Toepfer International Asia Pvt. Ltd. . vs Thapar Export Ltd.

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1999 Supreme(Bom) 768

IN THE HIGH COURT OF BOMBAY
S.S. Nijjar, J.
Toepfer International Asia Pte. Ltd...... Petitioners.
Versus
Thapar Export Limited..... Respondents.
Arbitration Petition No. 348 of 1998, decided on 8-10-1999.
Advocates appeared :
N.G. Thakkar with Z.A. Jariwala i/b Thakore Jariwala Associates, for the petitioners.
S.C. Dharmadhikari i/b Ajay N. Khandhar, for the respondent.

Headnote:Section 49-Petition for enforcement of foreign award-Jurisdiction of Bombay High Court-Contract was executed at Bombay-Thus, petition maintainable in this High Court-As regards enforcement of award High Court can only declare it as enforceable-Becomes a decree of Court-Parties can seek its execution under provisions of Civil Procedure Code-As regards interest from date of award till payment, Court cannot make order for such interest under the Act.-The material placed on record evidence that all terms of the contract were negotiated and finalized in Bombay on 5th September, 1995. It was, thereafter that the formal contract document was engrossed and sent to Ludhiana for the signature of the respondent. The respondents Director signed the contract document and forwarded it to the respondents broker at Bombay for onward transmission to the petitioner for taking necessary action. The Affidavit of Harish Thakkar clearly shows that this document was thereafter handed-over to the authorised representative of the petitioner. It is the case of the petitioner in paragraph 3 of the petition that the contract was actually executed by and on behalf of the petitioner at Bombay. There is no material on record to refute this assertion. In fact, there could not have been any material for it is a fact known only to the petitioner and its authorised representative. The issue can be looked at in two ways. If the contract is said to have been concluded when the terms were prepared, then obviously that took place in Bombay. If the contract is said to have been finalised only after both parties had signed, then it is clear that only one of the parties signed at Ludhiana and the other signed it in Bombay only after it was received in Bombay. Looking at it, either way, Court is satisfied that the contract was entered into in Bombay and that this Court has jurisdiction to entertain the petition.
Section 49 of the Act merely empowers the Court to declare that the foreign award is enforceable under the provisions of Chapter II of the Act. The moment such a declaration is granted, an award shall be deemed to be a decree of the Court. Once it is deemed to be a decree of the Court, it is open to the parties to seek its execution in accordance with the provisions of the Civil Procedure Code.
Section 49-Enforcement of foreign award-Power of Court under Section 49 of Act-Held, Court cannot directly enforce it but can only declare it as enforceable-Which then becomes a decree which can be executed in accordance with provisions of Civil Procedure Code.-Section 49 of the Act merely empowers the Court to declare that the Foreign Award is enforceable under the provisions of Chapter II of the Act. The moment such a declaration is granted, an award shall be deemed to be a decree of the Court. Once its deemed to be a decree of the Court, it is open to the parties to seek its execution in accordance with the provisions of the Civil Procedure Code.

JUDGMENT - S.S. NIJJAR, J.:---This is a petition under section 47 of the Arbitration and Conciliation Act, 1996, hereinafter referred to as "the Act", applying for enforcement of the Award dated 29th September, 1997.

2. The petitioner is a Company incorporated under the laws of Singapore carrying on business of imports and exports of, inter alia, Indian commodities and in particular import of Indian toasted soyabean extractions. The respondents are a Company carrying on business of export of Indian Commodities and in particular Indian toasted soyabean exports. The petitioners at all material times in respect of the transaction, which is the subject matter of this petition, acted through their Brokers Alfred C. Toepfer Export (India) Pvt. Ltd. The respondent in respect of the transactions acted through M/s. Reliance Brokers. After negotiations the contract was finalised and executed between the brokers. It is the admitted case of both the sides that the contract has been neither signed by the seller nor by the buyer. The contract is stated to have been executed through the brokers only. It is the case of the petitioners that the contract was finalised in Mumbai. The respondents had agreed to sell, supply and deliver to the petitioners 500 m.t. of the goods at the rates specified. These goods were to be tendered by the respondents to the petitioners during January, 1996. The petitioners made all the necessary arrangements for shipment of the material. The respondents, however, acted in breach of the contract. The contract is evidenced by a letter dated 23rd October, 1995 issued by the respondents brokers, M/s. Reliance Brokers at Bombay. By this letter it was decided that the other terms would be as per Contract No. TIA/3036-151406. This letter was received by the petitioners agents. The former contract dated 23rd October, 1995 incorporating all the terms and conditions was drawn up at Bombay. The parties acted on the contract. Letter of credit was opened by the petitioners, which is at Exhibit-C to the petition. When the respondents failed to make delivery of the goods the broker visited Ludhiana. He was assured by Mr. Anil Thapar that the matter would be amicably settled in the month of July, 1996. The contract included an arbitration Clause which as follows:

"Other Terms: All other terms and conditions as per GAFTA Contract Nos. 100 119/125 currently in force. Both the buyer and seller hereby acknowledges familiarity with the text of the said GAFTA contracts and agree to be bound by its terms and conditions ARBITRATION IN LONDON."

3. Since there was a breach of contract, the matter was referred to arbitration in London. Thus the arbitration Award came to be made in favour of the petitioners.

4. The respondents challenged the enforceability of this Award on three grounds viz. (i) that there is no concluded contract between the parties and, therefore, the arbitration was without jurisdiction, (ii) that the Award is liable to be set aside as it has been given in breach of rules of natural justice as the Arbitral Tribunal has proceeded ex parte. No notices had been served by the Tribunal on the respondents and (iii) that this Court has no territorial jurisdiction to entertain the enforcement petition as even if the existence of the contract is accepted, the same was neither executed in Mumbai nor has it been breached/broken in Mumbai. Thus either under Clause 12 of the Letters Patent or under section 20 of the Code of Civil Procedure, this Court will have no territorial jurisdiction.

5. So far as the objection with regard to the breach of Rules of Natural Justice is concerned, Mr. Dharmadhikari has very fairly stated that the matter stands concluded by the judgment of this Court in Arbitration Petition No. 350 of 1998 in which it has been held that the Arbitral Tribunal has not acted in breach of the rules of natural justice. So far as the first ground with regard to the existence of the contract is concerned, I am unable to accep

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