Eitzen Bulk A/S, Denmark vs Ashapura Minechem Ltd
2015 Latest Caselaw 594 Bom

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           IN THE HIGH COURT OF JUDICATURE AT BOMBAY
               ORDINARY ORIGINAL CIVIL JURISDICTION




                                                                             
                    ARBITRATION PETITION NO.561 OF 2009




                                                     
                                along with
                     NOTICE OF MOTION NO.3143 OF 2009
                                    in
                    ARBITRATION PETITION NO.561 OF 2009




                                                    
    Eitzen Bulk A/S.                     )
    a company incorporated under the )
    laws of Denmark and having its office)




                                            
    at Camillo Eitzen House,             )
    Amerika Plads 38, 2100 Copenhagen,)
    Denmark.
                                    ig   )      ..    Petitioner/Applicant

                    Versus
                                  
    Ashapura Minechem Ltd.,               )
    a company incorporated under the      )
    Companies Act, 1956 and having its )
    registered office at Jeevan Udyog bldg.)
          


    3rd floor, 278, Dr.D.N. Road, Fort,   )
       



    Mumbai - 400 001.                     )   ..    Respondent
                    ---
    Mr.Prashant Pratap, Senior Advocate a/w Mr.Ashwini Sinha a/w Mr.Hari
    Wadhwana i/by Mr.Harsh Pratap for the Petitioner/Applicant.





    Mr.G.R.Joshi, Senior Advocate a/w Mr.Amrut Joshi a/w Mr.Nishit
    Dhruva a/w Mr.Prakash Shinde a/w Ms.Ambrin Saheed i/by M/s.MDP
    & Partners for the Respondent.
                    ---
                               CORAM             : R.D. DHANUKA, J.

                               RESERVED ON       : 28th October 2015.
                               PRONOUNCED ON :   3rd December 2015.

    Judgment :-

    .               By this petition filed under Sections 44 to 48 of the

Arbitration and Conciliation Act, 1996 (for short "Arbitration Act"), the petitioner prays for a declaration that the arbitral award dated 26th May

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2009 is enforceable as a decree of this Court and seeks various interim

reliefs including an order and direction against the respondent to file an affidavit through its Directors disclosing its assets, bank accounts

and receivables wherever these be located in India and overseas. Some of the relevant facts for the purpose of deciding this petition are as under :-

2. On 18th January 2008, the petitioner as an Owner and the respondent as a Charterer entered into a Contract of Affreightment

(COA) at Copenhagen, Denmark for various shipments of bauxite from

India to China spread over the periods 2008 to 2010. Clause 28 of the said contract provides "Any dispute arising under this COA is to be

settled and referred to Arbitration in London and English law to apply. During the period between February 2008 and April 2008, two shipments were performed by the respondent. On 29th September 2008,

the respondent terminated the contract with effect from June 2008

alleging force majeure/ frustration on the ground that Gujarat Government had interfered with the export of bauxite. The petitioner vide their letter dated 1st October 2008 denied any force majeure/

frustration and accepted the termination as a repudiatory breach and reserved its rights to claim damages.

3. On 23rd October 2008, the petitioner lodged its claim on the respondent at Mumbai for US $ 36 million and invoked arbitration agreement in terms of clause 28 of the COA and appointed Mr.Tim Marshall as an Arbitrator. Vide their letter dated 24 th October 2008, the respondent confirmed that they would appoint an arbitrator shortly but did not appoint any arbitrator. On 10 th November 2008, the

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respondent raised a new plea that the COA itself was illegal and void

as the Directorate General of Shipping, Mumbai had on 3 rd November 2008 refused to grant a license of the respondent for charter of foreign

ships. According to the letter dated 3rd November 2008, the respondent had not followed the prescribed guidelines.

4. The petitioner vide their letter dated 10 th November 2008 addressed to the respondent informed that the respondent was not entitled

to invoke its own failure to comply with the requirements of the Directorate General of Shipping to excuse their failure to ship cargoes

under the contract.

5. On 11th November 2008, the respondent filed a Special Civil Suit No.55 of 2008 in the Court of the Principal Senior Civil Judge at Jamkhambalia, Gujarat and obtained an ex parte injunction

restraining the petitioner from taking any steps pursuant to the arbitration

clause. On 11th November 2008, the respondent filed three other identical suits in respect of three other similar COAs with three other

parties namely British Marine Plc, IHX (UK) Ltd. and Armada Shipping Pte Ltd., Singapore and obtained identical ex parte ad-interim injunction.

