WHETHER INDIAN PARTIES CAN CHOOSE FOREIGN LAW TO SETTLE DISPUTES?

Published On: 01/09/2015

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The question of whether or not Indian parties can choose foreign law to resolve disputes through arbitration has been much debated. While some argue that this is possible since the choice of the party to determine the choice of law must be recognised; the more conservative argument has been that Indian parties cannot agree to resolve disputes choosing a foreign law, as that would mean contracting out of Indian Law, and therefore opposed to public policy. There has been no conclusive judgement deciding this specific issue, though there has been some observations in this regard in the case of TDM Infrastructure Private Limited v UE Development India Private Limited, (2008) 14 SCC 271, ("TDM Infrastructure case"). Recent judgement of the Bombay High Court in the case of Addhar Mercantile Private Limited v Shree Jagdamba Agrico Exports Pvt Ltd (Arbitration Application No 197 of 2014 along with Arbitration Petition No 910 of 2013) has considered this pertinent issue.

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