Point of Law: Once declaratory arbitration award came to be passed by arbitral tribunal, same ought to have been challenged by petitioners by exercising its remedy available under provisions of English Arbitration Act and petitioners not having exercised such remedy under provisions of English Arbitration Act has lost its right to object correctness of such declaratory arbitration award in this proceeding filed under section 34 or while raising objection to enforcement of foreign award under section 48 the arbitration petition filed by respondents.

JUDGMENT :

P.B. Suresh Kumar, J.

This arbitration appeal is directed against the judgment dated 28.02.2019 in E.P.(ICA) No.1 of 2018, in terms of which the learned Single Judge dismissed an application instituted by the appellant against the respondent for enforcement of a foreign arbitral award. Documents are referred to in this judgment, as they appear in the proceedings from which the appeal arises.

2. The undisputed facts are the following:

The appellant, a company incorporated in the USA entered into a contract with the respondent for purchase of 700 cartons of W320 grade cashew kernels on terms negotiated and finalised through a broker as per the trade practice. Pursuant to the contract, the respondent exported the goods and received payment on cash against document basis. According to the appellant, the goods received by them were not conforming to the standard prescribed in the contract. They therefore raised a claim against the respondent. The respondent did not honour the claim. The appellant, in the circumstances, served on the respondent a Demand for Arbitration of the dispute by the Association of Food Industries Inc. (the AFI), an institution administering arbitration process in the USA. Annexure-7 is the Demand for Arbitration served by the appellant on the respondent. In terms of Annexure-7 Demand for Arbitration, the appellant has also informed the respondent that they will be precluded from raising any objection as regards the existence of a valid arbitration agreement, if they do not apply for stay of arbitration within 20 days from the date of service of the Demand for Arbitration. The respondent has not applied for stay of arbitration as required in terms of Annexure-7 Demand for Arbitration. On 07.01.2010, the AFI issued Annexure-8 Notice of Arbitration to the appellant and the respondent calling upon them to attend the arbitral proceedings with their witnesses on 16.02.2010 and present their proofs. As per Annexure-8 notice, the AFI has also informed the appellant and the respondent that a panel of eight arbitrators selected by the Arbitration Board of the AFI will arbitrate the dispute. Though the respondent received Annexure-8 notice on 22.01.2010, they did not attend the arbitral proceedings. Instead, the respondent sent a reply to the AFI contending that the AFI does not have jurisdictional competence to entertain the dispute, for Annexure-1 contract does not contain any provision for submission to the arbitration by the AFI. Annexure-10 is the communication addressed by the respondent to the AFI in this regard. In Annexure-10, it is stated by the respondent that the contract, on the basis of which the appellant has raised the claim against them is one altered by the appellant without the consent of the respondent to make it appear that the respondent has agreed to the arbitration of the AFI. In terms of Annexure-10, the respondent has, therefore, requested the AFI to consider the question of competence of the AFI to arbitrate the dispute, before proceeding to resolve the dispute on merits. On 24.03.2010, the AFI sent Annexure-11 communication to the respondent in reply to their Annexure-10 stating that the appellant had e-mail correspondence with the broker as regards the need for a revised contract to reflect the arbitration of the disputes by the AFI and it is that revised contract that was signed by the appellant. In terms of Annexure-11, the AFI has also informed the respondent that they will proceed with the hearing of the matter on 11.05.2010, and directed the respondent to be present for the hearing in person or submit their stand in the matter in writing. The respondent did not appear for the hearing or submit their stand on the merits of the matter in writing before the AFI as required in Annexure-11 communication. Instead, they claimed to have sent Annexure-12 communication to the AFI reiterating the stand taken in Annexure-10. While so, on 11.05.2010, the panel of Arbitrators appointed by the