{"id":192279,"date":"2011-09-01T00:00:00","date_gmt":"2011-08-31T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/yograj-infras-ltd-vs-ssang-yong-engineering-on-1-september-2011"},"modified":"2017-10-21T23:57:30","modified_gmt":"2017-10-21T18:27:30","slug":"yograj-infras-ltd-vs-ssang-yong-engineering-on-1-september-2011","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/yograj-infras-ltd-vs-ssang-yong-engineering-on-1-september-2011","title":{"rendered":"Yograj Infras.Ltd vs Ssang Yong Engineering & … on 1 September, 2011"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Yograj Infras.Ltd vs Ssang Yong Engineering & … on 1 September, 2011<\/div>\n
Bench: Altamas Kabir, Cyriac Joseph<\/div>\n
                                                    REPORTABLE\n\n\n\n\n\n              IN THE SUPREME COURT OF INDIA\n\n\n\n                  CIVIL APPELLATE JURISDICTION\n\n\n\n             CIVIL APPEAL NO.7562    OF 2011\n\n       (Arising out of SLP(C) No.25624 of 2010)\n\n\n\n\n\nYOGRAJ INFRASTRUCTURE LTD.                ...     APPELLANT  \n\n\n\n\n\n           Vs.\n\n\n\n\n\nSSANG YONG ENGINEERING AND \n\nCONSTRUCTION CO. LTD.                     ...     RESPONDENT\n\n\n\n\n\n                      J U D G M E N T\n<\/pre>\n
ALTAMAS KABIR, J.\n<\/p>\n
1.    Leave granted.\n<\/p>\n
2.    The   Appellant   is   a   company   incorporated   under <\/p>\n
the  Companies  Act,  1956,  while  the  Respondent  is  a <\/p>\n
                                2<\/span><\/p>\n
company incorporated under the laws of the Republic <\/p>\n
of   Korea   with   its   registered   office   at   Seoul   in <\/p>\n
Korea and its project office at New Delhi.\n<\/p>\n
3.    On   12th     April,   2006,   the   National   Highways <\/p>\n
Authority   of   India,   New   Delhi   (NHAI)   awarded   a <\/p>\n
contract   to   the   Respondent,   SSang   Yong   Engineering <\/p>\n
and   Construction   Co.   Ltd.,   hereinafter   referred   to <\/p>\n
as   “SSY”,   for   the   National   Highways,   Sector   II <\/p>\n
Project,   Package:   ABD-II\/C-8,   for   upgradation   to <\/p>\n
Four   Laning   of   Jhansi-Lakhnadon   Section,   KM   297   to <\/p>\n
KM   351   of   NH   26   in   the   State   of   Madhya   Pradesh.\n<\/p>\n
The   total   contract   amount   was       2,19,01,16,805\/-.\n<\/p>\n
On   13th     August,   2006,   SSY   entered   into   a   Sub-\n<\/p>\n
Contract   with   the   Appellant   Company   for   carrying <\/p>\n
out   the   work   in   question.     The   Work   Order   of   the <\/p>\n
entire  project  was  granted  to  the  Appellant  by  the <\/p>\n
Respondent on back-to-back basis.  Clause 13 of the <\/p>\n
Agreement   entered   into   between   the   Respondent   and <\/p>\n
the Appellant provided that 92% of all payments for <\/p>\n
                               3<\/span><\/p>\n
the work done received by the Respondent from NHAI, <\/p>\n
would   be   passed   on   to   the   Appellant.     Clauses   27 <\/p>\n
and   28   provided   for   arbitration   and   the   governing <\/p>\n
law   agreed   to   was   the   Arbitration   and   Conciliation <\/p>\n
Act,   1996.     On   31st  October,   2006,   the   Appellant <\/p>\n
furnished   a   Performance   Bank   Guarantee   for            <\/p>\n
6,05,00,000\/-   to   the   Respondent   and   it   also <\/p>\n
invested about      88.15 crores in the project.  Three <\/p>\n
more   Bank   Guarantees,   totaling      5,00,00,000\/-,   for <\/p>\n
release of mobilization advance were also furnished <\/p>\n
by   the   Appellant   on   29th     May,   2009.        On   22nd <\/p>\n
September,   2009,   the   Respondent   Company   issued   a <\/p>\n
notice of termination of the Agreement, inter alia, <\/p>\n
on the ground of delay in performing the work under <\/p>\n
the Agreement.\n<\/p>\n
4.    On account of the above, the Appellant filed an <\/p>\n
application before the District and Sessions Judge, <\/p>\n
Narsinghpur, Madhya Pradesh, under Section 9 of the <\/p>\n
Arbitration and Conciliation Act, 1996, praying for <\/p>\n
                                               4<\/span><\/p>\n
interim   reliefs.                   A   similar   application   under <\/p>\n
Section   9   of   the   above   Act   was   filed   by   the <\/p>\n
Appellant   before   the   same   Court   on   30th  December, <\/p>\n
2009, also for interim reliefs.  Ultimately, on 20th <\/p>\n
May,   2010,   the   dispute   between   the   parties   was <\/p>\n
referred   to   arbitration   in   terms   of   the   Agreement <\/p>\n
and   a   Sole   Arbitrator,   Mr.   G.R.   Easton,   was <\/p>\n
appointed          by              the         Singapore                 International <\/p>\n
Arbitration   Centre   on   20th  May,   2010.     On   4th  June, <\/p>\n
2010, the Appellant filed an application before the <\/p>\n
Sole   Arbitrator   under   Section   17   of   the   aforesaid <\/p>\n
Act   being   SIAC   Arbitration   No.37   of   2010,  inter  <\/p>\n
alia, for the following reliefs :\n<\/p>\n
     \"a.    restrain               the         SSY          from         encashing \n\n            Performance                             Bank                 Guarantee \n\n<\/pre>\n
            No.101BGPGO63040001   dated   31.10.06   of <\/p>\n
            Syndicate   Bank,   Nehru   Place,   Delhi   of <\/p>\n
             6.05 crores;\n<\/p>\n
     b.     restrain the SSY from enchashing three <\/p>\n
            Bank   Guarantees   furnished   towards   the <\/p>\n
            mobilization   advance   bearing   numbers <\/p>\n
            101   BGFG   091490001   of                       1   Crore,   101 <\/p>\n
            BGFG   091490002   of                      1   Crore   and   101 <\/p>\n
                                  5<\/span><\/p>\n
            BGFG   091490003   of       3   Crores,   totaling <\/p>\n
            to     5 Crores;\n<\/p>\n
      c.    direct   SSY   to   release   a   sum   of                      <\/p>\n
            144,42,25,884\/-            along               with            the <\/p>\n
            interest   @   36%   till   realization   of <\/p>\n
            nationalized   bank   of   India   for   the <\/p>\n
            aforesaid   amount   and   keep   it   alive <\/p>\n
            till passing of the final Award.\n<\/p>\n
      d.    restrain   SSY   from   removing,   shifting, <\/p>\n
            alienating   or   transferring   in   any <\/p>\n
            manner either itself or through any of <\/p>\n
            its         agents\/employees,                 the         plant, <\/p>\n
            machineries,   equipments,   vehicles   and <\/p>\n
            materials,   in   other   words   maintain <\/p>\n
            status-quo,   till   the   passing   of   the <\/p>\n
            final arbitral award;\n<\/p>\n
      e.    grant   any   other   appropriate   interim <\/p>\n
            measures   of   protection   in   favour   of <\/p>\n
            the   Cross-Claimant\/applicant,   which   in <\/p>\n
            the   esteemed   opinion   of   this   Hon’ble <\/p>\n
            Tribunal   are   just   and   proper   in   the <\/p>\n
            facts and circumstance of the case;”\n<\/p>\n
