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With regard to the effect of Section 42 of the Arbitration and Conciliation Act, 1996, the same, in our view was applicable at the pre-arbitral stage, when the Arbitrator had not also been appointed. Once the Arbitrator was appointed and the arbitral proceedings were commenced, the SIAC Rules became applicable shutting out the applicability of Section 42 and for that matter Part I of the 1996 Act, including the right of appeal under Section 37 thereof. 41 40. We are not, therefore, inclined to interfere with the judgment under appeal and the appeal is accordingly dismissed and all interim orders are vacated.

Madhya Pradesh Vidhan Sabha

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 REPORTABLE

 IN THE SUPREME COURT OF INDIA

 CIVIL APPELLATE JURISDICTION

 CIVIL APPEAL NO.7562 OF 2011

 (Arising out of SLP(C) No.25624 of 2010)

YOGRAJ INFRASTRUCTURE LTD. ... APPELLANT 

 Vs.

SSANG YONG ENGINEERING AND 

CONSTRUCTION CO. LTD. ... RESPONDENT

 J U D G M E N T

ALTAMAS KABIR, J.

1. Leave granted.

2. The Appellant is a company incorporated under 

the Companies Act, 1956, while the Respondent is a 

 2

company incorporated under the laws of the Republic 

of Korea with its registered office at Seoul in 

Korea and its project office at New Delhi.

3. On 12th April, 2006, the National Highways 

Authority of India, New Delhi (NHAI) awarded a 

contract to the Respondent, SSang Yong Engineering 

and Construction Co. Ltd., hereinafter referred to 

as "SSY", for the National Highways, Sector II 

Project, Package: ABD-II/C-8, for upgradation to 

Four Laning of Jhansi-Lakhnadon Section, KM 297 to 

KM 351 of NH 26 in the State of Madhya Pradesh. 

The total contract amount was 2,19,01,16,805/-. 

On 13th August, 2006, SSY entered into a Sub-

Contract with the Appellant Company for carrying 

out the work in question. The Work Order of the 

entire project was granted to the Appellant by the 

Respondent on back-to-back basis. Clause 13 of the 

Agreement entered into between the Respondent and 

the Appellant provided that 92% of all payments for 

 3

the work done received by the Respondent from NHAI, 

would be passed on to the Appellant. Clauses 27 

and 28 provided for arbitration and the governing 

law agreed to was the Arbitration and Conciliation 

Act, 1996. On 31st October, 2006, the Appellant 

furnished a Performance Bank Guarantee for 

6,05,00,000/- to the Respondent and it also 

invested about 88.15 crores in the project. Three 

more Bank Guarantees, totaling 5,00,00,000/-, for 

release of mobilization advance were also furnished 

by the Appellant on 29th May, 2009. On 22nd 

September, 2009, the Respondent Company issued a 

notice of termination of the Agreement, inter alia, 

on the ground of delay in performing the work under 

the Agreement.

4. On account of the above, the Appellant filed an 

application before the District and Sessions Judge, 

Narsinghpur, Madhya Pradesh, under Section 9 of the 

Arbitration and Conciliation Act, 1996, praying for 

 4

interim reliefs. A similar application under 

Section 9 of the above Act was filed by the 

Appellant before the same Court on 30th December, 

2009, also for interim reliefs. Ultimately, on 20th 

May, 2010, the dispute between the parties was 

referred to arbitration in terms of the Agreement 

and a Sole Arbitrator, Mr. G.R. Easton, was 

appointed by the Singapore International 

Arbitration Centre on 20th May, 2010. On 4th June, 

2010, the Appellant filed an application before the 

Sole Arbitrator under Section 17 of the aforesaid 

Act being SIAC Arbitration No.37 of 2010, inter 

alia, for the following reliefs :

 "a. restrain the SSY from encashing 

 Performance Bank Guarantee 

 No.101BGPGO63040001 dated 31.10.06 of 

 Syndicate Bank, Nehru Place, Delhi of 

 6.05 crores;

 b. restrain the SSY from enchashing three 

 Bank Guarantees furnished towards the 

 mobilization advance bearing numbers 

 101 BGFG 091490001 of 1 Crore, 101 

 BGFG 091490002 of 1 Crore and 101 

 5

 BGFG 091490003 of 3 Crores, totaling 

 to 5 Crores;

 c. direct SSY to release a sum of 

 144,42,25,884/- along with the 

 interest @ 36% till realization of 

 nationalized bank of India for the 

 aforesaid amount and keep it alive 

 till passing of the final Award.

 d. restrain SSY from removing, shifting, 

 alienating or transferring in any 

 manner either itself or through any of 

 its agents/employees, the plant, 

 machineries, equipments, vehicles and 

 materials, in other words maintain 

 status-quo, till the passing of the 

 final arbitral award;

 e. grant any other appropriate interim 

 measures of protection in favour of 

 the Cross-Claimant/applicant, which in 

 the esteemed opinion of this Hon'ble 

 Tribunal are just and proper in the 

 facts and circumstance of the case;"

5. The Respondent also filed an application under 

Section 17 of the above Act before the Sole 

Arbitrator on 5th June, 2010, for interim reliefs. 

