2013 Supreme(Bom) 282

High Court of Judicature at Bombay
R.D. DHANUKA, J.
M/s. Louis Dreyfus Commodities Asia Pvt. Ltd.
Versus
M/s. Govind Rubber Limited
Arbitration Petition No. 174 of 2012
Decided on: 04-02-2013

An arbitration agreement is valid and enforceable if it is incorporated into a contract by reference to the rules of an arbitration institution, even if the parties have not signed a separate arbitration agreement.

Headnote:

ARBITRATION - FOREIGN AWARD - ENFORCEMENT - JURISDICTION - ARBITRATION AGREEMENT - INCORPORATION OF RULES OF SINGAPORE COMMODITY EXCHANGE - VALIDITY - SECTION 7(5) OF THE ARBITRATION & CONCILIATION ACT, 1996 - SECTION 44 OF THE ARBITRATION & CONCILIATION ACT, 1996 - SECTION 47 OF THE ARBITRATION & CONCILIATION ACT, 1996 - SECTION 48 OF THE ARBITRATION & CONCILIATION ACT, 1996 - SECTION 49 OF THE ARBITRATION & CONCILIATION ACT, 1996 - EVIDENCE ACT, 1872 - SECTION 57(1) - CIVIL PROCEDURE CODE, 1908 - ORDER 6 RULE 2 - INTERNATIONAL COMMERCIAL ARBITRATION - SECTION 2(1)(F) OF THE ARBITRATION & CONCILIATION ACT, 1996 - AUTHENTICATION OF FOREIGN AWARD - SECTION 47(A) OF THE ARBITRATION & CONCILIATION ACT, 1996 - SUPPRESSION OF DOCUMENTS - FINALITY OF LITIGATION - PUBLIC POLICY - SECTION 46 OF THE ARBITRATION & CONCILIATION ACT, 1996.

Fact of the Case:

The petitioner, a Singapore-based company, entered into two sales contracts with the respondent, an Indian company, for the purchase of rubber. The contracts contained an arbitration clause providing for the resolution of disputes by the Singapore Commodity Exchange (SICOM). The respondent issued purchase orders that contained terms and conditions printed on the reverse, including a clause stating that the contract would be governed by Indian law and subject to the exclusive jurisdiction of Indian courts. The respondent requested changes to the payment terms and split bills of lading, which were accepted by the petitioner. The goods were shipped, but the respondent refused to make payment. The petitioner referred the matter to SICOM for arbitration, and the arbitral tribunal awarded damages to the petitioner. The respondent did not challenge the award in any court of law. The petitioner filed a petition in the Bombay High Court seeking enforcement of the award as a decree.

Finding of the Court:

The Bombay High Court held that: * The arbitration agreement between the parties was valid and enforceable, as it was incorporated into the sales contracts by reference to the rules of SICOM under Section 7(5) of the Arbitration & Conciliation Act, 1996. * The award was a foreign award within the meaning of Section 44 of the Act, as it arose out of an international commercial arbitration under Section 2(1)(f) of the Act. * The petitioner had satisfied the requirements for enforcement of the award under Section 47 of the Act, including the production of a duly authenticated copy of the award and evidence that the award was a foreign award. * The respondent had not furnished any proof as to why enforcement of the award should be refused under Section 48 of the Act. * The award was therefore enforceable under Section 49 of the Act.

Issues: 1. Whether the arbitration agreement between the parties was valid and enforceable. 2. Whether the award was a foreign award within the meaning of Section 44 of the Arbitration & Conciliation Act, 1996. 3. Whether the petitioner had satisfied the requirements for enforcement of the award under Section 47 of the Act. 4. Whether the respondent had furnished any proof as to why enforcement of the award should be refused under Section 48 of the Act.

Ratio Decidendi: 1. The court held that the arbitration agreement between the parties was valid and enforceable, as it was incorporated into the sales contracts by reference to the rules of SICOM under Section 7(5) of the Arbitration & Conciliation Act, 1996. The court noted that the respondent had acted upon the terms and conditions of the sales contracts, including the arbitration clause, and that the parties had not signed a separate arbitration agreement. 2. The court held that the award was a foreign award within the meaning of Section 44 of the Act, as it arose out of an international commercial arbitration under Section 2(1)(f) of the Act. The court noted that the petitioner was a Singapore-based company and that the arbitration was conducted in Singapore. 3. The court held that the petitioner had satisfied the requirements for enforcement of the award under Section 47 of the Act, including the production of a duly authenticated copy of the award and evidence that the award was a foreign award. The court noted that the petitioner had annexed a certified copy of the award notarized by a notary public in Singapore and that the petitioner had pleaded that the award was a foreign award in its petition. 4. The court held that the respondent had not furnished any proof as to why enforcement of the award should be refused under Section 48 of the Act. The court noted that the respondent had not challenged the award in any court of law and that the respondent had not raised any arguments that the award was contrary to public policy.

Final Decision: The Bombay High Court allowed the petition and ordered the enforcement of the foreign award as a decree. The court also directed the respondent to produce an inventory of its assets and properties within four weeks.