In Brief
The Punatsangchhu-1 Hydro-electric Project Authority (Bhutan) and Larsen & Toubro Ltd entered into a construction contract in 2009. The contract provided that in the absence of a Bhutanese arbitration law, disputes would be governed by India's Arbitration and Conciliation Act, 1996. After Bhutan enacted its Alternative Dispute Resolution Act in 2013, a dispute arose. The Delhi High Court held that the 1996 Act still applied and appointed an arbitrator with the seat in New Delhi. However, on appeal, with both parties' consent, the Supreme Court modified the order, directing that all disputes be resolved under Bhutan's 2013 Act with the seat of arbitration at Thimphu, while allowing the tribunal flexibility to hold hearings elsewhere as agreed."
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