After considering both the applications, the 

Arbitrator passed an interim order on 29th June, 

2010, in the following manner :

 6

"1. The respondent is to immediately 

release, for use by the Claimant, the 

items of plant, machinery and equipment 

(PME) numbered 1,5,7,8,10,19,20,21,22,23 

and 32, as listed in Annexure A (Machinery 

Details) of the Claimant's Application 

dated 5 June 2010.

2. The respondent is restrained from 

creating any third party interest in, or 

otherwise selling, leasing or charging, 

the PME or other assets presently located 

at the work site and/or the camp site and 

which are owned by the respondent, without 

the permission of this Tribunal.

3(i). The claimant is permitted to use 

the aggregates, which have been identified 

in Annexure D (engineer's Statement of 

Materials at Site for September 2009) of 

the Claimant's Application dated 5 June 

2010 as a total quantity of 274,580 cubic 

metres, for the carrying out of the works 

in accordance with the terms and 

conditions of the Main Agreement and the 

Agreement dated 13 August, 2006 between 

the parties.

3(ii) The respondent is to give the 

Claimant access to the aggregate 

stockpiles where the abovementioned 

quantity of material is currently held.

The above interim orders are made with the 

objective of enabling the construction 

work on the project to continue while the 

disputes between the parties are resolved 

in these arbitration proceedings (ref. 

Terms or Reference dated 23 June 2010).

 7

 The parties have liberty at short notice, 

 if any of the above directions require 

 clarification or amendment in order to 

 ensure proper implementation.

 The respondent has leave (until 6 July 

 2010) to make a further application for 

 the provision of security by the claimant 

 in relation to the PME and aggregates." 

6. Aggrieved by the aforesaid interim order passed 

by the learned Arbitrator, the Appellant herein, 

which was the respondent before the learned 

Arbitrator, filed Appeal No.2 of 2010 on 2nd July, 

2010 before the learned District Judge, 

Narsinghpur, under Section 37(2)(b) of the 

Arbitration and Conciliation Act, 1996, for setting 

aside the same. On behalf of the respondent it was 

contended in the said appeal that the same was not 

maintainable before the learned District Judge, 

Narsinghpur, since the seat of the arbitration 

proceedings was in Singapore and the said 

proceedings were governed by the laws of Singapore. 

Accepting the submissions advanced on behalf of the 

 8

respondent, the learned District Judge dismissed 

the appeal as not maintainable on 23rd July, 2010, 

without deciding the matter on merits.

7. The appellant then moved Civil Revision No.304 

of 2010, before the High Court on 26th July, 2010. 

The same was dismissed by the High Court on 31st 

August, 2010, against which the Special Leave 

Petition (now appeal) has been filed.

8. Appearing for the Company, Ms. Indu Malhotra, 

learned Senior Advocate, submitted that the stand 

taken on behalf of the respondent that the PMEs had 

to remain on site even in case of termination of 

the Agreement, was without any basis, since after 

the Agreement dated 13th August, 2006, the parties 

had agreed in the Meeting held on 23rd September, 

2006 that in case of termination of the Agreement 

between the parties, the respondent would transfer 

the PMEs to the appellant. Ms. Malhotra further 

clarified that Clause 4 of the Agreement related 

 9

only to the PMEs and not to the aggregates, since 

it had been admitted by the respondent that in case 

the aggregates were not made available to them, 

they could buy the same from the open market. It 

was further clarified that there were only two 

machines out of 35 machines which formed the 

subject matter of the interim application, i.e., 

Hotmix Plant and Crusher, which were in the 

possession of the appellant and the value thereof 

would be approximately 7 crores and a sum of 7.20 

crores had already been deducted by the respondent 

towards the repayment of the Arab Bank Loan for the 

said PMEs. Ms. Malhotra submitted that it was 

incorrect to say that the Project was stopped 

because of the Stay Order passed by this Court as 

the respondent had further subcontracted the work 

to Khara and Tarakunde Infrastructure Pvt. Ltd., 

Ramdin Ultratech Pvt. Ltd. and others. Ms. 

