TaxTMI 
TaxTMI 
2021 (8) TMI 448
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....tember, 2000, a representation agreement was entered into between Integrated Sales Services Ltd. ["ISS" / Respondent No. 1], a company based in Hong Kong and DMC Management Consultants Ltd. ["DMC"], a company registered in India, whose principal business address is at Nagpur. By this agreement, ISS was to assist DMC to sell its goods and services to prospective customers, and in consideration thereof was to receive commission. The relevant clauses of the agreement are clauses 2 and 3 which read as follows: - "2. Duties of Representative Representative shall assist Company with its efforts to sell its Goods and Services to prospective customers. Secondly, where acceptable to the Company, identify potential sources of investment and Investors, and assist Company in negotiating the terms of purchase, sale and/or investment. 3. Validity The right of representation under this Agreement is not limited by time. Compensation is due Representative as defined under "Payment" hereinafter. However, if Company finds Representative's efforts to be unsatisfactory, it will state so in writing with specific and, reasonable guidelines which, if accomplished within six months, shall co....
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....ion of any other clauses in this Amendment. 5. Disputes arose between the parties, as a result of which a notice for arbitration dated 22nd June, 2009 was sent by ISS to Arun Dev Upadhyaya. Ultimately, a statement of claim dated 22nd June, 2009, was filed before the learned Arbitrator naming Arun Dev Upadhyaya, DMC (India), DMC Global (company registered in Mauritius), Gemini Bay Consulting Limited (company registered in the British Virgin Islands) and Gemini Bay Transcription Private Limited ["GBT" / Appellant in CA No. 8343-8344/2018] as respondents. The statement of claim alleged as follows: - 6. DMC Management Consultants, through the Chairman (Upadhyaya) and/or with his family, in turn owns or controls all the stock of DMC Global, which has assumed the obligations of DMC Management Consultants under the agreement referred to below, including the agreement for arbitration; and the Chairman controls and dominates the activities of DMC Global. Both DMC Management Consultants and the Chairman have disregarded the corporate form of DMC Global to effect the wrongs complained of herein, in such a manner and to such an extent that DMC Global should be bound as a party to this arbit....
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.... purposely availed himself of this jurisdiction, and requiring his participation in this arbitration in Kansas City, Missouri does not offend traditional or constitutional notions of justice arid fair play. xxx xxx xxx 30. From September 18, 2000, until approximately June 30, 2008, the relationship among the parties proceeded agreeably. ISS performed its obligations, and upon information and belief, both DMC Management Consultants and DMC Global performed their obligations. xxx xxx xxx 38. On July 22, 2008, DMC Management Consultants gave notice by email entitled "Contract Termination Notice," to the two "PC" Customers, MedQuist and Assistmed, of its intention to terminate the Customer contracts 90 days later. (Note that the Customer Contract with MedQuist had been signed by DMC Global, but was terminated by DMC Management Consultants). DMC Management Consultants requested the Customers "begin the ramping down process 15 days from now," and further that the "ramping down be completed within a period of 90 days. 39. This purported "ramping down" of the Customer Contracts by DMC Management Consultants and DMC Global in fact never took place. Upon information and belief....
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....$4.8 million due and to become due to ISS from Respondents due to their breach of contract. 7. It was then averred: 74. By making its claims pursuant to the Representation Agreement and the corporate law of Delaware in this arbitration, Claimant ISS is not making, and hereby specifically reserves: (i) all claims which may arise in the future, under the Representation Agreement, for commissions which may become payable in a manner other than as described above, and (ii) all claims for any additional right, title, interest and other matters ISS may make at another time or in another forum against any of these Respondents based in tort, fraud, abusive conduct, or any other wrongful conduct under the law of any of the United States. India. Mauritius, or any other jurisdiction, whether for equitable relief, compensatory damages, punitive or exemplary damages, moral damages, or otherwise. 8. To this statement of claim, objections were filed by GBT and Arun Dev Upadhyaya, in which all the aforesaid averments were denied. Meanwhile, a suit was filed by GBT against ISS before the Civil Judge, Senior Division, Nagpur, with the following prayers: - (i) Pass a decree of declaration in ....
