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Indian Supreme Court Decision clears the air over power of Indian Courts in International Arbitration
6 September 2012


A 5-judge Bench of the Indian Supreme Court headed by the Chief Justice of India, S.H. Kapadia, this morning rendered its much awaited decision in the BALCO case. The BALCOcase was reconsidering earlier decisions of the Supreme Court in:
  • Bhatia International - A 2002 decision which took the view that Indian courts can grant interim measures in respect of foreign seated arbitrations; and
  • Venture Global - A 2007 decision which on a seemingly expansive view of Bhatia, took the view that an Indian court can set aside an award rendered in a foreign seated arbitration.


The Supreme Court in its decision today:

    (i)
 
    overruled the decision in Bhatia and clarified that Indian courts shall not have the power to grant interim measures in foreign seated arbitrations;   
  (ii)
 
  overruled the decision in Venture Global and clarified that Indian courts shall not have the power to set aside an award rendered in a foreign seated arbitration;
  (iii)
 
  clarified that the seat of arbitration is the most important factor in determining the jurisdiction of courts and is therefore the 'centre of gravity' of an arbitration;
  (iv)

 
  took the view that due to the difficulties that may arise due to the non-availability of interim measures in foreign seated arbitrations hereinafter, this decision is to apply prospectively to arbitration agreements executed after the date of this decision.

The SIAC was an intervenor in this case before the Supreme Court, on invitation, and placed the Singapore position in terms of case law and the legislative provisions on these issues before the Court earlier this year.

We will post further updates and a more detailed note on the decision soon. To read more the Bhatia decision and its implications in India thus far, please click here

A copy of the decision of the Indian Supreme Court can be found here


By Vivekananda N.
Head (South Asia) 
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