6. By an order dated 12th January 2009, the Principal Senior

Civil Judge, Jamnagar dismissed the special civil suit of the respondent and vacated the ex parte injunction order dated 11 th November 2008. By the said order, learned Principal Senior Civil Judge held that the said Court had no territorial jurisdiction and that the respondent had not produced even prima facie evidence of any embargo by the Gujarat

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Government on the export of bauxite; that the COA could not be

considered to be illegal or void. It is held that the respondent was fully aware of the provisions of the Merchant Shipping Act and should have

applied for a license if it was necessary and could not take advantage of its own wrong. It is held that in any event, there was a general exemption for charter of foreign flat ships by Indian Companies under

Section 406 of the Merchant Shipping Act.

7. On 21st January 2009, the respondent herein filed an appeal being Appeal from Order No.27 of 2009 in the Gujarat High

Court and impugned the order passed by the Principal Senior Civil Judge, Jamnagar dated 12th January 2009. The Gujarat High Court did

not grant any stay and arbitration proceedings were allowed to be proceeded with. On 1st February 2009, the petitioner once again called upon the respondent to appoint an arbitrator. There was no response

from the respondent to the said letter. The respondent did not appoint

any arbitrator. In the month of February 2009, the petitioner approached the English High Court for appointment of a sole arbitrator

after notice to the respondent. By an order dated 5 th March 2009, the English High Court granted leave to appoint Mr.Tim Marshall as a sole arbitrator.

8. During the period between March 2009 and May 2009, the arbitration proceedings continued before the learned sole arbitrator. The respondent, however, chose to remain absent though served. The petitioner herein filed a detailed statement of claim, pleadings, documents, evidence and witness statements etc. before the learned

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arbitrator. The respondent, however, did not file any defense statement

despite several opportunities being granted and chose to remain absent. On 26th May 2009, the learned arbitrator after considering the pleadings,

documents, evidence, witness statements and contentions of the respondent as raised in the correspondence and the order of the Jamnagar Court dated 12th January 2009 made and published an award holding

that the respondent was in repudiatory breach and awarded the petitioner a sum of USD 36,306,104 + USD 74,135 + GBP 90,233.66 aggregating

to Rs.166.25 crores + interest thereon and costs.

9.

On 2nd June 2009, though a copy of the award was sent to the respondent at Mumbai, it did not raise any objection. On 11 th June

2009, the respondent filed a Caveat in this Court apprehending that the petitioner would file a petition for enforcement of the award in this Court.

10. On 2nd July 2009, the respondent unconditionally withdrew the Appeal from Order No.27 of 2009 which was filed before the Gujarat

High Court in view of the award made by the learned arbitrator and sought liberty to challenge the award by appropriate proceedings before the appropriate forum.

11. On 3rd July 2009, the respondent filed a Civil Misc. Application No.101 of 2009 before the District Judge, Jamkhambalia, District Jamnagar for setting aside the foreign award dated 26 th May 2009 under Section 34 of the Arbitration Act. On 10 th July 2009, the respondent filed an application (Exhibit 8) for injunction restraining

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the petitioner from enforcing the award in foreign jurisdiction or

anywhere outside India and particularly U.S.A., U.K. and Belgium. No order however is passed in favour of the respondent.

12. On 14th July 2009, the petitioner filed proceedings in Netherlands Court seeking a declaration that the award dated 26 th May

2009 is enforceable as a judgment of the Court. The respondent appeared in the said proceedings and filed their objections. The Netherlands

Court, however declared that the award is enforceable as a judgment of the Court on 17th March 2010.

13. On 24th July 2009, the United States District Court for

Southern State of New York declared the award dated 26 th May 2009 enforceable as a judgment of that Court. The proceedings filed by the petitioner were contested by the respondent.

14. On 27th July 2009, the petitioner filed present proceedings under Sections 47 to 49 of Part II of the Arbitration Act for enforcing

the award dated 26th May 2009 on the ground that the respondent was carrying on business within the jurisdiction of this Court and has its registered office and corporate office and assets within the territorial jurisdiction of this Court.

15. On 29th July 2009, the Antwerp Court declared the award dated 26th May 2009 enforceable as a judgment of the Court. The said proceedings were contested by the respondent. On 3 rd August 2009, the English High Court declared the award dated 26 th May 2009 enforceable

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as a judgment of the Court. On 29 th August 2009, the petitioner filed

a Notice of Motion No.3143 of 2009 in this Court under Section 49 (3) of the Arbitration Act for securing their claims under the said award

dated 26th May 2009.

16. On 18th November 2009, the petitioner filed a Special

Civil Application No.12021 of 2009 inter alia praying for quashing of the proceeding filed by the respondent in the Jamkhambalia Court on the ground of patent lack of jurisdiction including the ground of

maintainability of the application under Section 34 of the Arbitration

Act.