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....he agreement and its interpretation and that, since neither the claimant nor the respondent challenged the validity of the agreement or the validity of the arbitration clause, the Arbitrator has jurisdiction to decide whether a non-signatory to the representation agreement can be bound by the award. The other two issues were stated to require an in-depth review and analysis of factual, testimonial and documentary evidence as a result of which the decision on these two issues was "postponed". 12. The learned Arbitrator in his final award dated 28th March, 2010, set out the issues that were to be adjudicated as follows: - I THE UNDERSIGNED ARBITRATOR, Alain Frecon, (the "tribunal") having been designated in accordance with the arbitration agreement entered into by ISS and DMC Management Consultants Limited, dated September 18 2000, having been duly sworn, having given the parties full and complete opportunity to present their respective case, and having heard all the proofs and allegations of the parties, including all the witnesses and reviewed all the documents, demonstrative evidence and submissions presented in this case, do hereby Award as follows: TO BE DECIDED 1) Does....
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....ak and the Board of DMC, that is what DMC would do, and the board always voted in line with Mr. Upadhyaya's recommendations. He was as a result, the sole decision maker. The total control and domination of ÐMC by Mr. Upadhyaya is therefore not questionable, in spite of his minority shareholding. The correlation existing between DMC and Gemini Bay is also, not the result of mere coincidence. Not only did the very existence of Gemini Bay germinate within the confines of DMC (but for Mr. Pathak's position as "Managing Director" of DMC, he would have never known about Medquist or AssistMed), but both companies shared (even if ever so temporarily) the same employees, address, telephone numbers, e-mail addresses, SVPs, customers (primarily Medquist and AssistMed), and shared almost identical contracts with the same customers. Respondents' affirmations that DMC's corporate formalities were respected and that some of these facts were only temporary, are simply not convincing or credible and, in totality, we find that the control of DMC by Mr. Upadhyaya, and the collusion with Mr. Pathak and the use of the corporate forms of DMC and Gemini Bay were simply a "facade....
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....her demonstrates the purpose and intent of DMC'S decision to abandon the medical transcription business, for the benefit of Gemini Bay minus the payment of commissions to ISS. Her statement was even acknowledged by Mr. Pathak himself when she asked him if the purpose of DMC's termination was "to cut out the Peteetes" (ISS) he responded." In essence that's what it does". (See Parker's deposition at pages 19 lines 18 through 20). Even though we agree with Respondents that DMC had no obligation to remain in the medical transcription business, it could only do so by respecting the terms of the Representation Agreement by making sure that the "compensation for existing or potential customers identified by the Representative, shall continue according to the Payment Clause" (See Clauses #3 and #4 of the Representation Agreement). The decision by DMC to abandon such business for the stated purpose (ISS failure to find an investor) does conflict with the terms of the Representation Agreement which did not give DMC an option to terminate it under such rationale and certainly not by refusing (or avoiding) the payment of commissions in violation of Clause # 4 of the Repre....
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....re law accepts the submission of damage testimony by lay opinion so must this tribunal. The conduct of Respondents gives us no other alternative but to conclude that damages should be computed as Claimant proposes. In essence, Respondents brought this result upon themselves. Claimant's request for damages focuses on the commissions due for finding Medquist and AssistMed and for no other reason (Claimant does not claim any damage for its efforts for trying to find an investor). We find that claim reasonable. We must not however assume that the Gemini Bay/Medquist/AssistMed Agreements would have, could have, lasted any specific amount of time in the future and we must determine the most reasonable period of duration. There is no guarantee that either the AssistMed or Medquist contracts would last for the length of their original 3 year term. The Medquist agreement can be terminated any time upon a 90 days' notice. The AssistMed contract can be terminated without cause with a 120 days' advance notice (See Exhibit 5 page 3). This tribunal therefore concludes that damages should be limited in time and cannot be assumed to last forever in the future. Claimant'....
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....e call held on Friday, March 5, 2010 shall be borne exclusively by Respondents but Claimant shall be responsible for the costs and expenses of its attorneys present during that call. 6. This award is in full settlement of all claims and counterclaims submitted to this Arbitration. Any claim or counterclaim not specifically awarded is hereby denied. 18. To enforce the aforesaid Award, the Respondent first knocked at the doors of the Principal District Judge, Nagpur, but given the fact that, being a foreign award, a District Judge would have no jurisdiction to enforce the same, a learned Single Judge of the High Court of Judicature at Bombay, Nagpur Bench, was then approached. By his judgment dated 18th April, 2016, the learned Single Judge expressly recorded: 4. .... The parties have agreed that the question of leading oral evidence in support of their rival contentions does not at all arise and the pure questions of law are raised, which can be decided on the basis of the documents which are admitted and placed on record. 19. After discussing as to whether the ingredients of a foreign award were met, the learned Single Judge found : 16. It is not in dispute that the Repr....
