Back
High Court of Kerala
K.M. JOSEPH & M.C. HARI RANI
Shastha Enterprises & Another
Versus
Olam International Ltd.
Arb.A.No.40 of 2010
Decided on: 27-09-2011
English Arbitration Act 1996 - Section. 70 - Arbitration and Conciliation Act 1996 - Section. 7, 9 and 34 - Arbitration agreement - Interim measures, etc., by Court - Recourse against arbitral award - Application for setting aside arbitral awards - Whether application under S. 34 will lie even when it is excluded by contract between the parties, the exclusion of the similar provisions in the English Act by the contract between the parties without exhausting an in house appellate remedy would certainly apply to oust the Courts' jurisdiction in India -Whether application under Sections. 9 & 34 must be treated as impliedly excluded by the parties -Appeal - Held, Court has laid down that application under S.34 will lie even when it is excluded by contract between the parties, the exclusion of the similar provisions in the English Act by the contract between the parties without exhausting an inhouse appellate remedy would certainly not apply to oust the Courts' jurisdiction in India. However, we do not think it is necessary for us to refer the matter to a Larger Bench, in view of the fact that we feel that it is otherwise distinguishable, as according to us the decision at least partly turned on the fact that there was an admitted arbitration agreement under which parties had participated on the merits and courted an award wherein, part of the counter claim of the appellant therein was even allowed in his favour. On the other hand, in this case, we notice that the appellants have right from the very beginning disputed the existence of any agreement and they have indulged in correspondence questioning the jurisdiction and contended that there is no arbitration agreement. Admittedly, they have not even filed defence statement - Court view that in the facts of this case there can be no dispute that the parties have clearly agreed that the proper law of contract is the English law. A perusal of Clause 3 of the CENTA Rules which we have already extracted, would further appear to make clear that the parties are agreed that the seat of arbitration is to be in London. The manner of carrying out the arbitration is also specifically stated to be in accordance with the association terms and the English Arbitration Act - Court not impressed by the contention of the respondent that the respondent could have approached the Court under Section 9 on the strength of Article 9 of the UNCITRAL. Any such contention will be in the teeth of the Judgments of the Supreme Court which we have already adverted to. In such circumstances, the impugned order under Section 9 must necessarily be set aside. Accordingly, Court allow Arb. Appeal and set aside the impugned order
K.M. Joseph, J.
1. ARBA No.40/2010 is directed against the order OP (Arb) No.21/2009 passed by the District Court, Kollam. The OP was filed under Sec.34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) by the appellants to set aside the arbitral award dated 14.1.2009. ARBA No.41/2010 is filed against the order passed in OP (Arb) 231/2008 filed by the respondent under Sec.9 of the Act to secure the award amount that was likely to be passed in his favour.
2. The respondent company which is incorporated at Singapore is doing business in species, edible oil, nut etc. The appellant is a cashew exporter. Purchase confirmation note dated 2.5.2007 containing admitted signature of the appellant was issued agreeing to export cashew kernel to the respondent. Likewise, confirmation note dated 25.5.2007 was admittedly issued by the appellant. So also, confirmation note dated 6.7.2007 also containing the admitted signature of the appellant was issued agreeing to export cashew to the respondent.
3. On the one hand, the respondent would contend that contracts dated 3.5.2007, 25.5.2007, and 9.7.2007 containing the arbitration agreement were executed by the appellant relatable to the three purchase confirmation notes referred to above respectively, the appellant would dispute the case of the respondent and contend that the signatures of the Managing Partner of the appellant are Forged. The following alleged arbitration clause.
“Arbitration : As per A.F.I. CENTA Terms and Conditions.”
4. Under the heading “other conditions” it is stated, inter alia, that arbitration jurisdiction is in India. It is not in dispute that on 27.8.2008 the counsel for the respondent issued notice calling upon the appellant and others to pay a sum of Rs.1,05,32,500/- within 7 days being the market difference of the value of the cashew kernel on 5.5.2008. According to the respondent, in breach of the contracts the appellant had failed to deliver the quantity of cashew as agreed and consequently it had suffered damages and was suing for the difference in market price. On the same day, on 27.8.2008, the respondent filed the OP under Section 9 of the Act before the District Court, Kollam which allowed conditional attachment of immovable properties owned by the appellant. On 30.9.2008 the appellant was informed by the counsel for the respondent that Mr. Neil Hyde (hereinafter called the Arbitrator), a Member of the Arbitrators Panel maintained by Combined Edible Nut Trade Association (hereinafter referred to as CENTA) was appointed as the sole Arbitrator. The appellant was called upon to nominate his Arbitrator within 14 days as per the regulation of CENTA. According to the appellant, on detection of the forged signature of the Managing Partner of the appellant in the three contracts, on 10.10.2008 a notice was issued to the counsel for the respondent to withdraw the action before CENTA and also the OP under Section 9 of the Act and pay a sum of Rs.37,28,385/-being the amount due to them under several heads in respect of the transactions. On 17.10.2008, according to the appellant, the appellant had filed a petition before the Superintendent of Police, Kollam against the Managing Director, Vice President of the respondent and 3 officers of its subsidiary at Kollam. On 18.10.2008 Crime No.113/2008 under Sec.120B, 465, 467, 420 read with sec.34 of the IPC was registered by the Kollam East police station against the officers of the respondent. On 28.10.2008 the Arbitrator informed the appellant about his nomination and the appellant was asked to make its comments about the dispute specifically by 4.11.2008. On 29.10.2008 the appellant by fax informed the Arbitrator about the apprehension of bias entertained by the appellant. It is specifically stated that the contra relied on were forged and that even under the forged contracts, CENTA is not having exclusive jurisdiction. On 30.10.2008, the Arbitrator addressed a fax communication t
SupremeToday
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