Malhotra contended that apart from the Hotmix Plant 

and Crusher all the remaining PMEs had been removed 

 10

by the respondent after the passing of the order 

29th June, 2010.

9. On the question of the applicable law in 

respect of the arbitral proceedings, Ms. Malhotra 

contended that the Arbitration and Conciliation 

Act, 1996, enacted in India is the applicable law 

of arbitration. Ms. Malhotra submitted that in 

terms of the Agreement arrived at between the 

parties, it is only the Indian laws to which the 

Agreement would be subjected. She pointed out that 

Clause 28 of the Agreement provides that the 

Agreement would be subject to the laws of India and 

that during the period of arbitration, the 

performance of the Agreement would be carried out 

without interruption and in accordance with its 

terms and provisions. Accordingly, having 

explicitly agreed that the Agreement would be 

subject to the laws of India, from the very 

commencement of the arbitration till its 

 11

conclusion, the law applicable to the arbitration 

would be the Indian law. In other words, all 

interim measures sought to be enforced would 

necessarily have to be in accordance with Sections 

9 and 37(2)(b) of the 1996 Act. 

10. Ms. Malhotra submitted that Clause 27.1, which 

forms part of Clause 27 of the agreement, which is 

the arbitration clause, provides that the 

proceedings of arbitration shall be conducted in 

accordance with the SIAC Rules. In other words, 

the provisions of SIAC Rules would apply only to 

the arbitration proceedings, but not to appeals 

from such proceedings. Ms. Malhotra submitted that 

the right to appeal from an interim order under 

Section 37(2)(b) is a substantive right provided 

under the 1996 Act and was not governed by the SIAC 

Rules. 

11. Ms. Malhotra also urged that Rule 1.1 of the 

SIAC Rules, which, inter alia, provides that where 

 12

the parties agreed to refer their disputes to the 

SIAC for arbitration, it would be deemed that the 

parties had agreed that such arbitration would be 

conducted in accordance with the SIAC Rules. If, 

however, any of the SIAC Rules was in conflict with 

a mandatory provision of the applicable law of 

arbitration from which the parties could not 

derogate, that provision from the applicable law of 

the arbitration shall prevail. Ms. Malhotra 

submitted that Rule 32 of the SIAC Rules is one of 

such Rules which provides that if the seat of 

arbitration is Singapore, then the applicable law 

of arbitration under the Rules would be the 

International Arbitration Act, 2002, of Singapore. 

However, Section 37(2)(b) of the 1996 Act being a 

substantive and non-derogable provision, providing 

a right of appeal to parties from a denial of an 

interim measure, such a provision protects the 

interest of parties during the continuance of 

arbitration and as a consequence, Rule 32 of the 

 13

SIAC Rules which does not provide for an appeal, is 

in direct conflict with a mandatory non-derogable 

provision contained in Section 37(2)(b) of the 1996 

Act.

12. Ms. Malhotra then went on to submit that Part I 

of the 1996 Act had not been excluded by Clause 27 

of the Agreement and the 1996 Act would, therefore, 

apply to the said Agreement. Ms. Malhotra 

submitted that in the decision of this Court in 

Bhatia International Vs. Bulk Trading S.A. [(2002) 

4 SCC 105], which was reiterated in Venture Global 

Engg. Vs. Satyam Computer Services Ltd. [(2008) 4 

SCC 190] and Citation Infowares Ltd. Vs. Equinox 

Corporation [(2009) 7 SCC 220], it has been clearly 

held that where the operation of Part I of the 1996 

Act is not expressly excluded by the arbitration 

clause, the said Act would apply. In any event, in 

the instant case, Clause 28 of the Agreement 

expressly provides that the Agreement would be 

 14

subject to the laws of India and that during the 

period of arbitration the parties to the Agreement 

would carry on in accordance with the terms and 

conditions contained therein. Accordingly, on 

account of the application of Part I of the 1996 

Act, the International Arbitration Act, 2002 of 

Singapore would have no application to the facts of 

this case, though, the conduct of the proceedings 

of arbitration would be governed by the SIAC Rules. 

13. Ms. Malhotra urged that the High Court had 

erred in coming to the conclusion that since under 

Clause 27 of the Agreement, the parties had agreed 

that the arbitral proceedings would be conducted in 

accordance with the SIAC Rules and by virtue of 

Rule 32 thereof, the jurisdiction of the Indian 

Courts stood ousted. Ms. Malhotra urged that the 

High Court had failed to appreciate the provisions 

of Clause 28 of the Agreement while arriving at 

such a conclusion. Ms. Malhotra reiterated her 

 15

earlier submissions that Rule 32 of the SIAC Rules 

is subject to Rule 1.1 thereof which provides that 

if any of the said Rules was in conflict with the 

mandatory provision of the applicable law of the 

arbitration, from which the parties could not 

derogate, that provision shall prevail. Ms. 