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....en challenged in the USA, then held that the award could only be challenged under Section 48 if the Delaware law has not been followed on the alter ego principle. Being satisfied that the Arbitrator had properly applied the Delaware law on the facts of this case, the Court held that none of the grounds contained in Section 48 would apply so as to resist enforcement of the foreign award in this case. The Division Bench then held that Section 48 required that the grounds that are pressed to resist enforcement must be "proved". The Division Bench held that "proof" is of a higher order than mere evidence being adduced and then held that the appellants have miserably failed to "prove" that any of the grounds contained in Section 48 were attracted. As a result, the Division Bench allowed the appeal and set aside the judgment of the Single Judge by the impugned judgment dated 4th January, 2017. A review petition was subsequently dismissed on 24th February, 2017. 23. When the matter came to this Court, in DMC's Special Leave Petition (SLP (Civil) No. 20802/2016), special leave was granted by an order dated 11th January, 2017, subject to DMC depositing a sum equivalent to 2.5 million US Do....
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....d stood vitiated on this ground also. 26. Shri Harish Salve, learned Senior Advocate appearing on behalf of Arun Dev Upadhyaya, argued that the commission of a tort would be outside contractual disputes that arise under the Arbitration Agreement and that since the cause of action really arose in tort, the Award was vitiated on this ground. He also argued relying heavily upon Dallah Real Estate and Tourism Co v Ministry of Religious Affairs of the Government of Pakistan [2010] 3 WLR 1472 ["Dallah"] that a full review based on oral and/or documentary evidence ought to have been undertaken which was not done on the facts of this case, the Division Bench merely echoing the Arbitrator's findings. He then made a distinction between Section 46 and Section 35 of the Arbitration Act, and argued that under Section 46, a foreign award is to be treated as binding only on persons as between whom it was made and not on persons who may claim under the parties. He also argued that insofar as his client was concerned, there was no evidence to show his involvement in any manner and that the findings against his client are unreasoned and perfunctory, and on this ground also the Award stands vitiated....
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.... be treated as binding for all purposes on the persons as between whom it was made, and may accordingly be relied on by any of those persons by way of defence, set off or otherwise in any legal proceedings in India and any references in this Chapter to enforcing a foreign award shall be construed as including references to relying on an award. 47. Evidence.- (1) The party applying for the enforcement of a foreign award shall, at the time of the application, produce before the court- (a) the original award or a copy thereof, duly authenticated in the manner required by the law of the country in which it was made; (b) the original agreement for arbitration or a duly certified copy thereof; and (c) such evidence as may be necessary to prove that the award is a foreign award. xxx xxx xxx 48. Conditions for enforcement of foreign awards.- (1) Enforcement of a foreign award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the court proof that- (a) the parties to the agreement referred to in section 44 were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the....
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....tual or not. Relationships of a commercial nature include, but are not limited to, the following transactions any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring, leasing, construction of works; consulting, engineering, licensing investment, financing: banking; insurance; exploitation agreement or concession, joint venture and other forms of industrial or business co-operation; carriage of goods or passengers by air, sea, rail, or road." 33. In R.M. Investment and Trading Co. (P) Ltd. v. Boeing Co., (1994) 4 SCC 541, at page 546, this court held: 12. [in] construing the expression "commercial" in Section 2 of the [Foreign Awards (Recognition & Enforcement) Act, 1961] it has to be borne in mind that the "Act is calculated and designed to subserve the cause of facilitating international trade and promotion thereof by providing for speedy settlement of disputes arising in such trade through arbitration and any expression or phrase occurring therein should receive, consistent with its literal and grammatical sense, a liberal construction." [See : Renusagar Power Co. Ltd. v. General Electric....
