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1995 Supreme(Ori) 105

ORISSA HIGH COURT
D.P. Mohapatra, J.
STATE OF ORISSA – PETITIONER
v.
M/S. KLOCKNER & CO. A.G. AND OTHERS – RESPONDENTS
C.R. No. 262 of 1994 and Misc. Application No. 553 of 1994
Decided on: May 12, 1995.

Advocates Appeared:
Sh. B.M. Patnaik, for the Petitioner.
S./Sh. C.S. Vaidyanathan and K.V. Viswanathan, for the Respondents.

The provisions of the Foreign Awards Act, particularly Section 3 are applicable to the case where the parties to the arbitration agreement have decided that the place of arbitration shall be London and the law applicable shall be substantive Swiss Law.

Headnote:

FOREIGN AWARDS ACT - STAY OF SUIT - ARBITRATION AGREEMENT - VALIDITY - SCOPE - ENFORCEABILITY - FOREIGN AWARD - DEFINITION - SECTION 3 - SECTION 7 - SECTION 9 - INTERPRETATION.

Fact of the Case:

The petitioner, State of Orissa, filed two cases assailing the order dated 16.4.1994 of the Civil Judge (Senior Division), Bhubaneswar in Misc. Case No. 426 of 1993. The said Misc. Case was registered on that application filed by Defendant No. 1, Klochner and Company, A.G. under Section 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961 ('Foreign Awards Act' for short) for stay of Title Suit No. 152 of 1993 By the impugned order the petitioner has been allowed and the suit has been stayed under Section 3 of the Foreign Awards Act.

Finding of the Court:

The court held that the provisions of the Foreign Awards Act, particularly Section 3 are applicable to the case. The court further held that the learned Trial Judge was right in holding that a case for stay of the suit under Section 3 of the Foreign Awards Act has been made out by the opposite party No. 1-Defendant.

Issues: Whether the provisions of the Foreign Awards Act, particularly Section 3 are applicable to the case.

Ratio Decidendi: The court held that the provisions of the Foreign Awards Act, particularly Section 3 are applicable to the case since the parties to the arbitration agreement have decided that the place of arbitration shall be London and the law applicable shall be substantive Swiss Law. The court further held that the learned Trial Judge was right in holding that a case for stay of the suit under Section 3 of the Foreign Awards Act has been made out by the opposite party No. 1-Defendant.

Final Decision: The court dismissed the cases being devoid of merit.

JUDGMENT

D.P. Mohapatra, J. - The State of Orissa, represented through the Secretary, Steel and Mines Department of Government of Orissa, has filed these two cases assailing the order dated 16.4.1994 of the Civil Judge (Senior Division), Bhubaneswar in Misc. Case No. 426 of 1993. The said Misc. Case was registered on that application filed by Defendant No. 1, Klochner and Company, A.G. under Section 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961 ('Foreign Awards Act' for short) for stay of Title Suit No. 152 of 1993 By the impugned order the petitioner has been allowed and the suit has been stayed under Section 3 of the Foreign Awards Act. Initially the cases were filed in the court of the Addl. District Judge, Bhubaneswar; subsequently by order of this court dated 6.9.1994 in M.J.C. Nos. 164 and 200 of 1994 they were transferred to this court for disposal.

2. At the outset Sri B.M. Patnaik, learned counsel appearing for State of Orissa submitted that though as a measure of arbundant caution both appeal and revision have been filed he will concentrate on the revision petition. Therefore in the discussions in the judgment reference will be made to the revision petition.

3. The relevant facts necessary for appreciation of the points raised in the case may be Stated thus : The revision petitioner filed T.S. No. 152 of 1993 in the court of the Civil Judge (Senior Division), Bhubaneswar citing the opposite parties as defendants 1 to 3 respectively. In the said suit the plaintiff has sought for the following reliefs :

"(a) Declaration declaring that the plaintiff is not the successor of defendant No. 3 and more particularly is not the successor of defendant No. 3 in the context of the claim of defendant No. 1 against defendant No. 3 before defendant No. 2 and

(b) Declaration declaring that plaintiff is not liable to pay jointly with defendant No. 3 or otherwise to defendant No. 1 U.S. $ 2,946,938.42 with ten per cent interest or any part thereof as claimed by defendant No. 1 in its request dated 21.4.1993 for arbitration to defendant No. 2 and in its statement of claim appended thereto which request for arbitration and claim defendant No. 1 has got served on the plaintiff through defendant No. 2.

(c) Declaration declaring that plaintiff has got no obligation whatsoever under document dated 20.4.1982, nomenclatured as marketing agreement and no obligation whatsoever towards defendant No. 1 under the said document.

(d) Declaration declaring that the aforementioned claim of defendant No. 1 against the plaintiff and defendant No. 3 jointly is not a matter agreed either between the defendant No. 1 and defendant No. 3 or between the plaintiff and defendant No. 1 or amongst plaintiff defendant No. 1 and defendant No. 3 to be referred to arbitration under the said document dated 20.4.1982 nomenclatured as marketing agreement or otherwise.

(e) Permanent injunction injuncting defendant No. 1 from prosecuting the arbitration proceeding, (bearing reference No. 7878/HV of defendant No. 2) initiated before defendant No. 2 by defendant No. 1 in its said request for arbitration dated 21.4.1993 and said statement of claim dated 21.4.1993 appended thereto.

(f) Such other relief/reliefs as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case".

The agreement dated 20.4.1982 which is discribed as 'marketing agreement' was executed in Germany between M/s. O.M.C. Ltd., Bhubaneswar, India Government of Orissa undertaking) and M/s. Klockner & Co. (Ores, Alloys Pig Iron Department), Duisbur, Federal Republic of Germany. In the said document it is stipulated inter alia that OMC, will establish a plaint at Bamnipal in the district of Keonjhar, Orissa for production of Charge Chrome, that OMC agrees to market its product exclusively through Klockner upon the terms and conditions contained in this agreement and Klockner accepts this arrangement, that during the currency of this agreement OMC shall not be entitled

































































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