Bombay HC: Arbitral Award can be executed by the court which passed it or by the Court to which it is sent for execution

Conclusion:

26. In the light of aforesaid discussion, we find that after an award attains finality and the stage as contemplated by provisions of Section 34 of the Act of 1996 has been crossed, the final arbitral award under Part-I of the Act of 1996 has to be enforced in accordance with the provisions of the Code in the same manner as if it were a decree of the Court. The legal fiction under Section 36 is only for the limited purpose of enforcement of an award as a decree. At that stage, the provisions of Sections 38 and 39 of the Code would come into operation. These provisions permit a decree to be executed either by the Court which passed it [the Court as defined by Section 2(1)(e)(i) of the Act of 1996] or by the Court to which it is sent for execution. The Court which passed the decree can also transfer it for execution to any subordinate Court of competent jurisdiction. Proceedings for execution of an arbitral award are beyond the purview of Section 42 of the Act of 1996, inasmuch as such proceedings are not in the nature of any application under Part-I of the Act of 1996. The view as taken by the Division Bench in Akola Janta Commercial Co-operative Bank Ltd. [supra] that a decree holder must apply for execution of an award to the Court of District Judge who may thereafter execute the award as a decree himself or send it for execution to another Court including a subordinate Court of competent jurisdiction commends itself and we respectfully concur with the same. The modality prescribed therein that all applications for execution of awards be first placed before the District Judge who may then execute the same himself or send it to subordinate Courts under Section 38 read with Section 39(2) of the Code is found appropriate in these circumstances.

27. We are, therefore, in respectful disagreement with the views expressed in the order of Reference in Gemini Bay Transcription Pvt. Ltd. [supra] that a Court subordinate to the Court of District Judge [here the Court of Principal District Judge] cannot be recognized as a Court of competent jurisdiction for the purposes of enforcement of awards under the Act of 1996. The view taken by learned Single Judge in Arunkumar Deedwania [supra] stands affirmed and the view taken in Sanjay Suryakant Mhaske & others [supra] with respect stands overruled.

30. The Reference accordingly stands answered as follows:-

An Award made under Part-I of the Arbitration and Conciliation Act, 1996 can be executed not only by the Court as defined by Section 2(1)(e)(i) but also by the Court to which it is sent for execution under Sections 38 and 39 of the Code of Civil Procedure, 1908.

 IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Writ Petition Nos. 6066 and 4682 of 2012

Decided On: 16.02.2018

Gemini Bay Transcription Private Ltd. and Ors. Vs. Integrated Sales Service Ltd. and Ors.

Hon'ble Judges/Coram:

R.K. Deshpande, A.S. Chandurkar and M.G. Giratkar, JJ.

Author: A.S. Chandurkar, J.

Citation:  MANU/MH/0265/2018, AIR 2018 BOMBAY 89, (2018) 2 MAH LJ 329.

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Enforcement of Foreign Arbitral Awards: The Landmark Judgment in Gemini Bay Transcription Pvt. Ltd. vs. Integrated Sales Service Ltd.

  In a significant ruling on August 10, 2021, the Supreme Court of India addressed the complex issues surrounding the enforcement of foreign arbitral awards against non-signatories in the case of Gemini Bay Transcription Pvt. Ltd. vs. Integrated Sales Service Ltd. This judgment clarifies the legal framework for recognizing and enforcing foreign arbitral awards in India, particularly under the Arbitration and Conciliation Act, 1996.

 Background of the Case

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Supreme Court: Six pre-requisites for an arbitral award to be recognized as a foreign award under Section 44 of the Act

The Supreme Court of India has identified six pre-requisites for a foreign award to be recognized and enforceable under Section 44 of the Arbitration and Conciliation Act, 1996. These prerequisites are:

1. Arbitral Award on Differences: The award must be an arbitral award concerning differences arising out of legal relationships between parties.

   

2.Nature of Differences : The differences can arise from contractual obligations or non-contractual situations, such as torts.

3. Commercial Relationship: The legal relationship involved must be considered "commercial" under Indian law.

4. Date of Award: The award must have been made on or after October 11, 1960.

5.New York Convention Award: The award must qualify as a New York Convention award, meaning it should arise from an agreement in writing that falls under the New York Convention's jurisdiction.

6.Territorial Application: The award must be made in a territory that is a signatory to the New York Convention. 

These criteria establish the framework for recognizing and enforcing foreign arbitral awards in India, providing clarity on the conditions necessary for such enforcement.

 IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 8343-8344 of 2018 and 8345-8346 of 2018

Decided On: 10.08.2021

Gemini Bay Transcription Pvt. Ltd. Vs. Integrated Sales Service Ltd. and Ors.

