THE HIGH COURT OF BOMBAY HAS JURISDICTION UNDER SECTION 47 AND SECTION 48 OF

THE ARBITRATION AND CONCILIATION ACT 1996

1. That the Arbitral Tribunal seated at Singapore has erred in deciding the dispute which
arose due to the absence of mutuality condition in the dispute resolution clause and the
decision was solely based on the private documents which was not admitted by the
respondent against whom it was duly executed. i
2. That the Hon’ble High Court of Bombay has jurisdiction to resist the arbitral award passed
by the arbitral tribunal seated in the Singapore as pre- decided in the clause 17.2 of the
Turbines Contract1 and this power of the Hon’ble Court is derived from the “Court”
defined under the explanation to S.47 of the Act along with S.2(1)(b) 2 of the Commercial
Courts Act 2015. The Court also has jurisdiction u/s 48(2) of the Act to resist the
enforcement of the award and the resistance applications are filed in the Court where the
other party seeks enforcement.

“Court” as defined in the explanation to S.47 of the Act and under the S. 3 of the
Commercial Courts Act, 2015.

3. That the Respondent has approached the Commercial Division of the Hon’ble Court as per
the provisions u/s 47 of the Act along with Section 3 of the Commercial Courts Act, 2015.
As per the landmark judgment of GMR Energy Ltd. v. Doosan Power3 which has stated
that if the seat of the arbitration is not within India and is outside India, Part II of the Act
will apply and hence the present dispute falls under the Part II of the Act. The award
passed by the tribunal is a foreign award as per the S. 44 4 of the Act and whose scope and
meanings has been interpreted by numerous judicial pronouncements. 5 S.44 is based on
the Article 1 and II(1) and II(2) of New York Convention 1958 and S.2 of the Foreign
Awards (Recognition and Enforcement Act) 1961.6

1
Factual Matrix
2
“Commercial Court” means “the Commercial Court constituted under sub-section 1 of the section 3 of the
Commercial Courts Act, 2015.”’
3
GMR Energy Ltd. v. Doosan Power, CS (COMM) 447/2017.
4

5
N.T.P.C. v. Singer Co., AIR 1993 SC 998; Gas Authority of India v. Spie Capage S.A. AIR 1994 Del. 75.
6
Refer the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards also known as New
York Convention 1958. S.2 of the Foreign Awards Act 1961 also talks about the definition of the foreign awards.
 4. That the explanation given under S.47 defines “court” and clearly states that the High
Court has original jurisdiction to decide on the question which arises from the subject
matter of the arbitral award and also the High Court has appellate jurisdiction to hear
appeals from the subordinate courts. The present suit deals with the matter which is
commercial in nature as defined in the landmark judgment of R.M. Investment v. Boeing
Co.7therefore the commercial division of the Bombay High Court has jurisdiction to dealt
with this matter which also derives its power from the Commercial Courts Act, 2015. 8 It
has also been stated in the judgment of Sundaram Finance Ltd. v. Abdul Samad and
Anr9that an award holder or the party of the arbitral proceedings can initiate the
proceeding at the court where the assets are located or as pre-decided and the pre-decided
in the present case is, the Courts of Maharashtra.10

Jurisdiction under Section 48 of the Act

5. That the S.48 of the Act provides for the different grounds for resistance of a foreign
arbitral award. It has clearly stated under this section that any party who is willing to resist
the enforcement of arbitral award has to furnish to the relevant court and the “court” used
in this S. is to be read with the definition of courts u/s 47 of the Act.
6. That the respondent has approached the Hon’ble court to resist the enforcement of the
arbitral award on the grounds of violation of S.48(2) of the Act and therefore has
approached the Hon’ble Court of Original Jurisdiction.
11
7. That in the landmark judgment of Cruz City Mauritius Holdings v. Unitech Limited the
court has noted that enforcement of the award can be resist on the court where the petition
for the enforcement of the award is initiated on the grounds as given in the Act and
therefore, the respondent has filed an application for the resistance of the Award in this
Hon’ble Court.
8. As per the clause 17(2) of the governing contract between G&T and Maritinium which
deals about the governing law and dispute resolution, the Courts in Maharashtra, India has

7
R.M. Investment v. Boeing Co., 1994 AIR 1136.
8
Refer Commercial Courts Act, 2015.
9
Sundaram Finance Ltd. v. Abdul Samad and Anr (2018) 3 SCC 622.
10
Factual Matrix
11
Cruz City Mauritius Holdings v. Unitech Limited EX. P. 132/2014 & Nos. 316/2015.
 exclusive jurisdiction over any dispute arising in connection of this contract and as the
matter is regarding the foreign award, this Hon’ble Court has exclusive jurisdiction.

