# ENERCON (INDIA) LTD. & ORS v. ENERCON GMBH & ANR - **Citation:** [2014] 2 S.C.R. 855 - **Court:** Supreme Court of India - **Decided:** 2014-02-14 - **Case number:** Civil Appeal No. 2086 of 2014 - **Bench:** Surinder Singh Nijjar, Fakkir Mohamed Ibrahim Kalifulla - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/enercon-india-ltd-ors-v-enercon-gmbh-anr-29864 - **Pages:** 100 ## Headnote ARBITRATION AND CONCILIATION ACT, 1996: s.45 rlw s. 16 - International Commercil Arbitration - Suit for declaration that Intellectual Property Licence Agreement (IPLA) was not concluded contract and coffespondingly there was no arbitration agreement therein - Application by respondent uls 45 - Held: parties have iffevocably agreed to resolve all the disputes through arbitration - Parties can not A B c D be permitted to avoid arbitration, without satisfying the court that it would be just and in the interest of all the parties not to proceed with arbitration - Findings recorded by appellate court that the parties can proceed to arbitration are affirmed - Findings recorded by trial court dismissing the application ul E s 45 are set aside -- Application filed by respondents for reference of the dispute to arbitration u/s 45 has been correctly allowed by appellate court as well as by High Court - Issue as to whether there is a concluded contract between the parties can be left to arbitral tribunal - All the disputes arising between the parties in relation to the following agreements viz. SHA, TKHA, SSHAs and STKHA, Agreed Principles and IPLA, including the controversy as to whether IPLA is a concluded contract are referred to arbitral tribunal for adjudication -Third arbitrator who shall act as Chairman of Arbitral Tribunal, is appointed -- Arbitration clause (agreement) is independent of the underlying contract, i.e. the IPLA containing the arbitration clause -- s.16 provides that arbitration clause forming part of a contract shall be treated 855 F G H 856 SUPREME COURT REPORTS [2014] 2 S .. C.R. A as an agreement independent of such a contract -- UNCITRAL Model Law. s. 16 - Separability of arbitration clause from underlying contract - Held: Concept of separability of the arbitration 8 clause/agreement from the underlying contract is a necessity to ensure that the intention of parties to resolve disputes by arbitration does not get frustrated with every challenge to legality, validity, finality or breach of the underlying contract - The Act, u/s 16 accepts the concept that the main contract and the arbitration agreement form two independent contracts C - Therefore, it cannot be accepted that Arbitration Agreement will perish as the IPLA has not been finalised - Rule of necessity. Arbitration clause - Seemingly unworkable arbitration D clause - Held: It would be the duty of court to make the same workable within the permissible limits of law - A common sense approach has to be adopted to give effect to the intention of parties to arbitrate - Arbitration clause cannot be construed with a purely legalistic mindset, as if one is E construing a provision in a statute - In the instant case, the arbitration clause as it stands cannot be frustrated on the ground that it is unworkable - Unworkability in the case is attributed only to the machinery provision - Arbitration agreement, otherwise, fulfils the criteria laid down u/s 44 of the F Act - Given that two arbitrators have been appointed, the missing line that "the two arbitrators appointed by the parties shall appoint the third arbitrator" can be read into the arbitration clause - Omission is so obvious that the court can legitimately supply the missing line - In the circumstances, G the Court would apply the officious bystander principle - Parties can be permitted to proced to arbitration. H 'Seat' of arbitration and 'venue' -- International Commercial Arbitration - Held: In an International Commercial Arbitration, venue can often be different from the. ENERCON (INDIA) LTD. & ORS. v. ENERCON GMBH 857 & ANR. seat of arbitration - In the instant case all the three laws: (i) A the law governing the substantive contract; (ii) the law governing the agreement to arbitrate and the performance of that agreement; and (iii) the law governing the conduct of the arbitration, are Indian - Therefore, the parties have designated India as the seat - Parties being Indian and German, except B for Lon ## Text _Characters 0–39,504 of 190,346. This is a partial read: ask again with offset=39504 for what follows._ [2014] 2 S.C.R. 855 ENERCON (INDIA) LTD. & ORS. V. ENERCON GMBH & ANR. (Civil Appeal No. 2086 of 2014 etc.) FEBRUARY 14, 2014 [SURINDER SINGH NIJJAR AND FAKKIR MOHAMED IBRAHIM KALIFULLA, JJ.] ARBITRATION AND CONCILIATION ACT, 1996: s.45 rlw s. 16 - International Commercil Arbitration - Suit for declaration that Intellectual Property