This article has been authored by Satvik Mittal, 3rd Year law student pursuing B.B.A., LL.B at National Law University Odisha.

In cross-border arbitration, jurisdiction is governed by the interplay of three distinct legal regimes: lex contractus (governing the substantive rights and obligations under the contract), lex arbitri (regulating the arbitration agreement’s validity, scope, and performance), and lex fori (governing procedural aspects before the court). While jurisdictional clarity is typically achieved when all three are expressly stipulated, disputes arise when any remain unspecified, requiring judicial interpretation.

This issue lay at the heart of Disortho S.A.S. v. Meril Life Sciences Pvt. Ltd., [2025] INSC 352 (“Disortho”), where the hon’ble Supreme Court of India (“SCI”) addressed a conflict between a contractual clause selecting Indian law and courts, and another providing for arbitration in Colombia. Relying on the three-stage test from Sulamérica Cia Nacional De Seguros S.A. v. Enesa Engenharia S.A., [2012] EWCA Civ 638 (“Sulamérica Cia”) and Enka Insaat Ve Sanayi AS v. OOO Insurance Company Chubb, [2020] UK SC 38 (“Enka Insaat”), the Court inferred Indian law as the governing law of the arbitration agreement (“agreement”) in the absence of an express lex arbitri or lex curiae (curial law), thereby asserting Indian courts’ supervisory jurisdiction despite a foreign arbitral venue.

This article contends that Disortho (supra) suffers from doctrinal infirmities, including the uncritical transplantation of foreign jurisprudence, misapplication of interpretive tests, and an undue emphasis on inferred party intentions. These errors risk undermining the procedural autonomy and certainty that arbitration seeks to ensure.

Ratio of the Supreme Court in Disortho

In Disortho (supra), the SCI addressed the determination of the law governing the agreement or lex arbitri in a cross-border dispute concerning a Distributor Agreement for medical supplies in Colombia. While the contract identified ‘Indian law’ as the lex contractus, it was silent on the lex arbitri. The Court reaffirmed that, in the absence of an express choice, issues of arbitral procedure such as appointment or removal of arbitrators are governed by the law applicable to the agreement rather than merely institutional or procedural rules (para 11 of Disortho), albeit, subject to party autonomy.

Further, the Court invoking principles of legal certainty and international comity, presumed that Indian law, as the lex contractus, also governed the agreement unless rebutted by factors such as invalidity or in-arbitrability (para 32 of Disortho). It distinguished between the mention of Bogotá D.C. as a ‘venue’ and a ‘seat’, holding that the former alone was insufficient to displace the presumption in favour of Indian law (para 31 of Disortho). While Clause 18 required the arbitral award (“award”) to conform to Colombian law, the Court limited its scope to the substantive merits and not procedural aspects. Clause 16.5, which expressly subjected the agreement and related disputes to Indian laws, was deemed determinative. Accordingly, the Court upheld the applicability of Indian courts’ jurisdiction under Section 11(6) of the Arbitration and Conciliation Act, 1996 (“Act”). Although Bogotá was initially referenced as the venue, the arbitration was ultimately permitted to proceed in India under the rules of the Delhi International Arbitration Centre, by mutual consent.

Accordingly, the Court allowed the arbitration petition, reaffirming the doctrinal preference for the lex contractus in the absence of compelling contrary indicators, while underscoring the role of judicial discretion in balancing party autonomy with statutory and contractual interpretation.

Wrong Turn at Crossroads: Flawed Reliance on Enka Insaat and Sulamérica Cia by SCI

In determining the law applicable to the agreement, the SCI drew upon the principles articulated by the UK Supreme Court (“UKSC”) in Enka Insaat (supra) and Sulamérica Cia (supra), reaffirming that, in the absence of an express choice of law for the agreement, the law governing the substantive contract ordinarily applies to the arbitration clause, which forms an integral part of the contract. Further, the Court noted that the mere designation of a foreign seat does not, in and of itself, rebut the inference that the parties intended the substantive governing law to also govern the agreement, except where Indian jurisprudence has adopted a contrary approach on specific aspects, negatively affecting the parties in arbitration.

The Court held that Bogotá D.C. constituted merely the venue of arbitration and not the juridical seat. Emphasising that the contract was governed by ‘Indian law’ and conferred jurisdiction upon Indian courts, the SCI affirmed the applicability of Section 11 of the Act.

Crucially, the designation of Bogotá as the venue and the adoption of the procedural rules of the Bogotá Chamber of Commerce did not displace the overarching intention to subject the agreement to Indian law. In the absence of a distinct choice of law governing the arbitration clause, the Court inferred that the lex contractus, that is, the Indian law, must extend to the agreement. It further clarified that the conduct of proceedings in Bogotá and references to Colombian law pertained solely to procedural matters and the substantive law governing the dispute, without affecting the interpretation or validity of the agreement itself.

