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2005 Supreme(Bom) 271

IN THE HIGH COURT OF BOMBAY
Goldcrestexports
Versus
N. V. Suissoen
Decided on : FEBRUARY 28, 2005

The provisions of section 34 are not available to challenge a foreign award, and specific provisions for challenging and enforcing foreign awards are highlighted under sections 47, 48, and 49 of the Arbitration and Conciliation Act, 1996.

Headnote:

Challenge - Foreign Award - Arbitration and Conciliation Act, 1996, Section 34, 47, 48, 49 - The court discussed the maintainability of a petition under section 34 to challenge a foreign award and concluded that the provisions of section 34 are not available to challenge a foreign award. The court highlighted the specific provisions for challenging and enforcing foreign awards under sections 47, 48, and 49 of the Act.

Fact of the Case:

The case involved a petition filed under section 34 of the Arbitration and Conciliation Act, 1996 to challenge an award passed by the second respondent. The main issue was the maintainability of the petition in view of the denial of the existence of the contracts by the appellant.

Finding of the Court:

The court found that the provisions of section 34 are not available to challenge a foreign award and highlighted the specific provisions for challenging and enforcing foreign awards under sections 47, 48, and 49 of the Act.

Issues: The main issue was whether a party against whom a foreign award is made is entitled to challenge the same under section 34 of the Act.

Ratio Decidendi: The court concluded that the provisions of section 34 are not available to challenge a foreign award and highlighted the specific provisions for challenging and enforcing foreign awards under sections 47, 48, and 49 of the Act.

Final Decision: The appeal was dismissed, and there was no order as to costs.

Judgment

S. J. VAZIFDAR, J.

( 1 ) THIS is an appeal against the order of the learned single Judge dismissing the appellants petition filed under section 34 of the arbitration and Conciliation Act, 1996 to challenge an award passed by the second respondent. The Federation of Oils, Seeds and Fats Associations Ltd. (FOSFA ).

( 2 ) THE two questions, both of which we have answered in the negative, that arise for our consideration are : (i) Whether a party against whom a foreign award is made is entitled to challenge the same under section 34 of the Act? (ii) Whether the mere denial of the existence of the agreement by the party against whom an award is made is entitled to challenge the same under section 34 if the award otherwise would be a foreign award and despite the party in whose favour the award is made stating that it treats the award as a foreign award and shall not either seek its enforcement or rely upon the same for any purpose as a domestic award.

( 3 ) THE controversy lies in a very narrow compass. The first respondents case is that two contracts dated the 19th September, 2003 and 24th September, 2003 were entered into between the petitioner/appellant and the first respondent by which the appellant agreed to sell to the respondent a certain variety of sesame seeds. Each of these contracts incorporates an arbitration agreement contained in the International Rules of Arbitration and appeal. The appellant has denied that these contracts were entered into. The appellant seeks to establish the maintainability of this petition in view of this defence.

( 4 ) AT the outset it is necessary to note two important aspects. Firstly, if the existence of the contracts is established there admittedly is a valid arbitration clause by incorporation, governing them. Secondly the impugned award in that event would admittedly be a foreign award within the meaning of that expression in the 1996 Act.

( 5 ) MR. Vasudeo however submitted that the petition under section 34 of the 1996 Act is maintainable for two reasons. Firstly he submitted that the petition is maintainable in view of the judgment of the Supreme Court in (Bhatia International v. Bulk Trading S. A. and another), 2002 (4) S. C. C. 105. Secondly, he submitted that in view of the appellants denial of the existence of the said contracts the petition to challenge the award is maintainable under section 34 and that it is not necessary for the appellant to challenge the same only if and when the first respondent seeks enforcement thereof. The submissions are not well founded.

( 6 ) AS we are concerned presently only with the question of maintainability of the petition it is necessary for us to refer to the facts only briefly. As stated by us above, the first respondents case is that two contracts dated 19th september, 2003 and 24th September, 2003 were entered into between the appellant and the first respondent under which the first respondent was to sell to the appellant certain varieties of sesame seeds on the terms and conditions mentioned therein. Among the various documents the contracts expressly incorporated the fosfa Terms Clause 27 whereof pertains to arbitration and Clause 25 reads as under :"25. Domicile.- This contract shall be deemed to have been made in England and the construction, validity and performance thereof shall be governed in all respects by English Law. Any dispute arising out of or in connection therewith shall be submitted to arbitration in accordance with the Rules of the Federation. . . . . "the said Rules in turn inter alia provide as under :-"any dispute arising out of a contract or contracts subject to these rules, including any questions of law arising in connection therewith, shall be referred to arbitration in London (or without prejudice to the juridical seat elsewhere if so agreed in accordance with the Arbitration Act, 1996 and any statutory modification or re-enactment thereof for the time being in force. The juridical seat of the arbitration sha























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