An interesting question had arisen for determination before the Bombay High Court in the matter of Aslam Ismail Khan Deshmukh v. Asap Fluids which decided a petition under Section 11(6) of the Act.
The applicant in this case was a non-resident Indian residing and working in Dubai, UAE and the respondent was a company incorporated in Mumbai under the Companies Act, 2013. It was contended by the respondent before the High Court that since the applicant is ex-facie a person habitually residing in a country other than India, the arbitration was an international commercial arbitration. Therefore, in view of Section 11(12)(a) of the Act, an application under Section 11 of the Act would only lie before the Supreme Court and not before the Bombay High Court.
As against this, the applicant’s case was that the arbitration was not an international commercial arbitration, because the applicant is a national of India holding an Indian passport, also having a ration card and an Aadhar card. It was also contended by the applicant that he is presently residing in Dubai only for work and comes to India frequently to visit his family. The applicant also relied upon the definition of “habitually resident” as defined in the Law Lexicon and sought to contend that in order to decide whether a person is a habitual resident in a particular country, the Court should consider whether such person intends to reside in that country so as to obtain domicile in that country. He argued that his permanent place of residence is in India and he has no intention of residing in any other country except India.
In light of the above facts, the question of law which arose for consideration before the High Court was the meaning and interpretation of Section 2(1)(f)(i) of the Act, and more particularly, the meaning of “…or habitually resident in, any country other than India”. The High Court, while upholding the contention of the respondent, concluded that the proposed arbitration proceedings in the present case would constitute an international commercial arbitration and observed as under:
“It is clear from the definition that the legislature has used two distinct expressions viz. “national” and “habitual resident”. These two expressions are separated by the expression “or”, which means they have been used disjunctively. Therefore, if even one of the parties to the arbitration satisfies the requirement of being a national of, or habitual resident in, any country other than India, it would be an international commercial arbitration. It is not necessary that party must be both a national of and a habitual resident in any country other than India… even if one of the parties is habitually resident in a country other than India but a national of India, this provision would still be applicable, and it would be an international commercial arbitration.”
“It is very clear that language of sub-clause (i) of Section 2(1)(f) of the Act does not use the expression ‘domicile’. It is an expression that the legislature would have been aware of but has consciously chosen to use the expression ‘habitually resident’. Further, even the Law Lexicon definition relied upon by the Applicant states that the meaning of “habitually resident” is “a physical presence in a country which must endure for some time; it is equivalent to the residence required to establish domicile without the necessary animus. Habitually Resident also means Place or Country in which a person has his home.” Even from this definition it is clear that the animus necessary for domicile is not necessary for satisfying the meaning of ‘habitually resident’. It is therefore a lower standard than that of domicile. Therefore, the judgments that deals entirely with the meaning of ‘domicile’ would not be of any help to the Applicant. Further, the submission of the Applicant that it is the intention to reside in a particular place that makes him a ‘habitual resident’ would be contrary to the Law Lexicon definition relied upon even by the Applicant, which says that animus is not necessary. For the same reason the alleged intention of the Applicant not to reside in any country other than India, as stated in the Written Submissions, would not be material to the issue of the Applicant being a ‘habitual resident’ of Dubai.”
The High Court opined that the applicant habitually resides in Dubai, and therefore, the present arbitration being an international commercial arbitration, the application under Section 11 of the Act was not maintainable.
Source: Barandbench
