Uttarakhand High Court Rules On ‘Foreign Element' In International Arbitration Disputes

The High Court of Uttarakhand in the case KLA Construction Pvt. Ltd. v. Kajima India Pvt. Ltd.¹ recently elucidated that where there is no 'foreign element', there can be no international arbitration between the parties. In other words, a dispute cannot be referred to an international arbitration and it will be treated as a domestic dispute when there is no 'foreign element' between the parties in the dispute.

In this case, a contract was executed on September 09, 2015 at Delhi between the Petitioner and the Respondent. The contract between the parties was for the construction of a factory at SIDCUL, District Haridwar where the Respondent was the employer. Relevant portion of the Arbitration Clause 20.6 of the agreement read as under: