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R.K. Industries v/s Maximus International General Trading LLC

    Special Appeal Civil No. 4 of 2018

    Decided On, 31 October 2018

    At, High Court of Rajasthan

    By, THE HONOURABLE MR. JUSTICE SANGEET LODHA & THE HONOURABLE MR. JUSTICE DINESH MEHTA

    For the Appearing Parties: Sanjeet Purohit, Gopal Bose, Manoj Bhandari, Rajvendra Saraswat, Advocates.



Judgment Text

Dinesh Mehta, J.

1. By way of the present appeal, the appellant has assailed the order dated 16.3.2018 passed by the learned Single Judge of this Court, whereby its application under Section 34 of the Arbitration and Conciliation Act, 1996 ('the Act of 1996' for short) has been rejected. The said application was filed for setting aside an interim award dated 22.3.2017, passed by the panel of arbitrators of the Refined Sugar Association, London. The appellant has approached this Court under Section 34 of the Act of 1996, as according to it, the impugned award was a foreign award and the jurisdiction to hear the same was vested in the High Court by virtue of clause (ii) of Section 2(e) of the Act of 1996.

2. No sooner had the counsel for the appellant commenced his arguments, than, Mr. Manoj Bhandari, learned counsel for the respondent raised preliminary objections regarding maintainability of the present intra-court appeal by contending that the present appeal under Section 37 of the Act of 1996 is not maintainable before the Division Bench of this Court. He firstly submitted that rule 134 of the Rajasthan High Court Rules, 1952 does not envisage such an appeal against an order passed by the learned Single Judge in exercise of his power under Section 34 of the Act of 1996. According to him the Division Bench of this Court is neither an appellate forum nor is the Single Bench, a Court subordinate to the Division Bench.

3. His second contention regarding the maintainability of the appeal has been that since the award under consideration was passed in London, the learned Single Judge of this Court had no jurisdiction to set aside the award; and for the same reasons, the Division Bench of this Court also cannot hear the appeal against the rejection of the application under Section 34 of the Act of 1996.

4. Mr. Sanjeet Purohit, learned counsel for the appellant opposed the submissions so made by Mr. Bhandari and asserted that the provisions of Section 37 of the Act of 1996 are very clear and an appeal certainly lies to the Division Bench, which is authorized by law to hear appeals from original decree of the court. He submitted that the appeal filed by him is not simply an appeal under Rule 134 of the Rajasthan High Court Rules, but the same is in essence under Section 37 of the Act of 1996. He contended that if the arguments of the respondent are accepted, then the appellant or any other person seeking to challenge an order passed by the learned Single Judge of the High Court under Section 34 of the Act will be rendered remediless. If the legislature wanted that the appeal under Section 37 of the Act would lie to the Supreme Court, it would have surely provided the same in specific terms, as has been done in various Acts, such as Representation of People Act, Arms Force Tribunal Act etc. In absence of a constitutional or statutory provision for an appeal to the Supreme Court as of right, the appellant cannot maintain an appeal to the Supreme Court. Remedy by way of special leave petition to the Supreme Court cannot be considered as an appeal or availment of right of appeal in pursuance of the right conferred by Section 37 of the Act of 1996. While reading Section 37 of the Arbitration Act of 1996 alongwith rule 134 of the Rajasthan High Court Rules, 1952, he emphasised that the appeal before the Division Bench is maintainable and even rule 134 of the Rajasthan High Court Rules does not debar such an appeal. He added that rule 134(1) of the High Court Rules rather furthers the cause of the appellant and the intra-court appeal as filed by the appellant is perfectly maintainable.

5. In support of his arguments regarding maintainability of intra-court appeal learned counsel relied upon

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the judgment of the Hon'ble Supreme Court in the matter of Arun Dev Upadhyaya Vs. Integrated Sales Service Ltd. reported in, (2016) 9 SCC 524 and contended that upon an identical question coming up for consideration, the Supreme Court has recently clinched the issue vide aforesaid judgment holding inter alia that intra-court appeal is maintainable.

