Indian Supreme Court Limits Domestic Court Interference In Overseas Arbitration

Indian Supreme Court Arbitration DecisionIn a massive, 177-page opinion, the Supreme Court of India greatly limited the power of Indian courts to interfere in arbitration proceedings conducted at a seat outside the country. Bharat Aluminium Co. v. Kaiser Aluminum Technical Service, Inc., Civ. App. No. 7019 of 2005, etc. (India Sept. 6, 2012). The court overruled Bhatia International v. Bulk Trading SA, 4 SCC 105 (India Mar. 12, 2012), which allowed Indian courts to exercise supervisory authority over foreign arbitral proceedings, and Venture Global Engineering v. Satyam Computer Services Ltd., 2008 (1) Scale 214, which expanded the Bhatia ruling. In Bharat, the court concluded that Part I of the Indian Arbitration Act, which provides for interim orders and other court proceedings pending completion of arbitration, does not apply to arbitrations seated outside of India. Because the court’s ruling reversed existing law, the court expressly determined that it should not be applied retroactively. Therefore, the new ruling applies only to “all the arbitration agreements executed” after the date of the court’s decision, i.e., September 6, 2012.

For more information regarding this decision, see Umer Akram Chaudhry, Marking their Territory: Bharat Aluminum v Kaiser Aluminum Technical Services (2012), Wolters Kluwer (Sept. 13, 2012).

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