2004 (6) TMI 635 - HC - Indian Laws

Challenge of Foreign Arbitral Award Dismissed Emphasizing Jurisdictional Issues

Inventa Fischer Gmbh & Co., K.G. Versus Polygenta Technologies Ltd.

The Court dismissed the petition challenging a foreign arbitral award made in Geneva, emphasizing that foreign awards cannot be challenged under Section ... - Issues Involved:1. Maintainability of the petition under Section 34 of the Arbitration and Conciliation Act, 1996.2. Jurisdiction of the Bombay High Court to entertain the petition.3. Applicability of Indian law to the arbitration agreement and the award.4. Distinction between challenging a foreign award and resisting its enforcement.Issue-Wise Detailed Analysis:1. Maintainability of the Petition under Section 34 of the Arbitration and Conciliation Act, 1996:The petition was filed under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an arbitral award made in Geneva. The petitioner argued that the award, though made in Geneva, was governed by Indian law and thus could be challenged in India. The Court, however, concluded that the award, being a foreign award, could not be challenged under Section 34 of the 1996 Act. The Court emphasized that the legislative intent was clear in providing a mechanism to resist the enforcement of a foreign award but not to challenge it directly in Indian courts.2. Jurisdiction of the Bombay High Court to Entertain the Petition:The petitioner contended that the Bombay High Court had jurisdiction since the agreements were entered into in Bombay and the principal officer of the respondent was situated in Bombay. However, the Court held that jurisdictional issues must be decided based on the law and not the conduct of the parties. The Court found that it did not have jurisdiction to entertain the petition challenging a foreign award, as the appropriate forum for such a challenge was in Switzerland where the award was made.3. Applicability of Indian Law to the Arbitration Agreement and the Award:The petitioner argued that since the agreements were governed by Indian law, the award should be considered a domestic award and thus challengeable under Section 34. The Court, however, clarified that the substantive law governing the contract does not determine the maintainability of a petition under Section 34. The Court highlighted that the curial law governing the arbitration proceedings was Swiss law, and therefore, the award was a foreign award under Section 44 of the 1996 Act.4. Distinction between Challenging a Foreign Award and Resisting its Enforcement:The Court distinguished between challenging a foreign award and resisting its enforcement. It noted that while a foreign award could not be challenged in Indian courts, its enforcement could be resisted under Section 48 of the 1996 Act on grounds similar to those available for challenging a domestic award under Section 34. The Court emphasized that this distinction was crucial and upheld by previous judgments, including those of the Supreme Court and other High Courts.Conclusion:The Court dismissed the petition as not maintainable, holding that a foreign award could not be challenged under Section 34 of the 1996 Act. It reiterated that the appropriate remedy for the petitioner was to resist the enforcement of the award under Section 48. The Court also vacated all interim orders and provided a brief continuation of interim relief to allow the petitioner to seek further legal remedies.