCCL refused to agree.
8. On 25th June 2015, INCCL entered into a maintenance and service contract with Valentina
Group.

PROCEEDINGS UNDER ON SHORE AND OFF SHORE CONTRACT

9. Valentina invoked arbitration clause under On Shore contract. INCCL opposed it since
according to it the contract provided for amicable settlement of issues. Valentine contended
that these meetings had already been tried thus request for arbitration wasn’t premature.
INCCL failed to respond and Valentina filed Arbitration Petition No 226/2015 under section
11 of the Arbitration Act for a sole arbitrator under the on-shore contract.

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10. Meanwhile, INCCL called for amicably settling the issues but Valentina refused to attend any
such meeting and thus INCCL filed Arbitration Petition No 74/2016 for a sole arbitrator for
both on shore and off shore contract.
11. Valentina opposed the appointment of common arbitrator under both the contracts and also
contended that Off shore contract would not lie before the SC.

PROCEEDINGS UNDER THE MAINTENANCE AND SERVICES CONTRACT

12. Valentina provided assistance in operation and maintenance for a period of 6 months but
INCCL refused to pay the amount since according to them it was a non-binding contract and
its obligations were already included in the on-shore contract and it was merely signed to
procure financial funds. Valentine opposed and arbitration was filed.
13. Sole arbitrator was appointed by the SC but the award which was in favour of Valentina was
delivered on 22ndMarch 2018 beyond the granted time period.
14. Valentina filed for extension of time under section 29 A before the HC of Bombay but INCCL
opposed it under section 42 which provided for all proceeding to be filed at one place.
15. HC rejected INCCL’s claims and extended the time period. Aggrieved, INCCL filed SLP No
18443/2018 before the SC.
16. Meanwhile INCCL filed before the HC for setting aside of the award. HCruled in the favour
of INCCL and set aside the award.
17. In response, Valentina filed an appeal before the division bench of the HC and the decision
of the single judge bench was overturned. Now INCCL filed SLP before SC against the
order of the division bench. Now the matter is to be heard before the SC.

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STATEMENT OF ISSUES

I :ARBITRATION PETITION NO. 226/2015AND ARBITRATION PETITION NO.

74/2016

(A) WHETHER THE HON’BLE SUPREME COURT HAS THE JURISDICTION TO ENTERTAIN THE PETITION
UNDER § 11 OF THE ACT SO FAR AS IT RELATES TO THE APPOINTMENT OF AN ARBITRATOR UNDER THE

OFF-SHORE CONTRACTS?

(B) WHETHER THE ARBITRATION PROCEEDINGS CAN BE CONSOLIDATED TO APPOINT A COMMON

TRIBUNAL CONSISTING OF A SOLE ARBITRATOR IN THE PRESENT FACTS AND CIRCUMSTANCES?

II. SPECIAL LEAVE PETITION (C) NO. 18443/2018

WHETHER, IN CASES WHERE THE ARBITRATOR IS APPOINTED BY A PARTICULAR COURT UNDER § 11

OF THE ARBITRATION ACT, THE MANDATE OF THE TRIBUNAL WOULD ALSO ONLY HAVE TO BE

EXTENDED BY THE SAME COURT IN VIEW OF SECTION 42?

III. SPECIAL LEAVE PETITION (C) NO. 17248/2018

WHETHER THE AWARD DATED 22 MARCH 2018 IS LIABLE TO BE SET ASIDE UNDER § 34 OF THE ACT?
IN PARTICULAR:

Memorial filed on behalf of the Respondents XI

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SUMMARY OF ARGUMENTS

I : ARBITRATION PETITION NO. 226/2015 AND ARBITRATION PETITION NO.

74/2016

A. That the hon’ble supreme court does not have the jurisdiction to entertain the petition
under § 11 of the act in so far as it relates to the appointment of an arbitrator under the off-
shore contracts.

It is humbly submitted that Supreme Court of India does not have the jurisdiction to entertain the
petition for appointing an arbitrator under the off-shore contracts under § 11 of the Indian
Arbitration and Conciliation Act, 1996 (including amendments). This can be substantiated by
applying § 11 and 2 of the Indian Arbitration and Conciliation Act,1996 which would prove that
Supreme Court cannot appoint an arbitrator in the case of off shore contracts.

B. That the arbitration proceedings cannot be consolidated to appoint a common tribunal

consisting of a sole arbitrator.

It is humbly submitted that arbitration proceedings can be consolidated to appoint a common

tribunal consisting of a sole arbitrator in the present facts and circumstances. The on shore and off
shore contracts have different functions and scope of work present so it is not possible to
consolidate the proceedings as they require different considerations for the arbitral award to be
awarded.

II. SPECIAL LEAVE PETITION (C) NO. 18443/2018

It is humbly submitted that in the cases where the arbitrator has been appointed by a particular
court under § 11 of the Indian arbitration and conciliation act 1996, the mandate of the tribunal
need not be extended by the same court.

It is humbly submitted before the Supreme Court of India that the mandate of the arbitral award
dated 23.03.2018 need to be extended by the Supreme Court under § 42 of the Indian Arbitration
and Conciliation Act of 1996 since it has appointed the arbitrator under section 11 of the Indian

Memorial filed on behalf of the Respondents XII

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arbitration and conciliation Act. Also, the jurisdiction to hear the extension of mandate would lie
with the high court of Bombay since it was explicitly mentioned under the Annexure 3 that the
seat of arbitration shall be Mumbai, India.

III. SPECIAL LEAVE PETITION (C) NO. 17248/2018

A. It is humbly submitted before the Hon’ble Supreme Court that the award dated 22 march
2018 is not in contravention of the public policy of India and is not patently illegal.

The counsel humbly submits that the award delivered by the sole arbitrator in proceedings under
the Maintenance Services Agreement is not in contravention of the public policy of India as it does
not violate the statutory provisions. The award has been delivered after consideration of facts and
evidence and is reasonably concluded to. Hence, it is not patently illegal.

B. It is humbly submitted that the court, under §34 of the act, cannot ascertain whether the
maintenance services agreement is a paper agreement.

