SHIN SATELLITE PUBLIC CO. LTD. versus M/S JAIN STUDIOS LTD.

SHIN SATELLITE PUBLIC CO. LTD. versus M/S JAIN STUDIOS LTD.

The offending portion of Clause 23, making the arbitrator's determination final and binding and restraining appeal, is clearly severable from the agreement. Applying the doctrine of severability and the blue pencil test, the valid portion referring disputes to arbitration is enforceable. The respondent failed to appoint an arbitrator within the prescribed timeframe, resulting in loss of right to make such appointment, and the venue cannot be changed from Delhi as per Clause 23 of the agreement. The petition is allowed, and the petitioner’s nominated arbitrator is appointed as Sole Arbitrator.

Parties
Petitioner: Shin Satellite Public Co. Ltd.; Respondent: Jain Studios Ltd.
Jurisdiction
India
Judgment Date
31 January 2006
Procedural Posture
Arbitration Petition / Disposition of Application Under Section 11(6) of Arbitration and Conciliation Act
Outcome
Arbitration petition allowed
Legal Topics
Doctrine of Severability, Appointment of Arbitrator, Enforceability of Arbitration Clause, Venue of Arbitration, Public Policy
Arbitration Law Contract Law Doctrine of Severability Appointment of Arbitrator Enforceability of Arbitration Clause Venue of Arbitration Public Policy

Case Brief

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Parties

Shin Satellite Public Co. Ltd.

Petitioner

Jain Studios Ltd.

Respondent

Procedural Posture

Arbitration Petition / Disposition of Application Under Section 11(6) of Arbitration and Conciliation Act

Legal Issues

  1. 1 Whether the arbitration clause in the agreement is valid and enforceable, particularly the clause restraining appeals and objections.
  2. 2 Whether the offending part of the arbitration clause is severable from the rest.
  3. 3 Whether the respondent's request to change the venue for arbitration is legally permissible.

Ratio Decidendi

The offending portion of Clause 23, making the arbitrator's determination final and binding and restraining appeal, is clearly severable from the agreement. Applying the doctrine of severability and the blue pencil test, the valid portion referring disputes to arbitration is enforceable. The respondent failed to appoint an arbitrator within the prescribed timeframe, resulting in loss of right to make such appointment, and the venue cannot be changed from Delhi as per Clause 23 of the agreement. The petition is allowed, and the petitioner’s nominated arbitrator is appointed as Sole Arbitrator.

Court Disposition

Arbitration petition allowed

Orders

  • Hon'ble Mr. Justice M.L. Pendse (Retired) appointed as Sole Arbitrator.
  • No order as to costs.