Rajasthan High Court - JodhpurBarminco Indian Underground Mining ... vs Hindustan Zinc Limited on 20 July, 2020Author:Dinesh MehtaBench:Dinesh MehtaHIGH COURT OF JUDICATURE FOR RAJASTHAN AT\n                                  JODHPUR\n                        S.B. Arbitration Application No. 10/2020\n\n       Barminco Indian Underground Mining Services Llp, Through Its\n       General Manager, Commercial And Legal, Having Its Principal\n       Office At - 81/1, Adchini, Sri Aurobindo Marg, New Delhi, Delhi,\n       110017, Email - Craig.earnshaw@ Barminco.com.au.\n                                                                             ----Petitioner\n                                             Versus\n       Hindustan Zinc Limited, Having Its Registered Office At - Yashad\n       Bhawan, Udaipur - 313004, Rajasthan.\n                                                                           ----Respondent\n\n\n       For Petitioner(s)           :     Mr. Nakul Diwan, Sr. Advocate\n                                         assisted by Mr. Kunal Bishnoi\n       For Respondent(s)           :     Mr. Gopal Jain, Sr. Advocate assisted\n                                         by Dr. Sachin Acharya\n\n\n\n        S. No                        Particulars                            Page Number\n             1      Introduction                                                1-3\n             2      Facts in a Nutshell                                         3-6\n             3      Respondent's contention                                     6-11\n             4      Applicant's response                                       11-19\n             5      Rejoinder arguments                                          19\n             6      Analysis and findings                                      19-36\n             7      Conclusion and Directions                                  36-37\n\n                               JUSTICE DINESH MEHTA\n\n                                           ORDERReserved on                               ::                       08/07/2020\n       Pronounced on                             ::                       20/07/2020\n\nReportable1.        Present application underSection 9of the Arbitration &\n\n       Conciliation Act, 1996 (hereinafter referred to as "the Act of\n\n       1996") has been preferred by the applicant inter-alia praying that\n\n       the respondent be restrained from invoking or encashing bank(Downloaded on 20/07/2020 at 08:19:04 PM)(2 of 37)                      [ARBAP-10/2020]\n\n\nguarantee of rupees five crores, which it had furnished pursuant to\n\ncontract   No.5100024963,          executed       with     the        respondent    on\n\n11.03.2019.2.   While    issuing   pre-admission            notice         on     14.5.2020,    a\n\nCoordinate Bench of this Court passed an interim order and\n\nrestrained the respondent from invoking above referred bank\n\nguarantee of rupees five crores.3.   A preliminary reply has been filed by the respondent\n\nCompany whereby objection about maintainability of the present\n\napplication before the High Court and following ancillary issues\n\nhave been raised:"(a) the present matter is not an "international Commercial\n     arbitration" underSection 2(1)(f)of the Arbitration and\n     Conciliation Act, 1996;(b) the Applicant has suppressed the fact that the Applicant is an\n     Indian incorporated body;(c) the allegations      of    fraud    against      the        Respondents    are\n     misplaced;(d) the scope of interference by Courts in matters relating to\n     involving bank guarantee is very limited;(e) the Applicant is pursuing divergent stances before this Hon'ble\n     Court and before the Arbitral Tribunal; and(f) the Applicant should have first tried to settle the matter before\n     initiating arbitration proceedings."4.   Since the objection regarding the maintainability of the\n\npresent application goes to the very root of the matter and\n\njurisdiction of this Court, it was thought appropriate to decide\n\nobjections enumerated in clause (a), (b) & (f) para No.3 above,\n\nbefore adverting to other aspects/merit of the application.(Downloaded on 20/07/2020 at 08:19:04 PM)(3 of 37)                      [ARBAP-10/2020]5.   Mr. Gopal Jain, learned senior counsel, led Dr. Sachin\n\nAcharya on behalf of the respondent Company and submitted that\n\nthe application at hands filed by the applicant is liable to be\n\ndismissed for want of jurisdiction, as the jurisdiction to hear the\n\napplication underSection 9of the Act of 1996 lies with the\n\nPrincipal Civil Court at Udaipur and not with the High Court.6.   Though maintainability before the High Court was the sheet\n\nanchor, other subsidiary and supplementary contentions (not\n\ntouching upon the merits of the case) were also heard.7.   For the purpose of deciding the preliminary objection, the\n\nfactual canvas, shorn of unwarranted details is laid hereinunder:-Facts in a Nutshell\n\n\n(7.1) The applicant Company - Barminco Indian Underground\n\nMining Services (or "Barminco") is a Limited Liability Partnership\n\n(hereinafter referred to as "the LLP"), registered underLimited\n\nLiability Partnership Act, 2008(hereinafter referred to as "the Act\n\n2008" or "LLP Act").(7.2) On 11.03.2019, the applicant entered into a contract to\n\nprovide its services for development of Rampura Agucha Mine of\n\nthe respondent - Hindustan Zinc Limited (HZL).\n\n\n(7.3) According   to     the     applicant,       it    had        duly   deployed    its\n\nresources, manpower and machinery in terms of the contract with\n\na view to perform the work awarded to it.(7.4) During the course of performance of the work, applicant\n\nraised certain invoices, which were duly paid by the respondent -\n\nHZL, whereafter, the invoices for February, 2020 and March, 2020(Downloaded on 20/07/2020 at 08:19:04 PM)(4 of 37)                  [ARBAP-10/2020]\n\n\nand the claim raised under the "Force Majeure" and "Change In\n\nLaw Clauses" of the contract were not paid.(7.5) As per the averments made in the application, citing that the\n\nContract in question was "financially unviable", the respondent-\n\nHZL sought re-negotiation of the terms of the Contract and\n\nrequested the applicant to reduce the scope of work by 50%.\n\n\n(7.6) As the applicant refused to accept such offer, the respondent,\n\nvide letter dated 19.04.2020, unilaterally terminated the contract\n\nw.e.f. 01.05.2020, alleging that the applicant had failed to honour\n\nClause 15.3 of the Contract.(7.7) The   applicant    thereafter         demanded           unpaid   amount\n\n(Rs.32,17,30,998/-) towards the work already done from the\n\nmonth of January, 2020 to April, 2020.(7.8) It is alleged by the applicant that as a counter-blast of the\n\napplicant's claim, the respondent Company (HZL) vide its letter\n\ndated 29.04.2020, raised a claim of Rs.49.69 crores against it.\n\n\n(7.9) Numerous e-mails were exchanged between the applicant\n\nand the respondent, which, for the present purposes are not of\n\nmuch relevance.(7.10) Apprehending that the respondent - HZL would invoke the\n\nbank guarantee of rupees five crores furnished by it, the applicant\n\npreferred the present application underSection 9of the Act of\n\n1996 inter-alia seeking injunction, while apprising the Court that\n\nthere is an arbitration clause in the form of Clause-16 of the\n\nGeneral Terms and Conditions of the Contract, which provides for\n\ndispute settlement mechanism through arbitration.(Downloaded on 20/07/2020 at 08:19:04 PM)(5 of 37)                    [ARBAP-10/2020]\n\n\n(7.11)        Clause 16 reads thus :\n\n\n     "16. ARBITRATIONAny dispute or difference whatsoever arising between the\n     parties out of or relating to the interpretation, meaning, scope,\n     operation or effect of this Agreement or the existence, validity,\n     breach or anticipated breach thereof or determination and\n     enforcement of respective rights, obligations and liabilities of the\n     parties thereto shall be amicably settled first by way of a meeting\n     between senior management representatives of each party.                        