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2008 Supreme(Del) 669
IN THE HIGH COURT OF DELHI AT NEW DELHI
A K Sikri
NATIONAL ABILITY S. A., - PETITIONER
v.
TINNA OIL & CHEMICALS LTD. & ORS., - RESPONDENTS.
Ex. P. No. 74 of 2000 with OMP No. 173 of 1998,
Decided on : June 4, 2008.
Mr. Arvind Nigam, Ms. Purnima Maheswari - Petitioner.
Mr. Ajay Kr. Agrawal, Ms. Alka Agrawal, Ms. Anamika Agrawal - Respondent.
Headnote:
Foreign Award - Enforcement under Arbitration and Conciliation Act, 1996 - Sections 5, 6 and 8 - Summary of Acts and Sections: The judgment discusses the enforcement of a foreign arbitral award under the Arbitration and Conciliation Act, 1996, specifically focusing on the provisions of Sections 5, 6, and 8. It also addresses the relevance of the New York Convention and the legal framework for recognizing and enforcing foreign arbitral awards.
Fact of the Case:
The petitioner chartered a vessel to the respondent for a voyage, and disputes arose between the parties. The matter was referred to arbitration in London, resulting in an award in favor of the petitioner. The petitioner sought enforcement of the award under the Arbitration and Conciliation Act, 1996.
Finding of the Court:
The court addressed the authority of the petitioner's representative to file the execution petition, the classification of the award as a 'foreign award,' and the effect of a Scheme of Arrangement between the respondents. The court found that the award was a foreign award and enforceable under the Act. It held that the Scheme of Arrangement was binding on the parties, and the respondent No. 1 was no longer liable for payment under the award.
Issues: The court addressed the authority of the petitioner's representative, the classification of the award as a 'foreign award,' and the effect of a Scheme of Arrangement between the respondents.
Ratio Decidendi: The court held that the award was a foreign award and enforceable under the Act. It also found that the Scheme of Arrangement was binding on the parties, and the respondent No. 1 was no longer liable for payment under the award.
Final Decision: The court allowed the petitioner's application for enforcement of the award and directed the respondent No. 2 to make the payment within eight weeks. If no payment was made, the petitioner would be entitled to attach the properties of the respondent No. 2 and take further action to realize the amounts under the award.
A. K. SIKRI, J.
The petitioner had, by a Charter Party dated 29.4.1995, on a Gencon form, chartered the vessel "AMAZON REEFER" to the respondent No. 1 herein for a voyage from Kandla to Novorossiysk. The said charter party contained the terms and conditions on which the vessel was chartered. It also contained an arbitration agreement in Clause 29 thereof which, inter alia, provided that in the event of disputes between the parties, the same could be settled through arbitration in London according to English Law. Disputes and differences arose between the parties and, accordingly, the matter was referred to arbitration in London. The said Arbitral Tribunal, which comprised of three arbitrators, has given award dated 19.11.1998.
The petitioner herein had initially filed a suit for enforcement of this award. However, realizing that no such suit is required to be filed inasmuch as such an award, even when it is a foreign award, is enforceable and executable under the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 1996 Act'), the petitioner filed the present execution petition and withdrew the suit, being Suit No. 740A/1999. The petitioner stated that the award in question is passed by the Arbitral Tribunal in England, which is a country notified under the New York Convention. The enforcement of the award is, accordingly, sought under Sections 5, 6 and 8 of the Foreign Awards (Recognition and Enforcement) Act, 1961. However, this Act stood repealed by the 1996 Act inasmuch as Part II, Chapter I of the same (Section 44 to 52) lays down the provisions for enforcement of foreign arbitral award given in the country which is signatory to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (hereinafter referred to as the 'New York Convention').
According to the petitioners, when the disputes arose and were referred to the arbitration in London, both the parties sought substantive relief and were represented by counsel before the Arbitral Tribunal. The Tribunal, after an oral hearing in London from 21.9.1998 to 25.9.1998, passed the reasoned award in favour of the petitioner ordering and directing the respondent to pay to the petitioner a sum of US $ 819,983.16 together with interest @ 7% p.a. from 1.10.1995 till the date of filing of the award. Costs have also been awarded in favour of the petitioner amounting to Sterling Pounds 26,762.17 being the cost of the award and Sterling Pounds 129,929.79 being the petitioner's cost. No appeal was filed by the respondent against this award and, therefore, the award has become final and binding.
In addition to impleading respondent No. 1, namely, M/s. Tinna Oils & Chemicals Ltd., the petitioner has also arraigned M/s. Tinna Finex Ltd. as the respondent No. 2. Though the vessel was chartered by the petitioner for the respondent No. 1, namely, M/s. Tinna Oils & Chemicals Ltd., in a Scheme of Arrangement sanctioned by this Court, the said company was taken over by M/s. Tinna Finex Ltd. Because of this reason, the respondent No. 2 was also impleaded before the Arbitral Tribunal and is arraigned in the execution petition as well.
In this execution petition, notice was issued on 19.7.2000, which was accepted by counsel for both the respondents, who were appearing at that time in Suit No. 740-A/1998.
The petitioner has also filed OMP No. 173/1998, which is an application under Section 9 of the 1996 Act, with the prayer that the respondents be directed to furnish security to the tune of US $ 1,308,340.54 besides costs and they be also directed to disclose, on oath, the details of movable and immovable assets of the respondent No. 1, which have been transferred to the respondent No. 2. It is also prayed that they be restrained from alienating and/or encumbering their movable and/or immovable assets. In this OMP, vide order dated 13.8.1998, a Local Commissioner was appointed to visit the factory premises of the respondents and prepare an inventor