17. On 20th November 2009, the Gujarat High Court issued a notice and stayed further proceedings before the Jamkhambaliya Court. On 24th December 2009, the respondent filed a Letters Patent

Appeal No.2469 of 2009 before the Division Bench of the Gujarat High

Court impugning the order of the learned Single Judge dated 20 th November 2009. On 17th March 2010, the Netherlands Court declared the award dated 26th May 2009 enforceable as a judgment of the

Court. The said proceedings were also contested by the respondent. On 22nd September 2010, the Gujarat High Court passed an order and judgment in Letters Patent Appeal No.2469 of 2009 holding that the

respondent was entitled to challenge the foreign award under Section 34 of Part I of the Arbitration Act.

18. On 18th January 2011, the petitioner filed a Special Leave Petition before the Supreme Court of India challenging the said order dated 22nd September 2010 passed by the Gujarat High Court. On 8 th

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February 2011, the petitioner issued a notice and after hearing the

respondent who appeared on Caveat, stayed the judgment of the Gujarat High Court and also the proceedings before the District Judge,

Jamkhambalia. In the said special leave petition, the respondent filed a counter affidavit and prayed for stay of the proceedings pending before this Court. The said relief was opposed by the respondent.

19. On 16th August 2011, the respondent filed a notice of motion in this Court raising a preliminary objection as to jurisdiction of

this Court to entertain the present petition on the ground that the respondent

had already filed a petition under Section 34 of the Arbitration Act challenging the impugned award in the District Court at

Khambalia, Jamnagar, Gujarat. By an order dated 5 th October 2011, the said notice of motion filed by the respondent came to be dismissed. The present petition was directed to be listed for hearing on merits.

20. On 27th February 2012, the respondent filed special leave petition inter alia impugning the order dated 5 th October 2011 passed by this Court in the notice of motion which was filed by the respondent.

By an order passed by the Supreme Court on 27 th February 2012, further proceedings in the present petition were stayed until 16th April 2012. The said stay was extended till 22nd August 2012. It is the case of the

petitioner herein that the said stay to the present proceedings granted by the Supreme Court on 22 nd August 2012 and the same was not further extended by the Supreme Court.

21. The respondent has filed an affidavit in the present proceedings opposing the grant of relief on various grounds. Mr.Pratap,

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learned senior counsel appearing for the petitioner invited my attention

to various orders passed by the Court at Gujarat and this Court and also to the findings recorded by the learned arbitrator in the impugned

award. The learned senior counsel also invited my attention to the objections raised by the respondent in their affidavit-in-reply and has dealt with those objections during the course of arguments.

22. Learned senior counsel appearing for the petitioner submits that issue of jurisdiction raised by the respondent in the affidavit-in-

reply on the ground that by virtue of Section 42 of the Arbitration Act,

it was only the District Court, Jamkhambaliya which has the exclusive jurisdiction to entertain, try and adjudicate upon any subsequent

application/petition under the Act including the present petition is totally frivolous and in any event, does not survive at this stage. In support of this submission, learned senior counsel placed reliance on the order

passed by this Court on 5th October 2011 in Notice of Motion No.3975

of 2009 which was filed by the respondent in the present petition inter alia praying for stay of the present proceedings by raising a preliminary

objection as to jurisdiction of this Court to entertain the present petition in view of the respondent already having filed a petition under Section 34 of the Arbitration Act before the Court at Jamkhambaliya and contending that in view of Section 42, the present proceedings cannot be

proceeded with in this Court.

23. Learned senior counsel submits that the issue of jurisdiction raised by the respondent has already been considered by this Court by an order and judgment dated 5th October 2011. He submits that this Court after considering the provisions of COA and also various judgments of

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the Supreme Court and this Court, the issue of jurisdiction raised by the

respondent has been rejected. He submits that though the said proceedings filed by the respondent under Section 34 of the Arbitration

Act impugning the arbitral award is pending, this Court took a cognizance of these proceedings and proceeded on the premise that the said proceedings were valid and maintainable and that this Court has

dismissed the notice of motion filed by the respondent.

24. It is held that all questions pertain to maintainability and

validity of the said proceedings must be decided by the Gujarat High

Court and not by this Court. He submits that this Court has already considered the clause 28 of the COA by which the parties had agreed

that the law governing the arbitration will be the English law. The Arbitration Act, 1996 has no reference to an Umpire whereas Section 21 of English Arbitration Act, 1996 expressly provides for an Umpire.