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....reted in accordance with the spirit of the Convention... The Contracting States wished to reduce the obligation for the party seeking recognition and enforcement of a foreign arbitral award as much as possible." [Judgment of 15 April 1999, XXVI Y.B. Comm. Arb. 863, 866 (Geneva Cour de justice) (2001)] Consistent with this objective, national courts have generally rejected efforts to complicate the proof requirements under Article IV, taking a practical and relatively flexible approach towards proof requirements. (at pages 3396-3397) 37. From this, is clear that all the requirements of sub-section (1) are procedural in nature, the object being that the enforcing court must first be satisfied that it is indeed a foreign award, as defined, and that it is enforceable against persons who are bound by the award. Shri Vishwanathan and Shri Salve's arguments that to prove that a nonsignatory to an arbitral agreement can only be roped in to the aforesaid agreement on evidence being adduced before the enforcing court as to whether the non-signatory is a person who claims under a party or is otherwise affected by the alter ego doctrine, is disingenuous to say the least. Section 47(1)(....
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....ishes on the basis of the record of the arbitral tribunal that", this judgment held that the expression "proof" cannot possibly mean the taking of oral evidence as it will otherwise defeat the object of speedy disposal of Section 34 petitions. This was so stated as follows: 21. It will thus be seen that speedy resolution of arbitral disputes has been the reason for enacting the 1996 Act, and continues to be the reason for adding amendments to the said Act to strengthen the aforesaid object. Quite obviously, if issues are to be framed and oral evidence taken in a summary proceeding under Section 34, this object will be defeated. It is also on the cards that if Bill No. 100 of 2018 is passed, then evidence at the stage of a Section 34 application will be dispensed with altogether. Given the current state of the law, we are of the view that the two early Delhi High Court judgments [Sandeep Kumar v. Ashok Hans, 2004 SCC OnLine Del 106 : (2004) 3 Arb LR 306] , [Sial Bioenergie v. SBEC Systems, 2004 SCC OnLine Del 863 : AIR 2005 Del 95] , cited by us hereinabove, correctly reflect the position in law as to furnishing proof under Section 34(2)(a). So does the Calcutta High Court judgmen....
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....owly. Thus, in Ssangyong Engg. & Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131 ["Ssangyong"], it was held: - 45. After referring to the New York Convention, this Court delineated the scope of enquiry of grounds under Sections 34/48 (equivalent to the grounds under Section 7 of the Foreign Awards Act, which was considered by the Court), and held : (Renusagar case [Renusagar Power Co. Ltd. v. General Electric Co., 1994 Supp (1) SCC 644] , SCC pp. 671-72 & 681-82, paras 34-37 & 65-66) "34. Under the Geneva Convention of 1927, in order to obtain recognition or enforcement of a foreign arbitral award, the requirements of clauses (a) to (e) of Article I had to be fulfilled and in Article II, it was prescribed that even if the conditions laid down in Article I were fulfilled recognition and enforcement of the award would be refused if the court was satisfied in respect of matters mentioned in clauses (a), (b) and (c). The principles which apply to recognition and enforcement of foreign awards are in substance, similar to those adopted by the English courts at common law. (See Dicey & Morris, The Conflict of Laws, 11th Edn., Vol. I, p. 578.) It was, however, felt that the Geneva Conv....
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....oceedings for enforcement of a foreign award under the Foreign Awards Act, 1961, the scope of enquiry before the court in which award is sought to be enforced is limited to grounds mentioned in Section 7 of the Act and does not enable a party to the said proceedings to impeach the award on merits. *** 65. This would imply that the defence of public policy which is permissible under Section 7(1)(b)(ii) should be construed narrowly. In this context, it would also be of relevance to mention that under Article I(e) of the Geneva Convention Act of 1927, it is permissible to raise objection to the enforcement of arbitral award on the ground that the recognition or enforcement of the award is contrary to the public policy or to the principles of the law of the country in which it is sought to be relied upon. To the same effect is the provision in Section 7(1) of the Protocol & Convention Act of 1837 which requires that the enforcement of the foreign award must not be contrary to the public policy or the law of India. Since the expression "public policy" covers the field not covered by the words "and the law of India" which follow the said expression, contravention of law alone will ....
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....und (i.e. an order recognising and enforcing an award). This is because the policy of the legislature is that there ought to be only one bite at the cherry in a case where objections are made to the foreign award on the extremely narrow grounds contained in Section 48 of the Act and which have been rejected. This is in consonance with the fact that India is a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (hereinafter referred to as "New York Convention") and intends - through this legislation - to ensure that a person who belongs to a Convention country, and who, in most cases, has gone through a challenge procedure to the said award in the country of its origin, must then be able to get such award recognised and enforced in India as soon as possible. This is so that such person may enjoy the fruits of an award which has been challenged and which challenge has been turned down in the country of its origin, subject to grounds to resist enforcement being made out under Section 48 of the Arbitration Act. .... xxx xxx xxx 44. Indeed, this approach has commended itself in other jurisdictions as well. Thus, in Sui Southern Gas Co. L....
