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Monday, February 17, 2014

Arbitration & Conciliation Act - Jurisdiction of Indian courts or English courts - German company established an Indian company under name & Style - Enercon (India) Ltd. (hereinafter referred to as “EIL”), in 1994 EIL, having its registered office at Daman in joint venture with respondents - Apex court held that neither party belongs to England nor the business meant for England - mere mentioning of venue as London, does not confer the English courts with jurisdiction over the disputed subject - and further held that when arbitration clause was mentioned - non- clarity about the number of arbitrators does not invalid the Arbitration clause and further held that Anti suit injunction restraining a party from initiating proceeding in England is maintainable as the English courts have no jurisdiction over the subject matter - further directed the parties to go with arbitration proceedings as per Indian laws = Enercon (India) Ltd. & Ors. …Appellants VERSUS Enercon GMBH & Anr. ...Respondents= 2014 (Feb.Part) judis.nic.in/supremecourt/filename=41227

Arbitration & Conciliation Act - Jurisdiction of Indian courts or English courts - German company established an Indian company under name & Style - Enercon (India) Ltd. (hereinafter referred to as “EIL”),  in  1994 EIL, having its registered office at Daman in joint venture with respondents - Apex court held that neither party belongs to England nor the business meant for England - mere mentioning of venue as London, does not confer the English courts with jurisdiction over the disputed subject - and further held that when arbitration clause was mentioned - non- clarity about the number of arbitrators does not invalid the Arbitration clause and further held that Anti suit injunction restraining a party from initiating proceeding in England is maintainable as the English courts have no jurisdiction over the subject matter - further directed the parties to go with arbitration proceedings as per Indian laws =

On 5th  October,  2012,
          the  Bombay  High  Court  dismissed  the  writ  petitions  by  the
          order/judgment impugned before us,  wherein  it  has  been,  inter
          alia, held as under:
          A. The scope of the enquiry under the  Writ  Petition  No.7804  of
             2009  is  restricted  to  the  existence  of  the   arbitration
             agreement and not the main underlying contract  (which  can  be
             challenged before the Arbitral Tribunal);
          B. Prima facie, there is an arbitration agreement;
          C. The curial law of the arbitration agreement is India;
          D. London, designated as the venue in Clause  18.3  of  the  draft
             IPLA, is only a convenient geographical location;
          E. London is not the seat;
          F. English Courts have concurrent jurisdiction since the venue  of
             arbitration is London.=

i) Is the IPLA a valid and concluded contract?
             ii) Is it for the Court to decide issue No. (i) or should it be
                 left to be considered by the Arbitral Tribunal?
            iii) Linked to (i) and (ii) is the issue whether the  Appellants
                 can refuse to join arbitration on the plea that there is no
                 concluded IPLA?
             iv) Assuming that the IPLA is  a  concluded  contract;  is  the
                 Arbitration Clause 18.1 vague and unworkable,  as  observed
                 by both the Arbitrators i.e. Mr. V.V.  Veeder  QC  and  Mr.
                 Justice B.P. Jeevan Reddy?
              v) In case the arbitration clause is held to be  workable,  is
                 the seat of arbitration in London or in India?
             vi) In the event it is held that the seat is  in  India,  would
                 the English Courts have  the  concurrent  jurisdiction  for
                 taking  such  measures  as  required  in  support  of   the
                 arbitration as the venue for the arbitration proceedings is
                 London?
            vii) Linked to (v) & (vi) is the issue  whether  the  Appellants
                 are entitled for an anti-suit injunction?
This apart, we have earlier noticed that the main  contract,  the
          IPLA is to be performed in  India.   The  governing  law  of  the
          contract is the law of India.  Neither  party  is  English.   One
          party is Indian, the other is German.   The  enforcement  of  the
          award will be in India.  Any interim measures  which  are  to  be
          sought against the assets of Appellant No. 1 ought to be in India
          as the assets are  situated  in  India.   We  have  also  earlier
          noticed that Respondent No.1 has not  only  participated  in  the
          proceedings in the Daman courts and the Bombay  High  Court,  but
          also filed independent proceedings under  the  Companies  Act  at
          Madras  and  Delhi.   All  these  factors  would  indicate   that
          Respondent No.1 does not even consider the Indian Courts as forum-
          non-conveniens. In view of the above, we are  of  the  considered
          opinion that the  objection  raised  by  the  Appellants  to  the
          continuance of the parallel proceedings in England is not  wholly
          without justification. The  only  single  factor  which  prompted
          Respondent No.1 to pursue the action  in  England  was  that  the
          venue  of  the  arbitration  has  been  fixed  in  London.    The
          considerations for designating a convenient venue for arbitration
          can not be understood as conferring  concurrent  jurisdiction  on
          the English Courts over the arbitration proceedings  or  disputes
          in general.  Keeping in view the aforesaid, we  are  inclined  to
          restore the anti-suit  injunction  granted  by  the  Daman  Trial
          Court.


 Civil Appeal No.2086 of 2014 @  SLP  (C)  No.10924  of  2013  is
      partly allowed as follows:
            a. The conclusion of the Bombay High Court that the seat of the
               arbitration is in India is upheld;


            b. The conclusion that the English Courts would have concurrent

               jurisdiction is overruled and consequently set aside;

            c. The conclusion of the Bombay High Court that  the  anti-suit

               injunction  granted  by  the  Daman  Trial  Court  has  been
               correctly vacated by Daman Appellate Court is overruled  and
               hence set aside.
            d. Consequently, the Respondents are restrained from proceeding
               with any of the actions the details of which have been given
               in the judgment of Eder, J. dated 23rd March, 2012  and  the
               order dated 27th March, 2012 as  well  as  the  judgment  of
               Justice Cooke  dated  30th  November,  2012.  These  matters
               include:
                 All  or  any  of  the  proceedings/  applications/  reliefs
                 claimed by the Respondents in the  Arbitration  Claim  2011
                 Folio 1399, including but not limited to:


                 (1) Application under Section 18 of the English Arbitration

                 Act, 1996;


                 (2) Injunctions pursuant  to  Section  44  of  the  English

                 Arbitration Act, 1996 and /or  Section  37  of  the  Senior
                 Courts Act, 1981.


                       The Respondents are also restrained from  approaching

                 the      English      Courts      for      seeking      any
                 declaration/relief/clarification and/or  to  institute  any
                 proceedings that may result in delaying or otherwise affect
                 the  constitution  of  the  arbitral   tribunal   and   its
                 proceedings thereafter.
148.  In view of the above, the parties are  directed  to  proceed  to
      arbitration in accordance with law


2014 (Feb.Part) judis.nic.in/supremecourt/filename=41227
SURINDER SINGH NIJJAR, FAKKIR MOHAMED IBRAHIM KALIFULLA
                                                                REPORTABLE


                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION


                        CIVIL APPEAL NO.2086 OF 2014
                 (Arising out of SLP (C) No. 10924 of 2013)


      Enercon (India) Ltd. & Ors.                         …Appellants
      VERSUS
      Enercon GMBH & Anr.                              ...Respondents
                                    With
                        CIVIL APPEAL NO.2087 OF 2014
                 (Arising out of SLP (C) No. 10906 of 2013)


                               J U D G M E N T
      SURINDER SINGH NIJJAR, J.
     1. Leave granted.


     2. These civil appeals have been filed against the order and  judgment
        dated 5th October, 2012, passed by the Bombay  High  Court  in  CWP
        Nos.7804 of 2009 and 7636 of 2009. The Bombay  High  Court  by  the
        impugned order dismissed both the aforesaid Civil Writ Petitions.

     3. Appellants No.2 and  3  (members  of  the  Mehra  family)  and  the
        Respondent No.1 (a company incorporated under the laws of  Germany,
        having its registered office at Aurich,  Germany)  entered  into  a
        joint venture business 
by setting up the Appellant No. 1-Company  –
        Enercon (India) Ltd. (hereinafter referred to as “EIL”),  in  1994.
        EIL, having its registered office at Daman, was to manufacture  and
        sell Wind Turbine Generators (“WTGs”) in  India.  
One  Dr.  Alloys
        Wobben is the Chairman of the Respondent No.1. Respondent  No.2,  a
        company incorporated under the laws of Germany, has the  patent  of
        technology in connection with the aforesaid WTGs.
In furtherance of
        their  business  venture,  the   parties   entered   into   various
        agreements, which can be briefly noticed:


      Share Holding Agreement:
     4.  On 12th January, 1994, the Appellant Nos. 2 and 3 entered  into  a
        Share Holding Agreement (“SHA”) with the Respondent No.1. In  terms
        of the SHA, the Respondent No. 1 was to  hold  51%  shares  of  the
        Appellant  No.  1-Company,  and  the  Appellant  Nos.  2   and   3,
        collectively, were to hold 49% shares.


      Technical Know How Agreement:
     5. On the same day, i.e. 12th January, 1994, the Appellant No.  1  and
        the Respondent No. 1 entered into a  Technical  Know-How  Agreement
        (“TKHA”) by which the Respondent No. 1 agreed to  transfer  to  the
        Appellant No. 1 the  right  and  the  technical  know-how  for  the
        manufacture of WTGs specified therein and their  components.  Under
        the terms of the TKHA, the Respondent No. 1 has to  supply  special
        components to the Appellant No. 1. Under the TKHA,  the  Respondent
        No. 1 is the licensor and the Appellants are the licensees.


      Supplementary Shareholding Agreements:
     6. The SHA was subsequently amended by two Supplementary Share Holding
        Agreements (“SSHAs”) dated 19th May,  1998  and   19th  May,  2000.
        Pursuant to the said SSHAs, the shareholding of  Respondent  No.  1
        in  the  Appellant  No.  1-Company  increased  to  56%  whilst  the
        shareholding of the Appellant Nos. 2 and 3 was reduced to 44%.


      Supplementary Technical Know-How Agreement:
     7. A Supplementary Technical Know-How Agreement (“STKHA”) amending the
        TKHA was executed on 19th May, 2000, by which a further license  to
        manufacture the E-30 and E-40 WTGs was granted  by  the  Respondent
        No. 1 to the Appellants.




      Heads of Agreement:
     8. In April 2004,  the  period  of  the  TKHA  expired;  however,  the
        Respondent No. 1 continued to supply the WTGs and components to the
        Appellant No.1. At this stage, there were discussions  between  the
        parties about the possibility of a further  agreement  which  would
        cover future technologies developed by Respondents.  On  23rd  May,
        2006, these negotiations were recorded in a document titled  “Heads
        of Agreement”.


      Agreed Principles:
     9. On 29th September, 2006, the Appellants and the  Respondent  No.  1
        entered into what is known as the "Agreed Principles" for  the  use
        and supply of the windmill  technology.  The  second  page  of  the
        Agreed Principles, inter alia, provides as follows:
           “The Agreed Principles as mentioned above,  in  their  form  and
           substance, would be the basis of all the final agreements  which
           shall be finally executed.


           The agreed principles shall be finally incorporated into the
           A. IPLA “Draft enclosed”
           B. Successive Technology Transfer Agreement
           C. Name Use Licence Agreement
           D. Amendment to Existing Share Holding Agreement.
           The above agreements will be made to  the  satisfaction  of  all
           parties. And then shall be legally executed.”
      IPLA (dated 29th September, 2006):
    10. On the same day, i.e. 29th September, 2006,  Intellectual  Property
        License Agreement (“IPLA”) was executed  between  the  parties.  It
        appears that Appellant No.2 has signed the IPLA on  behalf  of  the
        Appellants No. 2 and 3. However, the Appellants have contended that
        this IPLA is not a concluded contract.
According to the Appellants,
        the draft IPLA was  initialled  by  Appellant  No.2  only  for  the
        purpose of identification, with the clear  understanding  that  the
        said draft still contained certain discrepancies which  had  to  be
        brought in line with the Agreed Principles.
Thus, the case of  the
        Appellant is that the draft IPLA  was  not  a  concluded  contract.
         On the other hand, Respondent No.1 has taken the stand  that  IPLA
        is a concluded contract and hence, binding on the parties.
Both the
        parties refer to various e-mails/letters addressed  to  each  other
        for substantiating their respective stands.
It would be  useful  to
        notice here some of the emails and  other  communication  exchanged
        between the parties:


      E-mails, letters & Text message:
      i. 30.09.2006: A handwritten letter was addressed by Appellant No.2 to
         Dr. Wobben, Chairman of Respondent No. 2. In this letter, Appellant
         No.2 admits signing the IPLA. The fact that IPLA does  not  provide
         for E-82 model is also referred to in this letter.
     ii. 02.10.2006: Dr. Wobben, Chairman of Respondent  No.2,  addressed  a
         letter to Appellant No.2, stating therein his offer to  acquire  6%
         of Equity shares of the Appellant No.1  Company  which  were  being
         held by the Mehra Family, for 40 million Euros.
           iii. 04.10.2006:  Email by one Ms. Nicole Fritsch, on behalf  of
                Respondent no.1,  wherein  it  was  inter  alia  stated  as
                follows:
“…we will do our utmost to prepare/adapt the  agreements  according  to  the
agreed principles until 19, October and will send the drafts to you.”
            iv. 18.10.2006: Ms. Fritsch wrote a  letter  to  the  Appellant
                No.2, stating therein that IPLA has  been  signed  on  29th
                September, 2006 and also that the drafts of  the  remaining
                agreements have been prepared in the light  of  the  Agreed
                Principles.
             v. 01.11.2006: SMS/text message sent  by  Dr.  Wobben  to  the
                Appellant No.2, wherein it was stated that he wishes to buy
                12% of shares  held  by  Appellant  No.2  for            40
                million Euros.
            vi. 03.11.2006: E-mail written by the Appellant No.2 to     Dr.
                Wobben, wherein  the  aforesaid  offer  of  acquisition  of
                shares of the Appellant No.1 company was rejected. Further,
                Appellant No.2 wrote that it would be a prudent exercise to
                put together the IPLA and the relevant  amendments  to  the
                SHA in good shape, so that Agreed Principles get  reflected
                in the documents at the time of  their  signing.  Appellant
                No.2 also highlighted certain  discrepancies  between  IPLA
                and the Agreed Principles.
           vii.   24.11.2006:   E-mail   sent    by    Ms.    Fritsch    to
                Appellant No.2, wherein she apologised  for  the  delay  in
                sending outstanding drafts of the “Final IPLA, Shareholding
                Agreement, and other Successive Agreements”.  It  was  also
                mentioned  that  there  are  some  discrepancies   in   the
                contracts  and  the  Agreed  Principles   for   which   the
                Respondent has to discuss the matter internally.
          viii. 01.01.2007: Ms. Fritsch wrote an  email  to  the  Appellant
                No.2, wherein it was stated that the Respondent No.2  would
                be sending the revised drafts of the outstanding  contracts
                to the Appellants, so as to let Appellant  No.2  and  their
                lawyers verify those drafts.
            ix. 29.01.2007: Ms. Fritsch forwarded the amended SHA of  1994,
                Corporate Name User Agreement,  and  Successive  Technology
                Licence Agreement to Appellant No.2.
             x. 31.01.2007: An email was sent to  Respondent  No.1  by  the
                Appellant No.1, wherein it was  categorically  stated  that
                the IPLA is not a  “done  deal,”  the  same  being  not  in
                conformity with the Agreed Principles.

      11. The Appellants claim that  Respondent  No.1,  in  February,  2007,
          unilaterally decided to stop all shipments of supplies to India in
          order to pressurize them to sell the share holding as  desired  by
           Dr. Wobben.  
However in March, 2007,  after  discussions  between
          the parties, Respondent No.1 resumed  supplies.   
Thereafter,  the
          supplies were stopped once again in July, 2007.  This was followed
          by institution of the following legal proceedings:

LITIGATION:
      12. We may notice only those proceedings between the parties that have
          a bearing on the issues arising before us.


Derivative Suit:
      13.  Appellants No.2 and 3 filed a  derivative  suit  (in  Civil  Suit
          No.2667 of 2007) on 11th September, 2007 before  the  Bombay  High
          Court (“Bombay Suit”), seeking resumption of supplies,  parts  and
          components.
In this  suit,  Respondent  No.1  has  taken  out  an
          Application under Section 45 of the Arbitration  and  Conciliation
          Act, 1996 (hereinafter referred to as the ‘Indian Arbitration Act,
          1996’).  The Bombay Suit and the Application under Section  45  of
          the  Indian  Arbitration   Act,   1996   are   pending   disposal.
                On 31st October, 2007, the Bombay High Court, by an  interim
          order without prejudice  to  the  individual  contentions  of  the
          parties, directed the Respondent No.1 to resume  the  supplies  to
          Appellant No.1 until further orders. It appears that initially the
          supplies were  resumed  in  compliance  of  the  aforesaid  order.
          However, the Appellants  claim  that  the  Respondent  no.1  after
          sometime stopped  the  supplies  again.   Thereafter,  a  Contempt
          Petition was filed before the Bombay High Court at the instance of
          the Appellants for      non-compliance of the aforesaid  order  by
          Respondent  No.1.         This  contempt   petition   is   pending
          adjudication.

Nomination of Arbitrator :
      14. On 13th March, 2008, a letter was sent on behalf of the Respondent
          No. 1 to the Appellant Nos. 2 and 3, wherein the Respondent No.  1
          invoked the arbitration agreement, contained in Clause 18.1 of the
          IPLA.  The letter nominates Mr. V.V. Veedor QC as  the  licensors’
          arbitrator.
  It inter-alia stated that “Enercon and WPG  are  happy
          to allow EIL to nominate its arbitrator  and  for  the  two  party
          (sic)  nominated  arbitrators  to  select  the  third  arbitrator,
          subject to consultation with the parties.   The  third  arbitrator
          will act as the  Chairman  of  the  Tribunal.”  In  the  aforesaid
          letter, the  Respondent  No.1  also  identified  the  issues  that
          require determination through arbitration.

Arbitration Claim Form:
      15. On 27th March, 2008, “Arbitration Claim Form” was  issued  by  the
          Respondents seeking several declaratory reliefs in relation to the
          IPLA from the  High  Court  of  Justice,  Queens  Bench  Division,
          Commercial Court, United Kingdom (“the English High Court”).   The
          reliefs which were claimed included the constitution  of  Arbitral
          Tribunal under the IPLA.  Claim form was  annexed  to  the  letter
          dated 2nd April, 2008 sent by the UK Solicitors of Respondent No.1
          to the Appellants.

      16. Meanwhile on 31st March, 2008,  a  letter  was  addressed  by  the
          Appellant No.2  on  behalf  of  himself  and  Appellant  No.3,  in
          response to letter of Respondent  No.1  dated  13th  March,  2008,
          wherein it was  stated  that  since  the  draft  IPLA  was  not  a
          concluded contract, there is no question of  a  valid  arbitration
          agreement between the parties and as such, there is no question of
          nominating any arbitrator.

      17. In response to the aforesaid, a letter was  addressed  by  the  UK
          Solicitors of Respondent to the Appellants  on  2nd  April,  2008,
          stating therein that in the event the Appellants do  not  nominate
          their arbitrator within 7 days of the receipt of the said  letter,
          the Respondents shall proceed under Section 17(2) of  the  English
          Arbitration Act, 1996 to appoint  their  nominee  arbitrator   Mr.
          V.V. Veeder, QC, as the sole arbitrator.
The aforesaid letter was
          received  by  the  Appellants  on  3rd  April,  2008   in   Daman.
           The Arbitration Claim  Form  which  had  been  filed  before  the
          English High Court was also served on the Appellant No.1 in  Daman
          on 4th April, 2008.

