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Reliance Industries Ltd. v. Union of India

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 5765 of 2014)Decided 28 May 2014
Civil Appeal No. 5765 of 2014
Justice S.S. Nijjar · Justice A.K. Sikri

Background

Disputes arose under petroleum production-sharing contracts concerning the Tapti and Panna-Mukta fields. The contracts used Indian law for substantive obligations but English law for the arbitration agreement, with London confirmed as the legal seat. The Union challenged a partial award concerning arbitrability in Delhi under Section 34 of the Indian Arbitration Act.

Decision Breakdown

The Court allowed the companies' appeal and set aside the High Court judgment. The agreed London seat and English law governing arbitration excluded Part I of the Indian Act for this arbitration, so the Delhi Section 34 challenge was not maintainable. Indian law governing the underlying contracts did not displace that separate choice. Challenges to the award belonged in the courts of the agreed seat. Indian public-policy objections could still be raised if a final award was presented for enforcement in India; the Court did not adjudicate the underlying financial claims.

Lesson Learnt

For these contracts, choosing an overseas arbitration seat determined where an award could be challenged. Parties must distinguish the law governing their commercial obligations from the law governing arbitration and the later enforcement process.

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

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