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2019 Supreme(Mad) 228

IN THE HIGH COURT OF JUDICATURE AT MADRAS
N.Kirubakaran, Abdul Quddhose, JJ.
M/s. Perfint Healthcare Pvt. Ltd. – Appellant
Versus
California Institute of Computer Assisted Surgery Inc. 502, Palm Avenue, Suite 1, Los Altos, California – 94022 (USA) – Respondent
O.S.A.Nos.288 & 289 of 2018 & C.M.P.Nos.13492 & 13493 of 2018
Decided On : 02-01-2019

Advocates Appeared:
For the Appellant : Mr. Vinod Kumar
For the Respondent: Mr. T. Mohan for Mr. Christopher Manohara

Headnote:

Arbitration and Conciliation Act 1996 - Sections 44 to 52 - Sections 53 to 60 - Sections 47 to 49 - Section 48 - Companies Act, 2013 - Section 337 - Code of Civil Procedure, 1908 - Rule 37(1) and (2) - Order XIV Rule 10 - Foreign Arbitral Award - Disputes between respondent and Appellant and a foreign arbitral award came to be passed in favour of respondent against Appellant in ICDR Case by an Arbitrator Mr.Paul E.Burns at California, USA for a sum of US $1,38,182.88 equivalent to Indian Currency of Rs.88,16,068/- calculated at exchange rate of Rs.63.80 per US $1 - Respondent filed an execution petition before learned Master of this Court to execute foreign arbitral award against Appellant by arrest of Managing Director or any other Director of the Board of Directors of Appellant for being imprisoned in a civil prison within jurisdiction of this Court for failure to pay Appellant amount awarded under foreign arbitral award - A counter was also filed by Appellant wherein they have stated that an execution petition is not maintainable under Order XXI of Code of Civil Procedure before Master as it is well settled that before effective steps are taken for execution of foreign award, parties seeking to enforce award under New York Convention has to proceed in accordance - It is also contended in counter that learned Master of Original Side Rules can only deal with matters enumerated in Original Side Rules and since enforcement of foreign award is not one of matters enumerated in Order XIV Rule 10, learned Master lacks inherent jurisdiction to entertain execution petition for enforcement of foreign awards - Respondent also filed its rejoinder to counter filed by Appellant reiterating that Master has got jurisdiction to entertain execution petition seeking to execute the foreign arbitral award passed in their favour – Held, Eventhough scope of inquiry under Section 48 of the Act, 1996 does not permit a review of foreign awards on merits, but it is a statutory requirement which necessarily has to be complied with - Decision relating to enforcement of foreign arbitral award under Sections 47 to 49 of the Act, 1996 shall be rendered only by learned Single Judge of High Court sitting in the original side - Reference by learned counsel for respondent to Judgment of Honble Supreme Court in case of Shri Lal Mahal Limited vs. Progetto Grano SPA reported in (2014) 2 SCC 433 will not have any applicability to facts of instant case as proceeding relating to enforcement of foreign arbitral award shall be heard only by learned Single Judge of High Court sitting in original side – Appeal Allowed.

JUDGMENT :

ABDUL QUDDHOSE, J.

The point for determination in these Appeals is whether the Master of this Court under the Madras High Court Original Side Rules is a Court for the purpose of enforcement of foreign awards both under the New York convention as well as Geneva convention. This issue has led us to deal with the functions of the Master under the Letters patent and the Madras High Court Original Side Rules. Under the Arbitration and Conciliation Act 1996 (in short “Act, 1996”), provisions for enforcement of foreign arbitral award is contained in Part II. Sections 44 to 52 of the Act, 1996 deals with enforcement of foreign awards under the New York convention and Sections 53 to 60 deals with enforcement of foreign arbitral awards under the Geneva convention. A foreign arbitral award made on or after 11th October 1960 is a New York convention award and a foreign arbitral award made after 28th July 1924 and not being an Award passed under the New York convention is a Geneva convention Award.

2. In the instant case, we are dealing with a foreign arbitral award which is a New York convention award. There seems to be disputes between the respondent and the Appellant and a foreign arbitral award dated 23.07.2015 came to be passed in favour of the respondent against the Appellant in ICDR Case No.50-20-1300-1133 by an Arbitrator Mr.Paul E.Burns at California, USA for a sum of US $1,38,182.88 equivalent to Indian Currency of Rs.88,16,068/- calculated at the exchange rate of Rs.63.80 per US $1 as on 23.07.2015. The respondent filed an execution petition E.P.No.17 of 2017 before the learned Master of this Court under Order XXI Rule 11A read with Rule 37(1) and (2) of Code of Civil Procedure and Section 337 of the Companies Act, 2013 to execute the foreign arbitral award dated 23.07.2015 against the Appellant by arrest of the Managing Director or any other Director of the Board of Directors of the Appellant for being imprisoned in a civil prison within the jurisdiction of this Court for failure to pay the Appellant the amount awarded under the foreign arbitral award. A counter was also filed by the Appellant in E.P.No.17 of 2017 wherein they have stated that an execution petition is not maintainable under Order XXI of Code of Civil Procedure before the Master as it is well settled that before effective steps are taken for the execution of the foreign award, the parties seeking to enforce the award under New York Convention has to proceed in accordance with sections 47 to 49 of the Act, 1996. It is also contended in the counter that the learned Master under Order XIV Rule 8 of the Original Side Rules can only deal with the matters enumerated in Order XIV Rule 10 of the Original Side Rules and since enforcement of foreign award is not one of the matters enumerated in Order XIV Rule 10, the learned Master lacks the inherent jurisdiction to entertain the execution petition for enforcement of foreign awards. The respondent also filed its rejoinder to the counter filed by the Appellant in E.P.No.17 of 2017 reiterating that the Master has got the jurisdiction to entertain the execution petition seeking to execute the foreign arbitral award passed in their favour. The learned Master by his Order dated 14.12.2017 in E.P.No.17 of 2017 held that the execution petition filed by the respondent to enforce the foreign arbitral award before him is maintainable and the foreign award is enforceable.

3. Aggrieved by the order dated 14.12.2017 passed by the learned Master, the Appellant filed Application Nos.1633 & 1634 of 2018 before the learned Single Judge of this Court reiterating that the execution petition filed by the respondent in E.P.No.17 of 2017 before the learned Master to execute the foreign arbitral award dated 23.07.2017 passed against the Appellant is not maintainable as it is contrary to the provisions of the Act, 1996 and Original Side Rules. A common counter was also filed by the respondent in Application Nos.1633 and 1634 of 2018 filed

























































































































































































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