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....ction 48(1)(a), when read with Section 44. Also, it must not be forgotten that these grounds cannot be expansively interpreted as has been held above. The grounds are in themselves specific, and only speak of incapacity of parties and the agreement being invalid under the law to which the parties have subjected it. To attempt to bring non-parties within this ground is to try and fit a square peg in a round hole. 43. Quite apart from the fact that Section 48(1)(a) was not put forward either before the learned Single Judge or the Division Bench, let us examine the judgment in Dallah (supra) which appears to justify the bringing of a non-signatory to the agreement's objection to a foreign award under Section 48(1)(a). 44. In Dallah's case (supra), a Saudi company applied under the United Kingdom's Arbitration Act, 1996 for leave to enforce an award against a ministry of the Government of Pakistan. There was no doubt on the facts of that case that the Government was not a party to the arbitration agreement, which was between Dallah and the Awami Hajj Trust. The Supreme Court of the United Kingdom found, on a trial conducted before it, that the agreement containing the arbitration cla....
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....t made before the Tribunal was that the Trust was either the alter ego of the Government of Pakistan or the Government of Pakistan was the successor to the Trust. Since the 'alter ego' argument found favour with the Tribunal, and since it was not pursued before the Supreme Court, the conclusion that the award was bad would necessarily follow. In para 31, Lord Mance JSC made it clear that a court seized of an issue under Section 103(2)(b) will examine, both carefully and with interest, the reasoning and conclusion of an arbitral tribunal which has undertaken a similar examination before arriving at its own conclusion on facts. 48. In a separate concurring judgment, Lord Collins of Mapesbury JSC set out as to why, in His Lordship's opinion, Article V(1)(a) of the New York Convention (equivalent to Section 103(2)(b) of the UK Act and Section 48(4)(a) of the Indian Arbitration Act, 1996) would be attracted as follows: - 77 Although article V(1)(a) (and section 103(2)(b)) deals expressly only with the case where the arbitration agreement is not valid, the consistent international practice shows that there is no doubt that it also covers the case where a party claims that the agreemen....
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....bitration agreement is not valid' appearing in Section 8(5) (b) of the Australian International Arbitration Act, 1974 ["Australian Act"] (which is equivalent to Section 48(1)(a) of the Indian Arbitration Act, 1996) includes the ground that the 'award-debtor was not a party to the arbitration agreement'. 52. What is important to note is that there is a significant difference in the Australian Act i.e., Section 8(1) of the Australian Act (which is analogous to Section 46 of the Indian Arbitration Act, 1996) which states that "a foreign award is binding .... on the parties to the arbitration agreement in pursuance of which it was made". 53. The Supreme Court of Victoria, after initially expressing some doubt on whether 'not being signatory to the agreement' can be a ground that can be canvassed under Section 8(5)(b), held that, since Section 8(1) clearly does not intend enforcement of foreign awards against nonsignatories, such a plea can be brought within the ambit of Section 8(5) (b). The relevant paras are as follows: 135 In our opinion, at stage one, the award creditor must satisfy the Court, on a prima facie basis, of the following matters before the Court may make an order e....
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....ment in pursuance of which the award was made is more significant than, for example, the ground that the arbitration agreement pursuant to which the award was made was not valid. There is no reason to think that an award debtor has greater justification to be aggrieved because it maintains that it was not a party to the arbitration agreement than an award debtor that maintains that the arbitration agreement was invalid because it was forged or obtained by fraud. If the forgery or fraud are not apparent on the face of the arbitration agreement, and an ex parte order is made to enforce the award, the award debtor would have the onus under s 8(5) (b) to persuade the Court that the arbitration agreement was a forgery or was obtained by fraud. There is no justification for adopting a different approach where, on the face of the arbitration agreement, the award debtor was a party to that agreement. 166 Fourthly, the ordinary and natural meaning of the expression 'the arbitration agreement is not valid' is that the arbitration agreement is of no legal effect under the relevant law. A person who asserts that he or she is not a party to an arbitration agreement is, in substance, assertin....