It is humbly submitted that Hon’ble Court does not possess the requisite power under §34 of the
Act to delve into the merits of the case and adjudicate whether the award delivered with reasonable
consideration of the facts and evidence.

Memorial filed on behalf of the Respondents XIII

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ARGUMENTS ADVANCED

I :ARBITRATION PETITION NO. 226/2015AND ARBITRATION PETITION NO.

74/2016

(1.1) THAT THE HON’BLE SUPREME COURT DOES NOT HAVE THE JURISDICTION TO ENTERTAIN
THE PETITION UNDER SECTION 11 OF THE ACT IN SO FAR AS IT RELATES TO THE

APPOINTMENT OF AN ARBITRATOR UNDER THE OFF- SHORE CONTRACTS.

It is humbly submitted that Supreme Court of India does not have the jurisdiction to entertain the
petition for appointing an arbitrator under the off-shore contracts under section 11 of the Indian
Arbitration and Conciliation Act, 1996 (including amendments).1

(1.1.1) The meaning of off shore contract in the present context

The term off shore supply contract doesn’t make it an international commercial arbitration as the
contracting party with INCCL is Valentina India which is incorporated in India. It was also
mentioned in the clarifications that it has an office in Mumbai so we can infer that one of the
functions that it has is to supply material from abroad to the host country.

(1.1.2)Scope of international commercial arbitration

The party with whom Valentina India has contracted is INCCL with regard to the off-shore
contract. Section 2(1)(f)(iii) of the arbitration and conciliation act2 states the conditions for an
arbitration to be termed as international commercial arbitration and where at least one of the parties
should fulfill the conditions and if they are not fulfilled then it cannot be termed as international
commercial arbitration.

In the present case both the parties are incorporated in India which rules out any situation for it to
be termed as international commercial arbitration. In Tdm Infrastructure Private vsUe

1
Indian Arbitration and Conciliation Act, 1996 §11.
2
Indian Arbitration and Conciliation Act, 1996 §2.

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Development India Pvt.Ltd3 it was stated, once it is held that both the companies are incorporated
in India, and, thus, they have been domiciled in India, the arbitration agreement entered into by
and between them would not be an international commercial arbitration agreement and, thus, the
question of applicability of clause (iii) of Section 2(1)(f) would not arise.”

The intention is to determine the residence of a company based on its place of incorporation and
not the place of central management/control. This can be validated by the “place of incorporation”
principle laid down by the SCin TDM Infrastructure Private Limited v. UE Development India
Private Limited, and it adds greater certainty to fact that the place of incorporation of Valentina
India is in India.

In SubbayyaChettiar v. IT Commissioner, Madras4,the Court, while dealing with the issue of

Hindu Undivided Family and the residence of the family endorsed the definition of Patanjali Sastri
J. (in the same case before the Madras HC) as follows, "Control and management' signifies, in the
present context, the controlling and directive power, `the head and brain' as it is sometimes called,
and `situated' implies the functioning of such power at a particular place with some degree of
permanence, while `wholly' would seem to recognize the possibility of the seat of such power."

The term "some degree of permanence" can be referred in the case of the incorporation and the
central management of Valentina India being located in India and its official office being located
Mumbai, India. This lays emphasis on the degree of permanence that Valentina India has even
though it is only a subsidiary.

The “place of incorporation principle” was further reiterated inM/S Larsen And Toubro Limited vs
Mumbai Metropolitan Region5 and it gave more importance to the place of arbitration rather than
place of central management. Hence, applying it to the facts and circumstances can help to prove
that the contract was not an international commercial arbitration.

3
T.D.M. Infrastructure Private v. Ue Development India Pvt. Ltd., (2008) 14 S.C.C. 271.
4
Subbayya Chettiar v. I.T. Commissioner, AIR 1951 SC 101.
5
M/S. Larsen And Toubro Limited v. Mumbai Metropolitan Region,2016 SCC Online Bom. 13348.

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It is stated in Section 11(12) (a) that where matters arise in international commercial arbitration,6
the reference “supreme court or as the case may be, the High Court” in those sub sections shall be
construed as a reference to “ Supreme Court” but in this context it was not a case of international
commercial arbitration so Supreme Court did not have jurisdiction to entertain the petition under
Section 11 of the act in so far as it relates to the appointment of an arbitrator under off shore
contracts.

(1.2) THAT THE ARBITRATION PROCEEDINGS CANNOT BE CONSOLIDATED TO APPOINT A

COMMON TRIBUNAL CONSISTING OF A SOLE ARBITRATOR

The point of contention that Valentina has is that it contends that INCCL cannot ask for
proceedings of both on shore and off shore contracts to be combined and that will result in the
appointment of a common tribunal consisting of a sole arbitrator.7Thus, it would not be possible
to merge their jurisdiction as different courts can adjudicate on different matters.

(1.2.1) Designated parties to the contract

The parties in the onshore and offshore contracts are different in terms of the place of incorporation
under the different laws. In case of the onshore contract, the parties contracting with INCCL are
Valentina SpA and Valentina Group SpA, both of them are incorporated in Italy and by applying
section 2(1)(f)(ii) it can be said that this contract is International commercial arbitration.

This will prove that section 11(12)(a) will apply and the Supreme Court will have jurisdiction to
look into this matter as Section 11(12)(a) states that in case of international commercial arbitration,
the reference to “Supreme Court or, as the case may be, the High Court” in those sub sections shall
be construed as a reference to the “Supreme Court”.8

In the case of off shore contract, both the parties contracting were incorporated in India that are
INCCL and Valentina India and as proved above by the usage of the place of incorporation
principle which evolved in TDM Infrastructure Private Limited v. UE Development India Private

6
Indian Arbitration and Conciliation Act, 1996§ 11.
7
Moot Proposition, ¶ 16.
8
Indian Arbitration and Conciliation Act, 1996 §2.

Memorial filed on behalf of the Respondents 3

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Limited9 that its central management and control would also lie in India . Thus, it would result in
the off-shore contract being a domestic commercial arbitration.