In the Wake of International Comity: Disregard for Precedent and Party Autonomy

In Disortho (supra), the SCI declined to designate Bogotá D.C. the expressly stipulated place of arbitration and the jurisdiction whose law was to govern the award as the juridical seat. This determination stands in clear tension with established precedent and the principle of party autonomy.

The Court endorsed the UKSC ruling in Enka Insaat (supra) on the ground that uniformity in legal principles fosters international comity (para 15 of Disortho). However, it failed to offer a cogent rationale for adopting Enka Insaat (supra) within the Indian legal framework. Its reliance on prior Indian decisions such as Arif Azim v. Micromax Informatics, [2024] SCC OnLine SC 3212 (“Arif Azim”), and Mankastu Impex v. Airvisual Ltd., [2020] 5 SCC 399 (“Mankastu Impex”) are analytically unsound. These cases addressed the seat–venue distinction but did not engage with the determination of the ‘law governing the arbitration agreement’ (“LGAA”) or the lex arbitri. Their invocation in Disortho (supra) is thus merely peripheral and does not substantiate the Court’s position.

Under Arif Azim (supra), the venue is presumed to be the seat absent contrary indicia, none of which the Court identified in Disortho (supra). Likewise, Mankastu (supra) held that a reference to arbitration “in Hong Kong” sufficed to confer seat status, notwithstanding Indian governing law and jurisdiction clauses. The language used in Disortho (supra) was equally, if not more, definitive.

Additionally, the requirement that the award conform to Colombian law further supports the inference that Colombia was intended as the curial seat, with supervisory jurisdiction resting in its courts. The Court’s refusal to give effect to this intention marks a departure from its own jurisprudence and dilutes legal certainty in cross-border arbitration.

Legal Quicksand: The Perils of Uncritical Transplantation of Foreign Legal Judgments

In Disortho (supra), the SCI marked a significant departure from established principles governing the designation of the juridical seat and the determination of the LGAA or lex arbitri. Disregarding strong indicators pointing to Colombia as the seat, including the stipulation that the award must conform to Colombian law and that Bogotá was to be the place of arbitration. The Court declined to identify a juridical seat. It instead adopted an interpretive framework borrowed from Enka Insaat (supra), resulting in serious implications for doctrinal coherence and predictability in cross-border arbitration.

Flawed Presumption of Implied Choice

The Court’s central presumption that the parties intended the lex contractus to govern the agreement in the absence of express language rests on a legal fiction. This ignores the possibility, recognised in Indian jurisprudence as seen in the case of Enercon (India) Ltd. v. Enercon GmbH, [2014] 5 SCC 1, that parties may deliberately subject the arbitration clause to a different law or remain silent on the issue. In Disortho (supra), the Court’s inference of an implied choice not only misreads party intent but also disregards Article V(1)(a) of the New York Convention, which provides that in the absence of an express or implied choice, the law of the seat governs the agreement. This principle was properly applied in Kabab-Ji S.A.L. v. Kout Food Group, [2021] UKSC 48, where French courts treated the law of the seat as the lex arbitri. Disortho (supra) fails to offer a principled justification for departing from this internationally accepted norm.

Misapplication of the Separability Doctrine

The SC’s reasoning in Disortho (supra) reflects a constrained, Enka Insaat (supra) influenced interpretation of the separability doctrine, treating the arbitration clause as an extension of the main contract. This doctrinal posture is inconsistent with Indian arbitration law, which recognises the agreement’s substantive independence beyond jurisdictional considerations. Indian jurisprudence has consistently affirmed that the law governing the main contract does not necessarily extend to the arbitration clause, an approach rooted in a broader understanding of separability (refer to In Re: Interplay between arbitration agreements under the Arbitration and Conciliation Act 1996 and the Indian Stamp Act 1899).

By reducing separability to a mere curative device for invalid main contracts, Disortho (supra) undermines its foundational role in Indian arbitration law. The Court’s reliance on Enka Insaat (supra), a judgment already under critical scrutiny in its own jurisdiction, further compounds this error.

Conclusion

In sum, Disortho (supra) exemplifies the dangers of uncritical adoption of foreign jurisprudence in a distinct legal context. By prioritising the lex contractus over the law of the seat, the decision compromises the procedural autonomy of agreements and departs from established Indian and international norms on lex arbitri determination. The result is doctrinal incoherence and reduced legal certainty, undermining both the integrity of Indian arbitration jurisprudence and its compatibility with global arbitral standards, thus reflecting an overextension of foreign precedent unsuited to India’s statutory architecture and arbitral policy.