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Supreme Court of India
Amway India Enterprises Pvt. Ltd. vs Ravindranath Rao Sindhia on 4 March, 2021Author: Rohinton Fali Nariman
Bench: Rohinton Fali Nariman, Hrishikesh Roy
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 810 OF 2021
(ARISING OUT OF SLP(CIVIL) NO.15982 OF 2020
AMWAY INDIA ENTERPRISES PVT. LTD. … APPELLANT
VERSUS
RAVINDRANATH RAO SINDHIA & ANR. … RESPONDENTS
JUDGMENT
R.F. Nariman, J.
1. Leave granted.
2. This appeal arises out of a petition filed under Section 11(6) of the
Arbitration and Conciliation Act, 1996 [“Arbitration Act”] by the
respondents in the Delhi High Court for appointment of a sole arbitrator.
The brief facts of the case are noted in the impugned order dated
Signature Not Verified
03.12.2020 thus:
Digitally signed by
Jayant Kumar Arora
Date: 2021.03.04
16:01:48 IST
Reason:
“2. The facts of the case, as noted from the petition are, in the
year 1998, the petitioners were appointed as Distributor for
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respondent for undertaking sale, distribution and marketing of
its products in India and were registered as Amway Business
Owner (ABO)/ Amway Direct Seller (ADS), in the name of the
sole proprietorship ‘Sindhia Enterprises’ with ABO No. 141935.
According to the petitioners, they have set up a vast Line of
Sponsorship in the respondent Company, and nurtured and
supported close to 1500 ADSs, who have now set up their own
networks, and are in the category of Silver/ Gold/ Platinum/
Sapphire/ Emerald. From 2015, the renewal process for existing
ADSs became automatic, each year, without payment of any
fee. The respondent issued a Code of Ethics and Rules of
Conduct in 2015 to govern the terms of the relationship
between the respondent and the ADSs. The respondent also
started promoting registration of Preferred Customers (PCs)
directly through the respondent’s website, as customers of the
concerned ADS.
3. On the requirement of the respondent, necessary documents
were executed by the petitioners including contract for
distributorship, setting out the terms and conditions of the
distributorship, and to inter alia confirm the Code of Ethics and
Rules of Conduct, Legal Entity Authorisation Form (LEAF) etc.
Since then, the contract of the petitioners has been renewed
from time to time. The petitioners recorded client volume/sales
from their ABO account. The petitioners have also received
income on the sales generated by them for the months of
January to March, 2019 by the respondent. However, in April,
2019, upon logging into the respondent’s website, the
petitioners noted that they could not access their ABO account,
or view their LoS. They could only access their account as a
PC. Accordingly, between April, 2019 and December, 2019, the
petitioners raised a query with their Major Accounts Manager,
who informed them that their account had been reclassified as
a ‘PC’ account, since they have not complied with the criteria of
are corded re-sale related purchase in the last 12 months. The
petitioners learnt that this was a criteria in the fresh set of Terms
and Conditions issued by the respondent in December, 2016,
which was mandatorily required to be accepted by all ADSs, by
clicking on the ‘By clicking here you agree to abide by the new
Terms & Conditions’ button, immediately upon logging in on the
respondent’s website, to proceed further to their account.
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According to the petitioner, this requirement was never
communicated to the petitioners in the past, nor was any notice
of termination issued by the respondent. This criterion is also in
violation of the Direct Selling Guidelines dated September 09,
2016.
4. The petitioners made repeated requests to restore their ABO
account. The petitioners attempted to resolve the aforesaid
disputes and differences amicably by mutual discussions with
the representatives of the respondent from April till December,
2019. However, the respondent has failed to consider the
petitioners’ request for restoration of their ADS account. On
June 26, 2020, the petitioners referred the matter for redressal
and review to Mr. Jon Sherk, Vice President and Deputy
General Counsel of Amway Global in January, 2020. The
petitioners were communicated about the rejection of their
request for restoration of their ADS account on June 26, 2020.
