The court emphasized the 'pro-enforcement bias' in the New York Convention of 1958 and the need to enforce foreign arbitral awards as a rule, denying enforcement only as an exception.

ORDER :

The petitioner is seeking enforcement of foreign arbitral award dated 24.09.2020, passed by a learned sole arbitrator, who was appointed by the Grain and Feed Trade Association (GAFTA), with the arbitration being held in the United Kingdom (UK). It is an admitted position that the respondents did not challenge the said arbitral award on merits before the competent courts in UK.

2. The petitioner is a company registered under the laws of Brazil and it is engaged in the business of export of various agricultural products to number of countries including India. Respondent No.1 is a partnership firm registered in India, engaged in the business of trading, including import/export of agricultural products. Respondent Nos.2 to 4 are the partners of respondent No.1 firm. The respondents are resisting enforcement of the aforesaid foreign arbitral award on various grounds. Before referring to the said grounds, it would be appropriate to first refer to the chronology of events, leading upto filing of the present petition.

3. On 04.09.2019, the petitioner and respondent No.1 entered into a contract whereby the said respondent agreed to buy and the petitioner agreed to sell 780 Metric Tonnes (MT) of Brazilian Brown Eyed Beans. The consignments were to be dispatched in 3 shipments/parcels of 10 containers each from Brazil to India. The contract was executed under the aegis of the Global Pulse Confederation and GAFTA. The agreed payment terms were to be ‘cash against documents’. As per the contract, the quality of the aforesaid goods was to be determined finally at the time of loading, with respondent No.1 as the buyer having right to attend the loading and to inspect the same. It was specifically agreed between the parties under the said contract that if any conflict arose at the destination i.e. in India about the standard of the goods imported or if it was to be in conflict with any regulation or law, the buyer was to be fully liable for the consequences. The goods were required to be dispatched on Cost Insurance Freight basis to Nhava Sheva, India.

4. It is significant that one of the terms of the contract specified that the contract was executed as per Global Pulse Confederation (GPC) Contract No.1. This was a standard form of contract, which inter alia, provided for resolution of disputes between the parties by way of arbitration. Clauses 24 and 25 of GPC Contract No.1 specified that the seat of arbitration would be England and that the arbitration would be governed by the GAFTA Simple Disputes Arbitration Rules No.126. According to the petitioner, the said arbitration clauses, forming part of GPC Contract No.1, stood incorporated by way of reference in the aforesaid contract dated 04.09.2019, executed between the parties.

5. The petitioner dispatched 30 containers in 3 parcels of 10 containers each. The first parcel was dispatched on 20.09.2019, the second and third were dispatched subsequently. The petitioner, as the seller, sent a duplicate of the contractually agreed documents to respondent No.1 i.e. the buyer, which included the invoice, original bill of lading and certificate of quality issued by a contractually agreed GAFTA approved superintendent.

6. On 19.11.2019, respondent No.1 raised concerns about the quality of the first parcel, which had reached the port at Nhava Sheva on 07.11.2019. Although, in terms of the contract, the quality of the material was final at the time of loading, yet the petitioner appointed a surveyor company at the port in India, who confirmed that the quality of the first parcel was good as per the contract executed between the parties. But, there was a dispute between the parties with regard to the aspect of the quality of the goods. Although respondent No.1 had paid for the first lot of containers supplied by the petitioner, it refused to pay for the second and third lots, despite the same having reached the port at India.

7. In this backdrop, the petitioner was constrained to approach this Court o