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Supreme
Court has observed that the terms of the contract, especially Arbitration
agreements will have to be understood in the way the parties wanted and
intended them to be. Apex Court Bench comprising of Justices Anil R. Dave,
Kurian Joseph and Amitava Roy made this observation in Bharat Aluminium Company
vs. Kaiser Aluminium Technical Services Inc.
In
Bharat Aluminium Company v. Kaiser Aluminium Technical Services Inc., the Apex
Court had held that Part I of the Arbitration Act is applicable only to all the
arbitrations which take place within the territory of India”, overruling a
three-Judge Bench decision in Bhatia International v. Bulk Trading S.A.. Exercising
its the power under Article 142 of the Constitution of India, the Constitution
Bench however, held that the law declared by it would only operate
prospectively and the present case is guided by principles laid down by Three
judge Bench.
Observing
that the Court cannot interpret a contract between two parties like
interpreting a Statute, it said “particularly in agreements of arbitration,
where party autonomy is the grundnorm, how the parties worked out the
agreement, is one of the indicators to decipher the intention, apart from the
plain or grammatical meaning of the expressions and the use of the expressions
at the proper places in the agreement. Contextually, it may be noted that in
the present case, the respondent had invoked the provisions of English law for
the purpose of the initiation of the unsettled disputes. It has hence, while
interpreting an agreement, to be kept in mind that the parties, intended to
avoid impracticable and inconvenient processes and procedures in working out
the agreement.”
Going
through the entire agreement, the Court held that the applicable law is not the
Indian Law and upheld the High Court order which had held that the application
under Section 34 of Arbitration Act is not maintainable.
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