Licence Agreement (IPLA) was not concluded contract and coffespondingly there was no arbitration agreement therein - Application by respondent uls 45 - Held: parties have iffevocably agreed to resolve all the disputes through arbitration - Parties can not A B c D be permitted to avoid arbitration, without satisfying the court that it would be just and in the interest of all the parties not to proceed with arbitration - Findings recorded by appellate court that the parties can proceed to arbitration are affirmed - Findings recorded by trial court dismissing the application ul E s 45 are set aside -- Application filed by respondents for reference of the dispute to arbitration u/s 45 has been correctly allowed by appellate court as well as by High Court - Issue as to whether there is a concluded contract between the parties can be left to arbitral tribunal - All the disputes arising between the parties in relation to the following agreements viz. SHA, TKHA, SSHAs and STKHA, Agreed Principles and IPLA, including the controversy as to whether IPLA is a concluded contract are referred to arbitral tribunal for adjudication -Third arbitrator who shall act as Chairman of Arbitral Tribunal, is appointed -- Arbitration clause (agreement) is independent of the underlying contract, i.e. the IPLA containing the arbitration clause -- s.16 provides that arbitration clause forming part of a contract shall be treated 855 F G H 856 SUPREME COURT REPORTS [2014] 2 S .. C.R. A as an agreement independent of such a contract -- UNCITRAL Model Law. s. 16 - Separability of arbitration clause from underlying contract - Held: Concept of separability of the arbitration 8 clause/agreement from the underlying contract is a necessity to ensure that the intention of parties to resolve disputes by arbitration does not get frustrated with every challenge to legality, validity, finality or breach of the underlying contract - The Act, u/s 16 accepts the concept that the main contract and the arbitration agreement form two independent contracts C - Therefore, it cannot be accepted that Arbitration Agreement will perish as the IPLA has not been finalised - Rule of necessity. Arbitration clause - Seemingly unworkable arbitration D clause - Held: It would be the duty of court to make the same workable within the permissible limits of law - A common sense approach has to be adopted to give effect to the intention of parties to arbitrate - Arbitration clause cannot be construed with a purely legalistic mindset, as if one is E construing a provision in a statute - In the instant case, the arbitration clause as it stands cannot be frustrated on the ground that it is unworkable - Unworkability in the case is attributed only to the machinery provision - Arbitration agreement, otherwise, fulfils the criteria laid down u/s 44 of the F Act - Given that two arbitrators have been appointed, the missing line that "the two arbitrators appointed by the parties shall appoint the third arbitrator" can be read into the arbitration clause - Omission is so obvious that the court can legitimately supply the missing line - In the circumstances, G the Court would apply the officious bystander principle - Parties can be permitted to proced to arbitration. H 'Seat' of arbitration and 'venue' -- International Commercial Arbitration - Held: In an International Commercial Arbitration, venue can often be different from the. ENERCON (INDIA) LTD. & ORS. v. ENERCON GMBH 857 & ANR. seat of arbitration - In the instant case all the three laws: (i) A the law governing the substantive contract; (ii) the law governing the agreement to arbitrate and the performance of that agreement; and (iii) the law governing the conduct of the arbitration, are Indian - Therefore, the parties have designated India as the seat - Parties being Indian and German, except B for London being chosen as a convenient place/venue for holding the meetings of arbitration, there is no other factor connecting the arbitration proceedings to London - In such circumstances, hearing of arbitration will be conducted at the venue fixed by the parties, but this would not bring about a c change in the seat of arbitration - Therefore, the seat would remain in India. Concurrent jurisdiction - International Commercial Arbitration - Held: High Court having fixed the seat in India, committed an error in concluding that Courts in England D would have concurrent jurisdiction - It runs counter to the settled position of law in India as well as in England and would lead to unnecessary complications and inconvenience - Once the seat of arbitration has been fixed in India, it would be in the nature of exclusive jurisdiction to exercise the supervisory E powers over the arbitration - In view of s. 2, CPC, Daman trial court (India) has jurisdiction over the matter. Anti suit