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2014 DIGILAW 743 (GUJ)

Navalmar U. K. Ltd. v. Ashapura Minechem Ltd.

2014-07-09

C.L.SONI

body2014
JUDGMENT C.L. Soni, J. 1. In this petition filed under Art. 226 of the Constitution of India, the petitioner has made following prayer in Para 18(a): "18(a) YOUR LORDSHIPS may be pleased to issue writ of prohibition and/or any other appropriate writ, order or direction prohibiting/ restraining the learned District Judge at Bhuj-Kutch from entering and adjudicating Misc. Civil Application No. 36 of 2011 filed under Sec. 34 of the Arbitration and Conciliation Act, 1996, for challenging the arbitration award dated 8th February 2011." The case of the petitioner is that under the Charterparty, the petitioner chartered its vessel M.V. Humboldt Current to the respondent on 1-6-2006 for carriage of bagged bentonite from the port of Mundra to the port of Sagunto. Clause 31 of the said Charterparty provides for settling the dispute by arbitration in London and me parties agreed to apply English Law to the arbitration proceedings. It is further case of the petitioner that certain disputes arose between the parties which were referred to the Arbitral Tribunal as per the arbitration clause. The Arbitral Tribunal then made award dated 8-2-2011 accepting the claims of the petitioner and directed the respondent to pay sum of U.S.D. 181057-20 plus cost of the petitioner with interest at the rate of 5%. If the respondent was to challenge such award, it was required to approach English Court, as Part-I of the Arbitration Act does not apply to such award. However, the respondent has maliciously filed Misc. Civil Application No. 36 of 2011 in the District Court at Bhuj-Kutch under Sec. 34 of the Arbitration Act for setting aside the award dated 8-2-2011. It is the case of the petitioner that since initiation of proceedings before the District Court at Bhuj-Kutch to challenge the award is blatant abuse of process of law, the petitioner is constrained to approach this Court seeking appropriate writ, order or direction restraining/prohibiting the District Court from entertaining and adjudicating the said application under Sec. 34 of the Arbitration Act. 2. Affidavit-in-Reply is filed opposing me petition mainly stating that as per Clause 31 of the Charterparty, dispute was to be referred to arbitration in London, English law was to be applied to such arbitration, however Clause 31 stood exhausted on conclusion of arbitration proceedings. 2. Affidavit-in-Reply is filed opposing me petition mainly stating that as per Clause 31 of the Charterparty, dispute was to be referred to arbitration in London, English law was to be applied to such arbitration, however Clause 31 stood exhausted on conclusion of arbitration proceedings. It is stated that the proceedings initiated under Sec. 34 of the Act in the Court of learned District Judge at Bhuj-Kutch are in relation to effect, operation and scope of me award made and not in relation to the arbitration proceedings. Arbitration proceedings have been terminated upon pronouncement of the award and such award is akin to a judgment and decree which is required to be lodged with the Court of competent jurisdiction for execution and similarly, such award is required to be challenged by way of an appeal before the Court of competent jurisdiction. On the same parity, recourse can be had to the provisions of Sec. 34 of the Act and for such recourse, unless the parties to a contract have provided anything contrary in the contract, ordinary laws of land will apply. It is also stated that the petitioner ought to have resisted or opposed the maintainability of the application filed under Sec. 34 of the Act, being Misc. Civil Application No. 36 of 2011 before the District Court at Bhuj-Kutch. 3. I have heard learned Advocates for the parties. 4. Learned Senior Advocate Mr. Saurabh Soparkar appearing with learned Advocate Mr. Daxesh Mehta for the petitioner submitted that undisputably, as per the arbitration agreement in Charterparty, dispute arising between the parties was to be settled by arbitration in London in accordance with English law. Mr. Soparkar submitted that the dispute between the parties was accordingly referred to arbitration having seat at London and arbitration proceedings were conducted, concluded and final award came to be passed at London according to English law. Mr. Soparkar submitted that to such foreign award, Chapter-I of the Act, which includes Sec. 34 of the Act, shall have no application. Mr. Soparkar submitted that if Chapter-I of the Act cannot apply to the award made in international arbitration, no proceedings could have been taken under Sec. 34 of the Act before the District Court at Bharuch-Kutch by filing Misc. Civil Application No. 36 