Back
2018 Supreme(Ker) 698
IN THE HIGH COURT OF KERALA AT ERNAKULAM
K.P. JYOTHINDRANATH, J.
M/S. Peniel Cashew Company Puthoor P.O. & Ors. – Petitioner
Vs.
M/S. Ahcom Sarl Galerie Du Grand Large – Respondent
OP(C). No. 1877 of 2018
Decided On : 30-10-2018
For the Petitioner: Sri. N.D. Premachandran Sri. D. Ajithkumar
For the Respondent: Sri. T.R. Aswas, Sri. T. Krishnanunni –Sr
Headnote:The Arbitration and Conciliation Act, 1996 – Section 48, Section 47;; The General Clauses Act – Section 6;; Arbitration and Conciliation Act – Section 48 (1) (b) and 48(2)
Facts of the case:
A foreign arbitration award is the subject matter – A foreign award was passed by a Trade Association Combined Edible Nut Trade Association (CENTA) in London – That award was sought to be enforced under Section 48 of the Arbitration and Conciliation Act – The application was numbered as E.P.97/2013 on the file of the II Addl. District Court, Kollam – – The court below by its order dated 15.3.2018 found that the said award is enforceable. The said order was passed by the court, after finding that the court is having jurisdiction by its order dated 13.03.2018. Both these orders were challenged before this court in O.P. (C)No.1005/2018. This court remanded back the case by setting aside the order dated 13.3.2018 in E.P.No.97/2013 and directed to pass fresh orders on the question of jurisdiction, after hearing both sides. As O.P.(C)No.1877/2018 3 regards order dated 15.3.2018 in E.P.No.97/2013 this court left open the right of the petitioners to challenge the said order afresh in the event the court below finds that the said court has jurisdiction – After remand,the matter was again considered by the lower court and by its order dated 17.7.2018, the court found that enforcement petition is maintainable before the court – The said order is under challenge in this original petition along with the grounds left open to be considered while disposing O.P.(C) No.1005/2018 of this court.
Question of Law framed:
• The maintainability of the petition before the court below.
• The grounds under Section 48 (1) (b) and (2) of the Act.
Finding of the Court:
An admitted liability of US dollar 3287.07, an award came into existence for US Dollar 288125.02, this court cannot go into that matter mainly due to good faith principle. Parties when entering into an international commercial relation, they are flying above the laws of the land and choosing a curial law as agreed upon-Petitioner failed to prove non-receipt of notice- When notice is there, good faith principle will be applicable – Reconsideration of materials regarding dispute will be against the basic scheme or purpose of the statute.
(a) The effect of Act 3 of 2016 is that amendment is prospective in nature. As substantive right is involved, it will not affect the court proceeding which relates to the arbitral proceeding which already started under Section 48 of the Arbitration Act.
(b) Even though the burden to produce proof under Section 48(1)(b) of the Act is squarely on the resisting party, the onus may shift, according to facts. But still burden remains with the resisting party. It is, the degree of proof will vary as discussed in this case. It is a matter of appreciation of materials before the court.
(c) When originally there is an arbitral agreement in between the parties and when notice of arbitration is therein, good faith principle will be applicable, on the facts of the case. When there is notice, the facts projected to show fraud will not be sufficient to refuse enforcement. It could have been resolved under the curial law agreed upon by the parties when they entered into an international commercial relation. There is nothing to interfere with the order of the court below dated 15.3.2018.
Result: Dismissed
This is a petition filed under Article 227 of the Constitution of India. A foreign arbitration award is the subject matter. A foreign award was passed by a Trade Association Combined Edible Nut Trade Association (CENTA) in London. Now, that award was sought to be enforced under Section 48 of the Arbitration and Conciliation Act ( hereinafter referred to as the 'Act'). The application was numbered as E.P.97/2013 on the file of the II Addl. District Court, Kollam. The court below by its order dated 15.3.2018 found that the said award is enforceable. The said order was passed by the court, after finding that the court is having jurisdiction by its order dated 13.03.2018. Both these orders were challenged before this court in O.P. (C)No.1005/2018. This court remanded back the case by setting aside the order dated 13.3.2018 in E.P.No.97/2013 and directed to pass fresh orders on the question of jurisdiction, after hearing both sides. As O.P.(C)No.1877/2018 3 regards order dated 15.3.2018 in E.P.No.97/2013 this court left open the right of the petitioners to challenge the said order afresh in the event the court below finds that the said court has jurisdiction. After remand,the matter was again considered by the lower court and by its order dated 17.7.2018, the court found that enforcement petition is maintainable before the court. The said order is under challenge in this original petition along with the grounds left open to be considered while disposing O.P.(C) No.1005/2018 of this court.
2. When the matter came up for hearing, the learned counsel for the petitioners raised the following grounds :
Firstly the maintainability of the petition before the court below.
Secondly the grounds under Section 48 (1) (b) and (2) of the Act.
A specific ground is also raised as that the making of the award was induced and affected by fraud. Award is a product of fraud. It is also the contention that there was novation of the agreement and there is no arbitration agreement.
3. Thus, the question to be considered first is regarding the competency or the jurisdiction of the court.
4. As per the Arbitration and Conciliation (Amendment) Act, 2015 ( Act 3 of 2016) an amendment came into force on 23.10.2015. As per the amendment, in 'court' defined in Section 2(e), is amended as follows :
“2(e) “Court” means -
(I) in the case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in existence of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matte of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes;
(ii) in the case of international commercial arbitration, the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court”
5. As per the very same amendment, in Section 47 of the Arbitration and Conciliation Act, the Explanation is substituted as follows :
“Explanation - In this section and in the sections following in this Chapter, “Court” means the High Court having original jurisdiction to decide the questions forming the subject-matter of the arbitral award if the same had been the subject-matter of a suit on its original civil jurisdiction and in other cases, in the High Court having jurisdiction to hear appeals from decrees of courts subordinate to such High Court.”
6. Now let us examine the legal position. It is held by the Hon'ble Apex Court in Board of Control for Cricket in India v. Kochi Cricket Pvt. Ltd. And etc. (2018 (4) SCALE 502) that the Act will come immediately i.e. on 23.10.2015