5.    The   Respondent   also   filed   an   application   under <\/p>\n
Section   17   of   the   above   Act   before   the   Sole <\/p>\n
Arbitrator   on   5th  June,   2010,   for   interim   reliefs.\n<\/p>\n
After   considering   both   the   applications,   the <\/p>\n
Arbitrator   passed   an   interim   order   on   29th  June, <\/p>\n
2010, in the following manner :\n<\/p>\n
                                         6<\/span><\/p>\n
“1.         The   respondent   is   to   immediately <\/p>\n
release,   for   use   by   the   Claimant,   the <\/p>\n
items   of   plant,   machinery   and   equipment <\/p>\n
(PME)   numbered   1,5,7,8,10,19,20,21,22,23 <\/p>\n
and 32, as listed in Annexure A (Machinery <\/p>\n
Details)   of   the   Claimant’s   Application <\/p>\n
dated 5 June 2010.\n<\/p>\n
2.          The   respondent   is   restrained   from <\/p>\n
creating   any   third   party   interest   in,   or <\/p>\n
otherwise   selling,   leasing   or   charging, <\/p>\n
the   PME   or   other   assets   presently   located <\/p>\n
at   the   work   site   and\/or   the   camp   site   and <\/p>\n
which are owned by the respondent, without <\/p>\n
the permission of this Tribunal.\n<\/p>\n
3(i).           The   claimant   is   permitted   to   use <\/p>\n
the  aggregates, which  have been  identified <\/p>\n
in   Annexure   D   (engineer’s   Statement   of <\/p>\n
Materials   at   Site   for   September   2009)   of <\/p>\n
the   Claimant’s   Application   dated   5   June <\/p>\n
2010   as   a   total   quantity   of   274,580   cubic <\/p>\n
metres,   for   the   carrying   out   of   the   works <\/p>\n
in          accordance            with                   the            terms         and <\/p>\n
conditions   of   the   Main   Agreement   and   the <\/p>\n
Agreement   dated   13   August,   2006   between <\/p>\n
the parties.\n<\/p>\n
3(ii)           The   respondent   is   to   give   the \n\nClaimant              access                  to              the            aggregate \n\nstockpiles                 where              the                  abovementioned \n\n<\/pre>\n
quantity of material is currently held.\n<\/p>\n
The above interim orders are made with the <\/p>\n
objective   of   enabling   the   construction <\/p>\n
work   on   the   project   to   continue   while   the <\/p>\n
disputes   between   the   parties   are   resolved <\/p>\n
in   these   arbitration   proceedings   (ref.\n<\/p>\n
Terms or Reference dated 23 June 2010).\n<\/p>\n
                                          7<\/span><\/p>\n
        The   parties   have   liberty   at   short   notice, <\/p>\n
        if   any   of   the   above   directions   require <\/p>\n
        clarification   or   amendment   in   order   to <\/p>\n
        ensure proper implementation.\n<\/p>\n
        The   respondent   has   leave   (until   6   July <\/p>\n
        2010)   to   make   a   further   application   for <\/p>\n
        the   provision   of   security   by   the   claimant <\/p>\n
        in relation to the PME and aggregates.”\n<\/p>\n
6.      Aggrieved by the aforesaid interim order passed <\/p>\n
by   the   learned   Arbitrator,   the   Appellant   herein, <\/p>\n
which   was   the   respondent   before   the   learned <\/p>\n
Arbitrator,   filed   Appeal   No.2   of   2010   on   2nd  July, <\/p>\n
2010          before         the         learned          District             Judge, <\/p>\n
Narsinghpur,            under            Section         37(2)(b)         of         the <\/p>\n
Arbitration and Conciliation Act, 1996, for setting <\/p>\n
aside the same.  On behalf of the respondent it was <\/p>\n
contended in the said appeal that the same was not <\/p>\n
maintainable   before   the   learned   District   Judge, <\/p>\n
Narsinghpur,   since   the   seat   of   the   arbitration <\/p>\n
proceedings   was   in   Singapore   and   the   said <\/p>\n
proceedings were governed by the laws of Singapore.\n<\/p>\n
Accepting the submissions advanced on behalf of the <\/p>\n
                                8<\/span><\/p>\n
respondent,   the   learned   District   Judge   dismissed <\/p>\n
the   appeal   as   not   maintainable   on   23rd  July,   2010, <\/p>\n
without deciding the matter on merits.\n<\/p>\n
7.    The   appellant   then   moved   Civil   Revision   No.304 <\/p>\n
of   2010,   before   the   High   Court   on   26th  July,   2010.\n<\/p>\n
The   same   was   dismissed   by   the   High   Court   on   31st <\/p>\n
August,   2010,   against   which   the   Special   Leave <\/p>\n
Petition (now appeal) has been filed.\n<\/p>\n
8.    Appearing   for   the   Company,   Ms.   Indu   Malhotra, <\/p>\n
learned   Senior   Advocate,   submitted   that   the   stand <\/p>\n
taken on behalf of the respondent that the PMEs had <\/p>\n
to   remain   on   site   even   in   case   of   termination   of <\/p>\n
the   Agreement,   was   without   any   basis,   since   after <\/p>\n
the   Agreement   dated   13th  August,   2006,   the   parties <\/p>\n
had   agreed   in   the   Meeting   held   on   23rd  September, <\/p>\n
2006   that   in   case   of   termination   of   the   Agreement <\/p>\n
between   the   parties,   the   respondent   would   transfer <\/p>\n
the   PMEs   to   the   appellant.     Ms.   Malhotra   further <\/p>\n
clarified   that   Clause   4   of   the   Agreement   related <\/p>\n
                                9<\/span><\/p>\n
only   to   the   PMEs   and   not   to   the   aggregates,   since <\/p>\n
it had been admitted by the respondent that in case <\/p>\n
the   aggregates   were   not   made   available   to   them, <\/p>\n
they   could   buy   the   same   from   the   open   market.     It <\/p>\n
was   further   clarified   that   there   were   only   two <\/p>\n
machines   out   of   35   machines   which   formed   the <\/p>\n
subject   matter   of   the   interim   application,   i.e., <\/p>\n
Hotmix   Plant   and   Crusher,   which   were   in   the <\/p>\n
possession   of   the   appellant   and   the   value   thereof <\/p>\n
would be approximately         7 crores and a sum of          7.20 <\/p>\n
crores   had   already   been   deducted   by   the   respondent <\/p>\n
towards the repayment of the Arab Bank Loan for the <\/p>\n
said   PMEs.     Ms.   Malhotra   submitted   that   it   was <\/p>\n
incorrect   to   say   that   the   Project   was   stopped <\/p>\n
because   of   the   Stay   Order   passed   by   this   Court   as <\/p>\n
the   respondent   had   further   subcontracted   the   work <\/p>\n
to   Khara   and   Tarakunde   Infrastructure   Pvt.   Ltd., <\/p>\n
Ramdin   Ultratech   Pvt.   Ltd.   and   others.               Ms. <\/p>\n
Malhotra contended that apart from the Hotmix Plant <\/p>\n
and Crusher all the remaining PMEs had been removed <\/p>\n
                                                 10<\/span><\/p>\n
by   the   respondent   after   the   passing   of   the   order <\/p>\n
29th June, 2010.\n<\/p>\n
9.    On   the   question   of   the   applicable   law   in <\/p>\n
respect   of   the   arbitral   proceedings,   Ms.   Malhotra <\/p>\n
contended   that   the   Arbitration   and   Conciliation <\/p>\n
Act,   1996,   enacted   in   India   is   the   applicable   law <\/p>\n
