Delhi HC: Arbitration Between Metro Express and Construcciones to Stay in London

In a recent court decision, the Delhi High Court ruled that the argument between Delhi Airport Metro Express Pvt Ltd and Construcciones Y Auxiliar De Ferrocarriles will be settled in London. This decision confirms that London will be the place where the arbitration happens, and Indian courts won't be involved.

Background: The Metro Project

Delhi Airport Metro Express Pvt Ltd, a partnership between Reliance Infrastructure and Construcciones Y Auxiliar De Ferrocarriles, was in charge of the Delhi Metro Airport line project. Problems came up over technical issues, leading to arbitration proceedings.

Key Dates and Agreements

• 2007-2008: Agreements signed between the companies, including the Supply Contract and Maintenance Services Agreement (MSA).
• 2010: Assignment Agreement where responsibilities shifted to Construcciones Y Auxiliar De Ferrocarriles & Anr.
• 2013: Problems appeared, and Delhi Airport Metro Express Pvt Ltd cashed a performance bank guarantee, leading to more legal action.

Arbitration Battle

The arbitration clauses stated that arguments would be settled under ICC rules in London. Despite Delhi Airport Metro Express Pvt Ltd's attempt to bring the case under Indian jurisdiction, the court stuck to the original agreement terms.

"The place of the arbitration shall be London and the language of the arbitration shall be English."

Court's Analysis and Ruling

• Jurisdiction: The court stressed that having London as the place for arbitration gives exclusive control to English courts, meaning Indian courts can't get involved.
• Legal Precedents: The decision was backed by past rulings, especially the BALCO case, which made it clear that the place of arbitration decides jurisdiction.
• Party Autonomy: The court respected the freedom of the parties to choose their arbitration place, reinforcing the international nature of the agreement.

Summary of Verdict

The High Court's decision emphasizes the importance of sticking to the terms of arbitration agreements, especially the chosen location. This ruling shows how global business contracts can be and how local courts have a limited role in international arbitration.

"The clear choice of London as the place of arbitration, along with the inclusion of ICC rules, shows the parties’ intent to be governed by a neutral international framework."

This case is a crucial reminder of the binding nature of arbitration clauses and the freedom parties have in international contracts.