The corridor of uncertainty diminishes following another pro international arbitration judgment from the Indian Supreme Court

by Allen & Overy LLP

For international parties who have contracted with Indian counterparties and agreed to refer disputes to international arbitration, a critical issue is the degree to which the Indian courts have jurisdiction to review and set aside awards.

In the landmark decision of Reliance Industries Limited & Anr. v Union of India handed down on 28 May 2014, the Indian Supreme Court has confirmed that the Indian courts do not have jurisdiction to set aside an arbitral award in circumstances where the parties have (i) agreed to refer disputes to arbitration with a seat in London and (ii) provided for English law to govern their arbitration agreement. Rather, any application to set aside an award in this case should be made to the English courts.

International investors who have entered into an arbitration agreement with an Indian counterparty before 6 September 2012 which does not expressly exclude Part I of the Indian Arbitration and Conciliation Act 1996 Act (the 1996 Act), are likely to be interested in this judgment. We explain briefly why below. A more detailed analysis of the judgment can be accessed here.


Part I of the 1996 Act contains provisions which enable the Indian courts to exercise supervisory jurisdiction in arbitration proceedings, including to review and set aside arbitral awards. Even though Part I states that it applies where the place of arbitration is in India, there has been a long line of cases to the effect that the Indian courts can exercise supervisory jurisdiction in foreign seated arbitrations. These cases were the subject of widespread commentary and criticism in the international arbitration community.

In Bharat Aluminium v Kaiser Aluminium (2012) 9 SCC 552 (Balco), the Supreme Court confirmed that Part I of the 1996 Act does not apply to arbitration agreements entered into after 6 September 2012 which provide for a foreign seat.

However, for arbitration agreements entered into before 6 September 2012, the question of whether Part I of the 1996 Act applies (and therefore whether foreign awards can be reviewed and set aside in India) falls to be determined by reference to the earlier decision in Bhatia International v Bulk Trading SA and Anr. (2002) 4 SCC 105. In particular, the court will examine whether the parties expressly or impliedly excluded Part I.

Following the decision in Bhatia, many parties included a provision expressly excluding Part I in their arbitration agreements when contracting with Indian counterparties. However, numerous contracts were entered into before the 1996 Act came into force, and the question is therefore how they should be interpreted.

In this case, the arbitration agreement was entered into in 1994, and the Supreme Court considered whether the parties had excluded Part I. The Supreme Court concluded that, by selecting (i) London as the seat and (ii) English law as the governing law of the arbitration agreement, the parties agreed to exclude Part I. As a result, the Indian courts do not have jurisdiction to review and set aside arbitral awards in the present case: any such application must be made before the English courts as the courts of the seat.

This is another instance in which the Supreme Court has rendered a pro international arbitration judgment which limits the degree to which Indian courts can interfere in international arbitration proceedings. The Hon’ble Mr. Justice Surinder Singh Nijjar sat on the bench in this case and in Balco, and it is hoped the trend in favour of such decisions will continue following his imminent retirement from the Supreme Court bench.

Nevertheless, it is worth reminding foreign investors that when contracting with Indian parties it is advisable to refer disputes to arbitration with a seat outside India in order to minimise the scope for judicial intervention by the Indian courts during the course of the arbitration proceedings.

Allen & Overy act for Reliance Industries Limited and BG Exploration and Production India Limited in the underlying arbitration proceedings and also advised on the related Indian court proceedings including this appeal before the Supreme Court.



DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Allen & Overy LLP | Attorney Advertising

Written by:

Allen & Overy LLP

Allen & Overy LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.