Ramya Katti & Sankalp Srivastava write a case comment on Sasan Power Ltd. v. NAAC India Pvt. Ltd. and emphasize the convoluted issues that have plagued the Indian arbitration policy for a long time.
Abstract
The law regarding arbitration in India has been under the scanner recently due to the implementation of the recent amendments to the Arbitration and Conciliation Act of 1996, (“the Act”) and more so because of the string of cases that arose due to the lacunae present in the law and the subsequent attempt by the judiciary to remove such creases through its interpretation. In light of this increasingly pro-arbitration stance taken by the judiciary as well as the legislature, the case of Sasan Power Ltd. v. NAAC India Pvt. Ltd. deserves a great deal of emphasis, as it raises convoluted issues that have plagued the Indian arbitration policy for a long time. This paper seeks to examine the questions posed by this case, the first being whether two Indian parties to an arbitration agreement can derogate from Indian law and if the same is contrary to the public policy of India; and the second relating to the circumstances that mandate the application of Part I, Part II or both these Parts of the Act, in lieu of various Supreme Court cases that outlined many scenarios regarding the application of the same. Further, the paper analyses the Court’s application of the doctrine of severability in furtherance of its decision to include the review of the arbitration agreement only under the purview of Section 45 and not the substantive contract, while also examining the effect of this judgment on the competence of the tribunal to rule on its own jurisdiction. Through a normative analysis, this paper tries to fulfill its objective of showcasing the impact that this judgment has in arriving at a conclusive answer which untangles existing uncertainties.