6. While reading the contextual facts of the case and pointing out that the issue before the Hon'ble Supreme Court arose from an order of the learned Single Judge passed under Section 50 of the Act of 1996, he maintained that the provisions of Section 34 and 50 are analogous, for which the ratio of the said case covers the question posed by the respondents on all fours. It will not be out of place to reproduce para Nos.14, 25 and 26 which he had read and zealously relied :

"14. The pivotal question is whether an appeal against the judgment of the Single Judge in an international arbitration matter is appealable to the Division Bench or to put it otherwise, whether the intra-court appeal would lie because of the Letters Patent. In this context, it is necessary to refer to Section 50 of the 1996 Act, which provides for appeals. It is extracted hereunder:-

"50. Appealable orders. - (1)An appeal shall lie from the order refusing to

(a) refer the parties to arbitration under section 45;

(b) enforce a foreign award under section 48, to the court authorised by law to hear appeals from such order.

(2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court."

On a careful reading of the aforesaid provision, it is limpid that appeal can lie if an order is passed refusing to refer the parties to arbitration as engrafted under Section 45 of the 1996 Act or to enforce a foreign award as envisaged under Section 48 of the said Act.

25. The aforesaid provision clearly lays down that a forum is created, i.e., Commercial Appellate Division. Section 50(1)(b) of the 1996 Act provides for an appeal. Section 50(1)(b) has not been amended by the Act that has come into force on 23.10.2015. Thus, an appeal under Section 50(1)(b) of the 1996 Act before the Division Bench is maintainable.

26. Thus analysed, we find that the impugned judgment of the learned Single Judge under Section 50(1)(b) of the 1996 Act is passed in the original side of the High Court. Be that as it may, under Section 13 of the Act, the single Judge has taken the decision. Section 13 bars an appeal under Letters Patent unless an appeal is provided under the 1996 Act. Such an appeal is provided under Section 5 of the Act. The Letters Patent Appeal could not have been invoked if Section 50 of the 1996 Act would not have provided for an appeal. But it does provide for an appeal. A conspectus reading of Sections 5 and 13 of the Act and Section 50 of the 1996 Act which has remained unamended leads to the irresistible conclusion that a Letters Patent Appeal is maintainable before the Division Bench. It has to be treated as an appeal under Section 50(1) (b) of the 1996 Act and has to be adjudicated within the said parameters."

7. It would be apt to first deal with the second argument of Mr. Bhandari to the effect that the present appeal against the order passed by the learned Single Judge refusing to set aside the award on the question of jurisdiction is not maintainable as the application before this Court itself was not maintainable.

8. In this regard, we feel that by way of the present appeal, the appellant has questioned the legality of the order dated 16.3.2018, whereby the learned Single Judge has dismissed the application under Section 34 of the Act of 1996 holding, inter alia, that it lacks the territorial jurisdiction to decide the application under Section 34 of the Act. We are of the firm view that an order deciding an application on the question of jurisdiction is appealable before the Court authorized to hear the appeal or prescribed forum, irrespective of the fact whether the court has exercised jurisdiction or has refused to exercise the jurisdiction. Merely because the concerned court has held that it does not have jurisdiction, an aggrieved party is not precluded from invoking the appellate forum against such order, with a plea or assertion that the court below did have the jurisdiction. In this regard the provision of Section 37 of the Act of 1996 are unambiguous, which simply states that appeal shall lie from following orders:

"(a) ****** ******* ****** *****

(b) ****** ******* ****** *****

(c) setting aside or refusing to set aside an arbitral award under Section 34."

9. Reproduction of Rule 134 of the Rajasthan High Court Rules will be relevant for the present controversy and hence the same is being quoted hereinfra :-

"134. (i) Appeal to the High Court from Judgment of Judges of the Court:- An appeal shall lie to the High Court from the Judgment or a final order (not being a Judgment passed in the exercise of appellate Jurisdiction in respect of a decree or order made in the exercise of appellate Jurisdiction by a Court subject to the superintendence of the High Court and not being an order made in the exercise of revisional Jurisdiction and not being a sentence or order passed or made in the exercise of the power of superintendence or in the exercise of criminal Jurisdiction) of one Judge of the High Court.

(ii) Special appeal.- A person desiring to prefer a special appeal from the judgment of the Single Judge shall present a duly stamped memorandum of appeal within sixty days from the date of such judgment. Where such appeal is presented after the period mentioned above, it shall be accompanied by an application supported by an affidavit explaining the cause of delay and it shall be rejected unless the appellant satisfied the court that he had sufficient cause for non preferring the appeal within the aforesaid time. The memorandum of appeal shall be drawnup in accordance with Rules 125, 130 and 131 of this Chapter and shall be accompanied by a certified copy of the judgment or order appealed from alongwith two extra typed copies of the judgment or order."

