Alternative Dispute Resolution

Roger Shashoua v. Mukesh Sharma

(2017) 14 SCC 722

Facts

The parties entered into agreements concerning a major infrastructure and exhibition project in India.
The agreements contained arbitration clauses providing:
ICC arbitration;
London as the venue; and
Indian substantive law.
Disputes arose.
Arbitration was commenced in London.
English courts considered the clause and held that London was the juridical seat.
The arbitration proceeded, and awards were made.
Indian proceedings were later instituted challenging the awards and asserting that:
London was only a convenient venue;
India was the true seat because the project and governing law were Indian;
Part I applied under the pre-BALCO framework.
The opposing parties relied upon:
the wording of the clause;
the ICC framework;
the English court determination; and
the parties’ conduct.

A named venue will ordinarily be treated as the seat where:
arbitration is to be conducted there;
institutional rules support that location;
no other seat is identified; and
no contrary indicia appear.
This principle became known as the Shashoua principle.
Substantive governing law may differ from the law of the seat.
A foreign court’s determination concerning the seat may create:
issue estoppel;
res judicata; or
strong persuasive finality between the same parties.
Under the pre-BALCO regime, a foreign seat and curial law impliedly excluded Part I.

The clause selected London as the venue of ICC arbitration.
It did not merely provide that one or more hearings could occur there.
The whole arbitration was structured around London.
No alternative seat was mentioned.
The ICC process and English judicial support confirmed the legal connection.
The Supreme Court accepted the Shashoua principle:
where the venue is designated and no contrary indicators exist, it is ordinarily the seat.
Indian substantive law governed the merits of the dispute.
That did not make India the curial jurisdiction.
The tribunal seated in London could apply Indian law.
The English court had already examined the same contractual question and determined that London was the seat.
The parties had participated in proceedings on that basis.
Reopening the issue in India would:
permit inconsistent national judgments;
undermine finality;
encourage forum shopping; and
disregard the seat court.
The Court therefore treated Part I as excluded.
The Indian challenge to the award could not proceed under Section 34.
Any annulment challenge belonged to English courts.
Indian courts could examine the award only under the foreign-award enforcement provisions.
The case later influenced BGS SGS Soma, which adopted the Shashoua principle into Indian seat jurisprudence.

The Supreme Court held that London was the juridical seat.
Indian substantive law did not alter the seat.
The prior English determination and the parties’ conduct reinforced that conclusion.
Indian Section 34 proceedings were not maintainable.
Use this case for: a designated arbitration venue becomes the seat where no contrary indicia appear—the Shashoua principle.