Hon'ble Judges/Coram:

Rohinton Fali Nariman and B.R. Gavai, JJ.

Author: Rohinton Fali Nariman, J.

Citation:  MANU/SC/0517/2021, AIR 2021 SUPREME COURT 3836, AIRONLINE 2021 SC 481

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Whether Arbitration Act will prevail over Delhi High court Act?

It is first to be noted that the Arbitration and Conciliation Act, 1996 is a special statute vis-à-vis the Delhi High Court Act, which would be a general statute dealing with the jurisdiction and procedure of the High Court. It is well established principle of law that a special provision made on a certain matter would exclude the general provision in its application, with the provision of the special Act prevailing over the provision of a general Act. This principle is expressed in the maxims Generalia Specialibus Non Derogant and Specialia Generalibus Derogant. Reference can be drawn to the judgment of the Supreme Court in Jogendra Lal Saha v. State of Bihar and others, MANU/SC/0282/1991 : AIR 1991 SC 1148 and P.V. Hemalatha v. Kattamkandi Puthiya Maliackal Saheeda and others, MANU/SC/0501/2002 : AIR 2002 SC 2445.

13. The object and intent of the legislature in substituting the Explanation to Section 47 of the Act can be found in the 246th Report of the Law Commission, which has been reproduced hereinabove. The provision therefore, clearly intended to ensure that all challenges to a Foreign Award are made only before the High Court. Such intent cannot be defeated by applying a subsequent general law. In view of the above, the provisions of the Delhi High Court Act cannot be made applicable to the petitions seeking enforcement of the Foreign Awards.

14. In Kandla Export Corporation and Anr. v. M/s. OCI Corporation and Anr., MANU/SC/0112/2018, the Supreme Court relying upon its earlier judgment in Fuerst Day (supra) held that Section 13(1) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 being a general provision vis-a-vis arbitration relating to appeals arising out of commercial disputes, would obviously not apply to the case of Section 50 of the Act. Applying the above ratio, it would be clear that the Delhi High Court Act would not apply to the petitions seeking enforcement of a Foreign Award under the Arbitration and Conciliation Act, 1996 as amended by the Amendment Act.

IN THE HIGH COURT OF DELHI

Ex. P. 330/2015 and E.A. No. 387/2018

Decided On: 28.11.2018

Precious Sapphires Ltd. Vs. Amira Pure Foods Private Ltd.

Hon'ble Judges/Coram:

Navin Chawla, J.

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Whether application for enforcement of foreign arbitral award can be dismissed if necessary documents were not filed along with application?

 It is relevant to note that there would be no prejudice
caused to the party objecting to the enforcement of the
Award by the non-filing of the arbitration agreement at the
time of the application for enforcement. In addition, the
requirement of filing a copy of the arbitration agreement
under the Model Law which was categorized as a formal
requirement was dispensed with. Section 48 which refers
to the grounds on which the enforcement of a foreign
award may be refused does not include the non-filing of the
documents mentioned in Section 47. An application for
enforcement of the foreign award can be rejected only on
the grounds specified in Section 48. This would also lend
support to the view that the requirement to produce
documents mentioned in Section 47 at the time of
application was not intended to be mandatory.
21. Reading the word “shall” in Section 47 of the Act as
“may” would only mean that a party applying for

enforcement of the award need not necessarily produce
before the Court a document mentioned therein “at the
time of the application”. We make it clear that the said
interpretation of the word “shall” as “may” is restricted
only to the initial stage of the filing of the application and
not thereafter.
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No .4834 of 2007

P.E.C. LIMITED Vs AUSTBULK SHIPPING SDN BHD

L. NAGESWARA RAO, J.
Dated:NOVEMBER 14, 2018.
Citation: 2019(4) MHLJ 518

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Whether domestic arbitration award will be converted in foreign award due to conduct of parties?

