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ARBITRATION WORLD The Indian Supreme Court Further Clarifies the Limits of the Bhatia Decision By J.P. Duffy (New York) INTRODUCTION On 22 September 2015, the Indian Supreme Court issued a decision in Union of India v Reliance Industries Ltd and Ors (“Reliance” ) that further clarifies the increasingly limited circumstances under which the controversial 2002 decision in Bhatia International v. Bulk Trading S.A. AIR (“Bhatia” ) can apply to international arbitrations or arbitrations not seated in India. The Reliance decision is significant for international arbitration practitioners because it not only clarifies the limits of Bhatia—by relying on Bhatia itself—but is further evidence of the pro-arbitration stance the Indian Supreme Court has adopted in recent years. BACKGROUND The Reliance decision arose out of two oil production-sharing contracts between the Union of India (“GoI” ), Reliance and other parties. The production-sharing contracts specified that Indian law was the governing law of the contract and prohibited the parties from employing the contract to violate the laws of India. The production-sharing contracts also required disputes arising out of the contracts to be resolved by arbitration under the 1985 version of the UNCITRAL Rules and set London as the “venue” of the arbitration, which the parties clarified by subsequent agreement to mean that London was the seat. Notably, the arbitration clause further specified the arbitration agreement itself would be governed by English law. 42 K&L Gates: ARBITRATION WORLD