Euro-Asia Chartering ... vs Fortune International Ltd.
2002 Latest Caselaw 1035 Bom

JUDGMENT

D.Y. Chandrachud, J.

1. Arbitration Petition No. 162 of 2002 was filed before this Court by the petitioner, Euro-Asia Chartering Corporation (P.T.F.) Ltd., for a decree in terms of a foreign Award dated 16th December, 2001 as amended on 7th February, 2002 and for a declaration that the petitioner was entitled to enforce the Award as a decree of this Court against the respondent. The arbitration petition came up for hearing before a learned single Judge of this Court (S.A. Bobde, J.) on 19th June, 2002. The respondent was not present before the Court and on behalf of the petitioner, an affidavit of service dated 19th June, 2002 was placed on record. The learned single Judge took due note of the fact that by the arbitration petition, enforcement was sought of an Arbitral Award governed by the New York Convention, passed by a sole Arbitrator in Singapore and that the enforcement of the Award was covered by the provisions of Part II of the Arbitration and Conciliation Act, 1996. The learned single Judge held that the provisions of Section 47 of the Act have been duly complied with. Section 47 requires that the party applying for the enforcement of a foreign Award shall at the time of the application, produce before the Court: (i) the original Award or a copy thereof, duly authenticated in the manner required by the law of the country in which it was made ; (ii) the original agreement for arbitration or a duly certified copy thereof ; and (iii) such evidence as may be necessary to prove that the award is a foreign Award. This Court noted in its order dated 19th June, 2002 that the original Award was annexed at Exhibit A to the petition ; a certified copy of the agreement for arbitration had been tendered on the record and that a copy of the final Award had been duly certified and attested by a Notary Public in Singapore. The certified true copy, the learned single Judge noted, was sufficient evidence that the Award was a foreign Award. In these circumstances, this Court held that it was satisfied that the Award in question, was enforceable under the Arbitration and Conciliation Act, 1996 as a decree of this Court. The Court then made a reference to the judgment of the Supreme Court in Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., . in which the Supreme Court held that under the Act of 1996, a foreign Award is already stamped with the character of a decree. Once the Court has decided that the foreign Award is enforceable, it can proceed to take further steps in the execution of the Award and there arises no question of making the foreign Award a rule of the Court, or a decree of the Court again. The Supreme Court has held that it is not necessary to adopt two separate proceedings for the enforcement of a foreign Award, one for deciding the enforceability of the Award in order to make it the rule of the Court or decree and an other to take up execution thereafter. Having regard to the judgment of the Supreme Court, the learned single Judge directed the petitioner to put the Award in execution in accordance with the rules of this Court.

2. The learned single Judge, as already noted above, passed the aforesaid order on 19th June, 2002. On the same date, a letter was addressed by the respondent's Advocates to the Advocate appearing on behalf of the petitioner recording that they were appearing on behalf of the respondent in the arbitration petition and that all correspondence may thereupon be carried with them in the matter. On the next day, 20th June, 2002, the learned Advocate appearing on behalf of the petitioner informed the respondent's Advocates that the respondent had been served with a copy of the petition on 13th June, 2002 and that despite the acceptance of service by the respondent, no appearance had been entered on its behalf. The respondent's Advocates were informed that the matter had appeared on the board of the learned single Judge on 19th June, 2002 when, upon being satisfied with the service of the petition on the respondent and that the requisite condition for the recognition and enforcement of a foreign Award had been complied with, an order had been passed by the Court directing the petitioner to proceed in execution. On 24th June, 2002, a praecipe was moved by the advocate for the respondent before the Prothonotary and Senior Master for taking search of the papers and proceedings of the arbitration petition. On 5th July, 2002, the matter was again posted before the learned single Judge for speaking to the Minutes of the order on the application made by the petitioner on which day also there was no appearance on behalf of the respondent.