There was a reference to an Umpire in clause 28 of COA. This Court

accordingly held that clause 28, therefore, obviously referred to English Arbitration Act, 1996 and not Indian Arbitration Act, 1996. In the said

order and judgment, this Court held that the provisions of Part I of the Arbitration Act were impliedly excluded by the parties and thus Section 42 would not apply to the present case.

25. It is submitted by the learned senior counsel that in the said order and judgment dated 5th October 2011 passed by this Court holding that the provisions of Part I of the Arbitration Act were impliedly excluded by the parties in this case, though the special leave petition filed by the respondent is pending, stay of the present proceedings initially granted by the Supreme Court on 27th February 2012 is not extended

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beyond 22nd August 2012. He submits that though the present proceedings

were adjourned to enable the respondent to apply before the Supreme Court for clarification that the stay to the proceedings granted by an

order and judgment dated 27th February 2012 was specifically extended beyond 22nd August 2012 or not, he submits that to the knowledge of the petitioner, the said order dated 27th February 2012 was not extended

beyond 22nd August 2012. The respondent, however, did not produce any order of extension of stay by the Supreme Court though liberty was

granted to the respondent.

26.

Learned senior counsel for the petitioner submits that though issue of jurisdiction has been specifically rejected by this Court

in this case, even otherwise since the parties in the COA agreed that the English law would apply to the parties and the seat of arbitration was at London and the entire proceedings were held in London, even on that

ground, it is clear that the parties had expressly or by implication agreed

to exclude the provisions of Part I of the Arbitration Act.

27. Learned senior counsel placed reliance on the judgment of

the Supreme Court in the case of Harmony Innovation Shipping Ltd. Vs. Gupta Coal India Ltd. & Anr., reported in 2015 SCC OnLine Sc 190 and in particular paragraphs 32 and 44 to 48 thereof. He submits

that the Supreme Court has considered the identical arbitration clauses and has held that Part I of the Arbitration Act would not apply.

28. Learned senior counsel also placed reliance on the judgment of the Supreme Court in the case of Union of India Vs. Reliance Industries Limited & Ors., reported in 2015 SCC OnLine SC 835 in

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support of the submission that seat of arbitration was at London and

thus the provisions of Part I of the Arbitration Act were excluded.

29. Learned senior counsel also placed reliance on the following judgments of this Court :-

i) Harkirat Singh Vs.Rabobank International Holding B.V. Co-

operative Centrale Raiffeisen delivered on 20th January 2015 in Appeal No.171 of 2007 (paragraphs 22 to 26);

ii) Pol India Projects Limited Vs. Aurelia Reederei Eugen Friederich

GmbH reported in 2015 SCC OnLine Bom 1109;

iii) Sideralba S.P.A. Vs. Shree Precoated Steels Ltd. delivered on 13 th October 2015 in Arbitration Petition No.84 of 2013;

iv) Avitel Post Studioz Ltd. & Ors. Vs. HSBC PI Holdings (Mauritius) Ltd., delivered on 28th September 2015 in Arbitration Petition Nos.690 of 2015 and 757 of 2015;

v) Armada (Singapore) Pte.Ltd. Vs.Ashapura Minechem Ltd.,

delivered on 8th September 2015 in Arbitration Petition No.1359 of 2010 and other connected matters and;

vi) Pacific Basin IHX (UK) Ltd. Vs.Ashapura Minechem Ltd., delivered on 3rd July 2015 in Arbitration Petition No.24 of 2010.

30. Learned senior counsel invited my attention to one of the

objections raised by the respondent in the affidavit-in-reply that the arbitration agreement was not valid under the law to which the parties have subjected to it i.e. Indian law. The respondent has raised an objection that the COA including the arbitration agreement was void ab initio being contrary to Indian law. Learned senior counsel submits that the parties in this case had not subjected the arbitration agreement to

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Indian law but had expressly chosen English law as the law applicable

to the disputes as well as to the arbitration agreement. He submits that the contract is entered into at Copenhagen, Denmark. The petitioner is a

Danish Company. The shipments were to port in China. The freight was to be paid in U.S. Dollar currency in New York. The contract itself provided that the law applicable was an English law. He submits

that the contract was most connected to India. The said objection thus raised by the respondent is totally frivolous.

