SC Upholds Harmonious Construction of Different Arbitration Clauses between Same Parties Relating to the Same Transaction

In Balasore Alloys Limited v. Medima LLC[1], the SC was confronted with the issue of two different arbitration clauses existing in 2 related agreements between the same parties relating to the same transaction. The SC while relying upon its decision in Olympus Superstructures Pvt. Ltd. v. Meena Vijay Khetan[2], held that in order to harmonise or reconcile and arrive at a conclusion as to which of the arbitration clauses would be relevant; it was necessary for the Court to refer to the manner in which the parties invoked the arbitration clause and the nature of the dispute that was sought to be resolved through arbitration. In the present case SC held that the parties should get their disputes resolved pursuant to the arbitration clause in the main agreement rather than under a purchase order (which was for a limited purpose).

 

[1] Arbitration Petition (Civil) No. 15/2020.

[2](1999) 5 SCC 651.

Published In:Inter Alia - Quarterly Edition - September 2020 [ English
Date: September 30, 2020