If\n     the dispute is not conclusively settled within a period of twenty-\n     one (21) days from the date of commencement of the meeting\n     between senior management representatives or such further\n     period as the parties shall agree in writing, the dispute shall be\n     referred to and finally resolved by arbitration administered by\n     Singapore International Arbitration Centre ("SIAC") in accordance\n     with     the   Arbitration    Rules      of   the     Singapore     International\n     Arbitration Centre ("SIAC" Rules") for the time being in force.\n     The arbitration shall be conducted as follows:(i) The Arbitration shall be conducted by a forum of three\n     arbitrators with one arbitrator nominated by each Party and the\n     presiding arbitrator selected by the nominated arbitrators.(ii) The language of the mediation and arbitration proceedings\n     shall be English. The seat of arbitration shall be Singapore.(iii) The award made in pursuance thereof shall be final and\n     binding on the parties."(7.12)        It is asserted in the application that as the Seat of the\n\narbitration    is   located    outside       India,      it   is   an   International\n\nArbitration, for which the applicant has approached the High Court\n\ninvokingSection 9of the Act of 1996 and applied for measures.8.   The applicant has made categorical averments regarding\n\nterritorial jurisdiction in para-104, 105 and 106 of the application,\n\nmore particularly jurisdiction of the High Court in order to(Downloaded on 20/07/2020 at 08:19:04 PM)(6 of 37)               [ARBAP-10/2020]\n\n\nmaintain the application before the High Court, which are\n\nreproduced hereinfra :-"104. The Applicant submits that under with Clause 17 of the\n      Contract, the parties have agreed to the jurisdiction of the Courts\n      at Udaipur. The applicant further submits that the Contract was\n      executed at Udaipur. Further, the Respondent is also situated at\n      Udaipur. Accordingly, a part of the cause of action has arisen at\n      Udaipur.105. The Applicant further submits that the arbitration between\n      the parties herein would be an                     International Commercial\n      Arbitration in view of the fact that seat of arbitration it outside\n      India i.e. Singapore. Accordingly, in view ofSection 2(1)(e)(ii)of\n      the Act, the Applicant has to approach this Hon'ble Court, being\n      the High Court in exercising ordinary original civil jurisdiction,\n      having jurisdiction to decide the questions forming the subject\n      matter of the arbitration.Section 2(1)(e)(ii)of the Act is as\n      follows :"Court" means-(i) ...(ii) in the case of international commercial arbitration,\n            the High Court in exercise of its ordinary original civil\n            jurisdiction, having jurisdiction to decide the questions\n            forming the subject-matter of the arbitration if the same\n            had been the subject-matter of a suit, and in other cases, a\n            High Court having jurisdiction to hear appeals from decrees\n            of courts subordinate to that High Court;106. Therefore, the High Court of Rajasthan at Jodhpur would\n      have the necessary territorial jurisdiction."Respondent's contentions:9.    Respondent's attack regarding maintainability of the present\n\napplication mainly rested on four limbs:-(I) Non-disclosure of material fact:10.   Mr. Gopal Jain, learned senior counsel at the outset\n\ncontended that the present application has been craftily drafted(Downloaded on 20/07/2020 at 08:19:04 PM)(7 of 37)               [ARBAP-10/2020]\n\n\nand not only the fact that the applicant is an LLP registered under\n\nthe Indian laws has been suppressed, but the certificate of\n\nincorporation has also been withheld, with a motive to mislead the\n\nCourt and further with a purpose of portraying itself to be a body\n\ncorporate, registered outside India.11.   Mr. Jain fervently argued that had the applicant been\n\nbonafide, it would have made a clear disclosure of the fact that it\n\nis an LLP, registered under the Act of 2008 - an Indian enactment.It should have ideally placed its certificate of incorporation also,\n\nadded learned senior counsel. Had it been done, this Court would\n\nhave easily deciphered or realized that none of the parties are\n\nincorporated out of India and thus, would have refrained from\n\npassing any order, because the High Court does not have the\n\njurisdiction to hear an application underSection 9in light of the\n\nprovisions contained inSection 2(1)(f)(ii)of the Act of 1996.\n\n\n(II) No negotiation prior to invokingSection 9:12.   Second submission regarding maintainability of the present\n\napplication underSection 9of the Act of 1996 was made by\n\nlearned senior counsel that since no endeavor to settle the dispute\n\namicably or through negotiation was made by the applicant, not\n\nonly invocation of arbitration as per Clause 16 but the present\n\napplication underSection 9also is pre-mature.13.   Advancing his argument further, learned counsel invited\n\nCourt's attention towards Clause 16 of the Contract and submitted\n\nthat as per the Arbitration Clause in question, any dispute or\n\ndifference arising between the parties is required to be first\n\namicably settled by way of meeting between Senior Management(Downloaded on 20/07/2020 at 08:19:04 PM)(8 of 37)                  [ARBAP-10/2020]\n\n\nRepresentatives of each party and in case the dispute does not get\n\nsettled within a period of 21 days from the date of commencement\n\nof the meeting, then only it can be referred to and finally resolved\n\nby arbitration.14.   Asserting that the applicant Company has not made any\n\nendeavor     to   get    the     dispute       settled      amicably    or    through\n\nnegotiation or by way of meeting; with a tinge of disappointment\n\nand astonishment, it was submitted by Mr. Jain that much before\n\ninvocation of the arbitration clause, the applicant company has\n\napproached rather rushed to this Court, in an over-anxiety of\n\nobtaining    interim      order,      apprehending            invocation     of   bank\n\nguarantee.(III) Order in case of M/sHalliburton Offshore Services\n\nInc. Vs. Vedanta Limited & Anr.vacated :15.   Contending that order dated 20.04.2020 of the Delhi High\n\nCourt inHalliburton's case had been the basis of granting\n\ninjunction in applicant's favour, when the matter was first heard by\n\nCoordinate Bench of this Court on 14.05.2020, Mr. Jain eagerly\n\napprised the Court that the same has later been vacated by the\n\nsaid High Court on 30.05.2020.16.   It was argued that over-arching reliance, which was placed\n\nby the applicant Company on the order dated 20.04.2020 of the\n\nDelhi High Court has lost its very existence as the same has been\n\nvacated.    He went ahead to submit that since the very basis or\n\nreason for which the interim order came to be passed in\n\napplicant's favour, has ceased to exist, the interim order dated\n\n14.05.2020 granted in applicant's favour should also be vacated.(Downloaded on 20/07/2020 at 08:19:04 PM)(9 of 37)               [ARBAP-10/2020]\n\n\n(IV) Jurisdiction does not vest in the High Court:17.    Mr. Jain, learned senior counsel appearing for the Objector,\n\nargued that the arbitration in question cannot be treated to be an\n\nInternational Commercial Arbitration by any stretch of imagination\n\nor interpretation, as none of the parties - neither Barminco nor\n\nHZL, are a body corporate incorporated in a Country other than\n\nIndia.18.    He invited Court's attention towardsSection 2(1)(f)and2(1)(e) of the Act of 1996 andSection 2(1)(d)and2(1)(n)of the LLP\n\nAct to drive his above point home that the arbitration in question\n\nis not an International Commercial Arbitration.19.    It will also not be out of place to reproduce the definitions of\n\nexpression "body corporate" and "Limited Liability Partnership",\n\ngiven underSection 2(1)(d)and2(1)(n)of the Act of 2008,\n\nrespectively :"section 2(1)(d)- "body corporate" means a company as\n      defined inSection 3of the Companies Act, 1956 (1 of\n      1956) and includes -(i) a limited liability partnership registered under this\n          Act;(ii) a limited liability partnership incorporated outside\n          India; and(iii) a company incorporated outside India......."section 2(1)(n)- "limited liability partnership" means a\n      partnership formed and registered under this Act;"20.    