Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. [(2012) 9 SCC 552], popularly known as the BALCO judgment, is considered a turning point in Indian arbitration. It clarified the applicability of Part I of the Arbitration and Conciliation Act, 1996 to foreign-seated arbitrations.
Case Background: BALCO and Kaiser entered into an agreement that provided for arbitration in a foreign seat. A dispute arose, and BALCO approached Indian courts seeking interim relief under Part I of the Arbitration Act. The key issue was whether Part I applied to foreign-seated arbitrations.
Supreme Court’s Observations: The Constitution Bench held that Part I of the Arbitration Act applies only to arbitrations seated in India. Hence, Indian courts have no jurisdiction to interfere in foreign-seated arbitrations, including granting interim measures or setting aside awards.
Key Contributions:
- Distinguished between domestic and international arbitrations
- Recognized the principle of territoriality in arbitration law
- Overruled the earlier judgment in Bhatia International v. Bulk Trading
Impact: BALCO brought clarity and certainty to international commercial arbitration. It aligned Indian arbitration law with global standards and boosted investor confidence. It also limited judicial interference in foreign-seated arbitrations.
Conclusion: The BALCO judgment marks the dawn of a pro-arbitration regime in India. It affirmed India’s respect for party autonomy, seat-based jurisdiction, and minimal judicial intervention—core principles of modern arbitration.