It was stated in TDM Infrastructure Private Limited v. UE Development India Private Limited
thatOnce it is held that both the companies are incorporated in India, and, thus, they have been
domiciled in India, the arbitration agreement entered into by and between them would not be
an international commercial arbitration agreement and, thus, the question of applicability of clause
(iii) of Section 2(1)(f) would not arise.

Hence, it proves that Domestic commercial arbitration does not have its jurisdiction as Supreme
Court and consolidation of proceedings cannot take place.

(1.2.2) Subject matter of the contracts

Under a classic split, the Engineering, Procurement and Construction Contract is divided into two
separate contracts, commonly referred to as the “onshore contract” and the “offshore contract” 10.
This means that the contracts have different functions and scope of work present is also going to
vary.

M/S DuroFelguera S.A vs M/S. Gangavaram Port Limited11stated, “five different contracts were
substantially different, independent and separate in their content and subject matter and there
cannot be a 'composite reference' for efficacious settlement of disputes, it would be just and proper
to have multiple arbitral tribunals and may be by the same arbitrators.”Thus, the two sets of
contracts which are on shore and off shore need to have different arbitral tribunals as there cannot
be a composite reference in the present context.

M/S DuroFelguera S.A vs M/S. Gangavaram Port Limited also mentioned that if both contracts
had jurisdiction as Supreme Court then they would be international commercial arbitration. But
this will result in missing out on the opportunity of challenging the award under Section 34(2A) of

9
T.D.M. Infrastructure Private v. Ue Development India Pvt. Ltd., (2008) 14 S.C.C. 271.
10
Pricewaterhousecoopers, splitting an EPC contract, International Best Legal Practice in Project and Construction
Agreements, (2016).
11
M/S. Duro Felguera S.A v. M/S. Gangavaram Port Limited, (2017) 9 S.C.C. 729.

Memorial filed on behalf of the Respondents 4

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the Act12. In response to the above submission, it can be submitted that Section 34 (2A) of the
Act may be invoked by Indian subsidiary-Valentina India, though Section 34(2A) is not applicable
to international commercial arbitration.

(1.2.3)Arbitration clause present in the contracts

In the present case there are six contracts of which three are on shore and left ones are off shore.13
These six contracts have separate and independent arbitration clauses in each of them.

It was stated in M/S DuroFelguera S.A vs M/S. Gangavaram Port Limited, “When there are five
separate contracts each having independent existence with separate arbitration clauses that is New
Package No.4 (with foreign company DuroFelguera) and Packages No. 6, 7, 8 and 9 [with Indian
subsidiary (FGI)] based on MoU and Corporate Guarantee, there cannot be a single arbitral
tribunal for "International Commercial Arbitration".

Hence, there has to be an Arbitral Tribunal for the disputes pertaining to each agreement. While
the arbitrators can be the same, there has to be different Tribunals - for international commercial
arbitration involving the Italian Companies- Valentina Group SpA and Valentina Spa, Valentina
India for domestic arbitration with INCCL.

(1.2.4) Composition of arbitral tribunal

Article 11 of the onshore contract which had Disputes and Arbitration clause under which 11.3
stated that a sole arbitrator had to be selected in accordance14 with the said Act and rules. In the
off-shore contract, Article 12 which was Arbitration under which lay 12.2 which stated that each
party shall be entitled to nominate an arbitrator and the two arbitrators so nominated shall jointly
nominate a third arbitrator.15

12
Indian Arbitration and Conciliation Act 1996, §34 cl. 2A.
13
Moot Proposition, ¶ 7.
14
Moot Proposition, Annexure 1.
15
Moot Proposition, Annexure 2.

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Thus, the three arbitrators shall form the arbitral tribunal. But in the case of onshore contract a sole
arbitrator was said to be selected in accordance with the said act and rules.

The contractor is contending that INCCL petition for the appointment of a common arbitral
tribunal comprising of a sole arbitrator for both on shore and off shore is going against what is
stated and written in the contract. Valentina has asked for the proceedings to take place in the case
of onshore contract which explicitly states that a sole arbitrator has to be appointed if the parties
fail to appoint an arbitrator.

_______________________________________________

II. SPECIAL LEAVE PETITION (C) NO. 18443/2018

(2.1) IT IS HUMBLY SUBMITTED THAT IN THE CASES WHERE THE ARBITRATOR HAS BEEN

APPOINTED BY A PARTICULAR COURT UNDER SECTION 11 OF THE INDIAN ARBITRATION AND

CONCILIATION ACT 1996, THE MANDATE OF THE TRIBUNAL NEED NOT BE EXTENDED BY THE

SAME COURT

It is humbly submitted before the supreme court of India that the mandate of the arbitral award
dated 23.03.2018 need to be extended by the supreme court under section 42 of the Indian
Arbitration and Conciliation Act of 1996 since it has appointed the arbitrator under section 11 of
the Indian arbitration and conciliation Act. Also, the jurisdiction to hear the extension of mandate
would lie with the high court of Bombay since it was explicitly mentioned under the Annexure 3
that the seat of arbitration shall be Mumbai, India.

(2.1.1) THAT SECTION 2(1)(E) OF THE ARBITRATION AND CONCILIATION ACT 1996 DOES NOT

RECOGNIZE SUPREME COURT AS A “COURT”

The section 2 (1) (e) of the Indian Arbitration and Conciliation Act, 1996 states that:

““Court” means the principal Civil Court of original jurisdiction in a district, and includes the High
Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the
questions forming the subject-matter of the arbitration if the same had been the subject-matter of
a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any

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 University Moot Court Selection (Winter Edition, 2019)

Court of Small Causes16.” This clause clearly states that only district court and high court
exercising original jurisdiction are contained under the definition of court. Nowhere is the mention
or recognition of supreme court is done

In the case of State of W.B. v. Associated Contractors17, the court pondered upon the question
whether supreme court is a court within the Section 2(1)(e) of the Act. In two judgments under the
1940 Act, namely, State of M.P. v. Saith and Skelton (P) Ltd18and Guru Nanak
Foundation v. Rattan Singh & Sons 19, the Supreme Court took the view that where an arbitrator
was appointed by the Supreme Court itself and the Supreme Court retained seisin over the
arbitration proceedings, the Supreme Court would be “court” for the purpose of Section 2(c) of the
1940 Act20. These judgments were distinguished in National Aluminium Co. Ltd. v. Pressteel&
Fabrications (P) Ltd21 , Bharat Coking Coal Ltd. v. Annapurna Construction 22 and Garhwal
Mandal Vikas Nigam Ltd. v. Krishna Travel Agency23 .