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....aded AVA to let him take over AVA's Singapore operations. He established Asianic Food (S) Pte Ltd. ["Asianic"] for this purpose, as a result of which, an Exclusive Supply, Distributorship and License Agreement was entered into between AVA and Asianic. Mr. Chiew signed the agreement on behalf of Asianic. This agreement was subsequently terminated, with AVA commencing arbitral proceedings against both Asianic and Mr. Chiew. Mr. Chiew took the position that, not being a party to the agreement, he had not agreed to arbitration or to the laws of Arizona applying to him personally. However, the learned Arbitrator, in his award, ordered both Asianic and Mr. Chiew to pay AVA damages, compensation, administrative fees and expenses. In this fact situation, when Section 31(2)(b) of Singapore's International Arbitration Act [the "Singapore Act"] (equivalent of Section 48(1)(a) of the Indian Arbitration Act, 1996) was pressed in support of Mr. Chiew's objection to the foreign award, the Singapore High Court held: - 61. First of all, it should be remembered that under s 31(2) of the Act, it is the party who wishes the court to refuse enforcement of the award who has the burden of establishing ....
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....al approach taken by an enforcement court to the decision of the arbitral tribunal in question. They are also consonant with the views of the court in the Hebei case which underline that the approach towards the decisions of foreign arbitral tribunals in Convention countries is to recognise the validity of the same and give effect to them subject to basic notions of morality and justice. The Court of Appeals in the Sarhank case took a different view, one that I hope will not be generally endorsed. 57. In the facts of the present case, what this Court is being asked to do, in the guise of applying Section 48(1)(a), is really to undertake a review on the merits. As has been pointed out by us hereinabove, the application of the alter ego doctrine under Delaware law would depend primarily upon the Arbitrator applying the oral and documentary evidence led before him to arrive at this conclusion on facts. This he has done by not only adverting to the documentary evidence, but also adverting to the oral evidence of Ms. Parker of ISS, Mr. Pathak, MD of DMC and Arun Dev Upadhyaya, Chairman of DMC. Given the fact that the foreign award gives reasons on facts in this case to apply the alter....
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....ction 48, being a pari materia provision which appears in Part II of the Act. This argument must therefore stand rejected. 60. The appellants then pressed Section 48(1)(c) into operation. As can be seen, Section 48(1)(c) relates to an award which deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submissions to arbitration. Given the fact that the expression 'submission to arbitration' would refer primarily to the arbitration agreement (see Olympus Superstructures (P) Ltd. v. Meena Vijay Khetan, (1999) 5 SCC 651 at para 19), sub-clause (c) only deals with disputes that could be said to be outside the scope of the arbitration agreement between the parties - and not to whether a person who is not a party to the agreement can be bound by the same. In fact, the proviso to Section 48(1)(c) makes this even clearer, in that it states that an award may be partially enforced, provided that matters which are outside the submission to arbitration can be segregated, thereby again showing that the thrust of the provision is whether the dispute between parties are qua excepted ....
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....he "reference" contemplated is an act of the appointing authority referring the disputes to the arbitrator appointed by him. (c) Where the parties fail to concur in the appointment of the arbitrator(s) as required by the arbitration agreement, or the authority named in the arbitration agreement failing to nominate the arbitrator and refer the disputes raised to arbitration as required by the arbitration agreement, on an application by an aggrieved party, the court can appoint the arbitrator and on such appointment, the disputes between the parties stand referred to such arbitrator in terms of the arbitration agreement. 11. Reference to arbitration can be in respect of all disputes between the parties or all disputes regarding a contract or in respect of specific enumerated disputes. Where "all disputes" are referred, the arbitrator has the jurisdiction to decide all disputes raised in the pleadings (both claims and counterclaims) subject to any limitations placed by the arbitration agreement. Where the arbitration agreement provides that all disputes shall be settled by arbitration but excludes certain matters from arbitration, then, the arbitrator will exclude the excepted m....