31. The next objection raised in the affidavit-in-reply by the

respondent is that the award of damages granted by the learned arbitrator is ex facie contrary to the public policy or is exorbitant and exemplary

and penal in nature. The award of damages is not compensatory in nature for the loss actually suffered. It is alleged by the respondent that the impugned award ignored fundamental or basic principle of mitigation

of loss. Learned senior counsel appearing for the petitioner invited my

attention to the findings of facts rendered by the learned arbitrator on quantification of damages while dealing with the claim for damages in

paragraphs 42 to 54 of the impugned award. He submits that though various opportunities were given to the respondent to appear and to lead evidence before the learned arbitrator, the respondent chose not to appear and to defend the claim made by the petitioner. The petitioner

examined the witness. Quantification of damages is based on the evidence led by the petitioner. He submits that the damages claimed are to be aggregated by all three matters on similar basis. Two of the petitions for such enforcement of the arbitral award of those two parties have been allowed by this Court in Arbitration Petition No.1359 of

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2010 and in Arbitration Petition No.24 of 2010 respectively. He submits

that this Court cannot have a second look on merits of the award. The findings of facts rendered by the learned arbitrator cannot be re-

appreciated by this Court while dealing with the objection to the enforcement of the foreign award.

32. In support of this submission, learned senior counsel placed reliance on the following judgments :-

i) Judgment of the Supreme Court in the case of Shri Lal Mahal Limited Vs.Progetto Grano Spa, reported in (2014) 2 SCC 433;

ii) Judgment of the Supreme Court in the case of Smita Conductors Ltd. Vs. Euro Alloys Ltd., reported in (2001) 7 SCC 728;

iii) Judgment of this Court in the case of Sideralba S.P.A. Vs.Shree Precoated Steels Ltd., delivered on 13th October 2015 in Arbitration Petition No.84 of 2013;

iv) Judgment of this Court in the case of Armada (Singapore) Pte.

Ltd. Vs. Ashapura Minechem Ltd., delivered on 8 th September 2015 in Arbitration Petition No.1359 of 2010 and;

v) Judgment of this Court in the case of M/s.Louis Dreyfus Commodities Vs.Sakuma Exports Limited; delivered on 6 th October 2015 in Arbitration Petition No.47 of 2015.

33. In so far as the issue of unjust enrichment raised by the respondent is concerned, learned senior counsel submits that the learned arbitrator has rendered a finding of fact. The petitioner has not recovered the amount already awarded by the learned arbitrator. He submits that in any event, the issue of the alleged unjust enrichment touches the merit

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of the award and cannot travel beyond the scope of Section 48 of the

Arbitration Act. The issue of unjust enrichment raised by the respondent across the bar does not relate to enforcement of the foreign award

under Section 48 of the Arbitration Act. Learned senior counsel placed reliance on paragraph 11 of the judgment of the Supreme Court in the case of Smita Conductors Ltd. Vs. Euro Alloys Ltd. (supra) in support

of this submission. It is submitted by the learned senior counsel that four foreign countries have declared the award as enforceable after

considering the objection raised by the respondent. He submits that similar objections raised by the respondent in the present proceedings

have already been rejected by the Supreme Court and this Court in catena of the decisions which are squarely applicable to the facts of this

case.

34. In so far as the award of arbitration costs by the learned

arbitrator is concerned, learned senior counsel for the petitioner submits

that the petitioner has been awarded the said costs in view of costs incurred by the petitioner and in view of the respondent committing the

breach of the arbitration agreement by filing a frivolous suit.

35. In so far as the objection raised by the respondent about execution of the said foreign award as prayed in the present petition in

view of the pendency of the reference filed by the respondent before the BIFR is concerned, learned senior counsel for the petitioner clarified that the petitioner is restricting the prayer only for a declaration that the said foreign award is enforceable without filing appropriate proceedings for seeking enforcement of the said award as is permissible in law.

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36. In so far as the issue raised by the respondent that the

respondent could not enforce the said COA in view of the order passed by the Directorate General of Shipping is concerned, learned senior

counsel for the petitioner submits that there was no incapacity of the respondent to perform their part of the obligation under the said agreement of COA. The respondent had terminated the said COA on

29th September 2008 whereas the Directorate General of Shipping had refused to grant permission only on 3rd November 2008. He submits that

in any event, since the respondent was responsible for receiving/ obtaining of such permission, the respondent cannot be allowed to raise

such plea while objecting to enforcement of the foreign award under Section 48 of the Arbitration Act. In support of this submission, learned

senior counsel placed reliance on the judgment of the Delhi High Court in the case of Alcatel India Limited & Anr. Vs. Koshika Telecom Limited & Ors., reported in 2004 (3) Arb. L. R. 107 (Delhi) and the

judgment of this Court in the case of Pol India Projects Limited

(supra). Learned senior counsel submits that the respondent did not raise any issue in the affidavit-in-reply that the Directorate General of Shipping

has refused to grant permission. The respondent had already performed two shipments under the said COA.