It would not be out of place to keep relevant provisions\n\nincludingSection 2(1)(e)and2(1)(f)of the Act of 1996 handy,\n\nwhich run as under:(Downloaded on 20/07/2020 at 08:19:04 PM)(10 of 37)              [ARBAP-10/2020]\n\n\n      "Section 2. Definition. (1) In this Part unless the\n      context otherwise requires, -..................Section 2(1)(e). "Court" means -(i) In the case of an arbitration other than\n      international commercial arbitration, the principal Civil Court\n      of original jurisdiction in a district, and includes the High\n      Court in exercise of its ordinary original civil jurisdiction,\n      having jurisdiction to decide the questions forming the\n      subject-matter of the arbitration if the same had been the\n      subject-matter of a suit, but does not include any Civil Court\n      of a grade inferior to such principal Civil Court, or any Court\n      of Small Causes;(ii) in the case of international commercial arbitration,\n      the High Court in exercise of its ordinary original civil\n      jurisdiction, having jurisdiction to decide the questions\n      forming the subject matter of the arbitration if the same had\n      been the subject-matter of a suit, and in other cases, a High\n      Court having jurisdiction to hear appeals from decrees of\n      courts subordinate to that High Court;"Section 2(1)(f): "international commercial arbitration"means an arbitration relating to disputes arising out of\n       legal relationships, whether contractual or not, considered\n       as commercial under the law in force in India and where at\n       least one of the parties is -(i) an individual who is a national of, or habitually resident\n       in, any country other than India; or(ii) a body corporate which is incorporated in any country\n       other than India; or(iii) an association or a body of individuals whose central\n       management and control is exercised in any country other\n       than India; or(iv) the Government of a foreign country;"21.    Having navigated the Court through the above quoted\n\nstatutory provisions, Mr. Jain argued that admittedly the applicant\n\nCompany is a Limited Liability Partnership, incorporated under theLLP Actand thus, a body corporate, duly incorporated in India. He\n\nadded that, equally undisputed is the fact, that the respondent is\n\na Company registered in India, and since both the parties to the\n\narbitration are body corporates registered in India, the arbitration(Downloaded on 20/07/2020 at 08:19:04 PM)(11 of 37)              [ARBAP-10/2020]\n\n\nin question cannot be said to be an International Commercial\n\nArbitration.22.   Having submitted that the arbitration in question is not an\n\nInternational Commercial Arbitration, he drew Court's attention\n\ntowards the provisions contained in definition clause 2(1)(e) of the\n\nAct of 1996, particularly sub-clause (ii) thereof, and argued that\n\nan application underSection 9of the Act of 1996 does lie before\n\nthe High Court only in a case of International Commercial\n\nArbitration. He emphasised that as the arbitration in question is\n\npurely a domestic arbitration, the jurisdiction lies with the\n\n"Principal Civil Court" as per sub-clause (i) and not before the\n\nHigh Court under sub-clause (ii) ofSection 2(1)(e)of the Act of\n\n1996, as claimed by the applicant.23.In support of his argument, learned counsel relied upon the\n\njudgment of Hon'ble the Supreme Court rendered in case ofTDM\n\nInfrastructure Pvt. Ltd. Vs. UE Development India Private\n\nLimited[(2008) 14 SCC 271];                  M/sLarsen & Toubro Ltd.\n\nVs. Mumbai Metropolitan Region[(2019) 2 SCC 271];P.T.C.\n\nTechno Pvt. Ltd. Vs. Samsung India Electronics Pvt. Ltd.[2019 SCC Online Allahabad 3881] and submitted that on the\n\nbasis of the enunciation made by Hon'ble the Supreme Court in\n\nthe above judgments, the Contract in question and the arbitration\n\nin question are not International Commercial Arbitration and thus,\n\nthe jurisdiction does not vest in the High Court.Applicant's Response :24.   Mr. Nakul Diwan, learned senior counsel, assisted by Mr.\n\nKunal Bishnoi, responded to the objections raised by Mr. Jain with(Downloaded on 20/07/2020 at 08:19:04 PM)(12 of 37)                   [ARBAP-10/2020]\n\n\nequal     vehemence.          Opposing         the      respondent's       contention\n\nregarding non-disclosure of applicant's residential status, he\n\ninvited Court's attention towards the cause-title (memo of parties)\n\nand submitted that the applicant Company had clearly indicated\n\nthat it is an LLP - Limited Liability Partnership. He took the Court\n\nthrough para-19 of the application and submitted that the fact\n\nthat the applicant is an LLP incorporated in accordance with theLLP Acthas duly been mentioned.25.     It will not be out of place to reproduce para 19 of the\n\napplication, which runs thus :"19. The Applicant is a limited liability Partnership\n      incorporated in accordance with theLimited Liability\n      Partnership Act, 2008.       The Applicant is a part of the\n      Barminco Group of companies which is one of the world's\n      largest hard rock underground mining services operator\n      with operations in Australia, Asia and Africa."26.     Retorting to Mr. Jain's allegation that his client has tried to\n\nmislead the Court, he submitted that such accusation is totally\n\nbaseless inasmuch as the applicant has enclosed the Limited\n\nLiability Partnership agreement between the Barminco India Pvt.\n\nPTY Ltd. and Barminco India Holding PTY Ltd. and Clause-B\n\nthereof clearly suggests that both these entities are Limited\n\nLiability Partnership under theLLP Act.                           While adding that\n\nallegations of non-disclosure and concealment hurled by the\n\nrespondent are aimed to divert Court's attention from the core\n\nissue, he maintained that such allegations have no legs to stand.(Downloaded on 20/07/2020 at 08:19:04 PM)(13 of 37)                   [ARBAP-10/2020]27.    Adverting to the respondent's second submission regarding\n\nfailure to go for amicable settlement, learned counsel navigated\n\nthe Court through various documents placed with the application\n\nand submitted that vide letter/communication dated 15.04.2020\n\n(Annexure-A/23),      the     respondent          Company         had    called    the\n\napplicant for mutual discussion in a meeting proposed to be held\n\non 15.04.2020 itself. While pointing out that practically no time\n\nwas allowed for negotiation, he was perturbed when he stated that\n\nit was neither practicable nor possible for the applicant to\n\napproach and participate in the discussion on such a short notice.28.    While reiterating that the request for negotiation vide letter\n\ndated 15.02.2020 was an eye-wash, learned counsel submitted\n\nthat the respondent Company had not only hustled in issuing\n\nnotice for termination on 19.04.2020 but had also sent a letter\n\ndated 29.04.2020 and demanded a huge amount under various\n\nheads.29.    Highlighting the above facts, he argued that it is writ large\n\nthat    the   respondent       Company           has      proceeded       arbitrarily,\n\nvindictively and against the basic business ethics. That apart, the\n\nthreat of invocation of bank guarantee left the applicant Company\n\nwith no other alternative but to approach this Court and seek a\n\nprotection    underSection        9of    the      Act     of   1996,      while\n\nsimultaneously initiating arbitration proceedings in Singapore.30.    Stating that instant application was filed on 12.05.2020 and\n\nproceedings for arbitration at Singapore were taken up on\n\n14.05.2020, Mr. Diwan informed that now both the parties have\n\nnominated their respective arbitrators and the matter is pending(Downloaded on 20/07/2020 at 08:19:04 PM)(14 of 37)                   [ARBAP-10/2020]\n\n\nfor appointment of Chairman.              Therefore, in light of subsequent\n\ndevelopment, the efforts of negotiation, which were thwarted\n\nrather frustrated by none other than the respondent Company,\n\nthe objection has been rendered academic, as the stage of\n\nnegotiation has since passed.31.    With    reference     to    the    proposition         as   to    whether    an\n\napplication underSection 9of the Act of 1996 in the present\n\nfactual backdrop will lie before this Court or before the Principal\n\nCivil Court, Mr. Diwan argued that since parties have chosen\n\nSingapore to be the Seat of Arbitration, the arbitration in question\n\ncannot be said to be a domestic arbitration governed byPart-I of\n\nthe Actof 1996.           