Daman Suit:
      18.  On 8th April, 2008, the Appellants filed Regular Suit  No.  9  of
          2008 (Daman Suit) before the Court of Civil Judge,  Sr.  Division,
          “Daman Trial Court” seeking, inter  alia,  a  declaration  to  the
          effect that the draft  IPLA  was  not  a  concluded  contract  and
          correspondingly there was no  arbitration  agreement  between  the
          parties to the draft IPLA.  
On the same day, i.e. 8th April, 2008,
          the Daman Trial Court  passed  an  order  in  the  favour  of  the
          Appellants, wherein the  Respondents  were  directed  to  maintain
          status quo with regard to the proceedings initiated by them before
          the   English High Court.

      19. Meanwhile on 11th April, 2008, Appellant No.1, without  prejudice,
          nominated Mr. Justice B.P. Jeevan Reddy, a former  Judge  of  this
          court as arbitrator. 
On 24th May, 2008, Mr.  Justice  B.P.  Jeevan
          Reddy intimated to the  Solicitors  of  the  Appellants  that  the
          arbitrators  felt  that  there  were  inherent  defects   in   the
          arbitration clause contained in the draft IPLA and therefore,  the
          same was unworkable. 
The letter also expressed  the  inability  of
          the arbitrators to appoint the third arbitrator.  
On  5th  August,
          2008,  a  joint  letter  was  addressed  by  both  the   nominated
          arbitrators, wherein it was reiterated that  they  are  unable  to
          appoint the third and presiding arbitrator.

      20. Thereafter, the Respondents filed an Application under     Section
          45 of the Indian Arbitration Act in the Daman Suit. On  the  other
          hand, the Appellants moved an Application for  interim  injunction
          ex-parte in the same suit, seeking to  restrain  Respondents  from
          pursuing the proceedings they had initiated in  the  English  High
          Court (anti-arbitration injunction). 
The Daman Court dismissed the
          Application under Section 45 of the Indian Arbitration  Act,  1996
          on 5th January, 2009. 
On the other hand, the Application filed  by
          the  Appellants,  seeking  interim  reliefs  in  form   of   anti-
          arbitration injunction was allowed on 9th January, 2009.
Both  the
          aforesaid orders of the Daman Trial Court were challenged  by  the
          Respondents by filing four appeals before the  District  Court  of
          Daman (“Daman Appellate Court”).

Daman Appellate Court :
      21.  The  Daman  Appellate  Court  allowed  all  the  appeals  of  the
          Respondents by order dated 27th August, 2009 and  set  aside  both
          the  orders  of  the  Daman  Trial  Court.  The   anti-arbitration
          injunction was vacated, and the Application under  Section  45  of
          the Indian Arbitration Act, 1996 was allowed. 
The aforesaid  order
          dated 27th August, 2009 was challenged by the Appellants herein by
          filing two  writ  petitions  before  the  High  Court  of  Bombay,
          viz. Writ Petition No. 7636 of 2009, filed in respect of the anti-
          arbitration injunction and Writ Petition No. 7804 of  2009,  filed
          in respect of Section 45 of the Indian Arbitration Act.

Bombay High Court :
      22. On 4th September, 2009, the Bombay High  Court  ordered  that  the
          status  quo  order  dated  8th  April,   2008,   passed   by   the
          Daman Trial Court be continued in Writ Petition No. 7636 of  2009.
              On 9th September, 2009, the Bombay High  Court  continued  the
          stay of the reference under Section 45 of the  Indian  Arbitration
          Act until the next date of hearing. In the course  of  hearing  of
          the both writ petitions, the Bombay High Court, on  25th  January,
          2010, directed  that  the  interim  order(s)  granted  earlier  be
          continued until further orders.

English Proceedings:
      23. In spite of the aforesaid interim order(s), the Respondents  filed
          Arbitration Claim Form 2011 Folio No.1399 before the English  High
          Court, under Section 18 of the English Arbitration Act,  1996  for
          the constitution of an Arbitral Tribunal under the  provisions  of
          IPLA.
The following two grounds were raised by the Respondents:-
          A. that the anti-arbitration injunction passed  by  the   Bombay
             High Court had fallen away;
          B. that the Appellants had not pursued the writ petitions before
             the Bombay High Court.


      24. On 25th November, 2011, the English High Court passed an order  in
          form of an anti-suit injunction that had the effect of restraining
          the Appellants from prosecuting/arguing the writ petitions  before
          the Bombay  High  Court.
The  Appellants  were  restrained  from
          approaching the Bombay High Court to  clarify  whether  ad-interim
          stay granted by it was in place.  Meanwhile,  on   15th  February,
          2012,  the  English  High  Court  passed  an   ex-parte   freezing
          injunction restraining the Appellant No.1 from  disposing  of  its
          assets in excess of 90 Million Euros.

      25.  On 23rd March, 2012, the English High Court (Eder, J.)  delivered
          its judgment, wherein the freezing injunction was discharged.   It
          was inter-alia held in Paragraph 51 of  the  judgment  that  anti-
          arbitration injunction of the Bombay High Court was in force.
On
          27th March, 2012, the English High Court discharged the  anti-suit
          injunction subject to the undertakings given by Appellant No.1. 
It
          would be useful to notice here some of these undertakings:
              i) to apply forthwith to the Bombay High  Court  to  have  the
                 hearing of the Writ Petitions expedited  and  to  take  all
                 reasonable and necessary steps within its power to have the
                 writ petitions concluded as expeditiously as possible;
             ii) until the determination of the  Application  filed  by  the
                 Respondents in the English High Court, not to seek  further
                 directions in relation to prayer (c) of the  Writ  Petition
                 No.7636 of 2009 – which is a prayer for interim relief.

      26.  The Appellants took necessary steps for  an  expeditious  listing
          and hearing of the writ petitions before the  Bombay  High  Court.
          However on 11th June, 2012, the Respondents filed  an  Application
          before  the  English  High  Court  for  constituting  an  Arbitral
          Tribunal.  On 26th June,  2012,  since  the  High  Court  had  not
          disposed of early  hearing  Application  of  the  Appellants,  the
          Appellants  approached  this  Court  by  Special  Leave  Petitions
          No.11676 and 11677 of 2012 for expeditious  hearing  of  the  writ
          petitions.  This Court vide order /judgment dated 22nd June, 2012,
          requested the Bombay High Court to take up the writ petitions  for
          hearing on 2nd July, 2012.

Resumption of Writ Petitions before Bombay High Court:
      27.  The hearing of the  writ  petitions  in  the  Bombay  High  Court
          resumed on 2nd July, 2012.  On 3rd July, 2012,  the  English  High
          Court passed an order  by  consent,  adjourning  the  Respondents’
          Application dated 11th June, 2012, until  after  the  Bombay  High
          Court delivers judgment in the writ petitions, and  also  vacating
          the hearing listed for 3rd-4th July, 2012.
On 5th  October,  2012,
          the  Bombay  High  Court  dismissed  the  writ  petitions  by  the
          order/judgment impugned before us,  wherein  it  has  been,  inter
          alia, held as under:
          A. The scope of the enquiry under the  Writ  Petition  No.7804  of
             2009  is  restricted  to  the  existence  of  the   arbitration
             agreement and not the main underlying contract  (which  can  be
             challenged before the Arbitral Tribunal);
          B. Prima facie, there is an arbitration agreement;
          C. The curial law of the arbitration agreement is India;
          D. London, designated as the venue in Clause  18.3  of  the  draft
             IPLA, is only a convenient geographical location;
          E. London is not the seat;
          F. English Courts have concurrent jurisdiction since the venue  of
             arbitration is London.

English Proceedings :
      28. On 5th October, 2012, the English Solicitors  of  Respondent  No.1
          addressed a letter to the English Solicitors of Appellant No.1, in
           relation to re-listing of their Application dated 11th June, 2012
          for appointment  of  a  third  arbitrator/re-constitution  of  the
          Arbitral Tribunal. In October, 2012, the parties communicated with
          each other for getting Applications of both  the  parties  listed,
          which, apart from the Application dated 11th June, 2012,  included
          the following:
          A. An Application notice issued by Appellant No.1 on 16th October,
             2012:
             i. for a declaration that the undertaking given  by  Appellant
                No.1 as set out in Appendix  A  to  the  order  dated  27th
                March, 2012 do not prevent it from filing a  Special  Leave
                Petition before the Supreme Court of India and, if leave be
                granted, pursuing such appeals; or
            ii.  if  the  undertakings  (contrary   to   Appellant   No.1’s
                contention), do prevent Appellant No.1 from filing  Special
                Leave Petitions  before  the  Supreme  Court  of  India  or
                pursuing the same, then, a variation of the Undertakings to
                permit such Special Leave Petitions to  be  filed  and,  if
                leave be granted, to permit such appeals to be pursued.

          B. An  Application  notice  issued  by  the  Respondents  on  17th
             October, 2012 for:
             i. a declaration that Appellant No.1 would  be  breaching  the
                Undertakings by  filing  Special  Leave  Petitions  to  the
                Indian Supreme Court.
            ii. an anti-suit injunction to  restrain  Appellant  No.1  from
                filing Special Leave Petitions; and
           iii. expedition for the hearing of the Respondent’s  Application
                issued on 11th June, 2012.

      29. In the aforesaid Applications, the English High Court (Cooke,  J.)
          in its judgment dated 30th November, 2012 observed inter  alia  as
          follows:
           “Paragraph 32:   There are two critical issues  with  which  the
           Damman  (sic)  Court  and  the  Bombay  High  Court  have   been
           concerned.
First, is there  a  binding  arbitration  agreement?
         
Secondly, is the seat of the  putative  arbitration  in  London?
         
What has arisen  out  of  the  Bombay  High  Court  decision  in
           addition is the question whether there is room for a supervisory
           jurisdiction in the English Courts where  the  seat  is  not  in
           England  under  the  provisions  of  s.2(4)   of   the   English
           Arbitration Act.”


           “Paragraph 60:   
If the Supreme Court  of  India  were,  in  due
           course, to consider that the Bombay High Court was wrong in  its
           conclusion as to the seat of the arbitration or that there was a
           prima facie valid arbitration or  that  the  English  Court  had
           concurrent supervisory jurisdiction, it would be  a  recipe  for
           confusion and injustice if, in the meantime, the  English  Court
           were to conclude that England  was  the  seat  of  the  putative
           arbitration,  and  to  assume  jurisdiction  over  EIL  and  the
           putative arbitration, and to conclude that  there  was  a  valid
           arbitration agreement, whether on the basis of a  good  arguable
           case or the  balance  of  probabilities.   Further,  for  it  to
           exercise its powers, whether under s.2(1) or 2(4) or s.18 of the
           Arbitration Act in appointing a third arbitrator,  would  create
           real problems, should the Supreme Court decide differently.


           Paragraph 61:    

These are the very circumstances  which  courts
           must strive to avoid in line with a multitude  of  decisions  of
           high authority, from the Abidin Daver  (1984)  AC  398  onwards,
           including E.I. Dupont de Nemours v. Agnew [1987] 2  Lloyd’s  Rep
           585.  
The underlying  rationale  of  Eder  J.’s  judgment  leads
           inexorably, in my view, to the conclusion that the issues to  be
           determined in India, which could otherwise fall to be determined
           here in England, must be decided first by the Indian Courts  and
           that, despite the delay and difficulties involved, the  decision
           of the Indian Supreme Court should be awaited.”




      30.  From 3rd December to 14th December, 2012,  the  learned   counsel
          for the parties made efforts to finalize a draft of  the  Form  of
          Order and the accompanying undertaking(s) to be submitted  to  the
          English High Court; and ultimately,  parties  agreed  to  a  short
          hearing before the English High Court.  After a hearing,  on  19th
          December, 2012 the parties again made efforts to finalize the Form
          of Order.
Ultimately on 15th February,  2013,  the  English  High
          Court passed an order declaring that  the  undertakings  given  on
          27th March, 2012 (dealt with earlier in Para 25 of this  judgment)
          do not prevent the defendant (Appellant herein)  from  filing  and
          pursuing the Special Leave Petitions and, if leave be granted, the
          Substantive Appeals.  
The English High Court further  ordered  the
          Appellant No.1 herein to give some fresh  undertaking  which  will
          supersede and replace  the  undertakings  given  earlier  on  27th
          March, 2012.  
These undertakings restrain  the  Appellants  herein
          from seeking an injunction against the Respondents  save  if  this
          Court determines that the seat of the arbitration is in India.  
It
          was further  directed  that  the  Appellants  shall  not  seek  an
          injunction restraining the Respondents from  pursuing  proceedings
          instituted in the English High  Court  against  the  Appellant  on
          various grounds enumerated in the said undertakings.

      31.    Thereafter    in    February,    2013,    the    order/judgment
          dated 5th October, 2012  passed  by  the  Bombay  High  Court  was
          challenged in this court by way of present appeals.

Submissions:
      32.  We have heard the learned senior counsel for the parties.

      I. Re: Concluded Contract:
      33. The first submission of Mr. Rohinton Nariman is that there can  be
          no arbitration agreement in the absence of a  concluded  contract.
          It was submitted that IPLA is not a concluded contract since it is
          not in consonance with the Agreed  Principles.  It  was  submitted
          that the parties  merely  entered  into  the  ‘Agreed  Principles’
                               on 29th September, 2006,  to  which  a  draft
          IPLA was annexed.          Mr. Nariman submitted that  the  Agreed
          Principles formed the fundamental basis on which  the  final  IPLA
          “was to be made to the satisfaction of all parties and then to  be
          legally finally executed”. Mr. Nariman reiterated that  there  are
          certain discrepancies between the Agreed Principles and the  IPLA.
          By  its  letter            dated  3rd  November,  2006,  Appellant
          pointed out material discrepancies between the IPLA and the Agreed
          Principles. These discrepancies have been accepted to  be  present
          by the Respondents in the letter dated 24th  November,  2006.   In
          fact, the  Respondents  have  never  contended  that  IPLA  is  in
          accordance with the Agreed Principles.  The  Respondents  have  by
          their letters                       dated 29th October,  2006  and
          24th November, 2006 accepted the primacy of the Agreed Principles.



      34. Further, the Appellants have relied upon the correspondence  prior
          and subsequent to the signing of  the  IPLA  to  demonstrate  that
          there is no concluded contract. According to  the  learned  senior
          counsel, the Respondents have  deliberately  not  dealt  with  the
          correspondence subsequent to the IPLA except to  submit  that  the
          same refers to agreements other than the IPLA.  This, according to
          the learned senior counsel, is incorrect in view of the fact  that
          email dated 24th November, 2006 refers to “final IPLA”.  According
          to Mr. Nariman, the outstanding contracts had to be in  consonance
          with the Agreed  Principles;  therefore,  there  is  no  plausible
          explanation as to why only the IPLA should not  be  in  consonance
          with  the  Agreed  Principles.   The  subsequent   correspondence,
          therefore, necessarily refers to all the four agreements mentioned
          in the Agreed Principles.

      35. Mr.  Nariman  also  pointed  out  that  the  reliance  upon  prior
          contracts/agreements  or  correspondence  is  not  permissible  to
          determine whether IPLA is concluded  or  not.
 On  the  contrary,
          subsequent correspondence and contracts can be looked into for the
          purpose of determining whether the substantive contract containing
          arbitration agreement is concluded or not.  He  relied  on  Godhra
          Electricity Co. Ltd. And Anr. Vs. The State of Gujarat and Anr.[1]
           According to  Mr.  Nariman,  subsequent  correspondence  in  this
          regard clearly demonstrates  the unconcluded nature of the IPLA.

      36.  Mr. Nariman submitted that under  Clause  12  of  the  IPLA,  the
          duration of the IPLA was till  the  expiry  of  the  last  of  the
          patents, and since the patents portfolio was absent, the  duration
          of IPLA  could  not  be  ascertained.  He  pointed  out  that  the
          Respondents  have  wrongly  contended  that  the  IPLA  has   been
          concluded as the parties have duly signed the same.  According  to
          Mr. Nariman, mere signing  of  a  document  will  not  make  it  a
          concluded document, if in law, the contract is not  concluded.  In
          this context, reliance was  placed  upon  British  Electrical  vs.
          Patley Pressings,[2]  Harvey vs. Pratt,[3] Bushwall vs. Vortex,[4]
          Kollipara vs.  Aswathanarayana[5]  and  Dresser  Rand  vs.  Bindal
          Agro.[6]

      II. Re: Existence of Arbitration Agreement


      37.   As noticed above, the primary submission of the  Appellants,  is
          that IPLA is not a concluded contract.  It was then submitted that
          since there is no concluded contract, there is no question  of  an
          arbitration agreement coming into existence.  In  any  event,  the
          challenge to the existence  of  the  substantive  agreement  is  a
          matter required to be determined by the Court seized of the matter
          in the exercise of jurisdiction under Section  45  of  the  Indian
          Arbitration Act, 1996.  Reliance was placed upon  Chloro  Controls
          (I) Pvt. Ltd. Vs. Severn Trent Water Purification Inc.  &  Ors.[7]
          According to              Mr. Nariman, it is  no  longer  open  to
          contend that the question whether the contract is concluded or not
          can be gone into by the Arbitral Tribunal.
III. Re: Un-workability of Arbitration Agreement
      38.  It was submitted that Clause 18.1 of the  IPLA  is  incapable  of
          being performed and  therefore,  there  can  be  no  reference  to
          arbitration under Section 45 of the Indian Arbitration Act,  1996.
          It was submitted that the High Court has held that  “each  of  the
          licensors (Respondents) has  to  appoint  an  arbitrator  and  the
          licensee  (Appellant  No.1)   is   to   appoint   one   arbitrator
          ……………………………. making it in all three arbitrators”.  
As  such,  the
          High Court has misread Clause 18.3 of the IPLA to mean  that  each
          of the licensors (Respondent No.1 and Respondent No.2) has a right
          to appoint an arbitrator and that the Appellant No.1 also has  the
          right to appoint an arbitrator. The construction of Clause 18.1 of
          the IPLA in the aforesaid  manner,  according  to  learned  senior
          counsel, is contrary to the expressed terms of Clause 18.1 in  the
          light of  the  definition  of  licensor  and  licensors  contained
          therein as well as certain  other  provisions  of  the  IPLA.  Mr.
          Nariman also pointed out that the Respondents, however,  have  not
          sought to sustain the aforesaid reasoning of the High Court.

      39. He further submitted that even though an arbitration clause can be
          construed by the Court in such a way as to make it  workable  when
          there is a defect or an omission, nonetheless,  such  an  exercise
          would not permit the Court to rewrite the clause.  In  support  of
          the submissions, he relied upon Shin Satellite Public Co. Ltd. Vs.
          Jain Studio Ltd.[8]  He also submitted that the reconstruction  of
          the arbitration clause in the  present  case  cannot  be  achieved
          without doing violence to the language to the arbitration  clause;
          and  that  this  would  not  be  permissible  in  law.  For   this
          proposition, reliance was placed upon Bushwall Vs. Vortex (supra).
           He submitted that the submissions made by the Respondents fly  in
          the face of Section 45 of the Indian Arbitration Act,  1996  which
          does not permit the Court to make a reference  to  arbitration  if
          the arbitration  agreement  relied  upon  is  incapable  of  being
          performed.
IV. Re: Seat of Arbitration.
      40. Mr. Nariman submitted that for the purposes of fixing the seat  of
          arbitration the Court would have to determine the  territory  that
          will have the  closest  and  most  intimate  connection  with  the
          arbitration. He pointed out that in the present case provisions of
          the Indian Arbitration Act, 1996 are to apply; substantive law  of
          the contract is Indian  law;  law  governing  the  arbitration  is
          Indian Arbitration law; curial law is that of India;  Patents  law
          is that of India; IPLA is to be acted upon in  India;  enforcement
          of the award is to be done under the  Indian  law;  Joint  Venture
          Agreement between the parties  is  to  be  acted  upon  in  India;
          relevant assets are in India.  Therefore, applying  the  ratio  of
          law in ‘Naviera Amazonica Peruana S.A. Vs. Compania  Internacional
          De Seguros Del Peru[9]’, the seat of arbitration would  be  India.
          The submission is also sought to be supported by the  Constitution
          Bench decision of this Court  in  “Bharat  Aluminium  Company  Vs.
          Kaiser Aluminium[10] (“BALCO”).
Mr.  Nariman  submitted  that  the
          interpretation proposed by the Respondents that the  venue  London
          must be construed as seat is absurd. Neither party is British, one
          being German and the other being  Indian.  
He  submits  that  the
          Respondents have accepted that the choice of law of the underlying
          agreement is Indian. But, if  ‘venue  of  arbitration’  is  to  be
          interpreted as making London the seat  of  arbitration  it  would:
               
(a) make the English Act applicable when it is not chosen by
          the parties;
(b) would render the parties’ choice  of  the  Indian
          Arbitration Act, 1996 completely nugatory  and  otiose.
It  would
          exclude the application of Chapter V  of  the  Indian  Arbitration
          Act, 1996 i.e. the curial law provisions and  Section  34  of  the
          Indian Arbitration Act, 1996. On the  other  hand,  interpretation
          propounded by the Appellants would give full and  complete  effect
          to the entire clause as it stands.

