IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
C.L. Soni, J.
Navalmar U.K. Ltd. - Appellants
Vs.
Ashapura Minechem Ltd. - Respondent
Special Civil Application No. 14061 of 2011
Decided On : 09.07.2014
Arbitration and Conciliation Act, 1996 - Section 34 - Commercial Arbitration - Award - Seeking prohibiting/ restraining the learned District Judge from entering and adjudicating Civil Miscellaneous Application filed under Section 34 of the Arbitration and Conciliation Act, 1996 - Challenging the arbitration award- Held, Clause 28 indicates that the governing law of the agreement would be the law of India, Act, 1996 - The learned counsel for the parties have quite correctly spelt out the distinction between the "proper law" of the contract and the "curial law" to determine the law which is to govern the arbitration itself - While the proper law is the law which governs the agreement itself, in the absence of any other stipulation in the arbitration clause as to which law would apply in respect of the arbitral proceedings, it is now well-settled that it is the law governing the contract which would also be the law applicable to the Arbitral Tribunal itself - Petition allowed.
C.L. Soni, J.
1. In this petition filed under Art. 226 of the Constitution of India, the petitioner has made following prayer in Para 18(a):
"18(a) YOUR LORDSHIPS may be pleased to issue writ of prohibition and/or any other appropriate writ, order or direction prohibiting/ restraining the learned District Judge at Bhuj-Kutch from entering and adjudicating Misc. Civil Application No. 36 of 2011 filed under Sec. 34 of the Arbitration and Conciliation Act, 1996, for challenging the arbitration award dated 8th February 2011."
The case of the petitioner is that under the Charterparty, the petitioner chartered its vessel M.V. Humboldt Current to the respondent on 1-6-2006 for carriage of bagged bentonite from the port of Mundra to the port of Sagunto. Clause 31 of the said Charterparty provides for settling the dispute by arbitration in London and me parties agreed to apply English Law to the arbitration proceedings. It is further case of the petitioner that certain disputes arose between the parties which were referred to the Arbitral Tribunal as per the arbitration clause. The Arbitral Tribunal then made award dated 8-2-2011 accepting the claims of the petitioner and directed the respondent to pay sum of U.S.D. 181057-20 plus cost of the petitioner with interest at the rate of 5%. If the respondent was to challenge such award, it was required to approach English Court, as Part-I of the Arbitration Act does not apply to such award. However, the respondent has maliciously filed Misc. Civil Application No. 36 of 2011 in the District Court at Bhuj-Kutch under Sec. 34 of the Arbitration Act for setting aside the award dated 8-2-2011. It is the case of the petitioner that since initiation of proceedings before the District Court at Bhuj-Kutch to challenge the award is blatant abuse of process of law, the petitioner is constrained to approach this Court seeking appropriate writ, order or direction restraining/prohibiting the District Court from entertaining and adjudicating the said application under Sec. 34 of the Arbitration Act.
2. Affidavit-in-Reply is filed opposing me petition mainly stating that as per Clause 31 of the Charterparty, dispute was to be referred to arbitration in London, English law was to be applied to such arbitration, however Clause 31 stood exhausted on conclusion of arbitration proceedings. It is stated that the proceedings initiated under Sec. 34 of the Act in the Court of learned District Judge at Bhuj-Kutch are in relation to effect, operation and scope of me award made and not in relation to the arbitration proceedings. Arbitration proceedings have been terminated upon pronouncement of the award and such award is akin to a judgment and decree which is required to be lodged with the Court of competent jurisdiction for execution and similarly, such award is required to be challenged by way of an appeal before the Court of competent jurisdiction. On the same parity, recourse can be had to the provisions of Sec. 34 of the Act and for such recourse, unless the parties to a contract have provided anything contrary in the contract, ordinary laws of land will apply. It is also stated that the petitioner ought to have resisted or opposed the maintainability of the application filed under Sec. 34 of the Act, being Misc. Civil Application No. 36 of 2011 before the District Court at Bhuj-Kutch.
3. I have heard learned Advocates for the parties.
4. Learned Senior Advocate Mr. Saurabh Soparkar appearing with learned Advocate Mr. Daxesh Mehta for the petitioner submitted that undisputably, as per the arbitration agreement in Charterparty, dispute arising between the parties was to be settled by arbitration in London in accordance with English law. Mr. Soparkar submitted that the dispute between the parties was accordingly referred to arbitration having seat at London and arbitration proceedings were conducted, concluded and final award came to be passed at London according to English law. Mr. Soparkar submitted that to s
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