His stance was that in view of embargo\n\ncontained in sub-section (2) ofSection 2of the Act of 1996, which\n\nconfines the applicability of Part I to the cases in which the place\n\nof arbitration is in India, the definition of International Commercial\n\nArbitration and restrictive definition of Court encapsulated inSection 2(1)(f)&2(1)(e)of the Act of 1996 respectively does not\n\napply to the present case because of its peculiarity.32.    In a bid to drive his point home, he read sub-section (2) ofSection 2and submitted that except for the provisions ofSection\n\n9,27and37(1)(a)and37 (3)of the Act of 1996, Part-I does not\n\napply in a case where the place of arbitration is outside India.33.    Sub-section (2) ofSection 2of the Act of 1996 is reproduced\n\nhereunder :"(2) This Part shall apply where the place of arbitration is in\n      India:   emphasis supplied.(Downloaded on 20/07/2020 at 08:19:04 PM)(15 of 37)              [ARBAP-10/2020]\n\n      Provided that subject to an agreement to the contrary, the\n      provisions ofsection 9,27and clause (a) of sub-section (1)\n      and sub-section (3) ofsection 37shall also apply to\n      international commercial arbitration, even if the place of\n      arbitration is outside India, and an arbitral award made or\n      to be made in such place is enforceable and recognized\n      under the provisions of Part II of this Act."34.    Laying emphasis on the opening words of sub-section (2) ofSection 2, learned senior counsel submitted that since Part-I is\n\napplicable only when place of arbitration is in India, the whole of\n\nPart-I would not apply in the present case, as the place of\n\nArbitration is in Singapore.35.    Propelling his arguments further, he tenaciously argued that\n\ndefinition of International Commercial Arbitration given inSection\n\n2(1)(f)is an integral constituent ofPart-I of the Actof 1996.\n\nTherefore, definition given inSection 2(1)(f)has no application in\n\nthe present case, given that the place of arbitration is Singapore.\n\nHe added that once the definition given underSection 2(1)(f)is\n\ninapplicable, it cannot be said and held that the arbitration in\n\nquestion is not an International Commercial Arbitration.36.    Mr. Diwan urged that having regard to the fact that the seat\n\nof arbitration is in Singapore, the arbitration in question must be\n\ntreated and held to be an International Commercial Arbitration\n\nand as a necessary fall out of such finding, the application underSection 9of the Act of 1996 be also held maintainable before the\n\nHigh Court and not before the Principal Civil Court.37.    Learned senior counsel relied upon the judgment of MP High\n\nCourt rendered in case ofSassan Power Limited Vs. North(Downloaded on 20/07/2020 at 08:19:04 PM)(16 of 37)                  [ARBAP-10/2020]\n\n\nAmerican Coal Corporation India Pvt. Ltd., 2015 SCC MP\n\n1747 and also informed that same has been affirmed by the\n\nSupreme Court in its judgment reported at (2016) 10 SCC 813.Learned counsel also cited the judgment of Delhi High Court in the\n\ncase ofGMR Energy Limited Vs. Doosan Power Systems\n\nIndia Pvt. Ltd., 2017 SCC Online Del 11625 to contend that\n\nthe   arbitration     in      question       is    an     International      Commercial\n\nArbitration and the application underSection 9of the Act of 1996\n\nwill lie before the High Court.38.   Inviting Court's attention towards amendment brought inSection 2(2)of the Act of 1996, he submitted that proviso to sub-\n\nsection (2) was inserted w.e.f. 23.10.2015, essentially with a view\n\nto confer a jurisdiction upon the Courts in India in the cases of\n\nInternational Commercial Arbitration and/or where arbitration\n\ntakes place outside India.39.   It   was      further        submitted         that     since    the    arbitration\n\nproceedings are to be held in Singapore, it would result in an\n\naward, which would be enforceable in India underPart-II of the\n\nActand thus, the arbitration in question cannot be branded to be\n\na domestic arbitration.40.   It was suggested that considering seat centric legislative\n\nintent, the High Court alone, should exercise jurisdiction over an\n\narbitration seated outside India.41.   During the course of submission, Court's attention was\n\ninvited towards the Law Commission Report, that had suggested\n\namendments       to    theArbitration         &     Conciliation     Act,   1996,(Downloaded on 20/07/2020 at 08:19:04 PM)(17 of 37)                [ARBAP-10/2020]\n\n\nparticularly para-41 thereof, which is being reproduced for ready\n\nreference :-"41. While the decision in Balco is a step in the right\n    direction and would drastically reduce judicial intervention\n    in foreign arbitrations, the Commission feels that there are\n    still a few areas that are likely to be problematic.(i) Where the assets of a party are located in India, and\n    there is a likelihood that that party will dissipate its assets\n    in the near future, the other party will lack an efficacious\n    remedy if the seat of the arbitration is abroad. The latter\n    party will have two possible remedies, but neither will be\n    efficacious.   First, the latter party can obtain an interim\n    order from a foreign Court or the arbitral tribunal itself and\n    file a civil suit to enforce the right created by the interim\n    order. The interim order would not be enforceable directly\n    by filing an execution petition as it would not qualify as a\n    "judgment" or "decree" for the purposes ofsections 13and44Aof the Code of Civil Procedure (which provide a\n    mechanism for enforcing foreign judgments)".                  Secondly,\n    in the event that the former party does not adhere to the\n    terms of the foreign Order, the latter party can initiate\n    proceedings for contempt in the foreign Court and enforce\n    the judgment of the foreign Court undersections 13and44Aof the Code of Civil Procedure.                  Neither of these\n    remedies is likely to provide a practical remedy to the\n    party seeking to enforce the interim relief obtained by it.That being the case, it is a distinct possibility that a\n    foreign party would obtain an arbitral award in its favour\n    only to realize that the entity against which it has to\n    enforce the award has been stripped of its assets and has\n    been converted into a shell company.(ii) While the decision in BALCO was made prospective\n    to   ensure    that   hotly     negotiated         bargains   are   not\n    overturned overnight, it results in a situation where Courts,\n    despite knowing that the decision in Bhatia is no longer\n    good law, are forced to apply it whenever they are faced(Downloaded on 20/07/2020 at 08:19:04 PM)(18 of 37)              [ARBAP-10/2020]\n\n      with a case arising from an arbitration agreement executed\n      pre-BALCO."42.    Responding to Mr. Jain's reliance over the judgments inTDM\n\nInfrastructure Private Limited(supra), M/sLarsen & Toubro\n\nLtd.(supra) andP.T.C. Techno Pvt. Ltd.(supra), Mr. Diwan\n\nsubmitted that all these orders have been passed in exercise of\n\npower underSection 11of the Act of 1996, which have no\n\nprecedential value, as has been held by Hon'ble the Supreme\n\nCourt in case ofState of West Bengal Vs. Associated\n\nContractor, reported in (2015) 1 SCC 32. The part ofthe said\n\njudgmenthe relied upon, reads thus:-"It is obvious thatSection 11(12) (b)was necessitated\n      in order that it be clear that the Chief Justice of the\n      "the High Court" will only be such Chief Justice within\n      whose local limits the Principal Civil Court referred to inSection 2(1)(e)is situate and the Chief Justice of that\n      High Court which is referred to in the inclusive part of\n      the definition contained inSection 2(1)(e). This Sub-\n      section also does not in any manner make the Chief\n      Justice or his designate "court" for the purpose ofSection 42. Again, the decision of the Chief Justice or\n      his designate, not being the decision of the Supreme\n      Court or the High Court, as the case may be, has no\n      precedential value being a decision of a judicial\n      authority which is not a Court of Record."43.    