10. In the present case, the impugned order dated 16.3.2018 passed by the learned Single Judge indisputably amounts to refusing to set aside an arbitral award, may be on the ground of territorial jurisdiction. Hence, the appeal under Section 37 is maintainable.

11. Adverting to the other question as to whether the intra-court appeal is maintainable before the Division Bench of this Court, against the order under Section 34 of the Act of 1996 passed by the learned Single Judge, we find that though in the memo of appeal, the appellant has captioned the appeal to be an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 read with Rule 134 of the Rajasthan High Court Rules, 1952,but in substance, the same is under Section 37 of the Act of 1996, which is the substantive provision giving an aggrieved party a right to assail an order passed under Section 34 of the Act, setting aside or refusing to set aside an arbitral award. Section 37 of the Act of 1996 provides that an appeal shall lie from such order to the court authorized by law to hear appeals or original decrees of the court passing such order.

12. In the present case, the appellant had moved the High Court under Section 34 of the Act of 1996, treating the award to be a foreign award amenable to the High Court's jurisdiction in view of the definition of term "court" contained in clause (ii) of Section 2(e) of the Act of 1996.

13. It is worthy to note that Section 37 of the Act of 1996 instead of prescribing the forum for the appeal against an order under Section 34 of the Act, simply provides that the appeal shall lie to the court authorized by law to hear appeals. A perusal of Rule 134 of the Rajasthan High Court Rules, 1952 reveals that it provides that an appeal shall lie to the Division Bench of the High Court from the judgment or a final order of one Judge of the High Court.

14. Upon a conjoint reading of Rule 134 of the Rajasthan High Court Rules, 1952, which authroises the Division Bench to hear appeal from the judgment or final order of Single Judge, with Section 37 of the Act of 1996, we are firmly of the view that the present statutory appeal is maintainable before the Division Bench. This view of ours is fortified by the judgment of Hon'ble the Apex Court rendered in Arun Dev Upadhyayas case, (2016) 9 SCC 524, relevant paras whereof have been reproduced in earlier part of the judgment.

15. The contention of the learned counsel for the respondent that if any appeal is to be filed against the order impugned, the same can be filed before Hon'ble Supreme Court, has no force. Suffice it to note, unless specifically provided, neither the Hon'ble Supreme Court is an appellate court qua the orders passed by the High Court, nor the High Court is a Court subordinate to it, in the hierarchy of the courts defined in Section 3 of the Code of Civil Procedure, at least for the purpose of Section 34 and 37 of the Arbitration Act. Wherever the legislature wanted an appeal to lie before the Supreme Court, it has ingrained a specific provision to this effect. Sans a categorical stipulation in the Act, no appeal can be maintained before the Supreme Court, as the right of appeal is a statutory right governed by the substantive provisions enacted in this regard.

16. As an upshot of the deliberation aforesaid, we have no hesitation in holding that the instant intra-court appeal filed by the appellant against the order dated 16.3.2018 passed by the learned Single Judge is maintainable.

17. Having held the appeal to be maintainable, we move on to the moot question involved in the present appeal; "whether in the extant facts, the application under Section 34 of the Act of 1996 will lie before this Court or not?"

18. In a bid to answer this question and to adjudge the legality of the order dated 16.3.2018 passed by the learned Single Judge, it would be necessary to briefly lay the factual canvass, which we hereby do.

19. Rk Industries (hereinafter referred to as 'the supplier'), the appellant herein entered into a contract for supply of Indian White Sugar with the respondent no.1. An agreement dated 9.6.2016 came to be executed which inter alia contained an arbitration clause requiring the disputes regarding the contract to be referred to the arbitration. The said arbitration clause runs as under:

"ARBITRATION ALL DISPUTES ARISING OUT OR IN CONJUNCTION WITH THIS CONTRACT SHALL BE REFERRED TO THE REFINED SUGAR ASSOCIATION, LONDON FOR SETTLEMENT IN ACCORDANCE WITH THE RULES RELATING TO ARBITRATION. THIS CONTRACT SHALL BE GOVERNED BY AN CONSTRUED IN ACCORDANCE WITH ENGLISH LAW WITH THE SAID RULES IN INDIA."

20. As can be noticed, the above clause makes a reference of "rules relating to arbitration". According to respondents No.1 and 2, the arbitration was to be proceeded with in accordance with the rules relating to arbitration of the Refined Sugar Association. While the appellant claims to have understood the same to be governed by Indian laws.