of 2011. Mr. Mr. Soparkar submitted that if Chapter-I of the Act cannot apply to the award made in international arbitration, no proceedings could have been taken under Sec. 34 of the Act before the District Court at Bharuch-Kutch by filing Misc. Civil Application No. 36 of 2011. Mr. Soparkar submitted that since the District Court at Bhuj-Kutch lacks jurisdiction to entertain any application much less the application under Sec. 34 of the Act in respect of arbitration proceedings conducted in foreign country as per foreign law, the learned District Judge was not justified in entertaining the application under Sec. 34 of the Act by issuing notice to the petitioner. Mr. Soparkar submitted that since application under Sec. 34 of the Act in respect of foreign award is not at all maintainable before the learned District Judge, at Bhuj, this Court may issue appropriate writ of prohibition and for quashing the proceedings of the said application under Art. 226 of the Constitution of India and direct the learned District Judge to dispose of the proceedings by declaring the same as not maintainable. 5. In support of his submissions, Mr. Soparkar has relied on the following decisions: "(1) In the case of Yograj Infrastructure Ltd. v. Ssang Yong Engineering and Construction Co. Ltd., reported in : AIR 2011 SC 3517 ; (2) In the case of Videocon Industries Ltd. v. Union of India, reported in, 2011 (6) SCC 161 ; (3) Decision of this Court in Special Civil Application No. 11867 of 2012 in the case of Ineos Commercial Services U.K. Ltd. v. Essar Oil Ltd., (reported in 2012 (4) GLR 2867)" 6. Learned Advocate Mr. Udit Mehta appearing for the respondent submitted that though as per Charterparty, proceedings were conducted at London and award was made at London by applying English law, however, clause for arbitration at London as per English law since wholly implemented and exhausted, it is always open to the respondent to have recourse to the provisions of Sec. 34 of the Act when it comes to challenge of such award. Mr. Mehta submitted that simply because the seat of arbitration was at London where arbitration proceedings were conducted and concluded, it would not take away the right of the respondent to invoke the law of land to challenge the award made in such proceedings. Mr. Mr. Mehta submitted that simply because the seat of arbitration was at London where arbitration proceedings were conducted and concluded, it would not take away the right of the respondent to invoke the law of land to challenge the award made in such proceedings. Mr. Mehta submitted that Part-I of the Act does apply to the foreign award in absence of any provision made in Charterparty excluding application of Part-I of the Act. Mr. Mehta submitted that in fact, the Charterparty was entered at Mumbai and contract under Charterparty was partly performed at Mundra Port (Gujarat), and therefore, the award in the arbitration proceedings though made at London can be subject-matter of jurisdiction of District Court at Bhuj-Kutch for me purpose of challenging me same under Sec. 34 of the Act. Mr. Mehta submitted that since the decisions of the Hon'ble Supreme Court in the case of Bhatia International v. Bulk Trading S.A., reported in, 2002 (4) SCC 105 and in the case of Venture Global Engineering v. Satyam Computer Services Ltd., reported in, 2008 (4) SCC 190 are to apply till pronouncement of decision of me Hon'ble Supreme Court in me case of Bharat Aluminium Company v. Kaiser Aluminium Technical Service Inc., reported in, 2012 (9) SCC 552 , me application filed by the respondent in the Court at Bhuj-Kutch is maintainable. Mr. Mehta submitted that the petition is otherwise not maintainable before this Court as the petitioner should have raised all the objections before the Court below in me application filed by me respondent under Sec. 34 of the Act before the District Court at Bhuj. He thus urged to dismiss the petition. 7. Having heard learned Advocates for the parties, it appears that there is no dispute about the fact that the respondent agreed for settlement of dispute under me Charterparty by arbitration at London by applying English Law. Clause 31 for arbitration reads as under: "Any dispute arising under this Charterparty is to be settled and referred to Arbitration in London. One Arbitrator to be employed by the charters and one by the owners and in case they shall not agree then shall appoint an Umpire whose decision shall be final and binding, the Arbitrator and Umpire to be commercial shipping men. English law to apply. One Arbitrator to be employed by the charters and one by the owners and in case they shall not agree then shall appoint an Umpire whose decision shall be final and binding, the Arbitrator and Umpire to be commercial shipping men. English law to