injunction - International Commercial Arbitration - Suit in Daman court (India) for declaration that substantial F contract was not a concluded contract and correspondingly there was no arbitration agreement therein - Anti suit injunction granted by Daman Court against proceedings initiated in the English High Court - Held: Conclusion of the Bombay High Court that the anti-suit injunction granted by the G Daman trial court has been correctly vacated by Daman appellate court is overruled and set aside -- Consequential directions given in the judgment. Appellants No.2 and 3 and respondent No.1 (a company incorporated under the laws of Germany, H 858 SUPREME COURT REPORTS (2014] 2 S.C.R. A having its registered office in Germany), entered into a joint venture business by setting up appellant No. 1Company - Enercon (India) Ltd., with its registered office at Daman. On12.1.1994 appellants nos. 2 and 3 entered into a Share Holding Agreement (SHA) with respondent B no. 1. On the same day appellant no. 1 and respondent no. 1 entered into a Technical Know-How Agreement ("TKHA"). On 29-9-2006, the appellants and respondent No. 1 executed an Intellectual Property License Agreement ("IPLA"). Dispute arose between the parties c and appellants No.2 and 3 filed a derivative suit before the Bombay High Court, seeking resumption of supplies, parts and components. In the said suit, respondent No.1 took out an application u/s 45 of the Arbitration and Conciliation Act, 1996 (the Act). Respondent no.1 also 0 initiated proceedings before the High Court of Justice, Queens Bench Division, Commercial Court, United Kingdom ("the English High Court"). The reliefs which were claimed included the constitution of an arbitral tribunal under the IPLA. On 8-4-2008, the appellants filed Regular Suit No. 9 of 2008 (Daman Suit) before the Court E of Civil Judge, Sr. Division, ("Daman Trial Court") seeking, inter alia, a declaration to the effect that the draft IPLA was not a concluded contract and correspondingly there was no arbitration agreement between the parties to the draft IPLA. The Daman Trial Court passed an order in the F favour of the appellants, wherein the respondents were directed to maintain status quo with regard to the proceedings initiated by them before the English High Court. The respondents filed an application u/s 45 of the Act in the Daman Suit. The appellants moved an G application for interim injunction ex-parte in the same suit, seeking to restrain the respondents from pursuing the proceedings they had initiated in the English High Court (anti-arbitration injunction). The Daman Court dismissed the application u/s 45 of the Act on 5-1-2009 and allowed H the application filed by the appellants, seeking interim ENERCON (INDIA) LTD. & ORS. v. ENERCON GMBH 859 & ANR. reliefs in the form of anti-arbitration injunction. The A respondents filed four appeals, which were allowed by the District Cpurt of Daman ("Daman Appellate Court). The anti-arbitration injunction was vacated, and the application u/s 45 of the Act was allowed. The appellants filed two writ petitions before the High Court of Bombay, B which ultimately held: (a) "Prima facie, there is an arbitration agreement; (b) The curial law of the arbitration agreement is India; (c) London, designated as the venue in Clause 18.3 of the draft IPLA, is only a convenient geographical location; (d) London is not the seat; and (e) c English Courts have concurrent jurisciiction since the venue of arbitration is London." In the instant appeals, the following issues arose for consideration of the Court: "(i) Is the IPLA a valid and concluded contract? (ii) Is it for the Court to decide issue No. (i) or should it be left to be considered by the Arbitral Tribunal? (iii) Linked to (i) and (ii) is the issue whether the appellants can refuse to join arbitration on the plea that there is no concluded IPLA"? D E "(iv) Assuming that the IPLA is a concluded F contract; is the Arbitration Clause 18.1 vague and unworkable." "(v) In case the arbitration clause is held to be workable, is the seat of arbitration in London or in India? (vi) In the event it is held that the seat is in India, would the English Courts have the concurrent jurisdiction for taking such measures as required in support of the arbitration as the G H A 860 SUPREME COURT REPORTS [2014) 2 S.C.R. venue for the arbitration proceedings is London? (vii) Linked to (v) and (vi) is the issue whether the Appellants are entitled for an anti-suit 8 injunction?" Disposing of the appeals, the Court HELD: c Issues (i), (ii) and (iii): 1.1 There is a legal relationship between the parties of a long standing. Section 44 of the Arbitration and Conciliation Act, 1996 (the Act) applies to arbitral awards of differences between persons arising out of legal D proceedings. Such a relationship may