The first of these judgments was a judgment under the 1996 Act wherein it was held that when the
Supreme Court appoints an arbitrator but does not retain seisin over the proceedings, the Supreme
Court will not be “court” within the meaning of Section 2(1)(e) of the Act. Similar is the position
in the third judgment, Garhwal case. Even under the 1940 Act, in Bharat Coking Coal, the same
distinction was made and it was held that as the Supreme Court did not retain seisin over the
proceedings after appointing an arbitrator, the Supreme Court would not be “court” within the
meaning of the Arbitration Act, 1940.

In this landmark case the Supreme Court also discussed how section 2(1)(e)24 of the arbitration act
of 1996 is different from section 2 (c) 25of the arbitration act 1940. It was important do so since

16
Indian Arbitration and Conciliation Act, 1996 § 2.
17
State of W.B. v. Associated Contractors, (2015) 1 S.C.C. 32.
18
State of M.P. v. Saith and Skelton (P.) Ltd., (1972) 1 S.C.C. 702.
19
Guru Nanak Foundation v. Rattan Singh & Sons, (1981) 4 S.C.C. 634.
20
Indian Arbitration Act, 1940§ 2.
21
National Aluminium Co. Ltd. v. Pressteel & Fabrications (P) Ltd., (2004) 1 S.C.C. 540.
22
Bharat Coking Coal Ltd. v. Annapurna Construction,(2008) 6 S.C.C. 732.
23
Garhwal Mandal Vikas Nigam Ltd. v. Krishna Travel Agency, (2008) 6 S.C.C. 741.
24
Indian Arbitration and Conciliation Act, 1996.
25
Indian Arbitration Act, 1940 § 2.

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 University Moot Court Selection (Winter Edition, 2019)

the act of 1940 gave recognition to Supreme Court as court but the act of 1996 did not. Section 2
(1) (e) stated:

“Court” means the principal Civil Court of original jurisdiction in a district, and includes the High
Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the
questions forming the subject-matter of the arbitration if the same had been the subject-matter of
a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any
Court of Small Causes

And section 2 (c) of the act of 1940 stated: "Court" means a Civil Court having jurisdiction to
decide the questions forming the subject- matter of the reference if the same had been the subject-
matter of a suit, but does not, except for the purpose of arbitration proceedings under section 21,
include a Small Cause Court;

The court went on to state in paragraph 20 of its judgment in State of W.B. v. Associated
Contractors26 that: “As noted above, the definition of “court” in Section 2(1)(e) is materially
different from its predecessor contained in Section 2(c) of the 1940 Act. There are a variety of
reasons as to why the Supreme Court cannot possibly be considered to be “court” within the
meaning of Section 2(1)(e) even if it retains seisin over the arbitral proceedings.

i. Firstly, as noted above, the definition is exhaustive and recognizes only one of two possible
courts that could be “court” for the purpose of Section 2(1)(e).
ii. Secondly, under the 1940 Act, the expression “civil court” has been held to be wide enough
to include an appellate court and, therefore would include the Supreme Court as was held
in the two judgments aforementioned under the 1940 Act. Even though this proposition
itself is open to doubt, as the Supreme Court exercising jurisdiction under Article 13627 is
not an ordinary appellate court, suffice it to say that even this reason does not obtain under
the present definition, which speaks of either the Principal Civil Court or the High Court
exercising original jurisdiction.

26
State of W.B. v. Associated Contractors, (2015) 1 S.C.C. 32.
27
Indian Const. art.136.

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iii. Thirdly, if an application would have to be preferred to the Supreme Court directly, the
appeal that is available so far as applications under Sections 928 and 3429 are concerned,
provided for under Section 3730 of the Act, would not be available. Any further appeal to
the Supreme Court under Article 13631 would also not be available. The only other
argument that could possibly be made is that all definition sections are subject to context
to the contrary.”
To make interpretations clearer and to differentiate between the section 42 of the act of 1996 and
section 31(4) of the act of 1940 regarding jurisdiction, the judges said that:

“It has aptly been stated that the rule of forum convenience is expressly excluded by Section
42 in the case Jindal Vijayanagar Steel v. Jindal Praxair Oxygen Co. Ltd.32. Section 42 is
also markedly different from Section 31(4) of the 1940 Act 33in that the expression “has
been made in a court competent to entertain it” does not find place in Section 42. This is
for the reason that, under Section 2(1)(e), the competent court is fixed as the Principal
Civil Court exercising original jurisdiction or a High Court exercising original civil
jurisdiction, and no other court. For all these reasons, we hold that the decisions under the
1940 Act would not obtain under the 1996 Act, and the Supreme Court cannot be “court”
for the purposes of Section 42.”

Now the court considered the question as to whether section 42 explicitly gave jurisdiction to one
court or not. Section 42 was stated as,

“Notwithstanding anything contained elsewhere in this Part or in any other law for the time being
in force, where with respect to an arbitration agreement any application under this Part has been
made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all
subsequent applications arising out of that agreement and the arbitral proceedings shall be made
in that Court and in no other Court.”

28
Indian Arbitration and Conciliation Act,1996 § 9.
29
Indian Arbitration and Conciliation Act,1996 § 34.
30
Indian Arbitration and Conciliation Act, 1996 § 37.
31
Indian Const. art.136.
32
Jindal Vijayanagar Steel v. Jindal Praxair Oxygen Co. Ltd., (2006) 11 S.C.C. 521.
33
Indian Arbitration and Conciliation Act, 1996 § 31.