      41. Mr.  Nariman  also  submitted  that  there  are  even  more  clear
          indicators within the  arbitration  clause  which  show  that  the
          parties intended to be governed only  by  the  Indian  Arbitration
          Act, 1996. The clause uses the word Presiding Arbitrator  and  not
          Chairman; this language is expressly used in Sections 11 and 29 of
          the Indian Arbitration Act, 1996 as distinct from  Section  30  of
          the English Arbitration Act, 1996.
      42.  Mr. Nariman gave another reason as to why  London  can’t  be  the
          seat of the Arbitration. According to him, if  the  interpretation
          propounded by the Respondents is accepted, it would lead to  utter
          chaos, confusion and unnecessary complications.
This would result
          in absurdity because the Indian Arbitration Act, 1996 would  apply
          to  the  process  of  appointment  under   Section   11;  
English
          Arbitration Act, 1996 would apply to the  arbitration  proceedings
          (despite the choice of the parties to apply Chapter V to the  Part
          I of the Indian Arbitration Act, 1996);
challenge  to  the  award
          would be under English Arbitration Act, 1996  and  not  under  the
          Part I of the Indian Arbitration  Act,  1996;
Indian  Arbitration
          Act, 1996 (Section 48) would  apply  to  the  enforcement  of  the
          award.
      43. Lastly, it was submitted by Mr. Nariman that provisions of Section
          18 of the English Arbitration Act, 1996 are derogable and  in  any
          event the parties have chosen the Indian Court for constitution of
          Arbitral Tribunal.

V. Re: Anti Suit Injunction

      44. It was submitted on behalf of the Appellants that since  the  seat
          of arbitration is India, the  Courts  of  England  would  have  no
          jurisdiction.  Appellants rely upon Oil & Natural  Gas  Commission
          Vs. Western Company of North America[11]. Reliance was also placed
          upon Modi Entertainment Network & Anr.  Vs.  W.S.G.  Cricket  Pte.
          Ltd.[12],  in  support  of  the  submission  that  in   exercising
          discretion to grant an anti-suit injunction,  the  Court  must  be
          satisfied  that  the  defendant  is  amenable  to   the   personal
          jurisdiction of the Court and that if the injunction  is  declined
          the ends of justice will be defeated.  The Court is also  required
          to  take  due  notice  of  the  principle  of  comity  of  Courts,
          therefore, where more than one forum is available, the Court would
          have to examine as to which is forum conveniens.

      45. According to Mr. Nariman, all the tests which authorise the Indian
          Courts to exercise jurisdiction to grant the necessary relief,  as
          laid down are being satisfied by the Appellants.
 According to Mr.
          Nariman, the English Courts are not available to  the  Respondents
          since London is only a venue. Therefore, an injunction ought to be
          issued  restraining  the  Respondents  from  pursuing  proceedings
          before the English  Court.  
Mr.  Nariman  pointed  out  that  the
          Respondents have given up the contention that Indian  and  English
          Courts have concurrent jurisdiction.



      46. Reliance is placed on the judgment of this Court in Harshad Chiman
          Lal Modi Vs. DLF Universal[13], in support of the submission  that
          since Respondent No.1 has share holding in  a  company  which  has
          registered office within  the  territorial  limits  of  the  Daman
          Court,  therefore  relief  can  be  necessarily  granted  to   the
          Appellants for restraining Respondent No.1 for proceeding  in  the
          English Courts.
It was also pointed out that Respondent  No.1  has
          approached  the  Company  Law  Board  under  Section  397  of  the
          Companies Act; the Delhi High Court alleging infringement  of  its
          intellectual property rights; and the Madras  High  Court  against
          the orders passed by the Intellectual  Property  Appellate  Board,
          revoking patents in the name of Dr. Wobben in  India.   
Therefore,
          it has already submitted to the jurisdiction of Courts  in  India.
                      Mr. Nariman, however, points out that in view  of  the
          orders of the English Court dated 15th February, 2013, restraining
          the Appellants from seeking an injunction against the  Respondents
          save if this Court determines  the  seat  of  the  arbitration  is
          India, the Appellants shall not  seek  any  injunction  from  this
          Court, unless this Court determines that the seat  of  arbitration
          is in India.


Respondents’ Submissions:
      47. Dr. Abhishek Manu Singhvi, learned senior  counsel,  appeared  for
          Respondents No.1 and 2. Dr. Singhvi submitted that  the      over-
          riding principle for the Courts in Arbitration is to  see  whether
          there is an intention to arbitrate. According to Dr. Singhvi,  the
          Appellants attack the existence of the main contract,  but  it  is
          only the arbitration clause that the court has to  concern  itself
          with. The court in this case, according to  Dr.  Singhvi,  is  not
          required to determine whether there is a concluded contract, under
          the Indian Contract Act, 1872.  The court has to see whether there
          is a valid Arbitration Agreement. Dr. Singhvi emphasised  that  it
          is for the arbitrator to decide the question with  regard  to  the
                           formation  of  the  underlying  contract  (IPLA).
          Further,                     learned senior counsel submitted that
          the                               status of IPLA will not  nullify
          the arbitration clause.

      48. The Respondent, according to the learned senior  counsel,  has  to
          establish the existence of arbitration agreement.
Dr. Singhvi,  in
          this context, relied upon Section 7 of the Indian Arbitration Act,
          1996  which  has  three  constituents,  viz.  (i)   Intention   to
          arbitrate; (ii) Existence of a dispute; (iii)  Existence  of  some
          legal relationship. Further, it was submitted  that  an  agreement
          under Section 7 of the  Indian  Arbitration  Act,  1996  does  not
          require any offer and acceptance.

      49. It was further submitted that Section 16 of the Indian Arbitration
          Act, 1996 is a drastic departure since the Arbitral  Tribunal  can
          rule on its own jurisdiction.  Further,  it  was  submitted  under
          Section 16(a) of the Indian Arbitration Act, 1996 the existence of
          the arbitration clause in the contract  would  be  treated  as  an
          agreement independent of the  contract.   Learned  senior  counsel
          also brought to our attention Section 45 of the Indian Arbitration
          Act, 1996 and its interpretation by this court in Chloro  Controls
          India Pvt. Ltd. v. Severn Trent Water Purification Inc (supra). In
          the aforesaid case, this Court,  in  Para  120,  relied  upon  the
          earlier judgment of National Insurance  Company  Ltd.  V.  Bhogara
          Polyfab Pvt. Ltd.[14], and categorised the issues that have to  be
          decided under Section 45 as follows:
          A. The issues which the Chief Justice/his designate will  have  to
             decide: the question as to  whether  there  is  an  arbitration
             agreement.
          B. The issues which the Chief Justice/his designate may choose  to
             decide or leave them to be decided by  the  Arbitral  Tribunal:
             the question as to whether the claim is  a  dead  claim  (long-
             barred) or a live claim.
          C. The issues which the Chief Justice/his designate  should  leave
             exclusively to the Arbitral Tribunal. The  question  concerning
             the merits or any claim involved in the arbitration.

      50. Dr. Singhvi then submitted that leaving  aside the question of  un-
          workability  of  the  arbitration  clause  for  the  moment,   the
          intention of the parties in the instant  case  may  be  determined
          from  the following clauses of IPLA:
                              “17 GOVERNING LAW
           17.1 This Agreement and any dispute of claims arising out of  or
           in connection with  its  subject  matter  are  governed  by  and
           construed in accordance with the Law of India.


           18. DISPUTES AND ARBITRATION
           18.1 All disputes, controversies or differences which may  arise
           between the Parties  in  respect  of  this  Agreement  including
           without limitation to the validity, interpretation, construction
           performance and enforcement or alleged breach of this Agreement,
           the Parties shall, in the first  instance,  attempt  to  resolve
           such  dispute,  controversy   or   difference   through   mutual
           consultation. If the dispute, controversy or difference  is  not
           resolved  through  mutual  consultation  within  30  days  after
           commencement of discussions or such longer period as the Parties
           may  agree  in  writing,  any  Party   may   refer   dispute(s),
           controversy(ies) or difference(s) for resolution to an  arbitral
           tribunal to consist of three (3) arbitrators, of who one will be
           appointed by each of the  Licensor  and  the  Licensee  and  the
           arbitrator appointed by Licensor shall also act as the presiding
           arbitrator.


           18.2             *                 *               *
           18.3 A proceedings in such arbitration  shall  be  conducted  in
           English. The venue of the arbitration proceedings  shall  be  in
           London. The arbitrators may (but shall not be obliged to)  award
           costs and  reasonable  expenses  (including  reasonable-fees  of
           counsel) to the Party (ies) that substantially prevail on merit.
           The provisions of Indian Arbitration and Conciliation Act,  1996
           shall apply.


           The reference of any matter, dispute  or  claim  or  arbitration
           pursuant  to  this  Section  18  or  the  continuance   of   any
           arbitration proceedings consequent thereto or both  will  in  no
           way operate as a waiver of the obligations  of  the  parties  to
           perform their respective obligations under this Agreement.”


      51. Dr. Singhvi also drew our attention to the fact that the Heads  of
          the Agreement have been accepted to be final and binding and  that
          the parties have irrevocably accepted  the  Arbitration  Agreement
          contained in Clause 18. It was also brought to our notice that the
          said document has been signed by the Appellant No.1 and Respondent
          No.1.

      52.  Learned  Senior  Counsel  also  submitted  that  an   arbitration
          agreement would include the following:
           a. Intention to arbitrate;
           b. Intention to settle by Arbitration after failure of ADR  i.e.
              negotiations/conciliation/mediation.
           C.    Some law (i.e. proper law) to settle the Disputes (which
                 in this case is Indian Law)
           D.    Does the arbitration clause cover all disputes or is there
                 a carve out? In this case the clause covers all disputes.
           E.    Substantive Law  to  Arbitrate.  Here  it  is  the  Indian
                 Arbitration Act, 1996.


      It was further submitted that since all the essential elements of  the
arbitration are present, clumsy drafting will not  make  any  difference  in
interpretation of the Arbitration clause.

      53. The next submission of Dr.  Singhvi,  broadly  put,  is  that  the
          arbitration clause is not un-workable.  The  crucial  question  in
          this context is  not  whether  the  Arbitration  Clause  could  be
          differently drafted, but the clause has to be seen in  the  manner
          it has been drafted. Dr. Singhvi submitted that in fact  there  is
          no mismatch between different parts of  the  clause.  The  clause,
          according to Dr. Singhvi, talks of three arbitrators: one  by  the
          licensee, one by the licensor. The implication is that  the  third
          one is to be appointed by the two arbitrators. Dr. Singhvi submits
          that the sentence “the third arbitrator shall be appointed by  the
          two arbitrators” seems to have been missed out by  the  draftsman.
          This can be supplied by the Court to make the  arbitration  clause
          workable.


      54. It  was  further  submitted  that  the  missing  sentence  in  the
          arbitration clause can be supplied with the aid  of  some  of  the
          provisions of the Indian Arbitration Act, 1996. In  this  context,
          learned senior counsel brought to our attention  Sections  10  (1)
          and (2) read with section 11 of the Indian Arbitration Act,  1996.
          Section 10 (1) and 2 read as:
           “10. Number of arbitrators.
           (1) The parties are free to determine the number of arbitrators,
           provided that such number shall not be an even number.


           (2) Failing the determination referred to in sub-  section  (1),
           the arbitral tribunal shall consist of a sole arbitrator.”


           Section 11(1) & (2) reads as:
           Appointment of arbitrators.
           (1) A person of any nationality may  be  an  arbitrator,  unless
           otherwise agreed by the parties.


           (2) Subject to sub- section (6), the parties are free  to  agree
           on a procedure for appointing the arbitrator or arbitrators.

      55. Learned senior counsel also pointed out that the object underlying
          Sections  10  and  11  is  to  avoid  failure  in  appointment  of
          arbitrators. In fact, the Respondents tried to avoid  the  failure
          by making a concession to let  the  third  arbitrator  to  be  the
          Presiding Arbitrator. The  Letter/email  dated  13th  March,  2008
          clearly demonstrates this intention of Respondents.  It  was  also
          submitted  that  the  Appellant  is  determined   to   avoid   the
          arbitration.              Dr. Singhvi submitted that there  exists
          a manifest intention to refer disputes to arbitration and even  if
          there is lacuna it can be cured.  Furthermore,  according  to  Dr.
          Singhvi,  the  number  of  arbitrators  is  only  machinery   and,
          therefore, its  failure  cannot  affect  the  Arbitration  Clause.
          Learned senior counsel relied upon the law laid down  in  MMTC  v.
          Sterlite Industries (India) Ltd.,[15]  Shin Satellite  Public  Co.
          Ltd. v. Jain Studios Ltd., (supra)   Visa  International  Ltd.  v.
          Continental Resources (USA) Ltd.,[16] Jagdish  Chander  v.  Ramesh
          Chander & Ors.,[17] Smt. Rukmanibai Gupta v. Collector, Jabalpur &
          Ors.,[18] and Nandan Biometrix Ltd. v. D.I. Oils.[19] After taking
          us through the afore cited cases, Dr. Singhvi submitted  that  the
          parties  in  the  instant  case  had  expressed  an  intention  to
          arbitrate and that there is no contrary intention.

      56. The next submission of Dr. Singhvi is that the IPLA is  final.  It
          was submitted that IPLA was to succeed the Know How Agreement that
          contained an Arbitration Clause. Learned Senior counsel brought to
          our attention following provisions of the Heads of Agreement on  a
          Proposed IPLA dated 23.05.2006:
           “1.6   The  Parties  have   discussed   intensively   the   most
           appropriate structure and arrangements reflected  in  the  draft
           IPLA dated 22, May 2006 attached as ANNEX 1 (“Draft IPLA”). This
           draft IPLA expresses the final views of the parties and provides
           for detailed terms whereunder Enercon will make available to EIL
           the benefit of all  its  technology  including  patents,  design
           rights, copyrights, trademarks and  know  how  relating  to  the
           Products, including but not limited to:
           …………………………………………………………………….”


           “3. GOVERNING LAW AND JURISDICTION


           3.1 This paragraph is legally binding.


           3.2 This Heads of Agreement is (and  all  negotiations  and  any
           legal agreement  prepared  in  connection  with  IPLA  shall  be
           governed by and construed in accordance with the law of Germany.


           3.3 The parties irrevocably agree that Clause 18 of the proposed
           draft IPLA shall apply to  settle  any  dispute  or  claim  that
           arises  out  or  in   connection   with   this   memorandum   of
           understanding and negotiations relating to the  proposed  IPLA.”




           “4.1  This  Heads  of  Agreement  represents  the   good   faith
           intentions of the parties to proceed with the proposed  IPLA  on
           the basis of the Draft IPLA  but  is  not  legally  binding  and
           creates no legal obligations on either party. Its  sole  purpose
           is to set out the principles on which the parties intend in good
           faith to negotiate legally definitive agreements.”


      57. Learned  Senior  Counsel  also  pointed  out  the  email  sent  on
          27.06.2006 by Nicole Fritsch  on  behalf  of  Respondents  to  the
          Appellant No.2 and also  the  email  sent  by  Appellant  No.2  on
          16.09.2006 to Nicole Fritsch in context  of  the  submission  that
          IPLA is final. These emails  have  already  been  noticed  in  the
          earlier part of this judgment.

      58. It was also pointed out that the Appellant  by  his  letter  dated
          30th September, 2006 expressly admitted to having signed the IPLA.
          Thus, it was submitted that the Appellant cannot get  out  of  the
          contract unless there is coercion  and/or  fraud.  To  argue  that
          there is now a presumption of validity in favour of IPLA  being  a
          concluded contract, reliance was sought to be placed  upon  Grasim
          Industries Ltd. & Anr. v. Agarwal Steel[20] and J.K. Jain v. Delhi
          Development Authority.[21]

      59. Dr. Singhvi also brought to our  notice  that  the  execution  and
          finality of the IPLA is also demonstrated by the fact  that  first
          page of Heads of Agreement  dated  23rd  May,  2006  reads  as  “A
          PROPOSED INTELLECTUAL PROPERTY LICENSE  AGREEMENT.”  Whereas,  the
          word proposed or draft is conspicuously absent in the  IPLA  dated
          29th September,  2006.  This,  according  to  the  learned  senior
          counsel, shows that the IPLA was  a  concluded  contract.      Dr.
          Singhvi further submitted  that  on  29th  September,  2006  three
          drafts, viz. Successive Technical  Transfer  Agreement,  Name  Use
          License Agreement and  amendments  to  the  existing  Shareholders
          Agreement were ready and available to the  parties,  but  at  that
          point of time these agreements were  under  discussion  and  being
          negotiated. Admittedly, none of these agreements were  initialled,
          let alone signed by the parties. This, according to  Dr.  Singhvi,
          is a clear indication that the parties were aware of the documents
          that were to be finalised between them and also of  the  documents
          that were required to be executed. This fact was also relied  upon
          to support the contention that  IPLA  is  a  final  and  concluded
          agreement that was knowingly and willingly executed  by  Appellant
          No.2. To  add  credibility  to  this  submission,  learned  senior
          counsel pointed out that ‘E-82 Model’ is expressly  excluded  from
          the product  description  in  the  IPLA.  This  according  to  Dr.
          Singhvi, is a deviation from the earlier  agreement,  and  it  has
          been acknowledged by the Appellant. Dr. Singhvi also  pointed  out
          the difference as to the provision of royalty between the IPLA and
          earlier draft to support his contention.

      60. The next set of submissions made by Dr. Singhvi relate to the seat
          of arbitration.  Learned senior counsel submitted that  the  court
          has to determine where the centre of gravity  for  arbitration  is
          situated. The terms that are normally  used  to  denote  seat  are
          “venue”, “place”  or  “seat”.  According  to  the  learned  senior
          counsel, the court cannot adopt a semantic approach.  It was  also
          submitted that under sub sections (1), (2) and (3) of  Section  20
          of Arbitration Act,  1996  the  term  ‘place’  connotes  different
          meanings. Under Section 20(1), place means  seat  of  arbitration,
          whereas under section 20(3), place would  mean  venue.  Therefore,
          the expression “the venue of arbitration  proceedings”  will  have
          reference only to the seat of arbitration. It was  submitted  that
          all the surrounding circumstances would  also  show  that  parties
          intended to designate England as the seat of arbitration.

