This article is authored by Dushyant Manocha, a Partner at Manocha and Ghosh Law Associates. This article attempts to analyse the practice of Supreme Court of India with respect to ascertaining the juridical seat in international arbitrations, especially in cases where the arbitration agreement points to multiple locations.
Abstract
Over the course of the last couple of decades, the Indian Supreme Court has tackled the issue of jurisdiction of Indian courts in arbitrations with foreign elements from different perspectives and with varying degrees of success. Over time and with some setbacks on the way, the Indian Supreme Court course corrected in BALCO and aligned our jurisprudence with internationally accepted principles by making the juridical seat the focal point for answering the jurisdiction question. However, while BALCO may have ushered in a new era, Indian courts are still struggling to develop a framework within which the juridical seat can be ascertained. This is especially true for pluri-directional cases where the arbitration agreement points to multiple locations.
This article explains how two of the most important judgments, Hardy Exploration and BGS SGS Soma, which have tried to lay down tests for ascertaining the juridical seat, have failed, in part, because of their predisposition to lay down bright line tests. This article argues that given the idiosyncrasies of arbitration clauses, it is not possible to lay down objective tests to determine the juridical seat. It further argues that the only manner in which the law can meaningfully develop on this point is if there is recognition of the fact that arbitration agreements need to be seen in the same light as any other commercial contract and must be interpreted keeping in mind commercial common sense. Finally, it offers some signposts which may be relevant for interpreting such difficult arbitration agreements.