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 University Moot Court Selection (Winter Edition, 2019)

The judgement observed that : “The context of Section 42 does not in any manner lead to a
conclusion that the word “court” in Section 42 should be construed otherwise than as defined.
The context of Section 42 is merely to see that one court alone shall have jurisdiction over all
applications with respect to arbitration agreements which context does not in any manner enable
the Supreme Court to become a “court” within the meaning of Section 42.” The question arising
now is whether the Mumbai High Court would have jurisdiction because it was mentioned in
Annexure 3 in Art. 11.4 34 that the seat of arbitration shall be in Mumbai, India. For this purpose
the paragraph paragraph 22 of the judgment becomes relevant:

“One more question that may arise under Section 42 is whether Section 42 would apply in cases
where an application made in a court is found to be without jurisdiction. Under Section 31(4) of
the old Act, it has been held in F.C.I. v. A.M. Ahmed & Co35 SCC and Neycer India Ltd. v. GMB
Ceramics Ltd.36 that Section 31(4) 37of the 1940 Act would not be applicable if it were found that
an application was to be made before a court which had no jurisdiction. In Jatinder Nath v. Chopra
Land Developers (P) Ltd.38 and Rajasthan SEB v. Universal Petro Chemicals Ltd. 39 and Swastik
Gases (P) Ltd. v. Indian Oil Corpn. Ltd. 40,it was held that where the agreement between the parties
restricted jurisdiction to only one particular court, that court alone would have jurisdiction as
neither Section 31(4) nor Section 42 contains a non-obstante clause wiping out a contrary
agreement between the parties. It has thus been held that applications preferred to courts outside
the exclusive court agreed to by parties would also be without jurisdiction.”

Also in Garhwal Mandal Vikas Nigam Ltd. Vs. Krishna Travel Agency41 1 the arbitrator was
appointed by the Supreme Court and as such the controversy arose as to before whom the
objections against the award can be filed. Their Lordships of the Supreme Court held that
irrespective of the fact that the arbitrator was appointed by the Supreme Court the objections would

34
Moot Proposition, Annexure 3.
35
F.C.I. v. A.M. Ahmed & Co., (2001) 10 S.C.C. 532.
36
Neycer India Ltd. v. GMB Ceramics Ltd., (2002) 9 S.C.C. 489.
37
Indian Arbitration and Conciliation Act, 1996§ 31.
38
Jatinder Nath v. Chopra Land Developers (P.) Ltd., (2007) 11 S.C.C. 453.
39
Rajasthan SEB v. Universal Petro Chemicals Ltd., (2009) 1 S.C.C. (Civ.) 770.
40
Swastik Gases (P.) Ltd. v. Indian Oil Corpn. Ltd., (2013) 9 S.C.C. 32.
41
Garhwal Mandal Vikas Nigam Ltd. v. Krishna Travel Agency, (2008) 6 S.C.C. 74.

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 University Moot Court Selection (Winter Edition, 2019)

lie before the 'court' and the matter should go to the District Judge and for that purpose Supreme
Court would not be a 'court'.

From this it can be concluded that firstly, the supreme court is not a recognized court under section
2 (1) (e) of the arbitration and conciliation act of 1996, secondly that an agreement existed between
the parties which restricted jurisdiction to the high court of Mumbai thus only the high court of
Mumbai had jurisdiction and thirdly that the appeal made to supreme court was outside
jurisdiction.

(2.1.2) SECTION 11 OF THE ARBITRATION AND CONCILATION ACT OF 1996 DOES NOT COME

UNDER THE SCOPE OF SECTION 42 OF THE ARBITRATION AND CONCILIATION ACT OF 1996

Section 11 (6) (a) of the arbitration and conciliation act states that :

“Where, under an appointment procedure agreed upon by the parties a party fails to act as required
under that procedure a party may request the supreme court or as the case maybe , the high court
or any person or institution designated by such court to take the necessary measure, unless the
agreement on the appointment procedure provides other means for securing the appointment.”42

It must be noted that this section applies in the present case at hand as the parties failed to appoint
an arbitrator, and ultimately the supreme court had to appoint one.

But case of State of W.B. v. Associated Contractors43exlipcitly mentioned that section 11 is not
governed by section 42. It stated that

“Even under Section 42 itself, a Designated Judge has held in HBM Print Ltd.v. Scantrans India
(P) Ltd.44 , that where the Chief Justice has no jurisdiction under Section 11, Section 42 will not
apply. This is quite apart from the fact that Section 42, as has been held above, will not apply to
Section 11 applications at all.”

42
Indian Arbitration and Conciliation Act, 1996 § 11.
43
State of W.B. v. Associated Contractors, (2015) 1 S.C.C. 32.
44
H.B.M. Print Ltd. v. Scantrans India (P.) Ltd., (2009) 17 S.C.C. 338.

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The conclusions derived by the court in this case reiterated the same: “However, Section 42 only
applies to applications made under Part I if they are made to a court as defined. Since applications
made under Section 8 are made to judicial authorities and since applications under Section 11 are
made to the Chief Justice or his designate, the judicial authority and the Chief Justice or his
designate not being court as defined, such applications would be outside Section 42.” From this
paragraph it can clearly be concluded that section 11 is outside the scope of section 42, thus the
jurisdiction does not lie with the supreme court since the appointment was done by the supreme
court under section 11 (6) (a) which is outside the scope of section 42 which requires the cases to
be filed only in the court where the initial proceedings took place. Accordingly, the jurisdiction
does lie with the high court of Bombay since it was a high court exercising ordinary original civil
jurisdiction.

The same verdict has been given in many cases. In Godara Construction Company vs State Of
Rajasthan And Anr.45 the court said that “Section 42 refers to any application made to a court under
Part I of the Act. In the context, this clause can be invoked only on fulfillment of condition referred
to therein. Firstly, an application must have been made under Part I of the Act of 1996. Secondly,
such application must have been made to a Court Obviously, in the context, 'the court' to which
reference is made under Section 42ought to be a court as defined in Section 2(e) of the Act”. Same
verdict was reiterated in Khaleel ahmeddakhani v hatti gold mines46.

