Union of India v Reliance Industries Limited & Anor

The principle in Henderson v Henderson is a procedural power concerned with preventing abusive and duplicative proceedings. In an arbitration seated in London, its exercise is governed by the law of the seat, even where the underlying contract is governed by foreign law.

The principle may apply to claims, defences and arguments raised at an earlier stage of the same arbitration. A section 69 appeal requires satisfaction of each statutory threshold, including that determination of the question would substantially affect the parties’ rights. Section 68 provides a high hurdle and cannot be used to reargue foreign-law merits or public-policy issues.

The Union of India challenged a January 2021 partial award arising from long-running UNCITRAL arbitration concerning production sharing contracts governed by Indian law and seated in London.

The challenge was brought under sections 68 and 69 of the Arbitration Act 1996. The principal issues were whether the tribunal had correctly applied Henderson v Henderson as a matter of English procedural law, whether the principle could apply to earlier stages of the same arbitration, and whether the tribunal’s refusal to consider constitutional and related threshold objections constituted serious irregularity or offended public policy.

1. Applications refused. The Government failed to establish that the tribunal’s decision was obviously wrong or at least open to serious doubt, that the questions substantially affected its rights, or that it was just and proper for the court to determine them under section 69.
2. The principle in Henderson v Henderson is properly characterised as procedural rather than substantive. It protects the arbitral or judicial process from wasteful and potentially oppressive duplicative proceedings. In an arbitration seated in London, the tribunal was entitled to apply English law to that procedural question, notwithstanding that the contracts were governed by Indian law. The reasoning in Virgin Atlantic Airways Limited v Zodiac Seats UK Limited and Takhar v Gracefield Developments Ltd supported that conclusion.
3. The principle may apply in arbitration as well as litigation, to claims, defences and arguments, and to earlier stages of the same reference. Although the point in Daewoo Shipbuilding and Marine Engineering Company Ltd v Songa Offshore Equinox Ltd was obiter, there was substantial judicial support for it. In any event, the Government’s objections could and should have been advanced earlier, and the remission concerned additional documents supporting an existing claim rather than wholly new claims.
4. The tribunal’s procedural powers were consistent with its duty under sections 33(1)(a) and 33(1)(b) of the Arbitration Act 1996 to act fairly and avoid unnecessary delay or expense. There was no unfairness in preventing the Government from raising objections which should previously have been advanced.
5. The section 68 challenge failed. The tribunal dealt with the constitutional arguments and limitation issue, albeit briefly. Its conclusion that the objections lacked merit did not amount to failure to deal with essential issues. Section 68(2)(g) was not a vehicle for challenging the tribunal’s conclusions on Indian law or Indian public policy.

This was a first-instance challenge to a January 2021 arbitral award. Earlier court proceedings included the remission of an earlier award by Popplewell J and a subsequent section 67 decision and order by Knowles J, but the present applications were refused.