Risks Of Split Contracts & Arbitration Clause Included By Reference

Executive Summary:

The Supreme Court in  Ms. Duro Felguera, S.A ("Duro") v.  M/s Gangavaram Port Limited ("GPL")  held that there cannot be a "composite reference" to an arbitration of disputes arising out of multiple agreements that replaced a single agreement when a Memorandum of Understanding ("MoU") executed postdating such multiple agreements failed to incorporate arbitration clause from the single agreement.

Project & Agreements:

GPL, a green-field, ultra-modern seaport in the state of Andhra Pradesh started operations in 2009. GPL invited bids to expand its port facilities by a tender. Duro Felguera Plantas Industries S.A ("DF"), a Spanish company, and its Indian subsidiary, M/s. Felguera Graus India Private Limited ("FGI") submitted a single bid for Original Package 4 Tender Document ("Original P4T Document"). GPL awarded the tender to DF and FGI as contractors.