Court rules execution application for foreign award maintainable, dismisses objections, orders fixed deposit, denies stay.

The court ruled in favor of the petitioner, holding the execution application for enforcement of a foreign award as maintainable. The court dismissed objections raised by the respondent regarding the enforceability of the award, impact of a pending civil suit, proper invocation of the arbitration clause, compliance with GAFTA Rules for arbitrator appointment, and procedural irregularities in nominee arbitrator appointment. The court directed the creation of a fixed deposit and rejected the respondent's request for a stay, maintaining the injunction order until further notice.

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Issues Involved:
1. Maintainability of the execution application for enforcement of a foreign award.
2. Requirement of a declaration for enforceability of the foreign award.
3. Impact of pending civil suit on the execution application.
4. Proper invocation of the arbitration clause.
5. Compliance with GAFTA Rules for the appointment of the arbitrator.
6. Procedural irregularity in the appointment of the nominee arbitrator.

Issue-wise Detailed Analysis:

1. Maintainability of the Execution Application:
The execution application was moved on January 16, 2014, for the enforcement of a foreign award. The petitioner argued that the award is enforceable under Section 47 of the Arbitration and Conciliation Act, 1996, as they had produced the original award and a certified copy of the arbitration agreement. The respondent contended that the court must be satisfied about the enforceability of the award as per Sections 45, 47, and 48 of the Act. The court held that irrespective of the filing of an objection, it is required to decide on the maintainability of the petition.

2. Requirement of a Declaration for Enforceability:
The respondent raised an objection that no prayer for a declaration of enforceability was made in the application, citing a Single Bench decision of the Bombay High Court. The court rejected this objection, emphasizing the legislative intent to ensure the due enforcement of foreign awards and minimize judicial interference.

3. Impact of Pending Civil Suit:
The respondent argued that a pending civil suit between the parties, with observations by the Single Judge and Division Bench that any actions would be subject to the suit's outcome, rendered the execution application premature. The court dismissed this objection, noting that the pending suit did not preclude the enforcement of the foreign award.

4. Proper Invocation of the Arbitration Clause:
The respondent claimed that the arbitration clause, which required an initial attempt at amicable settlement, was not properly invoked. The court found that the invocation of the arbitration clause was valid, as the judgment-debtor failed to respond to the notice of arbitration, and the procedural requirements were met.

5. Compliance with GAFTA Rules for the Appointment of the Arbitrator:
The respondent contended that the appointment of the sole arbitrator did not comply with GAFTA Rules, which required informing the respondent and following specific procedures. The court held that the GAFTA Rules were followed, and the judgment-debtor was given an opportunity to appoint an arbitrator but failed to do so.

6. Procedural Irregularity in the Appointment of the Nominee Arbitrator:
The respondent argued that the nominee arbitrator was appointed outside the provisions of GAFTA Rules, making the award unenforceable. The court rejected this argument, stating that the appointment process was in accordance with the rules, and any procedural irregularities were waived by the judgment-debtor's inaction.

Conclusion:
The court overruled all objections raised by the respondent regarding the maintainability of the petition and held the execution application to be maintainable. The court directed the creation of a fixed deposit of Rs. 1.8 crore in the Bank of Baroda and rejected the respondent's prayer for a stay of the order. The injunction order was to continue until further orders.

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