37. It is submitted by the learned senior counsel that though the

petitioner cannot execute the arbitral award against the respondent in view of the pendency of the reference before the BIFR under the provisions of the Sick Industrial Companies Act, 1985 (SICA), the respondent cannot oppose the prayer clause (e) by which the petitioner seeks an order and direction against the respondent to file an affidavit

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through its Directors disclosing its assets, bank accounts and receivables

wherever these be located in India and overseas. He submits that there is no bar under the provisions of the SICA in granting the prayer of

disclosure of the assets. In support of this submission, learned senior counsel for the petitioner placed reliance on the order and judgment delivered by this Court in the case of Armada (Singapore) Pte. Ltd.

(supra). He submits that this Court has granted such relief of disclosure of assets against the respondent herein.

38. Mr.Joshi, learned senior counsel for the respondent, on the

other hand, submits that the status-quo order passed by the Supreme Court on 27th February 2012 thereby staying the further proceedings

in the present petition is in force and thus during the pendency of the said special leave petition, the present proceedings cannot be disposed of by this Court. He submits that the said special leave petition filed by

the respondent is still pending before the Supreme Court.

39. The next submission of the learned senior counsel for the

respondent is that in view of the pendency of the proceedings filed by the respondent under the provisions of the SICA, the present proceedings for execution of the foreign award are liable to be stayed under Section 22 of the SICA. In support of this submission, learned senior counsel

placed reliance on the judgment of the Supreme Court in the case of Paramjeet Singh Patheja Vs. ICDS Ltd., reported in (2006) 13 SCC

322. He submits that the present application for enforcement of the foreign award is in the nature of a suit and is thus liable to be stayed.

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40. The next submission of the learned senior counsel for the

respondent is that in view of pendency of the application filed by the respondent under the Arbitration and Conciliation Act, 1996 in the Court

of Jamkhambalia, the present proceedings under Section 48 are not maintainable and/or are required to be stayed. He submits that in view of the order passed by this Court on 5 th October 2011 in Notice of

Motion No. 3975 of 2009 and more particularly paragraph 22 of the said order, this Court cannot decide the issue about maintainability of

the said arbitration petition filed by the respondent under Section 34 of the Arbitration Act. This Court has to proceed on the basis that the

Court at Jamkhambalia has jurisdiction to entertain, try and dispose of the said arbitration petition filed by the respondent.

41. Learned senior counsel for the respondent submits that some of the issues raised by the respondent in the affidavit-in-reply by

way of objection to the present petition for enforcement have already

been decided conclusively and thus in view of the judgment of the Supreme Court and this Court, the respondent is not specifically pressing

those issues for consideration of this Court.

42. It is submitted by the learned senior counsel for the

respondent that the learned arbitrator could not have allowed the claim for damages without any proof and that the award of damages would amount to unjust enrichment in favour of the petitioner and against the respondent.

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43. It is lastly submitted by the learned senior counsel for the

respondent that even if this Court comes to a conclusion that the petitioner is entitled to seek a declaration that the said foreign award is

enforceable as decree, this Court cannot at this stage direct the respondent or its Directors to file any affidavit of disclosure of their assets in view of pendency of the reference before BIFR. He submits that such a

direction for disclosure of the assets is also in the nature of the order in execution of the foreign award which is barred under Section 22 of the

provision of the SICA.

44.

Mr.Pratap, learned senior counsel for the petitioner in rejoinder submits that each and every objection raised by the respondent

in the affidavit-in-reply are already rejected in various judgments of the Supreme Court and this Court which are referred by the learned senior counsel in his submission and none of the objections thus can be

considered while deciding this petition for enforcement of the foreign

award.

45. In so far as the submission of the learned senior counsel for the respondent that the present proceedings cannot be proceeded with on the ground that there was a status-quo order passed by the Supreme Court in the special leave petition filed by the respondent is concerned,

it is submitted that the Supreme Court had granted status-quo for a limited period. The said status-quo order was not continued thereafter. He submits that though various opportunities were given by this Court to the respondent to seek clarification from the Supreme Court and/or to seek continuation of the status-quo order and on that ground, this

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matter was adjourned, the respondent did not seek any clarification

from the Supreme Court and in any event did not obtain continuation of the status-quo order passed by the Supreme Court as far back as 27 th

February 2012.

46. In so far as the submission of the learned senior counsel

for the respondent that in view of pendency of the reference filed by the respondent before BIFR, the petitioner cannot even seek declaration

from this Court that the said foreign award is enforceable as decree is concerned, learned senior counsel placed reliance on the judgment of

this Court in the case of Armada (Singapore) Pte. Ltd.(supra) and submits that this Court has already rejected this submission of the

respondent who was a party to the said proceedings and the said judgment squarely applies to the facts of this case.

