IN THE HIGH COURT OF STATE OF TELANGANA
A. RAJASEKHAR REDDY, J.
Avra Commodities Pte. Ltd. – Appellant
Versus
Meenakshi Energy Ltd. – Respondent
EXE. P No. 3 of 2018
Decided On : 09-01-2020
Arbitration and Conciliation Act, 1996 - Section 47 - Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 - Sections 2(1)(c), 7 and 10(1) - Arbitration and Conciliation Act, 1996 - Section 48 - Civil Procedure Code, 1908 - Order XXI Rules 46 and 54 - Constitution of India - Article 136 - Singapore International Arbitration Centre SIAC Rules - Agreement and Contract - Sole Arbitrator - Award - Seeking enforcement of foreign arbitral award - Court opinion that petitioner has satisfied conditions a laid down under Section 48 of Act for enforcement of foreign award and accordingly the arbitral award under reference is declared to be a decree passed by this Court under Section 49 of Act and this Court is satisfied that award is executable.
Facts of the case: Petitioner is a foreign company based at Singapore and it is represented by its Director - Refusal of respondent company having its Registered Office at Hyderabad, India, to satisfy arbitral award passed by Sole Arbitrator, in Arb. under arbitration rules of Singapore International Arbitration Centre SIAC Rules (1st August, 2016) ("SIAC Rules") in respect of dispute and differences arose out of a coal supply contract made and executed by and between parties
Finding of the court: There is no provision in the Act to set aside a foreign award in India - In other words, foreign awards may be set aside or suspended in the country in which or under laws of which the award was made - Therefore, Indian Courts do not have jurisdiction to entertain a challenge to a foreign award on its merits - Under Section 50(1)(b) of Act, appeal lies only against an order refusing to enforce a foreign award under Section 48 of Act - An appeal shall lie only if the Court holds the award to be non-enforceable.
Result: Order accordingly.
ORDER :
A. Rajasekhar Reddy, J.
1. This execution petition has been filed under Section 47 of the Arbitration and Conciliation Act, 1996, (hereinafter referred to as, "the Act") read with Sections 2(1)(c), 7 and 10(1) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015, seeking enforcement of foreign arbitral award dated 28.6.2018 passed by the Sole Arbitrator, in Arb. No. 285 of 2017 at Singapore.
2. The facts that are material and relevant for deciding this petition are as under:
3. By dint of the contract, the petitioner agreed to sell and the respondent agreed to purchase 1,25,000 Metric Tones (MT) of stem (non-cooking) coal in bulk to be delivered FOB by ship in two shipments of 50,000 MT and 75,000 MT respectively on certain terms and conditions. The dispute between the parties in the arbitration essentially revolved around the quality, more particularly the Gross Calorific Value (GCV), of coal delivered by the petitioner. The petitioner relied upon the certificate of analysis of the Load Port Independent Inspection Agency (for short, "the LPILA") designated under the contract which certified the GCV of coal as being more than the rejection limit. That although the contract contained a mechanism for resolution of disputes pertaining to determination of quality of coal, at Clause 11 thereof, which, provided that it would be open for either party to insist on the third umpire sample or "split" of the coal to be tested by an internationally recognized laboratory located in a neutral country as may be mutually agreed upon by the parties in the event of any disagreement regarding the determination made by the LPHA, such mechanism was not resorted to or insisted upon by the respondent. That instead, the respondent choose to arbitrarily cancel the contract, but later agreed to take delivery of the first shipment of 55,000 MT of coal purportedly on the understanding that one Harshavardhan Sethi of PT Bina Insan Sukses Mandiri had negotiated a settlement with the respondent on behalf of the petitioner for a reduction in the unit price of the coal in departure from the rate specified in the agreement. While the respondent made part payment against the invoice raised apropos the first shipment, a sum of about 83,160 USD remained due and unpaid. That so far as the second shipment of 75,000 MT was concerned, the respondent outrightly refused to take delivery of coal. That such a refusal amounted to breach of contract thus entitling the petitioner to claim damages. That in the circumstances, the petitioner was constrained to invoke the arbitration agreement contained in Clause 26 of the contract and referred its claims to arbitration. That inasmuch as the arbitration agreement envisaged the dispute to be referred to and resolved by arbitration conducted by the Singapore International Arbitration Centre, the petitioner filed a notice of arbitration with the Registrar, SIAC on 23.8.2017. That the respondent having received notice of arbitration, also made a counter-claim against the petitioner. The respondent further agreed to the arbitration being conducted in terms of the expedited procedure envisaged under Rule 5 of the SIAC Rules. That the parties filed their respective p
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