3. The respondent instituted a Notice of Motion before this Court on 30th July, 2002 for setting aside the order passed by this Court on 19th June, 2002. The case of the respondent in the Notice of Motion is that the arbitration petition had not been validly served on the respondent and that the respondent in fact, has no office at the place where it was sought to be served in Mumbai. In paragraph 4 of the affidavit in support of the Notice of Motion, it has been stated that the respondent had office premises previously at Vikas Centre, Santacruz and had left the same on or about 30th November, 2001 and shifted to G/4, Community Centre, Naraina Vihar, New Delhi 110 028. According to the respondent it had no office at Mumbai after 30th November, 2001. The petition, it is alleged, was served upon a company by the name of E.E.I, Industries Pvt. Ltd. which has an office at 604, Shah Nahar Industrial Estate, Worli, Mumbai and it has been averred that the aforesaid company "has no connection with the respondent". Moreover, it has been submitted that the endorsement on the letter of service was made by one Ms. Rege, an employee of E.E.I. Industries Pvt. Ltd. and who was not authorised to accept the process of the Court or letters on behalf of the respondent. The respondent claimed that it was "surprised and astonished to notice how their." rubber stamp has been affixed on the acknowledgement slip of the courier company. At the same time the respondent states that Ms. Rege on receipt of the papers contacted the respondent's office at New Delhi whereupon the present Advocates of the petitioner were contacted on 19th June, 2002. The respondent has claimed that it does not have any place at Mumbai within the jurisdiction of this Court.

4. In considering the correctness of the case which has been sought to be advanced on behalf of the respondent in the Notice of Motion, it would at the outset, be necessary to notice that the acknowledgement slip annexed at Exhibit A to the reply filed by the petitioner bears the stamp of Fortune International Ltd., Bombay, the respondent herein. A copy of the "Run Sheet" of the courier Company, M/s. First Flight Couriers Ltd., is also annexed by the petitioner to the reply to the Notice of Motion and that too bears the signature in token of acceptance and the rubber stamp of Fortune International Ltd. in token of receipt. The case of the respondent, is that service was effected on E.E.I. Industries Pvt. Ltd. and it has "no connection whatsoever with the respondent". But, that is belied by a copy of the balance-sheet of the respondent for the year ending 31st March, 2001 which is annexed to the reply filed by the petitioner. The balance-sheet contains in Schedule 6 a statement of investments of the respondent. Item No. (v) shows an investment in 14.5 lakh equity shares each of a face value of Rs. 10 in E.E.I. Industries Ltd. by the respondent. The value of the investment is Rs. 1.45 crores. In deposing in the affidavit in support of the Notice of Motion that the respondent has no connection with E.E.I. Industries Ltd. there has been a wilful suppression of this fact which is borne out by the copy of the balance-sheet which has been filed on the record by the petitioner.

5. The petitioner in its affidavit in reply to the Notice of Motion has stated that it had made enquiries in January, 2002, when proceedings for the enforcement of the Award were in process. The deponent of the affidavit dated 30th August, 2002 filed on behalf of the petitioner states that he had personally telephoned the former office address of the respondent at Santacruz when he was informed that the respondent had shifted office to the location at 604, Shah Nahar, Dr. E. Moses Road, Worli Naka, Worli, Bombay 400 018. The deponent of the affidavit filed on behalf of the petitioner further states that he thereafter called the respondent's Delhi Office whereupon the Telephone Operator gave him the new address at Worli, Mumbai. It has also been stated that in order to confirm the veracity of the information conveyed to him orally on the telephone, in or about the second week of February, 2002, he personally visited the address of the respondent at Worli shown in the cause title of the arbitration petition and saw a common signboard/nameplate of 6 companies viz., M.P. Fortune Mining Ltd., E.E.I. Industries Ltd., G.O.M. Overseas Pvt. Ltd., Eastern Engineering Industries, and M.O.I. Engineering Ltd. besides the respondent. He has stated that he enquired from persons in the said premises as to whether the respondent was carrying on business from the said premises and was informed that the respondent did in fact, conduct business from that location. The petitioner had also addressed a letter dated 7th August, 2002 to the Courier, M/s. First Flight Couriers Ltd. in view of the allegation levelled by the respondent that the Rubber Stamp was "fake and got up". In the reply dated 26th August, 2002 that has been addressed by the Courier Company, it has reiterated that the delivery was effected to the respondent on 13th June, 2002 at the address mentioned on the envelop and was received by the consignee against which a stamp of the respondent was affixed on the relevant document.

6. All the aforesaid circumstances, are in my view, sufficient to indicate that there has been a proper and valid service of the arbitration petition on the respondent on 13th June, 2002 prior to the passing of the order by this Court dated 19th June, 2002.

