Bharat Aluminum Co. (“Balco”) v. Kaiser Aluminium Technical Service, Inc.

[2012] C.A. No. 7019 of 2005 (2012)

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Bharat Aluminum Co. (“Balco”) v. Kaiser Aluminium Technical Service, Inc.

India Supreme Court
[2012] C.A. No. 7019 of 2005 (2012)

Facts

In April 1993, Bharat Aluminum Co. (Balco) (plaintiff) and Kaiser Aluminium Technical Service, Inc. (Kaiser) (defendant) entered a contract for Kaiser to supply and install a computer system for Balco. The contract contained an arbitration clause providing that the parties would refer any dispute arising out of the contract to arbitration and that London, England, would serve as the arbitral seat. The contract further provided that “this agreement will be governed by the prevailing law of India and in case of Arbitration, the English law shall apply.” A dispute arose between the parties about the parties’ required performance of the contract. Balco asserted certain damages, seeking the return of its investment in the modernization program along with other sums. Kaiser counterclaimed for unclaimed installments plus interest and damages for breach of intellectual property rights. After a failure to negotiate a settlement, Kaiser referred the matter to arbitration in London, England, in November 1997. In November 2002, the arbitral tribunal in England entered two awards. Balco filed suit in India, asking the courts to set aside the arbitration awards under Section 34 of the Indian Arbitration Act, 1996. The lower courts denied Balco’s application, and Balco appealed to the Indian Supreme Court. On appeal, Balco argued Indian courts retained the authority to annul awards made outside India unless the parties excluded that authority by express agreement.

Rule of Law

Issue

Holding and Reasoning (Nijjar, J.)

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