Malhotra submitted that the finding of the High 

Court being contrary to the provisions agreed upon 

by the parties, such finding was liable to be set 

aside. Ms. Malhotra submitted that the very fact 

that the respondents had approached the District 

Court, Narsinghpur, in India and had filed an 

application under Section 9 of the 1996 Act 

therein, indicated that the respondent also 

accepted the applicability of the 1996 Act. Ms. 

Malhotra pointed out that in the application the 

respondent has indicated as follows :

 "That, the work of Contract, which was 

 executed between the petitioner and 

 respondent is well within the jurisdiction 

 of this Hon'ble Court at Narsinghpur. 

 16

 Thus, this Hon'ble Court has jurisdiction 

 to pass an order on this application under 

 Section 9 of the Arbitration and 

 Conciliation Act, 1996." 

14. Ms. Malhotra urged that having regard to 

Section 42 of the 1996 Act, it is in the District 

Court of Narsinghpur where the application under 

Section 9 of the Arbitration and Conciliation Act, 

has been filed which has jurisdiction over the 

arbitral proceedings at all stages. Ms. Malhotra 

pointed out that the High Court had erroneously 

held that Section 42 was not applicable to an 

appeal and was applicable only for filing an 

application, without appreciating the wordings of 

Section 42 which provides that Courts shall have 

jurisdiction over the arbitral proceedings also. 

Ms. Malhotra urged that with regard to the said 

findings of the High Court, the order impugned was 

liable to be set aside. 

 17

15. Ms. Malhotra submitted that the stand of the 

respondent that in view of clause 27 of the 

Agreement, the law governing the arbitral 

proceedings would be the SIAC Rules, was not 

tenable, in view of Clause 28 which without any 

ambiguity provides that the Agreement would be 

subject to the laws of India and that during the 

period of arbitration the parties to the Agreement 

would carry on, in accordance with the terms and 

conditions contained therein. Accordingly, it is 

the Arbitration and Conciliation Act, 1996, which 

would be the proper law or the law governing the 

arbitration.

16. Ms. Malhotra submitted that apparently there 

was a misconception in the minds of the learned 

Judges of the High Court as to the concept of the 

`proper law', of the Arbitration Agreement and the 

`Curial Law' governing the conduct and procedure of 

the reference. Ms. Malhotra submitted that while 

 18

the proper law of the Arbitration Agreement governs 

the law which would be applicable in deciding the 

disputes referred to arbitration, the Curial law is 

the law which governs the procedural aspect of the 

conduct of the arbitration proceedings. It was 

urged that in the instant case while the proper law 

of the arbitration would be the Arbitration and 

Conciliation Act, 1996, the Curial law would be the 

SIAC Rules of Singapore. Ms. Malhotra submitted 

that the said difference in the two concepts had 

been considered by this Court in Sumitomo Heavy 

Industries Ltd. Vs. ONGC [(1998) 1 SCC 305] and 

NTPC Vs. Singer [(1992) 3 SCC 551], in which the 

question for decision was what would be the law 

governing the arbitration when the proper law of 

the contract and the Curial law were agreed upon 

between the parties. In the said cases this Court 

observed that in many circumstances the applicable 

law would be the same as that of the proper law of 

contract and the Curial law, but it was not 

 19

uncommon to encounter the incumbent Curial law in 

cases where the parties had made an express choice 

of arbitration in a jurisdiction which was 

different from the jurisdiction with which the 

contract had the closest real connection.

17. Ms. Malhotra submitted that in the absence 

of any express choice, the proper law of the 

contract would be the proper law of the Arbitration 

Agreement. Ms. Malhotra submitted that in the 

instant case, admittedly the proper law of contract 

is the law of India and since the parties have not 

expressly made any choice regarding the law 

governing the Arbitration Agreement, the proper law 

of contract, namely, the Arbitration and 

Conciliation Act, 1996, would be the proper law of 

the Arbitration Agreement. Ms. Malhotra urged that 

ultimately the right to appeal which is a 

substantive right under the 1996 Act would be 

governed by the said Act and the instant appeal, 

 20

is therefore, liable to be allowed, and the order 

of the High Court, impugned in the appeal, was 

liable to be set aside.

