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2022 Supreme(Telangana) 410

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
P.Naveen Rao, Sambasivarao Naidu, JJ.
ITC Limited – Petitioner
Versus
Wide Ocean Shipping Service Ltd. – Respondent
Civil Revision Petition No. 4481 of 2007
Decided On : 29-07-2022

Advocates:
Advocate Appeared:
For the Petitioner: Sri G.V.S.Ganesh
For the Respondent: Sri A.Venkatesh

Point of law : Section 34 of English Arbitration Act deals with procedural and evidential matters.

Headnote:

Arbitration and Conciliation Act, 1996 - Section 48, 47, 48 (2) (b) - English Arbitration Act - Section 34 – Evidence - Procedural and evidential matters - ‘Audi alteram partem’ - Fast track procedure - Conditions for enforcement of foreign awards - Hearings and written proceedings - whether by a Court or other authority that affects rights of a citizen or leads to any civil consequence, Court or authority concerned is bound to adopt ‘judicial approach’, cannot act in an arbitrary, capricious or whimsical manner - Whether and to what extent there should be oral or written evidence or submissions and all that is subject to right of parties - Guided by principles enunciated by Hon’ble Supreme Court, it is noticed from decision of execution court, it has not applied its mind in assessing scope of law of enforcement of foreign decree in India.(Para 24).

Finding of the Court :

Execution Court grossly erred in not appreciating scheme of Arbitration and Conciliation Act, 1996. It has also erred in not appreciating scope of Section 34 of English Arbitration Act - Foreign award is contrary to fundamental policy of Indian law and is in conflict with basic notion of justice as Arbitrators denied oral hearing even though a request was made - Such award is not enforceable in India - Execution Court grossly erred in not appreciating scope of Section 48 of Act, 1996. Not challenging award, that award has become final and/or appellants participating in further proceedings before arbitrators have no relevance. award still has to pass tests prescribed in Section 48 for its enforcement in India. A foreign award becomes a decree under Section 49 only when it passes muster of Section 48.

Results: Revision allowed.

ORDER :

P Naveen Rao, J.

This revision is filed challenging the orders dated 24.9.2007 passed in E.P.No.54 of 2005 on the file of the XI Additional Chief Judge (FTC) City Civil Court, Hyderabad.

2. Wide Ocean Shipping Service Limited of London, England(disponent), chartered ‘m.v.RIZCUN TRADERS’ to ITC Limited, Secunderabad, India (the charterers ) to carry a cargo of minimum 6250 mt of bagged soya bean meals extract with 5 % more at the option of charterers from Mumbai to Haichong. Charter-party (agreement) was made on 24.6.2000 in Dubai. Disputes arose between two contracting parties leading to appointment of arbitrators. The disponent owner set up claim for US $ 54,120.53 with interest and costs. The Charterers made counter claim for US $ 8,316.63 with interest and costs. The arbitrators passed award on 6.2.2003 holding that the charterers should pay the disponent owners US $ 52,153.53 together with interest thereon at the rate of 6% per annum compounded by three monthly rests from 18.8.2000 to the date of payment. Arbitrator also awarded costs and interest on costs and fee and expenses payable to the arbitrators by the charterners.

3. On 11.6.2004, the arbitrators passed award of assessed costs quantifying the costs of NOK 94.262.33 together with interest at the rate of 6 % per annum from the date of award. Arbitrator also awarded costs for passing this award.

4. Seeking enforcement of the said awards, E.P. 54 of 2005 was filed under Section 48 of Part II of Arbitration and Conciliation Act, 1996 in the Court of Chief Judge, City Civil Court at Hyderabad.

5. The petitioner herein raised several objections for enforcement of foreign award. Brushing aside the objections, by order dated 24.9.2007 the Execution Court issued warrant of attachment against Execution Petition schedule properties. Aggrieved thereby, this revision is preferred.

6. Heard learned counsel for petitioner Sri G.V.S.Ganesh and learned counsel for respondent Sri A.Venkatesh.

7. It is contended that these foreign awards are not enforceable, therefore, Execution Petition ought to have been rejected at the threshold, as it was in utter violation of provisions of Section 48 (2) (b) of the Act, 1996. It is further contended that there was denial of principles of natural justice and fair hearing; that an award shall not be recognized or enforced if the person against whom it is sought to be enforced was unable to present his case; that even though petitioner requested for oral hearing, no oral hearing was held and award was passed based on written submissions. It was further contended that two independent awards cannot be passed as held by the Hon’ble Supreme Court. Once an award is passed, the Arbitrator becomes functus officio and therefore cannot deal with the claims and pass additional/ another award, whereas, erroneously two awards are passed by the Arbitrators. It is further contended that Section 47, 47. Evidence.

1. The party applying for the enforcement of a foreign award shall, at the time of the application, produces before the court-

a. the original award or a copy thereof, duly authenticated in the manner required by the law of the country in which it was made;

b. the original agreement for arbitration or a duly certified thereof; and

c. such evidence as may he necessary to prove that the award is a foreign award.

1. …..

2. If the award or agreement to be produced under sub-section (1) is in a foreign language, the party seeking to enforce the award shall produce a translation into English certified as correct by a diplomatic or consular agent of the country to which that party belongs or certified as correct in such other manner as may be sufficient according to the law in force in India.

Explanation.- In this section and all the following sections of this Chapter, "Court" means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction over t

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