21. When a dispute arose between the parties, the respondent No.1 approached Refined Sugar Association, respondent no.2 for resolution of the dispute through arbitration. Pursuant to the request made by the respondent no.1, an arbitrator came to be appointed by the Association from its panel. On entering into the reference, the arbitrator issued notice to the claimant and respondent, in pursuance whereof the respondent no.1-claimant filed its claim.

22. On receipt of the claim, the Refined Sugar Association through its Secretary sent a notice dated 21.11.2016 to the appellant alongwith the claim and solicited its defence submission. It was indicated in the notice that the arbitration clause in the contract provides for all the disputes to be submitted to Refined Sugar Association for settlement in accordance with its arbitration rules. A copy of the rules relating to arbitration was also enclosed with the said notice.

23. As soon as the appellant received the said notice, it responded vide letter dated 21.12.2016 and sought a clarification as to whether the arbitration shall take place in India or in England, as according to the appellant the disputes were required to be settled by arbitration in India.

24. The appellant thereafter raised a specific objection regarding the jurisdiction of the arbitrator/the Refined Sugar Association in London to arbitrate upon the dispute. Such objection came to be decided by the panel of arbitrator, vide order dated 23.3.3017, titled as "interim final award on jurisdiction". The aribtral tribunal after dealing with the relevant clause(s) of the contract; arbitration clause and the contentions raised by the parties held that the arbitration has been commenced correctly and in accordance with the association's arbitration rules. Having ruled upon the jurisdiction, the panel pronounced that the proceedings would continue in London in accordance with the rules.

25. Feeling aggrieved with the said interim award on jurisdiction dated 23.3.2017, the appellant preferred an application under Section 34 of the Act of 1996 in this Court and prayed that the same be set aside.

26. The respondent No.1, claimant at the outset raised a preliminary objection regarding the maintainability of said application on the basis of territorial jurisdiction.

27. Learned Single Judge of this Court after considering the rival contentions and dealing with the law on the subject has concluded that since the seat of arbitration is in London, the application for setting aside the instant international commercial arbitration award under Section 34 would not lie before this Court, as the jurisdiction of the Courts at India are expressly excluded.

28. The basic premise for which the maintainability of the application under Section 34 of the Act was questioned was two fold; firstly as the final ward in the matter had since been passed by the panel of arbitrator, the interim award has lost its significance or enforceability, as the same stood merged in the final award; and secondly because the arbitration proceedings having been conducted as per the arbitration rules of the Refined Sugar Association having its seat in London, the application under Section 34 of the Act for setting aside such award is not maintainable in Courts of India.

29. The learned Single Judge repelled the first contention of the respondent by holding that merely because the final award has been passed, the application under Section 34 or challenge to the interim award passed by the arbitrator does not obliterate and thus the application under Section 34 of the Act cannot be dismissed as having been rendered infructuous.

30. Regarding the second objection about the maintainability of application under Section 34 of the Act before this Court, learned Single Judge held that the courts in India do not have jurisdiction to hear the same.

31. Mr. Sanjeet Purohit, learned counsel for the appellant assailing the order under appeal submitted that the learned Single Judge has misconstrued the terms of the arbitration clause and the rules of arbitration and while also failing to appreciate the law on the subject in its correct perspective. Consequently, learned Single Judge has erroneously concluded that in the present case the seat of arbitration is in London and by virtue of Section 2(2) of the Act of 1996, the application under Section 34 of the Act of 1996 was not maintainable before this Court.

32. Taking the Court through various statutory provisions, such as, the definition of "Court" given in clause (e) of Section 2; subsection (2) of Section 2; Section 49 of the Act of 1996; arbitration clause and model arbitration clause of the Refined Sugar Association, he urged that the learned panel of arbitrator of the Refined Sugar Association has erred in assuming jurisdiction and passing the impugned interim award dated 17.3.2017.

33. Regarding maintainability of the present application under Section 34 of the Act of 1996, he argued that not simply because the agreement in question had been signed by the appellant in India, but because of the clear stipulation in the arbitration agreement, more particularly, the expression "WITH ENGLISH LAW WITH THE SAID RULES IN INDIA" all the laws including the arbitration law in India would apply and prevail in the present case and accordingly, the application under Section 34 of the Act of 1996 would lie before this Court.

