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2005 Supreme(Del) 204

High Court Of Delhi
AUSTBULK SHIPPING SDN BHD - Appellant
Versus
P.E.C.LIMITED - Respondent
E.A. : 195 of 2002
Decided On : 02/18/2005

Advocates Appeared:
GARVESH KABRA, Manoj Khanna, RAVI P.MEHROTRA

Substantial compliance with the provisions of the Arbitration and Conciliation Act, 1996, along with the existence of the original award and the charter party agreement, established the enforceability of the foreign award.

Headnote:

ENFORCEMENT - FOREIGN AWARD - ARBITRATION AND CONCILIATION ACT, 1996, 1996 - SECTION 44, SECTION 47, SECTION 48, SECTION 49

Fact of the Case:

The petitioner sought enforcement of a foreign award passed by an arbitrator in London. The respondent contested the petition on various grounds, including non-compliance with Section 47 of the Arbitration and Conciliation Act, 1996. The respondent argued that there was no valid arbitration agreement between the parties and that the award was not a valid foreign award.

Finding of the Court:

The court found that the petitioner substantially complied with the provisions of the Act, and the original award was on record, indicating it was a foreign award. The court allowed the petitioner to place the original charter party agreement on record. The court also analyzed correspondences and documents to establish the existence of a valid written agreement containing the arbitration clause. The court rejected the respondent's objections and held the award enforceable as a decree.

Issues: Non-compliance with Section 47 of the Act, existence of a valid arbitration agreement, validity of the foreign award

Ratio Decidendi: The court held that substantial compliance with the Act's provisions, along with the existence of the original award and the charter party agreement, established the enforceability of the foreign award. The court also analyzed correspondences and documents to establish the existence of a valid written agreement containing the arbitration clause.

Final Decision: The court held the award enforceable as a decree and gave the respondent four weeks to make payment. If the respondent failed to pay, the petitioner could list the respondent's assets for recovery of the amount in accordance with the law.

MUKUNDAKAM SHARMA, J.

( 1 ). The present petition is filed by the petitioner seeking enforcement and execution of the foreign award dated 30th May, 2001 passed by the sole arbitrator mr. William Robertson. The said award was made at London as per the English law on 30th May, 2001 and 1st November, 2001. The records placed before me reveals that the said award was an ex parte award. The petitioner has alleged in the petition that it had entered into a charter party agreement with the respondent on 20th April, 2000 containing an arbitration clause. It is also alleged that the said charter party governed the rights of the parties. According to it the charter party was duly signed on behalf of the petitioner and was forwarded to the respondent s agent M/s. Forbes gokak Limited, Patvolk Division , Mumbai for obtaining signature of the respondent under FAX dated 29th April, 2000. It is also alleged that the respondent also opened a Letter of Credit dated 13th March, 2000 with the desire to import 15,000 MT western Australian farmers dressed Tyson Chickpeas, which was followed by the said charter party agreement between the parties. Even subsequently, the respondent opened another Letter of Credit on 12th May, 2000 in respect of freight in favour of m/s. Challenge Shipping SDN BHD. It is the case of the petitioner that it arranged a vessel for the said purpose for carriage of the aforesaid quantity of Chickpeas to be carried to Jawahar Lal Nehru Port Trust. The vessel Rubin Halcyon arrived at the discharge port on 15th May, 2000 and it is alleged that even notice of readiness was duly served on the respondent by FAX dated 15. 5. 2000. The said FAX was replied to by the respondent on 18th May, 2000 wherein a request was made to the petitioner to change the discharge port from Jawahar Lal Nehru Port to Mumbai. The respondent by its letter dated 18th May, 2000 informed the petitioner of appointment of m/s. Unimarine Agencies Private Limited as charterer s nominated agent at the discharge port. In its letter dated 19th May, 2000 the respondent also undertook to indemnify the petitioner and its agents in respect of any liability, loss, damage or expenses of whatsoever nature, which it may sustain by reason of the vessel proceeding and giving delivery of the cargo in accordance with their request. In terms thereof the petitioner, on 22nd June, 2000 submitted to the respondent their statement of amount due to them due to the change of port and demurrage charges. The respondent by its letter dated 26th July, 2000 to M/s. Sealine International, their brokers, admitted the receipt of laytime statement forwarded by the petitioner and instructed them to proceed further in the matter with the petitioner for amicable settlement of demurrage. As no payment was made in terms of the request of the petitioner, the petitioner invoked the arbitration clause in the charter party agreement and appointed Mr. William Robertson as their arbitrator under letter dated 19th september, 2000 claiming for balance of freight and demurrage in terms of the said charter party agreement. The petitioner also requested the respondent to appoint its arbitrator in respect of the aforesaid claim. It is alleged that even subsequent thereto the respondent vide its FAX dated 6th October, 2000 instructed M/s. Sea Line international for settlement with the petitioner contending that without prejudice if the petitioner is willing to amicably settle all the claims, they would be prepared to pay US$ 71,207. 79 in full and final settlement of all claims pertaining to the vessel. The petitioner, however, by its letter dated 24th October, 2000 informed the respondent that settlement at the aforesaid quoted amount was not possible as the respondent owed a sum of US $ 150,362. 18. It was stated that in the absence of a more realistic settlement proposal the arbitration proceedings should continue. It was also pointed out in the said communication that since the respondent failed to appo































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