of   arbitration.     Ms.   Malhotra   submitted   that   in <\/p>\n
terms   of   the   Agreement   arrived   at   between   the <\/p>\n
parties,   it   is   only   the   Indian   laws   to   which   the <\/p>\n
Agreement would be subjected.  She pointed out that <\/p>\n
Clause   28   of   the   Agreement   provides   that   the <\/p>\n
Agreement would be subject to the laws of India and <\/p>\n
that   during   the   period   of   arbitration,   the <\/p>\n
performance   of   the   Agreement   would   be   carried   out <\/p>\n
without   interruption   and   in   accordance   with   its <\/p>\n
terms         and         provisions.                            Accordingly,          having <\/p>\n
explicitly   agreed   that   the   Agreement   would   be <\/p>\n
subject   to   the   laws   of   India,   from   the   very <\/p>\n
commencement                   of         the              arbitration         till         its <\/p>\n
                                    11<\/span><\/p>\n
conclusion,   the   law   applicable   to   the   arbitration <\/p>\n
would   be   the   Indian   law.     In   other   words,   all <\/p>\n
interim   measures   sought   to   be   enforced   would <\/p>\n
necessarily   have   to   be   in   accordance   with   Sections <\/p>\n
9 and 37(2)(b) of the 1996 Act.\n<\/p>\n
10.    Ms.   Malhotra   submitted   that   Clause   27.1,   which <\/p>\n
forms part of Clause 27 of the agreement, which is <\/p>\n
the         arbitration         clause,         provides         that         the <\/p>\n
proceedings   of   arbitration   shall   be   conducted   in <\/p>\n
accordance   with   the   SIAC   Rules.     In   other   words, <\/p>\n
the   provisions   of   SIAC   Rules   would   apply   only   to <\/p>\n
the   arbitration   proceedings,   but   not   to   appeals <\/p>\n
from such proceedings.  Ms. Malhotra submitted that <\/p>\n
the   right   to   appeal   from   an   interim   order   under <\/p>\n
Section   37(2)(b)   is   a   substantive   right   provided <\/p>\n
under the 1996 Act and was not governed by the SIAC <\/p>\n
Rules.\n<\/p>\n
11.    Ms.   Malhotra   also   urged   that   Rule   1.1   of   the <\/p>\n
SIAC   Rules,   which,  inter   alia,   provides   that   where <\/p>\n
                                12<\/span><\/p>\n
the   parties   agreed   to   refer   their   disputes   to   the <\/p>\n
SIAC   for   arbitration,   it   would   be   deemed   that   the <\/p>\n
parties   had   agreed   that   such   arbitration   would   be <\/p>\n
conducted   in   accordance   with   the   SIAC   Rules.     If, <\/p>\n
however, any of the SIAC Rules was in conflict with <\/p>\n
a   mandatory   provision   of   the   applicable   law   of <\/p>\n
arbitration   from   which   the   parties   could   not <\/p>\n
derogate, that provision from the applicable law of <\/p>\n
the   arbitration   shall   prevail.              Ms.   Malhotra <\/p>\n
submitted that Rule 32 of the SIAC Rules is one of <\/p>\n
such   Rules   which   provides   that   if   the   seat   of <\/p>\n
arbitration   is   Singapore,   then   the   applicable   law <\/p>\n
of   arbitration   under   the   Rules   would   be   the <\/p>\n
International   Arbitration   Act,   2002,   of   Singapore.\n<\/p>\n
However,   Section   37(2)(b)   of   the   1996   Act   being   a <\/p>\n
substantive   and   non-derogable   provision,   providing <\/p>\n
a   right   of   appeal   to   parties   from   a   denial   of   an <\/p>\n
interim   measure,   such   a   provision   protects   the <\/p>\n
interest   of   parties   during   the   continuance   of <\/p>\n
arbitration   and   as   a   consequence,   Rule   32   of   the <\/p>\n
                              13<\/span><\/p>\n
SIAC Rules which does not provide for an appeal, is <\/p>\n
in   direct   conflict   with   a   mandatory   non-derogable <\/p>\n
provision contained in Section 37(2)(b) of the 1996 <\/p>\n
Act.\n<\/p>\n
12.     Ms. Malhotra then went on to submit that Part I <\/p>\n
of the 1996 Act had not been excluded by Clause 27 <\/p>\n
of the Agreement and the 1996 Act would, therefore, <\/p>\n
apply   to   the   said   Agreement.          Ms.   Malhotra <\/p>\n
submitted   that   in   the   decision   of   this   Court   in <\/p>\n
Bhatia   International  Vs.  Bulk   Trading   S.A.  [(2002) <\/p>\n
4  SCC  105],  which  was  reiterated  in  Venture  Global <\/p>\n
Engg.  Vs.  Satyam   Computer   Services   Ltd.  [(2008)   4 <\/p>\n
SCC   190]   and  Citation   Infowares   Ltd.  Vs.  Equinox <\/p>\n
Corporation [(2009) 7 SCC 220], it has been clearly <\/p>\n
held that where the operation of Part I of the 1996 <\/p>\n
Act   is   not   expressly   excluded   by   the   arbitration <\/p>\n
clause, the said Act would apply.  In any event, in <\/p>\n
the   instant   case,   Clause   28   of   the   Agreement <\/p>\n
expressly   provides   that   the   Agreement   would   be <\/p>\n
                               14<\/span><\/p>\n
subject   to   the   laws   of   India   and   that   during   the <\/p>\n
period   of   arbitration   the   parties   to   the   Agreement <\/p>\n
would   carry   on   in   accordance   with   the   terms   and <\/p>\n
conditions   contained   therein.            Accordingly,   on <\/p>\n
account   of   the   application   of   Part   I   of   the   1996 <\/p>\n
Act,   the   International   Arbitration   Act,   2002   of <\/p>\n
Singapore would have no application to the facts of <\/p>\n
this   case,   though,   the   conduct   of   the   proceedings <\/p>\n
of arbitration would be governed by the SIAC Rules.\n<\/p>\n
13.    Ms.   Malhotra   urged   that   the   High   Court   had <\/p>\n
erred  in  coming  to  the  conclusion  that  since  under <\/p>\n
Clause  27  of  the  Agreement,  the  parties  had  agreed <\/p>\n
that the arbitral proceedings would be conducted in <\/p>\n
accordance   with   the   SIAC   Rules   and   by   virtue   of <\/p>\n
Rule   32   thereof,   the   jurisdiction   of   the   Indian <\/p>\n
Courts   stood   ousted.     Ms.   Malhotra   urged   that   the <\/p>\n
High   Court   had   failed   to   appreciate   the   provisions <\/p>\n
of   Clause   28   of   the   Agreement   while   arriving   at <\/p>\n
such   a   conclusion.     Ms.   Malhotra   reiterated   her <\/p>\n
                                      15<\/span><\/p>\n
earlier  submissions  that  Rule  32  of  the  SIAC  Rules <\/p>\n
is  subject  to  Rule  1.1  thereof  which  provides  that <\/p>\n
if   any   of   the   said   Rules   was   in   conflict   with   the <\/p>\n
mandatory   provision   of   the   applicable   law   of   the <\/p>\n
arbitration,   from   which   the   parties   could   not <\/p>\n
derogate,   that   provision   shall   prevail.                          Ms. <\/p>\n
Malhotra   submitted   that   the   finding   of   the   High <\/p>\n
Court   being   contrary   to   the   provisions   agreed   upon <\/p>\n
by   the   parties,   such   finding   was   liable   to   be   set <\/p>\n
aside.     Ms.   Malhotra   submitted   that   the   very   fact <\/p>\n
that   the   respondents   had   approached   the   District <\/p>\n
Court,   Narsinghpur,   in   India   and   had   filed   an <\/p>\n
