There Cannot be a Single Arbitration Reference for Disputes arising out of different Agreements :SC

While disposing of arbitration requests pertaining to agreements between Gangavaram Port Ltd(GPL), M/s Duro Felguera S.A, a Spanish company (DF) and Felguera Graus India Private Ltd.(FGI), the Supreme Court held that there cannot be a single reference for disputes arising out of different agreements, even if they are inter-linked to a single transaction.

When disputes arose, arbitration clause was invoked by DF and FGI. FGI had issued four arbitration notices, and DF issued one arbitration notice, under their respective agreements. On the other hand, GPL issued a composite notice constituting a single arbitral tribunal on the basis of MoU. The justification of GPL was that the subsequent MoU subsumed the earlier separate agreements.

The bench comprising Justice R. Banumathi and Justice Kurian Joseph, through their separate judgments,  did not uphold the course of action adopted by GPL in issuing a comprehensive notice. It was held that there were different agreements, each with its own arbitration clause, and hence there had to be separate arbitral tribunals. Also, the dispute with respect to DF was an international arbitration, whereas the disputes with respect to FGI were a domestic arbitration.

November 18th, 2017