(2.1.3) THAT THE SEAT OF ARBITRATION WAS EXPLICITLY MENTIONED TO BE THE HIGH COURT
OF BOMBAY AS MENTIONED IN ANNEXURE 1 WHICH GIVES THE HIGH COURT OF BOMBAY THE

EXCLUSIVE JURISDICTION TO HEAR THE PROCEEDING OF EXTENSION OF THE ARBITRAL AWARD

DATED 23.03.2018.

In the case of HII life care limited Versus Happy Lectricals47 in the recent judgement dated
11.07.2018, Delhi high court held that only in case of not specifying the seat of arbitration in the
arbitration agreement by the parties also if the seat is not decided by the arbitrator in its award, the
court in which the application was filed first, either the place where arbitration was held or the

45
Godara Construction Company v. State of Rajasthan And Anr., A.I.R 2004 Raj. 66.
46
Khaleel ahmed dakhani v. hatti gold mines, (2000) 3 S.C.C. 755.
47
H.I.I. life care limited v. Happy Lectricals, (2018) SCC Online D.L. 9814.

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 University Moot Court Selection (Winter Edition, 2019)

place where cause of action arose/ subject matter is situated , shall be the court having jurisdiction
to entertain an application under section 34 of arbitration and conciliation act, 1996 to challenge
the arbitration award.

In Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limitedand

Ors.48holding that in cases where the parties include an exclusive jurisdiction clause in an
arbitration agreement designating a particular place as the seat of the arbitration, the Court in
whose jurisdiction the seat of the arbitration falls would have sole jurisdiction to entertain petitions
in respective of non-arbitrable issues arising out of the agreement, to the exclusion of any other
Courts.

In many cases including Bharat Aluminium Co. v. Kaiser Aluminium Technical Services
Inc49, Enercon (India) Ltd. v. Enercon Gmbh50, and Reliance Industries Ltd. v. Union of India51,
the Court observed that in its previous judgments, it has time and again been reiterated that once
the seat of arbitration has been fixed, it would be in the nature of an exclusive jurisdiction clause
as to the courts which exercise supervisory powers over the arbitration.

Further, in Union of India v. Reliance Industries Limited and Others52, the Court referred had held
that the supervisory jurisdiction of courts over the arbitration goes along with seat. In the present
case, it was clearly specified that the parties had agreed to the seat of arbitration to be the high
court of Bombay. Thus, even though Supreme Court is the court where application was filed first
and arbitration was held, it does not have jurisdiction which the high court of Bombay has to hear
the extension of the mandate.

(2.1.4) THAT THE FUNCTION CARRIED OUT BY COURT UNDER SECTION 11 (6) CANNOT BE

CHALLENGED UNDER ARTICLE 136 OF THE CONSTITUTION OF INDIA

48
Indus Mobile Distribution Private Limited v. Datawind Innovations Private Limited and Ors., Civil Appeal Nos.
5370-5371 Of 2017.
49
Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2016) 4 S.C.C. 126.
50
Enercon (India) Ltd. v. Enercon Gmbh., (2014) 5 S.C.C. 1.
51
Reliance Industries Ltd. v. Union of India,2014 SCC OnLine SC 279.
52
Union of India v. Reliance Industries Limited and Others,2014 SCC OnLine Del. 7562.

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 University Moot Court Selection (Winter Edition, 2019)

Since the duty of appointment of an arbitrator comes under administrative duties of a court thus
no special leave petition under article 136 can be filed since the special leave petition should only
be in the case of court carrying out judicial function or duty.

The Apex Court held in Konkan Railway Corporation Ltd. v. Mehul Construction Co53, that the
order passed under Section 11(6) of the Act by the Chief Justice of the High Court or his nominee
is an administrative order. In a subsequent decision in Konkan Railway Corporation Ltd. and Anr.
v. Rani Construction (P.) Ltd.54, the question had been again referred for consideration to larger
Bench. The above reference was decided by five Judges Bench of the Apex Court. It was held by
the majority decision that the appointment of arbitrator by the Chief Justice or his designate is not
a judicial function resulting in an adjudicatory order and thus not open to challenge under Article
136 of the Constitution of India55.

Section 11 of the Act does not contemplate a decision on any controversy that the other party may
raise. It was also held by the Apex Court in the case AdorSamia (P.) Ltd. v. Peekay Holdings Ltd.56,
that the order passed by the Chief Justice under Section 11(6) of the Act being administrative in
nature cannot be subjected to any challenge directly under Article 136 of the Constitution of India.

Relying on the above decisions, the Division Bench of this Court in Union of India v. M. S.
Sachdeva57 and Union of India v. Chief Justice of High Court of Judicature at Allahabad58 held
that the order passed under Section 11(6) of the Act appointing an arbitrator is not a judicial
function, but administrative one. What can be interpreted from the above case laws is that the
functions performed by the chief justice or his designate is an administrative function under section
11 (6) and thus cannot be challenged through a special leave petition under article 136 of the
constitution of India.

53
Konkan Railway Corporation Ltd. v. Mehul Construction Co, (2000) 7 S.C.C 201.
54
Konkan Railway Corporation Ltd. and Anr. v. Rani Construction (P.) Ltd., 2001 (1) AWC 59 (SC).
55
Indian Const. art. 136.
56
Ador Samia (P.) Ltd. v. Peekay Holdings Ltd., (1999) 8 S.C.C. 572.
57
Union of India v. M. S. Sachdeva, 2000 (4) A.W.C. 2743.
58
Union of India v. Chief Justice of High Court of Judicature at Allahabad, 2001 (3) A.W.C. 1912.

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 University Moot Court Selection (Winter Edition, 2019)

Now the term Chief Justice or his designate has been substituted with the Supreme Court or as the
case maybe the high court or any person or institution designated by such court.

Thus, in the instant case, it can be concluded from the above line of argumentation that the act of
appointing an arbitrator by the Supreme Court was an administrative function under section 11 (6)
and thus cannot be challenged through a special leave petition under article 136 of the constitution
of India.