application   under   Section   9   of   the   1996   Act <\/p>\n
therein,   indicated   that   the   respondent   also <\/p>\n
accepted   the   applicability   of   the   1996   Act.     Ms. <\/p>\n
Malhotra   pointed   out   that   in   the   application   the <\/p>\n
respondent has indicated as follows :\n<\/p>\n
     “That,   the   work   of   Contract,   which   was <\/p>\n
     executed         between         the         petitioner         and <\/p>\n
     respondent  is well  within the  jurisdiction <\/p>\n
     of   this   Hon’ble   Court   at   Narsinghpur. <\/p>\n
                                            16<\/span><\/p>\n
       Thus,   this   Hon’ble   Court   has   jurisdiction <\/p>\n
       to pass an order on this application under <\/p>\n
       Section         9         of         the         Arbitration         and <\/p>\n
       Conciliation Act, 1996.”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
14.    Ms.   Malhotra   urged   that   having   regard   to <\/p>\n
Section   42   of   the   1996   Act,   it   is   in   the   District <\/p>\n
Court   of   Narsinghpur   where   the   application   under <\/p>\n
Section   9   of   the   Arbitration   and   Conciliation   Act, <\/p>\n
has   been   filed   which   has   jurisdiction   over   the <\/p>\n
arbitral   proceedings   at   all   stages.     Ms.   Malhotra <\/p>\n
pointed   out   that   the   High   Court   had   erroneously <\/p>\n
held   that   Section   42   was   not   applicable   to   an <\/p>\n
appeal   and   was   applicable   only   for   filing   an <\/p>\n
application,   without   appreciating   the   wordings   of <\/p>\n
Section   42   which   provides   that   Courts   shall   have <\/p>\n
jurisdiction   over   the   arbitral   proceedings   also.\n<\/p>\n
Ms.   Malhotra   urged   that   with   regard   to   the   said <\/p>\n
findings  of  the  High  Court,  the  order  impugned  was <\/p>\n
liable to be set aside.\n<\/p>\n
                                           17<\/span><\/p>\n
15.     Ms. Malhotra submitted that the stand of the <\/p>\n
respondent   that   in   view   of   clause   27   of   the <\/p>\n
Agreement,         the         law         governing         the         arbitral <\/p>\n
proceedings   would   be   the   SIAC   Rules,   was   not <\/p>\n
tenable,   in   view   of   Clause   28   which   without   any <\/p>\n
ambiguity   provides   that   the   Agreement   would   be <\/p>\n
subject   to   the   laws   of   India   and   that   during   the <\/p>\n
period   of   arbitration   the   parties   to   the   Agreement <\/p>\n
would   carry   on,   in   accordance   with   the   terms   and <\/p>\n
conditions   contained   therein.     Accordingly,   it   is <\/p>\n
the   Arbitration   and   Conciliation   Act,   1996,   which <\/p>\n
would   be   the   proper   law   or   the   law   governing   the <\/p>\n
arbitration.\n<\/p>\n
16.     Ms.   Malhotra   submitted   that   apparently   there <\/p>\n
was   a   misconception   in   the   minds   of   the   learned <\/p>\n
Judges   of   the   High   Court   as   to   the   concept   of   the <\/p>\n
`proper   law’,   of   the   Arbitration   Agreement   and   the <\/p>\n
`Curial Law’ governing the conduct and procedure of <\/p>\n
the   reference.     Ms.   Malhotra   submitted   that   while <\/p>\n
                               18<\/span><\/p>\n
the proper law of the Arbitration Agreement governs <\/p>\n
the   law   which   would   be   applicable   in   deciding   the <\/p>\n
disputes referred to arbitration, the Curial law is <\/p>\n
the  law  which  governs  the  procedural  aspect  of  the <\/p>\n
conduct   of   the   arbitration   proceedings.     It   was <\/p>\n
urged that in the instant case while the proper law <\/p>\n
of   the   arbitration   would   be   the   Arbitration   and <\/p>\n
Conciliation Act, 1996, the Curial law would be the <\/p>\n
SIAC   Rules   of   Singapore.   Ms.   Malhotra   submitted <\/p>\n
that   the   said   difference   in   the   two   concepts   had <\/p>\n
been   considered   by   this   Court   in  Sumitomo     Heavy <\/p>\n
Industries   Ltd.  Vs.  ONGC  [(1998)   1   SCC   305]   and <\/p>\n
NTPC  Vs.  Singer  [(1992)   3   SCC   551],   in   which   the <\/p>\n
question   for   decision   was   what   would   be   the   law <\/p>\n
governing   the   arbitration   when   the   proper   law   of <\/p>\n
the   contract   and   the   Curial   law   were   agreed   upon <\/p>\n
between the parties.   In the said cases this Court <\/p>\n
observed   that   in   many   circumstances   the   applicable <\/p>\n
law  would be the same as that of the proper law of <\/p>\n
contract   and   the   Curial   law,   but   it   was   not <\/p>\n
                                         19<\/span><\/p>\n
uncommon   to   encounter   the   incumbent   Curial   law   in <\/p>\n
cases  where  the  parties  had  made  an  express  choice <\/p>\n
of   arbitration   in   a   jurisdiction   which   was <\/p>\n
different   from   the   jurisdiction   with   which   the <\/p>\n
contract had the closest real connection.\n<\/p>\n
17.          Ms.   Malhotra   submitted   that   in   the   absence <\/p>\n
of   any   express   choice,   the   proper   law   of   the <\/p>\n
contract would be the proper law of the Arbitration <\/p>\n
Agreement.   Ms.   Malhotra   submitted   that   in   the <\/p>\n
instant case, admittedly the proper law of contract <\/p>\n
is the law of India and since the parties have not <\/p>\n
expressly   made   any   choice   regarding   the   law <\/p>\n
governing the Arbitration Agreement, the proper law <\/p>\n
of          contract,         namely,          the         Arbitration         and <\/p>\n
Conciliation  Act,  1996,  would  be  the  proper  law  of <\/p>\n
the   Arbitration   Agreement.   Ms.   Malhotra   urged   that <\/p>\n
ultimately   the   right   to   appeal   which   is   a <\/p>\n
substantive   right   under   the   1996   Act   would   be <\/p>\n
governed     by   the   said   Act   and   the   instant   appeal, <\/p>\n
                                          20<\/span><\/p>\n
is   therefore,   liable   to   be   allowed,   and   the   order <\/p>\n
of   the   High   Court,   impugned   in   the   appeal,   was <\/p>\n
liable to be set aside.\n<\/p>\n
18.      Within   the   fact   situation   indicated   on <\/p>\n
behalf   of   the   appellant,   Mr.   Dharmendra   Rautray, <\/p>\n
learned   Advocate,   appearing   for   the   respondent <\/p>\n
Company,   submitted   that   the   issues   involved   in   the <\/p>\n
present   appeal   were   (i)   whether   the   Indian   Courts <\/p>\n
would   have   jurisdiction   to   entertain   an   appeal <\/p>\n
under         Section         37         of         the         Arbitration         and <\/p>\n
Conciliation   Act,   1996,   against   an   interim   order <\/p>\n
passed   by   the   Arbitral   Tribunal   with   its   seat   in <\/p>\n
Singapore;     (ii)   Whether   the   “law   of   arbitration”\n<\/p>\n
would   be   the   International   Arbitration   Act,   2002, <\/p>\n
of   Singapore;   and   (iii)   whether   the   “Curial   law”\n<\/p>\n
would be the laws of Singapore?\n<\/p>\n
19.      Mr. Rautray submitted that apparently on the <\/p>\n