According to the petitioners, the respondent has now, with
effect from July, 2020 notified a new Code of Ethics & Rules of
Conduct wherein the respondent has now been given benefit of
a 2 year period for establishing sales, in accordance with the
DSG, and carved a provision for restoration of the ADS
account. Accordingly, the petitioners caused issuance of notice
invoking arbitration dated July 28, 2020 to the respondent
invoking the arbitration clause, Clause 12 of the Terms and
Conditions enclosed with the Amway Direct Seller Application
Form (Form-SA-88-ID), which is reproduced as under:
“12. Dispute Settlement. The parties shall
endeavour to settle any dispute or difference arising
out of or in connection with the Direct Seller
Contract through mutual discussions within 30 days
of such dispute arising. The Direct Seller agrees
that in the event it is not satisfied by any decision of
Amway, or in the event that any issue raised by the
Direct Seller has remained unresolved for a period
of more than two months, and / or during the
subsistence of this agreement or upon or after its
termination, any issue or dispute that the Direct
Seller may have regarding the interpretation or
operation of the clauses of this arrangement or any
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issues arising there from shall be referred to
Grievance Redressal Committee set up by the
company. Any dispute, difference or claim
remaining unresolved post reference to the
Grievance Redressal committee discussions shall
be submitted to binding arbitration under the
provisions of the Indian Arbitration and Conciliation
Act, 1996. The venue of such arbitration shall be at
New Delhi and the award of the Arbitrator shall be
final and binding on all Parties. Subject to the
above, courts at New Delhi shall alone have
jurisdiction in relation to the Direct Seller Contract
and matters connected here to.”
5. The respondent replied vide letter dated August 20, 2020
wherein the respondent communicated that the name of the
Arbitrator as recommended by the petitioners was not
acceptable by it and sought time to respond with the name of
another Arbitrator. However, the respondent has till the filing of
the petition failed to issue any follow up reply further to its reply
dated August 20, 2020 even after expiry of 30 days’ time.”
3. The main plea taken by the learned counsel appearing on behalf of
the appellant, Amway India Enterprises Pvt. Ltd., in the Delhi High Court
was that a petition before the High Court is not maintainable as the dispute
relates to an international commercial arbitration, being covered by Section
2(1)(f)(i) of the Arbitration Act inasmuch as the respondents are husband
and wife who are both nationals of and habitually resident in the United
States of America. This plea was turned down by the impugned judgment
stating:
“23. Even the judgment of the Supreme Court in the case of
TDM Infrastructure (P) Ltd. v. UE Development India (P)
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Ltd., (2008) 14 SCC 271 is not applicable in the facts of this
case, which have been noted above. Rather, the learned
counsel for the petitioners is justified in relying upon the
judgment in the case of Larsen & Toubro Ltd. – SCOMI
Engineering Bhd v. MMRDA, (2019) 2 SCC 271, wherein the
Supreme Court was concerned with a consortium consisting of
an Indian company and a foreign company and the Court took
note of the fact that the office of an unincorporated entity, i.e.
the consortium, being in Mumbai, as one of the factors for
arriving at the conclusion that the arbitration proceedings would
not be international commercial arbitration. No doubt a sole
proprietorship has no separate legal identity but in the case in
hand, two individuals, husband and wife, by joining together as
a proprietorship have taken a single Distributorship. The Code
of Ethics and Rules of Conduct issued by the respondent under
Clause 3.17.1 contemplates and recognises that a husband
and wife shall operate their Distributorship as single entity. The
proprietorship is an association or body of individuals with
central management in India.
24. The plea of Ms. Kumar that the petitioners being individuals
and habitual residents of USA, the case shall be covered by
Section 2 (1) (f) (i) of the Act of 1996 is not appealing in view of
my conclusion in the above paragraph.”
4. It was held that since the central management and control of this
association or body of individuals is exercised only in India under Section
2(1)(f)(iii), the dispute is not an international commercial arbitration, as a
result of which the High Court has jurisdiction under Section 11(6) to
appoint an arbitrator. Justice Brijesh Sethi, a retired Judge of the Delhi High
Court was, therefore, appointed as sole arbitrator.
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5. Shri Parag Tripathi, learned Senior Advocate appearing on behalf of
the appellant, has argued that his predecessor’s plea in the High Court was
incorrectly turned down in that this case is really governed by Section 2(1)
(f)(i) and not by Section 2(1)(f)(iii). Once it is found that a party to an
arbitration agreement is an individual who is a national of, or habitually
resident in, any country other than India, it is not necessary to go to any
other sub-clauses of Section 2(1)(f), and as it is clear that the respondents,
who applied to the High Court under Section 11(6), are individuals who are
nationals of and habitually resident in the USA, would fall under Section
2(1)(f)(i), the High Court would have no jurisdiction, such petition having to
be filed only under Section 11(6) read with Section 11(9) to the Supreme
Court.