18. Within the fact situation indicated on 

behalf of the appellant, Mr. Dharmendra Rautray, 

learned Advocate, appearing for the respondent 

Company, submitted that the issues involved in the 

present appeal were (i) whether the Indian Courts 

would have jurisdiction to entertain an appeal 

under Section 37 of the Arbitration and 

Conciliation Act, 1996, against an interim order 

passed by the Arbitral Tribunal with its seat in 

Singapore; (ii) Whether the "law of arbitration" 

would be the International Arbitration Act, 2002, 

of Singapore; and (iii) whether the "Curial law" 

would be the laws of Singapore?

19. Mr. Rautray submitted that apparently on the 

alleged failure of the appellant to complete the 

work awarded under the contract within the 

 21

stipulated period of 30 months from the date of 

commencement of the work, the respondent had to 

give an undertaking to the National Highways 

Authority of India by way of a Supplementary 

Agreement dated 11th February, 2009, to achieve a 

monthly rate of progress of work, failing which the 

aforesaid authority would be entitled to exercise 

all its rights under the main agreement and even to 

terminate the same with immediate effect. Mr. 

Routray submitted that on account of the failure of 

the appellant to live up to its commitments, the 

respondent who had suffered heavy financial loss 

and damages on account of such breach, issued 

notice of termination on 22nd September, 2009, 

pursuant to Clause 23.2 of the Agreement.

20. Thereafter, the parties entered into settlement 

talks, as provided for in Clause 26 of the 

Agreement and signed the minutes of the meeting 

dated 28th September, 2009. The settlement talks 

 22

between the parties having failed, the 

respondent/claimant, invoked Clause 27 of the 

Agreement for reference of the disputes to 

arbitration in accordance with the Singapore 

International Arbitration Centre Rules (SIAC 

Rules). The respondent/claimant filed a Statement 

of Claim on 16th August, 2010, before the Sole 

Arbitrator, Mr. Graham Easton, claiming a sum of 

221,36,91,097/- crores from the appellant. Both 

the parties filed applications before the learned 

Arbitrator seeking interim relief under Rule 24 of 

the SIAC Rules on 5th June, 2010. In their 

application for interim relief under Rule 24 of the 

SIAC Rules, the respondent, inter alia, prayed for 

release of all plants, machineries and equipment 

belonging to the respondent; injunction against the 

appellant from removing all plants, machineries, 

equipment, materials, aggregates, etc., owned by 

the respondent from the work site and/or camp site; 

a restraint order against the appellant from 

 23

creating any third party interest or otherwise 

sell, lease, charge the plants, machineries, 

equipment, materials, etc., at the work site and/or 

camp site and to permit the respondent to use the 

PMEs and materials, aggregates, etc., for carrying 

out the works in accordance with the terms and 

conditions of the main Agreement and the 

Supplementary Agreement dated 13th August, 2006.

21. The Sole Arbitrator appointed by the SIAC by 

its order dated 29th June, 2010, directed the 

appellant to, inter alia, release for use by the 

respondent all plants and equipment. The appellant 

was also restrained from creating any third party 

interest, or otherwise to deal with the properties 

at the work site and/or camp site and permit the 

respondent to use the aggregates of a total 

quantity of 27,580 cubic metres for carrying out 

the works. The Sole Arbitrator, while dealing with 

the applications filed by both the parties under 

 24

Rule 24 of the SIAC Rules, also recorded that the 

interim orders were being made with the object of 

allowing the construction work on the project to 

continue while the dispute between the parties were 

resolved in these arbitration proceedings and in 

order to ensure that the progress of the project 

was not hampered, while the parties waited for the 

outcome of the arbitration proceedings.

22. Mr. Routray submitted that the appeal filed 

by the appellant before the District Court, 

Narasinghpur, under Section 37 of the Arbitration 

and Conciliation Act, 1996, against the 

abovementioned order of the learned Arbitrator 

dated 29th June, 2010, was dismissed on 23rd July, 

2010, on the ground of maintainability and lack of 

jurisdiction. The Civil Revision filed against the 

said order was dismissed by the Madhya Pradesh High 

Court by its order dated 31st August, 2010. While 

dismissing the Revision, the High Court, inter 

 25

alia, observed that under Clause 27.1 of the 

Agreement, the parties had agreed to resolve their 

dispute under the provisions of SIAC Rules which 

expressly or, in any case, impliedly also adopted 

Rule 32 of the said Rules which categorically 

indicates that the law of arbitration under the 

said Rules would be the International Arbitration 

Act, 2002, of Singapore. The Special Leave 

Petition, out of which the present appeal arises, 

has been filed by the appellant against the said 

order dated 31st August, 2010.