_______________________________________________

III. SPECIAL LEAVE PETITION (C) NO. 17248/2018

(3.1) THE COUNSEL HUMBLY SUBMITS THAT THE AWARD DATED 22 MARCH 2018 IS NOT LIABLE
TO BE SET ASIDE UNDER S. 34 OF THE ACT. §¶

The counsel humbly submits that the award delivered by the sole arbitrator in proceedings under
the Maintenance Services Agreement is not in contravention of the public policy of India as it does
not violate the statutory provisions. The award has been delivered after consideration of facts and
evidence and is reasonably concluded to. Hence, it is not patently illegal.

(3.1.1) The award is not contrary to the public policy of the country and is not subject to the
ground of patent illegality.

(a) The award is not contrary to the public policy of India

The award dated 22 March 2018 is not contrary to the public policy of India. The said award was
delivered after the expiry of the mandate.59 This was on the basis of a provision of S. 29-A of the same
Act. However, that does not in any manner hold it in contravention of the public policy of India. The
grounds stated in S. 34 are –
i. fraud and corruption
ii. contravention with public policy
iii. conflict with notions of morality and justice;

59
Moot Proposition, ¶ 25.

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 University Moot Court Selection (Winter Edition, 2019)

and the said grounds are followed by an explanation60 explicitly prohibiting reappreciation of
evidence or consideration of the merits of a dispute.

The Supreme Court has defined public policy with a narrow interpretation of S. 34 in Renusagar
Power Co. v. General Electric Co.61 The Court has observed that a foreign award could be set
aside only if such enforcement would be contrary to (i) fundamental policy of Indian law; or (ii)
the interests of India; or (iii) justice or morality. It was also held that a mere contravention of law
would not attract annulment on the ground of public policy. This strict and narrow interpretation
was supported by the 1996 Amendment to the Act. And the very same grounds have been retained
in the 2015 Amendment as well.

Furthermore, in BCCI v. Kochi Cricket Pvt. Ltd.62 has clarified that the 2015 amendment would
apply to those court proceedings which were initiated/filed after the commencement of the said
amendment irrespective of when arbitration proceedings were commenced.

The narrow interpretation of the definition of public policy was confirmed in Shri Lal Mahal Ltd.
v. ProgettoGranoSpA63wherein the ratio of the Renusagar case was supported.

In conjunction to the above mentioned cases, the legislative intent behind the 2015 amendment
can be constructed from the Law Commission Report which explicitly states that the explanation
to the grounds under S. 34 aims to bring the standard for “setting aside an award in conformity
with the decision of the Supreme Court in Renusagar Power Co. Ltd.v. General Electric Co., 1994
Supp (1) SCC 644 and Shri Lal Mahal Ltd. v. ProgettoGrano Spa,(2014) 2 SCC 433,for awards
in both domestic as well as international commercial arbitrations.”

61
Renusagar Power Co. v. General Electric Co., (1994) 1 S.C.C. 644.
62
BCCI v. Kochi Cricket Pvt. Ltd., 2018 SCC onLine SC 232.
63
Shri Lal Mahal Ltd. v. ProgettoGranoSpA,(2014) 2 S.C.C. 433.

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In the instant case, the award cannot be set aside because it does not violate the public policy, has
not been induced or affected by fraud or corruption and is not against the notions of justice and
morality.

(3.1.2) The award cannot be held to be patently illegal

In the case of ONGC v. Saw Pipes64the Supreme Court introduced the additional ground for setting aside
an arbitral award, i.e, patent illegality, However, this ground is reserved for domestic commercial
arbitrations only and does not apply to international commercial arbitrations.

In the instant petition, the arbitration agreement was signed by INCCL and Valentina Group, which
is incorporated in Italy.65 S. 2(f) clearly defines an international commercial arbitration and
pursuant to sub-sub clause (ii), the instant arbitration is rendered an International Commercial
Arbitration. Pursuant to S. 34 (2A), the grounds for patent illegality are reserved for arbitrations
other than international commercial arbitrations. This has been backed by the legislative intent
constructed from the Law Commission’s report on incorporating the grounds for annulment of
arbitral awards.

In furtherance of the same argument, the award cannot be held to be patently illegal as it does not
violate any statutes or provisions and is supported by S. 29-A of the Act. The Supreme Court
explained patent illegality as a violation of the provisions of the Act or of the jurisdiction of the
arbitrator.66 The same was confirmed in ONGC v. Western Geco67where the court held that
“illegality could not be of a trivial nature and should strike at the root of the matter, shocking the
conscience of the court.” Therefore, the award is not patently illegal as contended by INCCL.

(3.2)THE COURT, UNDER SECTION 34, CANNOT ASCERTAIN WHETHER THE MAINTENANCE AND
AGREEMENT WAS A PAPER CONTRACT

64
ONGC v. Saw Pipes, (2003) 5 S.C.C. 705.
65
Moot Proposition,¶ 2.
66
ONGC v. Saw Pipes,(2003) 5 S.C.C. 705.
67
ONGC v. Saw Pipes, (2003) 5 S.C.C. 705.

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 University Moot Court Selection (Winter Edition, 2019)

(3.2.1) The Supreme Court cannot interfere with the award on merits

The arbitrator for the arbitration proceedings under the Maintenance and Services Agreement was
appointed by the Supreme Court. This was a result of a petition to the Supreme Court under §11
for the appointment of an arbitrator.68 Following the appointment, the arbitrator initiated
proceedings and on March 22, 2018 delivered the award in favor of Valentina Group.

In the course of proceedings, the arbitrator dismissed INCCL’s contention that the MSA was
merely a non-binding paper contract.69 The reason cited for dismissing the contention was that
INCCL “entered into the contract with open eyes” and hence could not belatedly hold the Contract
as non-binding.

The instant petition has been filed by the petitioner with the intention of having the Court
adjudicate on the nature of the MSA and on the very same basis set aside the award. However, the
Court is not empowered under S. 34 of the Act to interfere with the merits of the award even if it
is delivered after an erroneous conclusion on the facts.70 The Supreme Court has observed, “An
arbitrator is a judge appointed by the court and as such an award passed by him is not to be lightly
interfered with.”