apply. Notwithstanding anything to the contrary agreed in the charter party all disputes where me amount involved is less than U.S.D. 25,000/- (Twenty-five thousand only) the arbitration shall be conducted in accordance with the small claims procedure of the L.M.A.A." 8. Para 7 of the Affidavit-in-Reply filed on behalf of me respondent reads as under: "7. Therefore, all that Clause 31 provides is that in case of any dispute arising under the Charterparty, dispute was to be settled after referring for arbitration in London. English law shall apply to arbitration proceedings. Arbitration was to be conducted by two Arbitrators - one each to be appointed by the two parties; and in case of disagreement between the two Arbitrators, an Umpire was to be appointed whose decision was to be final and binding. Qualification of the Arbitrators and the Umpire are also stipulated. Procedure in case of stated monetary limit has also been provided. Thus, Clause 31 is complete, full, self-contained and exhaustive insofar as conduct of Arbitration proceedings is concerned." 9. Thus, as stated in the affidavit-in-reply and not disputed by the learned Advocate for the respondent, the dispute was to be settled by arbitration at London by applying English law. There is no dispute about the fact that the award was made in such arbitration proceedings at London according to English law. 10. Sub-section (2) of Sec. 2 of the Act provides that Part-I shall apply where the place of arbitration is in India. Sub-section (1) of Sec. 20 of the Act provides that the parties are free to agree on the place of arbitration. 11. In view of undisputed facts that the parties agreed for the place of arbitration at London and also agreed to apply English law to the arbitration proceedings took place at London, Part-I of the Act shall have no application to such arbitration proceedings culminated in award. 12. 11. In view of undisputed facts that the parties agreed for the place of arbitration at London and also agreed to apply English law to the arbitration proceedings took place at London, Part-I of the Act shall have no application to such arbitration proceedings culminated in award. 12. In the case of Bhatia International (supra), which stands overruled by the decision in the case of Bharat Aluminium Company (supra), it is held that where arbitration is held in India, provision of Part-I would compulsorily apply and parties are free to deviate only to the extent permissible by derogable provisions of Part-I. In the case of international commercial arbitrations held out of India, provision of Part-I would apply unless the parties by agreement expressed or implied to exclude any of its provisions. In that case, laws or rules chosen by party would prevail. Any provision, in Part-I, which is contrary to or excluded by that law or rule will not apply. 13. In the case of Venture Global Engineering (supra), the Hon'ble Supreme Court has held and observed in Paras 31, 33, 35, 37 and 47 as under: "31. On close scrutiny of the materials and the dictum laid down in three-Judge Bench decision in Bhatia International (supra), we agree with the contention of Mr. K.K. Venugopal and hold that Paragraphs 32 and 35 of the Bhatia International (supra) make it clear that the provisions of Part-I of the Act would apply to all Arbitrations including international commercial arbitrations and to all proceedings relating thereto. We further hold that where such arbitration is held in India, the provisions of Part-I would compulsorily apply and parties are free to deviate to the extent permitted by the provisions of Part-I. It is also clear that even in the case of international commercial arbitrations held out of India provisions of Part-I would apply unless the parties by agreement, express or implied, exclude all or any of its provisions. We are also of the view that such an interpretation does not lead to any conflict between any of the provisions of the Act and there is no lacuna as such. The matter, therefore, is concluded by the three-Judge Bench decision in Bhatia International (supra). 33. We are also of the view that such an interpretation does not lead to any conflict between any of the provisions of the Act and there is no lacuna as such. The matter, therefore, is concluded by the three-Judge Bench decision in Bhatia International (supra). 