Arbitration












Section 2(1)(f) of the Act defines an ICA as a “legal relationship which must be considered commercial, where either of the parties could even be a faraway national or resident, or could even be a faraway body corporate or could even be a corporation , association or body of individuals whose central management or control is in foreign hands”.


Thus, under Indian law, “an arbitration with a seat in India, but involving a faraway party are visiting be considered an ICA, and may be subject to Part I of the Act. However, where an ICA is held outside India, Part I of the Act would haven't got any applicability on the parties (save the stand-alone provisions introduced by the Amendment Act, unless excluded by the parties, as discussed later) but the parties would be subject to Part II of the Act”.


The Amendment Act has deleted the words ‘a company’ from the purview of the definition thereby restricting the definition of ICA only to the body of people or association. Therefore, by inference, it's been made clear that if an organization has its place of incorporation as India then central management and control would be irrelevant as far as its determination of being an “international commercial arbitration” is worried. ‘Commercial’ should be construed broadly having relevance the manifold activities which are an integral a component of international trade today (R.M. Investments & Trading Co. Pvt. Ltd. v. Boeing Co., AIR 1994 SC 1136). Notably, the scope of Section 2 (1) (f) (iii) structure my mind by the Supreme Court within the case of TDM Infrastructure Pvt. Ltd. v. UE Development India Pvt. Ltd., wherein, despite TDM Infrastructure Pvt. Ltd. having foreign control, it absolutely was concluded that “a company incorporated in India can only have Indian nationality for the aim of the Act”.


Thus, though the Act recognizes companies controlled by foreign hands as a faraway body corporate, the Supreme Court has excluded its application to companies registered in India and having Indian nationality. Hence, just case an organization has dual nationality, one supported foreign control and other supported registration in India, for the aim of the Act, such corporation wouldn't be considered a faraway corporation. during a recent case, where the Indian company was the lead partner during a consortium (which also included foreign companies) and was the determining voice in appointing the chairman and thus the consortium was in Mumbai, the Supreme Court held that the central management and control was in India.

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