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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
RITU RAJ AWASTHI, SURAJ GOVINDARAJ, JJ.
CTI Future Corporation Represented By Its Authorized Signatory Sudarshan Gujar – Appellant
Versus
Ducgiang Chemical And Detergent Powder Joint Stock Company - Respondent
AP-EFA No.1 of 2022
Decided on : 18-02-2022
Arbitration and Conciliation Act, 1996 - Sections 2 (e) (ii), 46, 47, 48 and 49 - Foreign awards - International commercial arbitration - New York Convention Awards - Any foreign award enforceable under Act within India - Whether an international commercial arbitral award rendered outside India between parties who have no connection to India can be enforced in India by filing proceedings under Sections 47, 48 and 49 of Arbitration and Conciliation Act, 1996 - Whether this Court would have jurisdiction to take above matter on file - Court exercise its jurisdiction when both parties are not connected to India and they are not corporate bodies established within territorial limits of Republic of India, more particularly within territorial limits of this Court (Para 15).
Findings of the Court: Application which is filed under Sections 44 to 52 of Act of 1996 which deals with New York Convention awards under Chapter I of Part II of Act of 1996 and obligations of Republic of India in terms of Article 51 (c) of Constitution of India, we are of considered opinion that this Court could exercise jurisdiction to enforce a foreign award in event properties of respondent against which enforcement is sought for is situated within territorial limits of this Court in view of later part of Section 2 (e) (ii) of Act of 1996 as also later part of explanation to Section 47(2) of Act of 1996. Hence, above petition is taken on record.
Result: Ordered accordingly.
ORDER :
1. The petitioner is before this Court seeking for the following reliefs:
ii. Pass such other order as this Hon'ble Court may deem fit and proper in the interest of justice.”
2. The international commercial arbitral award dated 18.08.2021 has been delivered by the Sole Arbitrator in international arbitration proceedings held in Singapore, the final award being registered with the Singapore International Arbitration Centre (SIAC) Registry of Awards as Award No.87 of 2021. It is the said award that is sought to be enforced in these proceedings.
3. A perusal of the award as also cause title of the present proceedings indicates that both the petitioner and respondent are body corporates which are incorporated outside India, the petitioner having its registered office at Korea and the respondent having its registered office at Vietnam. It is in this background that a question has arisen as to whether an international commercial arbitral award rendered outside India between the parties who have no connection to India can be enforced in India by filing proceedings under Sections 47, 48 and 49 of the Arbitration and Conciliation Act, 1996 (for short, “the Act of 1996”).
4. Part II of the Act of 1996 deals with New York Convention Awards, under which Sections 44 to 52 find place. Section 44 of the Act of 1996 deals with foreign awards and defines the same as an arbitral award on differences between persons arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India. Section 44(b) contemplates a situation of an award being delivered in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made may, by notification declare to be territories to which the Convention applies.
5. Thus, for an award to be recognised as a foreign award, it has to be as regards a commercial relationship as per the laws in India and rendered in a territory where the Convention has been made applicable by a suitable notification by the Central Government.
6. Section 46 of the Act of 1996 makes any foreign award enforceable under the Act within India. Section 47 of the Act of 1996 requires the original award or a copy thereof, duly authenticated in the manner required by the law in the country it is made, the original agreement for arbitration or a duly certified copy thereof and such evidence as may be necessary to prove that the award is a foreign award.
7. Section 47(2) contemplates that if the award or agreement to be produced is in foreign language, then the same shall be translated into English.
8. The explanation to Section 47 provides for the definition of ‘Court’ under which means the High Court having original jurisdiction to decide the questions forming the subject-matter of the arbitral award if the same had been the subject-matter of a suit in its ordinary original civil jurisdiction and in other cases, in the High Court having jurisdiction to hear appeals from decrees of courts subordinate to such High Court.
9. It is relevant to quote Section 2 (e) (ii) of the Act of 1996 which reads as under:
(i) xxx
(ii) in the case of international commercial arbitration, the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court.”
10. Section 2 (f) of the Act of 1996 deals with international commercial arbitration, which is reproduced hereunder for reference:
Section 47 provides for definition of ‘Court’ under which means High Court having original jurisdiction to decide questions forming subject-matter of arbitral award.
Sine qua non for execution of an award is existence of properties against which an order could be passed by Court.
A foreign arbitration award cannot be enforced where the tribunal conclusively finds no valid arbitration agreement exists, as per Sections 44 and 48 of the Arbitration and Conciliation Act, 1996.
The enforcement of foreign awards may be executed directly without separate proceedings for enforceability as long as statutory requirements are met.
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