33. The very fact that the judgment holds that it would be open to the parties to exclude the application of the provisions of Part-I by express or implied agreement, would mean that otherwise the whole of Part-I would apply. In any event, to apply Sec. 34 to foreign international awards would not be inconsistent with Sec. 48 of the Act, or any other provision of Part-II as a situation may arise, where, even in respect of properties situate in India and where an award would be invalid if opposed to the public policy of India, merely because the judgment-debtor resides abroad, the award can be enforced against properties in India through personal compliance of the judgment-debtor and by holding out the threat of contempt as is being sought to be done in the present case. In such an event, the judgment-debtor cannot be deprived of his right under Sec. 34 to invoke the public policy of India, to set aside the award. As observed earlier, the public policy of India includes (a) the fundamental policy of India; or (b) the interests of India; or (c) justice or morality; or (d) in addition, if it is patently illegal. This extended definition of public policy can be bypassed by taking the award to a foreign country for enforcement. 35. As rightly pointed out the effort of respondent No. 1 was to avoid enforcement of me Award under Sec. 48 of me 1996 Act which would have given the appellant herein the benefit of me Indian Public Policy rule based on the judgment in the Saw Pipes case (supra) and for avoiding me jurisdiction of the Courts in India though the award had an intimate and close nexus to India in view of the fact mat, (a) the company was situated in India; (b) the transfer of the 'ownership interests' shall be made in India under the laws of India as set out above; (c) all the steps necessary have to be taken in India before the ownership interests stood transferred. If, therefore, respondent No. 1 was not prepared to enforce the Award in spite of this intimate and close nexus to India and its laws, the appellant herein would certainly not be deprived of the right to challenge me award in Indian Courts. 37. In view of the legal position derived from Bhatia International (supra), we are unable to accept Mr. Nariman's argument. It is relevant to point out that in this proceeding, we are not deciding the merits of the claim of both parties, particularly, the stand taken in the suit filed by the appellant herein for setting aside the award. It is for the concerned Court to decide the issue on merits and we are not expressing anything on the same. The present conclusion is only with regard to the main issue whether the aggrieved party is entitled to challenge the foreign award which was passed outside India in terms of Sec. 9/34 of the Act. Inasmuch as the three-Judge Bench decision is an answer to the main issue raised, we are unable to accept the contra view taken in various decisions relied on by Mr. Nariman. Though in Bhatia International (supra) the issue relates to filing a petition under Sec. 9 of the Act for interim orders the ultimate conclusion that Part-I would apply even for foreign awards is an answer to the main issue raised in this case. 47. In terms of the decision in Bhatia International (supra), we hold that Part-I of the Act is applicable to the Award in question even though it is a foreign Award. We have not expressed anything on the merits of claim of both the parties. It is further made clear that if it is found that the Court in which the appellant has filed a petition challenging the Award is not competent and having jurisdiction, the same shall be transferred to the appropriate Court. Since from the inception of ordering notice in the Special Leave Petition both parties were directed to maintain status quo with regard to transfer of shares in issue, the same shall be maintained till the disposal of the suit. Considering the nature of dispute which relates to an arbitration Award, we request the concerned Court to dispose of the suit on merits one way or the other within a period of six months from the date of receipt of copy of this judgment. Considering the nature of dispute which relates to an arbitration Award, we request the concerned Court to dispose of the suit on merits one way or the other within a period of six months from the date of receipt of copy of this judgment. Civil Appeal is allowed to this extent. No costs." 14. In the case of Videocon Industries Ltd. (supra), the Hon'ble Supreme Court has held and observed in Para 29 to 33 as under: "29. We may now advert to the judgment of the learned Single Judge of the Gujarat High Court in Hardy Oil and Gas Limited v. Hindustan Oil Exploration Company Ltd., 2006 (1) GLR 658 . The facts of that case were that an agreement was entered into between Unocal Bharat Limited, Hardy Oil and Gas Limited, Netherland B.V. (Hardy), Infrastructure Leasing and Financial Services Limited, Housing Development Finance Corporation Limited and Hindustan Oil Exploration Company Limited on 14-10-1998. The agreement had an arbitration clause. A dispute having arisen between the parties, the matter was referred to the arbitral Tribunal. During the pendency of the arbitration proceedings, an application was filed by the appellant in the District Court, Vadodara under Sec. 9 of the Act. A preliminary objection was raised to the maintainability of that petition. The learned District Judge accepted the objection. 