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2020 Supreme(SC) 387

SUPREME COURT OF INDIA
R.F. Nariman, S. Ravindra Bhat, V. RAMASUBRAMANIAN, JJ.
M/S. CENTROTRADE MINERALS AND METALS INC. – APPELLANT
VERSUS
HINDUSTAN COPPER LTD. – RESPONDENT
CIVIL APPEAL NO.2562 OF 2006 WITH CIVIL APPEAL NO.2564 OF 2006
Decided On : 02-06-2020

Advocates appeared:
For the Parties :Gourab Banerji, Sidharth Bhatnagar, Ruby Singh Ahuja, Vishal Gehrana, Shravan Sahny, Ankit Yadav, Ashutosh P. Shukla, Raka Chatterjee, Mohit Pandey, Ishita Mishra, For M/s Karanjawala & Co. Nandini Sen Mukherjee, S. S. Jauhar, Advocates

IMPORTANT POINTS
(1) Arbitrator is in control of arbitral proceedings and procedural orders which give time limits must be strictly adhered to.
(2) Arbitrator’s refusal to adjourn proceedings at behest of one party cannot be said to be perverse, keeping in mind object of speedy resolution of disputes of Arbitration Act.

Headnote:

Arbitration and Conciliation Act, 1996 – Section 48 – Enforcement of foreign award – Arbitrator was extremely fair to respondent – Having noticed that respondent wanted to stall arbitral proceedings by approaching Courts in Rajasthan and having succeeded partially, conduct of respondent leaves much to be called for – Despite being informed time and again to appear before Tribunal and submit their response and evidence in support thereof, it is only after Arbitrator indicated that he was going to pass an award that respondent’s attorneys woke up and started asking for time to present their response – This too was granted by Arbitrator, by not only granting extension of time, but by extending this time even further – No fault whatsoever with conduct of arbitral proceedings – Arbitrator is in control of arbitral proceedings and procedural orders which give time limits must be strictly adhered to – Arbitrator’s refusal to adjourn proceedings at behest of one party cannot be said to be perverse, keeping in mind object of speedy resolution of disputes of Arbitration Act – Remanding the matter to ICC Arbitrator to pass a fresh award, is clearly outside jurisdiction of an enforcing court under Section 48 of 1996 Act – Chatterjee, J.’s judgment cannot be sustained – As a result, Centrotrade’s appeal, being Civil Appeal No. 2562 of 2006, allowed – Judgment of Chatterjee, J set aside – HCL’s appeal, being Civil Appeal No. 2564 of 2006, dismissed – Foreign award, dated 29.09.2001, shall now be enforced. (Paras 34, 36 and 37)

Facts of the Case:

Dispute arose between parties as regards the quantity of dry weight of copper concentrate delivered. Clause 14 of the agreement contained a two-tier arbitration agreement by which the first tier was to be settled by arbitration in India. If either party disagrees with the result, that party will have the right to appeal to a second arbitration to be held by the ICC in London. The appellant M/s Centrotrade Minerals and Metals Inc. invoked the arbitration clause. By an award dated 15.06.1999 Arbitrator appointed by the Indian Council of Arbitration made a Nil Award.

Findings of the Court:

Despite being informed time and again to appear before the Tribunal and submit their response and evidence in support thereof, it is only after the arbitrator indicated that he was going to pass an award that the respondent’s attorneys woke up and started asking for time to present their response. This too was granted by the learned arbitrator, by not only granting extension of time, but by extending this time even further. Finally, when the legal submissions of 75 pages were sent even beyond the time that was granted, the learned Arbitrator took this into account and then passed his award. This being the case, on facts we can find no fault whatsoever with the conduct of the arbitral proceedings.

Result : Appeals Partly allowed.

JUDGMENT

R.F. Nariman, J.

1. This matter comes to this Bench after two previous forays to this Court.

2. The appellant before us, in Civil Appeal No.2562 of 2006, is a U.S. Corporation who had entered into a contract for sale of 15,500 DMT of copper concentrate to be delivered at the Kandla Port in the State of Gujarat, the said goods to be used at the Khetri Plant of the respondent Hindustan Copper Ltd. (hereinafter referred to as “HCL”/ “the respondent”), who is the appellant in the other Civil Appeal No.2564 of 2006. After all consignments were delivered, payments had been made in accordance with the contract. However, a dispute arose between the parties as regards the quantity of dry weight of copper concentrate delivered. Clause 14 of the agreement contained a two-tier arbitration agreement by which the first tier was to be settled by arbitration in India. If either party disagrees with the result, that party will have the right to appeal to a second arbitration to be held by the ICC in London. The appellant M/s Centrotrade Minerals and Metals Inc. (hereinafter referred to as “Centrotrade”/ “the appellant”) invoked the arbitration clause. By an award dated 15.06.1999 the arbitrator appointed by the Indian Council of Arbitration made a Nil Award. Thereupon, Centrotrade invoked the second part of the arbitration agreement, as a result of which Jeremy Cook QC, appointed by the ICC, delivered an award in London, dated 29.09.2001, in which the following amounts were awarded:

    “27. For the above reasons I THEREFORE AWARD and ADJUDGE that

    (1) HCL do pay Centrotrade the sum of $152,112.33, inclusive of interest to the date of the Award in respect of the purchase price for the first shipment.

    (2) HCL do pay Centrotrade the sum of $15,815.59, inclusive of interest to the date of this Award in respect of demurrage due on the first shipment.

    (3) HCL, do pay Centrotrade the sum of $284,653.53, inclusive of interest to the date of this Award in respect of the purchase price on the second shipment.

    (4) HCL do pay Centrotrade their legal costs in this arbitration in the sum of $82,733 and in addition the costs of the International Court of Arbitration, the Arbitrator's fees and expenses totalling $29,000.

    (5) HCL do pay Centrotrade compound interest on the above sums from the date of this Award at 6% p.a. with quarterly rests until the date of actual payment.”

3. Even before Jeremy Cook QC could deliver his award, HCL, during the pendency of the proceedings before the arbitrator in London, filed a suit in the Court at Khetri, in the State of Rajasthan, challenging the arbitration clause. By an Order dated 27.04.2000, in a revision petition filed against the Order of the Khetri Court, the High Court at Rajasthan restrained the appellant from taking further steps in the London arbitration, pending hearing and disposal of the revision petition. This ad interim ex parte stay granted by the High Court was ultimately vacated by the Supreme Court only on 08.02.2001. Meanwhile, we are reliably informed that Mr. Cook, the learned arbitrator, referred the matter of stay of the parties from proceeding with the London arbitration to the ICC Court, which then decided that the arbitrator could continue with the arbitral proceedings.

4. When the said award dated 29.09.2001 was sought to be enforced by Centrotrade in India, a learned Single Judge of the Calcutta High Court, after considering the objections of HCL, dismissed the Section 48 petition filed by HCL, as a result of which the aforesaid foreign award became executable in India. However, a Division Bench of the Calcutta High Court, by its judgment dated 28.07.2004, held that an appeal would be maintainable inasmuch as the London award could not be said to be a foreign award, but that a two-tier arbitration clause would be valid. However, since the Indian award and the London Award, being arbitration awards by arbitrators who had concurrent jurisdiction, were mutually destructive of each other, neither coul

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