National Thermal Power Corp. v. Singer Co.

The National Thermal Power Corporation (NTPC) (plaintiff) and Singer Co. (defendant) entered two agreements for the construction of certain works in India. Section 7.2 provided that Indian law would apply to the contract and that the Court of Delhi retained exclusive jurisdiction over all matters arising from the contract. However, Clause 27(7) of the contract provided that “in the event of foreign Contractor,” the arbitration would proceed under the International Chamber of Commerce (ICC) Rules. Clause 27(7) further provided that such an arbitration under the ICC Rules “shall be conducted at such places as the arbitrators may determine.” A dispute arose between the NTPC and a foreign contractor under Singer Co., and the parties referred the dispute to an arbitral tribunal under the ICC Rules. The ICC Court chose London, England, as the seat of the arbitration, and the arbitral tribunal entered an award. The NTPC initiated a suit in India seeking to set aside the award entered by the arbitral tribunal in London. The Delhi High Court refused to set aside the interim award by the tribunal in London. The Delhi High Court held that the arbitration agreement was not governed by the Indian Arbitration Act, 1940 and that the English courts retained jurisdiction to set aside the award. NTPC appealed the judgment of the Delhi High Court to the Indian Supreme Court, arguing the Arbitration Act, 1940 governed the arbitration given the contract provisions providing Indian law governed the contract. Singer Co. countered that although Indian law governed the main contract, English law applied as the arbitration occurred in London. Singer Co. further argued that the Indian courts lacked jurisdiction over the award except as permitted under the Foreign Awards Act provisions on the recognition and enforcement of foreign awards.