      61. It was also submitted that all the proceedings between the parties
          would indicate that there is nothing  to  indicate  India  as  the
          choice of the seat of arbitration. Learned senior  counsel  relied
          upon Shashoua v. Sharma,[22]  Dozco  India  Pvt.  Ltd.  V.  Doosan
          Infracore  Company  Ltd.[23]  Videocon  Industries  v.  Union   of
          India,[24] Yograj Infrastructure Ltd. V.  Ssang  Yong  Engineering
          and Construction Ltd.[25] National  Agricultural  Coop.  Marketing
          Federation India (supra).
      62. It was further submitted that three potential laws that govern  an
          arbitration agreement are as follows :
           1. The proper law of the contract ;
           2. The law governing the arbitration agreement ;
           3. The law governing the conduct of the        arbitration  also
              known as curial law or lex arbitri.


    63. Reliance was placed upon the following except of Naviera  Amazonica
        Peruana SA (supra):
           “……..in the majority of cases all three will  be  same  but  (1)
           will often be different from (2) and (3). And occasionally,  but
           rarely, (2) may also differ from (3).”


      64. The next submission of  Dr.  Singhvi  is  that  law  of  the  seat
          dictates  the  curial  law,  and  that  the  proper  law  of   the
          arbitration agreement does not overwhelm law of the  seat.  Laying
          particular  emphasis  on  Naviera,  Dr.  Singhvi  submitted   that
          intention of the parties is important to determine  the  seat.  If
          place is designated then curial law will be that  of  such  place.
          Dr. Singhvi relied on the ratio of Naviera and submitted that  the
          proper law, law of arbitration and the curial law  have  all  been
          expressly mentioned in the present case.  It  was  also  submitted
          that in the present case London as venue  has  to  be  interpreted
          having conferred London the status of seat, unless  some  contrary
          intention has been expressed.

      65. According to Dr. Singhvi, closest connection  test  is  completely
          irrelevant when the parties have  specified  all  the  three  laws
          applicable in a contract. Further, close connection test is to  be
          applied only when nothing has been mentioned in the agreement. The
          effort of the court is always to  find  the  essential  venue.  He
          relied upon Dicey, Morris & Collins[26] to  submit  that  in  most
          cases, seat is sufficiently indicated by the country chosen as the
          place of the arbitration.  Dr. Singhvi submitted that  the  proper
          law and law of arbitration cannot override curial law.

      66. Dr. Singhvi relied heavily on the ratio of the law  laid  down  in
          Naviera (supra). Reliance  was  also  placed  upon  the  cases  of
              C vs. D.[27]  and Union of India v/s  McDonnel.[28]   He  also
          relied upon the ratio of Balco in support of the  submission  that
          London is the seat of arbitration. Particular reference  was  made
          to Paras 75,76, 96, 100, 104, 113, 116 and 117 of BALCO’s judgment
          to submit that  since  the  seat  is  outside  India,  only  those
          provisions of Part I of the Indian Arbitration Act, 1996  will  be
          applicable, which are not inconsistent with the English Law, i.e.,
          English Arbitration Act, 1996.

Anti-Suit injunction:
      67. Dr. Singhvi submitted that the prayer of Appellants  for  an  anti
          suit injunction is subject to determination by this court that the
          seat  is  India.  Dr.  Singhvi,  however,  argued  that  such   an
          injunction be denied even if this court holds  that  the  seat  of
          arbitration is India since there is no occasion that warrants  the
          grant of such an injunction.   The  Respondents  relied  upon  the
          judgment of this court in Modi  Entertainment  Network  v.  W.S.G.
          Cricket Pte. Ltd. (supra) to submit that the present case does not
          fall within any, let alone all, of the parameters set out  in  the
          aforesaid  case  that  determine  the  grant   of   an   anti-suit
          injunction.

      68. Mr. C.U. Singh, learned senior advocate, appeared  for  Respondent
          no.2. Mr. Singh adopts the submissions made before this  court  by
          Dr.  Singhvi.   Besides,  Mr.  Singh  submitted  that  after   the
          enactment of the Indian  Arbitration  Act,  1996  the  distinction
          between the seat and the venue has blurred. The term that has been
          used by the Parliament is  ‘place’  which  denotes  the  place  of
          physical sitting of the Arbitral Tribunal. This is the place which
          governs the curial law. However, Arbitrators have been  given  the
          flexibility to hold meetings anywhere. He  also  relied  upon  the
          judgment of this court in Chloro (supra) (Paras 80-83)  to  submit
          that the approach of the court is to make the  arbitration  clause
          workable. Reliance was also placed upon Reva Electric Car  Company
          P. Ltd. v. Green Mobil.[29]

Issues :
      69. We have  anxiously  considered  the  submissions  of  the  learned
          counsel for the parties.  We  have  also  considered  the  written
          submissions.
           The issues that arise for consideration of this Court are :
              i) Is the IPLA a valid and concluded contract?
             ii) Is it for the Court to decide issue No. (i) or should it be
                 left to be considered by the Arbitral Tribunal?
            iii) Linked to (i) and (ii) is the issue whether the  Appellants
                 can refuse to join arbitration on the plea that there is no
                 concluded IPLA?
             iv) Assuming that the IPLA is  a  concluded  contract;  is  the
                 Arbitration Clause 18.1 vague and unworkable,  as  observed
                 by both the Arbitrators i.e. Mr. V.V.  Veeder  QC  and  Mr.
                 Justice B.P. Jeevan Reddy?
              v) In case the arbitration clause is held to be  workable,  is
                 the seat of arbitration in London or in India?
             vi) In the event it is held that the seat is  in  India,  would
                 the English Courts have  the  concurrent  jurisdiction  for
                 taking  such  measures  as  required  in  support  of   the
                 arbitration as the venue for the arbitration proceedings is
                 London?
            vii) Linked to (v) & (vi) is the issue  whether  the  Appellants
                 are entitled for an anti-suit injunction?


            These, of course,  are  only  broad  based  issues;  many  other
      supplementary questions will have to be examined in order  to  give  a
      definitive determination.


      Our Conclusions :
      Issues (i), (ii) and (iii)


      70. Is the IPLA a valid and a concluded contract? Is it for the  Court
          to decide this issue or have  the  parties  intended  to  let  the
          arbitral tribunal decide it?

      71. The Bombay High Court upon consideration of the factual as well as
          the legal issues has concluded that “there can be  no  escape  for
          the Appellants from the consequences flowing from the  signing  of
          the IPLA; and the signing of the IPLA by the parties is  therefore
          a strong circumstance in arriving at a prima facie  conclusion  as
          enunciated in Shin-Etsu Chemicals Co. Ltd.’s  case  for  referring
          the parties to arbitration.”

      72. The Daman Trial Court on the basis of the material on record  came
          to the conclusion that IPLA was not a concluded contract  for  the
          want of free consent, and was executed  due  to  undue  influence,
          fraud, misrepresentation and mistake. It  further  held  that  the
          plaintiffs (the Appellants herein)  would  suffer  heavy  economic
          loss if the arbitration is held at  London.  These  findings  were
          reversed by the Daman Appellate Court. It was held that since IPLA
          has been signed by the parties,  there  was  a  valid  arbitration
          agreement for reference of the disputes  to  arbitration.  It  was
          also held  that  assuming  that  there  was  some  defect  in  the
          methodology for appointment of the arbitrators that would not come
          in the way of enforcement of the arbitration agreement. The  Daman
          Appellate Court has further held that since the parties had agreed
          to  London  being  the  seat  of   arbitration,   the   Appellants
          (plaintiffs)  could  not  raise  a  grievance   as   regards   the
          jurisdiction of the English Courts.


      73. Mr. R.F.  Nariman,  learned  senior  counsel,  appearing  for  the
          Appellants has vehemently argued that there is neither a concluded
          IPLA between the  parties  nor  is  there  a  legally  enforceable
          arbitration agreement.  In any  event,  the  arbitration  can  not
          proceed as  the  arbitration  clause  itself  is  unworkable.   As
          noticed earlier, learned senior counsel has submitted that in  the
          absence of a concluded  contract,  there  can  be  no  arbitration
          agreement. In short, the  submission  is  that  there  can  be  no
          severability of the arbitration clause from the  IPLA.  Since  the
          IPLA is not a concluded  contract  there  can  be  no  arbitration
          agreement.

      74. On the other hand, Dr. Singhvi has submitted, as noticed  earlier,
          that the intention of the parties to arbitrate is clear.  Even  if
          the existence of the main contract is under dispute, the court  is
          concerned only with the arbitration agreement i.e. the arbitration
          clause. The submission of Dr. Singhvi is that the absence of  IPLA
          will not nullify the arbitration clause.

      75. We find considerable merit in  the  submissions  made  by      Dr.
          Singhvi. It cannot be disputed that there is a legal  relationship
          between the parties of a long standing. Section 44 of  the  Indian
          Arbitration Act, 1996 applies to arbitral  awards  of  differences
          between  persons  arising  out  of  legal  proceedings.   Such   a
          relationship may be contractual or not, so long it  is  considered
          as commercial under the laws in  force  in  India.  Further,  that
          legal relationship must  be  in  pursuance  of  an  agreement,  in
          writing,  for  arbitration,  to  which  the  New  York  Convention
          applies. The court can decline to make a reference to  arbitration
          in case it finds that the arbitration agreement is null and  void,
          inoperative  or  incapable  of  being  performed.  There  are   no
          pleadings to that effect in the plaint.   The  Daman  Trial  Court
          findings that the contract is null and void and not based on  free
          consent were rendered in the absence of relevant pleadings.  There
          is a mention in one of the  e-mails  that  Dr.  Wobben  has  taken
          advantage of his friendship with Mr. Yogesh Mehra.  But that seems
          to be more of a sulk  than  a  genuine  grievance.   Even  if  one
          accepts the truth of such a statement, the same is  not  reflected
          in the pleadings.  Therefore, no serious note could  be  taken  of
          that statement at this stage.   The  Daman  Appellate  Court  upon
          reconsideration of the pleadings found that there is  no  plea  to
          the effect that the agreement is null, void or incapable of  being
          performed.  Justice Savant has not examined the pleadings  as  the
          issue with regard to the underlying contract has been left  to  be
          examined by the Arbitral Tribunal.  Before us also, it is not  the
          plea of the Appellants that the arbitration agreement  is  without
          free consent, or has been procured by coercion,  undue  influence,
          fraud, misrepresentation or was signed under a mistake.  In  other
          words, it is not claimed that the  agreement  is  null  and  void,
          inoperative and incapable of being performed as it violates any of
          the provisions under Sections 14, 15, 16, 17, 18, 19, 19A  and  20
          of the Indian Contract Act, 1872.   The  submission  is  that  the
          matter cannot be referred to arbitration as the  IPLA,  containing
          the arbitration clause/agreement, is  not  a  concluded  contract.
          This, in our opinion, would not fall within the parameters  of  an
          agreement being “null and void, inoperative or incapable of  being
          performed”, in terms of Sections 14, 15, 16, 17, 18, 19 and 20  of
          the Indian Contract Act,  1872.   These  provisions  set  out  the
          impediments, infirmities or  eventualities  that  would  render  a
          particular provision of a contract or the whole contract  void  or
          voidable. Section 14 defines  free  consent;  Section  15  defines
          coercion in causing any person to enter into a  contract.  Section
          16 deals with undue influence. Fraud in relation to a contract  is
          defined under     Section 17; whereas misrepresentation is defined
          and explained under Section  18.  Section  19  states  that  “when
          consent  to  an  agreement  is  caused   by   coercion, fraud   or
          misrepresentation, the agreement is a  contract  voidable  at  the
          option of the party whose consent  was  so  caused”.  Section  19A
          gives the party who was unduly influenced to enter into a contract
          an option similar to the one provided by  the  preceding  section.
          Section 20 makes an agreement void where both the parties  thereto
          are under a mistake as to a matter of fact. In  our  opinion,  all
          the   aforesaid   eventualities   refer   to   fundamental   legal
          impediments. These are the defences to resist a claim for specific
          performance of a concluded contract; or  to  resist  a  claim  for
          damages for breach of a concluded contract. We agree with  Savant,
          J. that the issue as to whether  there  is  a  concluded  contract
          between the parties can be left to the Arbitral  Tribunal,  though
          not for the same reasons.

      76. In our opinion, all the issues raised by the Appellants about  the
          non-existence of a concluded contract pale into insignificance  in
          the face of “Heads of Agreement on the proposed  IPLA  dated  23rd
          May, 2006”. Clause 3 of the Heads of Agreement provides as under:-
           “3.   Governing Law and Jurisdiction


           3.1   This paragraph is legally binding.


           3.2   This Heads of Agreement is (and all negotiations  and  any
           legal agreements prepared in connection with the IPLA shall  be)
           governed by and construed in accordance with the law of Germany.


           3.3   The parties  irrevocably  agree  that  Clause  18  of  the
           proposed draft IPLA shall apply to settle any dispute  or  claim
           that arises out of or in  connection  with  this  memorandum  of
           understanding and negotiations relating to the proposed IPLA.”


      77. A bare perusal of this clause makes it abundantly clear  that  the
          parties have irrevocably agreed that clause  18  of  the  proposed
          IPLA shall apply to settle any dispute or claim that arises out of
          or  in  connection  with  this  Memorandum  of  Understanding  and
          negotiations relating to IPLA. It must also be noticed  here  that
          the relationship between the parties formally  commenced  on  12th
          January, 1994 when the parties entered  into  the  first  SHA  and
          TKHA.  Even under that SHA, Article XVI inter  alia  provided  for
          resolution of disputes by arbitration. The TKHA also contained  an
          identically worded arbitration clause,  under  Article  XIX.  This
          intention to arbitrate has continued without waiver. In  the  face
          of  this,  the  question  of  the   concluded   contract   becomes
          irrelevant, for the  purposes  of  making  the  reference  to  the
          Arbitral Tribunal. It must be clarified that the doubt  raised  by
          the Appellant is  that  there  is  no  concluded  IPLA,  i.e.  the
          substantive  contract.   But  this  can  have  no  effect  on  the
          existence of a binding Arbitration Agreement in view of Clause  3.
          The parties have irrevocably agreed to resolve  all  the  disputes
          through Arbitration.   Parties  can  not  be  permitted  to  avoid
          arbitration, without satisfying the Court that it  would  be  just
          and in the interest  of  all  the  parties  not  to  proceed  with
          arbitration. Furthermore in arbitration  proceedings,  courts  are
          required to aid and support the arbitral process, and not to bring
          it to a grinding halt. If we were to accept the submissions of Mr.
          Nariman, we would be  playing  havoc  with  the  progress  of  the
          arbitral process. This would be  of  no  benefit  to  any  of  the
          parties involved in these unnecessarily complicated and convoluted
          proceedings.

      78. In the facts of this case, we have  no  hesitation  in  concluding
          that the parties must  proceed  with  the  Arbitration.   All  the
          difficulties pointed out by Mr. Rohinton Nariman can be  addressed
          by the Arbitral Tribunal.

      79. Further, the arbitration agreement contained  in  clause  18.1  to
          18.3 of IPLA is very widely  worded  and  would  include  all  the
          disputes,  controversies  or  differences  concerning  the   legal
          relationship between the parties.  It would include  the  disputes
          arising in respect of  the  IPLA  with  regard  to  its  validity,
          interpretation,  construction,  performance,  enforcement  or  its
          alleged breach.  Whilst  interpreting  the  arbitration  agreement
          and/or the arbitration clause, the court must be conscious of  the
          overarching policy of least intervention  by  courts  or  judicial
          authorities in matters covered  by  the  Indian  Arbitration  Act,
          1996. In view of the aforesaid, it  is  not  possible  for  us  to
          accept  the  submission  of  Mr.  Nariman  that  the   arbitration
          agreement will perish as the IPLA has not been finalised. This  is
          also because the arbitration clause (agreement) is independent  of
          the underlying contract, i.e. the IPLA containing the  arbitration
          clause. Section 16 provides that the  Arbitration  clause  forming
          part of a contract shall be treated as an agreement independent of
          such a contract.

      80. The concept of separability of  the  arbitration  clause/agreement
          from the underlying contract is a necessity  to  ensure  that  the
          intention of the parties to resolve the  disputes  by  arbitration
          does not evaporate into thin  air  with  every  challenge  to  the
          legality, validity, finality or breach of the underlying contract.
           The Indian Arbitration Act, 1996, as noticed above, under Section
          16 accepts the concept that the main contract and the  arbitration
          agreement form two independent contracts.  Commercial  rights  and
          obligations are contained in the underlying, substantive,  or  the
          main contract.   It  is  followed  by  a  second  contract,  which
          expresses the agreement  and  the  intention  of  the  parties  to
          resolve the disputes relating to the underlying  contract  through
          arbitration.  A remedy is elected by parties  outside  the  normal
          civil court remedy.  It is  true  that  support  of  the  National
          Courts would be required to ensure the success of arbitration, but
          this would not detract from the legitimacy or independence of  the
          collateral arbitration agreement, even if it  is  contained  in  a
          contract, which is claimed to be void or voidable  or  unconcluded
          by one of the parties.

      81. The scope and ambit of provision contained in Section  16  of  the
          Indian Contract Act has been clearly explained  in  Reva  Electric
          Car (supra), wherein it was inter alia observed as follows:
           “54. Under Section 16(1), the legislature makes  it  clear  that
           while considering any objection with respect to the existence or
           validity of the arbitration agreement,  the  arbitration  clause
           which formed part of the contract,  has  to  be  treated  as  an
           agreement independent of the other terms  of  the  contract.  To
           ensure that  there  is  no  misunderstanding,  Section  16(1)(b)
           further provides that even if the  Arbitral  Tribunal  concludes
           that the contract is null and void, it should not result,  as  a
           matter of law, in an automatic invalidation of  the  arbitration
           clause. Section 16(1)(a)  presumes  the  existence  of  a  valid
           arbitration clause and mandates the same to  be  treated  as  an
           agreement independent of the other terms  of  the  contract.  By
           virtue of Section  16(1)(b),  it  continues  to  be  enforceable
           notwithstanding a declaration of the  contract  being  null  and
           void. In view of the provisions contained in  Section  16(1)  of
           the Arbitration and Conciliation Act,  1996,  it  would  not  be
           possible to accept the submission of Mr. Ahmadi  that  with  the
           termination of the MoU on  31-12-2007,  the  arbitration  clause
           would also cease to exist.”




           The aforesaid reasoning has also been approved by  a  two  Judge
      bench of this Court in Today Homes and Infrastructure  Pvt.  Ltd.  vs.
      Ludhiana Improvement Trust and Anr.,[30] wherein  it  was  inter  alia
      held as under:
           “14. The same reasoning was adopted by a member  of  this  Bench
           (S.S. Nijjar, J.), while deciding the case of Reva Electric  Car
           Company Private Limited Vs.  Green  Mobil  [(2012)  2  SCC  93],
           wherein the  provisions of Section 16(1) in the backdrop of  the
           doctrine of kompetenz kompetenz were considered and it was inter
           alia held that under Section 16(1),  the  legislature  makes  it
           clear that while considering any objection with  regard  to  the
           existence  or  validity  of  the  arbitration   agreement,   the
           arbitration clause, which formed part of the contract, had to be
           treated as an agreement independent of the other  terms  of  the
           contract. Reference  was  made  in  the  said  judgment  to  the
           provisions of Section 16(1)(b) of the 1996 Act,  which  provides
           that even if the arbitral tribunal concludes that  the  contract
           is null and void, it should not result, as a matter of  law,  in
           an automatic invalidation of the arbitration clause. It was also
           held  that  Section  16(1)(a)  of  the  1996  Act  presumes  the
           existence of a valid arbitration clause and mandates the same to
           be treated as an agreement independent of the other terms of the
           contract. By virtue of Section 16(1)(b) of  the  1996  Act,  the
           arbitration clause continues to be enforceable,  notwithstanding
           a declaration that the contract was null and void.”




In view of the aforesaid, we are not inclined to accept  the  submission  of
Mr. Nariman that Arbitration Agreement will perish as the IPLA has not  been
finalised.