30. The learned Single Judge of Gujarat High Court referred to Clause 9.5 of the Agreement, which was as under: "9.5 Governing Law and Arbitration: (1) This Agreement (except for the provisions of Clause 9.5.4 relating to arbitration) shall be governed by and construed in accordance with the substantive laws of India. (2) Any dispute or difference of whatever nature arising under, out of, or in connection with this Agreement, including any question regarding its existence, validity or termination, which me parties are unable to resolve between themselves within sixty (60) days of notification by one or more parties to the other(s) that a dispute exists for me purpose of this Clause 9 shall at the instance of any party be referred to and finally resolved by arbitration under the rules of the London Court of International Arbitration (L.C.I.A.), which Rules (Rules) are deemed to be incorporated by reference into this clause. (3) The Tribunal shall consist of two arbitrators who shall be Queen's Counsel, practising at the English Bar in the Commercial Division of the High Court, one to be selected by the parties invoking the Arbitration clause acting unanimously and one to be selected by the other shareholders acting unanimously, and one umpire who shall also be a Queen's Counsel, practising at the English Bar in the Commercial Division of this High Court. If the parties are unable to agree on the identity of the Umpire within 15 days from the day on which the matter is referred to arbitration, the Umpire shall be chosen and appointed by L.C.I.A. Notwithstanding Art. 3.3 of me Rules, the parties agree that L.C.I.A. may appoint a British Umpire. No arbitrator shall be a person or former employee or agent of, or consultant or Counsel to, any party or any Associated Company or any party or in any way otherwise connected with any of the parties. (4) The place of arbitration shall be London and the language of arbitration shall be English. The law governing arbitration will be the English law. (5) Any decision or award of an arbitral Tribunal shall be final and binding on the Parties." The learned Single Judge referred to various judgments of this Court including Bhatia International v. Bulk Trading S.A., AIR 2002 SC 1432 : 2002 AIR SCW 1285) (supra), Shreejee Traco (I) Pvt. Ltd. v. Paperline International Inc., 2003 (9) SCC 79 , National Thermal Power Corporation v. Singer Company, 1992 (3) SCC 551 : AIR 1993 SC 998 : 1992 AIR SCW 131 and upheld the order of the learned District Judge by observing that in terms of Clause 9.5.4 of the agreement, the place of arbitration was London and me law governing arbitration was the English law." 31. The learned Single Judge of the Gujarat High Court in Hardy case (supra) referred to Paragraph 32 of the judgment in Bhatia International v. Bulk Trading S.A. (supra) and observed that once the parties had agreed to be governed by any law other than Indian law in cases of international commercial arbitration, then that law would prevail and the provisions of me Act cannot be invoked questioning the arbitration proceedings or the award. This is evident from Paragraph 11.3 of the judgment, which is extracted below: "11.3. This is evident from Paragraph 11.3 of the judgment, which is extracted below: "11.3. However, their Lordships observed in Para 32 that in cases of international commercial arbitrations held out of India provisions of Part-I would apply unless me parties by agreement, express or implied, exclude all or any of its provisions. In that case laws or rules chosen by the parties would prevail. Any provision, in Part-I, which is contrary to or excluded by that law or rules would not apply. Thus, even as per the decision relied upon by learned Advocate for the appellant, if the parties have agreed to be governed by any law other than Indian law in cases of international commercial arbitration, same would prevail. In the case on hand, it is very clear even on plain reading of Clause 9.5.4 that the parties' intention was to be governed by English law in respect of arbitration. It is not possible to give a narrow meaning to this clause as suggested by learned Senior Advocate Mr. Thakore that it would apply only in case of dispute on Arbitration Agreement. It can be interpreted only to mean that in case of any dispute regarding arbitration, English law would apply. When the clause deals with the place and language of arbitration with a specific provision that the law governing arbitration will be the English law, such a narrow meaning cannot be given. No other view is possible in light of exception carved