alleged   failure   of   the   appellant   to   complete   the <\/p>\n
work   awarded   under   the   contract   within   the <\/p>\n
                              21<\/span><\/p>\n
stipulated   period   of   30   months   from   the   date   of <\/p>\n
commencement   of   the   work,   the   respondent   had   to <\/p>\n
give   an   undertaking   to   the   National   Highways <\/p>\n
Authority   of   India   by   way   of   a   Supplementary <\/p>\n
Agreement   dated   11th  February,   2009,   to   achieve   a <\/p>\n
monthly rate of progress of work, failing which the <\/p>\n
aforesaid   authority   would   be   entitled   to   exercise <\/p>\n
all its rights under the main agreement and even to <\/p>\n
terminate   the   same   with   immediate   effect.     Mr. <\/p>\n
Routray submitted that on account of the failure of <\/p>\n
the   appellant   to   live   up   to   its   commitments,   the <\/p>\n
respondent   who   had   suffered   heavy   financial   loss <\/p>\n
and   damages   on   account   of   such   breach,   issued <\/p>\n
notice   of   termination   on   22nd     September,   2009, <\/p>\n
pursuant to Clause 23.2 of the Agreement.\n<\/p>\n
20. Thereafter, the parties entered into settlement <\/p>\n
talks,   as   provided   for   in   Clause   26   of   the <\/p>\n
Agreement   and   signed   the   minutes   of   the   meeting <\/p>\n
dated   28th  September,   2009.     The   settlement   talks <\/p>\n
                                            22<\/span><\/p>\n
between         the              parties          having              failed,            the <\/p>\n
respondent\/claimant,   invoked   Clause   27   of   the <\/p>\n
Agreement   for   reference   of   the   disputes   to <\/p>\n
arbitration   in   accordance   with   the   Singapore <\/p>\n
International               Arbitration                Centre         Rules         (SIAC <\/p>\n
Rules).     The   respondent\/claimant   filed   a   Statement <\/p>\n
of   Claim   on   16th  August,   2010,   before   the   Sole <\/p>\n
Arbitrator, Mr. Graham Easton, claiming a sum of  <\/p>\n
221,36,91,097\/-   crores   from   the   appellant.     Both <\/p>\n
the   parties   filed   applications   before   the   learned <\/p>\n
Arbitrator   seeking   interim   relief   under   Rule   24   of <\/p>\n
the   SIAC   Rules   on   5th                     June,   2010.   In   their <\/p>\n
application for interim relief under Rule 24 of the <\/p>\n
SIAC   Rules,   the   respondent,  inter   alia,   prayed   for <\/p>\n
release   of   all   plants,   machineries   and   equipment <\/p>\n
belonging to the respondent; injunction against the <\/p>\n
appellant   from   removing   all   plants,   machineries, <\/p>\n
equipment,   materials,   aggregates,   etc.,   owned   by <\/p>\n
the respondent from the work site and\/or camp site;\n<\/p>\n
a   restraint   order   against   the   appellant   from <\/p>\n
                                           23<\/span><\/p>\n
creating   any   third   party   interest   or   otherwise <\/p>\n
sell,   lease,   charge   the   plants,   machineries, <\/p>\n
equipment, materials, etc., at the work site and\/or <\/p>\n
camp   site   and   to   permit   the   respondent   to   use   the <\/p>\n
PMEs   and   materials,   aggregates,   etc.,   for   carrying <\/p>\n
out   the   works   in   accordance   with   the   terms   and <\/p>\n
conditions         of         the         main         Agreement         and         the <\/p>\n
Supplementary Agreement dated 13th August, 2006.\n<\/p>\n
21.     The Sole Arbitrator appointed by the SIAC by <\/p>\n
its   order   dated   29th                June,   2010,   directed   the <\/p>\n
appellant   to,  inter   alia,   release   for   use   by   the <\/p>\n
respondent all plants and equipment.  The appellant <\/p>\n
was   also   restrained   from   creating   any   third   party <\/p>\n
interest,   or   otherwise   to   deal   with   the   properties <\/p>\n
at   the   work   site   and\/or   camp   site   and   permit   the <\/p>\n
respondent   to   use   the   aggregates   of   a   total <\/p>\n
quantity   of   27,580   cubic   metres   for   carrying   out <\/p>\n
the works.  The Sole Arbitrator, while dealing with <\/p>\n
the   applications   filed   by   both   the   parties   under <\/p>\n
                                   24<\/span><\/p>\n
Rule   24   of   the   SIAC   Rules,   also   recorded   that   the <\/p>\n
interim   orders   were   being   made   with   the   object   of <\/p>\n
allowing   the   construction   work   on   the   project   to <\/p>\n
continue while the dispute between the parties were <\/p>\n
resolved   in   these   arbitration   proceedings   and   in <\/p>\n
order   to   ensure   that   the   progress   of   the   project <\/p>\n
was  not  hampered,  while  the  parties  waited  for  the <\/p>\n
outcome of the arbitration proceedings.\n<\/p>\n
22.         Mr.   Routray   submitted   that   the   appeal   filed <\/p>\n
by   the   appellant   before   the   District   Court, <\/p>\n
Narasinghpur,   under   Section   37   of   the   Arbitration <\/p>\n
and         Conciliation         Act,         1996,         against         the <\/p>\n
abovementioned   order   of   the   learned   Arbitrator <\/p>\n
dated   29th  June,   2010,   was   dismissed   on   23rd  July, <\/p>\n
2010,  on  the  ground  of  maintainability  and  lack  of <\/p>\n
jurisdiction.  The Civil Revision filed against the <\/p>\n
said order was dismissed by the Madhya Pradesh High <\/p>\n
Court   by   its   order   dated   31st  August,   2010.     While <\/p>\n
dismissing   the   Revision,   the   High   Court,  inter  <\/p>\n
                              25<\/span><\/p>\n
alia,   observed   that   under   Clause   27.1   of   the <\/p>\n
Agreement,   the   parties   had   agreed   to   resolve   their <\/p>\n
dispute   under   the   provisions   of   SIAC   Rules   which <\/p>\n
expressly   or,   in   any   case,   impliedly   also   adopted <\/p>\n
Rule   32   of   the   said   Rules   which   categorically <\/p>\n
indicates   that   the   law   of   arbitration   under   the <\/p>\n
said   Rules   would   be   the   International   Arbitration <\/p>\n
Act,   2002,   of   Singapore.         The   Special   Leave <\/p>\n
Petition,   out   of   which   the   present   appeal   arises, <\/p>\n
has   been   filed   by   the   appellant   against   the   said <\/p>\n
order dated 31st August, 2010.\n<\/p>\n
23.    Mr.   Routray   further   submitted   that   the <\/p>\n
parties   had,  inter   alia,   agreed   that   the   seat   of <\/p>\n
arbitration   would   be   Singapore   and   that   the <\/p>\n
arbitration   proceedings   would   be   continued   in <\/p>\n
accordance  with  the  SIAC  Rules,  as  per  Clause  27.1 <\/p>\n
of   the   Agreement.     It   was   also   agreed   that   the <\/p>\n
proper   law   of   the   agreement\/contract   dated   13th <\/p>\n
August,   2006,   between   the   appellant   and   the <\/p>\n
                               26<\/span><\/p>\n
respondent   would   be   the   Indian   law   and   the   proper <\/p>\n
law of the arbitration would be the Singapore law.\n<\/p>\n
24.     Mr.   Routray   submitted   that   an   application <\/p>\n
