Kessia E. Kuriakose, NALSAR, Hyderabad & Anushka Agrawal, DSNLU, Visakhapatnam
The seat of arbitration is an important aspect of party autonomy that refers to the substantive law that will be applicable to the arbitration agreement; it also gives power to national courts to get involved in the arbitral process and provide interim relief. The seat of arbitration also determines whether the award is a foreign award or a domestic award. However even years later there have been contradictory decisions by various High Courts on this question of law. The arbitration agreement needed to have a foreign element for the parties to choose a seat of arbitration outside India. The agreements which have parties belonging to Indian jurisdiction were not allowed to choose a foreign seat of arbitration thereby diminishing the relevance of party autonomy. Some High Courts came close to giving the judgment in favour of domestic parties opting for a foreign-seated arbitration on the ground of party autonomy being of prime importance but it was never decided in a concrete manner.
By the PASL judgment the SC has finally settled the long uncertainty around the question whether parties can choose for a foreign seat of arbitration. India has moved a step closer to being an arbitration friendly jurisdiction.
Keywords: International Commercial Arbitration, Foreign Award, Public Policy, Party Autonomy, etc.