THE DISPUTE RESOLUTION CLAUSE BEING UNILATERAL IS OPPRESSIVE AND BIASED AGAINST
THE RESPONDENT AND THEREFORE NOT MAINTAINABLE

9. That the agreement entered between the claimant and the respondent on 4 th January 2019
to opt for arbitration as Unilateral Option Clause is considered to be bad and oppressive in
the Indian Arbitration Jurisprudence as it violates the Principal of Natural Justice by
creating biasness towards one of the party. The dispute resolution clause in the present
case lacks the doctrine of mutuality and there is a present of unconscionability therefore
the petition filed by M&T should not be held maintainable.

The Doctrine of Lack of Mutuality

10. That the mutuality is one of the most important aspects of an arbitration agreement. 12The
Supreme Court explaining the doctrine of mutuality 13 has said that it refers to the
reciprocal understanding i.e. both parties should be bound or neither should be. In the
landmark judgment of Baron v. Sunderland Corp14 the English Court of Appeal stated that
mutuality is a necessary element for an arbitration clause and it must provide equal rights
to both the parties to refer disputes to arbitration. Without giving equal rights to both the
parties to refer for arbitration whenever there is a dispute with respect to the underlying
contract, the principal of natural justice and neutrality cannot be fulfilled.
11. That in the present suit, it has to be noted that clause 17.3 of the Turbines Contract 15 only
provides right to G&T to refer to arbitration in case of any dispute arising out of or in
connection with the contract including the existence, validity or even the termination of
the contract which clearly lacks the concept of mutuality which is one of the most
essential element of the arbitration agreement.
12. That in the landmark judgment of Bhartia Cutler Hammer Ltd. v. Avn Tubes Ltd16the
Delhi High Court has clearly stated that only one party cannot have an exclusive right to

12
Pittalis v. Shorefettin, (1986) 1QB 868.
13
Yum! Restaurants (MarketIng) Pvt. Ltd. v. CIT Delhi ABCAUS 2260 (2018) (03) SC.
14
Baron v. Sunderland Corporation (AllER 1966(1) 349(351))
15
Factual Matrix
16
Bhartia Cutler Hammer Ltd. v. Avn Tubes Ltd., (1993) BC 472.
 initiate arbitration. The Act clearly talks about the mutual rights of the parties to refer to
arbitration and there must be an opportunity for bilateral invocation. The Hon’ble court
also stated that if there is such a clause present in the arbitration agreement then the
agreement will not be deemed as a valid arbitration agreement.
13. That in the landmark judgment of the Union of India v. Ratilal R. Taunk17 the Calcutta
High Court has stated that if only one party has right to refer the disputes to arbitration
than such option is only valid at the instance of other parties. The Hon’ble Court said that
when the arbitration agreement gives an option or liberty to only one of the parties to
submit or present to arbitration, then it is not an arbitration agreement. According to the
court, for a valid arbitration agreement, there must be an unqualified or an unconditional
agreement in favor of all the parties to the contract to submit or present to arbitration. In
other words, the court clearly stated that unilateral arbitration agreement is not valid
according to the Act.
14. That in the other landmark judgment of the Delhi High Court in the case of Emmsons
International Ltd. v. Metal Distriutors18the court has confirmed its previous stance on
unilateral clause on the basis of the Bhartia Cutler v. Avn Tubes19 and UoI v.
Ratilal.20Also in the judgment of Lucent Technology v. ICICI Bank21the Delhi High Court
once again held the unilateral clause invalid following the principal laid down in the
Emmsons International. The court in this case invoked the S.28 22 of Indian Contract Act,
1872, implying that the party’s right to recourse through legal proceedings had been
infringed.
15. That if we analyze the principal which arises from the above discussed landmark
judgments, it can be clearly seen that the doctrine of mutuality is clearly missing in the
present case and only one party, i.e. G&T, has exclusive right to refer to arbitration for
any type of dispute arising out of the contract and can be easily determined that this has
made the dispute resolution clause biased in the favor G&T and the right of the respondent
is clearly been hampered by this oppressive clause.

17
Union of India v. Ratilal R. Taunk 2nd (1996) ILR 2 Cal527.
18
Emmsons International Ltd. v. Metal Distributors (2005) BC 465.
19
Supra note 15.
20
Supra note 16.
21
Lucent Technology v. ICICI Bank (2009) SCC OnLine Del 3213.
22
The Doctrine of Unconscionability

16. That unconscionability refers to “a degree of unreasonableness of an agreement forcing a

court to modify or nullify it. The doctrine refers to contractual terms that are extremely
unjust and one-sided in favor of one party possessing more bargaining power.” 23
According to this doctrine one party has more favorable bargaining power to oppress the
rights of the other party. In the present case also, the dispute resolution clause s totally in
the favor of M&T which has subsequently oppressed the rights of the respondent and
therefore the dispute resolution clause is not maintainable.
17. That in the California Court of Appeal case Armendariz v. Foundation Health Psychcare
Services24it was stated that the unilateral arbitration clause generally tends to oppress the
rights of the weaker parties and doctrine of reasonableness is also not present which makes
this type of clause unenforceable. This was also supported in the case of Arnold v. United
Companies Lending Corp.25
18. That on the basis of the case laws discussed above and on the basis of doctrine of
unconscionability it can be said that the dispute resolution clause clearly lacks the natural
balance between the parties, especially regarding their bargaining power and is clearly
oppressive against the respondent.

