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2014 Supreme(Del) 3231
DELHI HIGH COURT
Rajiv Shakdher, J.
Centravis Production Ukraine - Appellant
Versus
Gallium Industries Limited - Resopndent
EX. P. 275/2011
Decided On : 02-12-2014
For the Judgement Debtor:Mr Kewal Singh Ahuja, Advocate.
The court's decision reaffirms the importance of upholding the enforcement of foreign awards and the limited grounds for challenging such enforcement under the Arbitration & Conciliation Act, 1996.
Headnote:
Objections - Execution of Foreign Award - Arbitration & Conciliation Act, 1996, Section 48 - The judgment debtor raised objections to the execution of a foreign award, including lack of negotiation, denial of opportunity of hearing, reimbursement of arbitration fee, reliance on SGS report, and award in foreign currency. The court rejected all objections and dismissed the application.
Fact of the Case:
The judgment debtor filed objections to the execution of a foreign award, citing lack of negotiation, denial of opportunity of hearing, reimbursement of arbitration fee, reliance on SGS report, and award in foreign currency. The court dismissed the application.
Finding of the Court:
The court rejected all objections raised by the judgment debtor, finding no merit in the objections and dismissing the application.
Issues: The issues included lack of negotiation, denial of opportunity of hearing, reimbursement of arbitration fee, reliance on SGS report, and award in foreign currency.
Ratio Decidendi: The court found that the objections raised by the judgment debtor lacked merit and were rejected, leading to the dismissal of the application.
Final Decision: The court dismissed the judgment debtor's objections and the application for execution of the foreign award.
Rajiv Shakdher, J.:--
EA(OS) 134/2012 (Objections by judgement debtor)
1. These are objections filed by the judgement debtor. By these objections the prayer made is that the execution petition No. 275/2011 filed by the decree holder to enforce the foreign award dated 31.03.2011, which has morphed into a decree, be dismissed.
1.1 By order dated 09.05.2012, both the execution petition, as well as the objections filed by the judgement debtor represented by the captioned application, were disposed of in view of the fact that the aforementioned award was pending challenge in the Court at Ukraine. While disposing of the execution petition though, liberty was given to either party to revive the proceedings, as the case may be – a course which was dependent on the outcome of the process pending in the Ukrainian Court.
2. Upon completion of the process under the Ukrainian Law, steps were taken by the decree holder for revival of the execution proceedings.
2.1 Counsels for the parties are agreed that the judgement debtor has exhausted its remedies under the Ukrainian law. I must also indicate herein that parties had attempted settlement in the matter which failed, whereupon arguments were addressed in support and against the contentions in the captioned application.
3. Mr. Ahuja, who appears for the judgement debtor, raised the following objections to the execution of the decree.
(i) That clause 14.4 of the contract, (I would assume he was referring to the delivery contract dated 06.07.2007), envisaged that the parties had to attempt a negotiation in the first instance before proceeding for arbitration.
(i)(a). It was his say that in the present case, no negotiation was attempted prior to the decree holder filing its request for initiation of arbitration.
(ii) The judgement debtor was denied opportunity of hearing of a meaningful kind. In other words, the dispute being of a technical nature, adequate opportunity, as expected, was not granted to the judgement debtor to present its case.
(ii)(a). In this behalf, he adverted to the fact that on 18.03.2011, the judgement debtor had sent a letter to the International Commercial Arbitration Court of Chamber of Commerce and Industry of Ukraine (in short ICAC), to change the date of hearing from 21.03.2011 to 10.04.2011 due to non-receipt of visa from the Ukrainian Embassy in India, by the judgement debtor’s representative. In this regard, it was suggested that an application had also been made for grant of an express visa as well, which too, was not received, and that despite which, the hearing in the matter took place on 31.03.2011, followed by an award of even date. In substance, a case for breach of principles of natural justice was sought to be made out.
(iii) The learned arbitrator has, inter alia, awarded reimbursement of 100% of the total arbitration fee incurred by the decree holder, which is unreasonable. It is suggested that such a determination amounts to “wagering”, which is in conflict with the public policy of India.
(iv) The learned arbitrator in passing the award relied upon the submissions made by SGS (Ukraine), a power of attorney holder of the decree holder, without seeking the opinion of an expert. Furthermore, the judgement debtor’s right to cross-examine the representative of the decree holder was also declined. The award relies on the technical defects pointed out by the decree holder, without affording an opportunity to the judgment debtor, to present any technical evidence in the matter.
(v) Contrary to the provisions of Article 23 of the ICAC Rules, the judgement debtor was not permitted to file comments/ objections to the statement of defence filed by the decree holder, qua the counter claim preferred by the judgement debtor.
(vi) The award has determined the claims in foreign currency (i.e., in Euros). Consequently, the execution petition deserves to be dismissed in as much as it is not in conformity with the directions adverted to in paragraphs 70 and 71 of the judgmen
