Indian Court Has No Jurisdiction in International Arbitration

In an appeal case of Videocon Industries Ltd vs Union of India, the Supreme Court of India (SCI), recently, negated a Delhi High Court (HC) judgment stating that the HC had no authority to consider an international arbitration petition. A production sharing contract was signed between the government and a group of four companies consisting of ONGC, Videocon, Cairn Energy of UK and Ravva Oil of Singapore. The contract was for exploration and mining of hydro carbon resources in the territorial waters and exclusive economic zones of India. 

Afterwards, disagreements cropped between the parties over cost upturn and profit. Due to an epidemic, arbitral tribunal proceedings in Kuala Lumpur (KL) were reallocated to Amsterdam and then to London. The tribunal rejected the government’s request to hold the proceedings in KL. The government then moved the Delhi HC with the same request. The HC allowed the prayer, upholding that Indian courts have jurisdiction in the issue. On appeal, the SCI ruled that the HC had no jurisdiction in this international agreement.

By Vidhi Agarwal, Partner.