The Dispute Resolution Clause is Biased and Do Not Provides Equal Rights to Respondent

19. That in the present case, there is a clear imbalance under the dispute resolution clause as it
has served the interest of only one party and it is clearly against the legal rights of
respondent and violates the Principal of Natural Justice. This designation present in the
present case, in the opinion, potentially shows the lack of balance between claimant and
the respondent, especially regarding their reference to arbitration. It must be clearly
observed that one of the parties to this arbitration clause has to adhere to the unfavorable
terms of the dispute resolution clause and the respondent had to adhere to this unfavorable
clause which is a clear violation of natural justice.

23
Iurii Ustinov, “UNILATERAL ARBITRATION CLAUSE; LEGAL VALIDITY ”, Master’s Thesis, Tilburg University.
24
Armendariz v. Foundation Health 24 Cal. 4th 83.
25
Arnold v. United Companies Lending Corp., 511 S.E. 2d 854 (W. Va. 1998).
 20. That it violates the party’s basic rights to refer to a fair trial and to approach the dispute
resolution mechanism. In the Landmark case of Sony Ericsson26 the Supreme Arbitrazh
Court of Russia has impliedly stated that Unilateral Option Clause violates the most
important doctrine of “right of equality of arms.” It is well established principal in law that
every party must have right to have equal opportunity to present one’s case before the
court and in the present case, it must be interpreted like “equal footing before a specific
forum not with regards to choice of forum.”27

THE SUBJECT MATTER IS NOT FIT TO BE SETTLED THROUGH ARBITRATION

Violation of Doctrine of Public Policy

21. That Article V of the New York Convention states that public policy refers to the public
policy of the state in which the award is sought to be enforced. However, the convention
does not define what actually public policy means. Section 48 of the Act clearly states that
the enforcement of a foreign award may be refused if it violates the public policy of India.
It is to be noted that the Supreme Court of India in the case of Renusagar Power Co v.
General Electric Co28held that “a distinction must be drawn while applying the said rule
of public policy between a matter governed by the domestic law, and a matter involving
conflict of laws. The application of this doctrine in the field of conflict of laws is more
limited, and the courts are slower to involve public policy in the case involving a foreign
element, than when a purely municipal legal issue is involved.”
22. That the test lied in the Renusagar clearly states that that the enforcement of the award can
be refused if it is contrary to justice or morality which comes under the ambit of public
policy. In the present case, due to the present of the unilateral dispute clause which has
created a notion of biasness towards the petitioner by resisting the respondents right to
refer to the arbitration clearly violates the notion of morality and justice and thus it
infringes the doctrine of public policy.
23. That in the landmark judgment of ONGC v. Saw Pipe29the Supreme Court held that the
term “Public Policy” must be given a wider interpretation. In the another landmark

26

27
Youssef Nasssar,” ARE UNILATERAL OPTION CLAUSES VALID?” Kulwer Arbitration Blog.
28
Renusagar Power Co v. General Electric Co 1994 AIR SC 860 at para 51.
29
ONGC v. Saw Pipes AIR 2003 SC 2629
 judgment of Supreme Court of India which decided the fate and expression of the term
public policy and overruled its previous instance given in the judgment of Phulchand
Exports Ltd. v. OOO Patriot30where the court was of the opinion that “public policy given
under S.48(2)(b) has to be given wider meaning and the award could be set aside if it is
patently illegal.”
24. That the aforesaid verdict of the Supreme Court was overruled in the judgment of Shri Lal
Mahal Ltd. v. Progetto Grano Spa31 where the SC stated that the term public policy must
be given the narrower meaning and the foreign award can be refused for enforcement on
the basis foof violation of doctrine of public policy if it covered by one of the three
categories present in the landmark judgment of Renusagar i.e. (i) fundamental policy of
Indian Law (ii) the interest of India; or (iii) justice or morality. In the present case it must
be noted that the dispute resolution clause favored the M&T by giving firsthand and only
right to go for arbitration without providing equal right to the respondent which clearly
violates the underlying principal of morality and justice.
25. That the judgment of ONGC v. Western Geco International Ltd32. has also made a clear
stance of Supreme Court on the topic of Public Policy by stating that the expression must
include all such fundamental principle as providing a basis for administration of justice
and enforcement of law in this country. As above discussed earlier the present case is
contrary to the notion of Public Policy in respect to principal of Justice and Morality.

Serious Allegation of Fraud is Not Arbitrable

26. That the claimant on the basis of the report submitted by the investigating agency which
stated that document were forged a

30
Phulchand Exports Ltd. v. OOO Patriot (2011) 10 SCC 300.
31
Shri Lal Mahal Ltd. v. Progetto Grano Spa (2014) 2 SCC 433.
32
ONGC v. Western Geco International Ltd. (2014) SLT 564.