Issue (iv)

      82. We now come to the next issue  that  even  if  there  is  a  valid
          arbitration  agreement/clause,  can  the  parties  be  denied  the
          benefit of the same on the ground that it is unworkable?  Both the
          Arbitrators, as noticed above, are of the opinion that the parties
          cannot  proceed  to  arbitration  as  the  arbitration  clause  is
          unworkable.  The Bombay High Court has taken  the  view  that  the
          arbitration clause is  workable  as  two  Arbitrators  are  to  be
          appointed by the licensors and one by the licensee.   We  are  not
          inclined to agree with the aforesaid  finding/conclusion  recorded
          by the High Court.  Respondent No.1 is the licensor and Respondent
          No.2 is undoubtedly 100% shareholder of Respondent No.1, but  that
          is not the same as being an independent licensor.  It  would  also
          be  relevant  to  point  out  here  that  before  this  Court  the
          Respondent has not even tried to support the aforesaid  conclusion
          of the High Court.

      83. In our opinion, the Courts have to adopt a pragmatic approach  and
          not  a  pedantic  or  technical  approach  while  interpreting  or
          construing  an  arbitration  agreement  or   arbitration   clause.
          Therefore, when faced  with  a  seemingly  unworkable  arbitration
          clause, it would be the  duty  of  the  Court  to  make  the  same
          workable  within  the  permissible  limits  of  the  law,  without
          stretching it beyond  the  boundaries  of  recognition.  In  other
          words, a common sense approach has to be adopted to give effect to
          the intention of the parties to arbitrate. In  such  a  case,  the
          court ought to adopt the attitude of a reasonable business person,
          having business common sense as well as being  equipped  with  the
          knowledge that may  be  peculiar  to  the  business  venture.  The
          arbitration clause cannot be construed with  a  purely  legalistic
          mindset, as if one is construing a provision in a statute. We  may
          just add here the words of Lord Diplock in  The  Antaios  Compania
          Neviera SA v Salen Rederierna AB,[31] which are as follows:
           “If detailed semantic and syntactical analysis  of  words  in  a
           commercial contract is going to lead to a conclusion that flouts
           business common sense, it must be  made  to  yield  to  business
           common sense.”


            We entirely agree with the aforesaid observation.
           This view of ours is also supported by the  following  judgments
      which were relied upon by Dr. Singhvi:


            In Visa International Limited (supra), it was  inter  alia  held
      that:
           “25….No party can be allowed to  take  advantage  of  inartistic
           drafting of arbitration clause in any agreement as long as clear
           intention of parties to go for arbitration in case of any future
           disputes is evident from the agreement and  material  on  record
           including surrounding circumstances.


           26. What is required to be gathered  is  the  intention  of  the
           parties from the surrounding circumstances including the conduct
           of  the  parties  and  the  evidence   such   as   exchange   of
           correspondence between the parties….”


            Similar position of law was reiterated in Nandan Biomatrix  Ltd.
      (supra), wherein this court observed inter alia as under:
           28. This Court in Rukmanibai Gupta v.  Collector,  Jabalpur  has
           held (at SCC p. 560,  para  6)  that  what  is  required  to  be
           ascertained while construing a clause is  “whether  the  parties
           have agreed that if disputes arise between them  in  respect  of
           the subject-matter of contract such dispute shall be referred to
           arbitration,  then  such  an  arrangement  would  spell  out  an
           arbitration agreement”.




           29. In M.  Dayanand  Reddy  v.  A.P.  Industrial  Infrastructure
           Corpn. Ltd., this Court has held that: (SCC p. 142, para 8)
           “8. … an arbitration clause is not required to be stated in  any
           particular form. If the intention of the parties  to  refer  the
           dispute to arbitration can be clearly ascertained from the terms
           of the agreement, it is immaterial whether or not the expression
           arbitration or ‘arbitrator’ or ‘arbitrators’ has  been  used  in
           the agreement.”
                                  (original emphasis supplied)
           30. The Court is required,  therefore,  to  decide  whether  the
           existence of an agreement to refer the  dispute  to  arbitration
           can be clearly ascertained in the facts and circumstances of the
           case. This, in turn,  may  depend  upon  the  intention  of  the
           parties to be gathered from the correspondence exchanged between
           the parties, the  agreement  in  question  and  the  surrounding
           circumstances. What is required is to gather  the  intention  of
           the parties as to whether they have agreed for resolution of the
           disputes through arbitration. What is required to be decided  in
           an application under Section 11 of  the  1996  Act  is:  whether
           there is an arbitration agreement as defined in the said Act.”

      84. It is a well recognized principle of arbitration jurisprudence  in
          almost all  the  jurisdictions,  especially  those  following  the
          UNCITRAL Model Law, that the Courts  play  a  supportive  role  in
          encouraging the arbitration to proceed rather than letting it come
          to  a  grinding  halt.   Another   equally   important   principle
          recognized in almost all jurisdictions is the  least  intervention
          by the Courts.  Under the Indian Arbitration Act, 1996, Section  5
          specifically lays down that : “Notwithstanding anything  contained
          in any other law for the time being in force, in matters  governed
          by this Part, no judicial authority shall intervene  except  where
          so provided in this Part”.  Keeping in view the aforesaid, we find
          force in the submission of Dr. Singhvi that the arbitration clause
          as it stands cannot  be  frustrated  on  the  ground  that  it  is
          unworkable.

      85. Dr. Singhvi has rightly submitted that the un-workability in  this
          case is attributed only  to  the  machinery  provision.   And  the
          arbitration agreement, otherwise, fulfils the criteria  laid  down
          under Section 44 of the Indian Arbitration Act, 1996.  Given  that
          two Arbitrators have been appointed, the missing  line  that  “the
          two Arbitrators appointed by the parties shall appoint  the  third
          Arbitrator” can be read into the arbitration clause. The  omission
          is so obvious that the court can legitimately supply  the  missing
          line. In these circumstances, the Court would apply the  officious
          bystander principle, as explained by MacKinnonn, LJ in Shirlaw  v.
          Southern Foundries,[32] to interpret the clause.  In  Shirlaw,  it
          was held that:

            "prima facie that which in any contract is left to  be  implied
           and need not be expressed is something so obvious that  it  goes
           without saying; so that, if, while the parties were making their
           bargain, an officious bystander were  to  suggest  some  express
           provision for it in their agreement, they would testily suppress
           him with a common 'Oh, of course!”




           In construing an arbitration clause,  it  is  not  necessary  to
      employ the strict rules of interpretation which may  be  necessary  to
      construe a statutory provision.  The court would be  well  within  its
      rights to set right an obvious omission  without  necessarily  leaving
      itself open to the criticism of having reconstructed the clause.
           Further, we find support in  this  context  from  the  following
      extract of Halsbury’s Laws of England (Vol. 13, Fourth  Edition,  2007
      Reissue):
           “The words of a written instrument must in general be  taken  in
           their ordinary or natural sense notwithstanding  the  fact  that
           such a construction may appear not  to  carry  out  the  purpose
           which it might otherwise be supposed  the  parties  intended  to
           carry  out;  but  if  the   provisions   and   expressions   are
           contradictory, and there are grounds, appearing on the  face  of
           the instrument, affording proof of the  real  intention  of  the
           parties, that intention will prevail  against  the  obvious  and
           ordinary meaning of the words; and where  the  literal  (in  the
           sense of ordinary, natural or primary) construction  would  lead
           to an absurd result, and the words used  are  capable  of  being
           interpreted so as to avoid this result, the literal construction
           will be abandoned.”

      86. Mr.  Rohinton  Nariman  had  very  fairly  submitted  that  it  is
          permissible for the Court to construe the arbitration clause in  a
          particular manner to make the same workable when there is a defect
          or an omission in it.  His only caveat was that such  an  exercise
          would not permit the Court  to  re-write  the  contract.   In  our
          opinion, in the present case, the crucial line which seems  to  be
          an omission or an error can be inserted by  the  Court.   In  this
          context, we find support from  judgment  of  this  court  in  Shin
          Satellite Public Co. Ltd. (supra), wherein the ‘offending part’ in
          the arbitration clause made determination by the arbitrator  final
          and binding between the parties and declared that the parties have
          waived the rights to appeal or an objection against such award  in
          any  jurisdiction.  The  Court,  inter-alia,  held  that  such  an
          objectionable part is clearly severable being independent  of  the
          dispute  that  has  to  be  referred  to   be   resolved   through
          arbitration. By giving effect to the arbitration clause, the court
          specifically noted that the “it cannot be said that the  Court  is
          doing something which is not contemplated by  the  parties  or  by
          ‘interpretative process’, the  Court  is  rewriting  the  contract
          which is in the nature of ‘novatio’ (sic). The  intention  of  the
          parties is explicit and clear; they have agreed that the  dispute,
          if any, would be  referred  to  an  arbitrator.  To  that  extent,
          therefore, the agreement is legal, lawful and the  offending  part
          as to the finality and restraint in approaching a Court of law can
          be separated and severed by using a 'blue pencil'.”

      87. There is another reason which permits us  to  take  the  aforesaid
          view and accept the submission made  by  Dr.  Singhvi  that  while
          construing  the  arbitration  agreement/clause  the  same  can  be
          construed to make it workable, as such an approach is  statutorily
          provided for.  For this submission, Dr. Singhvi has rightly relied
          upon the provision contained in Sections 10 and 11 of  the  Indian
          Arbitration Act, 1996. The object of these two  provisions  is  to
          avoid failure of the  arbitration  agreement  or  the  arbitration
          clause if contained in contract. Under  Section  10(1),  there  is
          freedom  given  to  the  parties  to  determine  the   number   of
          Arbitrators, provided that  such  number  shall  not  be  an  even
          number.  The arbitration clause in this  case  provides  that  the
          arbitral tribunal shall consist of three arbitrators.  Further, it
          must also be noticed that the Respondents have been trying to seek
          adjudication of disputes by arbitration.  As  noted  earlier,  the
          Respondent No.2 in  its  email  dated  13th  March,  2008  clearly
          offered that the third and the presiding arbitrator  be  appointed
          by  the  respective  arbitrators  of  the   Appellants   and   the
          Respondents. On the other hand, the attitude of the Appellants  is
          to avoid arbitration at any cost.

      88. In this context, reliance placed by Dr. Singhvi upon MMTC  Limited
          (supra)  is  justified.  In  MMTC,  the  provisions  contained  in
          Sections 10(1) and (2) of the Indian Arbitration  Act,  1996  have
          been held to be machinery provisions by this Court. It was further
          held that the validity of an arbitration agreement does not depend
          on the number of arbitrators specified therein. The Court declined
          to render the arbitration agreement invalid on the ground that  it
          provided an even number of  arbitrators.   In  the  present  case,
           Mr. Rohinton Nariman had rightly not  even  emphasised  that  the
          arbitration agreement itself is illegal.  The learned sr.  counsel
          only emphasised that the arbitrators  having  expressed  the  view
          that the arbitration clause is unworkable, the parties  ought  not
          to be sent to the arbitration.
      Similarly, other provisions contained in Sections 8, 11 and 45 of  the
Indian Arbitration  Act,  1996  are  machinery  provisions  to  ensure  that
parties  can  proceed  to  arbitration  provided  they  have  expressed  the
intention to Arbitrate. This intention can be expressed by the  parties,  as
specifically provided under Section 7 of the Indian  Arbitration  Act,  1996
by  an  exchange  of  letters,  telex,   telegrams   or   other   means   of
telecommunication which provide a record of the agreement.   Such  intention
can even be expressed in the pleadings of the parties such as statements  of
claim and defence, in which the existence of the  agreement  is  alleged  by
one party and not denied by the other.  In view of the above, we are of  the
opinion that the parties can be permitted to proceed to arbitration.

Issue No. V/Re: Seat
      89. This now clears the decks for the crucial question, i.e.,  is  the
          ‘seat’ of arbitration in London or in India.  This is  necessarily
          so as the location of the seat will determine the Courts that will
          have   exclusive   jurisdiction   to   oversee   the   arbitration
          proceedings.  Therefore,  understandably,  much  debate  has  been
          generated before us on the question
whether the use of the  phrase
          “venue shall be in London” actually refers to designation  of  the
          seat of arbitration in London.

      90. We find much substance in the  submissions  of  Mr.  Nariman  that
          there are very strong  indicators  to  suggest  that  the  parties
          always understood that the seat of arbitration would be  in  India
          and London would only be the “venue” to hold  the  proceedings  of
          arbitration.  We find force in  the  submission  made  by  learned
          senior counsel for the Appellants that the facts  of  the  present
          case would make the ratio of law laid down  in  Naviera  Amazonica
          Peruana S.A. (supra) applicable in the present case.
Applying the
          closest and the intimate connection to arbitration,  it  would  be
          seen that the parties had agreed that  the  provisions  of  Indian
          Arbitration Act, 1996 would apply to the arbitration  proceedings.
          By making such a choice, the parties  have  made  the  curial  law
          provisions contained in Chapters III, IV, V and VI of  the  Indian
          Arbitration Act, 1996 applicable. Even Dr. Singhvi  had  submitted
          that Chapters III, IV, V  and  VI  would  apply  if  the  seat  of
          arbitration is in India.                
By choosing that  Part  I
          of the Indian Arbitration Act, 1996 would apply, the parties  have
          made a choice that the seat of  arbitration  would  be  in  India.
          Section 2 of the Indian Arbitration Act, 1996 provides that Part I
          “shall apply where the place of  arbitration  is  in  India”.   In
          Balco, it has been categorically held that Part I  of  the  Indian
          Arbitration Act, 1996, will have no application, if  the  seat  of
          arbitration is not in India.   In  the  present  case,  London  is
          mentioned only as a “venue” of arbitration which, in our  opinion,
          in the facts of this case  can  not  be  read  as  the  “seat”  of
          arbitration.

      91. We are fortified in taking the aforesaid view
since all the  three
          laws applicable in arbitration proceedings are Indian  laws.   The
          law governing the Contract,  the  law  governing  the  arbitration
          agreement and the law of arbitration/Curial law are all stated  to
          be Indian.  In such  circumstances,  the  observation  in  Naviera
          Amazonica Peruana S.A. (supra) would become fully  applicable.  In
          this case, the Court of Appeal in England considered the agreement
          which contained a clause providing for  the  jurisdiction  of  the
          courts in Lima, Peru in the event of judicial dispute; and at  the
          same time contained a clause providing that the arbitration  would
          be  governed  by  the  English  law  and  the  procedural  law  of
          arbitration  shall  be  the  English  law.  The  Court  of  Appeal
          summarised  the  state  of  the  jurisprudence  on   this   topic.
          Thereafter, the conclusions which arose  from  the  material  were
          summarised as follows:
           “All contracts which  provide  for  arbitration  and  contain  a
           foreign element may involve three potentially  relevant  systems
           of law: (1) the law governing the substantive contract; (2)  the
           law governing the agreement to arbitrate and the performance  of
           that agreement;  (3)  the  law  governing  the  conduct  of  the
           arbitration. In the majority of cases  all  three  will  be  the
           same. But (1) will often be different  from  (2)  and  (3).  And
           occasionally, but rarely, (2) may also differ from (3).”


           It was observed that the problem about all  these  formulations,
      including the third, is that they elide the  distinction  between  the
      legal localisation of arbitration on the one hand and the  appropriate
      or convenient geographical locality for hearings of the arbitration on
      the other hand.

    92.   On the facts of the case, it was observed  in  Naviera  Amazonica
        case (supra) that since there was no contest on Law 1  and  Law  2,
        the entire issue turned on Law 3, “the law governing the conduct of
        the arbitration”. This is usually referred  to  as  the  curial  or
        procedural law, or the lex fori. Thereafter, the Court  approvingly
        quoted the  following  observation  from  Dicey  &  Morris  on  the
        Conflict of Laws (11th Edn.): “English Law does not  recognise  the
        concept of a delocalised  arbitration  or  of  arbitral  procedures
        floating in  the  transnational  firmament,  unconnected  with  any
        municipal system of law”. It  is  further  held  that  “accordingly
        every arbitration must have a ‘seat’ or ‘locus arbitri’ or  ‘forum’
        which subjects its procedural rules to the municipal law  which  is
        there in force”. The  Court  thereafter  culls  out  the  following
        principle:
           “Where the parties have failed to choose the law  governing  the
           arbitration proceedings, those   proceedings must be considered,
           at any rate prima facie, as being governed by  the  law  of  the
           country in which the arbitration is held, on the ground that  it
           is the country most closely connected with the proceedings.”




The aforesaid classic statement of the conflict of law rules  as  quoted  in
Dicey & Morris on the Conflict of Laws (11th Edn.), Vol. 1, was approved  by
the House of Lords in James Miller  &  Partners  Ltd.  v.  Whitworth  Street
Estates (Manchester) Ltd.[33] Mustill, J.  in  Black  Clawson  International
Ltd.  v.  Papierwerke  Waldhof-Aschaffenburg  A.G.[34],   a   little   later
characterised the same proposition as  “the  law  of  the  place  where  the
reference is conducted, the lex fori”. The position of law in India  is  the
same.

      93. The Court in Naviera Amazonica, also, recognised  the  proposition
          that “there is equally no reason in theory which precludes parties
          to agree that an arbitration shall  be  held  at  a  place  or  in
          country X but subject to the procedural laws of Y”. But it  points
          out that in reality parties would hardly make such a  decision  as
          it would create enormous unnecessary complexities. Finally  it  is
          pointed out that it is necessary not to confuse the legal seat  of
          arbitration with the geographically convenient place or places for
          holding hearings. In the present case, Dr.Singhvi, it seems to us,
          is confusing the geographically convenient place, which is London,
          with the legal seat which, in our opinion, is undoubtedly India.

      94. Further, on examination of the facts in  Naviera  Amazonica  case,
          the Court of Appeal observed that there is nothing  surprising  in
          concluding that these parties intended that any dispute under this
          policy should be arbitrated in London. But it would always be open
          to the Arbitral Tribunal to hold hearings  in  Lima  if  this  was
          thought to be convenient, even though the seat  or  forum  of  the
          arbitration would remain in London.  In the present case, with the
          utmost ease, “London” can be replaced by India,  and  “Lima”  with
          London.

      95. Having chosen all the three applicable laws to be Indian laws,  in
          our considered opinion, the parties would  not  have  intended  to
          have created an  exceptionally  difficult  situation,  of  extreme
          complexities, by fixing the seat of arbitration in London.
In view of the above, we are unable to accept the submissions  made  by  Dr.
Singhvi that in this case, the term “venue” ought to be read as seat.

      96.    We  are  also  unable  to  accept  the   submission   made   by
          Dr. Singhvi that in this case the venue should  be  understood  as
          reference to place in the  manner  it  finds  mention  in  Section
          20(1), as opposed to the manner it appears in  Section  20(3),  of
          the Indian Arbitration Act, 1996.  Such  a  submission  cannot  be
          accepted since the parties have agreed that Curial  law  would  be
          the Indian Arbitration Act, 1996.


97.  In Balco, it has been clearly  held  that  concurrent  jurisdiction  is
vested in the Courts of seat and venue, only when the seat  of  arbitrations
is in India (Para 96).  Reason for the aforesaid conclusion  is  that  there
is no risk of conflict of  judgments  of  different  jurisdictions,  as  all
courts in India would follow the Indian Law. Thus, the  reliance  placed  by
D. Singhvi on Balco in this context is misplaced.

      98. It is correct that, in virtually  all  jurisdictions,  it  is  an
          accepted proposition of law that the seat normally  carries  with
          it the choice of that country’s arbitration/Curial law.  But this
          would arise only if the Curial law is not specifically chosen  by
          the parties.  Reference can be made  to  Balco  (supra),  wherein
          this Court considered a number of judgments having a  bearing  on
          the issue of  whether  the  venue  is  to  be  treated  as  seat.
          However, the court was not required  to  decide  any  controversy
          akin to the one this court is considering in  the  present  case.
          The cases were examined only to demonstrate the difficulties that
          the court will face in a situation similar to the one  which  was
          considered in Naviera Amazonica (supra).