under   Section   9   of   the   1996   Act   was   filed   before <\/p>\n
the District Court on 30th  December, 2009, prior to <\/p>\n
the   date   of   invocation   of   the   arbitration <\/p>\n
proceedings   and   before   the   Curial   law,   i.e.,   the <\/p>\n
Singapore   law,   became   operative.           On   the   said <\/p>\n
application,   the   District   Judge   by   his   order   dated <\/p>\n
10th  March,   2010,   directed   the   applicant   to   submit <\/p>\n
its   case   before   the   Arbitrator   at   Singapore.     Mr. <\/p>\n
Routray   pointed   out   that   in   the   present   case,   the <\/p>\n
parties had expressly chosen the applicable laws to <\/p>\n
each   legal   disposition   while   entering   into   the <\/p>\n
Agreement   dated   13th  August,   2006.     Mr.   Routray <\/p>\n
submitted   that   the   parties   had   expressly   agreed <\/p>\n
that   the   proper   law   of   the   contract   would   be   the <\/p>\n
Indian Law, the proper law of the arbitration would <\/p>\n
be   the   Singapore   International   Arbitration   Act, <\/p>\n
                                27<\/span><\/p>\n
2002   and   the   Curial   law   would   be   Singapore   law, <\/p>\n
since   the   seat   of   arbitration   was   in   Singapore.\n<\/p>\n
Mr.   Routray   submitted   that   as   observed   by   this <\/p>\n
Court   in  Sumitomo   Heavy   Industries   Ltd.  Vs.  ONGC <\/p>\n
Ltd.   &   Ors.  [(1998)   1   SCC   305],   the   Curial   law, <\/p>\n
besides   determining   the   procedural   powers   and <\/p>\n
duties   of   the   Arbitrators,   would   also   determine <\/p>\n
what   judicial   remedies   are   available   to   the <\/p>\n
parties, who wished to apply for security for costs <\/p>\n
or   for   discovery   or   who   wished   to   challenge   the <\/p>\n
Award   once   it   had   been   rendered   and   before   it   was <\/p>\n
enforced.\n<\/p>\n
25.     As   to   the   filing   of   Application   under <\/p>\n
Section   9   by   the   appellant   before   the   District <\/p>\n
Court   at   Narsinghpur,   Mr.   Routray   submitted   that <\/p>\n
the   High   Court   had   correctly   held   that   the <\/p>\n
proceedings   had   been   initiated   by   the   parties   in <\/p>\n
the   Court   of   District   Judge,   Narasinghpur,   before <\/p>\n
the   matter   was   referred   to   the   Arbitrator   and   the <\/p>\n
                               28<\/span><\/p>\n
same   was   decided   taking   into   consideration   such <\/p>\n
circumstances.   However,   once   the   dispute   was <\/p>\n
referred   to   the   Arbitrator,   the   parties   could   not <\/p>\n
be   permitted   to   deviate   from   the   express   terms   of <\/p>\n
the  Agreement  under  which  the  SIAC  Rules  came  into <\/p>\n
operation.\n<\/p>\n
26.      Mr.   Routray   submitted   that   the   Section   9 <\/p>\n
application   had   been   filed   before   the   Curial   law <\/p>\n
became   operative   and   in   view   of   the   agreement <\/p>\n
between   the   parties   the   Indian   Arbitration   and <\/p>\n
Conciliation   Act,   1996,   would   not   apply   to   the <\/p>\n
arbitration   proceedings   and   the   same   would   be <\/p>\n
governed by the Singapore laws.\n<\/p>\n
27.    Mr.   Routray   then   proceeded   to   the   next <\/p>\n
important   question   as   to   whether   choice   of   the <\/p>\n
“seat   of   arbitration”   by   the   parties   confers <\/p>\n
exclusive jurisdiction on the Courts of the seat of <\/p>\n
arbitration to entertain matters arising out of the <\/p>\n
contract.  Learned counsel submitted that choice of <\/p>\n
                                         29<\/span><\/p>\n
the seat of arbitration empowered the courts within <\/p>\n
the   seat   of   arbitration   to   have   supervisory <\/p>\n
jurisdiction   over   such   arbitration.     Mr.   Routray <\/p>\n
has referred to various decisions of English Courts <\/p>\n
which   had   laid   down   the   proposition   that   even   if <\/p>\n
the  arbitration  was  governed  by  the  law  of  another <\/p>\n
country, it would not entitle the objector to mount <\/p>\n
a   challenge   to   the   Award   in   a   country   other   than <\/p>\n
the   seat   of   arbitration.     It   is   not   necessary   to <\/p>\n
refer to the said judgments for a decision in this <\/p>\n
case.\n<\/p>\n
28.    Mr. Routray submitted that the decision of this <\/p>\n
Court   in  NTPC  Vs.  Singer  (supra)   relates   to   the <\/p>\n
applicability   of   the   Indian   Arbitration   Act,   1940, <\/p>\n
and         the         Foreign         Awards         (Recognition         and <\/p>\n
Enforcement)   Act,   1961,   to   a   foreign   award   sought <\/p>\n
to   be   set   aside   in   India   under   the   provisions   of <\/p>\n
the   1940   Act.     It   was   submitted   that   the   said <\/p>\n
decisions   have   no   relevance   to   the   question   raised <\/p>\n
                               30<\/span><\/p>\n
in the present case which raises the question as to <\/p>\n
whether   the   Indian   Courts   would   have   jurisdiction <\/p>\n
to entertain an appeal under Section 37 of the 1996 <\/p>\n
Act   against   an   interim   order   of   the   Arbitral <\/p>\n
Tribunal,   despite   the   parties   having   expressly <\/p>\n
agreed   that   the   seat   of   arbitration   would   be   in <\/p>\n
Singapore   and   the   Curial   law   of   the   arbitration <\/p>\n
proceedings   would   be   the   laws   of   Singapore.     Once <\/p>\n
again   referring   to   the   decision   in   the  NTPC  case, <\/p>\n
Mr.   Routray   submitted   that   in   paragraph   46   of   the <\/p>\n
judgment, this Court had, inter alia, observed that <\/p>\n
Courts   would   give   effect   to   the   choice   of   a <\/p>\n
procedural   law   other   than   the   proper   law   of <\/p>\n
contract only where the parties had agreed that the <\/p>\n
matters   of   procedure   should   be   governed   by   a <\/p>\n
different   system   of   law.     Mr.   Routray   submitted <\/p>\n
that   in   the   above-mentioned   case,   this   Court   was <\/p>\n
dealing  with  a  challenge  to  a  “domestic  award”  and <\/p>\n
not a “foreign award”.  Section 9(b) of the Foreign <\/p>\n
Awards   (Recognition   and   Enforcement)   Act,   1961, <\/p>\n
                                 31<\/span><\/p>\n
provides   that   the   said   Act   would   not   apply   to   an <\/p>\n
award,   although,   made   outside   India,   but   which   is <\/p>\n
governed   by   the   laws   of   India.     Accordingly,   all <\/p>\n
such  awards  were  treated  as  domestic  awards  by  the <\/p>\n
1961   Act   and   any   challenge   to   the   said   award, <\/p>\n
could,   therefore,   be   brought   only   under   the <\/p>\n
provisions   of   the   1940   Act.     Mr.   Routray   further <\/p>\n
submitted   that   the   law   of   arbitration   in   the  NTPC <\/p>\n
case (supra) was Indian law as opposed to the facts <\/p>\n
of   the   present   case,   where   the   parties   had   agreed <\/p>\n
that   the   law   of   arbitration   would   be   the <\/p>\n
International Arbitration Act, 2002, of Singapore.\n<\/p>\n