be contractual or not, so long it is considered as commercial under the laws in force in India. Further, that legal relationship must be in pursuance of an agreement, in writing, for arbitration, to which the New York Convention applies. E The court can decline to make a reference to arbitration in case it finds that the arbitration agreement is null and void, inoperative or incapable of being performed. There are no pleadings to that effect in the plaint. Before this Court also, it is not the plea of the appellants that the F agreement is null and void, inoperative and incapable of being performed as it violates any of the provisions u/ss 14, 15, 16, 17, 18, 19, 19A and 20 of the Contract Act, 1872. The issue as to whether there is a concluded contract between the parties can be left to the arbitral tribunal. G [para 75) (907-E-G; 908-C-D; 909-B] H 1.2 All the issues raised by the appellants about the non-existence of a concluded contract pale into insignificance in the face of "Heads of Agreement on the proposed IPLA dated 23.5. 2006". A bare perusal of this ENERCON (INDIA) LTD. & ORS. v. ENERCON GMSH 861 & ANR. clause makes it abundantly clear that the parties have A irrevocably agreed that clause 18 of the proposed IPLA shall apply to settle any dispute or claim that arises out of or in connection with this Memorandum of Understanding and negotiations relating to IPLA. It must also be noticed that the relationship between the parties B formally commenced on 12.1.1994 when the parties entered into the first SHA and TKHA. Even under that SHA, Art. 16 inter alia provided for resolution of disputes by arbitration. The TKHA also contained an identically worded arbitration clause, under Article XIX. This c intention to arbitrate has continued without waiver. In the face of this, the question of the concluded contract becomes irrelevant, for the purposes of making the reference to arbitral tribunal. [para 76-77] [909-C-D, G-H; 910-A-B] D 1.3 It must be clarified that the doubt raised by the appellant i·s that there is no concluded IPLA, i.e. the substantive contract. But this can have no effect on the existence of a binding arbitration agreement in view of Clause 3. The parties have irrevocably agreed to resolve E all the disputes through arbitration. Parties can not be permitted to avoid arbitration; without satisfying the court that it would be just and in the interest of all the parties not to proceed with arbitration. Besides; in arbitration proceedings, courts are required to aid and support the F arbitral pr~cess, and not to bring it to a grinding halt. This would be of no benefit to any of the parties. [para 77] [910-B-E] 1.4 Further, the arbitration agreement contained in G clause 18.1 to 18.3 of IPLA is very widely worded and would include all the disputes, controversies or differences concerning the legal relationship between the parties. It would include the. disputes arising in respect of the IPLA with regard to its validity, interpretation, H 862 SUPREME COURT REPORTS [2014] 2 S.C.R. A construction, performance, enforcement or its alleged breach. [para 79) [910-F-G] 1.5 Whilst interpreting the arbitration agreement and/ or the arbitration clause, the court must be conscious of 8 the overarching policy of least intervention by courts or judicial authorities in matters covered by the Act. In this view of the matter, it is not possible to accept that the arbitration agreement will perish as the IPLA has not been finalised. This is also because the arbitration clause (agreement) is independent of the underlying contract, i.e. C the IPLA containing the arbitration clause. Section 16 provides that the arbitration clause forming part of a contract shall be treated as an agreement independent of such a contract. [para 79] [910-G-H; 911-A-B] D 1.6 In the facts of the case, this Court holds that the E F parties must proceed with the arbitration. All the difficulties pointed out on behalf of appellants can be addressed by the arbitral tribunal. [para 78] [910-E-F] 1. 7 The concept of separability of the arbitration clause/agreement from the underlying contract is a necessity to ensure that the intention of the parties to resolve the disputes by arbitration does not get frustrated with every challenge to the legality, validity, finality or breach of the underlying contract. The Act, u/s 16 accepts the concept that the main contract and the arbitration agreement form two independent contracts. Commercial rights and obligations are contained in the underlying, substantive, or the main contract. It is followed by a second contract, which expresses the agreement and G the intention of the parties to resolve the disputes relating to the underlying contract through arbitration. A remedy is elected by parties outside the normal civil court remedy. It is true that support of the National Courts H would be required to ensure the success of arbitration, but this would not detract from the legitimacy or ENERCON (INDIA) LTD. & ORS. v. ENERCON GMBH 863 &ANR. independence of the collateral arbitration agreement, A even if it is contained in a contract, which is claimed to be void or voidable or unconcluded by one of the parties. Therefore, it cannot be accepted that Arbitration Agreement will perish as the IPLA has not been finalised. [para 80-81] [911-C-F; 913-C] B Reva Electric Car Company P. Ltd. v. Green Mobil. 