HEADNOTE: The appellant Corporation and Respondent Company entered into two agreements on 17.8.1982 at New Delhi for the supply of equipment, erection and commissioning of certain works in India. It was agreed that the law applicable to the contract would be the laws in force in India and that the Courts of Delhi would have the exclusive jurisdiction. The agreements contained a specific provision that any dispute arising out of the contract should be decided as per the relevant clauses of the General conditions of the contract. According to the General Terms, the Respondent being a foreign contractor it would be governed by the provisions relating to foreign contractors. It further provided for settlement of disputes amicable, failing which by arbitration which would be conducted by three arbitrators one each to be nominated by the owner and the Contractor and a third to be named by the President of the International Chamber of Commerce (I.C.C.).

A dispute arose between the parties and it was referred to the Arbitral Tribunal constituted in terms of rules of arbitration of the ICC Courts Rules and London was chosen by the ICC Court as the place of arbitration. The Tribunal made an interim award.

The appellant corporation filed an application under the provisions of the Arbitration Act, 1940 before the Delhi High Court for setting aside the said interim award.

The High Court held that the award was not governed by the Arbitration Act, 1940; the arbitration agreement on which the award was made was not governed by the law of India; The award fell within the ambit of the Foreign Awards (Recognition and Enforcement) Act, 1961; London being the seat of arbitration, English Courts alone had jurisdiction to set aside the award; and, that it had no jurisdiction to entertain the application filed under the Arbitration Act, 1940.

Being aggrieved against the High Court’s order, the appellant corporation preferred the present appeal by special leave.