JUDGMENT :

S. RAVINDRA BHAT, J.

1. The appellant, which was granted special leave, challenges a judgment of the Bombay High Court¹[Dated 28.4.2008 in Appeal No. 519/2002]. It urges that the impugned judgment is erroneous because it concludes that proceedings under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter “the Act”) can be maintained to challenge a foreign award, defined as one, under that enactment.

The facts

2. The appellant company (hereafter “NV Engineering” or “the appellant”) was at the relevant time, incorporated under Italian law and involved in the setting-up and construction of plants for production of synthetic fibers, polymers and ascorbic acid. The respondent (hereafter “Jindal”) is a public limited company incorporated under relevant Indian law. In 1994, Jindal negotiated with a company-Engineering Chur AG of Sagenstrasse 97, 7001 Chur, Switzerland (hereafter, ‘Enco’) and, on 30.01.1995 entered into four related agreements with Enco to set up an ascorbic acid plant in India. These were: (i) Engineering Contract for Ascorbic for Acid Plant (ECAAP, or “plant contract”); (ii) Supply contract for Ascorbic Acid plant (SCAAP or “supply contract”); (iii) Service agreement for Ascorbic Acid plant (SAAAP “service contract”); and (iv) License agreement for Ascorbic acid plant (LAAAP “license contract”).

3. Under the plant contract, Enco agreed to provide Jindal with technical information and basic engineering documentation for the construction, commission, operation and maintenance of the Ascorbic Acid Plant (“the plant”). In consideration of Enco's obligations, Jindal was to pay a total fee of Swiss Francs 86,00,000/-in the manner provided in the Agreement. ECAAP as well as the other three agreements had an arbitration clause. In March 1995, with the consent of the respondent, Enco assigned ECAAP to NV Engineering. All the obligations of Enco towards Jindal were taken over by NV Engineering.

4. Disputes arose between Jindal and NV Engineering. The latter terminated the agreement and claimed damages. On 31.10.1996, Jindal filed a request for arbitration under the ECAAP, i.e. the plant contract, before the International Court of Arbitration (ICC), Paris. The appellant filed its reply to Jindal’s claim and also made a counter claim. Jindal appointed Mr. Desai as its nominee on the arbitral tribunal. NV Engineering nominated Prof. ACC Alberto Santa Maria as its nominee. The appointment of Mr. Desai and Prof. ACC Alberto Santa Maria as Arbitrators was confirmed by the ICC. Mr. Richard Fernyhough Q.C. was appointed as Chairman of the Arbitral Tribunal.

5. After considering the claims and counter claims, the tribunal made a partial award on 01.02.2000; by that award, Jindal’s claims were rejected. NV Engineering was awarded SFr.44,33,416(Swiss Francs) towards its counterclaims under the ECAAP. The tribunal then called upon the parties to present written representations on interest and costs in terms of Article 20 of the ICC Rules of Arbitration to enable it to frame the final award.

6. On 20.2.2000 Jindal filed a petition²[Arbitration petition No. 49/2000.] before the Bombay High Court under Section 34 of the Act challenging the partial award. The petition was admitted for final hearing on 01.03.2000 and notice was issued to the respondents (including the ICC and the tribunal). An interim injunction restraining the said respondents “from receiving any further submissions, and/or passing any further direction and/or Ruling and/or Award in the arbitration proceedings….” was issued. This order was continued from time to time till the petition was decided. The ICC tribunal in the meanwhile was of the view that the interim order passed by the high court was not binding on it and consequently, proceeded further. NV Engineering filed written submissions on interest and cost on 14.03.2001. Jindal, however, notified the tribunal that it did not intend to make any submission on the issue of interest and cost. Mr. Desai (