out of Clause 9.5.1 relating to arbitration. Term Arbitration, in Clause 9.5.4 cannot be taken to mean arbitration agreement. Entire arbitral proceedings have to be taken to be agreed to be governed by English law." 32. In our opinion, the learned Single Judge of Gujarat High Court had rightly followed the conclusion recorded by the three-Judge Bench in Bhatia International v. Bulk Trading S.A. AIR 2002 SC 1432 : 2002 AIR SCW 1285) and held that the District Court, Vadodara did not have the jurisdiction to entertain the petition filed under Sec. 9 of the Act because the parties had agreed that the law governing the arbitration will be English law. 33. In the present case also, the parties had agreed that notwithstanding Art. 33.1, the arbitration agreement contained in Art. 34 shall be governed by laws of England. This necessarily implies that the parties had agreed to exclude the provisions of Part-I of the Act. 33. In the present case also, the parties had agreed that notwithstanding Art. 33.1, the arbitration agreement contained in Art. 34 shall be governed by laws of England. This necessarily implies that the parties had agreed to exclude the provisions of Part-I of the Act. As a corollary to the above conclusion, we hold that the Delhi High Court did not have the jurisdiction to entertain the petition filed by the respondents under Sec. 9 of the Act and the mere fact that the appellant had earlier filed similar petitions was not sufficient to clothe that High Court with the jurisdiction to entertain the petition filed by the respondents." 15. In the case of Bharat Aluminium Company (supra), the Hon'ble Supreme Court after considering the judgments in the case of Bhatia International (supra), Venture Global Engineering (supra) and Videocon Industries Limited (supra), has held and observed in Paras 116 and 117 and drawn final conclusion in Paras 194 to 196 as under: "116. The legal position that emerges from a conspectus of all the decisions, seems to be, that the choice of another country as the seat of arbitration inevitably imports an acceptance that the law of that country relating to the conduct and supervision of arbitrations will apply to the proceedings. 117. It would, therefore, follow that if the arbitration agreement is found or held to provide for a seat/place of arbitration outside India, then the provision that the Arbitration Act, 1996 would govern the arbitration proceedings, would not make Part-I of the Arbitration Act, 1996 applicable or enable Indian Courts to exercise supervisory jurisdiction over the arbitration or the award. It would only mean that the parties have contractually imported from the Arbitration Act, 1996, those provisions which are concerned with the internal conduct of their arbitration and which are not inconsistent with the mandatory provisions of the English Procedural Law/Curial Law. This necessarily follows from the fact that Part-I applies only to arbitrations having their seat/place in India." 194. In view of the above discussion, we are of the considered opinion that the Arbitration Act, 1996 has accepted the territoriality principle which has been adopted in the UNCITRAL Model Law. Sec. 2(2) makes a declaration that Part-I of the Arbitration Act, 1996 shall apply to all arbitrations which take place within India. In view of the above discussion, we are of the considered opinion that the Arbitration Act, 1996 has accepted the territoriality principle which has been adopted in the UNCITRAL Model Law. Sec. 2(2) makes a declaration that Part-I of the Arbitration Act, 1996 shall apply to all arbitrations which take place within India. We are of the considered opinion that Part-I of the Arbitration Act, 1996 would have no application to international commercial arbitration held outside India. Therefore, such awards would only be subject to the jurisdiction of the Indian Courts when the same are sought to be enforced in India in accordance with the provisions contained in Part-II of the Arbitration Act, 1996. In our opinion, the provisions contained in Arbitration Act, 1996 make it crystal clear that there can be no overlapping or intermingling of the provisions contained in Part-I with the provisions contained in Part-II of the Arbitration Act, 1996. 195. With utmost respect, we are unable to agree with the conclusions recorded in the judgments of this Court in Bhatia International, AIR 2002 SC 1432 ) (supra) and Venture Global Engineering, AIR 2008 SC 1061 ) (supra). In our opinion, the provision contained in Sec. 2(2) of the Arbitration Act, 1996 is not in conflict with any of the provisions either in Part-I or in Part-II of the Arbitration Act, 1996. In a foreign seated international commercial arbitration, no application for interim relief would be maintainable under Sec. 9 or any other provision, as applicability of Part-I of the Arbitration Act, 1996 is limited to all arbitrations which take place in India. Similarly, no suit for interim injunction simpliciter would be maintainable in India, on the basis of an international commercial arbitration with a seat outside India. 