34. Before dilating upon the issues at hand, it will not out of place to reproduce the arbitration clause, model arbitration clause, provisions of Section 2(e) and 2(2) of the Arbitration and Conciliation Act, 1996 at one place so as to enable a close, combined and comparative survey:

"ARBITRATION ALL DISPUTES ARISING OUT OR IN CONJUNCTION WITH THIS CONTRACT SHALL BE REFERRED TO THE REFINED SUGAR ASSOCIATION, LONDON FOR SETTLEMENT IN ACCORDANCE WITH THE RULES RELATING TO ARBITRATION. THIS CONTRACT SHALL BE GOVERNED BY AN CONSTRUED IN ACCORDANCE WITH ENGLISH LAW WITH THE SAID RULES IN INDIA."

MODEL ARBITRATION CLAUSE:

"ANY DISPUTES ARISING OUT OF OR IN CONNECTION WITH THIS CONTRACT SHALL BE REFERRED TO ARBITRATION BEFORE THE REFINED SUGAR ASSOCIATION FOR SETTLEMENT IN ACCORDANCE WITH THE RULES RELATING TO ARBITRATION. SUCH ARBITRATION SHALL BE CONDUCTED IN ACCORDANCE WITH ENGLISH LAW. THIS CONTRACT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH ENGLISH LAW."

(E) "Court" means-

(i) in the case of an arbitration other than international commercial arbitration, the principal civil court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subejct-matter of a suit, but does not include any civil court of a grade inferior to such principal civil court, or any Court of Small Causes;

(ii) in the case of international commercial arbitration, the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, an in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court;

(2) This part shall apply where the place of arbitration is in India:

Provided that subject to an agreement to the contrary, the provisions of Sections 9, 27 and clause (a) of sub-section (1) and sub-section (3) of Section 37 shall also apply to international commercial arbitration, even if the place of arbitration is outside India, and an arbitral award made or to be made in such place is enforceable an recognised under the provisions of Part II of this act.

35. Mr. Sanjeet Purohit, learned counsel for the appellant relied upon a Constitution Bench decision of Hon'ble the Supreme Court pronounced on 25.9.2018, in the matter of Union of India Vs. Hardy Exploration and Production (India) Inc. While reading the said judgment, in which almost all the judgments on the point has been referred and discussed, he zealously submitted that it is a complete answer to the question of jurisdiction raised by the respondent. He contended that as a fall out of the law enunciated in the case of Hardy Exploration (supra), appellant's application under Section 34 filed by the appellant deserves to be held maintainable before this Court.

36. Mr. Manoj Bhandari having entered caveat on behalf of the respondent no.1-claimant vehemently opposed the arguments advanced by Mr. Purohit and contended that learned Single Judge was legally correct in rejecting the appellant's application under Section 34 of the Act, at the threshold.

37. Learned counsel for the respondent reiterated the objection regarding appeal having become infrcutuous on the advent of passing of the final award. He contended that both the parties including the appellant had agreed to be governed by the rules of arbitration of the Refined Sugar Association and the appellant has expressly accepted the reference of the dispute to the Refined Sugar Association, London for settlement in accordance with its rules. The so called variation in the arbitration clause in the agreement between the parties and the model arbitration clause is insignificant and inconsequential and the argument of the appellant based on such difference has no substance.

38. Having heard learned counsel for the parties and going through the law on the subject, including the recent judgment of the Supreme Court in case of Union of India Vs. Hardy Exploration (supra), we are of the view that the learned Single Judge has neither committed any error of law nor of jurisdiction in rejecting the application for setting aside the impugned award for want of jurisdiction. The reasons for coming to such conclusion are set out herein below:

39. It is true that there is some difference in the model arbitration clause of the association, if compared with the arbitration agreement between the parties. But upon reading of these clauses in juxtaposition, it transpires that the expression "such arbitration shall be conducted in accordance with English Law" from the model clause has been omitted from the contentious clause; whereas the words "with the said rules in India" have been inserted in the end.

40. Notwithstanding the above noticed changes, the appellant's contention that it had consciously excluded the conducting of the arbitration proceedings in accordance with English law and had intentionally inserted the last words in the arbitration clause to make the arbitration proceedings subject to India and Indian laws, does not cut any ice.