      99. We also do not agree with  Dr.  Singhvi  that  parties  have  not
          indicated they had chosen India to be the  seat  of  arbitration.
          The judgments relied upon by  Dr.  Singhvi  do  not  support  the
          proposition canvassed. In fact, the judgment in the case Braes of
          Doune Wind Farm (Scotland) Limited Vs. Alfred  McAlpine  Business
          Services Limited[35], has considered a situation very similar  to
          the factual situation in the present case.


     100.    In Braes of Doune, the English & Wales High  Court  considered
          two Applications relating to the first award  of  an  arbitrator.
          The  award  related  to  an  EPC  (engineering,  procurement  and
          construction)  contract  dated  4th  November,  2005   (the   EPC
          contract) between the claimant (the employer) and  the  defendant
          (the contractor), whereby the contractor undertook to  carry  out
          works in connection with the provision of 36 WTGs at a site  some
          18  km  from  Stirling  in  Scotland.  This  award   dealt   with
          enforceability of the clauses of the EPC contract which  provided
          for liquidated damages for delay. The claimant applied for  leave
          to appeal against this award upon a question of  law  whilst  the
          defendant sought, in effect, a declaration that the court had  no
          jurisdiction to entertain such an Application and  for  leave  to
          enforce the award. The Court considered the issue of jurisdiction
          which arose out of  application  of  Section  2  of  the  English
          Arbitration Act, 1996 which provides that:
           “2. Scope of application of provisions.—(1)  The  provisions  of
           this Part apply where the seat of the arbitration is in  England
           and Wales or Northern Ireland.”

    101.    The Court notices the singular  importance  of  determining  the
         location of juridical seat in terms of Section 3, for the  purposes
         of Section 2, in the following words of Akenhead, J.:
           “15. I must determine what the parties agreed was the ‘seat’  of
           the arbitration for the purposes of Section 2 of the Arbitration
           Act, 1996. This means by Section 3 what the parties  agreed  was
           the ‘juridical’ seat. The word ‘juridical’ is not an  irrelevant
           word or a word to be ignored in ascertaining what the ‘seat’ is.
           It means and connotes the administration of justice  so  far  as
           the arbitration is concerned. It implies that there  must  be  a
           country whose job it is to administer, control  or  decide  what
           control there is to be over an arbitration.”
                                                         (emphasis supplied)




    102.   Thus, it would be evident that if the  “juridical  seat”  of  the
         arbitration was in Scotland,  the  English  courts  would  have  no
         jurisdiction to entertain an Application for leave to  appeal.  The
         contractor argued that the seat of  the  arbitration  was  Scotland
         whilst the employer argued that it was England. There  were  to  be
         two contractors involved with the project.
           The material clauses of the EPC contract were:


                 “1.4.1. The contract shall be governed by and construed  in
                 accordance with the laws of England and Wales and,  subject
                 to Clause 20.2 (Dispute Resolution), the parties agree that
                 the courts of England and Wales have exclusive jurisdiction
                 to settle any dispute arising out of or in connection  with
                 the contract.


                 (a) … any dispute or difference between the parties to this
                 agreement  arising  out  of  or  in  connection  with  this
                 agreement shall be referred to arbitration.


                 (b) Any reference to  arbitration  shall  be  to  a  single
                 arbitrator  …  and  conducted  in   accordance   with   the
                 Construction Industry  Model  Arbitration  Rules,  February
                 1998 Edn., subject to this clause (Arbitration Procedure)….


                 (c) This arbitration agreement is subject  to  English  law
                 and the seat of the arbitration shall be Glasgow, Scotland.
                 Any such reference to arbitration shall be deemed to  be  a
                 reference  to  arbitration  within  the  meaning   of   the
                 Arbitration Act, 1996 or any statutory re-enactment.”


    103.   The arbitration was to be conducted under the  arbitration  rules
         known colloquially as the “CIMAR Rules”. Rule 1  of  the  aforesaid
         Rules provided that:
           “1.1.  These  Rules  are  to  be  read  consistently  with   the
           Arbitration Act, 1996 (the Act), with common expressions  having
           the same meaning.”


           “1.6. (a) a single arbitrator is to be appointed, and
           (b) the seat of the arbitration  is  in  England  and  Wales  or
           Northern Ireland.”


The Court was informed  by  the  parties  in  arguments  that  the  Scottish
Court’s powers of control or intervention  would  be,  at  the  very  least,
seriously circumscribed by the parties’ agreement in terms  as  set  out  in
para 6 of the judgment. It was further indicated by  the  counsel  that  the
Scottish Court’s powers of intervention  might  well  be  limited  to  cases
involving such extreme circumstances as  the  dishonest  procurement  of  an
award.  In construing the EPC, the Court relied upon the  principles  stated
by the Court of Appeal in Naviera Amazonica Peruana S.A.

     104.    Upon consideration of the entire material,  the  Court  formed
          the  view  that  it  does  have  jurisdiction  to  entertain   an
          Application by either party to the  contract  in  question  under
          Section 69 of the English Arbitration Act, 1996. The  Court  gave
          the following reasons for the decision:
           “(a) One needs to  consider  what,  in  substance,  the  parties
           agreed was the  law  of  the  country  which  would  juridically
           control the arbitration.


           (b) I attach particular importance to Clause 1.4.1. The  parties
           agreed that essentially the  English  (and  Welsh)  courts  have
           ‘exclusive jurisdiction’ to settle disputes.  Although  this  is
           ‘subject to’ arbitration, it must and does mean something  other
           than being mere verbiage. It is a jurisdiction over disputes and
           not simply a court in which a foreign award may be enforced.  If
           it is in arbitration alone that disputes are to be  settled  and
           the English courts have no residual involvement in that process,
           this part of Clause 1.4.1 is meaningless in practice. The use of
           the word ‘jurisdiction’ suggests some form of control.


           (c) The second part of Clause 1.4.1 has some real meaning if the
           parties were agreeing by it that, although the  agreed  disputes
           resolution process is arbitration, the parties  agree  that  the
           English  court  retains  such  jurisdiction  to  address   those
           disputes  as  the  law  of  England  and  Wales   permits.   The
           Arbitration  Act,  1996  permits  and  requires  the  court   to
           entertain applications under Section  69  for  leave  to  appeal
           against awards which address disputes which have  been  referred
           to  arbitration.  By  allowing  such   applications   and   then
           addressing the relevant questions of law, the court will  settle
           such disputes; even if the application  is  refused,  the  court
           will be applying its jurisdiction  under  the  Arbitration  Act,
           1996 and providing resolution in relation to such disputes.


           (d) This reading of  Clause  1.4.1  is  consistent  with  Clause
           20.2.2(c) which  confirms  that  the  arbitration  agreement  is
           subject to English law and that the ‘reference’ is ‘deemed to be
           a reference to arbitration within the meaning of the Arbitration
           Act, 1996’. This latter expression is extremely odd  unless  the
           parties were agreeing that any reference to arbitration  was  to
           be treated as a reference to which the Arbitration Act, 1996 was
           to apply. There is no definition in the Arbitration Act, 1996 of
           a ‘reference to arbitration’, which is not a statutory  term  of
           art.  The  parties  presumably  meant  something  in  using  the
           expression and the most obvious meaning is that the parties were
           agreeing that the Arbitration Act,  1996  should  apply  to  the
           reference without qualification.


           (e) Looked at in this light, the parties’ express agreement that
           the ‘seat’ of arbitration  was  to  be  Glasgow,  Scotland  must
           relate to the  place  in  which  the  parties  agreed  that  the
           hearings should take place. However, by all the other references
           the parties were agreeing that  the  curial  law  or  law  which
           governed the arbitral proceedings … establish that, prima  facie
           and in the absence of agreement otherwise, the  selection  of  a
           place or seat for an arbitration will determine what the  curial
           law or ‘lex fori’ or ‘lex arbitri’ will be, [we] consider  that,
           where in substance the  parties  agree  that  the  laws  of  one
           country will govern and control a given arbitration,  the  place
           where the arbitration is to be heard will not dictate  what  the
           governing or controlling law will be.


           (f) In the context of this particular case, the  fact  that,  as
           both parties seemed to accept  in  front  of  me,  the  Scottish
           courts would have no real control or interest  in  the  arbitral
           proceedings other than in a criminal context, suggests that they
           can not have intended that the arbitral proceedings were  to  be
           conducted as an effectively ‘delocalised’ arbitration  or  in  a
           ‘transnational firmament’,  to  borrow  Kerr,  L.J.’s  words  in
           Naviera Amazonica.


           (g) The CIMAR Rules are not inconsistent  with  my  view.  Their
           constant references to the Arbitration Act,  1996  suggest  that
           the parties at least envisaged the possibility that  the  courts
           of England and Wales  might  play  some  part  in  policing  any
           arbitration. For instance, Rule 11.5 envisages something  called
           ‘the court’ becoming involved  in  securing  compliance  with  a
           peremptory order of the arbitrator. That would have  to  be  the
           English court, in practice.”




     105.     In our opinion, Mr. Nariman has rightly relied upon the ratio
          in Braes of  Doune  case  (supra).  Learned  senior  counsel  has
          rightly  pointed  out  that  unlike  the  situation  in   Naviera
          Amazonica (supra), in the present case all the  three  laws:  (i)
          the  law  governing  the  substantive  contract;  (ii)  the   law
          governing the agreement to arbitrate and the performance of  that
          agreement (iii) the law governing the conduct of the  arbitration
          are Indian. Learned senior counsel has rightly submitted that the
          curial law of England would become applicable only if  there  was
          clear designation of the seat in London. Since the  parties  have
          deliberately chosen London as a venue, as a neutral place to hold
          the meetings of arbitration only,  it  cannot  be  accepted  that
          London  is  the  seat  of  arbitration.  We  find  merit  in  the
          submission of Mr. Nariman that businessmen do not  intend  absurd
          results. If seat is in London, then challenge to the award  would
          also  be  in  London.  But  the  parties  having  chosen   Indian
          Arbitration Act, 1996 - Chapter III, IV, V  and  VI;  Section  11
          would be applicable for appointment of  arbitrator  in  case  the
          machinery for  appointment  of  arbitrators  agreed  between  the
          parties breaks down. This would be so since the ratio  laid  down
          in Bhatia will apply, i.e., Part I of the Indian Arbitration Act,
          1996 would apply even though seat of arbitration is not in India.
          This position has been reversed in Balco, but only prospectively.
           Balco would apply to the agreements on or after  6th  September,
          2012. Therefore, to interpret that London has been designated  as
          the seat would lead to absurd results.

     106.    Learned senior counsel has rightly submitted  that  in  fixing
          the seat in  India,  the  court  would  not  be  faced  with  the
          complications which were faced by the English High Court  in  the
          Braes of Doune (supra). In that case, the  court  understood  the
          designation of the seat  to  be  in  Glasgow  as  venue,  on  the
          strength  of  the  other  factors   intimately   connecting   the
          arbitration to  England.   If  one  has  regard  to  the  factors
          connecting the dispute to India and the absence  of  any  factors
          connecting it to England, the only reasonable conclusion is  that
          the parties  have  chosen  London,  only  as  the  venue  of  the
          arbitration. All the other connecting  factors  would  place  the
          seat firmly in India.

     107.    The submission made by Dr. Singhvi would  only  be  worthy  of
          acceptance on the assumption that London is the seat. That  would
          be to put the cart before the horse. Surely, jurisdiction of  the
          courts can not be rested upon unsure or insecure foundations.  If
          so, it will flounder with every gust of the wind  from  different
          directions. Given the connection to India of the  entire  dispute
          between the parties, it is difficult to accept that parties  have
          agreed that the seat would be London and that  venue  is  only  a
          misnomer. The parties having chosen the Indian  Arbitration  Act,
          1996 as the law governing the substantive contract, the agreement
          to arbitrate and the performance of the  agreement  and  the  law
          governing the conduct of the arbitration; it would, therefore, in
          our opinion, be vexatious  and  oppressive  if  Enercon  GMBH  is
          permitted to compel  EIL  to  litigate  in  England.  This  would
          unnecessarily  give  rise  to  the  undesirable  consequences  so
          pithily pointed by Lord Brandon and Lord Diplock  in  Abidin  Vs.
          Daver.[36] It was to avoid such a situation that the  High  Court
          of England & Wales, in Braes  of  Doune,  construed  a  provision
          designating Glasgow in Scotland as the seat of the arbitration as
          providing only for the venue of the arbitration.
     108.    At  this  stage,  it  would  be  appropriate  to  analyse  the
          reasoning of the Court in Braes of Doune in support of construing
          the designated seat by the parties as making a reference only  to
          the venue of arbitration.  In that  case,  the  Court  held  that
          there was no supplanting of the Scottish law by the English  law,
          as both the seat under Section 2 and the “juridical  seat”  under
          Section 3, were held to be in England.  It was further concluded,
          as observed earlier, that where in substance the  parties  agreed
          that the laws of one country will  govern  and  control  a  given
          arbitration, the place where the arbitration is to be heard  will
          not dictate what the governing law  will be.

     109.    In Braes of Doune, detailed examination was undertaken by  the
          court to discern the intention of the parties as to  whether  the
          place mentioned refers to venue or the seat of  the  arbitration.
          The factual situation in the present case is not as difficult  or
          complex as the parties herein have only designated  London  as  a
          venue. Therefore, if one has to apply the reasoning and logic  of
          Akenhead, J., the  conclusion  would  be  irresistible  that  the
          parties have designated India as the seat. This is even  more  so
          as the parties have not agreed that the  courts  in  London  will
          have exclusive jurisdiction to resolve any dispute arising out of
          or in  connection  with  the  contract,  which  was  specifically
          provided  in  Clause  1.4.1  of  the  EPC  Contract  examined  by
          Akenhead, J. in Braes of Doune. In the present case,  except  for
          London being chosen as a convenient place/venue for  holding  the
          meetings of the arbitration, there is no other factor  connecting
          the arbitration proceedings to London.

110. We also do not  find  much  substance  in  the  submission  of      Dr.
Singhvi that the agreement of the parties that the  arbitration  proceedings
will  be  governed  by  the  Indian  Arbitration  Act,  1996  would  not  be
indicative of the intention of the parties that the seat of  arbitration  is
India. An argument similar to the argument put  forward  before  us  by  Dr.
Singhvi was rejected in C vs. D by the Court of Appeal in  England  as  well
as by Akenhead, J. in Braes of Doune. Underlying reason for  the  conclusion
in both the cases was that it would be rare for the law of  the  arbitration
agreement to be different from the law of the seat of arbitration.

    111. C v. D[37] the Court of Appeal in England was examining  an  appeal
         by the defendant insurer from the judgment of Cooke, J. granting an
         anti-suit injunction preventing it from challenging an  arbitration
         award in the US courts. The insurance  policy  provided  that  “any
         dispute arising under  this  policy  shall  be  finally  and  fully
         determined in London, England under the provisions of  the  English
         Arbitration Act, 1950 as amended”. However, it was further provided
         that “this policy shall be governed by and construed in  accordance
         with the internal laws of the State of New York….” A partial  award
         was made in favour of  the  claimants.  It  was  agreed  that  this
         partial award is, in  English  law  terms,  final  as  to  what  it
         decides. The defendant sought  the  tribunal’s  withdrawal  of  its
         findings. The defendant also intimated its intention to apply to  a
         Federal Court applying the US Federal Arbitration Law governing the
         enforcement of arbitral award, which was said to permit vacatur  of
         an award where arbitrators have manifestly disregarded the law.  It
         was    in    consequence    of    such    an    intimation     that
                 the claimant  sought  and  obtained  an  interim  anti-suit
         injunction. The  Judge  held  that  parties  had  agreed  that  any
         proceedings seeking to attack or set aside the partial award  would
         only be those permitted by the English law. It was not,  therefore,
         permissible for the defendant to bring any proceedings in New  York
         or elsewhere to attack the partial award. The  Judge  rejected  the
         arguments to the effect that the choice of the law of New  York  as
         the proper law of the contract amounted to an  agreement  that  the
         law of England should not apply  to  proceedings  post  award.  The
         Judge also rejected a further argument that the separate  agreement
         to arbitrate contained in Condition V(o) of the policy  was  itself
         governed by New York Law so that proceedings could be instituted in
         New York. The Judge granted the claimant a final injunction.

    112.  The Court of Appeal  noticed  the  submission  on  behalf  of  the
         defendant as follows:
           “14. The main submission of Mr Hirst for the  defendant  insurer
           was that the Judge had been wrong to hold that  the  arbitration
           agreement itself was governed by English law merely because  the
           seat  of  the  arbitration  was  London.  He  argued  that   the
           arbitration agreement itself was silent as to its proper law but
           that its proper law should follow the proper law of the contract
           as a whole, namely, New York law, rather than  follow  from  the
           law of the seat of the arbitration, namely,  England.  The  fact
           that the arbitration itself was governed by  English  procedural
           law did not mean that it followed that the arbitration agreement
           itself had to be governed by English law. The proper law of  the
           arbitration agreement was that law with which the agreement  had
           the most close and real connection; if the insurance policy  was
           governed by New York law, the law  with  which  the  arbitration
           agreement had its closest and most real connection was  the  law
           of New York.  It  would  then  follow  that,  if  New  York  law
           permitted a challenge for manifest disregard  of  the  law,  the
           court in England should not enjoin such a challenge.”

     113. Justice Longmore of Court of Appeal observed:
           “16. I shall deal with Mr Hirst’s arguments in due  course  but,
           in my judgment, they fail to grapple with the central  point  at
           issue which is whether or not, by choosing London as the seat of
           the arbitration, the parties must be taken to have  agreed  that
           proceedings on the award  should  be  only  those  permitted  by
           English law. In my view they must be taken to have so agreed for
           the reasons given by the Judge. The whole purpose of the balance
           achieved by the Bermuda Form (English arbitration  but  applying
           New York law  to  issues  arising  under  the  policy)  is  that
           judicial remedies in  respect  of  the  award  should  be  those
           permitted by English law and only those so permitted.  Mr  Hirst
           could not say (and did not say) that English  judicial  remedies
           for lack of  jurisdiction  on  procedural  irregularities  under
           Sections 67 and  68  of  the  Arbitration  Act,  1996  were  not
           permitted; he was reduced  to  saying  that  New  York  judicial
           remedies were also permitted. That, however, would be  a  recipe
           for litigation and (what is worse) confusion which  cannot  have
           been intended by the parties. No doubt New York law has its  own
           judicial  remedies  for  want  of   jurisdiction   and   serious
           irregularity but it could scarcely  be  supposed  that  a  party
           aggrieved  by  one  part  of  an  award  could  proceed  in  one
           jurisdiction and a party aggrieved by another part of  an  award
           could proceed in another jurisdiction. Similarly, in the case of
           a single complaint about an award, it could not be supposed that
           the aggrieved party could complain in one jurisdiction  and  the
           satisfied party be entitled to ask  the  other  jurisdiction  to
           declare its satisfaction  with  the  award.  There  would  be  a
           serious risk of parties rushing to get the first judgment or  of
           conflicting   decisions   which   the   parties   cannot    have
           contemplated.


           17. It  follows  from  this  that  a  choice  of  seat  for  the
           arbitration must be a choice of forum for  remedies  seeking  to
           attack the award.”
                                                         (emphasis supplied)




             On the facts of the case, the Court held that the seat  of  the
       arbitration was in England and accordingly entertained the challenge
       to the award.