29.    Mr.   Routray   urged   that   by   virtue   of   Clause   27 <\/p>\n
of   the   Agreement   dated   13th  August,   2006,   and   by <\/p>\n
accepting   the   SIAC   Rules,   the   parties   had   agreed <\/p>\n
that   Part   I   of   the   Arbitration   and   Conciliation <\/p>\n
Act,   1996,   would   not   apply   to   the   arbitration <\/p>\n
proceedings   taking   place   in   Singapore.     According <\/p>\n
to Mr. Routray, the said decision was reiterated in <\/p>\n
                                           32<\/span><\/p>\n
the   Terms   of   Reference   that   the   arbitration <\/p>\n
proceedings   would   be   governed   by   the   laws   of <\/p>\n
Singapore.    Mr.  Routray  further  urged  that  even  in <\/p>\n
the   decision   relied   upon   by   the   appellant   in   the <\/p>\n
case   of  Bhatia   International,   this   Court   had   held <\/p>\n
that   parties   by   agreement,   express   or   implied, <\/p>\n
could exclude all or any of the provisions of Part <\/p>\n
I   of   the   1996   Act.                   Consequently,   in           Bhatia <\/p>\n
International this Court had held that exclusion of <\/p>\n
Part   I   of   the   1996   Act   could   be   by   virtue   of   the <\/p>\n
Rules   chosen   by   the   parties   to   govern   the <\/p>\n
arbitration proceedings.\n<\/p>\n
30.  As   far   as   applicability   of   Section   42   of   the <\/p>\n
1996   Act   is   concerned,   the   Jabalpur   Bench   of   the <\/p>\n
Madhya  Pradesh  High  Court  had  held  that  by  express <\/p>\n
agreement   parties   had   ousted   the   jurisdiction   of <\/p>\n
the         Indian         Courts,          while         the         arbitration <\/p>\n
proceedings   were   subsisting.   Accordingly,   the <\/p>\n
jurisdiction   of   the   Indian   Courts   stood   ousted <\/p>\n
                                          33<\/span><\/p>\n
during         the         subsistence               of         the         arbitration <\/p>\n
proceedings   and,   accordingly,   it   is   only   the   laws <\/p>\n
of  arbitration  as  governed  by  the  SIAC  Rules  which <\/p>\n
would govern the arbitration proceedings along with <\/p>\n
the procedural law, which is the law of Singapore.\n<\/p>\n
31.    In order to appreciate the controversy that has <\/p>\n
arisen         regarding           the          applicability                    of         the <\/p>\n
provisions   of   Part   I   of   the   Arbitration   and <\/p>\n
Conciliation   Act,   1996,   to   the   proceedings   being <\/p>\n
conducted   by   the   Arbitrator   in   Singapore   in <\/p>\n
accordance   with   the   SIAC   Rules,   it   would   be <\/p>\n
necessary   to   look   at   the   arbitration   clause <\/p>\n
contained in the agreement entered into between the <\/p>\n
parties   on   13th  August,   2006.     Clause   27   of   the <\/p>\n
Agreement   provides   for   arbitration   and   reads   as <\/p>\n
follows :\n<\/p>\n
       “27.   Arbitration.\n<\/p><\/blockquote>\n
\n
       27.1        All   disputes,   differences   arising <\/p>\n
       out of or in connection with the Agreement <\/p>\n
       shall   be   referred   to   arbitration.     The <\/p>\n
                                              34<\/span><\/p>\n
       arbitration   proceedings   shall   be   conducted <\/p>\n
       in English in Singapore in accordance with <\/p>\n
       the   Singapore   International   Arbitration <\/p>\n
       Centre   (SIAC)   Rules   as   in   force   at   the <\/p>\n
       time   of   signing   of   this   Agreement.     The <\/p>\n
       arbitration shall be final and binding.<\/p>\n
       27.2     The   arbitration   shall   take   place   in <\/p>\n
       Singapore   and   be   conducted   in   English <\/p>\n
       language. <\/p><\/blockquote>\n
\n\n\n\n       27.3     None of the Party shall be entitled \n\n       to         suspend         the         performance         of         the \n\n<\/pre>\n
       Agreement   merely   by   reason   of   a   dispute <\/p>\n
       and\/or a dispute referred to arbitration.”<\/p>\n<\/blockquote>\n
32.    Clause   28   of   the   Agreement   describes   the <\/p>\n
governing law and provides as follows :\n<\/p>\n
       “This   agreement   shall   be   subject   to   the <\/p>\n
       laws   of   India.                  During   the   period   of <\/p>\n
       arbitration,   the   performance   of   this <\/p>\n
       agreement   shall   be   carried   on   without <\/p>\n
       interruption   and   in   accordance   with   its <\/p>\n
       terms and provisions.”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
33.    As   will   be   seen   from   Clause   27.1,   the <\/p>\n
arbitration   proceedings   are   to   be   conducted   in <\/p>\n
Singapore   in   accordance   with   the   SIAC   Rules   as   in <\/p>\n
force   at   the   time   of   signing   of   the   agreement.\n<\/p>\n
There   is,   therefore,   no   ambiguity   that   the <\/p>\n
                                35<\/span><\/p>\n
procedural   law   with   regard   to   the   arbitration <\/p>\n
proceedings, is the SIAC Rules.\n<\/p>\n
34.    Clause   27.2   makes   it   clear   that   the   seat   of <\/p>\n
arbitration would be Singapore.\n<\/p>\n
35.    What   we   are,   therefore,   left   with   to   consider <\/p>\n
is the question as to what would be the law on the <\/p>\n
basis   whereof   the   arbitral   proceedings   were   to   be <\/p>\n
decided.     In   our   view,   Clause   28   of   the   Agreement <\/p>\n
provides   the   answer.     As   indicated   hereinabove, <\/p>\n
Clause   28   indicates   that   the   governing   law   of   the <\/p>\n
agreement   would   be   the   law   of   India,   i.e.,   the <\/p>\n
Arbitration   and   Conciliation   Act,   1996.              The <\/p>\n
learned   counsel   for   the   parties   have   quite <\/p>\n
correctly   spelt   out   the   distinction   between   the <\/p>\n
“proper   law”   of   the   contract   and   the   “curial   law”\n<\/p>\n
to   determine   the   law   which   is   to   govern   the <\/p>\n
arbitration   itself.     While   the   proper   law   is   the <\/p>\n
law   which   governs   the   agreement   itself,   in   the <\/p>\n
absence of any other stipulation in the arbitration <\/p>\n
                               36<\/span><\/p>\n
clause   as   to   which   law   would   apply   in   respect   of <\/p>\n
the   arbitral   proceedings,   it   is   now   well-settled <\/p>\n
that   it   is   the   law   governing   the   contract   which <\/p>\n
would   also   be   the   law   applicable   to   the   Arbitral <\/p>\n
Tribunal  itself.    Clause  27.1  makes  it  quite  clear <\/p>\n
that   the   Curial   law   which   regulates   the   procedure <\/p>\n
to   be   adopted   in   conducting   the   arbitration   would <\/p>\n
be   the   SIAC   Rules.        There   is,   therefore,   no <\/p>\n
ambiguity   that   the   SIAC   Rules   would   be   the   Curial <\/p>\n
law   of   the   arbitration   proceedings.            It   also <\/p>\n
happens   that   the   parties   had   agreed   to   make <\/p>\n
Singapore   the   seat   of   arbitration.   Clause   27.1 <\/p>\n
