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Supreme Court clarifies whether two Indian entities can opt for foreign-seated arbitration


In a win for party autonomy, a three-judge bench of the Supreme Court, comprising Mr Justice RF Nariman, Mr Justice BR Gavai and Mr Justice Hrishikesh Roy, has settled a longstanding and controversial question of law by holding that two entities or companies incorporated in India can opt for foreign-seated arbitration and that an award passed in such arbitration would be enforceable in India (
PASL Wind Solutions Private Limited v GE Power Conversion India Private Limited, 20 April 2021).
Facts
The parties were companies incorporated in India. In 2010 the appellant issued three purchase orders to the respondent for the supply of specified converters. Certain disputes arose between the parties in relation to the expiry of the converters warranties. The parties then entered into a settlement agreement, dated 23 December 2014, to resolve the disputes. Clause 6 of the settlement agreement contained the dispute resolution clause which stipulated that if the parties were u ....

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Can Two Indian Parties Choose Foreign Law To Govern Their Arbitration Agreement? The Delhi High Court Answers In The Affirmative - Litigation, Mediation & Arbitration


Introduction:
Recognising that an arbitration agreement between parties is an
agreement independent of the substantive contract, the Delhi High
Court in
Dholi Spintex Pvt. Ltd. v. Louis Dreyfus Company India
Pvt. Ltd.
1 has held that two Indian
parties can choose a foreign law as the law governing the
arbitration between them. The Court has also reiterated the legal
position on limited interference by Courts in international
arbitrations.
Factual Background:
Plaintiff ) had entered into a contract
with Louis Dreyfus Company India Pvt. Ltd. (the

Defendant ) for supply of 600 metric
tonnes of American imported raw cotton on May 30, 2019
(
Contract ). The Contract was entered ....

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