- Supreme Court of India allows Indian parties to choose foreign seat of arbitration (PASL v GE Power)
- What are the practical implications of this judgment?
- What was the background to the case?
- The arbitration proceedings
- Enforcement proceedings before Gujrat High Court
- What did the court decide?
- Seat of arbitration
- International Commercial Arbitration and Foreign Awards
- Contract Act and Public Policy
- Section 28(1)(a) of the Arbitration Act
- Section 10 of Commercial Courts Act 2015
- Ability to secure interim reliefs under section 9 of the Arbitration Act
- Analysis and way forward
Arbitration analysis: In a landmark ruling, the Supreme Court of India held that two Indian parties are entitled to agree a foreign seat of arbitration. The Supreme Court further clarified that the arbitral award issued in such cases would be considered a foreign award enforceable under the provisions of Part II of the Arbitration and Conciliation Act 1996 (Arbitration Act). The court also held that two Indian parties are entitled to interim reliefs from Indian courts in support of arbitration, even if their arbitration is seated outside India. Although it has not been expressly ruled by the Supreme Court, a careful review of the judgment suggests that there may not be any prohibition on two Indian parties electing a foreign law as the substantive law of the contract, provided the seat of arbitration is outside India. Aparimita Pratap, Aipak Banerjee, Kshama A Loya, member and leaders respectively in the International Litigation & Dispute Resolution Team at Nishith Desai Associates, consider the court’s judgment.
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