In Roger Shashoua & Others v. Mukesh Sharma & Others (2017) 14
SCC 722, the Supreme Court has clearly held that even if a party has wrongly
approached the Court in India and accepted the applicability of Part-I of the
Act, the same would not confer jurisdiction on Indian Courts.
“64. The other ground of attack is that the Appellants
had themselves approached the courts in India and,
therefore, by their own conduct applicability of Part I
has been accepted by the Appellants and the right to
raise the issue of jurisdiction has been waived.
…6
6. In Kanwar Singh Saini (supra), this Court has laid
down that conferment of jurisdiction is a legislative
function and it can neither be conferred with the
consent of the parties nor by a superior court, and if
the court passes an order/or a decree having no
jurisdiction over the matter, it would amount to a
nullity as the matter goes to the root of the cause. For
the said purpose the two-Judge Bench has placed
reliance upon United Commercial Bank Ltd. (supra),
State of Gujarat v. Rajesh Kumar Chimanlal Barot
EX.P. 271/2014 Page 15 of 18
Kesar Singh v. Sadhu, Kondiba Dagadu Kadam v.
Savitribai Sopan Gujar and Collector of Central
Excise, Kanpur v. Flock (India) Pvt. Ltd.
67. In Zuari Cement Ltd. (supra), the Court ruled that
though the petitioner and the Corporation therein have
subjected themselves to the ESI Court, the same could
not confer jurisdiction upon the ESI Court to determine
the question of exemption from the operation of the
Act, for by consent, the parties cannot agree to vest
jurisdiction in a court to try the dispute which the court
does not possess.
68. In view of the aforesaid, there cannot be any trace
of doubt that any filing of an application by the
appellant in the courts in India can clothe such courts
with jurisdiction unless the law vests the same in
them.”
IN THE HIGH COURT OF DELHI AT NEW DELHI

Dated :1st November, 2018
 EX.P. 271/2014
DRAGER MEDICAL Vs  M/S ION BIO MED-I CARE PVT LTD 
CORAM:
JUSTICE PRATHIBA M. SINGH

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When court should not decline enforcement of arbitration Award?

 The first and foremost issue to be considered is whether the enforcement of the Award ought to be declined on the ground that Dalmia was unable to present its case. In terms of section 48(1)(b) of the Act, enforcement of a foreign award may be refused, at the request of the party against whom it is sought to be enforced, only if that party furnishes to the court proof that it “was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings or was otherwise unable to present his case”. In the present case, there is no allegation that Dalmia was not given proper notice of the appointment of the arbitral tribunal or the arbitration proceedings.

 The inability to present a case as contemplated under section 48(1)(b) of the Act (which is pari materia to Article V(I)(b) of the New York Convention) must be such so as to render the proceedings violative of the due process and principles of natural justice. It is rudimentary that for a fair decision each party must have full and equal opportunity to present their respective cases and this includes due notice of proceedings. In the event a party opposing the enforcement of a foreign award is able to present sufficient proof of such infirmity in the arbitral proceedings, the courts may decline to enforce the foreign award.

26. A clear distinction needs to be drawn between cases where a party is unable to present its case, rendering the arbitral award susceptible to challenge as falling foul of the minimal standards of due process/natural justice and cases where the arbitral tribunal does not accept the case sought to be set up by a party. The latter case, obviously, does not give rise to a ground as mentioned in section 48(1)(b) of the Act, even if the decision of the arbitral tribunal is erroneous.

In the High Court of Delhi at New Delhi

(Before Vibhu Bakhru, J.)

Glencore International AG 

v.

Dalmia Cement (Bharat) Limited .

EX.P. 75/2015 and EX APPL. (OS) No. 1216-1217/2015

Decided on July 3, 2017

Citation:2017 SCC OnLine Del 8932

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Whether foreign arbitration award is enforceable against non signatories to arbitration agreement?

Having dealt with the questions of law, I turn to the facts of
the present case. The Representation Agreements in force are signed
by   the   Director­Terry   L.   Peteete   for   and   on   behalf   of   the
applicant­Integrated   Sales   Services   Limited,   and   by   Rattan   Ram
Pathak, the   non­applicant No.3(i), in his capacity as the Managing
Director   of   the   non­applicant   No.1­DMC   Management   Consultants
Ltd., containing the clause of arbitration, making it subject to the laws
of State of Missouri, U.S.A.  Neither the non­applicant No.2­Arun Dev
s/o   Govindvishnu   Upadhyaya,   nor   the   applicant   No.3­Gemini   Bay
Transcription Pvt. Ltd., through its Directors­(i) Rattan Ram Pathak,
and   (ii)   Naresh   Kumar   Kopisetti,   have   signed   the   Representation

Agreements   in   force   in   their   individual   capacity.   Except   the
non­applicant No.2­Arun Dev s/o Govindvishnu Upadhyaya, none of
the other individual non­applicants in this application were joined as
the   party­respondents   in   the   dispute   before   the   International
Arbitration Tribunal.  The respondents before the said Tribunal were
DMC   Management   Consultants   Ltd.,   Arun   Dev   s/o   Govindvishnu
Upadhyaya,   Gemini   Bay   Consultants   Ltd.,   and   Gemini   Bay
Transcription Pvt. Ltd.  
35. The   non­applicant   Nos.2   and   3   have   neither   submitted
themselves   to   the   arbitration   nor   to   the   composition   of   the
International Arbitration Tribunal.  There did not exist or subsist any
arbitration agreement between the applicant and the non­applicant
Nos.2 and 3.   There is nothing in the Representation Agreements in
force, which permit the said Tribunal to exercise jurisdiction over the
non­signatories to it.   The invocation of the principle of lifting of
corporate   veil   and   holding   the   non­applicant   Nos.2   and   3   as
“alter ego” of the non­applicant No.1­Company and on the basis of it,
to hold them jointly and severally liable to pay the amount under the
award, is totally without jurisdiction and cannot be sustained.  Merely

