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2023 Supreme(Cal) 539

IN THE HIGH COURT AT CALCUTTA
HARISH TANDON, PRASENJIT BISWAS, JJ.
Balasore Alloys Limited – Appellant
Versus
Medima LLC - Respondent
APO 8 of 2022 with AP 267 of 2021
Decided on : 28-04-2023

Advocates:
Advocate Appeared:
For the Appellant : Mr. Dhruba Ghosh, Sr. Adv., Mr. Rishad Medora, Adv., Mr. Meghajit Mukherjee, Adv.
For the Respondent: Mr. S. N. Mookherjee, Mr. Shounak Mitra, Ms. Nandini Khaitan, Adv., Ms. Shreya Singh, Adv., Mr. Vishal Sinha, Adv.

Headnote:

Constitution of India,1950 - Article 28 - Arbitration and Conciliation Act, 1996 - Sections 9, 2 (2) , 2(1)(f) , 37 , 36, 47 , 17 , 48 and 49 - Code of Civil Procedure,1908 - sections 13 and 44A - Legislative intent in segregating the domestic award - Restricted to the domestic award - British Law having a seat/place of arbitration in London, UK - Such being an undisputed fact, a plea was taken when a leave under Clause 12 of Letters Patent was sought by respondent that Section 9 of Arbitration and Conciliation Act contained in Part I has its applicability to a domestic award and not foreign awards which is governed by Part II – Held, There is every possibility of assets being dissipated or dealt with rendering award on mere paper - Object and the purpose underlying the incorporation of said proviso are laudable any restrictive interpretation would frustrate the very purpose - There is no logic to contention of appellant that the language used in section 9 has to be given a restrictive meaning that it would apply to a foreign award only in pre or during the arbitral proceeding - Appeal is dismissed

JUDGMENT :

Harish Tandon, J.:

1. The appellant is consistently raising an issue at the different stages of the proceedings which was raised at the time of granting a leave under Clause 12 of the Letters Patent whether the Clause relating to governing law contained in the agreement shall ipso facto exclude the powers of the Court to pass interim reliefs under Section 9 of the Arbitration and Conciliation Act as it is required to be construed as ‘an agreement to contrary’ appearing in proviso to Section 2 (2) of the Arbitration and Conciliation Act, 1996.

2. There is no dispute to the fact that the appellant has suffered an award dated 29th March, 2021 for an amount of USD 30,35,249.87 (equivalent to INR 22,08,75,133) passed by the ICC in a proceeding governed by the British Law having a seat/place of arbitration in London, UK. Such being an undisputed fact, a plea was taken when a leave under Clause 12 of the Letters Patent was sought by the respondent that Section 9 of the Arbitration and Conciliation Act contained in Part I has its applicability to a domestic award and not the foreign awards which is governed by Part II thereof. The Single Bench while granting a leave of Clause 12 of the Letters Patent held that an application for interim protection under Section 9 of the Act in respect of London Seated Arbitration is maintainable. The said order was assailed before the Division Bench in AP 267 of 2021 which was disposed of with the categorical finding that the nature of the order does not come within the ambit of Section 37 of the Act and therefore, the aforesaid question cannot be gone into at this stage when the Single Bench decided to hear out the application on the issue relating to grant of interim measures. However, the liberty was given to the appellant if ultimately aggrieved by a subsequent order passed by the Court while granting the interim reliefs to take all grounds including the ground relating to maintainability of the said proceedings.

3. Pursuant to the aforesaid leave having granted, the point which was decided at the time of granting leave under Clause 12 of the Letters Patent had further been taken with suitable adjustment which suits the appellant in upholding its contention on the maintainability of a proceeding under Section 9 of the said Act.

4. Mr. Ghosh, the learned senior Advocate appearing for the appellant submits that the foreign awards are not automatically enforceable in the Indian Courts except when the condition for such enforcements provided in Sections 48 and 49 of the said Act are fulfilled. According to Mr. Ghosh, an apparent distinction can be seen from the legislative intent in segregating the domestic award and the foreign award in different parts indicating that they are governed by the provisions contained in the respective parts in order to avoid overlapping of the provisions contained therein. To buttress the aforesaid submission, it is contended that the provisions contained in Part I of the Act, the applicability thereof which is restricted to the domestic award, manifestly intended to treat such award as decree and enforceable before the Court in accordance with the provisions of the Civil Procedure Code. On the other hand, the foreign award has to pass the muster of conditions provided in Section 48 of the said Act which clearly distinct the domestic award from the foreign award and therefore, its enforceability is not automatic. Taking a clue from the aforesaid submission, Mr. Ghosh relies upon the provisions contained in Section 9 of the said Act containing a provision relating to interim measures or passing interim reliefs before or during the arbitral proceedings or any time after making the award but before it is enforced in accordance with the Section 36. Taking aid of the language employed therein, Mr. Ghosh argued that there is no reference of Section 48 appearing in Part II of the said Act and therefore, it ruled out the applicability of Section 9 of the said Act. Accordin

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