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SUPREME COURT OF INDIA
ROHINTON FALI NARIMAN, B.R. GAVAI, JJ.
Gemini Bay Transcription Pvt. Ltd. - Appellant
Versus
Integrated Sales Service Ltd. & Anr. - Respondents
Civil Appeal Nos. 8343-8344 of 2018 With Civil Appeal Nos. 8345-8346 of 2018
Decided On : 10-08-2021
Arbitration and Conciliation Act, 1996 – Section 46, 35, 47(1)(c), 48, 48(1) or 48(2), 34, 44 – Maharashtra High Court (Hearing of Writ Petitions by Division Bench and Abolition of Letters Patent) Act, 1986 – Section 3 – Foreign Awards Act, 1961 – Section 7 – Geneva Convention Act of 1927 – Article I(e) – UK Act, Section 103(2)(b) – Singapore’s International Arbitration Act, 1994 – Section 31(2)(b) – Narcotic Drugs and Psychotropic Substances Act, 1985 – When foreign award binding – Evidence – Definition – Conditions for enforcement of foreign awards – Held, There is also merit in submissions made on behalf of that there was no material produced before Arbitral Tribunal by Agritrade to show that it had, in fact, suffered any loss as a result of not opening an L/C for quantity of 5000 MT of CPO – Tribunal merely accepted the default and proceeded to determine “close out price” to assess damage – Facts in this case are far removed from facts in aforesaid High Court Judgment – There can be no doubt whatsoever that as a result of machinations, as found by arbitral tribunal, ISS was deprived of commission legitimately due to it under representation agreement – This being so, there can be no doubt that, on facts as proved before arbitral tribunal, actual loss can be said to have been occasioned to ISS – In any case, damages so awarded in facts of this case cannot even remotely be said to shock conscience of this Court so as to clutch at “basic notion of justice” ground contained in Section 48(2) Explanation (1)(iii) – Appeals dismissed.
JUDGMENT :
R.F. Nariman, J.
1. These appeals raise interesting questions relatable to Part II of the Arbitration and Conciliation Act, 1996 [the “Arbitration Act, 1996”] which provisions deal inter alia with recognition and enforcement of foreign awards. The facts necessary to appreciate the points raised in these appeals are as follows.
2. On 18th September, 2000, a representation agreement was entered into between Integrated Sales Services Ltd. [“ISS” / Respondent No. 1], a company based in Hong Kong and DMC Management Consultants Ltd. [“DMC”], a company registered in India, whose principal business address is at Nagpur. By this agreement, ISS was to assist DMC to sell its goods and services to prospective customers, and in consideration thereof was to receive commission. The relevant clauses of the agreement are clauses 2 and 3 which read as follows : -
Representative shall assist Company with its efforts to sell its Goods and Services to prospective customers. Secondly, where acceptable to the Company, identify potential sources of investment and Investors, and assist Company in negotiating the terms of purchase, sale and/or investment.
3. Validity
The right of representation under this Agreement is not limited by time. Compensation is due Representative as defined under "Payment" hereinafter. However, if Company finds Representative's efforts to be unsatisfactory, it will state so in writing with specific and, reasonable guidelines which, if accomplished within six months, shall constitute satisfactory performance, If Representative is unable to substantially-satisfy these guidelines, then Company may cancel this Agreement forthwith. However, compensation for existing or potential customers identified by the Representative, shall continue according to the Payment clause below.”
3. The commission payable is then referred to in clause 4. The agreement under clause 8(d) which is “General” then states as follows : -
(i) This Agreement is subject to the laws of the State of Missouri, U.S.A.
(ii) In the event a dispute arises in connection with this Agreement, such dispute shall be referred to a single arbitrator in Kansas City, Missouri, U.S.A. to be appointed by agreement between the parties hereto, or failing agreement to be appointed according to the rules of the American Arbitration, Association the same rules under which any dispute which any dispute shall be decided.
(iii) In the event a dispute is committed to arbitration, the party deemed at fault shall reimburse the full cost of the arbitration and legal process to the aggrieved party.
(iv) The Agreement shall not be amended in any way other than by agreement in writing, signed by both parties.
4. It is important to note that this agreement was signed by one Shri Rattan Pathak as Managing Director of DMC, and by one Shri Terry Peteete, Director of ISS. Though this agreement was entered into on 18th September, 2000, it came into force on 3rd October, 2000. A first amendment to this representation agreement was made between the aforesaid parties, which was signed by one Shri Arun Dev Upadhyaya [Appellant in CA No. 8345-8346/2018] on behalf of DMC, and Terry Peteete on behalf of ISS. We are not directly concerned with the changes made by this first amendment except to indicate that Arun Dev Upadhyaya, one of the appellants before us, was a signatory on behalf of DMC. Likewise, a second amendment agreement was entered into on 1st January, 2008, again with effect from 3rd October, 2000, in which various amendments were made to the original representation agreement. We are concerned, with sub-clause (4) of this amendment, which reads as follows:
5. Disputes arose between the parties, as a result of wh
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