23. Mr. Routray further submitted that the 

parties had, inter alia, agreed that the seat of 

arbitration would be Singapore and that the 

arbitration proceedings would be continued in 

accordance with the SIAC Rules, as per Clause 27.1 

of the Agreement. It was also agreed that the 

proper law of the agreement/contract dated 13th 

August, 2006, between the appellant and the 

 26

respondent would be the Indian law and the proper 

law of the arbitration would be the Singapore law.

24. Mr. Routray submitted that an application 

under Section 9 of the 1996 Act was filed before 

the District Court on 30th December, 2009, prior to 

the date of invocation of the arbitration 

proceedings and before the Curial law, i.e., the 

Singapore law, became operative. On the said 

application, the District Judge by his order dated 

10th March, 2010, directed the applicant to submit 

its case before the Arbitrator at Singapore. Mr. 

Routray pointed out that in the present case, the 

parties had expressly chosen the applicable laws to 

each legal disposition while entering into the 

Agreement dated 13th August, 2006. Mr. Routray 

submitted that the parties had expressly agreed 

that the proper law of the contract would be the 

Indian Law, the proper law of the arbitration would 

be the Singapore International Arbitration Act, 

 27

2002 and the Curial law would be Singapore law, 

since the seat of arbitration was in Singapore. 

Mr. Routray submitted that as observed by this 

Court in Sumitomo Heavy Industries Ltd. Vs. ONGC 

Ltd. & Ors. [(1998) 1 SCC 305], the Curial law, 

besides determining the procedural powers and 

duties of the Arbitrators, would also determine 

what judicial remedies are available to the 

parties, who wished to apply for security for costs 

or for discovery or who wished to challenge the 

Award once it had been rendered and before it was 

enforced. 

25. As to the filing of Application under 

Section 9 by the appellant before the District 

Court at Narsinghpur, Mr. Routray submitted that 

the High Court had correctly held that the 

proceedings had been initiated by the parties in 

the Court of District Judge, Narasinghpur, before 

the matter was referred to the Arbitrator and the 

 28

same was decided taking into consideration such 

circumstances. However, once the dispute was 

referred to the Arbitrator, the parties could not 

be permitted to deviate from the express terms of 

the Agreement under which the SIAC Rules came into 

operation. 

26. Mr. Routray submitted that the Section 9 

application had been filed before the Curial law 

became operative and in view of the agreement 

between the parties the Indian Arbitration and 

Conciliation Act, 1996, would not apply to the 

arbitration proceedings and the same would be 

governed by the Singapore laws. 

27. Mr. Routray then proceeded to the next 

important question as to whether choice of the 

"seat of arbitration" by the parties confers 

exclusive jurisdiction on the Courts of the seat of 

arbitration to entertain matters arising out of the 

contract. Learned counsel submitted that choice of 

 29

the seat of arbitration empowered the courts within 

the seat of arbitration to have supervisory 

jurisdiction over such arbitration. Mr. Routray 

has referred to various decisions of English Courts 

which had laid down the proposition that even if 

the arbitration was governed by the law of another 

country, it would not entitle the objector to mount 

a challenge to the Award in a country other than 

the seat of arbitration. It is not necessary to 

refer to the said judgments for a decision in this 

case.

28. Mr. Routray submitted that the decision of this 

Court in NTPC Vs. Singer (supra) relates to the 

applicability of the Indian Arbitration Act, 1940, 

and the Foreign Awards (Recognition and 

Enforcement) Act, 1961, to a foreign award sought 

to be set aside in India under the provisions of 

the 1940 Act. It was submitted that the said 

decisions have no relevance to the question raised 

 30

in the present case which raises the question as to 

whether the Indian Courts would have jurisdiction 

to entertain an appeal under Section 37 of the 1996 

Act against an interim order of the Arbitral 

Tribunal, despite the parties having expressly 

agreed that the seat of arbitration would be in 

Singapore and the Curial law of the arbitration 

proceedings would be the laws of Singapore. Once 

again referring to the decision in the NTPC case, 

Mr. Routray submitted that in paragraph 46 of the 

judgment, this Court had, inter alia, observed that 

Courts would give effect to the choice of a 

procedural law other than the proper law of 

contract only where the parties had agreed that the 

matters of procedure should be governed by a 

different system of law. Mr. Routray submitted 

that in the above-mentioned case, this Court was 

dealing with a challenge to a "domestic award" and 

not a "foreign award". Section 9(b) of the Foreign 

Awards (Recognition and Enforcement) Act, 1961, 

 31

provides that the said Act would not apply to an 

award, although, made outside India, but which is 

governed by the laws of India. Accordingly, all 

such awards were treated as domestic awards by the 

1961 Act and any challenge to the said award, 

could, therefore, be brought only under the 

provisions of the 1940 Act. Mr. Routray further 

submitted that the law of arbitration in the NTPC 

case (supra) was Indian law as opposed to the facts 

of the present case, where the parties had agreed 

that the law of arbitration would be the 

International Arbitration Act, 2002, of Singapore.