because   the   non­applicant   Nos.2   and   3   have   participated   in   the
proceedings before the International Arbitration Tribunal, they cannot
be   estopped   from   raising   the   question   of   jurisdiction   of   the   said
Tribunal in response to the application under Section 49 of the said
Act.  The question of operating estoppel, acquiescence, surrender, etc.,
to the jurisdiction of the said Tribunal, does not at all arise.   The
award passed by the International Arbitration Tribunal, in the present
case, is, therefore, hit by the conditions in clauses (c), (d) and (e) of
sub­section (1) of Section 48 of the said Act.  The said award cannot,
therefore, be enforced in India against the non­applicant Nos.2 and 3
by making a decree of the Court.
36. Though   the   International   Arbitration   Tribunal   had   no
jurisdiction to invoke the principle of lifting of corporate veil and
holding   the   non­applicant   Nos.2   and   3   as   “alter   ego”   of   the
non­applicant   No.1­Company,   this   Court   is   competent   under
Section 49 of the said Act to go into all these aspects of the matter and
hold that the non­applicant Nos.1, 2 and 3 are jointly liable to pay the
amount covered by the award passed by the said Tribunal.  However,
the applicant has to make out such a case in the proceedings under

Section 49 of the said Act.   After going through the contents of the
application, I  do not  find that any such  case is made out  by the
applicant.   In  spite  of repeated queries, Shri Deven  Chauhan, the
learned Advocate for the applicant, makes a statement that this is not
the case with which the applicant has come forward before this Court
while invoking the jurisdiction under Section 49 of the said Act.  Had
such   a   case   been   made   out,   then   the   extent   of   liability   of   the
non­applicant   No.2,   being   the   Director   of   the   non­applicant
No.1­Company,   was   required   to   be   judged   on   the   basis   of   the
provisions   of   the   Companies   Act,   1956.     In   view   of   this,   the
non­applicant Nos.2 and 3 cannot be held in this proceeding jointly
liable to pay the amount covered by the arbitration award, along with
the non­applicant No.1­Company.
37. Shri   Deven   Chauhan   for   the   applicant   submits   that   the
non­applicant   Nos.2   and   3   were   made   parties   in   the   proceedings
before   the   International   Arbitration   Tribunal   in   their   individual
capacity and they are also made parties in the same capacity before
this Court.  The award passed against them is required to be executed
against them individually by attaching their properties if such occasion

arises.   In order to make the non­applicant Nos.2 and 3(i) and (ii)
individually or severally liable to pay the sum covered by the arbitral
award   in   question,   it   must   be   shown   that   they   have   signed   the
arbitration agreement as guarantors or sureties for the debts due or
recoverable   arising   out   of   or   in   connection   with   the   contract   in
question   against   the   non­applicant   No.1,   of   which   they   are   the
Directors.  In such an event, the liability of the guarantor or surety will
be co­extensive with that of the principal debtor, and consequently
their personal assets may be attached in execution of the decree.  This
is not the case with which the applicant has approached this Court
under Section 49 of the said Act.  Hence, the award passed in question
cannot be enforced against them by passing a decree.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
Misc. Civil Application No.1319 of 2015
Integrated Sales Services Limited,

V
 DMC Management Consultants Ltd.,

Coram : R.K. Deshpande, J.

Dated:  18th April, 2016
Citation: 2016(6) MHLJ195

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Whether foreign Award of arbitration can be reviewed at enforcement stage?

The grounds of challenge enumerated in the aforesaid section are meant to be construed narrowly and do not permit review of the foreign award on merits. The Courts are not expected in any enforcement proceedings to re-determine questions of fact. In Shri Lal Mahal Ltd. (supra) in paragraph 45 of the report, the Hon'ble Supreme Court has specifically held that Section 48 of the 1996 Act does not give an opportunity to have a "second look" at the foreign award in the award enforcement stage. The scope of inquiry under Section 48 does not permit review of the foreign award on merits. Procedural defects (like taking into consideration inadmissible evidence or ignoring/rejecting the evidence which may be of binding nature) in the course of foreign arbitration do not lead necessarily to excuse an award from enforcement on the ground of public policy.

Calcutta High Court

Cliff Navigation S. A vs Lmj International Limited on 23 July, 2015

Author: Soumen Sen

Read full judgment here; click here
Citation;AIR2015(NOC)1089 Cal

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