47. In so far as the submission of the learned senior counsel for

the respondent that this Court cannot pass any order against the respondent to file affidavit of disclosure of their assets is concerned,

learned senior counsel placed reliance on the judgment delivered by this Court on 30th April 2012 in Chamber Summons No.638 of 2011 in Arbitration Petition No.1360 of 2010 filed by Armada (Singapore) Pte. Ltd. against Ashapura Minechem Ltd. and would submit that in the

identical matter, in which the respondent was a party, this Court had directed the respondent to file an affidavit of disclosure and to furnish the details of immovable and movable properties of the respondent. Reliance is also placed on the order and judgment passed by this Court on 8th September 2015 in Chamber Summons No.639 of 2011 along

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with Notice of Motion No.657 of 2014 in Arbitration Petition No.1359

of 2010 2010 filed by Armada (Singapore) Pte. Ltd. against Ashapura Minechem Ltd. (supra) and submits that similar direction had been issued

by this Court in the identical proceedings which order and judgment would apply to the facts of this case.

REASONS AND CONCLUSIONS :

48. I shall first deal with the issue whether Part I of the

Arbitration Act was excluded by the parties in writing or whether there

was any implied exclusion or not.

49. This Court by an order dated 5th October 2011 in Notice of Motion No.3975 of 2009 after considering the arbitration agreement and other provisions of the COA has held that the parties had agreed

that English law would apply to the parties to conduct the arbitration

proceedings. The parties had agreed that the law governing the arbitration would be the English law. There was a reference to an Umpire in clause

28 of COA. The Arbitration Act, 1996 has no reference to an Umpire whereas Section 21 of English Arbitration Act, 1996 expressly provides for an Umpire. It is held that that clause 28, therefore, obviously refers to English Arbitration Act, 1996. This Court accordingly held that

the provisions of Part I of the Arbitration Act were impliedly excluded by the parties and thus Section 42 would not apply to the present case. It is not in dispute that against the said order passed by this Court in the said notice of motion filed by the respondent has not been set aside by the Supreme Court.

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50. Be that as it may, a perusal of the arbitration agreement

clearly indicates that the parties in the COA had specifically agreed that English law would apply to the parties and the seat of arbitration would

be at London and that the entire arbitral proceedings would be held in London.

51. The Supreme Court in the case of Harmony Innovation Shipping Ltd. (supra) has considered the identical arbitration clause and

has held that Part I of the Arbitration Act would not apply. In the case of Union of India Vs. Reliance Industries Limited & Ors. (supra), it is held

that since seat of arbitration was at London, the provisions of Part I of the Arbitration Act were excluded.

52. The Division Bench of this Court in the case of Harkirat Singh (supra) has interpreted identical provisions in the agreement and

has held that the provisions of Part I of the English Arbitration Act,

1996 would apply where the seat of arbitration is in England. The Division Bench has also considered Section 3 of the English Arbitration

Act, 1996. Section 3 defines the seat of arbitration to mean the juridical seat of the arbitration designated by the parties to the arbitration agreement or any arbitral or institution or person vested by the parties with powers in that regard. It is held that if the seat of arbitration is in

England, the provisions of Part I of the English Arbitration Act, 1996 would apply. The provisions of Part I of the Indian Arbitration Act, 1996 are excluded. Similar view has been taken by this Court also in the cases of Avitel Post Studioz Ltd. & Ors. (supra), Pol India Projects Limited (supra) and M/s.Louis Dreyfus Commodities (supra). In my

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view, since the juridical seat of the arbitration in this case was at London,

the English law would apply to the parties and thus it is made clear that the parties had expressly or by implication excluded the provisions of

Part I of the Arbitration Act, 1996.

53. In so far as the submission of the learned senior counsel for

the respondent that the Supreme Court had granted status-quo order thereby staying the present proceedings and the status-quo is in force

till date is concerned, a perusal of the orders produced by both the parties clearly indicates that the status-quo order passed by the Supreme Court

on 27th February 2012 thereby staying further proceedings was initially granted until 16th April 2012 and thereafter was extended till 22 nd

August 2012. The said order was granted upto a particular date and has not been extended further by the Supreme Court. Be that as it may, the respondent though obtained adjournment from this Court to seek

clarification from the Supreme Court or to seek continuation of the

status-quo order granted in the year 2012, the respondent did not produce any such clarification from the Supreme Court and did not

apply for continuations of the status-quo order. In my view, there is thus no substance in this submission of the learned senior counsel for the respondent.

