The central legal point established in the judgment is that for the enforcement of a foreign award, there must be a valid arbitration agreement in writing, as required by the New York Convention and the Arbitration & Conciliation Act, 1996.

JUDGMENT :

Dr. S. Muralidhar, J.

1. This appeal is directed against the order dated 5th December, 2016 passed by the learned Single Judge in Execution Petition No. 149/2015 filed by the Appellant against the judgment debtor, the National Agricultural Co-operative Marketing Federation of India Ltd. (“NAFED”) (the Respondent herein) upholding the objections filed by NAFED under Section 48 of the Arbitration & Conciliation Act, 1996 (“the Act”) and declining to enforce the Foreign Award dated 5th April, 2012 in favour of the Appellant. Consequently, by the impugned judgment, the learned Single Judge dismissed the Appellant’s aforementioned execution petition.

2. The Appellant is a company incorporated under the laws of Singapore. It claimed to have entered into three separate sales contracts for a sale of 4500 metric tons (“MT”) in total of crude palm oil (edible grade) to NAFED. The case of NAFED throughout was that none of the contracts was ever finalized and there was no binding obligation of NAFED there under.

3. Both parties corresponded with one Ashok Bansal and Company as the Broker and the submissions of the parties centred around the correspondence between them and the Broker. In order to show that NAFED had accepted the existence of the contracts as well as their binding nature, the Appellant refers to a letter dated 29th July, 2008 sent by NAFED to the Broker requesting that the shipments under the contracts be deferred by the Appellant from August to September, 2008.

4. The Appellant also refers to an email dated 13th August, 2008 sent to the Broker accepting the request of NAFED and deferring the shipments to September, 2008. The Appellant states that pursuant thereto, it had issued amended contracts.

5. The Appellant had nominated the vessel MT PROCESS with a laycan of 5th to 11th September 2008 to lift the cargo. Thereafter, on 2nd September, 2008, the Appellant sent a letter to NAFED through the Broker pointing out that despite the Appellant nominating a vessel, in terms of the contract, NAFED had failed to establish the Letter of Credit (“L/C”). The Appellant requested NAFED to open the L/Cs. When repeated requests to NAFED were not responded to, the Appellant on 23rd September, 2008 declared NAFED to be in default. The vessel nominated by the Appellant arrived at Kandla Port on 30th September, 2008.

6. The Appellant made a claim for the difference between the contract price and the market price of the palm oil that was to be supplied as well as demurrage. NAFED declined to recognize these claims leading the Appellant to invoke the arbitration clause under the Palm Oil Refiners Association of Malaysia Rules of Arbitration and Appeal, 2005 (“PORAM Rules”).

7. In response to the claims filed by the Appellant before the Arbitral Tribunal (“AT”) appointed under the PORAM Rules, NAFED filed a Statement of Defence raising the plea that the bargains between the parties were not finalized. Although NAFED accepted that the draft contracts had been forwarded to it through the Broker, it did not communicate acceptance of those contracts. NAFED maintained that they were only at the preliminary stage of negotiation and no concluded contract resulted between the parties.

8. The AT rejected the plea of NAFED, and accepted the Broker’s testimony that “having contracts unsigned was the usual trade practice between parties trading palm oil in India at the time”. The claims of the Appellant were allowed by the AT by the Award dated 5th April, 2012.

9. Seeking enforcement of the aforementioned award, the Appellant filed Execution Petition No.149/2015 in this Court. One of the central questions addressed by the learned Single Judge was whether there was an arbitration agreement between the parties. It was held that from the plain language of Section 44 (a) of the Act, for recognition of a foreign Award, it should have been rendered in respect of differences between parties pursuant to an agreement in writing for arbitration to which the Conve