IN THE HIGH COURT OF DELHI AT NEW DELHI
HONBLE MR. JUSTICE VIKRAMAJIT SEN, HONBLE MR. JUSTICE V.K. JAIN, JJ.
SPENTEX INDUSTRIES LTD. ...Appellant
Versus
DUNVANT S.A. & ANR. …...Respondent
RFA(OS) No.69/2009 & CM No.11710-11/2009
Decided on : October 29, 2009
VIKRAMAJIT SEN, J.
CM No.11711/2009
1. For the reasons stated in the Application the delay of thirty days in refilling the Appeal is condoned.
2. Application stands disposed of. RFA(OS) No.69/2009 & CM No.11710/2009
3. This Appeal assails the Order dated 29.5.2009 passed by the learned Single Judge holding the view that none of the reliefs prayed for in the plaint could be granted. Although it has not been specifically stated that the suit stands dismissed, this is the understanding (rightly so) of the Plaintiff/Appellant as stated in paragraph 2 of the Memorandum of Appeal which is, inter alia, to the effect that the suit has been dismissed as not maintainable.
4. The Reliefs prayed for in the plaint are as follows:-
(a) declare the purported contract/letter of intent dated 24th July, 2008 and 20.08.2008 as null and void;
(b) Declare the purported Arbitration Clause (Arbitration Agreement) contained in the purported contract dated 24th July, 2008 and 20.08.2008 as non-est and unenforceable;
(c) Declare the arbitral award dated 09.04.2009 as null and void and unenforceable;
(d) Pass a decree of permanent injunction against the enforcement of the Arbitral Award;
(e) Pass a decree for damages of rupees twenty two lakhs only;
(f) Pass a decree for recovery of Rupees five lakhs for the excess payments made towards the substandard good supplied;
(g) Pass such other/further order as this Hon?ble Court deems fit and proper in the facts and circumstances of this case.
These supplications were made in the backdrop of arbitral proceedings conducted by the International Cotton Association Limited, which had also appointed the Chairman of the Arbitral Tribunal, of which the appointees of the two adversaries before us were also members.
5. The Contract contains a clause mentioning that disputes would be settled by arbitration under the aegis of the International Cotton Association Limited. The Plaintiff/Appellant had itself preferred a claim of damages for defective quality of the first two consignments.
6. The first question to be addressed is whether there are material dissimilarities between Chapter-I and Chapter-II of the Arbitration and Conciliation Act, 1996 („A&C Act? for short). The debate in this regard has been settled by Bhatia International –vs- Bulk Trading S.A., 2002 (4) SCC 105 which has, inter alia, held that Chapter-I, including Section 9 of the A&C Act, would be applicable even to international commercial arbitrations held outside India unless the parties had expressly or impliedly excluded all or any of its provisions, in which event laws agreed upon between the parties would take effect. Bhatia International specifically concludes that Part I is applicable even to foreign awards. Their Lordships enunciated the law, inter alia, in these words-
32. To conclude we hold that the provisions of Part I would apply to all arbitrations and to all proceedings relating thereto. Where such arbitration is held in India the provisions of Part I would compulsory apply and parties are free to deviate only to the extent permitted by the derogable provisions of Part I. In cases of international commercial arbitrations held out of India provisions of Part I would apply unless the parties by agreement, express or implied, exclude all or any of its provisions. In that case the laws or rules chosen by the parties would prevail. Any provision, in Part I, which is contrary to or excluded by that law or rules will not apply.
33. Faced with this situation Mr. Sen submits that, in this case the parties had agreed that the arbitration be as per the rules of ICC. He submits that thus by necessary implication Section 9 would not apply. In our view in such cases the question would be whether Section 9 gets excluded by the ICC Rules of Arbitration. Article 23 of ICC Rules reads as follows:
"Conservatory and Interim Measures
1. Unless the parties have otherwise agreed, as soon as the file has been transmitted to it, the Arbitral Tribunal may,
Bhatia International v. Bulk Trading SA 2002 (4) SCC 105
Gujarat Urja Vikas Nigam Ltd. v. Essar Power Ltd. (2008) 4 SCC 755
K.V. Aerner Cementation India Ltd. v. Bajranglal Agarwal IV(2001) SL T 535 : 2001 (6) Supreme 265
Rao Shiv Bahadur Singh v. State of Vindhayanchal Pradesh AIR 1954 SC 322
S.B.P. & Co. v. Patel Engineering Ltd. (2005) 8 SCC 618
Shin Etsu Chemical Ltd. v. Aksh Optfiber Ltd. AIR 2005 SC 3766: (2005) 7 SCC 234
State of Uttar Pradesh v. Singhara Singh AIR 1964 SC 358
Venture Global Engineering v. Sat yam Computer Services Ltd. AIR 2008 SC 1061
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