The recent judgment by the Delhi High Court delves into the intricate realm of arbitration jurisdiction, particularly examining the implications of the Bhutan Act, 2013 as compared to the Indian Arbitration & Conciliation Act, 1996. The court’s legal analysis provides crucial insights into the ongoing dispute resolution process, shedding light on the complexities of cross-border agreements and the application of multiple arbitration laws. Let’s explore the nuances of this case and the implications for international arbitrations.
Facts
- The Respondent-Contractor filed an application under S. 11 (6) of the Arbitration & Conciliation Act, 1996 before the Delhi High Court for appointment of an arbitrator on behalf of the Appellant-Authority.
- A Contract Agreement was executed on 14.04.2009 between the Appellant and the Respondent-Contractor for the Punatsangchhu-I Hydro-electric Project in Bhutan.
- Disputes arose between the parties regarding certain claims made by the Respondent-Contractor.
- The Bhutan Act, 2013 for Alternative Dispute Resolution was enacted on 25.02.2013.
- The Contract specified that arbitration would be governed by the Bhutan Act, 2013, with the place of arbitration at Thimphu, Bhutan.
- Despite the Bhutan Act, the Indian Arbitration & Conciliation Act, 1996 would still apply.
- The Court appointed an arbitrator on behalf of the Appellant-Authority as it had failed to do so.
- The Appellant replied affirmatively for settlement of disputes through arbitration in response to the Respondent-Contractor’s notice.
- The contract provided for resolution of disputes through arbitration.
- Delhi High Court Order dated 11.12.2020
- Clause 67 (ii) of the Agreement was discussed
- Applicability of the 1996 Act was not indicated to cease upon enactment of the Bhutan Act
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Arguments
- Mr. Gourab Banerji, Senior Advocate, representing Contractor 4, agreed to arbitration under the Alternative Dispute Resolution Act, 2013 of Bhutan with Thimphu as the seat of arbitration.
- The Solicitor General, representing the Authority, confirmed that the Appellant had no issues regarding the panel of arbitrators appointed for the dispute resolution process.
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Decision
- All disputes arising from the Agreement dated 14.04.2009 will be resolved according to the Alternative Dispute Resolution Act of Bhutan, 2013.
- The seat of arbitration for these disputes will be at Thimphu.
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Case Title: PUNATSANGCHHU I HYDROELECTRIC PROJECT AUTHORITY Vs. LARSEN AND TOUBRO LIMITED (2021 INSC 108)
Case Number: C.A. No.-000693-000693 / 2021