Without prejudice to his submission that the application filed\n\nby the applicant is maintainable before the High Court, learned\n\ncounsel alternatively implored that in case the Court comes to a\n\nconclusion that it does not have the jurisdiction and the(Downloaded on 20/07/2020 at 08:19:04 PM)(19 of 37)                   [ARBAP-10/2020]\n\n\njurisdiction rests with the Principal Civil Court, the application be\n\nsent to the concerned Court or the same be returned to the\n\napplicant to be filed in competent court, however, while continuing\n\nthe interim order dated 14.05.2020, at least for a period of fifteen\n\ndays.Rejoinder arguments :44.     Mr. Jain, learned counsel appearing for the respondent -\n\nHZL, in his crisp and concise rejoinder argued that Indian entity\n\nincorporated under the Indian laws, more particularly having its\n\nbusiness operations in India cannot act in derogation of Indian\n\nlaws, including the Act of 1996. He submitted that the judgments\n\nrelied upon by the respondent, which were passed by the\n\nSupreme Court in exercise of powers underSection 11of the Act\n\nof 1996 may not be binding, but the interpretation of the statutory\n\nprovisions given by the Supreme Court is like a guiding pole star.45.     It was lastly submitted that the conduct of the applicant\n\ndisentitles it from claiming equitable relief.                    Thus, not only the\n\napplication merits rejection on the ground of jurisdiction, but\n\ninterim order passed therein also deserves vacation.Analysis and Findings :46.     Dealing with the first objection first, this Court feels that the\n\napplicant Company should have made clearer and categorical\n\ndisclosure of the fact that it is an LLP, registered under the Indian\n\nlaws.      The applicant ought to have placed its certificate of\n\nincorporation on record as well. Ideally what was expected of the(Downloaded on 20/07/2020 at 08:19:04 PM)(20 of 37)                [ARBAP-10/2020]\n\n\napplicant Company has not been done, so far as pleading part is\n\nconcerned.47.   However, these lacunae are not fatal to the maintainability of\n\nits application in hands.48.   This Court does not find much substance in the submission\n\nof Mr. Jain that the applicant Company has deliberately done so,\n\nwith a view to project itself to be an entity, registered outside\n\nIndia. It cannot be said with certitude that it was done to impress\n\nupon this Court that its case is covered by the provisions\n\ncontained in sub clause (ii) of clause (f) ofSection 2(1).49.   In considered opinion of this Court, non-furnishing the\n\nrequisite   information,    as    was      expected        from   the   applicant\n\nCompany cannot be held to be a material non-disclosure so as to\n\ndenude or divest it from claiming equitable relief, particularly in\n\nthe face of the stand the applicant Company has taken: the\n\napplication underSection 9of the Act of 1996 will lie before the\n\nHigh Court, as the seat of arbitration is Singapore.50.   Having regard to the averments made in para 105 of the\n\napplication, it cannot be said that the applicant has deliberately or\n\nwillfully indulged in concealment. Applicant, therefore, cannot be\n\nnon-suited on this count, particularly because it has approached\n\nthe High Court with a plausible argument/reasoning.51.   Second contention of Mr. Jain concerning the question of the\n\nmaintainability of the application, as the applicant failed to first\n\nmake attempt to settle the dispute amicably keeping the spirit of\n\nClause 15 and 16 of the Contract, is also equally frail, if not(Downloaded on 20/07/2020 at 08:19:04 PM)(21 of 37)              [ARBAP-10/2020]\n\n\nfallacious. Upon appraisal of the facts and documents on record,\n\nthis Court finds that the applicant cannot be arraigned of avoiding\n\namicable settlement and/or not resorting to mutual negotiation.52.   The facts are revealing. The respondent Company vide\n\ncommunication dated 15.04.2020 had called upon the applicant\n\nfor mutual discussion in a meeting fixed on 15.04.2020 itself. No\n\nsooner had the respondent invited the applicant for negotiation\n\nthan it terminated the Contract (on 19.04.2020), practically giving\n\nno time to the applicant. In this view of the matter, neither can\n\nthe applicant be accused of non adherence to the Clause 15/16\n\nnor can its application be held non maintainable on this count.53.   Much was said by the respondent about the interim order\n\ndated 20.04.2020 passed by the Delhi High Court in the case of\n\nM/sHalliburton Offshore Services Inc.(supra) - it was contended\n\nthat the applicant had heavily relied upon the interim order passed\n\nby Delhi High Court to successfully impress upon the Court that it\n\nwas entitled for identical injunction. According to Mr. Jain, present\n\ninterim order came to be passed in light of the order of the Delhi\n\nHigh Court. While informing that the interim injunction passed by\n\nthe Delhi High Court has been vacated on 29.05.2020, learned\n\ncounsel for the respondent submitted that the interim order\n\npassed in the present case should also follow suit.54.   Having gone through the reasoned interim order passed by\n\nthe Coordinate Bench on 14.05.2020, this Court is of the\n\nconsidered opinion that the interim order of Delhi High Court in\n\ncase of M/sHalliburton's case (supra) can not even be said to be\n\nin the back of the mind of the Court, much less being a reason to(Downloaded on 20/07/2020 at 08:19:04 PM)(22 of 37)              [ARBAP-10/2020]\n\n\ngrant injunction in applicant's favour.                   The interim order has\n\nobviously been passed considering the submissions made and\n\narguments advanced, which are duly penned in the interim order\n\nitself.55.       Be, that as it may, since this Court is not pronouncing upon\n\nthe merit of the application and/or the interim order passed herein\n\nand is confining the present order to the extent of deciding the\n\npreliminary objections to the extent of its maintainability, it would\n\nbetter deter from making any observation or recording a finding\n\nas to whether the interim order in question deserves to be\n\ncontinued or vacated.56.       This Court, however, cannot resist from observing that\n\nmerely because the interim order, which has been placed as\n\nannexure with the application has been vacated, the interim\n\ninjunction granted in applicant's favour cannot be dissolved.57.       Coming on to the core question, which has cropped up for\n\nconsideration and further to resolve the conundrum involved in\n\nthis case, viz. - "What is the true import of expression\n\n'International Commercial Arbitration', given the fact that place\n\nand seat of arbitration is in Singapore?" Sprouting from the same\n\nstem, equally seminal and significant is the issue, "as to whether\n\npresent application will lie before the High Court or not?"58.       Before embarking upon the journey, it would be beneficial to\n\nbear in mind the principles, which emerge from the reading of the\n\nprovisions and emanate from various enunciation made by Hon'ble\n\nthe Apex Court and other High Courts.(Downloaded on 20/07/2020 at 08:19:04 PM)(23 of 37)                    [ARBAP-10/2020]59.The Arbitration and Conciliation Act, 1996, which has been\n\nenacted on the United Nations Commission on International Trade\n\nLaw   (UNCITRAL)        Model       Law      of     International         Commercial\n\nArbitration in 1985 applies equally to International Commercial\n\nArbitration and arbitration which is not International Commercial\n\nArbitration, often referred to as Domestic Arbitration.The Actof\n\n1996 deals with both types of arbitration.60.The Actof 1996 envisages two types of awards based on\n\nseat of arbitration.        Award passed in furtherance of arbitral\n\nproceedings held abroad, is termed as foreign award, else it is\n\nclassified as domestic award.61.   The     distinction   between         the     International         Commercial\n\nArbitration    and    an    arbitration        which       is     not   International\n\nCommercial Arbitration has a bearing or impact essentially on\n\njurisdiction of the Courts in relation to grant of injunction;\n\napplication for setting aside award and appointment procedure\n\nunderSection 11of the Act etc.62.   Proviso to sub-section (2) ofSection 2has been incorporated\n\nvide Section 3 of the Amendment Act, 2015 w.e.f. 23.10.2015\n\nwith a view to confer jurisdiction upon the courts of India in the\n\nmatters relating toSection 9,27,37(1)(a)and37 (3)of the Act of\n\n1996, when the place of arbitration is outside India.                         