The court emphasized the importance of upholding the terms of the Charter Party Agreement and clarified the application of Quantum Meruit in awarding demurrage. The court also highlighted the limited scope for challenging the enforcement of foreign awards under the Arbitration and Conciliation Act, 1996.

I.A.No.8471/2016

1. This application has been filed by the respondent under Section 48 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) inter-alia praying therein that the enforcement of the Foreign Award dated 07.01.2015 as subsequently amended on 09.02.2015 and 16.03.2015 along with the Supplementary Award dated 06.07.2015 be refused.

2. The disputes between the parties arose out of the Charter Party Agreement dated 21.07.2010 executed between the parties whereby the petitioner as “owner” chartered to the respondent “charterer” its ship “Hawk” for the carriage of a cargo of 2 Jack-up rigs from Malaysia to India.

3. Clause 29, Part-I read with Clause 39, Part-II of the Charter Party Agreement provided for resolution of disputes in accordance with the English Law through Arbitration in London conducted in accordance with the London Maritime Arbitrators Association (LMAA) Rules.

4. Clause 7, Part-I of the Charter Party provided for the discharging port to be Bharuch or Sikka, India. The parties later agreed that the discharging should take place at Bedi Bunder rather than at Bharuch or Sikka. The respondent informed the petitioner that for discharging at Bedi Bunder, the vessel is required to be converted from foreign to coastal run at Pipavav during the first call and subsequently reconverted from coastal to foreign run post discharge of rigs and prior final departure from Pipavav. The petitioner by its response dated 16.08.2010 informed the respondent that time lost and costs for deviation would be on respondent’s account.

5. The present challenge, on merits, to the Impugned Award is to the award of amount in favour of the petitioner on basis of principle of Quantum Meruit for the period of 21 hours between 15:00 hours on 20.09.2010 to 12:00 hours on 21.09.2010 at the agreed demurrage rate.

6. Before proceeding with the objections raised by the respondent/applicant to the Impugned Award, it would be useful to reproduce the provision of Sub Section 1 and Sub Section 2 to Section 48 of the Act within the limits of which the Court may refuse to enforce a Foreign Award :

“48. Conditions for enforcement of foreign awards.—(1) Enforcement of a foreign award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the court proof that—

(a) the parties to the agreement referred to in section 44 were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or

(b) the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

(c) the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be enforced; or

(d) the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place ; or

(e) the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

(2) Enforcement of an arbitral award may also be refused if the Court finds that—

(a) the subject-matter of the difference is not capable of settlement by arbitration under the law of India; or

(b) the enforcement of the award would be contrary to the public policy of India.

Explanation 1.—For