Case: – PASL Wind Solutions Private Limited v/s GE Power Conversion India Private Limited; Civil Appeal No. 1647 OF 2021
The Supreme Court of India recently passed a judgement in a matter pertaining to arbitration, which held that the two Indian companies can choose a forum situated outside India for arbitration.
In the instant case, the settlement agreement between the parties provided for the seat of arbitration at Zurich in the English language, in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce. After, dispute arose between the parties and the Respondent (G.E. Power) filed a preliminary application challenging the jurisdiction of the Arbitrator on the ground that two Indian parties could not have chosen a foreign seat of arbitration. However, the Arbitral Tribunal, citing various judgments of the Supreme Court held the arbitration clause in the agreement was valid and going forward Mumbai was to be the venue of arbitration.
In 2019, the tribunal issued a final award dismissing PASL’s claims and awarded GE India damages and costs. PASL failed to oblige and GE initiated enforcement proceedings under Sections 47 and 49 of the Arbitration Act before the High Court of Gujarat, within whose jurisdiction the assets of the PASL were located. Subsequently, the Gujarat High Court determined that Zurich was the seat of arbitration, allowing Indian parties to choose a foreign seat. Due to the Zurich seat, the award was considered a foreign award subject to enforcement under Part II of the Act.
PASL filed a petition before the Hon’ble Supreme Court challenging the High Court’s judgment, arguing that two Indian parties couldn’t choose a foreign seat. PASL raised three main arguments, all of which were rejected by the Apex Court. The Hon’ble Supreme Court thus, also granted GE India’s cross-objection and provided interim relief to safeguard PASL’s assets from dissipation.

Author of this article:
Adv. Ravish Bhatt,
Partner, R&D Law Chambers,
Dual Qualified Lawyer Solicitor | International Tax Affiliate

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