196. We conclude that Part-I of the Arbitration Act, 1996 is applicable only to all the arbitrations which take place within the territory of India." Lastly, the Hon'ble Supreme Court pronounced in Para 197 that since the judgment in the case of Bhatia International (supra) was rendered on 13-3-2002 and since then followed by all High Courts as well as this Court on numerous occasions, even in the case of Venture Global Engineering (supra), the law declared in this judgment shall apply prospectively to all arbitration agreements executed thereafter. 16. Mr. 16. Mr. Mehta, however, submitted that since judgment in the case of Bharat Aluminium Company (supra) is to apply prospectively, it is not correct to say that Part-I of the Act shall not apply to the proceedings initiated by the respondent under Sec. 34 of the Act before the District Court at Bhuj-Kutch. 17. However, such contention cannot be accepted as even in the case of Bhatia International (supra), in the case of Venture Global Engineering (supra) and in the case of Videocon Industries Limited (supra), it has been clearly held that if the parties have agreed for settlement of disputes by arbitration at the place outside India and also agreed to apply foreign law then Part-I shall have no application. 18. In the case of Yograj Infrastructure Ltd. (supra), the Hon'ble Supreme Court has held and observed in Paras 31 to 38 as under: "31. In order to appreciate the controversy that has arisen regarding the applicability of the provisions of Part-I of the Arbitration and Conciliation Act, 1996, to the proceedings being conducted by the Arbitrator in Singapore in accordance with the S.I.A.C. Rules, it would be necessary to look at the arbitration clause contained in the agreement entered into between the parties on 13th August, 2006. Clause 27 of the Agreement provides for arbitration and reads as follows: "27. Arbitration: 27.1 All disputes, differences arising out of or in connection with the Agreement shall be referred to arbitration. The arbitration proceedings shall be conducted in English in Singapore in accordance with the Singapore International Arbitration Centre (S.I.A.C.) Rules as in force at the time of signing of this Agreement. The arbitration shall be final and binding. 27.2 The arbitration shall take place in Singapore and be conducted in English language. 27.3 None of the Party shall be entitled to suspend the performance of the Agreement merely by reason of a dispute and/or a dispute referred to arbitration." 32. Clause 28 of the Agreement describes the governing law and provides as follows: "This agreement shall be subject to the laws of India. During the period of arbitration, the performance of this agreement shall be carried on without interruption and in accordance with its terms and provisions." 33. Clause 28 of the Agreement describes the governing law and provides as follows: "This agreement shall be subject to the laws of India. During the period of arbitration, the performance of this agreement shall be carried on without interruption and in accordance with its terms and provisions." 33. As will be seen from Clause 27.1, the arbitration proceedings are to be conducted in Singapore in accordance with the S.I.A.C. Rules as in force at the time of signing of the agreement. There is, therefore, no ambiguity that the procedural law with regard to the arbitration proceedings, is the S.I.A.C. Rules. 34. Clause 27.2 makes it clear that the seat of arbitration would be Singapore. 35. What we are, therefore, left with to consider is the question as to what would be the law on the basis whereof the arbitral proceedings were to be decided. In our view, Clause 28 of the Agreement provides the answer. As indicated hereinabove, Clause 28 indicates that the governing law of the agreement would be the law of India, i.e., the Arbitration and Conciliation Act, 1996. The learned Counsels for the parties have quite correctly spelt out the distinction between the "proper law" of the contract and the "curial law" to determine the law which is to govern the arbitration itself. While the proper law is the law which governs the agreement itself, in the absence of any other stipulation in the arbitration clause as to which law would apply in respect of the arbitral proceedings, it is now well-settled that it is the law governing the contract which would also be the law applicable to the Arbitral Tribunal itself. Clause 27.1 makes it quite clear that the Curial law which regulates