2011 (13) SCR 359 = 2012(2) sec 93; Today Homes and Infrastructure Pvt. Ltd. vs. Ludhiana Improvement Trust and Anr., 2013 (7) SCALE 327 - relied on. Issue (iv) c 2.1 Respondent No.1 is the licensor and respondent No.2 is 100% shareholder of respondent No.1, but that is not the same as being an independent licensor. [para 82] [913-F] D 2.2 The courts have to adopt a pragmatic approach and not a pedantic or technical approach while interpreting or construing an arbitration agreement or arbitration clause. Therefore, when faced with a E seemingly unworkable arbitration clause, it would be the duty of the court to make the same workable within the permissible limits of the law, without stretching it beyond the boundaries of recognition. A common sense approach has to be adopted to give effect to the intention F of the parties to arbitrate. In such a case, the court ought to adopt the attitude of a reasonable business person, having business common sense as well as being equipped with the knowledge that may be peculiar to the business venture. The arbitration clause cannot be construed with a purely legalistic mindset, as if one is G construing a provision in a statute. [para 83] [913-G-H; 914-A-C] Visa International Ltd. v. Continental Resources (USA) Ltd. 2008 (16) SCR 1043 = 2009 (2) SCC 55 Nandan H 864 SUPREME COURT REPORTS [2014] 2 S.C.R. A Biometrix Ltd. v. D./. Oils. 2009 (3) SCR 115 = 2009 (4) SCC 495 - relied on. The Antaios Compania Neviera SA v Salen Rederiema AB [1985] 1 AC 191 - referred to. B 2.3 It is a well recognized principle of arbitration jurisprudence in almost all the jurisdictions, especially those following the UNCITRAL Model Law, that the courts play a supportive role in encouraging the arbitration to proceed rather than letting it come to a grinding halt. C Another equally important principle recognized in almost all jurisdictions is the least intervention by the courts. Under the Act, s.5 specifically lays down, "Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, o no judicial authority shall intervene except where so provided in this Part". [para 84] [915-H; 916-A-B] 2.4 Therefore, in the instant case, the arbitration clause as it stands cannot be frustrated on the ground that it is unworkable. The un-workability in the case is E attributed only to the machinery provision. And the arbitration agreement, otherwise, fulfils the criteria laid down u/s 44 of the Act. Given that two arbitrators have been appointed, the missing line that "the two arbitrators appointed by the parties shall appoint the third arbitrator" F can be read into the arbitration clause. The omission is so obvious that the court can legitimately supply the missing line. In these circumstances, the Court would apply the officious bystander principle. It is permissible for the court to construe the arbitration clause in a G particular manner to make the same workable when there is a defect or an omission in it, albeit such an exercise would not permit the court to re-write the contract. In the instant case, the crucial line which seems to be an omission or an error can be inserted by the court. [para H 84-86] [916-C-E; 917-E-F] ENERCON (INDIA) LTD. & ORS. v. ENERCON GMBH 865 &ANR. Shin Satellite Public Co. Ltd. Vs. Jain Studio Ltd. 2006 A (1) SCR 933 = 2006 (2) SCC 628 - referred to. Shir/aw v. Southern Foundries [1937 S. 1835] referred to Halsbury's Laws of England Vol. 13, Fourth Edition, B 2007 Reissue - referred to. 2.5 The object of ss. 10 and 11 of the Act is to avoid failure of the arbitration agreement or the arbitration clause if contained in contract. Under s. 10(1 ), there is freedom given to the parties to determine the number of C arbitrators, provided that such number shall not be an ~ even number. The arbitration clause in the instant case provides that the arbitral tribunal shall consist of three arbitrators. Further, it must also be noticed that the respondents have been trying to seek adjudication of D disputes by arbitration. Respondent No.2 in its email dated 13.3. 