6. Ms. Manmeet Arora, learned counsel appearing on behalf of the
respondents, has supported the judgment under appeal, and has referred
to various documents which, according to her, make it clear that the
respondents, husband and wife, would have to be pigeonholed under
“association or body of individuals” under Section 2(1)(f)(iii) and not under
Section 2(1)(f)(i).
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7. The question lies in a very narrow compass. As rightly contended by
Ms. Arora, the documentary evidence in this case would be decisive of
whether the requirements of sub-clause (i) to Section 2(1)(f) have been
met, in which case it is unnecessary to go to sub-clause (iii), as under
Section 2(1)(f), “at least one of the parties” must fall under sub-clauses (i)
to (iv) of Section 2(1)(f).
8. In a document entitled “Code of Ethics of Amway Direct Sellers”,
under “Rules of Conduct”, it is stipulated as follows:
“2.1.17 Legal Entity Authorisation Form” (LEAF) means the
document that must, in addition to the Direct Seller Contract, be
completed by a Direct Seller required to or electing to operate
an Amway Business in the name of an applicable legal entity.”
xxx xxx xxx
“3.1 Application and Starter Guide: In order to be considered
for an Amway distributorship, an individual(s) must, in
his/her/their own name(s) or on behalf of a legal entity, submit a
signed, completed Direct Seller Application(in Form SA-88-ID),
together with all required supporting documentation.
A distributorship may be taken up in individual capacity or as a
sole proprietorship concern, partnership firm or company.
Amway reserves the right to require that Applicants having Non-
Resident Indian (NRI), Person of Indian Origin (PIO) or
Overseas Citizen of India (OCI) status operate distributorships
via certain types of legal entities.”
xxx xxx xxx
“3.14 Legal Entity Distributorships: A Direct Seller may own
and operate his or her Distributorship as a sole proprietary
concern or registered partnership firm or limited liability
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company (LLC), provided it complies with certain requirements
and conditions. …”
xxx xxx xxx
“3.14.5 The sole business of the legal entity must be the
operation of an Amway Distributorship. No other business may
be conducted by such an entity.”
xxx xxx xxx
“3.17 Husband and Wife Distributorships: If both husband
and wife wish to become Direct Sellers, they must be
sponsored together for a single Distributorship. Husbands and
wives may not be sponsored in different Lines of Sponsorship.
Husbands and wives may not sponsor each other. If one
spouse is already a Direct Seller, the other spouse, upon
electing to become a Direct Seller, must join the same
Distributorship as his or her spouse.
3.17.1 A husband and wife shall operate their Distributorship as
a single entity. Therefore, each is held accountable for the
actions of the other so far as the Rules of Conduct are
concerned regardless of whether a husband or wife is active in
the distributorship or not.”
xxx xxx xxx
“4.13 Franchises and Territories: No Direct Seller shall
represent to anyone that there are exclusive franchises or
territories available under the Amway Sales and Marketing
Plan.
No Direct Seller shall represent that he or she, or anyone else
has the authority to grant, sell, assign, or transfer such
franchises or to assign or designate territories. No Direct Seller
or Sponsor may state or imply that he or she has a given
territory, nor that any other Direct Seller is operating outside his
territory.
Amway Direct Sellers have no territorial limits. They can
operate anywhere within India.”
xxx xxx xxx
“4.16 Exporting Amway Products: Amway Direct Sellers must
sell Amway products and/or sponsor prospective Amway Direct
Sellers within India only. No Direct Seller may export, or
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knowingly sell to others who exports, Amway Products from
India, or from any other country in which Amway has
established operations, into any country regardless of whether
or not Amway is doing business in that country.
For important legal reasons, including trade names and
trademark protections; local laws on product registration,
packaging, labelling ingredient content and formulation, product
liability; customs and tax laws; and literature content or
language requirements. Amway must limit the resale of Amway
Products by Direct Sellers to only other Direct Sellers or retail
customers located within country in which the Direct Seller
legitimately buys the Amway Products and is authorised to do
business. The term “products” includes, without limitation, all
literature, sales aids, and any other items obtained by a Direct
Seller from Amway or from his sponsor or Platinum.
4.16.1 Exporting Rule: Personal Use
Globally, Amway’s Rules and Commercial Principles include
prohibitions on exporting and importing Amway products from
one market to another. Amway Direct Sellers may, however,
take Amway products across borders for personal use, with the
following limitations:
The Amway Direct Seller is visiting another country and
personally places the product order in that country.
