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Enercon (India) Ltd. and Others v. Enercon GMBH and Another

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 2086 of 2014)Decided 14 Feb 2014
Civil Appeal No. 2086 of 2014
Justice S.S. Nijjar · Justice F.M. Ibrahim Kalifulla

Background

Indian and German partners in a wind-turbine venture disputed their technology agreements, including whether a proposed licence agreement was concluded. Their arbitration clause named London as the venue but chose Indian law and contained an incomplete mechanism for selecting the third arbitrator. Litigation in both countries delayed constitution of the tribunal.

Decision Breakdown

The Supreme Court held that the clear agreement to arbitrate should not fail because of an obvious omission in the appointment mechanism. It referred the parties' disputes, including the licence agreement's validity, to arbitration and appointed Lord Hoffmann as the presiding arbitrator. Reading the agreements as a whole, India was the legal seat and London only the meeting venue, so English courts did not acquire concurrent supervisory jurisdiction. The Court restored the restraint on the specified English proceedings and stayed the identified Indian proceedings, while preserving access to interim measures under Indian arbitration law.

Lesson Learnt

The place where arbitrators meet does not necessarily identify the country whose courts supervise the arbitration. Clear drafting of the seat and appointment procedure can prevent years of preliminary litigation; an obvious machinery defect need not defeat a clear promise to arbitrate.

Official source (sci.gov.in)View Judgment (PDF)

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