Benin-seat Arbitration Prevails; Section 11 Petition Dismissed for Lack of Jurisdiction

A bench of Justice Pamidighantam Sri Narasimha and Justice Atul S. Chandurkar heard an arbitration petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 in which the petitioner sought appointment of a sole arbitrator and a composite reference of disputes said to arise from a Buyer and Seller Agreement (BSA) and related transactions, invoking the group of companies doctrine to implead two other entities.

The Court dismissed the Section 11 petition and held that the disputes arose under an international commercial arbitration agreement seated in the Republic of Benin, governed by Benin law, so that Part I of the 1996 Act did not apply and Indian courts lacked jurisdiction to appoint an arbitrator. The Court concluded that the BSA and its Addendum constituted the principal or "mother agreement", the subsequent Sales Contracts and High Seas Sale Agreements (HSSAs) were ancillary consignment-level arrangements that did not novate or supersede the BSA, and the group of companies doctrine did not justify a composite reference. The Court also relied on the prior decision of the Delhi High Court refusing an anti-arbitration injunction and on the fact that the Benin-seated arbitration had culminated in a final award dated 21.05.2024. The Court, in its reasoning, observed: “In view of the aforesaid discussion, both the legal position and the factual matrix converge to a single, inescapable conclusion. The very nature of the present dispute is that of an ‘international commercial arbitration’ as defined under Section 2(1)(f) of the 1996 Act, respondent no.1 being a corporation incorporated under the laws of Benin. This statutory characterisation necessarily triggers the application of Part II of the 1996 Act when the arbitration is foreign-seated, and not Part I. Section 2(2) makes the position explicit by providing that Part I applies only where the place of arbitration is in India; consequently, recourse to Section 11, located within Part I, is available solely in respect of India-seated arbitrations. … The BSA and its Addendum constitute the mother agreement, containing a clear and deliberate choice of Benin as the juridical seat of arbitration and Benin law as the governing and curial law. The subsequent Sales Contracts and HSSAs are merely ancillary, facilitating performance of isolated shipments, and cannot override the dispute resolution framework of the BSA.”

Background The petitioner, Balaji Steel Trade, entered into a Buyer and Seller Agreement dated 06.06.2019 with Fludor Benin S.A. (respondent no.1) for supply of product over five years; the BSA provided that arbitration “will take place in Benin” and an Addendum dated 09.01.2021 recorded Benin law as governing law while expanding respondent no.1’s sale to third parties. Respondent no.1 assigned supply obligations to Vink Corporations DMCC (respondent no.2) and Tropical Industries International Pvt. Ltd. (respondent no.3) and the petitioner executed discrete Sales Contracts and HSSAs for individual consignments; those contracts contained separate arbitration clauses pointing to India under Indian statutes. Disputes over quantity and payments led to competing arbitration notices: respondent no.1 invoked arbitration in Benin and the Commercial Court of Cotonou appointed a sole arbitrator; the petitioner served its own arbitration notice in India and filed an anti-arbitration injunction suit before the Delhi High Court. The Delhi High Court dismissed the injunction application on 08.11.2024, finding that the BSA and Addendum formed the operative contractual matrix and that the consignment contracts were distinct. The Benin tribunal rendered an award on 21.05.2024. On 23.08.2023 the petitioner filed the present Section 11 petition seeking constitution of an arbitral tribunal under Indian law for a composite reference; the Supreme Court rejected the petition as legally untenable, barred by issue estoppel arising from the Delhi High Court judgment, and inconsistent with the territorial and curial effect of a foreign seat of arbitration. The petition was dismissed and parties were directed to bear their own costs.

Case Details: Case No.: ARBITRATION PETITION NO. 65 OF 2023 (REPORTABLE 2025 INSC 1342) Case Title: Balaji Steel Trade v. Fludor Benin S.A. & Ors. Appearances: For the Petitioner(s): Mr. Devadatt Kamat, Senior Counsel; Ms. Shruti Sabharwal; Mr. Nishant Doshi For the Respondent(s): For Respondent No.1: Mr. Nakul Dewan, Senior Counsel; Mr. Susshil Daga; Mr. Pallav Mongia (Advocates for Respondent Nos. 2 and 3 were recorded in the proceedings; specific names not set out in the reported judgment)

Date of Judgment: November 21, 2025 Bench: PAMIDIGHANTAM SRI NARASIMHA and ATUL S. CHANDURKAR, JJ.