the procedure to be adopted in conducting the arbitration would be the S.I.A.C. Rules. There is, therefore, no ambiguity that the S.I.A.C. Rules would be the Curial law of the arbitration proceedings. It also happens that the parties had agreed to make Singapore me seat of arbitration. Clause 27.1 indicates that the arbitration proceedings are to be conducted in accordance with the S.I.A.C. Rules. The immediate question which, therefore, arises is whether in such a case the provisions of Sec. 2(2), which indicates that Part-I of the above Act would apply, where me place of arbitration is in India, would be a bar to the invocation of the provisions of Secs. The immediate question which, therefore, arises is whether in such a case the provisions of Sec. 2(2), which indicates that Part-I of the above Act would apply, where me place of arbitration is in India, would be a bar to the invocation of the provisions of Secs. 34 and 37 of the Act, as far as the present arbitral proceedings, which are being conducted in Singapore, are concerned. 36. In Bhatia International, AIR 2002 SC 1432 ) (supra), wherein while considering the applicability of Part-I of the 1996 Act to arbitral proceedings where me seat of arbitration was in India, this Court was of the view 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. 37. As has been pointed out by me learned Single Judge in me order impugned, the decision in the aforesaid case would not have any application to the facts of this case, inasmuch as, the parties have categorically agreed that the arbitration proceedings, if any, would be governed by me S.I.A.C. Rules as the Curial law, which included Rule 32, which categorically provides as follows: "Where me seat of arbitration is Singapore, the law of the arbitration under these Rules shall be the International Arbitration Act {Cap. 143A, 2002 Ed, Statutes of the Republic of Singapore) or its modification or re-enactment thereof." 38. Having agreed to the above, it was no longer available to the appellant to contend that the "proper law" of the agreement would apply to me arbitration proceedings. The decision in Bhatia International v. Bulk Trading S.A., 2002 (4) SCC 105 : AIR 2002 SC 1432 , which was applied subsequently in me case of Venture Global Engg. v. Satyam Computer Services Ltd., 2008 (4) SCC 190 : AIR 2008 SC 1061 and Citation Infowares Ltd. v. Equinox Corporation, 2009 (7) SCC 220 , 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 S.I.A.C. 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 S.I.A.C. 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, Sec. 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. This Court in Bhatia International, AIR 2002 SC 1432 ) (supra), while considering the said provision, held that in certain situations the provision of Part-I of the aforesaid Act would apply even when the seat of arbitration was not in India. In the instant case, once the parties had specifically agreed that the arbitration proceedings would be conducted in accordance with the S.I.A.C. Rules, which includes Rule 32, the decision in Bhatia International (supra) and the subsequent decisions on the same lines, would no longer apply in the instant case where the parties had willingly agreed to be governed by the S.I.A.C. Rules." 19. Therefore, in view of the above principles of law laid down by the Hon'ble Supreme Court and in view of the provisions made in the arbitration clause for applying English law to the arbitration proceedings took place at London between the parties, and the respondent having not disputed as regards the agreement to apply English law to such arbitration proceedings, wherein the award is made which is the subject-matter of challenge before the District Court at Bhuj in Misc. Civil Application No. 36 of 2011, the Court is of the view that the District Court at Bhuj-Kutch lacks jurisdiction to entertain and decide the said application, and therefore, this is a fit case for issuance of writ of Prohibition under Art. 226 of the Constitution of India directing the Court below not to proceed with the application made by the respondent under Sec. 34 of the Act and to dispose of the same as not maintainable. 20. For the reasons stated above, the petition is allowed. 20. For the reasons stated above, the petition is allowed. By way of writ of Prohibition under Art. 226 of the Constitution of India, learned Principal District Judge, at Bhuj-Kutch is directed not to proceed with Misc. Civil Application No. 36 of 2011 and further directed to dispose of the said application as not maintainable. Rule is made absolute to the aforesaid extent. At this stage, learned Advocate for the respondent requests to stay and suspend the present order for four weeks. Such request is rejected in the facts of the case.