Overseas arbitral awards: HC clears uncertainty

Overseas arbitral awards: HC clears uncertainty

Swati Deshpande TNN

Mumbai: The Bombay HC on Wednesday held that parties to an international commercial agreement governed by a foreign law cannot challenge in an Indian court an award passed by an overseas arbitral tribunal.The judgment,passed by a bench headed by Justice D Y Chandrachud,holds significance for the international business community and sets to rest uncertainty that has prevailed since last year.
The matter before the HC pertained to an international contract that was subject to English law and was governed by the rule of Refined Sugar Association in London.The seat of the arbitration was London.Senior counsel Aspi Chinoy,who represented the Indian party,argued that when parties were silent on the choice of law that would govern an arbitration agreement then the Indian Arbitration law is not excluded.
Rejecting such a contention,the HC held that where foreign law is a proper law governing a contract,it would necessarily mean that the application of Indian Arbitration law is excluded.The HC held that if the parties to an agreement have chosen to be governed by a foreign arbitration law,they cannot later challenge in an Indian court any award passed by a foreign arbitral tribunal.