The Amway Direct Seller physically picks up/receives the
products in one country and personally carries the products
to another country. There may be no couriers, shipping
companies, or freight forwarders involved.
If the Amway Direct Seller has a Multiple Business in the
country visited, the order cannot be placed as a customer
order for an overseas customer.
The products are for the Amway Direct Sellers personal use
only.
The products may not be resold, distributed, or given away
under any circumstances.
The products ordered must not be available in the Amway
Direct Seller’s home market.
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Durables (e.g. water treatment systems, air treatment
systems) may not be carried from one market to another
under any circumstances.
The Amway Direct Seller order must not be for more than a
reasonable amount of product: under 300 USD annually.
The personal use exclusion may not be used as a business-
building strategy.”
9. In what is referred to as the “Legal Entity Authorisation Form”, what
was filled up was “Legal Entity Authorisation Form: Sole Proprietor”. The
said form which was filled in by the respondents reads as follows:
“LEGAL ENTITY AUTHORISATION FORM:
SOLE PROPRIETORSHIP
Where an Amway Independent Business (“Amway Business”)
will be operated in India via a Sole Proprietorship (the “Entity”)
held by a Resident Indian, Non-Resident Indian (“NRI”), Person
of Indian Origin (“PIO”) or Overseas Citizen of India (“OCI”), the
Sole Proprietorship must, through the sole proprietor (the “Sole
Proprietor”), complete this Legal Entity Authorisation Form for
Amway Business Owners (the “Entity Agreement”) and submit
it to Amway India Enterprises Pvt. Ltd. (“AIE”). The Sole
Proprietor must agree to remain and ensure that the Entity
remains in full compliance with the Rules of Conduct for Amway
Business Owners. This Entity Agreement shall become effective
if and when AlE signs the completed form. This Entity
Agreement incorporated into and forms an integral part of the
Amway Distributor Agreement, which includes any and all
documents incorporated therein (the “ABO Contract”). In the
event of any conflict, the terms and conditions of this Entity
Agreement shall prevail.
xxx xxx xxx
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“5. The Sole Proprietor agrees that :
A. The sole purpose of the Entity is to own and operate the
Amway Business identified above, unless AIE expressly allows
the Entity to own and operate more than one Amway business.
Neither the Entity nor the Sole Proprietor will own or operate
any other business or business interest.
xxx xxx xxx
C. Any NRI, PIO or OCl investment in the Entity, if and as
applicable, has been made on a non-repatriatable basis in
accordance with applicable foreign exchange laws of India.
xxx xxx xxx
G. The Entity shall, in accordance with the laws of India and for
all matters connected to the Amway Business, exclusively use a
duly authorised Indian rupee bank account which, if applicable,
operates on a non-repatriatable basis.
H. The Sole Proprietor shall be responsible for his or her, and
the Entity’s, compliance with the Amway Rules of Conduct and
the applicable laws with respect to the operation of the Amway
Business by the Entity, including foreign exchange laws. Any
violation of the aforesaid entitles AIE to terminate the ABO
Contract and the Entity Agreement.
xxx xxx xxx”
10. Under “authorised signature”, the entity’s name was filled in as
Sindhia Enterprises and the proprietor was filled in as Ravindranath Rao
Sindhia (respondent no. 1 herein). This was done pursuant to an
application again filed in a printed form, given by the appellant to the
respondents, which reads as follows:
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11. A reading of the application form as filled in, together with the Code of
Ethics, would show that a distributorship may be taken up either in
individual capacity, a sole proprietorship concern, partnership firm, or
company. When it comes to a husband and wife’s distributorship, they are
entitled not to two, but to a single distributorship, it being made clear under
clause 3.17 of the Code of Ethics that they are to operate only as a single
entity. The form that was filled in made it clear that the respondents applied
to become a distributor as a sole proprietorship, it being made clear that
the husband, Ravindranath Rao Sindhia, was the sole proprietor / “primary
applicant”, the wife, Indumathi Sindhia, being a “co-applicant”.
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12. However, Ms. Arora argued, from a reading of the Code of Ethics and
correspondence between the parties, that there was no international flavour
whatsoever to the transaction as the business that is to be conducted can
be conducted only in India, an exception being made only for personal use
under clause 4.16.1. Most importantly, the address of the so-called sole
proprietorship in all the correspondence between the parties was the
address of the Bangalore office of the sole proprietorship.