29. Mr. Routray urged that by virtue of Clause 27 

of the Agreement dated 13th August, 2006, and by 

accepting the SIAC Rules, the parties had agreed 

that Part I of the Arbitration and Conciliation 

Act, 1996, would not apply to the arbitration 

proceedings taking place in Singapore. According 

to Mr. Routray, the said decision was reiterated in 

 32

the Terms of Reference that the arbitration 

proceedings would be governed by the laws of 

Singapore. Mr. Routray further urged that even in 

the decision relied upon by the appellant in the 

case of Bhatia International, this Court had held 

that parties by agreement, express or implied, 

could exclude all or any of the provisions of Part 

I of the 1996 Act. Consequently, in Bhatia 

International this Court had held that exclusion of 

Part I of the 1996 Act could be by virtue of the 

Rules chosen by the parties to govern the 

arbitration proceedings. 

30. As far as applicability of Section 42 of the 

1996 Act is concerned, the Jabalpur Bench of the 

Madhya Pradesh High Court had held that by express 

agreement parties had ousted the jurisdiction of 

the Indian Courts, while the arbitration 

proceedings were subsisting. Accordingly, the 

jurisdiction of the Indian Courts stood ousted 

 33

during the subsistence of the arbitration 

proceedings and, accordingly, it is only the laws 

of arbitration as governed by the SIAC Rules which 

would govern the arbitration proceedings along with 

the procedural law, which is the law of Singapore. 

31. In order to appreciate the controversy that has 

arisen regarding the applicability of the 

provisions of Part I of the Arbitration and 

Conciliation Act, 1996, to the proceedings being 

conducted by the Arbitrator in Singapore in 

accordance with the SIAC Rules, it would be 

necessary to look at the arbitration clause 

contained in the agreement entered into between the 

parties on 13th August, 2006. Clause 27 of the 

Agreement provides for arbitration and reads as 

follows :

 "27. Arbitration.

 27.1 All disputes, differences arising 

 out of or in connection with the Agreement 

 shall be referred to arbitration. The 

 34

 arbitration proceedings shall be conducted 

 in English in Singapore in accordance with 

 the Singapore International Arbitration 

 Centre (SIAC) Rules as in force at the 

 time of signing of this Agreement. The 

 arbitration shall be final and binding.

 27.2 The arbitration shall take place in 

 Singapore and be conducted in English 

 language. 

 27.3 None of the Party shall be entitled 

 to suspend the performance of the 

 Agreement merely by reason of a dispute 

 and/or a dispute referred to arbitration."

32. Clause 28 of the Agreement describes the 

governing law and provides as follows :

 "This agreement shall be subject to the 

 laws of India. During the period of 

 arbitration, the performance of this 

 agreement shall be carried on without 

 interruption and in accordance with its 

 terms and provisions."

33. As will be seen from Clause 27.1, the 

arbitration proceedings are to be conducted in 

Singapore in accordance with the SIAC Rules as in 

force at the time of signing of the agreement. 

There is, therefore, no ambiguity that the 

 35

procedural law with regard to the arbitration 

proceedings, is the SIAC Rules. 

34. Clause 27.2 makes it clear that the seat of 

arbitration would be Singapore. 

35. What we are, therefore, left with to consider 

is the question as to what would be the law on the 

basis whereof the arbitral proceedings were to be 

decided. In our view, Clause 28 of the Agreement 

provides the answer. As indicated hereinabove, 

Clause 28 indicates that the governing law of the 

agreement would be the law of India, i.e., the 

Arbitration and Conciliation Act, 1996. The 

learned counsel for the parties have quite 

correctly spelt out the distinction between the 

"proper law" of the contract and the "curial law" 

to determine the law which is to govern the 

arbitration itself. While the proper law is the 

law which governs the agreement itself, in the 

absence of any other stipulation in the arbitration 

 36

clause as to which law would apply in respect of 

the arbitral proceedings, it is now well-settled 

that it is the law governing the contract which 

would also be the law applicable to the Arbitral 

Tribunal itself. Clause 27.1 makes it quite clear 

that the Curial law which regulates the procedure 

to be adopted in conducting the arbitration would 

be the SIAC Rules. There is, therefore, no 

ambiguity that the SIAC Rules would be the Curial 

law of the arbitration proceedings. It also 

happens that the parties had agreed to make 

Singapore the seat of arbitration. Clause 27.1 

indicates that the arbitration proceedings are to 

be conducted in accordance with the SIAC Rules. 