    114.   The cases relied  upon  by  Dr.  Singhvi  relate  to  the  phrase
         “arbitration in London” or expressions similar  thereto.  The  same
         cannot be equated with the term “venue of  arbitration  proceedings
         shall be in London.” Arbitration in London  can  be  understood  to
         include venue as well as seat; but it would  be  rather  stretching
         the imagination if “venue of arbitration shall be in London”  could
         be understood as “seat of arbitration  shall  be  London,”  in  the
         absence of any other factor connecting the arbitration  to  London.
         In spite  of  Dr.  Singhvi’s  seemingly  attractive  submission  to
         convince us, we decline to entertain the notion  that  India  would
         not be the natural forum  for  all  remedies  in  relation  to  the
         disputes, having such a close and intimate connection  with  India.
         In contrast, London is described only as a venue which Dr.  Singhvi
         says would be the natural forum.

    115.  In Shashoua, such an expression was understood as seat instead  of
         venue, as the parties had agreed that the ICC Rules would apply  to
         the arbitration proceedings. In Shashoua, the ratio in Naviera  and
         Braes Doune has  been  followed.   In  this  case,  the  Court  was
         concerned with the  construction  of  the  shareholders’  agreement
         between  the  parties,  which  provided  that  “the  venue  of  the
         arbitration shall be London, United Kingdom”. It provided that  the
         arbitration  proceedings  should  be  conducted   in   English   in
         accordance with the ICC Rules and that the  governing  law  of  the
         shareholders’ agreement itself would  be  the  law  of  India.  The
         claimants made an Application  to  the  High  Court  in  New  Delhi
         seeking interim measures of  protection  under  Section  9  of  the
         Indian  Arbitration  Act,  1996,  prior  to  the   institution   of
         arbitration  proceedings.  Following  the   commencement   of   the
         arbitration, the defendant and the joint venture company  raised  a
         challenge to the jurisdiction of the Arbitral Tribunal,  which  the
         panel heard as a  preliminary  issue.  The  Tribunal  rejected  the
         jurisdictional objection.

    116. The Tribunal then made a costs award ordering the defendant to  pay
         $140,000 and £172,373.47. The  English  Court  gave  leave  to  the
         claimant to enforce the costs award as a  judgment.  The  defendant
         applied to the High Court of Delhi under  Section  34(2)(a)(iv)  of
         the Arbitration Act,  1996  to  set  aside  the  costs  award.  The
         claimant had obtained a charging order, which had been made  final,
         over the defendant’s property in UK. The defendant applied  to  the
         Delhi High Court for an order directing the claimants not  to  take
         any action  to  execute  the  charging  order,  pending  the  final
         disposal of the Section 34 petition in Delhi seeking to  set  aside
         the  costs  award.  The  defendant  had  sought  unsuccessfully  to
         challenge the costs award in the Commercial Court under Section  68
         and Section 69 of the English Arbitration  Act,  1996  and  to  set
         aside the order giving leave to enforce the award.

    117. Examining the fact situation in the case,  the  Court  observed  as
         follows:
           “The basis for the court’s grant of an anti-suit  injunction  of
           the kind sought depended upon the seat of  the  arbitration.  An
           agreement as to the seat of an arbitration brought in the law of
           that country as the curial law and was analogous to an exclusive
           jurisdiction clause. Not only was there agreement to the  curial
           law of the seat, but also to  the  courts  of  the  seat  having
           supervisory jurisdiction  over  the  arbitration,  so  that,  by
           agreeing to the seat, the parties agreed that any  challenge  to
           an interim or final award was to be made only in the  courts  of
           the place designated as the seat of the arbitration.


           Although,  ‘venue’  was  not  synonymous  with  ‘seat’,  in   an
           arbitration  clause  which  provided  for  arbitration   to   be
           conducted in accordance with the Rules of the ICC  in  Paris  (a
           supranational body of rules), a provision  that  ‘the  venue  of
           arbitration shall be London, United Kingdom’ did amount  to  the
           designation of a juridical seat….”


           In para 54, it is further observed as follows:


           “There was a little debate about the possibility of  the  issues
           relating to the alleged  submission  by  the  claimants  to  the
           jurisdiction of the High Court of  Delhi  being  heard  by  that
           Court, because it was best fitted to determine such issues under
           the Indian law. Whilst I found this idea  attractive  initially,
           we are persuaded that it would be wrong in  principle  to  allow
           this and that it would create undue practical  problems  in  any
           event. On the basis of what I have already decided,  England  is
           the seat of the arbitration  and  since  this  carries  with  it
           something akin to an exclusive jurisdiction clause, as a  matter
           of principle the foreign court should not decide  matters  which
           are for this Court to decide in  the  context  of  an  anti-suit
           injunction.”
                                                         (emphasis supplied)


           If the aforesaid observations are applied to the  facts  of  the
      present case, it would be apparent that the Indian Courts  would  have
      jurisdiction in the nature of exclusive jurisdiction over the disputes
      between the parties.


     118. In Shashoua case (supra), Cooke, J. concluded that London is  the
          seat, since the phrase “venue of  arbitration  shall  be  London,
          U.K.” was accompanied by the provision in the arbitration  clause
          for arbitration to be conducted in accordance with the  Rules  of
          ICC in Paris (a supranational body of rules). It was  also  noted
          by Cooke, J. that “the parties have not simply provided  for  the
          location of hearings to be in  London……”  In  the  present  case,
          parties have not chosen a supranational body of rules  to  govern
          the  arbitration;  Indian  Arbitration  Act,  1996  is  the   law
          applicable to the arbitration proceedings.
     119. Also,  in  Union  of  India  v.  McDonnell  Douglas  Corpn.,  the
          proposition laid down  in  Naviera  Amazonica  Peruana  S.A.  was
          reiterated. In this case, the agreement provided that:
           “The arbitration shall  be  conducted  in  accordance  with  the
           procedure provided in the Indian Arbitration Act of 1940 or  any
           re-enactment or modification thereof. The arbitration  shall  be
           conducted in the English language. The award of the  arbitrators
           shall be made by  majority  decision  and  shall  be  final  and
           binding on the parties  hereto.  The  seat  of  the  arbitration
           proceedings shall be London, United Kingdom.”


     120.  Construing  the  aforesaid  clause,  the  Court  held  as
          follows:
           “On the contrary, for the reasons given, it seems to me that  by
           their agreement the parties have chosen English law as  the  law
           to govern their  arbitration  proceedings,  while  contractually
           importing from the Indian Act those provisions of that Act which
           are concerned with the internal conduct of their arbitration and
           which are not inconsistent with the choice of  English  arbitral
           procedural law.”


     121. The same question was again  considered  by  the  High  Court  of
          Justice, Queen’s Bench Division, Commercial  Court  (England)  in
          SulameRica CIA Nacional De Seguros SA v. Enesa  Engenharia  SA  -
          Enesa. The Court noticed that the issue in this case depends upon
          the weight to be given to the provision in Condition  12  of  the
          insurance policy that “the  seat  of  the  arbitration  shall  be
          London, England.” It was observed that this  necessarily  carried
          with it the English Court’s  supervisory  jurisdiction  over  the
          arbitration process. It was observed that “this follows from  the
          express terms of the Arbitration Act, 1996  and,  in  particular,
          the provisions of Section 2 which provide  that  Part  I  of  the
          Arbitration Act, 1996 applies where the seat of  the  arbitration
          is in England and Wales or  Northern  Ireland.  This  immediately
          establishes a strong connection between the arbitration agreement
          itself and the law of England. It is for this reason that  recent
          authorities have laid stress upon the locations of  the  seat  of
          the arbitration as an important factor in determining the  proper
          law of the arbitration agreement.” The Court thereafter  makes  a
          reference to the observations made in        C v. D by  the  High
          Court as well as the Court of Appeal. The  observations  made  in
          paragraph 12 have particular relevance which are as under:
           “In the Court of Appeal, Longmore, L.J., with whom the other two
           Lord Justices agreed, decided (again obiter) that,  where  there
           was no express choice of law for the arbitration agreement,  the
           law with which that agreement had  its  closest  and  most  real
           connection was more  likely  to  be  the  law  of  the  seat  of
           arbitration than the law of the underlying contract. He referred
           to Mustill, J. (as he then was) in Black  Clawson  International
           Ltd. v. Papierwerke Waldhof-Aschaffenburg A.G. as saying that it
           would be a rare  case  in  which  the  law  of  the  arbitration
           agreement was not the same as the law of the place  or  seat  of
           the arbitration. Longmore, L.J. also referred to the  speech  of
           Lord Mustill (as he had then become)  in  Channel  Tunnel  Group
           Ltd. v. Balfour Beatty Construction Ltd. and concluded that  the
           Law Lord was saying that, although it was  exceptional  for  the
           proper law of the underlying contract to be different  from  the
           proper law of the arbitration agreement, it was less exceptional
           (or more common) for the proper law of that underlying  contract
           to be different from the curial law, the law of the seat of  the
           arbitration. He was not expressing any view on the frequency  or
           otherwise of the law of the arbitration agreement differing from
           the law of the seat of the arbitration.  Longmore,  L.J.  agreed
           with Mustill, J.’s earlier dictum that it would be rare for  the
           law of the separable arbitration agreement to be different  from
           the law of the seat of the arbitration. The reason was


                 ‘that an agreement to arbitrate will normally have a closer
                 and more real connection with the place where  the  parties
                 have chosen to arbitrate, than with the place of the law of
                 the underlying contract, in cases where  the  parties  have
                 deliberately chosen to arbitrate, in  one  place,  disputes
                 which have arisen under a contract governed by the  law  of
                 another place’. (C case, Bus LR p. 854, para 26)”


    122. Upon consideration  of  the  entire  matter,  it  was  observed  in
         SulameRica supra that “In these circumstances it  is  clear  to  me
         that the law with which the agreement to arbitrate has its  closest
         and most real connection is the law of  the  seat  of  arbitration,
         namely, the law of England”. It was  thereafter  concluded  by  the
         High Court that the English law is the proper law of the  agreement
         to arbitrate.

The aforesaid observations make it abundantly  clear  that  the  submissions
made by Dr. Singhvi cannot be supported either in law or in  facts.  In  the
present case, all the chosen laws are of  India,  therefore,  it  cannot  be
said the laws of England would have any application.

    123. We also do not find any merit in the submission of Dr. Singhvi that
         the  close  and  the  most  intimate  connection  test  is   wholly
         irrelevant in  this  case.   It  is  true  that  the  parties  have
         specified all the three laws.  But the Court in  these  proceedings
         is required to determine  the  seat  of  the  arbitration,  as  the
         Respondents have taken the  plea  that  the  term  “venue”  in  the
         arbitration clause actually makes a reference to the “seat” of  the
         arbitration.

    124. It is accepted by most of  the  experts  in  the  law  relating  to
         international arbitration that in almost  all  the  national  laws,
         arbitrations are anchored to the seat/place/situs  of  arbitration.
         Redfern and Hunter on International Arbitration (5th  Edn.,  Oxford
         University Press, Oxford/New York 2009),  in  para  3.54  concludes
         that “the seat of the arbitration is thus intended to be its centre
         of gravity.”  In Balco, it is further noticed that  this  does  not
         mean that all proceedings of the arbitration are to be held at  the
         seat of arbitration.   The  Arbitrators  are  at  liberty  to  hold
         meetings at a place which is of convenience to all concerned.  This
         may become necessary  as  Arbitrators  often  come  from  different
         countries.  Therefore, it may be convenient to hold all or some  of
         the meetings of the arbitration in a location other than where  the
         seat of arbitration is located. In Balco, the relevant passage from
          Redfern and Hunter, has been quoted which is as under:
           “The preceding discussion has been on the basis  that  there  is
           only one ‘place’ of arbitration.  This will be the place  chosen
           by or on behalf of the parties; and it will be designated in the
           arbitration agreement or the terms of reference or  the  minutes
           of proceedings or in some other way as the place  or  ‘seat’  of
           the arbitration.  This does not mean, however, that the Arbitral
           Tribunal must hold all its meetings or hearings at the place  of
           arbitration.    International   commercial   arbitration   often
           involves people  of  many  different  nationalities,  from  many
           different countries.  In these circumstances, it is by no  means
           unusual for  an  Arbitral  Tribunal  to  hold  meetings—or  even
           hearings—in  a  place  other  than  the  designated   place   of
           arbitration,  either  for  its  own  convenience  or   for   the
           convenience of the parties or their witnesses…  It may  be  more
           convenient for an Arbitral Tribunal sitting in  one  country  to
           conduct a hearing in another country —  for  instance,  for  the
           purpose of taking evidence….  In such circumstances each move of
           the Arbitral Tribunal does not of itself mean that the  seat  of
           arbitration changes.  The seat of arbitration remains the  place
           initially agreed by or on behalf of the parties.”




            These observations have also been noticed in Union of India  Vs.
      McDonald Duglas Corporation (supra).




    125.  In  the  present  case,  even  though  the  venue  of  arbitration
         proceedings has been fixed in London, it cannot  be  presumed  that
         the parties have intended the seat to be also  in  London.   In  an
         International Commercial Arbitration, venue can often be  different
         from the seat of arbitration.  In such circumstances,  the  hearing
         of the arbitration will be conducted at  the  venue  fixed  by  the
         parties, but this would not bring about a change in the seat of the
         arbitration.  This is precisely  the  ratio  in  Braes  of  Dounne.
         Therefore, in the present case, the seat would remain in India.

    126. In Naviera Amazonica Peruana S.A.  (supra),  the  Court  of  Appeal
         observed that it would always be open to the Arbitral  Tribunal  to
         hold the hearings in Lima if this were thought  to  be  convenient,
         even though the seat or forum of the arbitration  would  remain  in
         London.


      Issue No. VI/ Re: Concurrent Jurisdicion:
     127. Having held that the seat of arbitration  is  in  India,  in  our
          opinion, the Bombay High Court committed an error  in  concluding
          that the Courts in England would  have  concurrent  jurisdiction.
          Holding that the Courts in England and India will have concurrent
          jurisdiction, as observed on different  occasions  by  Courts  in
          different jurisdictions, would lead to unnecessary  complications
          and  inconvenience.   This,  in  turn,  would  be   contrary   to
          underlying principle of the policy of dispute resolution  through
          arbitration.  The whole aim and objective of  arbitration  is  to
          enable the parties to resolve the disputes speedily, economically
          and finally. The kind of  difficulties  that  can  be  caused  by
          Courts in two countries exercising concurrent  jurisdiction  over
          the same subject matter have been very  succinctly  set  down  by
          Lord Brandon in                   Abdin  Vs.  Daveu  (supra)–  as
          follows:-
           “In this connection it is right to point out that, if concurrent
           actions in respect of the same subject matter  proceed  together
           in two different countries, as seems likely if a stay is refused
           in the present  case,  one  or  other  of  the  two  undesirable
           consequences may follow: first, there  may  be  two  conflicting
           judgments of the two courts concerned; or secondly, there may be
           an ugly rush to get one action decided ahead  of  the  other  in
           order to create a situation of res judicata or issue estoppel in
           the latter.”

      Lord Diplock said in the same case:


           "comity demands that such a situation should not be permitted to
           occur as between courts of two civilised and  friendly  states";
           it would be, he said, "a recipe for confusion and injustice". As
           Bingham LJ said in Dupont No 1 the policy of the law must be  to
           favour  the  litigation  of  issues  only  once  in   the   most
           appropriate forum. The interests of  justice  require  that  one
           should take into account as a factor the risks of injustice  and
           oppression that arise from concurrent proceedings  in  different
           jurisdictions in relation to the same subject matter.”

     128. Once the seat of arbitration has been fixed in India, it would be
          in  the  nature  of  exclusive  jurisdiction  to   exercise   the
          supervisory powers over the arbitration.  This view of ours  will
          find support from the judgment of the Court of Appeal in  England
          in recognizing the difficulties that the  parties  will  face  in
          case  the  Courts  in   India   and   England   have   concurrent
          jurisdiction. Cooke J. in his judgment in (1)  Enercon  GMBH  (2)
          Wobben Properties GMBH  Vs.  Enercon  (India)  Ltd.,  dated  30th
          November, 2012, (2012) EWHC 3711(Comm), observed as under:
           “14.   A lifting of the stay in this country and an appoint of a
           third arbitrator under s. 18 of the English Act  would,  if  the
           Indian proceedings continue and the Supreme  Court  decides  the
           matter differently from the Bombay High Court  and  this  court,
           give rise to the possibility of conflicting judgments  with  all
           the chaos  that  might  entail.   In  practice,  therefore,  the
           question of lifting the stay here and the grant of the anti-suit
           injunction against EIL are closely interconnected.


           15.   It cannot, in my judgment, be right that both English  and
           Indian courts should be free to reach inconsistent judgments  on
           the same subject matter, whether or  not  the  current  ultimate
           result in India, which allows for an English court to appoint an
           arbitrator by virtue of s.2(4) of the English Act, will or  will
           not involve any inconsistent judgment, and whether there  is  or
           is not a current issue estoppels which would debar Enercon  from
           contending that London is the seat of the arbitration, which  is
           its primary case, giving rise, as it says, to the court’s  power
           to appoint an arbitrator under s.18 of the English Act by virtue
           of s.2(1) of that Act and by reference to s.3 of that Act.


                  xx   xxx   xx    xxx  xx
           56.   Comity and the avoidance of inconsistent judgments require
           that I should refrain from deciding matters which  are  possibly
           going to be decided further in India.  It would be a recipe  for
           confusion and injustice if I were not to do so.  Issue estoppels
           is already said  to  arise  on  the  question  of  the  seat  of
           arbitration and curial  law,  and  that  raises  very  difficult
           questions for the court to decide.  If the stay was lifted, then
           I could decide the matter differently from Savant J. or  from  a
           later final decision on appeal in the Supreme Court of India, if
           that matter went ahead.  The Indian courts are seised and should
           reach, in my  judgment,  a  concluded  decision,  albeit  on  an
           expedited basis.
                  xx   xxx   xx    xxx  xx
           60.   If the Supreme Court in India  were,  in  due  course,  to
           consider that the Bombay High Court was wrong in its  conclusion
           as to the seat of the arbitration or  that  there  was  a  prima
           facie valid arbitration or that the English court had concurrent
           supervisory jurisdiction, it would be a recipe for confusion and
           injustice if,  in  the  meantime,  the  English  court  were  to
           conclude that England was the seat of the putative  arbitration,
           and  to  assume  jurisdiction  over   EIL   and   the   putative
           arbitration, and to conclude that there was a valid  arbitration
           agreement, whether on the basis of a good arguable case  or  the
           balance of probabilities.   Further,  for  it  to  exercise  its
           powers, whether under s.2(1) or 2(4) or s.18 of the  Arbitration
           Act  in  appointing  a  third  arbitrator,  would  create   real
           problems, should the Supreme Court decide differently.


           61.   These are the very circumstances which courts must  strive
           to  avoid  in  line  with  a  multitude  of  decisions  of  high
           authority,  from  the  Abidin  Daver  [1984]  AC  398   onwards,
           including E.I. Dupont de Nemours v. Agnew  [1987]2  Lloyd’s  Rep
           585.  The underlying  rationale  of  Eder  J.’s  judgment  leads
           inexorably, in my view, to the conclusion that the issues to  be
           determined in India, which could otherwise fall to be determined
           here in England, must be decided first by the Indian courts  and
           that, despite the delay and difficulties involved, the  decision
           of the Indian Supreme Court should be awaited.


           62.   It is also fair to point out in this context that, even if
           I were to decide the seat  issue  here  on  the  basis  of  full
           argument (which I have not heard) whether in the way  that  Eder
           J. did or otherwise, the possibility or likelihood of  one  side
           or another wishing to appeal with subsequent  delay  might  then
           arise in the context of the English proceedings.  But, if I  did
           make such a decision, in line with Eder J., I would be making  a
           determination which is directly contrary to that  of  Savant  J.
           and it seems to me that that is inappropriate  as  a  matter  of
           comity, whether or not there is any issue estoppels.


