The question of whether or not Indian parties can choose foreign
law to resolve disputes through arbitration has been much debated.
While some argue that this is possible since the choice of the
party to determine the choice of law must be recognised; the more
conservative argument has been that Indian parties cannot agree to
resolve disputes choosing a foreign law, as that would mean
contracting out of Indian Law, and therefore opposed to public
policy. There has been no conclusive judgment deciding this
specific issue, though there has been some observations in this
regard in the case of TDM Infrastructure Private Limited v
UE Development India Private Limited, (2008) 14 SCC 271,
("TDM Infrastructure case"). Recent
judgment of the Bombay High Court in the case of Addhar
Mercantile Private Limited v Shree Jagdamba Agrico Exports Pvt
Ltd (Arbitration Application No 197 of 2014 along with
Arbitration Petition No 910 of 2013) has considered this pertinent
issue.