The immediate question which, therefore, arises is 

whether in such a case the provisions of Section 

2(2), which indicates that Part I of the above Act 

would apply, where the place of arbitration is in 

India, would be a bar to the invocation of the 

provisions of Sections 34 and 37 of the Act, as far 

 37

as the present arbitral proceedings, which are 

being conducted in Singapore, are concerned. 

36. In Bhatia International (supra), wherein while 

considering the applicability of Part I of the 1996 

Act to arbitral proceedings where the seat of 

arbitration was in India, this Court was of the 

view that Part I of the Act did not automatically 

exclude all foreign arbitral proceedings or awards, 

unless the parties specifically agreed to exclude 

the same. 

37. As has been pointed out by the learned Single 

Judge in the order impugned, the decision in the 

aforesaid case would not have any application to 

the facts of this case, inasmuch as, the parties 

have categorically agreed that the arbitration 

proceedings, if any, would be governed by the SIAC 

Rules as the Curial law, which included Rule 32, 

which categorically provides as follows :

 38

 "Where the seat of arbitration is 

 Singapore, the law of the arbitration 

 under these Rules shall be the 

 International Arbitration Act (Cap. 143A, 

 2002 Ed, Statutes of the Republic of 

 Singapore) or its modification or re-

 enactment thereof."

38. Having agreed to the above, it was no longer 

available to the appellant to contend that the 

"proper law" of the agreement would apply to the 

arbitration proceedings. The decision in Bhatia 

International Vs. Bulk Trading S.A. [(2002) 4 SCC 

105], which was applied subsequently in the case of 

Venture Global Engg. Vs. Satyam Computer Services 

Ltd. [(2008) 4 SCC 190] and Citation Infowares Ltd. 

Vs. Equinox Corporation [(2009) 7 SCC 220], would 

have no application once the parties agreed by 

virtue of Clause 27.1 of the Agreement that the 

arbitration proceedings would be conducted in 

Singapore, i.e., the seat of arbitration would be 

in Singapore, in accordance with the Singapore 

International Arbitration Centre Rules as in force 

 39

at the time of signing of the Agreement. As 

noticed hereinabove, Rule 32 of the SIAC Rules 

provides that the law of arbitration would be the 

International Arbitration Act, 2002, where the seat 

of arbitration is in Singapore. Although, it was 

pointed out on behalf of the appellant that in Rule 

1.1 it had been stated that if any of the SIAC 

Rules was in conflict with the mandatory provision 

of the applicable law of the arbitration, from 

which the parties could not derogate, the said 

mandatory provision would prevail, such is not the 

case as far as the present proceedings are 

concerned. In the instant case, Section 2(2) of 

the 1996 Act, in fact, indicates that Part I would 

apply only in cases where the seat of arbitration 

is in India. This Court in Bhatia International 

(supra), while considering the said provision, held 

that in certain situations the provision of Part I 

of the aforesaid Act would apply even when the seat 

of arbitration was not in India. In the instant 

 40

case, once the parties had specifically agreed that 

the arbitration proceedings would be conducted in 

accordance with the SIAC Rules, which includes Rule 

32, the decision in Bhatia International and the 

subsequent decisions on the same lines, would no 

longer apply in the instant case where the parties 

had willingly agreed to be governed by the SIAC 

Rules.

39. With regard to the effect of Section 42 of the 

Arbitration and Conciliation Act, 1996, the same, 

in our view was applicable at the pre-arbitral 

stage, when the Arbitrator had not also been 

appointed. Once the Arbitrator was appointed and 

the arbitral proceedings were commenced, the SIAC 

Rules became applicable shutting out the 

applicability of Section 42 and for that matter 

Part I of the 1996 Act, including the right of 

appeal under Section 37 thereof.

 41

40. We are not, therefore, inclined to interfere 

with the judgment under appeal and the appeal is 

accordingly dismissed and all interim orders are 

vacated.

41. There will be no order as to costs. 

 ................................................J.

 (ALTAMAS KABIR)

 ................................................J.

 (CYRIAC JOSEPH)

New Delhi

Dated:01.09.2011 

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