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2013 Supreme(Bom) 664
High Court of Judicature at Bombay
R.D. DHANUKA, J.
Konkola Copper Mines (PLC)
Versus
Stewarts and Lloyds of India Limited
Arbitration Petition No. 160 of 2013
Decided on : 19-03-2013
For the Petitioner:G.R. Joshi i/by D.P. Desai, Advocates.
For the Respondent:L.M. Acharya i/by Kunal Bhange, Advocates.
Headnote:
Petitioner seeks direction against respondent to furnish security to secure the amounts awarded to the petitioner by the learned arbitrator by declaring an award on 9th January, 2013 in the sum of US # 3356203 equivalent to Rs.181234926/-approximately as on 18th January, 2013 and seeks appointment of the Court Receiver and injunction against respondents.
Fact of the Case:
Petitioner and respondent entered into a contract dated 10th August, 2006 and 18th August, 2006 which were subject matter of arbitration. The arbitration proceedings were held at Mumbai and the arbitration proceedings were agreed to be at Mumbai. The venue of arbitration proceedings was subsequently changed to Mumbai. The petitioner proposed the place of arbitration to be at Mumbai. The respondents conveyed their acceptance that the Mumbai, India as the place of arbitration as proposed by the petitioner. The learned counsel for the petitioner submitted that the venue of arbitration proceedings was admittedly at Mumbai and the arbitration proceedings were held at Mumbai which was agreed place of arbitration. It is submitted that the place of arbitration decided by the parties at Mumbai was neutral venue. The learned counsel appearing for parties placed reliance upon Paragraphs 2, 10 to 10.3, 16 to 20, 24,52 to 54, 58, 59, 63, 67, 75, 76, 78, 86, 89, 96 to 100, 194 and 197 of the judgment of the Supreme Court in the case of Bharat Allulminium Co. (supra) which read thus:
Finding of the Court:
The court held that the provisions of Part I would apply to all arbitrations and all proceedings relating thereto. Where such arbitration is held in India the provisions of Part I would compulsory apply and parties are free to deviate only to the extent permitted by the derogable provisions of Part I. In cases of international commercial arbitrations held out of India provisions of Part I would apply unless the parties by agreement, express or implied, exclude all or any of its provisions. In that case the laws or rules chosen by the parties would prevail. Any provision, in Part I, which is contrary to or excluded by that law or rules will not apply.
Issues: Whether the provisions of Part I of the Arbitration & Conciliation Act, 1996 would apply to the facts of this case.
Ratio Decidendi: The court held that the law laid down by the Supreme Court in case of Bhatia International (supra), has been overruled by the Constitution Bench of the Supreme Court in case of Bharat Aluminium Company (supra), with prospective effect and in view of the agreement entered into between the parties is much prior to the date of the decision in case of Bharat Aluminium Company (supra) and in view of the agreement between the parties referred to aforesaid, it is clear that the parties had intended to exclude the provisions of Part I of the Arbitration Act, 1996.
Final Decision: Arbitration petition is not maintainable in this court and is dismissed.
By this petition filed under section 9 of the Arbitration & Conciliation Act, 1996, the petitioner seeks direction against the respondent to furnish security to secure the amounts awarded to the petitioner by the learned arbitrator by declaring an award on 9th January, 2013 in the sum of US # 3356203 equivalent to Rs.181234926/-approximately as on 18th January, 2013 and seeks appointment of the Court Receiver and injunction against respondents.
2. The respondents have filed affidavit dated 25th February, 2013 raising preliminary objection about territorial jurisdiction of this court to entertain this petition.
3. The learned counsel appearing on behalf of the respondents submits that the respondent carries on business at Kolkata. The Petitioner is having its registered office at Jambia. The contracts dated 10th August, 2006 and 18th August, 2006 which were subject matter of arbitration were received and executed by the respondent at Kolkata. The transaction between the petitioner and respondent took place at Kolkata. It is submitted that no part of cause of action in the pending arbitral proceedings has arisen within the territorial jurisdiction of this court nor the respondents has its registered office or branch office within the jurisdiction of this court. The learned counsel submits that this court does not fall within the purview of “Court” as contemplated by provisions of section 2(1)(e) of the Arbitration & Conciliation Act, 1996.
4. The learned counsel for the respondent placed reliance upon the judgment of the Supreme Court in the case of Bharat Alluminium Vs. Kaiser Alluminium delivered on 6th September, 2012 reported in (2012) 9 S.C.C. 552 and particularly paragraph 197.
5. The learned counsel submits that the Supreme Court has made it clear in para 197 that the Judgment in Bhatia International Vs. Bulk Trading 2002 (4) SCC 105 was rendered by the Supreme Court on 13th March, 2002 and since then the said judgment has been followed by the High Courts as well as by Supreme court on numerous occasions. The learned counsel submits that the Supreme Court has held that the judgment in Venture Global (2008) 4 SCC 190 had been rendered on 10th January, 2008 in terms of the ratio of the decision in Bhatia International. It was clarified that the law now declared by the Supreme Court in the case of Bharat Alluninium Co. (supra) shall apply prospectively to all arbitration agreement executed hereafter. The learned counsel therefore, submits that though venue of the arbitration proceedings was subsequently changed to Mumbai, the fact remains that the agreement entered into between the parties was prior to the date of the Supreme Court rendering the said decision in the case of Bharat Alluminium Co. and in view of the fact no cause of action has arisen in Mumbai and the parties having agreed that all disputes arising out of or in connection with the contract in question shall be finally settled under the rules of arbitration of International Chamber Commerce and the contract shall be governed, construed and interpreted in accordance with the laws of Republic of Jambia, both the parties had agreed expressly or in any event impliedly that Part I of the Arbitration & Conciliation Act, 1996 would be excluded and would not be applicable to the parties hereto.
6. Without prejudice to the aforesaid submissions, the learned counsel for the respondent submits that the respondents are in the process of challenging the impugned award by filing petition in the appropriate court and the petition would be filed shortly. The learned counsel submits that on merits, the petitioner is not entitled to seek any interim relief.
7. Mr. G.R. Joshi, the learned counsel on behalf of the petitioner on the other hand submits that the venue of arbitration proceedings was admittedly at Mumbai and the arbitration proceedings were held at Mumbai and therefore, in view of the judgment of the Supreme Court in the case of Bharat Alluminium Co. (supra)
