Two Indian parties cannot choose seat outside India

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In M/s Addhar Mercantile Private Limited v Shree Jagdamba Agrico Exports Pvt Ltd, Bombay High Court recently ruled that arbitration between two Indian parties “has to be conducted in India” and that under section 28(1)(a) of the Arbitration and Conciliation Act, 1996, an arbitral tribunal will have to decide the disputes “in accordance with the substantive law for the time being in force in India”.

Business_meeting_discussionThe court relied on a 2008 ruling of the Supreme Court in TDM Infrastructure Private Limited v UE Development India Private Limited, which held that “where both parties have Indian nationalities, then the arbitration between such parties cannot be said to be an international commercial arbitration”.

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The dispute digest is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted atlbhasin@bhasinco.in or lbhasin@gmail.com. Readers should not act on the basis of this information without seeking professional legal advice.