13. Ms. Arora also strongly relied upon the judgment of this Court in
Larsen & Toubro Ltd.–SCOMI Engineering Bhd v. MMRDA, (2019) 2
SCC 271. This Court was concerned with an agreement between the
MMRDA, an Indian company, and a consortium of Larsen and Toubro, an
Indian company together with Scomi Engineering Bhd, a Malaysian
company. The argument that was pressed in the appeal before this Court
was that since a Malaysian company was involved, it would be a body
corporate which is incorporated in a country other than India, which would
attract the provisions of Section 2(1)(f)(ii) of the Arbitration Act. This Court
repelled the aforesaid argument, stating:
“9. Under the general conditions of contract, the “contractor”, in
Clause 1.1.2.3 is defined as meaning an individual, firm,
company, corporation, joint venture or Consortium, whether
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incorporated or not. “Bidder” is also defined under Clause
1.1.2.10 as meaning an individual, firm, company, corporation,
joint venture or Consortium which could submit a bid. What is
important to notice is that the contract was signed by the
employer viz. MMRDA and by the contractor under the head
sub-clauses (A) and (B) in which L&T India signed as ‘A’ and
Scomi Engineering Bhd has signed as ‘B’. When we come to
the consortium agreement that is entered into between the
Indian company and the Malaysian company as aforestated, we
find in the definition clause that “Consortium” shall mean L&T
and Scomi Engineering Bhd, acting in collaboration, for the
purpose of this agreement and shall be called “the L&T-SEB”
Consortium “unincorporated”. The contract is defined in Sub-
Clause 6 as meaning, “the contract to be entered by the
Consortium with the employer for the execution of the Project”.
Under Sub-Clause 7, “the lead Member of the Consortium” or
“Consortium Leader” shall mean L&T, that is, the Indian
Company. Under Sub-Clause 8, the “Supervisory Board”
(hereinafter referred to as “the SB”) shall mean a Board
constituted under Clause 11 of the GCC. When we come to
Clause 11.2, it is clear that the Members of this Supervisory
Board will consist of four members, two appointed by each
Member. One of the Members nominated by the Consortium
leader and agreed to by all members shall then act as the
Chairman of the Supervisory Board, which is, by Clause 11.5,
to decide on various matters relating to the execution of the
contract. Clause 21.1(g) provides that the Consortium leader
shall lead all arbitration proceedings.
xxx xxx xxx
11. It is important, at this juncture, to refer to an order made by
the High Court of Bombay dated 20-10-2016 [L&T
Ltd. v. MMRDA, 2016 SCC OnLine Bom 13348] which, as has
been stated earlier, arises between the self-same parties, under
the same contract. An interim award made by the arbitrators
qua different claims arising under the same contract had made
it clear that the claim could be filed only in the name of the
Consortium and not separately, as was contended by Shri
Jain’s client. The preliminary issue framed on this count was
“whether the claimants are entitled to file this claim as Claimant
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1 and Claimant 2 or only as the Consortium of L&T and Scomi
Engineering Bhd?” The High Court of Bombay agreed with the
interim award of the arbitrators, and held as follows: (L&T Ltd.
case [L&T Ltd. v. MMRDA, 2016 SCC OnLine Bom 13348] ,
SCC OnLine Bom para 10)
“10. Considering the terms and conditions of the
contract as well as the decision cited by Mr. Ankhad,
in my opinion, in the facts and circumstances of the
present case, it is not open for the petitioners to rely
upon their independent identities while dealing with
the respondent and that they will have to deal with
the respondent as a Consortium only. Therefore,
there is no infirmity in the impugned order. For the
same reason the present petition as filed would also
not been maintainable. Hence, the same is
dismissed.”
12. Shri Gopal Jain did not dispute the fact that this judgment
was final inter-partes as no appeal has been preferred.
Therefore, to stress the fact that it pertains only to “this claim”
and would therefore, not apply to a different set of claims under
the arbitration clause is not an argument that appeals to us.
13. It is clear, as has been held by the judgment [L&T Ltd v.
MMRDA, 2016 SCC OnLine Bom 13348] of the High Court of
Bombay, and which is binding inter-partes, that it is not open for
the petitioner to rely upon their status as independent
entities while dealing with the respondent and they will have to
deal with the respondent as a Consortium only.