41. At first flush the argument of the appellant appears to be attractive, but a deeper scrutiny suggests otherwise. On reading of the arbitration clause as a whole and upon purposive construction thereof, we are of the view that it does not convey the meaning as projected by the appellant. A careful reading of the arbitration clause reveals that it has two parts; its first part conveys that the disputes arising out of or in connection with the contract are required to be referred to the Refined Sugar Association, London for settlement and the said exercise is to be done in accordance with "the rules relating to arbitration," whereas the second part "this contract shall be governed by and construed in accordance with English law with the said rules in India" does not deal with the arbitral proceedings or curial law at all. The second part provides for the substantive law governing the contract viz., "English Law with the rules in India". The second part postulates that the substantive law of England with relevant rules in India, shall be applicable, when it comes to construction or interpretation of the terms of the contract. As far as the juridical law is concerned, the rules relating to arbitration of the Refined Sugar Association, London have been adopted or made applicable.

42. Upon perusal of the record, we find that Rule 8 of the Rules relating to arbitration of the Refined Sugar Association, has an important bearing on the question involved. It is rather surprising that the said rule has not been discussed by the learned panel of arbitrator nor the same has been brought to the notice of learned Single Judge, during the adjudication of the application under Section 34 of the Act. It will not be out of place to reproduce rule 8 of the Rules of Refined Sugar Association, which reads thus:

"8. For the purpose of all proceedings in arbitration, the contract shall be deemed to have been made in England, any correspondence in reference to the offer, the acceptance, the place of payment or otherwise, not-with-standing, and England shall be regarded as the place of performance. Disputes shall be settled according to the law of England wherever the domicile, residence or place of business of the parties to the contract may be or become. The seat of the Arbitration shall be England and all proceedings shall take place in England. It shall not be necessary for the award to state expressly the seat of the arbitration. Unless the contract contains any statement expressly to the contrary, the provisions of neither the Convention relating to a Uniform Law on the International Sale of Goods, of 1964, nor the United Nations Convention on Contracts for the International Sale of Goods, of 1980, shall apply thereto. Unless the Contract contains any statement expressly to the contrary, a person who is not a party to the Contract has no right under the Contract (Rights of Third Parties) Act 1999 to enforce any term of it."

43. If the appellant's stand is considered in the face of the arbitration clause, it comes out clearly that the disputes arising out of the contract were required to be referred to Refined Sugar Association, London. Once that is done, the natural fall out is, that the proceedings are to be governed in accordance with the rules relating to the arbitration of the association, as has been mutually agreed. The appellant's contention that though it has submitted it to the arbitration of Refined Sugar Association, London, however, without agreeing for the arbitration to be conducted at London, is untenable. As such, in the facts of the present case the appellant's contention cannot be accepted that the proceedings of arbitration as well as the seat of arbitration was required to be held/situated in India.

44. A reading of rule 8 reproduced above reveals that not only the seat of arbitration has been agreed to be in England, all the proceedings incidental and consequential thereto have been accepted to take place in England. It has also been clearly stipulated that unless the contract contains any settlement expressly to the contrary, the seat of arbitration shall be England and it shall not be necessary for the award to state expressly the seat of arbitration.

45. In view of the aforesaid stipulation, there remains no room for ambiguity that for the present arbitration proceedings, the seat of arbitration is London.

46. The contention of the appellant that though the panel of arbitrator has kept a sitting in London and commenced the proceedings in London, it is only a venue of arbitration and the seat of arbitration remains in India, is equally flawed and fallacious. Such argument of the appellant is contrary to the facts involved in the case and the same has no legal basis or support. Mere use of the words "the said rules in India", does not shift the seat of arbitration to India, particularly when, the venue of arbitration has been in England. Various factors are required to be reckoned to treat the venue to be a seat. Until and unless the contract or the arbitration clause in express terms defines or provides that the seat of arbitration shall be India, the bare use of the words "rules in India", or the mere fact that the appellant operates from India, the seat of arbitration cannot be said to be situated in India.

47. As the seat of arbitration is in London and not in India, in our considered view, the jurisdiction of this Court to hear an application under Section 34 of the Act is clearly barred, as a result of the provision contained in Section 2(2) of the Act of 1996, which confines the applicability of part first of the Act to the cases where the place of arbitration is in India. In the present case even the seat of arbitration, much less the venue of arbitration is in London, hence, the Courts in India cease to have jurisdiction to proceed under the provisions of Part I of the Act of 1996, including the jurisdiction to entertain the application under Section 34 of the Act.

48. We also concur with the view of the learned Single Judge that merely because a final award has been passed, the application under Section 34 of the Act against the interim award dated 17.3.2017 does not become infructuous.

