## Facts

- National Thermal Power Corporation (NTPC) and a foreign contractor consortium headed by Singer executed two agreements in New Delhi (Aug. 17, 1982) for supply, erection, and commissioning of works in India.
- The contracts expressly provided that Indian law governed the contracts and that the courts in Delhi had exclusive jurisdiction.
- The contracts included an arbitration clause requiring attempts at amicable settlement, then ICC arbitration before three arbitrators (one appointed by each party and a third named by the President of the ICC).
- The arbitration clause did not expressly designate a governing law for the arbitration agreement or specify a seat.
- Pursuant to the ICC Rules, the ICC Court fixed London as the place of arbitration, and the tribunal sitting in London issued an interim award in Singer’s favor.
- NTPC sought to set aside the interim award in the Delhi High Court under the Arbitration Act, 1940.
- The Delhi High Court held English law governed the arbitration agreement because London was the seat, treated the interim award as a “foreign award” under the Foreign Awards (Recognition and Enforcement) Act, 1961, and concluded only English courts could set it aside.

## Issues

1. Whether, absent an express choice for the arbitration clause, the arbitration agreement was governed by Indian law (as the proper law of the contract) or by English law (as the law of the seat fixed under ICC Rules).
2. Whether an interim award made in London under ICC Rules was a “foreign award” under the Foreign Awards (Recognition and Enforcement) Act, 1961, or instead fell under the Arbitration Act, 1940, considering Section 9(b) of the 1961 Act.
3. Whether Delhi courts had jurisdiction to entertain an application to set aside the interim award in light of the contractual clause granting exclusive jurisdiction to the courts of Delhi.

## Decision

- The Supreme Court of India allowed NTPC’s appeal and reversed the Delhi High Court.
- It held the proper law of the arbitration agreement was Indian law, consistent with the parties’ express choice of Indian law for the contract and exclusive Delhi jurisdiction.
- It held the interim award, though made in London, was not a “foreign award” under the 1961 Act and was instead governed by the Arbitration Act, 1940, in view of Section 9(b) of the 1961 Act.
- It held the Delhi High Court had jurisdiction to hear NTPC’s challenge to set aside the interim award under the Arbitration Act, 1940.

## Legal Principles

- Parties to an international contract may choose the law governing their contract and dispute resolution; presumptions tied to the arbitral seat are rebuttable by the parties’ demonstrated intent.
- An arbitration clause incorporated in a contract is generally governed by the same proper law as the underlying contract unless a different intention is clearly expressed or necessarily implied.
- The “proper law” governing validity, interpretation, and scope of the arbitration agreement is distinct from the curial law governing arbitral procedure; designation of a foreign place of arbitration may affect procedure without displacing the chosen proper law of the arbitration agreement.
- Under Section 9(b) of the Foreign Awards (Recognition and Enforcement) Act, 1961, an award rendered abroad may be treated as governed by domestic arbitration law where the arbitration agreement is governed by Indian law.
- An express exclusive-jurisdiction clause selecting Delhi courts supported Indian judicial supervision over challenges to the award under the Arbitration Act, 1940.

## Conclusion

The Court held that the contracts’ express choice of Indian law and exclusive Delhi jurisdiction governed the arbitration agreement, and that London being fixed as the place of ICC arbitration did not convert the interim award into a foreign award or exclude Delhi courts from setting it aside under India’s domestic arbitration statute.


Nat’l Thermal Power Corp. v. Singer Co., (1992) 3 S.C.C. 551 (India 1992)