14. This being the case, it is clear that the unincorporated
“association” referred to in Section 2(1)(f)(iii) would be attracted
on the facts of this case and not Section 2(1)(f)(ii) as the
Malaysian body cannot be referred to as an independent entity
following the judgment [L&T Ltd. v. MMRDA, 2016 SCC OnLine
Bom 13348] of the High Court of Bombay.
xxx xxx xxx
18. This being the case, coupled with the fact, as correctly
argued by Shri Divan, that the Indian company is the lead
partner, and that the Supervisory Board constituted under the
consortium agreement makes it clear that the lead partner really
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has the determining voice in that it appoints the Chairman of
the said Board (undoubtedly, with the consent of other
members); and the fact that the Consortium’s office is in
Wadala, Mumbai as also that the lead member shall lead the
arbitration proceedings, would all point to the fact that the
central management and control of this Consortium appears to
be exercised in India and not in any foreign nation.”
14. This case is distinguishable on facts, inasmuch as a final judgment
between the parties made it clear that it would not be open for the
consortium to rely upon their status as independent entities while dealing
with MMRDA. This being the case, the consortium was held to be an
association of persons falling under Section 2(1)(f)(iii), and that since the
lead member is to lead arbitral proceedings, the central management and
control of the consortium being exercised by Larsen and Toubro in India, it
was held that Section 2(1)(f)(iii) would not be attracted on the facts of that
case.
15. By way of contrast, we have seen how the respondents have
themselves applied to become distributors of Amway products in India as a
sole proprietorship concern under the relevant forms issued by the
appellant, read with the Code of Ethics referred to hereinabove. In Ashok
Transport Agency v. Awadhesh Kumar, (1998) 5 SCC 567, this Court
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has clearly held that a sole proprietary concern is equated with the
proprietor of the business as follows:
“6. A partnership firm differs from a proprietary concern owned
by an individual. A partnership is governed by the provisions of
the Indian Partnership Act, 1932. Though a partnership is not a
juristic person but Order XXX Rule 1 CPC enables the partners
of a partnership firm to sue or to be sued in the name of the
firm. A proprietary concern is only the business name in which
the proprietor of the business carries on the business. A suit by
or against a proprietary concern is by or against the proprietor
of the business. In the event of the death of the proprietor of a
proprietary concern, it is the legal representatives of the
proprietor who alone can sue or be sued in respect of the
dealings of the proprietary business. The provisions of Rule 10
of Order XXX which make applicable the provisions of Order
XXX to a proprietary concern, enable the proprietor of a
proprietary business to be sued in the business names of his
proprietary concern. The real party who is being sued is the
proprietor of the said business. The said provision does not
have the effect of converting the proprietary business into a
partnership firm. The provisions of Rule 4 of Order XXX have
no application to such a suit as by virtue of Order XXX Rule 10
the other provisions of Order XXX are applicable to a suit
against the proprietor of proprietary business “insofar as the
nature of such case permits”. This means that only those
provisions of Order XXX can be made applicable to proprietary
concern which can be so made applicable keeping in view the
nature of the case.
7. In the present case A.C. Basu, Proprietor of Ashok Transport
Agency, had died before the date of the institution of the suit
and on the date of the institution of the suit, the proprietary
concern was not in existence. Only the legal representatives of
A.C. Basu could be sued with regard to any cause of action
arising against A.C. Basu in connection with the proprietary
business. We find it difficult to understand how the provisions of
Rule 4 Order XXX CPC, could be extended to such a case.”
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16. In this view of the matter, the argument that there is no international
flavour to the transaction between the parties has no legs to stand on.
Indeed, an analysis of Section 2(1)(f) would show that whatever be the
transaction between the parties, if it happens to be entered into between
persons, at least one of whom is either a foreign national, or habitually
resident in, any country other than India; or by a body corporate which is
incorporated in any country other than India; or by the Government of a
foreign country, the arbitration becomes an international commercial
arbitration notwithstanding the fact that the individual, body corporate, or
government of a foreign country referred to in Section 2(1)(f) carry on
business in India through a business office in India. This being the case, it
is clear that the Delhi High Court had no jurisdiction to appoint an arbitrator
in the facts of this case.
17. Ms. Arora made an impassioned plea to this Court to use its power
under Article 142 of the Constitution to straightaway appoint an arbitrator,
now that the matter is before this Court. We are afraid we cannot
countenance such a suggestion as the respondents would have to now
follow the drill of Section 11(6) read with Section 11(9) of the Arbitration
Act.
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18. The appeal is allowed, and the judgment under appeal is set aside.
…………………………J.
(R.F. Nariman)
…………………………J.
(B.R. Gavai)
New Delhi;
March 04, 2021.
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