The Arbitration Conciliation Act 1996 (the Act) contains the following relevant provisions:

Rule 32 of the Singapore International Arbitration Rules 2007 (the SIAC Rules) states that where the seat of arbitration is Singapore, the law of arbitration would be the Singapore International Arbitration Act 2002.

The National Highways Authority of India entered into a construction contract with Ssang Yong Engineering and Construction Company Limited, a company incorporated in Korea (the respondent). The respondent entered into a sub-contract with Yograj Infrastructure Limited, a company incorporated in India (the appellant) for carrying out the construction work. The contract between the appellant and the respondent provided that disputes would be resolved by arbitration in Singapore, in accordance with the SIAC Rules, and that the contract would be governed by Indian law.

Disputes arose between the appellant and the respondent, when the respondent terminated the contract on the ground of delay in performing the construction work. Thereafter, the appellant and the respondent filed applications under section 9 of the Act for interim relief before the Madhya Pradesh District Court (district court). The district court dismissed the applications and directed the parties to refer the matter to arbitration. Accordingly, disputes were referred to arbitration in Singapore. The parties filed applications for interim relief before the arbitrator, under section 17 of the Act. The arbitrator passed an interim order, granting certain interim relief against the appellant.

The appellant filed an appeal against the interim order under section 37 of the Act in the district court. The district court dismissed the appeal on the ground that Part I of the Act is not applicable as the seat of arbitration was Singapore and the law governing the arbitration was Singaporean law. The appellant then filed a civil revision application (an application filed in a High Court against an order of a subordinate court, in cases where no appeal is available against such an order of a subordinate court) before the Madhya Pradesh High Court, which was also dismissed.

The appellant then filed a special leave petition before the Supreme Court of India (Supreme Court).

With regard to the issue of the law governing the arbitration proceedings, the Supreme Court held that the arbitration would be governed by the Singapore International Arbitration Act 2002, in accordance with Rule 32 of the SIAC Rules.

The Supreme Court then held, as regards the applicability of Part I of the Act, that as the seat of arbitration was outside India and the law governing the arbitration proceedings was Singaporean law, that Part I of the Act was impliedly excluded. The Supreme Court, therefore, dismissed the appeal under section 37 of the Act.

The Supreme Court distinguished its decision Bhatia International Ltd v Bulk Trading SA and another (2002) 4 SCC 105 (Bhatia) in the present case, by observing that once the parties have agreed that the arbitration proceedings would be governed by SIAC Rules, including Rule 32, the ratio laid down in Bhatia (as to the applicability of Part I of the Act even when the seat of arbitration is outside India, unless expressly excluded) will not apply.

The requirement of "express exclusion" of Part I of the Act initiated by the Bhatia judgment seems to have now blurred, thanks to the Supreme Court's own decisions in M/s Dozco India P. Ltd v M/s Doosan (2011) 6 SCC 179, Videocon Industries Limited v Union of India (2011) 6 SCC 161 (see Legal update, Indian Supreme Court adopts a pro-arbitration approach) and now in the present case.

Yograj Infrastructure Limited v Ssang Yong Engineering and Construction Company Limited, Civil Appeal No. 7562 of 2011 (Arising out of SLP No. 25624 of 2010, decided on 1 September 2011).