2008 clearly offered that the third and the presiding arbitrator be appointed by the respective arbitrators of the appellants and the respondents. On the other hand, the attitude of the appellants is to avoid E arbitration at ·any cost. The parties can be permitted to proceed to arbitration. [para 87-88] [918-D-F; 919-E] MMTC v. Sterlite Industries (India) Ltd. 1996 (8) Suppl. SCR 676 = 1996 (6) SCC 716 - referred to. Issue No. v/Re: Seat 3.1 There are very strong indicators to suggest that the parties always understood that the seat of arbitration would be in India, and London would only be the "venue" F to hold the proceedings of arbitration. Applying the G closest and the intimate connection to arbitration, it would be seen that the parties had agreed that the provisions of the Act would apply to the arbitration proceedings. By making such a choice, the parties have made the curial law provisions contained in Chapters Ill, H 866 SUPREME COURT REPORTS [2014] 2 S.C.R. A IV, V and VI of the Act applicable. In the instant case, London is mentioned only as a "venue" of arbitration, which, in the facts of the case cannot be read as the "seat" of arbitration. This is also because, all the three laws applicable in arbitration proceedings are Indian laws. B The law governing the contract, the law governing the arbitration agreement and the law of arbitration/curial law are all stated to be Indian. [para 90-91] [919-G-H; 920-BC, D-F] 'Naviera Amazonica Peruana S.A. Vs. Compania C Internacional De Seguros Del Peru 1988 (1) Lloyd's Rep 116 - relied on. D E Bharat Aluminium Company Vs. Kaiser Aluminium 2012 · (12) SCR 327 = 2012 (9) SCC 552 - referred to. James Miller & Partners Ltd. v. Whitworth Street Estates (Manchester) Ltd. [1970] 1 Lloyd's Rep. 269; [1970] A.C.583; Mustill, J. in Black Clawson International Ltd. v. Papierwerke Waldhof-Aschaffenburg A.G. [1981] 2 Lloyd's Rep. 446 at P. 453 - referred to. Dicey & Morris on the Conflict of Laws (11th Edn.) - cited. 3.2 In the instant case all the three laws: (i) the law governing the substantive contract; (ii) the law governing F the agreement to arbitrate and the performance of that agreement; and (iii) the law governing the conduct of the arbitration, are Indian. The curial law of England would become applicable only if there was clear designation of the seat in London. Since the parties have deliberately G chosen London as a venue, as a neutral ptace to hold the meetings of arbitration only, it cannot be accepted that London is the seat of arbitration. Businessmen do not intend absurd results. If seat is in London, then challenge to the award would also be in London. But the parties H having chosen Indian Arbitration Act, 1996 - Chapter Ill, ENERCON (INDIA) LTD. & ORS. v. ENERCON GMBH 867 &ANR. IV, V and VI, s.11 would be applicable for appointment of A arbitrator in case the machinery for appointment of arbitrators agreed between the parties breaks down. Therefore, to interpret that London has been designated as the seat would lead to absurd results, and it would, therefore, be vexatious and oppressive if respondent no. 8 1 is permitted to compel. appellant n_o. 1 to litigate in England.' This would unnecessarily give. rise to the undesirable consequences. [para 105 and 107] [928-H; 929-A-E; 930-C] Braes of Doune Wind Farm (Scotland) Limited Vs. Alfred C McA/pine Business Services Limited [2008] EWHC 426 (TCC) • relied on. Abidin Vs. Daver. [1984] AC 398 • referred to. 3.3 In the instant case, the parties have only D designated London as a venue. Therefore, the parties have designated India as the seat. This is even more so as the parties have not agreed that the courts in London will have exclusive jurisdiction to resolve any dispute arising out of or in connection with the contract. In the E instant case, except for London being chosen as a convenient place/venue for holding the meetings of the arbitration, there is no other factor connecting the arbitration proceedings to London. [para 109] [930-H; 931A·C] F C v. D [2007] EWCA Civ 1282 • referred to. Shashoua v. Sharma, (2009) 2 LLR 376 - distinguished. 3.4 In an International Commercial Arbitration, venue can often be different from the seat of arbitration. In such G circumstances, the hearing of the arbitration will be conducted at the venue fixed by the parties, but this would not bring about a change in the seat of the arbitration. Therefore, in the instant case, the seat would remain in India. [para 125] [941-C-D] H . 