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....tion or contains a decision on the matter beyond the scope of the submission to arbitration". 65. Mr Loh submitted that the Award should not be enforced in Singapore because it contains a decision on matters that are beyond the scope of the submission to arbitration - the arbitration agreement was between AVA and Asianic and the submission to arbitration was restricted to those parties only. Joining Mr Chiew and entering an award against him went beyond the scope of the submission to arbitration. Javor v Francoeur [2003] BCJ No 480 was cited in support. Additionally, Mr Loh said certain academics (though he referred me to only one article, that by Prof Wedam-Lukic, "The Jurisdictional Problems of Arbitration" (1994) 1 Croatian Arbitration Yearbook 51) were also of the view that an award seeking to bind non-parties to an arbitration agreement was a ground for refusal of enforcement under Art V(1)(c) of the Convention (the equivalent of s 31(2)(d) of the Act). 66. On behalf of AVA, Mr Dhillon submitted that s 31(2)(d) dealt with the grounds of excess of power or authority of the arbitrator. He cited para 20.145 of Halsburyʼs Laws of Singapore vol 2 (LexisNexis, 2003 Reissu....
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.... is to be enforced, the foreign law of the award would be applicable. In this case, Mr Chiew had brought no evidence based on Arizona law to prove that the Award contained a decision on a matter beyond the scope of the submission to arbitration. As for Javor v Francoeur, this case was distinguishable on its facts as the arbitrator there had held that the respondent was liable without finding him to be a party to the arbitration agreement. 69. Having considered Mr Dhillonʼs arguments, I accept them. I agree with the assistant registrar that this ground of challenge relates to the scope of the arbitration agreement rather than to whether a particular person was a party to that agreement. Mr Chiew has not established that this ground avails him in this instance. 62. We think this judgment states the law correctly. 63. Shri Vishwanathan then pressed the ground that since the Arbitrator's Award in the present case contained reasoning which was perfunctory in nature, it would not pass muster and it would be a breach of natural justice, 'reasons' being a part of natural justice as understood in this country. For this, he referred to Section 48(1)(b) of the Arbitration Act, 1996....
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....t disregard of Section 48 of the Arbitration Act that the Supreme Court would interfere with a judgment which recognises and enforces a foreign award however inelegantly drafted the judgment may be. ... 83. Having said this, however, if a foreign award fails to determine a material issue which goes to the root of the matter or fails to decide a claim or counterclaim in its entirety, the award may shock the conscience of the Court and may not be enforced, as was done by the Delhi High Court in Campos Bros. Farms v. Matru Bhumi Supply Chain (P) Ltd., 2019 SCC OnLine Del 8350 : (2019) 261 DLT 201 on the ground of violation of the public policy of India, in that it would then offend a most basic notion of justice in this country. It must always be remembered that poor reasoning, by which a material issue or claim is rejected, can never fall in this class of cases. .... 65. This argument also stands rejected. 66. Shri Salve argued that since damages were given in tort in the present case, they would be outside the scope of the arbitration agreement. The arbitration agreement in this case reads as follows: - (ii) In the event a dispute arises in connection with this Agreement suc....
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....ary for the purpose of determining whether the claim in question was justified or otherwise and this test, as indicated above, is clearly satisfied with regard to the third claim in the instant case. 40. We may, at this stage, refer to a passage in Russell on Arbitration and a few decided cases which fortify our aforesaid conclusion. In Russell on Arbitration (Twentieth Edn.) the following statement of law occurs at p. 90: "Claims in tort may be so intimately connected with a contract that a clause of appropriate width designed primarily to make contractual disputes arbitrable will nevertheless render such claims in tort arbitrable as well." 41. In Woolf v. Collis Removal Service [(1947) 2 All ER 260 : (1948) 1 KB 11 : 177 LT 405 (CA)] the defendants had contracted to remove plaintiff's furniture and effects from London to their store in Marlow and there safely to keep and take care of them, but, according to the plaintiff, the defendants had, in breach of the contract, removed the goods to a different destination where some were lost and others damaged. Alternatively the plaintiff claimed that the goods were lost and damaged owing to the negligence of the defendants i....
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....nder the bye-laws of the East India Jute & Hessian Exchange Association and the relevant bye-law ran thus: "All matters, questions, disputes, difference and/or claims arising out of and/or concerning and/or in connection with and/or in consequence of or relating to this contract shall be referred to arbitration...." Under the commercial contract Respondent 1 had sold, through a broker, certain quantities of fibre to the appellant Mill and after effecting delivery of the goods Respondent 1 had submitted bills to the appellant Mill again through the broker; the appellant Mill, however, claimed reduction in price on account of shortage in weight and submitted claims in that respect. Since the price was not paid, Respondent 1 referred the claim to the arbitration of Bengal Chamber of Commerce and Industry. The appellant Mill informed the Chamber of Commerce and Industry that it had filed a suit upon the whole of the subject-matter of the reference and served a notice under Section 35 of the Arbitration Act. In the suit so filed against Respondent 1 and the broker apart from the declaration sought that the broker had no claims against the appellant Mill in respect of the contract or in ....
