Indian Courts Exercise Jurisdiction to Appoint Arbitrator Despite Bogotá Venue; Sole Arbitrator Appointed

A Bench of Chief Justice Sanjiv Khanna, Justice Sanjay Kumar and Justice K.V. Viswanathan heard an arbitration petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, filed by Disortho S.A.S. for appointment of an arbitral panel under Clauses 16.5 and 18 of an International Exclusive Distributor Agreement, a petition which Meril Life Sciences Private Limited opposed on jurisdictional grounds.

The Court held that, on a proper construction of the contract and applicable conflict‑of‑laws principles, the parties had impliedly chosen Indian law as the law governing the arbitration agreement and that Indian courts possessed jurisdiction under the A&C Act to appoint an arbitrator. The Bench observed that the choice of venue alone did not displace the presumption in favour of the lex contractus and relied on established authorities including Sulamérica and Enka Insaat to apply the three‑step test for determining the law applicable to an arbitration agreement. The Court, in its reasoning, observed: “We begin by applying the three‑step test developed by Sulamérica Cia (supra). First, neither Clause 16.5 nor Clause 18 explicitly stipulates the governing law of the arbitration agreement. Therefore, we proceed to the next step of the test, which involves identifying the parties' implied choice of law for the arbitration agreement. At this stage, there was a strong presumption that the lex contractus, i.e., Indian law, governed the arbitration agreement. ... In conclusion, at this second stage of the inquiry, we found that the parties had impliedly agreed that Indian law governed the arbitration agreement, and the controversy could be resolved accordingly.”

Background

The dispute arose from an International Exclusive Distributor Agreement dated 16 May 2016 under which Disortho (a Colombian company) appointed Meril (an Indian company) as distributor for Colombia. Clause 16.5 stated that “This Agreement shall be governed by and construed in accordance with the laws of India and all matter pertaining to this agreement or the matters arising as a consequence of this agreement with be subject to the jurisdiction of courts in Gujarat, India.” Clause 18 provided for conciliation and arbitration at the Conciliation and Arbitration Centre of the Chamber of Commerce of Bogotá D.C., specified Bogotá as the venue and stated that “The award shall be in law and standard will be applicable Colombian law governing the mailer [sic]”. Disortho sought appointment of arbitrators under Section 11(6); Meril contended that the arbitration clauses conferred jurisdiction on Colombian authorities and that Indian courts lacked power to appoint arbitrators.

The Court reviewed international and domestic precedents (including Enka Insaat, Sulamérica, Mankastu, Enercon and the recent Arif Azim decision) and outlined the governing principles: (i) the law applicable to the arbitration agreement may differ from the law governing the substantive contract; (ii) the three‑stage inquiry of express choice, implied choice and closest connection; and (iii) the limited weight of a mere venue designation without other indicia shifting the lex arbitri. Applying these principles, the Bench found no express choice of governing law for the arbitration agreement, identified an implied choice in favour of Indian law, and held that Part I of the A&C Act applied. During hearing the parties agreed that, if appointment were made, the arbitration could be held in India and that a sole arbitrator would adjudicate. The Court therefore appointed Mr. Justice S.P. Garg (Retd., Delhi High Court) as sole arbitrator, directed that the venue be mutually decided by parties and the arbitrator, and ordered that the arbitration be governed by the rules of the Delhi International Arbitration Centre with the international fee schedule applicable. The petition was allowed and disposed of accordingly.

Case Details: Case No.: ARBITRATION PETITION NO.48 OF 2023 (2025 INSC 352) Case Title: Disortho S.A.S. v. Meril Life Sciences Private Limited Appearances: For the Petitioner(s): [Not indicated in the judgment] For the Respondent(s): [Not indicated in the judgment]