indicates   that   the   arbitration   proceedings   are   to <\/p>\n
be   conducted   in   accordance   with   the   SIAC   Rules.\n<\/p>\n
The   immediate   question   which,   therefore,   arises   is <\/p>\n
whether   in   such   a   case   the   provisions   of   Section <\/p>\n
2(2), which indicates that Part I of the above Act <\/p>\n
would   apply,   where   the   place   of   arbitration   is   in <\/p>\n
India,   would   be   a   bar   to   the   invocation   of   the <\/p>\n
provisions of Sections 34 and 37 of the Act, as far <\/p>\n
                                 37<\/span><\/p>\n
as   the   present   arbitral   proceedings,   which   are <\/p>\n
being conducted in Singapore, are concerned.\n<\/p>\n
36.    In  Bhatia   International  (supra),   wherein   while <\/p>\n
considering the applicability of Part I of the 1996 <\/p>\n
Act   to   arbitral   proceedings   where   the   seat   of <\/p>\n
arbitration   was   in   India,   this   Court   was   of   the <\/p>\n
view   that   Part   I   of   the   Act   did   not   automatically <\/p>\n
exclude all foreign arbitral proceedings or awards, <\/p>\n
unless   the   parties   specifically   agreed   to   exclude <\/p>\n
the same.\n<\/p>\n
37.    As   has   been   pointed   out   by   the   learned   Single <\/p>\n
Judge   in   the   order   impugned,   the   decision   in   the <\/p>\n
aforesaid   case   would   not   have   any   application   to <\/p>\n
the   facts   of   this   case,   inasmuch   as,   the   parties <\/p>\n
have   categorically   agreed   that   the   arbitration <\/p>\n
proceedings,  if  any,  would  be  governed  by  the  SIAC <\/p>\n
Rules   as   the   Curial   law,   which   included   Rule   32, <\/p>\n
which categorically provides as follows :\n<\/p>\n
                                          38<\/span><\/p>\n
       “Where         the         seat         of         arbitration               is <\/p>\n
       Singapore,   the   law   of   the   arbitration <\/p>\n
       under          these            Rules         shall          be         the <\/p>\n
       International   Arbitration   Act   (Cap.   143A, <\/p>\n
       2002   Ed,   Statutes   of   the   Republic   of <\/p>\n
       Singapore)   or   its   modification   or   re-\n<\/p>\n
       enactment thereof.”\n<\/p>\n
38.    Having   agreed   to   the   above,   it   was   no   longer <\/p>\n
available   to   the   appellant   to   contend   that   the <\/p>\n
“proper   law”   of   the   agreement   would   apply   to   the <\/p>\n
arbitration   proceedings.     The   decision   in  Bhatia <\/p>\n
International  Vs.  Bulk   Trading   S.A.  [(2002)   4   SCC <\/p>\n
105], which was applied subsequently in the case of <\/p>\n
Venture   Global   Engg.  Vs.  Satyam   Computer   Services <\/p>\n
Ltd. [(2008) 4 SCC 190] and Citation Infowares Ltd.\n<\/p>\n
Vs.  Equinox   Corporation  [(2009)   7   SCC   220],   would <\/p>\n
have   no   application   once   the   parties   agreed   by <\/p>\n
virtue   of   Clause   27.1   of   the   Agreement   that   the <\/p>\n
arbitration   proceedings   would   be   conducted   in <\/p>\n
Singapore,   i.e.,   the   seat   of   arbitration   would   be <\/p>\n
in   Singapore,   in   accordance   with   the   Singapore <\/p>\n
International   Arbitration   Centre   Rules   as   in   force <\/p>\n
                               39<\/span><\/p>\n
at   the   time   of   signing   of   the   Agreement.     As <\/p>\n
noticed   hereinabove,   Rule   32   of   the   SIAC   Rules <\/p>\n
provides   that   the   law   of   arbitration   would   be   the <\/p>\n
International Arbitration Act, 2002, where the seat <\/p>\n
of   arbitration   is   in   Singapore.     Although,   it   was <\/p>\n
pointed out on behalf of the appellant that in Rule <\/p>\n
1.1   it   had   been   stated   that   if   any   of   the   SIAC <\/p>\n
Rules   was   in   conflict   with   the   mandatory   provision <\/p>\n
of   the   applicable   law   of   the   arbitration,   from <\/p>\n
which   the   parties   could   not   derogate,   the   said <\/p>\n
mandatory   provision   would   prevail,   such   is   not   the <\/p>\n
case   as   far   as   the   present   proceedings   are <\/p>\n
concerned.     In   the   instant   case,   Section   2(2)   of <\/p>\n
the 1996 Act, in fact, indicates that Part I would <\/p>\n
apply   only   in   cases   where   the   seat   of   arbitration <\/p>\n
is   in   India.     This   Court   in  Bhatia   International <\/p>\n
(supra), while considering the said provision, held <\/p>\n
that  in  certain  situations  the  provision  of  Part  I <\/p>\n
of the aforesaid Act would apply even when the seat <\/p>\n
of   arbitration   was   not   in   India.     In   the   instant <\/p>\n
                              40<\/span><\/p>\n
case, once the parties had specifically agreed that <\/p>\n
the   arbitration   proceedings   would   be   conducted   in <\/p>\n
accordance with the SIAC Rules, which includes Rule <\/p>\n
32,   the   decision   in  Bhatia   International  and   the <\/p>\n
subsequent   decisions   on   the   same   lines,   would   no <\/p>\n
longer  apply  in  the  instant  case  where  the  parties <\/p>\n
had   willingly   agreed   to   be   governed   by   the   SIAC <\/p>\n
Rules.\n<\/p>\n
39.    With regard to the effect of Section 42 of the <\/p>\n
Arbitration   and   Conciliation   Act,   1996,   the   same, <\/p>\n
in   our   view   was   applicable   at   the   pre-arbitral <\/p>\n
stage,   when   the   Arbitrator   had   not   also   been <\/p>\n
appointed.     Once   the   Arbitrator   was   appointed   and <\/p>\n
the   arbitral   proceedings   were   commenced,   the   SIAC <\/p>\n
Rules   became   applicable            shutting   out   the <\/p>\n
applicability   of   Section   42   and     for   that   matter <\/p>\n
Part   I   of   the   1996   Act,   including   the   right   of <\/p>\n
appeal under Section 37 thereof.\n<\/p>\n
                              41<\/span><\/p>\n
40.    We are not, therefore,   inclined   to interfere <\/p>\n
with   the   judgment   under   appeal   and   the   appeal   is <\/p>\n
accordingly   dismissed   and   all   interim   orders   are <\/p>\n
vacated.\n<\/p>\n
41.    There will be no order as to costs.\n<\/p>\n
                                         …………………………………………J.\n<\/p>\n
                                         (ALTAMAS KABIR)<\/p>\n
                                         …………………………………………J.\n<\/p>\n
                                         (CYRIAC JOSEPH)<\/p>\n
New Delhi<\/p>\n
Dated:01.09.2011 <\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Yograj Infras.Ltd vs Ssang Yong Engineering & … on 1 September, 2011 Bench: Altamas Kabir, Cyriac Joseph 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. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-192279","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nYograj Infras.Ltd vs Ssang Yong Engineering & ... on 1 September, 2011 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/yograj-infras-ltd-vs-ssang-yong-engineering-on-1-september-2011\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Yograj Infras.Ltd vs Ssang Yong Engineering & ... on 1 September, 2011 - 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