Nothing stands in the way of party autonomy, in designating a seat of arbitration outside India, even when both parties happen to be Indian nationals
Parties to a contract who are Indian nationals or Companies incorporated in India can choose a forum for arbitration outside India.
In the present case four ingredients which is necessary for award to be designated as a foreign award is satisfied because dispute is a commercial dispute under the law in force in India, it made in pursuance of an agreement in writing for arbitration, disputes arise between "persons" without regard to their nationality, residence, or domicile, and the arbitration conducted in a country which is a signatory to the New York Convention.
Clause of settlement agreement showing that arbitration is to be resolved "in Zurich" in accordance with Rules of Conciliation and Arbitration of International Chamber of Commerce(ICC). Zurich therefore determined to be a juridical seat of arbitration. This arrangement was accepted by both parties even in the final award.
Section 44 of Arbitration act is party-neutral, having reference to the place at which the award is made. Part II of Arbitration Act does not apply to arbitral proceedings once commenced in a country outside India and Part I applies only if place of arbitration is in India. Exception 1 to S.28 of Act of 1872 specifically saves arbitration of disputes between two persons without reference to their nationality. Whereas S.28(1)(a) of Act of 1996 makes no reference to arbitration being conducted between two Indian parties in a country other than India. Hence
As quoted by Justice R.F. Nariman in the present case “It is not possible to accede to the argument that the expression "unless the context otherwise requires" can be held to undo the very basis of section 44 by converting it from a seat-oriented provision in countries that are signatories to the New York Convention to a person- oriented provision in which one of the parties to the arbitration agreement has to be a foreign national or habitually resident outside India.” "Persons" mentioned in S.44 has no reference to nationality.
Appearing Counsel/s : Mr. Nakul Dewan, Mr. Tushar Himani