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IN THE HIGH COURT AT CALCUTTA
Shekhar B. Saraf, J.
Jaldhi Overseas Pte Ltd. – Petitioner
Versus
Steer Overseas Pvt. Ltd. – Respondent
EC 100 of 2022
Decided On : 23-06-2023
ARBITRATION - Enforcement of foreign award - Jurisdiction - Arbitration agreement - Existence - Validity - Grounds for refusal - Public policy of India.
Fact of the Case:
Petitioner/award holder, Jaldhi Overseas Pte. Ltd., seeks enforcement and execution of a foreign partial award in its favour against the respondent/award debtor, Steer Overseas Private Limited. The award debtor challenged the enforcement of the award on various grounds, including the absence of a valid arbitration agreement, lack of jurisdiction of the arbitral tribunal, and violation of the public policy of India.
Finding of the Court:
The Court held that the existence of a valid arbitration agreement is a prerequisite for the enforcement of a foreign award. However, the Court found that the arbitrator had already determined the existence of a valid arbitration agreement between the parties based on the correspondence and conduct of the parties. The Court further held that the scope of inquiry under Section 48 of the Arbitration and Conciliation Act, 1996, is limited, and the Court cannot substitute its own view for that of the arbitrator. The Court also held that the enforcement of the award would not be contrary to the public policy of India.
Issues: 1. Whether there was a valid arbitration agreement between the parties? 2. Whether the arbitral tribunal had jurisdiction to adjudicate the dispute? 3. Whether the enforcement of the award would be contrary to the public policy of India?
Ratio Decidendi: 1. The existence of a valid arbitration agreement is a prerequisite for the enforcement of a foreign award. 2. The Court cannot substitute its own view for that of the arbitrator on the issue of the existence of a valid arbitration agreement. 3. The scope of inquiry under Section 48 of the Arbitration and Conciliation Act, 1996, is limited, and the Court cannot review the merits of the dispute. 4. The enforcement of a foreign award will not be refused on the ground of public policy unless it is found to be contrary to the fundamental policy of Indian law, the interests of India, or justice or morality.
Final Decision: The Court ordered the enforcement of the foreign award as a decree of the Court.
JUDGMENT :
Shekhar B. Saraf, J.
1. The petitioner/award holder, Jaldhi Overseas Pte. Ltd., in the instant application [being EC 100/2022] under section 46 of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as the ‘Act’] read with Order XXI of the Code of Civil Procedure, 1908 [hereinafter referred to as ‘CPC’] is a company incorporated under the appropriate laws of Singapore.
2. The respondent/award debtor, Steer Overseas Private Limited, is a company within the meaning of the Companies Act, 2013, having its registered office at 103, Sahid Nagar, 2nd floor, Bhubaneshwar –751007 outside the jurisdiction aforesaid and its corporate office at 91 A/1, Park Street, Block No. 401, 4th Floor, Kolkata – 700016 within the jurisdiction aforesaid.
3. The instant application has been filed by the award holder for enforcement and execution of a foreign partial award in its favour.
Relevant Facts
4. The relevant facts are produced below: -
a) The award holder through an email correspondence dated December 24, 2009 (hereinafter referred to the ‘first email’), offered to carry the award debtor’s cargo of iron ore fines from Haldia and Visakhapatnam Ports to a Main Port in China on the terms and conditions as contained in the said correspondence.
b) The award debtor, on receipt of the offer, altered its commercial terms and returned a counter offer (hereinafter referred to as the ‘second email’) to the award holder on the same day, requesting the petitioner to nominate a vessel.
c) The petitioner prepared a fixture note in furtherance of the terms and conditions in its own correspondence dated December 24, 2009 [hereinafter referred to as ‘fixture note 1’].
d) The award holder nominated the vessel MV Dong Jin [hereinafter referred to as ‘the said vessel’]. The said vessel first arrived at Haldia on January 21, 2010 and thereafter loaded the award debtor’s cargo. The vessel then reached Vishakhapatnam on February 2, 2010 for loading the remaining cargo. Fixture note 1 was sent to the award debtor on January 27, 2010.
e) Fixture note 1 possessed an arbitral clause under clause 4 of ‘OTHER TERMS’ which provided for ‘ARBITRATION IN SINGAPORE, ENGLISH LAW TO APPLY’.
f) On receipt of fixture note 1, the award debtor amended two terms of the note by hand: -
a. Discharge rate was changed from 15,000 MT to 12,000 MT; and
b. Detention rate was changed from US $30,000 HD PDPR to US $20,000 HD PDPR. [hereinafter referred to as ‘modified fixture note 1’].
g) The award debtors forwarded the modified fixture note 1 to the award holders on January 29, 2010.
h) On December 24, 2009, the award holders circulated a separate fixture notice [hereinafter referred to as ‘fixture note 2’] to Global Up International Ltd. [hereinafter referred to as ‘sister company’] in Hong Kong which is a 100% subsidiary of the award debtors.
i) Succeeding invoices in light of fixture note 2 were raised under the name of the sister company. However, the award holder alleges that the same was conducted under the direction of the award debtor.
j) The appointed vessel could not berth at Visakhapatnam due to non-readiness of cargo documents.
k) The award debtor utilized 2 days 4 hours and 8 minutes in excess of the lay time at the discharge port of Zhenjiang which resulted in the accrual of demurrage and damages worth the sum of USD $299,047.
l) Additionally, the award debtor through its sister company also owed funds to the petitioner in relation to fixtures where other vessels were appointed.
m) In a meeting held on January 24, 2011, the award debtors offered USD 200,000 to the award holder as a full and final settlement of all dues.
n) The award holder did not accept the proposal. Regardless, the award debtors paid the said amount to the award holders.
o) Through a letter dated May 4, 2012, the award holder initiated arbitral references in relation to all the fixtures between the award holder, award debtor, and the sister company.
p) Accordingly, by its letter dated June 25, 2012, the Sin
AI
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Point of law : Section 34 of English Arbitration Act deals with procedural and evidential matters.
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Once declaratory arbitration award came to be passed by arbitral tribunal, same ought to have been challenged by petitioners by exercising its remedy available under provisions of English Arbitration....
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