PASL WIND SOLUTIONS PRIVATE LIMITED versus GE POWER CONVERSION INDIA PRIVATE LIMITED

PASL WIND SOLUTIONS PRIVATE LIMITED versus GE POWER CONVERSION INDIA PRIVATE LIMITED

The arbitration clause designated Zurich as the juridical seat and Mumbai only as the convenient venue; Part I and Part II of the Arbitration Act are territorially distinct and mutually exclusive so an arbitration seated in a New York Convention signatory State (Switzerland) between two Indian companies constitutes a "foreign award" under section 44 and is enforceable under Part II; the proviso to section 2(2) does not bridge Parts I and II; the closest-connection test does not apply where the parties and tribunal have designated the seat; applications under section 9 are maintainable in appropriate cases.

Parties
Appellant: PASL Wind Solutions Private Limited; Respondent: GE Power Conversion India Private Limited
Jurisdiction
India
Judgment Date
20 April 2021
Procedural Posture
Civil Appeal / Appeal From the Judgment and Order Dated 03.11.2020 of the High Court of Gujarat at Ahmedabad (petition Under Arbitration Act No. 131 of 2019) to the Supreme Court of India
Outcome
Appeal disposed of; impugned judgment of the Gujarat High Court upheld except for the finding that the respondent’s section 9 application was non-maintainable, which is set aside
Legal Topics
Seat of Arbitration Vs. Venue, Enforcement of Foreign Award, Party Autonomy in Arbitration, Public Policy (section 23), Applicability of Part I and Part II of Arbitration Act, Definition of International Commercial Arbitration, Jurisdiction and Forum Selection, Closest Connection Test
Arbitration and Conciliation Act, 1996 Indian Contract Act, 1872 Foreign Awards (recognition and Enforcement) Act, 1961 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (new York Convention) Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 Seat of Arbitration Vs. Venue Enforcement of Foreign Award Party Autonomy in Arbitration +5 more

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Parties

PASL Wind Solutions Private Limited

Appellant

GE Power Conversion India Private Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From the Judgment and Order Dated 03.11.2020 of the High Court of Gujarat at Ahmedabad (petition Under Arbitration Act No. 131 of 2019) to the Supreme Court of India

Legal Issues

  1. 1 Whether two Indian companies can validly choose a foreign seat of arbitration
  2. 2 Whether an award made at such foreign seat is a "foreign award" under section 44 of the Arbitration Act and enforceable under Part II
  3. 3 Whether Part I and Part II of the Arbitration Act are mutually exclusive and whether the proviso to section 2(2) bridges them

Ratio Decidendi

The arbitration clause designated Zurich as the juridical seat and Mumbai only as the convenient venue; Part I and Part II of the Arbitration Act are territorially distinct and mutually exclusive so an arbitration seated in a New York Convention signatory State (Switzerland) between two Indian companies constitutes a "foreign award" under section 44 and is enforceable under Part II; the proviso to section 2(2) does not bridge Parts I and II; the closest-connection test does not apply where the parties and tribunal have designated the seat; applications under section 9 are maintainable in appropriate cases.

Court Disposition

Appeal disposed of; impugned judgment of the Gujarat High Court upheld except for the finding that the respondent’s section 9 application was non-maintainable, which is set aside

Orders

  • Appeal disposed of
  • Impugned judgment of the Gujarat High Court dated 03.11.2020 upheld except insofar as it held the respondent’s application under section 9 to be non-maintainable; that finding is set aside