Prior to\n\namendment, in case of International Commercial Arbitration, when\n\nthe place of arbitration was outside India, the courts were\n\nconfronted with an inherent inhibition in the teeth of provisions ofSection 2of the Act of 1996, if they were to grant injunction. The\n\nSupreme Court in the case of Bharat Aluminium Company &(Downloaded on 20/07/2020 at 08:19:04 PM)(24 of 37)                [ARBAP-10/2020]\n\n\nOrs. etc. Vs. Kaiser Aluminium Technical Service Inc. & Ors.\n\netc., reported in (2012) 9 SCC 552 has concluded as under :"194. In view of the above discussion, we are of the\n      considered opinion that theArbitration Act, 1996has\n      accepted the territoriality principle which has been\n      adopted in the UNCITRAL Model Law.Section 2(2)makes a declaration thatPart I of the Arbitration Act,\n      1996shall apply to all arbitrations which take place\n      within India.   We are of the considered opinion thatPart I of the Arbitration Act, 1996would have no\n      application to international commercial arbitration held\n      outside India. Therefore, such awards would only be\n      subject to the jurisdiction of the Indian courts when\n      the same are sought to be enforced in India in\n      accordance with the provisions contained inPart II of\n      the Arbitration Act, 1996.                In our opinion, the\n      provisions contained in theArbitration Act, 1996make\n      it crystal clear that there can be no overlapping or\n      intermingling of the provisions contained in Part I with\n      the provisions contained inPart II of the Arbitration\n      Act, 1996."63.    With a view to cure the lacuna, the proviso has been inserted\n\nin sub-section (2) ofSection 2, so as to enable the courts of law in\n\nIndia to deal with the applications underSection 9,27,37(1)(a)and37(3)of the Act of 1996.64.    After insertion of proviso to sub-section (2) ofSection 2, the\n\nprovisions ofSection 9,27,37(1)(a)and37(3)of the Act have\n\nbeen made applicable to International Commercial Arbitration,\n\neven if the place of arbitration is outside India.(Downloaded on 20/07/2020 at 08:19:04 PM)(25 of 37)               [ARBAP-10/2020]65.    Learned senior counsel for the respondent - HZL has cited\n\njudgments of Hon'ble the Supreme Court in the case ofTDM\n\nInfrastructure(supra) and M/sLarsen & Toubro(supra) in support\n\nof his contention that the Courts have refused to hold identical\n\narbitrations to be International Commercial Arbitration. A perusal\n\nof the judgments so cited reveals that in those cases, the seat of\n\narbitration was New Delhi and Bombay respectively.                           The\n\narbitrations in question were held not to be 'International\n\nCommercial Arbitration', as both the parties had Indian nationality.66.    It would not be out of place to reproduce relevant extracts of\n\nthe judgments cited -(a) para No.19 of the judgment in case ofTDM Infrastructure(supra):"19. Determination of nationality of the parties plays\n      a crucial role in the matter of appointment of an\n      arbitrator. A company incorporated in India can only\n      have Indian nationality for the purpose of the Act. It\n      cannot be said that a company incorporated in India\n      does not have an Indian nationality.                  Hence, where\n      both parties have Indian nationalities, then the\n      arbitration between such parties cannot be said to be\n      an international commercial arbitration."(b) para 18 of the judgment in case of M/sLarsen & Toubro(supra):"18. this being the case, coupled with the fact, as correctly\n      argued by Shri Divan, that the Indian company is the lead\n      partner, and that the Supervisory Board constituted under\n      the consortium agreement makes it clear that the lead(Downloaded on 20/07/2020 at 08:19:04 PM)(26 of 37)                 [ARBAP-10/2020]\n\n      partner really has the determining voice in that it appoints\n      the Chairman of the said Board (undoubtedly, with the\n      consent of other members); and the fact that the\n      Consortium's office is in Wadala, Mumbai as also that the\n      lead member shall lead the arbitration proceedings, would\n      all point to the fact that the central management and\n      control of this Consortium appears to be exercised in India\n      and not in any foreign nation."67.    Both the judgments cited by Mr. Gopal Jain, do not provide a\n\ndirect answer to the question, which this Court is seized of.68.    The facts of this case are a bit peculiar - the seat of\n\narbitration, so also the venue of the arbitration proceedings is\n\nSingapore, whereas the contracting parties hail from India.                     The\n\naward, if passed, would obviously be a foreign award and not a\n\ndomestic award.69.    The issue, which the Court is faced with in the present case\n\nis, which Court will have jurisdiction to entertain an application\n\nunderSection 9of the Act of 1996 - will it be High Court or the\n\nPrincipal Civil Court? given the fact that seat and venue of\n\narbitration is Singapore.70.    To answer the question as to whether this Court is invested\n\nwith the jurisdiction to entertain an application underSection 9of\n\nthe Act of 1996, one would obviously advert to the definition of\n\nterm "Court", as given underSection 2(1)(e)of the Act of 1996. A\n\nbare look at the definition of the expression "Court" suggests that\n\nin    case   of   arbitration    other      than      International     Commercial\n\nArbitration, the term "Court" means Principal Civil Court of original\n\njurisdiction in a district and includes High Court in exercise of its(Downloaded on 20/07/2020 at 08:19:04 PM)(27 of 37)                     [ARBAP-10/2020]\n\n\nordinary    original    civil        jurisdiction.        Whereas          in    case     of\n\nInternational    Commercial            Arbitration,      High      Court        has    been\n\nprescribed as the Court, even if it does not have original civil\n\njurisdiction.71.   Therefore, to ascertain as to whether the High Court has the\n\njurisdiction to entertain an application underSection 9of the Act\n\nof 1996, one has to firstly find out, as to whether the arbitration in\n\nquestion is an International Commercial Arbitration or not.72.   The term "International Commercial Arbitration" has been\n\nexpressly defined in clause (f) ofSection 2(1).                      This definition,\n\nwhich is nationality centric definition, clearly suggests that an\n\narbitration to be termed or treated as an International Commercial\n\nArbitration, the agreement has to have at least one foreign party\n\nor a company whose nationality is other than that of India.73.   Two      judgments        of    the   Supreme         Court      namely,TDM\n\nInfrastructure Pvt. Ltd.(supra) and M/s Larsen & Toubro were\n\ncited by Mr. Jain, precedential value whereof was doubted by Mr.\n\nDiwan on the ground that they were passed by the Supreme Court\n\nin exercise of power underSection 11of the Act of 1996, which\n\njurisdiction    was    administrative          in    nature        until     the      recent\n\namendment.Mr. Diwan relied upon judgments in the case ofState of West Bengal Vs. Associated Contractors; (2015) 1\n\nSCC 32 to contend that the judgment ofTDM(supra) andLarsen\n\n& Toubro(supra) are not binding.                     On the issue of binding\n\nprecedential value of the judgments in question, this Court is of\n\nthe view that the adjudication made by the Supreme Court underSection 11may be administrative in nature, but the interpretation(Downloaded on 20/07/2020 at 08:19:04 PM)(28 of 37)              [ARBAP-10/2020]\n\n\nof the provision made therein can always be relied and this Court\n\ncan gather guidance from the exposition of law.                  They may be\n\ntreated to be not binding, only when other contrary view on\n\njudicial side is available.74.    May be, that in the present factual backdrop, since seat and\n\nvenue of arbitration is Singapore, the award passed (if any),\n\nwould be a foreign award and the same will be executable in\n\naccordance with the provisions ofPart-II of the Actof 1996. But\n\nmerely because the award is to be executed in accordance withPart-II of the Actof 1996, the arbitration by itself cannot be\n\ntreated to be an International Commercial Arbitration. To be an\n\nInternational Commercial Arbitration, the prerequisite conditions\n\nenumerated in sub-clause (i) to (iv) ofSection 2(1)(f)are required\n\nto be satisfied.75.    