Yograj Infrastructure Ltd v. Ssang Yong Engineering and
Construction Co. Ltd
Introduction
The appellant is a company incorporated under the companies act,
1956 and the respondent company is a company incorporated as per
the laws of the Republic of Korea with its registered office at
Seoul and project office at New Delhi.
Case history leading to this appeal
1. On 12th April, 2006, NHAI entered into a contract with the
respondent company for up gradation to Four laning of
Jhansi-Lakhnadon section in Madhya Pradesh.2. On 13th August, 2006,
the respondent company entered into a sub-contract with the
appellant company to carry out the above mentioned work which
mentioned the consideration involved3. The appellant furnished
certain bank guarantees to the respondent company along with
investing 88.15 Crore in the project.4. Clauses 27 and 28 of the
agreement provided for arbitration wherein the governing law was to
be the arbitration and conciliation act, 1996.5. On 22nd September,
2009, the respondent company issued a notice of termination, on the
ground of delay in performing the work.6. the Appellant filed an
application before the District and Sessions Judge, Narsinghpur,
Madhya Pradesh, under Section 9 of the Arbitration and Conciliation
Act, 1996, praying for interim relief's. A similar application
under Section 9 of the above Act was filed by the Appellant before
the same Court on 30th December, 2009, also for interim relief's.
Ultimately, on 20th May, 2010, the dispute between the parties was
referred to arbitration in terms of the Agreement and a Sole
Arbitrator, Mr. G.R. Easton, was appointed by the Singapore
International Arbitration Centre on 20th May, 2010.7. Both parties
filed an application for interim measures under section 17 of the
act. 8. On considering the prayers of both the parties, the sole
arbitrator passed an order in favour of the respondent. Due to
which, the appellant went in appeal under section 37(2) of the act
to set aside the same. The same was set aside as the respondents
conteded that the seat of arbitration is Singapore and hence the
laws applicable to the proceedings would be that of Singapore.9. On
being aggrieved, the appellants filed for a revision in the High
Court, which was also dismissed, against which the current Special
leave petition has been filed.
Issues
1. Whether the law of arbitration would be the arbitration act
of Singapore?2. Whether the curial laws would be the laws of
Singapore?
Held:
1. With regard to the second issue, the court held that clause
27.1 of the agreement states that arbitration proceedings are to be
conducted in Singapore in accordance with the SIAC rules. Hence the
procedural law with regard to the arbitration proceedings has been
held to be the SIAC rules as it was explicitly mentioned in the
agreement.2. With regard to the first issue, the judge referred to
the judgment of Bhatia International wherein, it was held that Part
I of the act did not automatically exclude all foreign arbitral
proceedings or awards, unless the parties specifically agreed to
exclude the same.3. After reference to the case, in the instant
case it was held that Bhatia international would have no
application once the parties agreed by virtue of Clause 27.1 of the
Agreement that the arbitration proceedings would be conducted in
Singapore, i.e., the seat of arbitration would be in Singapore, in
accordance with the Singapore International Arbitration Centre
Rules as in force at the time of signing of the Agreement. As
noticed hereinabove, Rule 32 of the SIAC Rules provides that the
law of arbitration would be the International Arbitration Act,
2002, where the seat of arbitration is in Singapore. Although, it
was pointed out on behalf of the Appellant that in Rule 1.1 it had
been stated that if any of the SIAC Rules was in conflict with the
mandatory provision of the applicable law of the arbitration, from
which the parties could not derogate, the said mandatory provision
would prevail, such is not the case as far as the present
proceedings are concerned. In the instant case, Section 2(2) of the
1996 Act, in fact, indicates that Part I would apply only in cases
where the seat of arbitration is in India.
