1985 (4) TMI 337 - HC - Indian Laws

Bhavnagar Court lacked jurisdiction for foreign award petition, sets aside trial court order

Orient Middle East Lines Ltd. and Anr. Versus Brace Transport Corporation of Monrovia and Ors.

The High Court held that the Bhavnagar Court lacked jurisdiction to entertain a petition for filing a foreign award. It emphasized the applicability of ... - Issues Involved:1. Jurisdiction of the Bhavnagar Court to entertain the petition for filing a foreign award under Section 5 of the Foreign Awards (Recognition and Enforcement) Act, 1961.2. Applicability of the Code of Civil Procedure (CPC) in determining the jurisdiction for filing a foreign award.3. Interpretation of the term 'subject matter of the award' in the context of jurisdiction under Section 5 of the Foreign Awards Act.Detailed Analysis:1. Jurisdiction of the Bhavnagar Court:The primary issue was whether the Bhavnagar Court had jurisdiction to entertain the petition for filing a foreign award. The petitioners argued that the Bhavnagar Court lacked jurisdiction as respondents Nos. 1 and 2 were not carrying on any business within its jurisdiction. The vessel was brought to Alang in Bhavnagar for scrapping, and the sale price was to be paid by respondent No. 3 to respondents Nos. 1 and 2. The trial court initially held that it had jurisdiction based on Section 20 of the CPC, as respondent No. 4 was carrying on business within the local limits of the Bhavnagar Court, and respondent No. 3 had acquiesced in the jurisdiction. However, the High Court found that respondents Nos. 1 and 2 did not acquiesce and were not carrying on business within the Bhavnagar Court's jurisdiction. Therefore, the Bhavnagar Court did not have jurisdiction to entertain the petition.2. Applicability of the CPC:The petitioners contended that the Foreign Awards Act is a self-contained code and that the provisions of the Arbitration Act, 1940, and the CPC should not be considered. However, the court held that while the Foreign Awards Act provides specific provisions for enforcing foreign awards, it is silent on many procedural aspects. Therefore, the procedural laws of the country, including the CPC, apply unless there is a conflict with the Foreign Awards Act. The court emphasized that the Foreign Awards Act should be read in conjunction with the CPC for procedural matters, including jurisdiction.3. Interpretation of 'Subject Matter of the Award':The term 'subject matter of the award' was interpreted to mean the relief or reliefs granted by the award. The court agreed with the submission that the subject matter refers to the reliefs awarded by the arbitrators. The court noted that the Foreign Awards Act, 1961, and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (which forms part of the Act) require that foreign awards be enforced in accordance with the rules of procedure of the territory where the award is relied upon. This includes considering the jurisdictional aspects under the CPC.Conclusion:The High Court concluded that the Bhavnagar Court did not have jurisdiction to entertain the petition for filing the foreign award. The court directed that the petition be returned to the original petitioner for presentation to the proper court. The court also held that the procedural laws of India, including the CPC, apply to the enforcement of foreign awards under the Foreign Awards Act, 1961, unless there is a specific provision to the contrary in the Act. The court emphasized the need to interpret the Foreign Awards Act in light of the New York Convention and the procedural laws of the country.Final Order:The Revision Petition was allowed, the order of the trial court was set aside, and the petition was directed to be returned to the original petitioner for presentation to the proper court. The original petitioner was also directed to pay the costs of the revision petition and the original petition to the respondents.