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....ts the three claims are beyond the scope or purview of the Arbitration clause or that the Arbitration clause on its own language does not embrace the issue of arbitrability of the three claims. 68. In Tarapore & Co. v. Cochin Shipyard Ltd., (1984) 2 SCC 680, this Court held: 39. Phrases such as "claim arising out of contract" or "relating to the contract" or "concerning the contract" on proper construction would mean that if while entertaining or rejecting the claim or the dispute in relation to claim may be entertained or rejected after reference to the contract, it is a claim arising out of contract. Again the language of clause 40 shows that any claim arising out of the contract in relation to estimates made in the contract would be covered by the arbitration clause. If it becomes necessary to have recourse to the contract to settle the dispute one way or the other then certainly it can be said that it is a dispute arising out of the contract. And in this case the arbitration clause so widely worded as disputes arising out of the contract or in relation to the contract or execution of the works would comprehend within its compass a claim for compensation related to estimates....
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.... apply the alter ego doctrine correctly, as a result of which the foreign award would have to be upheld. We wish to indicate that this approach is completely erroneous. First and foremost, Section 48 does not contain any ground for resisting enforcement of a foreign award based upon the foreign award being contrary to the substantive law agreed to by the parties and which it is to apply in reaching its conclusion. As a matter of fact, whether the award is correct in law (applying Delaware law), would be relevant if at all such award were to be set aside in the State in which it was made and that too if such law permitted interference on the ground that the arbitral award had infracted the substantive law of the agreement. As has been pointed out hereinabove, the arbitral award in this case was not challenged in the State of Missouri. Hence, the Division Bench's foray into this line of reasoning is wholly incorrect. 72. As a matter of fact, if an international commercial arbitration were to be held in India, Section 28(1)(b) recognises that an arbitral tribunal can decide the dispute in accordance with the rules of law designated by the parties as applicable to the substance of the....
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....es of criminal prohibitions implicates national and international public policies, crimes of terrorism, piracy, slave-trading, drug smuggling, torture, murder, kidnapping and robbery are all typically identified as examples of public policy. As discussed above, in the context of arbitration agreements: "The English court would not recognise an agreement between ... highwaymen to arbitrate their differences any more than it would recognise the original agreement to split the proceeds." [Soleimany v. Soleimany [1999] QB 785, 797 (English Ct. Appl)] Equally, neither an English court nor courts of most other states would recognize awards that split the proceeds of a criminal enterprise or that otherwise facilitated serious criminal activities, whether highway robbery, terrorism, drug smuggling, slave- trading, human-trafficking, or similar crimes. In practice, however, it is highly unusual for criminals involved in such enterprises to come anywhere close to either lawyers or arbitrators; other forms of alternative dispute resolution are used in almost all such settings. As a consequence, there are very few national court decisions involving the text-book cases of serious criminal....
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....of Asutosh Mookerjee, J. reported as Frederick Thomas Kingsley v. The Secretary of State for India AIR 1923 Cal 49. In this judgment, a learned Division Bench of the Calcutta High Court put it thus: - It may be conceded that though every breach of duty arising out of a contract gives rise to an action for damages, without proof of actual damage, Marzetti v. Williams [(1830) I B & Ad. 415 : 35 R.R. 329.], Embery v. Owen [(1851) 6 Exch. 353 : 86 R.R. 331], the amount of damages recoverable is, as general rule, governed by the extent of the actual damage sustained in the consequence of the defendant's act, Hiort v. L.N.W. Ry. Co. [(1879) 4 Exch. Div. 188.]. In cases admitting proof of such damage, the amount must be established with reasonable certainty, The Commerce [(1850) 3 W. Rob. 283.]. But this does not mean that absolute certainty is required, nor in all cases, is there a necessity for direct evidence as to the amount. Damages are not uncertain for the reason that the loss sustained is incapable of proof with the certainty of mathematical demonstration or is to some extent contingent and incapable of precise measurement. As Harlan J. observed in delivering the judgment of the....