Bharat Aluminium Company vs. Kaiser Aluminium Technical Services Inc.
[2016] 1 S.C.R. 364; 2016 INSC 96
Coram: Hon’ble Justice Anil R. Dave, Hon’ble Justice Kurian Joseph & Hon’ble Justice Amitava Roy
Forum: Hon'ble Supreme Court of India
Case No.: Civil Appeal No. 7019 of 2005 with Civil Appeal No. 3678 of 2007
Date of Decision: January 28, 2016

Facts and Background:

  • The Bharat Aluminium Company was the Appellant.
  • The Kaiser Aluminium Technical Services Inc. was the Respondent.
  • On 22.04.1993, an agreement was executed between the Appellant and the Respondent to supply equipment and modernise the Appellant’s production facilities at Korba, Chhattisgarh.
  • Disputes arising under the agreement were referred to arbitration in England, resulting in two arbitral awards dated 10.11.2002 and 12.11.2002, rendered in favor of the respondent.
  • The Appellant’s applications under Section 34 of the Arbitration Act were dismissed by the District Judge, Bilaspur, and the appeals therefrom were dismissed by the High Court of Chhattisgarh.
  • The Constitution Bench resolved conflicting views on Part I of the Arbitration and Conciliation Act of 1996, and the present case arises as its residual outcome.

Procedural Posture:

  • In Bhatia International vs. Bulk Trading S.A. and Another (2002) 4 SCC 105, the Three-Judge Bench held that:
  1. Part I of the Arbitration Act applies to international commercial arbitrations outside India, unless the parties expressly or impliedly exclude its provisions.
  2. Part I applies compulsorily in arbitrations within India, and parties may deviate from its provisions only to the extent permitted by its permissive sections.
  • The Constitution Bench in Bharat Aluminium Company v. Kaiser Aluminium Technical Services Inc. (2012) 9 SCC 552 overruled the decision in Bhatia International vs. Bulk Trading S.A. and Another (2002) 4 SCC 105 and held that:
  1. Part I of the Arbitration and Conciliation Act, 1996, applies only to arbitration in India.
  2. The law declared by the Bench would operate prospectively, meaning agreements executed before 06.09.2012 would continue to be governed by Bhatia International.


Main Issue:

Have the parties, by agreement, express or implied, excluded wholly or partly Part I of the Arbitration Act? (Paragraph 3)