868 SUPREME COURT REPORTS [2014] 2 S.C.R. A Braes of Doune Wind Farm (Scotland) Limited Vs. Alfred B McAlpine Business Services Limited [2008] EWHC 426 (TCC); 'Naviera Amazonica Peruana S.A. Vs. Compania Internacional De Seguros Del Peru 1988 (1) Lloyd's Rep 116 - referred to. Redfern and Hunter on International Arbitration (5th Edn., Oxford University Press, Oxford/New York 2009), referred to. Issue No. vi/ Re: Concurrent Jurisdicion: C 4.1 The High Court having fixed the seat in India, committed an error in concluding that the Courts in England would have concurrent jurisdiction. It runs counter to the settled position of law in India as well as in England and would lead to unnecessary complications o and inconvenience. This, in turn, would be contrary to underlying principle of the policy of dispute resolution through arbitration. The whole aim and objective of arbitration is to enable the parties to resolve the disputes speedily, economically and finally. Once the seat of E arbitration has been fixed in India, it would be in the nature of exclusive jurisdiction to exercise the supervisory powers over the arbitration. [para 127 and 128] [941-F-H; 942-F-G] (1) Enercon GMBH (2) Wobben Properties GMBH Vs. F Enercon (India) Ltd., (2012) EWHC 3711(Comm) - referred to. 4.2 The Courts in England have time and again reiterated that an agreement as to the seat is analogous G to an exclusive jurisdiction clause. This agreement of the parties would include the determination by the court as to the intention of the parties. The natural forum for all remedies, in the facts of the instant case, is only India. [para 135] [948-C-D] H , ENERCON (INDIA) LTD. & ORS. v. ENERCON GMBH 869 & ANR. Shashoua v. Sharma, (2009) 2 LLR 376 Bharat A Aluminium Company Vs. Kaiser Aluminium 2012 (12) SCR 327 = 2012 (9) SCC 552; A Vs. B [2007] 1 Lloyds Report 237 - referred to. Issue (vii)IRe: Anti-Suit Injunction: B 5.1 It must be noticed that respondent No. 1 was initially having 51 per cent shareholding of appellant No.1 company, which was subsequently increased to 56 per cent. This would be an indicator that respondent No. 1 is actively carrying on business at Daman. This Court C considered the expression "carries on business" as it occurs in s.20 of the Code of Civil Procedure. Therefore, Daman Trial Court has jurisdiction over the matter. [para 141 and 142] [951-A-B, F] Oil & Natural Gas Commission Vs .. Western Company of Norlh America 1987 SCR (1) 1024; Modi Entertainment Network & Anr. Vs. W S. G. Cricket Pte. Ltd. 2003 (1) SCR 480 = 2003 (4) SCC 341; Dhodha House Vs. S.K. Maingi 2005 D (5) Suppl. SCR 751 = 2006 (9) SCC 41- referred to. E Harshad Chiman Lal Modi Vs. DLF Universal 2005 (3) Suppl. SCR 495 = 2005 (7) SCC 791 - relied on. 5.2 Besides, the main contract, the IPLA is to be performed in India. The governing law of the contract is F the law of India. Neither party is English. One party is Indian, the other is German. The enforcement of the award will be in India. Any interim measures which are to be sought against the assets of appellant No. 1 ought to be in India as the assets are situated in India. G Respondent No.1 has not only participated in the proceedings in the Daman courts and the Bombay High Court, but also filed iridependent proceedings under the Companies Act at Madras and Delhi. All these factors would indicate that respondent No.1 does not even H 870 SUPREME COURT REPORTS [2014] 2 S.C.R. A consider the Indian courts as forum-non-conveniens. In this view of the matter, this Court is of the considered opinion that the objection raised by the appellants to the continuance of the parallel proceedings in England is not wholly without justification. The only single factor which B prompted respondent No.1 to pursue. the action in England was that the venue of the arbitration has been fixed in London. The considerations for designating a convenient venue for arbitration can not be understood as conferring concurrent jurisdiction on the English C Courts over the arbitration proceedings or disputes in general. Therefore, this Court is inclined to restore the anti-suit injunction granted by the Daman trial court. [para 143] [952-B-F] 6.1 In the result, the findings recorded by the D Appellate Court that the parties can proceed to arbitration are affirmed. The findings recorded by the Trial Court dismissing the application u/s 45 of the Act are set aside. The application filed by respondents for reference of the dispute to arbitration u/s 45 has been correctly allowed E by the Appellate Court as well as by the High Court. The findings of the High Court are affirmed to that extent. All the disputes arising between the parties in relation to the agreements, viz. SHA, TKHA, SSHAs and STKHA, Agreed Principles and IPLA, including the controversy as to F whether IPLA is a concluded contract are referred to the arbitral tribunal for adjudication. The third arbitrator who shall act as the Chairman of the Arbitral Tribunal is appointed. [para 144-145] [952-G-H; 953-A-B, E] 6.2 Regular Civil Suit No. 9 of 2008, pending before G the Court of Civil Judge, Senior Division, Daman, and the application u/s 45 of the Arbitration Act, 1996 filed in the Civil Suit No.2667 of 2007 and Contempt Petition in relation to Civil Suit No.2667 of 2007 pending before the Bombay High Court at the instance of the appellants are H ENERCON (INDIA) LTD. & ORS. v. ENERCON