           63.    Moreover,  it  would  be  a  recipe  for  confusion   and
           injustice, and to back it up with an anti-suit injunction  would
           merely fan the flames for a continued battle, which is  contrary
           to the principles of comity when the position is unclear and the
           agreement itself is governed by Indian law.”


    129. In our opinion, these observations of  Justice  Cooke  foresee  the
         kind of intricate complexities that may arise in case the Courts of
         India and England were to exercise the concurrent  jurisdiction  in
         these matters.

    130. We are unable to agree  with  the  conclusion  reached  by  Justice
         Savant  that  the  Courts  in  England  would  exercise  concurrent
         jurisdiction in the matter.  Having  concluded  that  the  seat  of
         arbitration is in India, the conclusions reached by the Bombay High
         Court seem to be contrary  in  nature.   In  Paragraph  45,  it  is
         concluded that the law relating to  arbitration  agreement  is  the
         Indian Arbitration Act.  Interpreting Clause 18.3, it  is  observed
         as follows:-
           “45. ……………….The said clause provides that the provisions of  the
           Indian Arbitration and Conciliation Act, 1996  shall  apply.  If
           the said clause is read in the ordinary and natural  sense,  the
           placement  of  the  words  that  "the  Indian  Arbitration   and
           Conciliation Act shall apply" in the last clause 18.3  indicates
           the specific intention of the parties to the application of  the
           Indian Arbitration Act, not only to  the  Arbitration  Agreement
           but also that the curial law or the Lex  Arbitri  would  be  the
           Indian  Arbitration  Act.  The   application   of   the   Indian
           Arbitration Act therefore can be said to permeate  clause-18  so
           that in the instant case laws  (2)  and  (3)  are  same  if  the
           classification as made by the learned authors is to be  applied.
           The reference to the Indian Arbitration  Act  is  therefore  not
           merely a clarification as to the proper law of  the  arbitration
           agreement as  is  sought  to  be  contended  on  behalf  of  the
           Respondents. It has to be borne in mind  that  the  parties  are
           businessmen and would therefore not include  words  without  any
           intent or object  behind  them.  It  is  in  the  said  context,
           probably that the parties have also used the word "venue" rather
           than the word "seat" which is usually the phrase which  is  used
           in the clauses encompassing an Arbitration Agreement.  There  is
           therefore a clear and unequivocal indication  that  the  parties
           have agreed to abide by the Indian Arbitration Act  at  all  the
           stages, and therefore, the logical consequence of the same would
           be that in choosing London as the venue the parties have  chosen
           it  only  as  a  place  of  arbitration  and  not  the  seat  of
           arbitration which is a juristic concept.”








     131. This conclusion is reiterated in Paragraph 46  in  the  following
          words:-
           “46.  The proposition that when a choice of a particular law  is
           made, the said choice cannot be restricted to only a part of the
           Act or the substantive provision of that Act only. The choice is
           in respect of all the substantive and curial law  provisions  of
           the Act. The said  proposition  has  been  settled  by  judicial
           pronouncements in the recent past…….”




     132. Having said so, learned Judge further observes as follows:-
           “49. Though in terms of  interpretation  of  Clause  18.3,  this
           Court has reached a conclusion that the lex arbitri would be the
           Indian Arbitration Act.  The  question  would  be,  whether  the
           Indian Courts  would  have  exclusive  jurisdiction.  The  nexus
           between the "seat" or the "place" of arbitration  vis-à-vis  the
           procedural law i.e. the lex  arbitri  is  well  settled  by  the
           judicial pronouncements which  have  been  referred  to  in  the
           earlier part of this judgment. A useful reference could also  be
           made to the learned authors Redfern and Hunter who  have  stated
             thus :-



                 “the place or seat of  the  arbitration  is  not  merely  a
                 matter of geography. It is the territorial link between the
                 arbitration itself and the law of the place in  which  that
                 arbitration is legally situated....”


           The choice of seat also has the effect of  conferring  exclusive
           jurisdiction to the Courts wherein the seat is situated.”




Here the Bombay High Court accepts that the seat carries with  it,  usually,
the notion of exercising jurisdiction  of  the  Courts  where  the  seat  is
located.
    133. Having said so, the High Court examines the  question  whether  the
         English Courts can exercise jurisdictions in support of arbitration
         between the parties, in view of London  being  the  venue  for  the
         arbitration meetings.  In answering  the  aforesaid  question,  the
         High Court proceeds on the basis that there is no agreement between
         the  parties  as  regards  the  seat  of  the  arbitration,  having
         concluded in the earlier part of the judgment that the parties have
         intended the seat to be in India.   This  conclusion  of  the  High
         Court is contrary to the  observations  made  in  Shashoua  (supra)
         which have been approvingly  quoted  by  this  Court  in  Balco  in
         (Paragraph 110).  On the facts of the case, the Court held that the
         seat of the arbitration was in England and accordingly  entertained
         the challenge to the award.


     134. In A Vs. B[38]  again the Court of  Appeal  in  England  observed
          that:-
           “…..an agreement as to the seat of an arbitration  is  analogous
           to an exclusive jurisdiction clause. Any claim for a  remedy……as
           to the validity of an existing interim or final award is  agreed
           to be made only in the courts of the  place  designated  as  the
           seat of arbitration.”

(emphasis supplied)


     135.  In our opinion, the conclusion reached by  Justice  Savant  that
          the Courts in England would  have  concurrent  jurisdiction  runs
          counter to the settled position of law in India  as  well  as  in
          England and is, therefore, not sustainable. The Courts in England
          have time and again reiterated that an agreement as to  the  seat
          is analogous to an exclusive jurisdiction clause. This  agreement
          of the parties would include the determination by the court as to
          the intention of the parties. In the  present  case,  Savant,  J.
          having fixed the seat in India erred in holding that  the  courts
          in India and England would exercise concurrent jurisdiction.  The
          natural forum for all remedies, in the facts of the present case,
          is only India.


      Issue (vii)/Re: Anti-Suit Injunction:
     136. Having held that the Courts  in  England  would  have  concurrent
          jurisdiction,  the  Bombay  High  Court  on  the  basis   thereof
          concludes as follows:-
           “In view of the conclusion that this Court has  reached,  namely
           that the English Courts would have  concurrent  jurisdiction  to
           act in support of arbitration, the case of the Appellants for an
           anti suit injunction does not stand to scrutiny. However, in  so
           far as the aspect of forum non-conveniens is  concerned,  in  my
           view, since the Appellants have agreed to London  as  the  venue
           for arbitration, they cannot  be  heard  to  complain  that  the
           Courts  at  London  are  forum  non-conveniens  for  them.   The
           Appellants have appeared before the said Courts, and  therefore,
           the case of forum non- conveniens is bereft of any merit.”


     137. The aforesaid conclusion again ignores the principle laid down by
          this Court in Oil & Natural Gas Commission Vs. Western Company of
          North America (supra), wherein it is held as follows:-
           “As per the contract, while the  parties  are  governed  by  the
           Indian Arbitration Act and the Indian Courts have the  exclusive
           jurisdiction to affirm or set aside the  award  under  the  said
           Act, the Respondent is seeking to violate the  very  arbitration
           clause on the basis of which the award  have  been  obtained  by
           seeking confirmation of the award in the New  York  Court  under
           the American Law. This amounts to an improper use of  the  forum
           in American (sic) in violation of the stipulation to be governed
           by the Indian  law,  which  by  necessary  implication  means  a
           stipulation to exclude the USA Court to seek an affirmation  and
           to seek it only under the Indian Arbitration Act from an  Indian
           Court. If the restraint order is not granted, serious  prejudice
           would be occasioned and a party violating the  very  arbitration
           clause on the basis of which the award has come  into  existence
           will have secured an order enforcing the order  from  a  foreign
           court in violation of that very clause..”


     138. Again in the case of Modi Entertainment Network &  Anr.  (supra),
          it was held that :-
           “24(1).   In  exercising  discretion  to  grant   an   anti-suit
           injunction the court must be satisfied of the following aspects:
            (a) the  defendant,  against  whom  injunction  is  sought,  is
           amenable to the personal jurisdiction of the court;  (b) if  the
           injunction is declined, the ends of justice will be defeated and
           injustice will be perpetuated; and  (c)       the  principle  of
           comity — respect for the court  in  which  the  commencement  or
           continuance of action/proceeding is sought to  be  restrained  —
           must be borne in mind.”
     139. In Paragraph 24(2) of  the  same  decision,  this  Court  further
          observed that :-
           “24(2). In a case where more forums than one are available,  the
           court  in  exercise  of  its  discretion  to   grant   anti-suit
           injunction will examine as to which  is  the  appropriate  forum
           (forum conveniens) having  regard  to  the  convenience  of  the
           parties  and  may  grant  anti-suit  injunction  in  regard   to
           proceedings which are oppressive or vexatious or in a forum non-
           conveniens.”


     140. Examining these aspects, Eder,  J.  in  fact  also  came  to  the
          conclusion that the anti-suit injunction granted by  the  English
          Court needed  at-least  to  be  stayed  during  the  pendency  of
          proceedings in India.  The reasons given by Eder, J.  in  support
          of the conclusions are as under:-
           “48. Bearing these general principles in  mind  and  recognising
           the permissive nature of CPR Part 62.5, the important point,  in
           my view, is that the claimants did not pursue their applications
           in the original proceedings that they issued in  this  court  in
           March 2008. On the contrary, they engaged fully (albeit  perhaps
           reluctantly) in the Indian proceedings before the  Daman  court.
           When they lost at  first  instance  before  Judge  Shinde,  they
           appealed to the DCC with the result indicated above. That is the
           choice they made. Having made that choice  and  now  some  years
           down the line, it seems to me that the English court  should  at
           least be extremely cautious to intervene at this stage  and,  in
           Mr Edey QC's words, to "wrest" back the proceedings to  England.
           To do so at this stage when those proceedings  are,  in  effect,
           still pending would give rise to the "recipe for  confusion  and
           injustice" which Lord Diplock specifically warned against in The
           Abidin Daver as referred to in the passage of  the  judgment  of
           Hobhouse J which I have quoted above. For that reason  alone,  I
           have decided somewhat  reluctantly  that  I  should  follow  the
           course suggested by Mr Edey QC ie that these proceedings  should
           be stayed at least for the time being pending resolution of  the
           Writ Petitions currently before the BHC……”


     141. It must be noticed that Respondent No. 1 was initially having  51
          per cent shareholding of the Appellant No.1  company,  which  was
          subsequently  increased  to  56  per  cent.   This  would  be  an
          indicator that the Respondent  No.  1  is  actively  carrying  on
          business at Daman.  This Court considered the expression “carries
          on business” as it occurs in Section 20 of  the  Civil  Procedure
          Code in the case of Dhodha House Vs. S.K. Maingi[39] and observed
          as follows:-


           “46. The expression “carries on  business”  and  the  expression
           “personally works for gain” connote two different meanings.  For
           the purpose of carrying on business only presence of a man at  a
           place is not necessary. Such business may be  carried  on  at  a
           place through an agent or a manager or through  a  servant.  The
           owner may not even visit that  place.  The  phrase  “carries  on
           business” at a certain place would, therefore,  mean  having  an
           interest in a business at that place, a voice in what is done, a
           share in the gain  or  loss  and  some  control  thereover.  The
           expression is much wider than  what  the  expression  in  normal
           parlance connotes, because of the ambit of a civil action within
           the meaning of Section 9 of the Code…..”




     142. The fact that Daman trial court has jurisdiction over the  matter
          is supported by the judgment of this Court in Harshad Chiman  Lal
          Modi  (supra),  which  was  relied  upon  by  Mr.  Nariman.   The
          following excerpt makes it very clear:-


           “16………..The proviso to Section 16, no doubt, states that  though
           the court cannot, in case of immovable property  situate  beyond
           jurisdiction, grant a relief in rem still  it  can  entertain  a
           suit where relief sought can be obtained  through  the  personal
           obedience of the defendant…… The principle on  which  the  maxim
           was based was that  the  courts  could  grant  relief  in  suits
           respecting immovable property situate abroad by enforcing  their
           judgments by process in personam i.e. by arrest of the defendant
           or by attachment of his property.”

     143. This apart, we have earlier noticed that the main  contract,  the
          IPLA is to be performed in  India.   The  governing  law  of  the
          contract is the law of India.  Neither  party  is  English.   One
          party is Indian, the other is German.   The  enforcement  of  the
          award will be in India.  Any interim measures  which  are  to  be
          sought against the assets of Appellant No. 1 ought to be in India
          as the assets are  situated  in  India.   We  have  also  earlier
          noticed that Respondent No.1 has not  only  participated  in  the
          proceedings in the Daman courts and the Bombay  High  Court,  but
          also filed independent proceedings under  the  Companies  Act  at
          Madras  and  Delhi.   All  these  factors  would  indicate   that
          Respondent No.1 does not even consider the Indian Courts as forum-
          non-conveniens. In view of the above, we are  of  the  considered
          opinion that the  objection  raised  by  the  Appellants  to  the
          continuance of the parallel proceedings in England is not  wholly
          without justification. The  only  single  factor  which  prompted
          Respondent No.1 to pursue the action  in  England  was  that  the
          venue  of  the  arbitration  has  been  fixed  in  London.    The
          considerations for designating a convenient venue for arbitration
          can not be understood as conferring  concurrent  jurisdiction  on
          the English Courts over the arbitration proceedings  or  disputes
          in general.  Keeping in view the aforesaid, we  are  inclined  to
          restore the anti-suit  injunction  granted  by  the  Daman  Trial
          Court.


     144.  For the reasons recorded above, Civil Appeal No.2087 of  2014  @
          SLP (C) No.10906 of 2013 is dismissed. The findings  recorded  by
          the Appellate Court that the parties can proceed  to  arbitration
          are affirmed. The findings recorded by the Trial Court dismissing
          the Application under Section 45 are set aside. In  other  words,
          the Application filed by the Respondents  for  reference  of  the
          dispute to  arbitration  under  Section  45  has  been  correctly
          allowed by the Appellate Court as well as by the High Court.  The
          findings of the High Court are affirmed to that extent.  All  the
          disputes arising between the parties in relation to the following
          agreements viz. SHA, TKHA, SSHAs and STKHA, Agreed Principles and
          IPLA, including the controversy as to whether IPLA is a concluded
          contract are referred to the Arbitral Tribunal for adjudication.

     145. In the normal circumstances, we would have directed  the  parties
          to approach the two learned arbitrators, namely Mr. V.V.  Veeder,
          QC and Mr.  Justice  B.P.  Jeevan  Reddy  to  appoint  the  third
          arbitrator who  shall  also  act  as  the  presiding  arbitrator.
          However, keeping in view the peculiar facts and circumstances  of
          this case and the inordinate delay which has been caused  due  to
          the extremely convoluted and complicated proceedings indulged  in
          by the parties, we deem it appropriate to take it upon  ourselves
          to name the third arbitrator. A perusal of the judgment of  Eder,
          J. gives an indication that a list of three  names  was  provided
          from which the third arbitrator could possibly be appointed.  The
          three names are Lord Hoffmann, Sir Simon Tuckey  and  Sir  Gordon
          Langley. We hereby appoint Lord Hoffmann as the third  arbitrator
          who shall act as the Chairman of the Arbitral Tribunal.

     146.   In view of the above, Regular Civil Suit No. 9 of 2008, pending
          before the Court of Civil Judge, Senior Division, Daman; and  the
          Application under Section 45 of the Arbitration Act,  1996  filed
          in the Civil Suit  No.2667  of  2007  and  Contempt  Petition  in
          relation to Civil Suit No.2667 of 2007 pending before the  Bombay
          High Court at the instance of the Appellants are stayed.
Parties
          are at liberty to approach the Court for the appropriate  orders,
          upon the final award being rendered  by  the  Arbitral  Tribunal.
          This will not preclude the parties from seeking interim  measures
          under Section 9 of the Indian Arbitration Act, 1996.


      147.  Civil Appeal No.2086 of 2014 @  SLP  (C)  No.10924  of  2013  is
      partly allowed as follows:
            a. The conclusion of the Bombay High Court that the seat of the
               arbitration is in India is upheld;


            b. The conclusion that the English Courts would have concurrent
               jurisdiction is overruled and consequently set aside;

            c. The conclusion of the Bombay High Court that  the  anti-suit
               injunction  granted  by  the  Daman  Trial  Court  has  been
               correctly vacated by Daman Appellate Court is overruled  and
               hence set aside.
            d. Consequently, the Respondents are restrained from proceeding
               with any of the actions the details of which have been given
               in the judgment of Eder, J. dated 23rd March, 2012  and  the
               order dated 27th March, 2012 as  well  as  the  judgment  of
               Justice Cooke  dated  30th  November,  2012.  These  matters
               include:
                 All  or  any  of  the  proceedings/  applications/  reliefs
                 claimed by the Respondents in the  Arbitration  Claim  2011
                 Folio 1399, including but not limited to:


                 (1) Application under Section 18 of the English Arbitration
                 Act, 1996;


                 (2) Injunctions pursuant  to  Section  44  of  the  English
                 Arbitration Act, 1996 and /or  Section  37  of  the  Senior
                 Courts Act, 1981.


                       The Respondents are also restrained from  approaching
                 the      English      Courts      for      seeking      any
                 declaration/relief/clarification and/or  to  institute  any
                 proceedings that may result in delaying or otherwise affect
                 the  constitution  of  the  arbitral   tribunal   and   its
                 proceedings thereafter.


      148.  In view of the above, the parties are  directed  to  proceed  to
      arbitration in accordance with law.


                                                            ………………………………..J.
                                                     [Surinder Singh Nijjar]




                                                         ……..…………………………………J.
                                          (Fakkir Mohamed Ibrahim Kalifulla]
      New Delhi
      February 14, 2014.


-----------------------
[1]    (1975) 1 SCC 199
[2]    [1953] 1 WLR 280
[3]    [1965] 1 W.L.R. 1025
[4]    [1976] 1 WLR 591
[5]    (1968) 3 SCR 387
[6]    (2006) 1 SCC 751
[7]    (2013) 1 SCC 641
[8]    (2006) 2 SCC 628
[9]    1988 (1) Lloyd’s Rep 116
[10]   (2012) 9 SCC 552
[11]   1987 SCR (1) 1024
[12]   (2003) 4 SCC 341
[13]   (2005) 7 SCC 791
[14]   (2009) 1 SCC 267
[15]   AIR 1997 SC 605 Para 8-13
[16]   (2009) 2 SCC 55, Paras 24-25
[17]   (2007) 5 SCC 719, pp. 7-8
[18]   (1980) 4 SCC 556, pp. 6-7
[19]   (2009) 4 SCC 495 , pp. 26-30 & 40
[20]   (2010) 1 SCC 83, p6
[21]   (1995) 6 SCC 571
[22]   (2009) 2 LLR 376
[23]   (2011) 6 SCC 179 (Paras 4,15 and 18)
[24]   (2011) 6 SCC 161 (Paras 3 and Paras 20 to 23)
[25]   (2011) 9 SCC 735 (Paras 46-52)
[26]   Dicey, Morris & Collins Fifteenth Edition at 16-035.
[27]   (2007) 2 Lloyd’s Law Reports 367
[28]   (19993) 2 Lloyd’s Rep 48
[29]   (2012) 2 SCC 93
[30]   2013 (7) SCALE 327
[31]   [1985] 1 AC 191
[32]   [1937 S. 1835]
[33]   [1970] 1 Lloyd’s Rep. 269; [1970] A.C.583
[34]   [1981] 2 Lloyd’s Rep. 446 at P. 453
[35]   [2008]EWHC 426 (TCC)
[36]   [1984] AC 398
[37]   [2007] EWCA Civ 1282
[38]   [2007] 1 Lloyds Report 237
[39]   (2006) 9 SCC 41

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