Union of India v. Reliance Industries Limited & Ors.
Background
This case was a sequel to an earlier Supreme Court judgment (2014) arising out of Production Sharing Contracts between Reliance Industries, the Union of India, Enron and ONGC for the Tapti and Panna-Mukta gas fields, where the Court had already held that the "seat" of arbitration under these contracts was London and that the arbitration agreement was governed by English law. After an adverse award from the Permanent Court of Arbitration in 2013, the Union of India filed an application under Section 14 of the Arbitration Act (an Indian, Part-I provision) before the Delhi High Court seeking to terminate the arbitrator's mandate, which the High Court dismissed. The Union of India then challenged that dismissal before the Supreme Court.
Decision Breakdown
The Supreme Court held that since it had already conclusively determined (and a review and curative petition on the same point had already failed) that the juridical seat of arbitration was London and English law governed the arbitration agreement, Part-I of India's Arbitration Act, including Section 14, had no application by necessary implication under the "Bhatia International" principle as refined by later rulings (including Bharat Aluminium/BALCO). The Court rejected the argument that questions of jurisdiction can never be barred by res judicata, holding that the issue here was a mixed question of fact and law already settled twice over. It therefore held the Section 14 application was not maintainable, was an abuse of process, and dismissed the Special Leave Petition, upholding the Delhi High Court's decision.
Lesson Learnt
When parties clearly agree that their arbitration will be seated in a foreign country under foreign law, Indian courts generally cannot later be asked to exercise control over that arbitration under India's domestic arbitration law, and once the Supreme Court has settled that point for a contract, a party cannot keep relitigating it in new proceedings.