GMBH 871 &ANR. stayed. Parties are at liberty to approach the court for the A appropriate orders, upon the final award being rendered by the Arbitral Tribunal. This will not preclude the parties from seeking interim measures uls 9 of the Act. [para 146] [953-E-G] 6.3 (a) The conclusion of the Bombay High Court that 8 the seat of the arbitration is in India is upheld; (b) The conclusion that the English Courts would have concurrent jurisdiction is overruled and consequently set aside; (c) The conclusion of the Bombay High Court' that the anti-suit injunction granted by the Daman Trial Court C has been correctly vacated by Daman Appellate Court is overruled and set aside; (d) Consequential directions given in the judgment. [para 147] [953-A-D] Godhra Electricity Co. Ltd. And Anr. Vs. The State of D Gujarat and Anr. 1975 (2) SCR 42 = 1975 (1) SCC 199; · Kol/ipara vs." Aswathanarayana (1968) 3 SCR 387 and Dresser Rand vs. Bindal Agro. 2006 (1) SCR 308 = 2006 (1) SCC 751; Chloro Controls (/) Pvt. Ltd. Vs. Severn Trent Water Purification Inc. & Ors. 2013 (1) SCC 641; National Insurance E Company Ltd. V. Bhogara Polyfab Pvt. Ltd. 2008 (13) SCR 638 = 2009 (1) SCC 267; Jagdish Chander v. Ramesh Chander & Ors. 2007 (5) SCR 720 = 2007 (5) SCC 719 Smt. Rukmanibai Gupta v. Collector, Jabalpur & Ors. 1980 (4) SCC. 556; Grasim Industries Ltd. & Anr. v. Agarwal Steel 2009 (15) F SCR 283 = 2010 (1) SCC 83; and J.K. Jain v. Delhi Development Authority 1995(4) Suppl. SCR 72 = 1995 (6) SCC 571; Dozco India Pvt. Ltd. V. Doosan lnfracore Company Ltd. 2010 (12) SCR 259 = 2011 (6) SCC 179; Videocon Industries v. Union of India 2011 (8) SCR 569 = 2011 (6) SCC 161; Yograj Infrastructure Ltd. V. Ssang Yong G Engineering and Construction Ltd. 2011 (14) SCR 301 = 2011 (9) sec 735 - cited. British Electrical vs. Patley Pressings, [1953] 1 WLR 280 Harvey vs. Pratt, [1965] 1 W.L.R. 1025; Bushwall vs. Vortex, H 872 SUPREME COURT REPORTS [2014) 2 S.C.R. A [1976] 1 WLR 591; C vs. D. (2007) 2 Lloyd's Law Reports 367 and Union of India vis McDonnel. (1993) 2 Lloyd's Rep 48 - cited. Case Law Reference: B 1975 (2) SCR 42 cited para 35 1975 (1) sec 199 cited para 35 -, [1953] 1 WLR 280 cited para 36 c (1965] 1 W.L.R. 1025 cited para 36 (1976] 1 WLR 591 cited para 36 (1968) 3 SCR 387 cited para 36 2006 (1) SCR 308 cited para 36 D 2013 (1) sec 641 cited para 37 2006 (1) SCR 933 referred to para 39 1988 (1) Lloyd's Rep 116 relied on Para 40 E 2012 (12) SCR 327 referred to Para 40 1987 SCR (1) 1024 referred to Para 44 2003 (1) SCR 480 referred to p~ra 44 2005 (3) Suppl. SCR 495 relied on para 46 F 2008 (13) SCR 638 cited para 49 1996 (8) Suppl. SCR 676 referred to para 55 2008 (16) SCR 1043 relied on para 55 G 2007 (5) SCR 720 cited para 55 2009 (3) SCR 115 relied on para 55 2009 (15) SCR 283 cited para 58 1995 (4) Suppl. SCR 72 cited para 58 H ENERCON (INDIA) LTD. & ORS. v. ENERCON GMBH 873 &ANR. (2009) 2 LLR 376 distinguished para 61 A 2010 (12) SCR 259 cited para 61 2011 (14) SCR 301 cited para 61 2011 (8) SCR 569 cited para 61 B (2007) 2 Lloyd's Law cited para 66 Reports 367 (19993) 2 Lloyd's Rep 48 cited para 66 2011 (13) SCR 359 cited Para 68 c [1985) 1 AC 191 referred to para 83 [1937 s. 1835) referred to para 85 [1970] 1 Lloyd's Rep. 269 : referred to para 92 D [1970) A.C.583 [1981) 2 Lloyd's Rep. 446 referred to para 92 [2008]EWHC 426 (TCC) relied on Para 99 E [2007) EWCA Civ 1282 referred to Para 111 (2012) EWHC 3711 (Comm) referred to Para 134 [2007) 1 Lloyds Report 237 referred to Para 134 2005 (5) Suppl. SCR 751 referred to Para 141 F CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2086 of 2014. From the Judgment and Order dated 05.10.2012 of the G High Court of Bombay in CWP No. 7636 of 2009. WITH Civil Appeal No. 2087 of 2014. Rohinton Nariman, Nikhil Sakhardande, Ashim Sood, H 874 SUPREME COURT REPORTS [2014] 2 S.C.R. A Manu Agarwal, Sonali Mathur, Swagata Naik, N. Ganpathy for the Appellants, Dr. A.M. Singhvi, C.U. Singh, Akhil Sibal, Vivek A. Vashi, Naira Jejeebhoy, Jehangir Jejeebhoy, Kum Kum Sen, Shamika B Haldipurkar, Nidiram Sharma, Nikhil Chawla for the Respondents. c The Judgment of the Court was delivered by SURINDER SINGH NIJJAR, J. 1. Leave granted. 2. These civil appeals have been filed against the order and judgment dated 5th October, 2012, passed by the Bombay High Court in CWP Nos.7804 of 2009 and 7636 of 2009. The Bombay High Court by the impugned order dismissed both the D aforesaid Civil Writ Petitions. 3. Appellants No.2 and 3 (members of the Mehra family) and the Respondent No.1 (a company incorporated under the laws of Germany, having its registered office at Aurich, Germany) entered into a joint venture business by setting up E the Appellant No. 1-Company- Enercon (India) Ltd. (hereinaft~r referred to as "Ell"), in 1994. !;IL, having its registered