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HIGH COURT OF DELHI
S. MURALIDHAR, J.
Cinergy Corporation Pte Ltd.
Versus
National Agricultural Co-Operative Marketing Federation of India Ltd.
O.M.P. 389 of 2006 & 243 of 2008
Decided On: 19-09-2012
Arbitration - Enforcement of Foreign Arbitration Award - Arbitration and Conciliation Act, 1996, Section 47, Section 48 - The judgment discusses the enforcement of Foreign First Tier Arbitration Award and Arbitration Appeal Award followed by the Final Foreign Arbitration Award. The court analyzed the trade confirmation documents, the contentions of the parties, and the validity of the arbitration agreement. The key legal provisions discussed include Section 7, Section 47(1)(b), Section 48(1)(a), and Section 48(2)(a) of the Arbitration and Conciliation Act, 1996.
Fact of the Case:
The case involved a petition seeking enforcement of Foreign First Tier Arbitration Award and Arbitration Appeal Award followed by the Final Foreign Arbitration Award. The petitioner sought realization of the awarded amount from the respondent by attachment and sale of properties. The background involved trade confirmation documents and disputes regarding the buyer's identity.
Finding of the Court:
The court found that there was no valid arbitration agreement between the parties within the meaning of Section 7 read with Section 47(1)(b) of the Act. Consequently, the First Tier Award, the Appellate Award, and the Final Foreign Arbitration Award could not be enforced in terms of Section 47(1) read with Sections 48(1)(a) and 48(2)(a) of the Act.
Issues: The key issues included the validity of the arbitration agreement, the interpretation of trade confirmation documents, and the determination of the buyer's identity.
Ratio Decidendi: The court's decision was based on the finding that there was no valid arbitration agreement between the parties, as required by the relevant provisions of the Arbitration and Conciliation Act, 1996.
Final Decision: The objections raised by the respondent were sustained, and the petition filed by the petitioner was dismissed with costs. Another related petition was disposed of as not pressed by the respondent.
O.M.P. No. 389 of 2006
1. This is a petition under Sections 47 and 48 of the Arbitration and Conciliation Act, 1996 (‘Act’) filed by the Petitioner Cinergy Corporation PTE Ltd. (‘Cinergy’) seeking enforcement of Foreign First Tier Arbitration Award No. 3906 dated 11th April 2005 (hereinafter referred as ‘First Tier Award’) and Arbitration Appeal Award No. 927 dated 16th November 2005 (hereinafter referred as ‘Appellate Award’) followed by the Final Foreign Arbitration Award dated 8th May 2006. Cinergy prays inter alia for therealization of the awarded amount from the respondent National Agricultural Cooperative Marketing Federation of India Limited (‘NAFED’) by attachment and sale of NAFED’s properties, both movable and immovable.
2. Upon notice being issued of the petition on 23rd August 2006, NAFED filed objections on 24th January 2007. The present order disposes of NAFED’s objections to the enforcements of the aforementioned Awards.
3. The background to this petition is that on 16th September 2004 an e-mail titled ‘Trade Confirmation’ was sent by Global Commodities (M) SDN BHD (hereinafter referred to as ‘Global’) to Cinergy confirming that the trade mentioned therein had been concluded through its ‘broker’. The said email reads as under:
“We r plsd to cnfm fllwg trade concluded thru us as broker:
Trade confirmation No. G 1297-04
Date : 16.9.2004
Seller : Cinergy Corporation Pte Ltd
19, Hong Kong Street
Singapore 059662
Buyer : M/s. National Agricultural Co-operative Marketing
Federation of India Ltd.
Sidhartha Enclave, Ashram Chowk
Product : Crude Palm Oil in Bulk
Qnty : 6000 metric ton
Price : USD 440.00 PMT CIF Kandla
Shpmt : During October 2004
Specs : FFA : 5% MAX / MNI : 0.5% MAX
Payment : By L/C from 1st class Indian Bank
Basis : Landed Weight Shipped Quality Final
Rules to govern : As per PORAM/FOSFA 81
Commission : USD 2.00 PMT payable by seller
TQ for yr support.
Rgds Global Comm.”
4. This was followed by a message sent by Earthtech Enterprises Ltd. (‘Earthtech’) to
Global on 18th September 2004 as under:
“Subject: Trade Confirmation
We are pleased to confirm the following:
Your Trade confirmation No. G 1297-04
Seller : Cinergy Corporation Pte Ltd
19, Hong Kong Street
Singapore-059662
Through Broker : Global Commodities (M) SDN BHD
Unit D-7-5, Megan Avenue 1, No. 189
Jalan Tun Razak, 50400 Kuala Lumpur
Buyer : National Agricultural
Co-operative Marketing
Federation of India Ltd.
Nafed House, 1 Sidhartha Enclave,
Ashram Chowk, Ring Road,
New Delhi-110014
A/c. Earthtech Enterprises Limited 39,
2nd Floor, Sidhartha Enclave,
New Delhi-110017
Product : Crude Palm Oil in Bulk
Origin : Malaysian / Indonesian
Quantity : 6000 metric ton
Price : USD 440.00 P/MT CIF Landed
Weight PMT Kandla Basis
Shipment : During October, 2004
Specifications : FFA 5% MAX/MIN 0.5% MAX
Payment : By L/C from 1st Class Indian Bank
Shipped quality at load port &
Landed Weight at
Basis : Discharge Port Final to be certified by
Geo-Chem for East Pvt. Ltd. or its nominee.
Rules to govern : As per PORAM/FOSFA 81
Others : Letter of Indemnity from the
Buyer at Discharge port in
case delay of documents”
5. On the basis of the above two documents, it is contended by Cinergy that a concluded contract resulted between Cinergy and NAFED whereby NAFED agreed to buy from Cinergy the said quantity of 6000 metric tonnes (‘MTs’) of crude palm oil in bulk. Cinergy’s case is that following the above two documents, Cinergy sent a message to Global requiring NAFED to establish a Letter of Credit (‘L/C’) in terms of the contract. According to Cinergy, Global advised it on 11th October 2004 that NAFED needed time up to 15th October 2004 to consider taking up the shipment or to wash out the contract. Cinergy states that on 15th October 2004 it placed NAFED in default for non-performance. On 18th November 2004 in terms of the contract Cinergy appointed Mr. R.A. Barber as its Arbitrato
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