TaxTMI 
TaxTMI 
TaxTMI 
2016 (5) TMI 770
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.... case they shall not agree then shall appoint an Umpire whose decision shall be final and binding, the Arbitrators and Umpire to be Commercial Shipping Men. English Law to apply. Notwithstanding anything to the contrary agreed in the C.O.A., all disputes where the amount involved is less then USD 50,000/- (fifty thousand) the Arbitration shall be conducted in accordance with the Small Claims Procedure of the L.M.A.A." ( emphasis supplied ) 3. Disputes having arisen between the parties, the matter was referred to Arbitration by a sole Arbitrator. The Arbitration was held in London according to English Law. Ashapura Minechem was held liable and directed to pay a sum of 36,306,104 US$ together with compound interest at the rate of 3.75 % per annum. In addition they were directed to pay 74,135 US$ together with compound interest at the rate of 3.75% per annum and another sum of 90,233.66 Pounds together with compound interest at the rate of 2.5% per annum vide Award of the Sole Arbitrator dated 26.5.2009. Proceedings in Gujarat 4. Before Arbitration had commenced, Ashapura filed a suit alongwith an application for injunction before the Civil Judge at Jam-khambalia, Gujarat prayi....
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....s Court. 11. On 29th July, 2009, the Antwerp Court declared the award dated 26th May, 2009 enforceable as a judgment of the Court. The said proceedings were contested by the respondent. On 3rd August, 2009, the English High Court declared the award dated 26th May, 2009 enforceable as a judgment of the Court. 12. Against the rejection of the application for injunction Ashapura filed a petition under Articles 226 and 227 of the Constitution of India before the High Court of Gujarat at Ahmadabad for a Writ of Certiorari to quash and set aside the Order dated 24.8.2009 rendered by the District Judge, Jam-Khambalia and for a direction not to enforce the execution of the judgment dated 24.7.2009. Ashapura inter-alia contended that the Award cannot be enforced or executed since their objections under Section 34 were pending. A learned Single Judge who heard the petition however, observed that the issues before him were inextricably connected with the issues of jurisdiction of the Court in the Section 34 application and the contentions of Eitzen opposing the said Section 34 application. The Single Judge, therefore, set aside the Order dated 24.8.2009 and remanded the matter for fresh dec....
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.... Arbitration Act. 17. Ashapura filed Notice of Motion No. 3975 of 2009 claiming that since proceedings had already been initiated under Part I before the Gujarat High Court, the Bombay High Court had no jurisdiction in the matter by virtue of Section 42 of the Arbitration Act. A learned Single Judge of the Bombay High Court vide order dated 05.10.2011 dismissed the Notice of Motion and held that Part I of the Arbitration Act was excluded by the parties and therefore Section 42, which occurs in Part I, had no application to the present case. The learned Single Judge also directed that the petition be heard on merits. This decision is questioned by Ashapura in SLP (C) No. 3959 of 2012. 18. The learned Single Judge of the Bombay High Court has allowed Arbitration Petition No. 561 of 2009 of Eitzen for enforcing the Foreign Award dated 26.5.2009. 19. As a preliminary objection, it was contented before the Bombay High Court that this Court had passed an Order on 27.2.2012 ordering status quo on further proceedings and, therefore, the Hon'ble Court ought not to proceed in the matter. That this Order was to operate upto 16.4.2012 and was thereafter extended till 22.8.2012. The High Cou....
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....f 2009 is under challenge in appeal arising out of SLP (C) No. 3959 of 2012. 22. Apparently Ashapura had a similar dispute with Armada (Singapore) Pvt. Ltd. Armada had, similarly filed an application for enforcement of the foreign award in its favour under Section 42 of the Arbitration Act being Arbitration Petition Nos.1359 and 1360 of 2010 before the Bombay High Court. Ashapura has raised similar objection to the enforcement of the Foreign Award by way of Notice of Motion. By Notices of Motion Nos. 2390 and 2444 of 2012 Ashapura had contended that the Bombay High Court cannot entertain the application in view of the Section 42 of the Arbitration Act. Both these Notices of Motion were dismissed by the learned Single Judge of the Bombay High Court. Ashapura has challenged the said dismissal by way of filing SLP Nos.....of 2016 [CC Nos.3266 and 3382 of 2013] before this Court. 23. It may be noted at the outset that since proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985 (for short, the SICA Act) are pending before the Board for Industrial and Financial Reconstruction (BIFR), though the Bombay High Court has ordered execution of the Award, it has held t....
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....n accordance with English Law. There is thus an express exclusion of the applicability of Part I to the instant Arbitration by Clause 28. In fact, Clause 28 deals with not only the seat of Arbitration but also provides that there shall be two Arbitrators, one appointed by the charterers and one by the owners and they shall appoint an Umpire, in case there is no agreement. In this context, it may be noted that the Indian Arbitration and Conciliation Act, 1996 makes no provision for Umpires and the intention is clearly to refer to an Umpire contemplated by Section 21 of the English Arbitration Act, 1996. It is thus clear that the intention is that the Arbitration should be conducted under the English law, i.e. the English Arbitration Act, 1996. It may also be noted that Sections 67, 68 and 69 of the English Arbitration Act provide for challenge to an Award on grounds stated therein. The intention is thus clearly to exclude the applicability of Part I to the instant Arbitration proceedings. 28. This is a case where two factors exclude the operation of Part I of the Arbitration Act. Firstly, the seat of Arbitration which is in London and secondly the clause that English Law will apply....
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..... The aforesaid observations in C v. D were subsequently followed by the High Court of Justice, Queen's Bench Division, Commercial Court (England) in Sulamerica Cia Nacional de Seguros SA v. Enesa Engelharia SA - Enesa. In laying down the same proposition, the High Court noticed that the issue in that case depended upon the weight to be given to the provision in Condition 12 of the insurance policy that "the seat of the arbitration shall be London, England". It was observed that this necessarily carried with it the English Court's supervisory jurisdiction over the arbitration process. It was observed that: "this follows from the express terms of the Arbitration Act, 1996 and, in particular, the provisions of Section 2 which provide that Part I of the Arbitration Act, 1996 applies where the seat of the arbitration is in England and Wales or Northern Ireland. This immediately establishes a strong connection between the arbitration agreement itself and the law of England. It is for this reason that recent authorities have laid stress upon the locations of the seat of the arbitration as an important factor in determining the proper law of the arbitration agreement." 57. In our op....
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....tant to note that in para 32 of Bhatia International itself this Court has held that Part I of the Arbitration Act, 1996 will not apply if it has been excluded either expressly or by necessary implication. Several judgments of this Court have held that Part I is excluded by necessary implication if it is found that on the facts of a case either the juridical seat of the arbitration is outside India or the law governing the arbitration agreement is a law other than Indian law. This is now well settled by a series of decisions of this Court [see Videocon Industries Ltd. v. Union of India, Dozco India (P) Ltd. v. Doosan Infracore Co. Ltd., Yograj Infrastructure Ltd. v. Ssang Yong Engg. and Construction Co. Ltd., the very judgment in this case reported in Reliance Industries Ltd. v. Union of India and a recent judgment in Harmony Innovation Shipping Ltd. v. Gupta Coal India Ltd.]." We see no reason to take a different view. In Bhatia International's case, this Court concluded as follows: "To conclude, we hold that the provisions of Part I would apply to all arbitrations and to all proceedings relating thereto. Where such arbitration is held in India the provisions of Part I would c....