Yograj Infrastructure Ltd v.

Ssang Yong
Engineering and Construction Co. Ltd
Introduction
The appellant is a company incorporated under the companies act,
1956 and the respondent company is a company incorporated as
per the laws of the Republic of Korea with its registered office at
Seoul and project office at New Delhi.

Case history leading to this appeal

1. On 12th April, 2006, NHAI entered into a contract with the
respondent company for up gradation to Four laning of JhansiLakhnadon section in Madhya Pradesh.
2. On 13th August, 2006, the respondent company entered into a
sub-contract with the appellant company to carry out the
above mentioned work which mentioned the consideration
involved
3. The appellant furnished certain bank guarantees to the
respondent company along with investing 88.15 Crore in the
project.
4. Clauses 27 and 28 of the agreement provided for arbitration
wherein the governing law was to be the arbitration and
conciliation act, 1996.
5. On 22nd September, 2009, the respondent company issued a
notice of termination, on the ground of delay in performing the
work.
6. the Appellant filed an application before the District and
Sessions Judge, Narsinghpur, Madhya Pradesh, under Section
9 of the Arbitration and Conciliation Act, 1996, praying for
interim relief's. A similar application under Section 9 of the
above Act was filed by the Appellant before the same Court on
30th December, 2009, also for interim relief's. Ultimately, on
20th May, 2010, the dispute between the parties was referred
to arbitration in terms of the Agreement and a Sole Arbitrator,
Mr. G.R. Easton, was appointed by the Singapore International
Arbitration Centre on 20th May, 2010.
7. Both parties filed an application for interim measures under
section 17 of the act.
8. On considering the prayers of both the parties, the sole
arbitrator passed an order in favour of the respondent. Due to
which, the appellant went in appeal under section 37(2) of the
act to set aside the same. The same was set aside as the
respondents conteded that the seat of arbitration is Singapore

and hence the laws applicable to the proceedings would be

that of Singapore.
9. On being aggrieved, the appellants filed for a revision in the
High Court, which was also dismissed, against which the
current Special leave petition has been filed.

Issues
1. Whether the law of arbitration would be the arbitration act of
Singapore?
2. Whether the curial laws would be the laws of Singapore?

Held:
1. With regard to the second issue, the court held that clause
27.1 of the agreement states that arbitration proceedings are
to be conducted in Singapore in accordance with the SIAC
rules. Hence the procedural law with regard to the arbitration
proceedings has been held to be the SIAC rules as it was
explicitly mentioned in the agreement.
2. With regard to the first issue, the judge referred to the
judgment of Bhatia International wherein, it was held that Part
I of the act did not automatically exclude all foreign arbitral
proceedings or awards, unless the parties specifically agreed
to exclude the same.
3. After reference to the case, in the instant case it was held that
Bhatia international would have no application once the
parties agreed by virtue of Clause 27.1 of the Agreement that
the arbitration proceedings would be conducted in Singapore,
i.e., the seat of arbitration would be in Singapore, in
accordance with the Singapore International Arbitration Centre
Rules as in force at the time of signing of the Agreement. As
noticed hereinabove, Rule 32 of the SIAC Rules provides that
the law of arbitration would be the International Arbitration
Act, 2002, where the seat of arbitration is in Singapore.
Although, it was pointed out on behalf of the Appellant that in
Rule 1.1 it had been stated that if any of the SIAC Rules was in
conflict with the mandatory provision of the applicable law of
the arbitration, from which the parties could not derogate, the
said mandatory provision would prevail, such is not the case
as far as the present proceedings are concerned. In the instant
case, Section 2(2) of the 1996 Act, in fact, indicates that Part I
would apply only in cases where the seat of arbitration is in
India.