Bombay High Court On Whether Two Indian Parties Can Choose A Foreign Seated Arbitration?

The Bombay High Court in the recent case of M/s Addhar Mercantile Private Limited (Applicant) v Shree Jagdamba Agrico Exports Pvt Ltd¹ (Respondent) has considered the important issue as to whether two Indian parties choosing a foreign seat of arbitration and a foreign law governing the arbitration agreement may be construed to be contracting out of Indian law and therefore opposed to public policy.

Background

• Applicant and the Respondent had entered into an agreement whereby all disputes were to be referred to arbitration and the arbitration clause included the following language:
  
  "Arbitration in India or Singapore and English law to be (sic) apply."
• Pursuant to a dispute under the agreement, the Applicant filed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (the Arbitration Act) for appointment of an arbitrator as well as a petition under Section 9 of the Arbitration Act seeking interim reliefs.