Applicant being an LLP is a body corporate in India in terms\n\nof clause (i) ofSection 2(1)(d)read withSection 2(1)(n)of LLP\n\nAct. It is therefore a body corporate having Indian nationality. The\n\nrespondent - Company is admittedly an Indian Company. Hence,\n\nnone of the parties to the contract is a body incorporated outside\n\nIndia. This being the position, the arbitration in question cannot\n\nbe termed as International Commercial Arbitration, as it does not\n\nsatisfy the conditions cataloged in clause (i) to (iv) ofSection 2(1)(f).76.    The judgment of Delhi High Court in the case ofGMR Energy\n\nLtd.(supra) and that of Madhya Pradesh High Court in the case ofSassan Power Ltd.(supra), which were cited by Mr. Diwan, hardly\n\nlend any support to the cause of his client. Dealing with almost(Downloaded on 20/07/2020 at 08:19:04 PM)(29 of 37)               [ARBAP-10/2020]\n\n\nidentical facts, the High Courts in these cases have held that seat\n\nof arbitration being abroad,Part-I of the Actof 1996 will not\n\napply, as mandated by sub-section (2) ofSection 2of the Act.\n\nThere can be no two opinion about coverage of the arbitration in\n\nquestion underPart-II of the Act. The bone of contention or main\n\ncontroversy in the present case is, as to whether the arbitration\n\nbetween the parties is an International Commercial Arbitration or\n\nnot? and further sincePart-I of the Actis not applicable, whether\n\nthe definition clause being its integral component, can be resorted\n\nto or not.77.   Main reason for maintaining the present application in the\n\nHigh Court as per the applicant is, because the seat and place of\n\narbitration is in Singapore. No statutory provision or case law was\n\nbrought to the notice of the Court, which provides that an\n\napplication underSection 9of the Act of 1996 will be laid before\n\nthe High Court, in a case where the seat of arbitration is not in\n\nIndia.78.   It appears that the applicant has preferred the present\n\napplication before this Court under misconception that this Court\n\nexercises ordinary original civil jurisdiction, which is evident from\n\nfollowing excerpt of para No.105 of its application "... ... ... to\n\napproach this Hon'ble Court, being the High Court exercising\n\nordinary original jurisdiction ... ... ...".                 It may be noted that\n\nRajasthan High Court does not possess original civil jurisdiction\n\nand it is conferred with only appellate civil jurisdiction by the\n\nRajasthan High Court Ordinance, 1949.                     Hence, it cannot be(Downloaded on 20/07/2020 at 08:19:04 PM)(30 of 37)               [ARBAP-10/2020]\n\n\ntreated to be a Court as per sub-clause (i) of clause (e) ofSection\n\n2(1)of the Act of 1996.79.    A close and conjoint reading of the provisions contained inSection 2(1)(e)&2(1)(f)of the Act of 1996 makes it abundantly\n\nclear that for the purpose of determining the jurisdiction of the\n\ncourt with respect to an application underSection 9of the Act of\n\n1996, the sole factor to be looked at, is, as to whether the\n\narbitration in question is International Commercial Arbitration or\n\nnot.    The seat of arbitration and/or place of arbitration is\n\nabsolutely inconsequential, rather irrelevant for the purpose of\n\ndetermining the jurisdiction of the Court.                May be in a contract\n\nhaving place of arbitration abroad, the award would be a foreign\n\naward; such being the case, if a party seeks to challenge the\n\naward or prefer an application for setting aside the award, the\n\nseat/venue may be relevant, but thenin that case, the Courts in\n\nIndia per-se would not be available as forum.80.    It was vehemently argued by Mr. Diwan that according to\n\nsub-section (2) of Section 2, Part-I of the Act is applicable only in\n\nthe event of place of arbitration being in India. In other words,\n\nhis argument was that since place of arbitration, in the present\n\ncase, isSingapore, Part-I of the Actof 1996 does not apply and,\n\ntherefore, definition of International Commercial Arbitration given\n\ninSection 2(1)(f)of the Act of 1996, which forms part ofPart I of\n\nthe Actof 1996 cannot be held applicable.81.    In considered opinion of this Court, the argument put forth\n\nby Mr. Diwan is paradoxical and self defeating, to say the least.\n\nNot only that the reasoning behind the argument is flawed, it(Downloaded on 20/07/2020 at 08:19:04 PM)(31 of 37)              [ARBAP-10/2020]\n\n\nwould also lead to anomalous and disastrous results, if not absurd.\n\nIf the preposition as advanced by the applicant is accepted and it\n\nis held thatPart-I of the Actof 1996, including what has been\n\ncontained inSection 2of the Act of 1996 is inoperative or\n\ninapplicable in the present case, as the place of arbitration is\n\nSingapore, the very foundation of his novel argument falls flat on\n\nthe ground. The reasons are set out hereinafter82.    It is noteworthy that sub-section (2) ofSection 2of the Act\n\nis not divorced of Part-I. If his argument is accepted, then, entire\n\nPart-I, which envelopes within its foldSection 2(1)- the definition\n\nclause gets eclipsed or becomes non-est in the cases, where the\n\nplace of arbitration is out of India.83.    In the cases, where the place of arbitration is outside India,\n\nobviously, procedure and other provisions contained in Part I do\n\nnot apply.   It will be too far fetched to hold or even to contend\n\nthat the definition clause of the Act of 1996 also will not apply,\n\nsimply because place of arbitration is not in India, particularly\n\nwhen, both the parties are incorporated in India and substance\n\nand substratum of the dispute emanates from Indian laws.84.    According to this Court, the whole of the definition clause\n\nbeing the soul of an Act cannot be held inapplicable to a particular\n\npart of the Act, especially in the contextual facts. That apart, the\n\ndefinition clause is determinative of the expressions used in the\n\nAct.    If argument advanced by Mr. Nakul Diwan is brought to\n\nlogical end, and expression "International Commercial Arbitration"given in clause (f) is to be held inapplicable, then, which\n\narbitration will be an International Commercial Arbitration, will be(Downloaded on 20/07/2020 at 08:19:04 PM)(32 of 37)                  [ARBAP-10/2020]\n\n\nan impossible question to be answered. Besides this, one fails to\n\ncomprehend as to how can the applicant, thereafter, rely upon\n\ndefinition of expression "Court' given in the selfsame Part-I itself -\n\nclause (e) ofSection 2(1)of the Act of 1996, to maintain its\n\napplication before any Court, let alone High Court?85.   One has to bear in mind the statutory position thatPart-II of\n\nthe Actdoes not have a separate definition clause of its own to\n\ngovern the arbitration having place outside India. As such, if the\n\nargument advanced by the applicant were to be accepted, andSection   2(1)(f)of   the    Act     namely         definition    of   'Internal\n\nCommercial Arbitration' were to be excluded, then according to\n\nthis Court, it cannot be done selectively-in that case, the whole\n\nof the definition clause will have to be ignored or held inapplicable.86.   This Court is firmly of the view that it could never be the\n\nintention of the Legislature to eschew applicability of the definition\n\nclause for Part II, while incorporating sub-section (2) ofSection 2of the Act, particularly when no definition or interpretation clause\n\nhas been separately provided for Part-II or other parts.87.   It is noteworthy thatSection 2of the Act, which contains\n\nvarious definitions, uses the opening words:"2(1) In this part, unless the context otherwise requires -"Similar is the language used in sub-section (2) ofSection 2,\n\nwhich reads thus:-"2(2) This part shall apply where the place of Arbitration is in\n\nIndia."*emphasis supplied(Downloaded on 20/07/2020 at 08:19:04 PM)(33 of 37)               [ARBAP-10/2020]\n\n\nGenerally definition clause is not restrictive of its applicability to a\n\nparticular part - it applies to whole of the Act. Use of expression\n\n'Part' in opening words of the definition clause has resulted in\n\nsomewhat confusing, if not conflicting situation - it gives an\n\nimpression as if the definition clause is not applicable to remaining\n\nparts of the Act, except Part-I.88.   