49. It may be true that the award dated 17.3.3017 is an interim award, but we cannot lose sight of the fact that the learned panel of arbitrator has not only passed an interim award, but has ruled upon its jurisdiction and has decided the question of jurisdiction. As such, the appellant's grievance against the assumption of jurisdiction by the panel of arbitrator at London still survives and subsists. It does not end merely because a final award has been pronounced. The judgment of the Apex Court in case of Satwant Singh Sachhi Vs. State of Punajab, (1999) 3 SCC 487 is pertinent in this context.

50. As far as judgment of the Hon'ble Supreme Court in the case of Union of India Vs. Hardy Exploration (supra) is concerned, the same hardly lend any support to the appellant. Although in the said case, the Supreme Court has set aside the order of the learned Single Judge as well as that of the Division Bench, holding that since the seat of arbitration was in London, the High Court of Delhi did not have jurisdiction to hear the application under Section 34 of the Act of 1996; but a careful reading of the facts of the said case coupled with the arbitration clause 32.1; 32.2 and 33.12 duly noticed in para no.25 of the said judgment clearly brings to fore that not only the substantive law, even the juridical or curial law of India had been adopted by the parties. It was only the venue of conciliation or arbitration, which had been agreed to be at Kuala lumpur. Interpreting such clauses and the facts peculiar, the Supreme Court has held that Kuala lumpur was only the venue of arbitration and the seat of arbitration was in India, while also holding that the parties have agreed to be governed by the substantive law relating to contract as well as the juridical and curial law of India. There is a fundamental difference in the factual matrix of the present case, hence, judgment of Hardy Exploration (supra) of the Supreme Court is of little avail to the appellant.

51. As a matter of fact, the exposition of law in the said judgment clearly mandates that if on facts it is found that either juridical seat of arbitration is outside India or the law governing the arbitration agreement is a law other than Indian Law, part first of the Act of 1996 shall be excluded. In the present case not only the juridical seat of the arbitration is outside India, even the law governing the arbitration agreement is that of England, albeit, with a small exception that too in relation to the substantive law concerning the contract, wherein the rules of India have also been accepted to be considered with the laws of England. Mere insertion of the words 'rules in India', neither changes the position of law nor does it change the situs of the seat.

52. The facts of the present case are almost identical to the facts involved in the case of Sakuma Exports Ltd. Vs. Louis Dreyfus Commodities Suissee S.A., (2015) 5 SCC 656, wherein the parties had agreed to refer the dispute to the Refined Sugar Association and the same was accepted to be governed by the rules of arbitration of said Association. Considering the arbitration clause and the rules of arbitration of the Refined Sugar Association, the Supreme Court held that the words "contract is subject to rules of Refined Sugar Association, London" stand inserted in the contract and wordings of said rule 8 clinch the issue in favour of the respondent. In the present case also, the very same rule 8 of the rules of Refined Sugar Association is applicable and the same has been incorporated by reference in the subject arbitration clause between the parties. Hence, following the judgment in Sukuma Export's case, we hold that the Courts at London alone shall have jurisdiction to pronounce upon the validity of impugned award passed by the panel of arbitration.

53. The learned Single Judge has relied upon the judgment of the Supreme Court in the case of Roger Shashoua and Ors. Vs. Mukesh Sharma and Others. reported in, (2017) 14 SCC 722 and considered various relevant paragraphs of the said judgment, while holding that this Court has no jurisdiction to entertain an application under Section 34 of the Act of 1996. A perusal of the judgment of Roger Shashoua (supra) reveals that Hon'ble Supreme Court has referred to and dealt with all the judgments on the subject and in almost identical fact situation has held that the London has not been mentioned as the mere location, but it has been written that the Courts in London will have jurisdiction. In the present facts also, if the arbitration clause is read in conjunction with rule 8 with the rules relating to arbitration of the Refined Sugar Association, it leaves no room for ambiguity that in the present case also, the seat of arbitration is in London (England), hence all proceedings relating to challenge to the award shall take place in England.

54. As an upshot of the above discussion, we concur with and hence, confirm the view of learned Single Judge that in the present case seat of arbitration is in England.

55. The appellant's grievance against the impugned award dated 17.3.2017 cannot be heard or redressed by this Court or any of the Courts of India, as the jurisdiction of the Courts of India is expressly barred.

56. The appeal is thus dismissed
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