7. On behalf of the respondent, the learned counsel sought to urge that the respondent has its registered office at New Delhi and that previous communications of the petitioner to the respondent were addressed at the aforesaid office at New Delhi. Those communications have been annexed to the earlier arbitration petition (Arbitration Petition No. 265 of 2000) filed before this Court by the petitioner. The learned counsel sought to rely upon those communications including letter heads of the respondent which showed that as on October 1, 1999, the respondent had a registered and Head Office at New Delhi and a Branch Office in Mumbai at Santacruz. There can be no dispute about the fact that the respondent does have a registered office at New Delhi. The essential question that falls for consideration is as to whether the respondent has established that it had shifted its establishment from Mumbai and that on 13th June, 2002 it was not carrying On business at Mumbai and had no place of business within the jurisdiction of this Court. Having heard the learned counsel and upon perusing the material which has been produced on behalf of the contesting parties in these proceedings, I am of the view that the respondent has failed to establish that the arbitration petition was not validly served or that on the date on which it was sought to be served, the respondent had no place of business in Mumbai within the jurisdiction of this Court. The respondent has obviously not been candid or fair in attempting to deny any relationship with E.E.I. Industries Pvt. Ltd. and in attempting to contend that the arbitration petition was served only on the aforesaid company and not on the respondent. No cogent explanation whatsoever is forthcoming on the part of the respondent as to how the service of the petition was acknowledged by the affixation of a rubber stamp of the respondent. There is no reason, therefore, to discard the explanation which has been tendered by the petitioner in paragraphs 8 and 9 of the reply to the Notice of Motion.

8. The learned single Judge has directed that in view of law laid down by the Supreme Court in Fuerst Day Lawson Ltd. (supra), the petitioner will have to place the Award in execution in accordance with the rules of the Court. That being the position, it would be for the Court in the course of the execution proceedings, when the Award is placed in execution, to determine all questions relating to the execution of the Award. In so far as the Notice of Motion is concerned, I am of the view that no case has been made out for this Court to hold that the arbitration petition was not validly served or to set aside the previous order dated 19th June, 2002.

9. Counsel for the respondent submitted that the reason which motivated the filing of the petition in this Court is because of the ceiling on Court fees which would not be available if the petition were to be filed in Delhi. Even if, for the sake of argument, it is conceded that this was the motive in filing the petition before this Court. I do not see how that can affect the validity of the order of my learned Brother, S.A. Bobde, J., dated 19th June, 2002 if otherwise this Court does have jurisdiction under the Act. In Tata International v. Trisuns Chemical, a learned single Judge of this Court, Mr. Justice F.I. Rebello, held in the context of Section 47 of the Arbitration and Conciliation Act, 1996 that a petition for the enforcement of a foreign Award can be filed in any part of the country where a party answerable in the claim of arbitration may have money or where a suit for recovery can be filed. Enforcement of a foreign Award is not tied down, as in the case of a domestic Award under Part I to the subject matter of arbitration. The learned single Judge, relying upon a decision of the Supreme Court in Brace Transport Corporation of Monrovia Bermuda v. Orient Middle East Lines Ltd., Saudi Arabia and Ors., held that the 'subject matter of the Award' and the 'subject matter of an arbitration agreement' are two different and distinct expressions :

"In respect of a foreign Award, if the expression subject matter of the Award was to mean the same thing as the subject matter of the arbitration agreement, in most cases there would be no Court available where the Award could be the enforced as the entire cause of action in respect of the subject matter of the arbitration could be the foreign country. Merely because in the instant case, the contract was entered into in India cannot result in a different interpretation. The expression as the explanation itself permits forum hunting if that expression can be used. After considering all these provisions a similar view was taken in Arbitration Petition Lodg. No. 427 of 2001 in the case of Naval Gent Martine Ltd. v. Shivnath Rai Harnarain (I) Ltd. and Ors., decided on 5th July, 2001 in which at the ad interim stage, apart from other issues, the issue as to the meaning of the expression "subject matter of the Award" was in issue and has been similarly answered."

That was a case where the respondents had no office and did not carry on business within the jurisdiction of this Court. Moreover, it was not averred that the respondent had any money within the jurisdiction of the Court. On the facts of that case, it was held that this Court had no jurisdiction since the subject matter of the Award did not lie within the jurisdiction of this Court. The facts of this case are clearly different, though I am in respectful agreement with the ratio which has been laid down in the judgment of my learned brother, Mr. Justice F.I. Rebello, Here service has been duly effected on the office of the respondent in Mumbai.

10. The Notice of Motion is accordingly rejected.