- (1.) The residue of the Constitution Bench Judgment in Bharat Aluminium Company v. Kaiser Aluminium Technical Services Inc., 2012 9 SCC 552 is the subject matter of the present appeal. At the instance of the appellant, the Bench resolved the conflicting, if not, confusing views on the applicability of Part I of Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'Arbitration Act') and held that " Part I of the Arbitration Act is applicable only to all the arbitrations which take place within the territory of India", overruling a three-Judge Bench decision of this Court in Bhatia International v. Bulk Trading S.A. and another, 2002 4 SCC 105. Exercising its the power under Article 142 of the Constitution of India, the Constitution Bench however, held that the law declared by it would only operate prospectively. In other words, all agreements executed prior to 06.09.2012 were to be governed by the decision in Bhatia International .
(2.) In Bhatia International , it was held that even in cases of international commercial arbitrations held out of India, provisions of Part I would apply unless the parties by agreement express or implied, excluded all or any of its provisions. To quote paragraph-32: "32. To conclude, we hold that the provisions of Part I would apply to all arbitrations and to all proceedings relating thereto. Where such arbitration is held in India the provisions of Part I would compulsorily apply and parties are free to deviate only to the extent permitted by the derogable provisions of Part I. In cases of international commercial arbitrations held out of India provisions of Part I would apply unless the parties by agreement, express or implied, exclude all or any of its provisions. In that case the laws or rules chosen by the parties would prevail. Any provision, in Part I, which is contrary to or excluded by that law or rules will not apply."
(3.) Therefore, the simple question before us is whether the parties by agreement, express or implied, have excluded wholly or partly, Part I of the Arbitration Act.;