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IN THE HIGH COURT OF DELHI
REVA KHETRAPAL
GLENCORE GRAIN ROTTERDAM B.V. - Appellant
Versus
SHIVNATH RAI HARNARAIN (INDIA) CO. - Respondent
CS(OS) 541/1998
Decided On : 27-11-2008
The court held that the plaintiff was entitled to enforce the foreign arbitral award and that the award shall be deemed to be a decree of the court. The court also held that the plaintiff was entitled to the award amount with interest till the date of the award as awarded by the arbitral tribunal along with future interest at the same rate from the date of the award till the date of realization.
Fact of the Case:
The plaintiff, a company based in Rotterdam, Netherlands, entered into eleven contracts with the defendant, a partnership firm based in India, for the sale of Indian white rice. The defendant delivered the full quantity of grains covered by contracts No.9827, 9840, 9855 and 9867. In regard to the other seven contracts, however, the defendant failed to perform contracts No.9844, 9923 and 9924 and nothing was delivered against them, whereas the remaining four contracts were partly fulfilled. As a result of the defendants breach and default, the plaintiff suffered loss and damages. Resultantly, disputes and differences arose between the parties, and the plaintiff through communications dated 25th September, 1995 and 3rd October, 1995 invoked the arbitration clause contained in Clause 11 of the said LRBA Contracts and referred their claims to the London Rice Brokers Association for arbitration.
Finding of the Court:
The court held that the plaintiff had discharged the burden placed upon him of proving that the award sought to be enforced is a genuine foreign award based on a foreign agreement for arbitration and thereby has discharged the obligation placed upon him of complying with the provisions contained in Section 47(a) to (c) of the Act of 1996. The court also held that the defendant had failed to furnish proof as required under Section 48 of the Act, showing that the enforcement of the award is liable to be refused under Section 48.
Issues: 1. Whether the petitioner has complied with the provisions contained in Section 47 (1)(a) to (c) of Act, 1996, for enforcement of the award dated 29.7.97 2. If the issue No.1 is decided in affirmative, whether the respondent has furnished proof as required under Section 48 of the Act, 1996, showing that the enforcement of the said award is liable to be refused under Section 48
Ratio Decidendi: The court held that the plaintiff was entitled to enforce the foreign arbitral award and that the award shall be deemed to be a decree of the court. The court also held that the plaintiff was entitled to the award amount with interest till the date of the award as awarded by the arbitral tribunal along with future interest at the same rate from the date of the award till the date of realization. The court relied on the provisions of the Arbitration and Conciliation Act, 1996, the New York Convention, and various case laws to arrive at its decision.
Final Decision: The court held that the plaintiff was entitled to enforce the foreign arbitral award and that the award shall be deemed to be a decree of the court. The court also held that the plaintiff was entitled to the award amount with interest till the date of the award as awarded by the arbitral tribunal along with future interest at the same rate from the date of the award till the date of realization.
REVA KHETRAPAL, J.
1. This is a suit under Section 48 of the Arbitration and Conciliation Act, 1996 (for short “the Act, 1996”) for filing and enforcement of the foreign award No.12031 A dated 29.07.1997.
FACTS 2. The background facts as set out in the plaint are as follows.
.3. The plaintiff is a company based in Rotterdam, Netherlands while the defendant is a partnership firm based in India with its office at A-8, Bhagwan Dass Nagar, New Delhi “ 110 026. Between 30th November, 1994 and 8th June, 1995, the plaintiff entered into eleven contracts with the defendant, in terms whereof a total quantity of 300,500 MT of Indian white rice was to be sold by the defendant and purchased by the plaintiff. All these eleven contracts were negotiated and concluded through an English broker, Jackson Son and Co. (London) Ltd. In respect of each contract, immediately after the business had been concluded, Jackson Son and Co. sent to both parties, by fascimile transmission, their Contract Confirmation Notes. At the end of each of these Contract Confirmation Notes, Jackson Son and Co. stated: “All other terms as per London Rice Brokers Association Contract number 3.” Thereafter, in respect of each contract, Jackson Son and Co. prepared formal contracts written on London Rice Brokers Association Contract No.3 (for short “LRBA Contracts”). These formal LRBA written Contracts were then sent by Jackson Son and Co. to the plaintiff and the defendant by fascimile transmission.
.4. The case of the plaintiff is that the contractual relationship between the plaintiff and the defendant was governed by the terms and conditions contained in the aforesaid eleven LRBA written Contracts, the certified copies of which have been placed on record. According to the plaintiff, Clause 11 of the said LRBA Contracts contains an arbitration clause which provides for settlement of any dispute under the contract by arbitration of the London Rice Brokers Association. Clause 14 of the said LRBA Contracts provides that the contract shall be deemed to have been made in England and the construction, validity and performance thereof shall be governed in all respects by English Law. For the facility of reference, clauses 11 and 14 of the said LRBA Contracts are reproduced as under:- Clause 11 “11. Any dispute arising on this Contract shall be referred for settlement to the Arbitration by two Members of this Associations Panel of Arbitrators or their Umpire, being also a Member of this Panel. Each party to appoint one Arbitrator and having the right to reject one nominee. In the event of any party omitting to nominate an Arbitrator within ten days of receipt of notice of appointment of an Arbitrator by the other party, or of the Arbitrators failing to agree on the appointment of an Umpire, the Committee of the London Rice Brokers Association, in either case, shall have power to appoint one forthwith, who shall act on behalf of and as if nominated by the party or parties in default. Claims for arbitration other than Arbitration on quality shall be made and the Claimants Arbitrator shall be nominated not later than 90 days after the expiry of the contract period of shipment or not later than 90 days from the date of final discharge of the ship at port of destination, whichever period may last expire. The parties to the Arbitration shall have the right of appealing against any Award (except on questions of law) within thirty days from the date of Award to the London Rice Brokers Association, whose decision shall be final. Any payments arising out of the Award are to be made within 30 days of the date hereof.” Clause 14 “14. Domicile “ The Contract shall be deemed to have been made in England and the construction, validity and performance thereof shall be governed in all respects by English Law. Any dispute arising out of or in connection therewith shall be submitted to arbitration in accordance with the Rules of the London Rice Brokers Association. The serving of proceed
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