This Court does not have slightest of doubt that in case, the\n\ninterpretation sought to be given by the applicant is accepted, it\n\nwould lead to anomaly, incongruity and absurdity.89.   The Book 'Principles of Statutory Interpretation' by Justice\n\nG.P. Singh (14th Edition - 2016 Lexis Nexis - page 158) contains\n\nan extraction of four conditions, which should exist to depart from\n\nthe plain meaning of the Statute from the judgment of House of\n\nLords in the case of Stock Vs. Frank Jones (Tipton) Ltd.:(1978) 1 AII ER 948, page 954. It will be of immense use to\n\nreproduce relevant part hereinfra:"... a court would only be justified in departing from\n        the plain words of the statute when it is satisfied\n        that: (1) there is clear and gross balance of\n        anomaly; (2) Parliament, the legislative promoters\n        and the draftsman could not have envisaged such\n        anomaly, could not have been prepared to accept it\n        in   the   interest      of    a     supervening         legislative\n        objective; (3) the anomaly can be obviated without\n        determent to such legislative objective; (4) the\n        language of the statute is susceptible of the\n        modification required to obviate the anomaly."(Downloaded on 20/07/2020 at 08:19:04 PM)(34 of 37)                     [ARBAP-10/2020]90.   It is pertinent to note that above principle has been approved\n\nand     applied   by    the    Apex       Court      in    the      case     ofAfcons\n\nInfrastructure         Ltd.     Vs.      Cherian          Varkey       Construction\n\nCompany: (2010) 8 SCC 24 (at page 36).91.     With a view to obviate the anomaly or incongruity taking cue\n\nfrom the principle noticed in para No. 89 above, duly approved by\n\nthe Apex Court inAfcons' case (supra), the word 'Part' used inSection 2(1)is required to be read as 'Act'. If that is done, not\n\nonly the present incongruity will be taken care of and the\n\nprovisions of the Act, particularly the definition clause will be given\n\nits true and full meaning and play.92.     Upon reading of expression "Part" used in sub-section (1) ofSection 2as "Act", the definition clause will naturally be applicable\n\nto the entire Act, notwithstanding the expression used in sub-\n\nsection (2) ofSection 2. Then, it cannot be said that since place\n\nof arbitration is not in India, the definition clause is not applicable\n\nor that it cannot be read.93.     The case before this Court is a bit peculiar. As the seat and\n\nplace of arbitration is Singapore, it cannot be said that the\n\narbitration is a domestic arbitration. Nor can it be said that the\n\naward which would be passed will be a domestic award. It is a\n\nthird situation - where the arbitration is not International\n\nCommercial Arbitration, but the award will be a foreign award.94.     As an upshot of the discussion foregoing, this Court deduces\n\nthus:(Downloaded on 20/07/2020 at 08:19:04 PM)(35 of 37)              [ARBAP-10/2020]\n\n\n      (i)    An arbitration agreement can result in Foreign award tobe covered by Part-II, yet the arbitration can be an arbitration\n\n      other than International Commercial Arbitration.(ii)   the definition clause given inSection 2(1)of the\n\n      Arbitration & Conciliation Act, 1996 applies to whole of the Act\n\n      and is not confined to Part-I thereof.(iii) If an arbitration is not an International Commercial\n\n      Arbitration, the expression 'Court' would mean Principal Civil\n\n      Court or the High Court having original civil jurisdiction as per\n\n      clause (i) ofSection 2(1)(e).95.    As there is no quarrel about the fact that the applicant is\n\nincorporated under the provisions of theLLP Act, whereas the\n\nrespondent is a company registered under theIndian Companies\n\nAct, 1956. Nationality, natural habitation or residence of both the\n\nparties is unquestionably Indian/India. The nationality being the\n\nsole determining or decisive factor, which in the present case, of\n\nboth the contracting parties is, Indian, it cannot be said that the\n\narbitration in question is an International Commercial Arbitration.96.    Since the arbitration in question is not an International\n\nCommercial Arbitration, going by the definition of expression\n\n"Court", encapsulated in clause (e) ofSection 2(1), there remains\n\nno doubt that the case at hands will fall within the sweep of sub-clause (i) of clause (e), to the exclusion of sub-clause (ii).97.    This Court upon appraisal of facts and analysis of law,\n\nconcludes that for the purpose of the Act of 1996, the "Court" in\n\nthis case would be Principal Civil Court.                 It is only such Court,(Downloaded on 20/07/2020 at 08:19:04 PM)(36 of 37)              [ARBAP-10/2020]\n\n\nwhich is conferred with the jurisdiction to deal with present\n\napplication.98.   Although, according to the provisions of the Act of 1996, the\n\npresent application would lie before the Principal Civil Court, but\n\nwhile giving the final verdict and consequential direction, this\n\nCourt cannot, but be oblivious of the provisions of theCommercial\n\nCourt Act, 2015.99.   According toSection 10(3)of the Commercial Court Act,\n\n2015, all arbitration matters are required to be dealt with by the\n\nCommercial Court of the District.             As noticed earlier, Rajasthan\n\nHigh Court does not exercise original civil jurisdiction nor any\n\ncommercial division of the Rajasthan High Court has been\n\nconstituted.   Hence, the present application would lie before the\n\ncompetent Commercial Court, having territorial jurisdiction to deal\n\nwith the disputes/issues arising in this case, which in the present\n\ncase is Udaipur, as per para 104 of the application, reproduced in\n\npara 8 of this judgment.:: Conclusion and Directions ::100. Objection regarding maintainability of the instant application\n\nbefore this Court is, accepted.101. It is hereby held that Rajasthan High Court is not endowed\n\nwith or clothed with the jurisdiction to entertain and hear the\n\npresent application underSection 9of the Act of 1996.                   The\n\njurisdiction to hear the present application, as per clause 2(1)(e)(i) of the Act of 1996 read withSection 10(3)of the Commercial\n\nCourts Act, 2015 vests in Commercial Court, Udaipur.(Downloaded on 20/07/2020 at 08:19:04 PM)(37 of 37)              [ARBAP-10/2020]102. Keeping the spirit of the provisions of Rule 10 and 10-A of\n\n                                   Order VII of the Code of Civil Procedure in mind, the application\n\n                                   filed by the applicant M/s Barminco Indian Underground Mining\n\n                                   Services LLP is hereby ordered to be returned to it.103. Both the parties shall appear before the Commercial Court,\n\n                                   Udaipur on 31.07.2020.           The applicant shall either file fresh\n\n                                   application or the application, which would be returned to it, by\n\n                                   31.07.2020.104. The applicant will be required to pay requisite/deficit Court\n\n                                   fee (if any).105. The concerned court shall fix the next date(s) with the\n\n                                   consent of the parties, albeit subject to its convenience and hear\n\n                                   the application itself or consider the prayer for interim relief\n\n                                   afresh, as deemed expedient.106. The interim order dated 14.05.2020 shall continue till\n\n                                   14.08.2020, whereafter the order of the Court concerned shall\n\n                                   govern the rights of the parties.107. Any fact noticed or observation made herein will be treated\n\n                                   to be a prima facie observation of this Court and the same shall\n\n                                   not be construed to be binding in any manner upon the court,\n\n                                   deciding the application.108. Application stands disposed of for statistical purposes.109. No order as to costs.(DINESH MEHTA), J\n                                   s-3-ArunV/-(Downloaded on 20/07/2020 at 08:19:04 PM)Powered by TCPDF (www.tcpdf.org)