Supreme Court Bars Appointment of Arbitrator for Foreign-Seated Dispute

The Supreme Court held that Indian courts lack jurisdiction under Section 11 of the Arbitration and Conciliation Act, 1996, to appoint an arbitrator when parties have expressly chosen a foreign seat and foreign governing law.

The dispute stemmed from a Buyer and Seller Agreement designating Benin as the arbitral seat under Benin law, while subsequent contracts contained India-seated clauses.

The Court held that the original agreement was the controlling contract, rejecting arguments of novation, composite transaction, and the group of companies doctrine. 

The Court ruled that Part I of the Act does not apply to foreign-seated arbitrations and dismissed the Section 11 petition.
[Balaji Steel Trade v Fludor Benin S.A. & Ors]