It is also a well-settled aspect of law in the case of Hindustan Construction Co. Ltd. v. Governor
of Orissa71 wherein the Supreme Court held that while considering whether the award should be
set aside, the Court does not examine the question as an Appellate Court. This view was later
confirmed by the Supreme Court in Venture Global Engineering LLC and Ors v. Tech Mahindra
Ltd. & Ors.72,

“The Award of an arbitral Tribunal can be set aside only on the grounds specified in
Section 34 of the Act and on no other ground. The Court cannot act as an Appellate Court
to examine the legality of Award nor it can examine the merits of claim by entering in
factual arena like an Appellate Court. It has to confine its enquiry only to the limited issue

68
Moot Proposition,¶ 22.
69
Moot Proposition, ¶ 25.
70
Indu Engg.& Textiles Ltd. v. DDA, (2001) 5 S.C.C. 691.
71
Hindustan Construction Co. Ltd. v. Governor of Orissa, A.I.R. 1995 SC 2189.
72
Venture Global Engineering LLC and Ors v. Tech Mahindra Ltd. & Ors., (2017)13 SCALE 91 SC.

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as to whether any ground specified in Section 34 of AAC Act is made out or not. Once the
ground under Section 34 of the AAC Act is made out, the Award then has to be set aside.”

Furthermore, the power and jurisdiction of the court to set aside an award is specifically laid down
in §34 of the Act.73 Therefore, the Supreme Court is empowered to set aside the award by delving
into the merits of the award or facts of the case.

(3.2.2) The Supreme Court cannot interfere with a speaking award

The sole arbitrator delivered the award in favor of Valentina Group with the reasoning that the
MSA is not merely a paper contract as INCCL entered into the contract “with open eyes.”
Therefore, the arbitrator concluded, INCCL cannot contend the contract to be non-binding.74

The Supreme Court has laid down in MCD v. Jagan Nath Ashok Kumar75 that reasonableness of
the reasons in a speaking award is not justiciable under Art. 136 of the Constitution. The Court
also clarified that on the basis of the evidence considered by the arbitrator the court, might arrive
at a different decision but hat in itself is no ground for setting aside an award. Similarly, it has
been held the Court cannot go into the reasonableness of the reasons given by the arbitrator.76 The
reason given by the arbitrator need not be a full-fledged statement. If the rational basis of the award
is revealed in the narration, it is a speaking award even if expressed in a few words.77

Therefore, in the event of the award being supplemented with a reason, the Court does not possess
the power to inspect the validity of the award on the basis of the facts of the case.

(3.2.3) The Maintenance Services Agreement is a valid contract binding on both parties

The Maintenance Services Agreement is a valid binding contract and hence enforceable. A general
reading of the Scope of services under the MSA reveals that it is radically different as it
encompasses those works which are concerned with the upkeep and serviceability of the assets.

73
Hyder Consulting v. Governor for the state, 2007 (1) Arb LR 244 (Ori).
74
Moot Proposition,¶ 25.
75
MCD v. Jagan Nath Ashok Kumar,(1987) 4 S.C.C. 497.
76
U.P. Hotels v. U.P. SEB., (1989) 1 S.C.C. 359.
77
Union of India v Hindustan motors ltd., (1987) 3 S.C.C. 458.

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However, the On Shore contract deals with those aspects which are concerned with the raw
materials, the assembly and the construction of the plant.

The Scope of services clause 1.3 clearly states that the maintenance services are to be provided for
a period of 6 months after the start-up of the plant78 whereas the On Shore contract had a time
period of not more than 30 months for the completion of the works.79 This clearly differentiates
between the two contracts.

Furthermore, INCCL’s contention that the MSA is a non-binding contract is frivolous on the face
of it. The intent of the parties in contracting the said agreement was to create legal relations. The
result is a binding contract that is enforceable. The Supreme Court has observed that,

“The test of an intention to effect legal relations is an objective one. It may be that the
promisor never anticipated that his promise would give rise to any legal obligation, but if
a reasonable man would consider that he intended so to contract, then he will be bound to
make good his promise.”80

When the test of intention is applied to the instant circumstance, any reasonable man would
conclude that that the MSA is in fact a binding contract and is distinct from the On Shore contract
in its objectives and operation. Furthering this argument is the intent of Valentina as documented
in its letter to INCCL dated 14 June 2015. In the said letter, Valentina expresses its intent to
“provide follow-up assistance and maintenance services.”81 Pursuant to this, Valentina and INCCL
entered into a contract for providing Assistance in Operation and Maintenance on 25 June 2015.82
From the events, it would only be reasonable to conclude that INCCL intended to enter the
contract.

78
Moot proposition, Annexure A.
79
Moot proposition,¶ 6.
80
BrikramKishoreParida v. Penudhar Jena, A.I.R. 1976 Orissa 4.
81
Moot Proposition,¶ 20.
82
Moot Proposition,¶21.

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Prayer

Wherefore, in light of the facts of the case, issues raised, arguments advanced and authorities cited,
this Hon’ble Court may be pleased to adjudge and declare that:

In INCCL v Valentina SPA and others (ARB. P. 226/2015 & ARB. P. 74/2016),

 The Supreme Court does not have the jurisdiction to entertain the petition under section 11
of the arbitration and conciliation act,1996 in so far as it relates to the appointment of an
arbitrator under off shore contracts.
 The arbitration proceedings cannot be consolidated to appoint common tribunal consisting
of a sole arbitrator in the present facts and circumstances.

In INCCL v Valentina Group (SLP(C) No. 18443/2018),

 The High Court of Bombay had the jurisdiction the extend the mandate dated 23 March
2018 as it was a recognized court under section 2 (1)(e) of the Act.

In INCCL v Valentina Group (SLP(C) No. 17248/2019),

The award dated 22 March 2018 is not in contravention of the public policy of India and is not
patently illegal

The Court, under § 34 of the Act, cannot ascertain whether the Maintenance Service Agreement is
a paper contract

ALL OF WHICH IS RESPECTFULLY SUBMITTED

COUNSELS FOR THE RESPONDENTS.

Memorial filed on behalf of the Respondents XIV