54. In so far as the submission of the learned senior counsel for the respondent that the learned arbitrator could not have awarded any claim for damages on the ground that the same was either not proved or there was any unjust enrichment in favour of the petitioner is concerned, in my view, the issue of the alleged unjust enrichment

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touches the merits of the award and cannot be adjudicated upon while

deciding the petition for enforcement of the foreign award under Sections 47 and 48 of the Arbitration Act. It was not the case of the

respondent that the amount awarded by the learned arbitrator as and by way of damages was already recovered from the respondent and inspite thereof the said claim for damages, was allowed in favour of the

petitioner.

55. This Court in the case of M/s.Louis Dreyfus Commodities (supra) has considered the similar issue and has held that the finding

of fact rendered by the learned arbitrator while allowing the claim for damages cannot be interfered with at the stage for enforcement of the

foreign award under Section 48 of the Arbitration Act. The said foreign award is final in so far as the merits of that claim awarded by the arbitral tribunal is concerned. In my view, the said judgment of this Court

squarely applies to the facts of this case.

56. This Court in the case of Sideralba S.P.A.(supra) has

considered the similar issue and has held that the finding of fact rendered by the arbitral tribunal while allowing the claim for damages cannot be interfered with and the Court cannot refuse to enforce the foreign award under section 48 of the Arbitration Act by adjudicating

upon the disputes between the parties on merits. The said judgment squarely applies to the facts of this case. This Court has also rejected the submission of the respondent in the said matter that the expression "fundamental policy of Indian law" as interpreted by the Supreme Court in the case of Associate Builders Vs. Delhi Development

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Authority reported in (2015) 3 SCC 49 shall apply to enforcement of

the foreign award under Section 48(2)(b) of the Arbitration Act though being the similar expression.

57. The Supreme Court in the case of the Shri Lal Mahal Ltd. (supra) has held that Section 48 of the Arbitration Act, 1996 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. It is held that 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. In my view, this Court cannot adjudicate upon the merits of the case and cannot interfere with the findings of facts recorded by the learned arbitrator

while awarding the claim for damages and while dealing with the

present petition for enforcement of the foreign award. This Court has no power to review the foreign award on merits and to interfere with the

findings of facts. The judgment of the Supreme Court in the case of Shri Lal Mahal Ltd. (supra) squarely applies to the facts of this case. Similar view has been taken by the Supreme Court in the case of Smita Conductors Ltd. (supra) and it is held that the expression "public

policy" means a public policy of India and the recognition and enforcement of foreign award cannot be questioned on the ground that it is contrary to public policy of foreign countries. The said expression has been used in a narrow sense, must necessarily be construed as applied in private international law.

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58. In so far as the objection raised in the affidavit-in-reply

that the COA itself was not enforceable on the ground that the Directorate General of Shipping has refused to grant permission is

concerned, in my view there is no merit in this submission of the learned senior counsel of the respondent. A perusal of the record indicates that the respondent had permitted the COA on 29 th September 2008 whereas

the Directorate General of Shipping had refused to grant permission only on 3rd November 2008. This Court after adverting to the judgment

of the Supreme Court in the case of Shri Lal Mahal Ltd.(surpa) in the case of Pol India Projects Limited (supra) ig has held that simplicitor violation of the provisions or the regulations of the Indian law would not be contrary to the fundamental policy of the Indian law and thus

enforcement of the foreign award cannot be objected to on that ground. It is held that refusal of permission of Directorate General of Shipping under the provisions of Merchant Shipping Act cannot fall

under the expression "some incapacity" mentioned in Section 48(1)(a)

of the Arbitration Act.

59. Be that as it may, it was the responsibility of the respondent

to obtain such permission and the respondent having failed to obtain such permission, cannot be allowed to raise such plea by raising an objection to the enforcement of the foreign award under Section 48 of

the Arbitration Act. This issue has already been decided by this Court in the judgment delivered on 8 th April 2015 in the case of Pol India Projects Limited (supra) which squarely applies to the facts of this case. In my view, the recognition and enforcement of a foreign award cannot be denied merely because the award was in contravention of the law of India.

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60. In my view, the scope of objection under Section 48 of the

Arbitration Act to the enforcement of the foreign award is very limited. None of the objections raised by the respondent falls under any of the

grounds permissible under Section 48 of the Arbitration Act. The respondent has not furnished any proof before this Court as to why the enforcement of the foreign award shall be refused. The foreign award is

thus enforceable under Part II of the Arbitration Act and is binding for all the purposes on the parties. I am therefore of the view that the

foreign award is already stamped as decree. However, in view of the pendency of the proceedings before the BIFR, the petitioner would not

be entitled to take steps in execution of the award and seek any relief which would be in violation of Section 22 of Sick Industrial Companies

(Special Provisions) Act, 1985 without permission of the BIFR.

61. In so far as the submission of the learned senior counsel for

the respondent that in view of pendency of the reference before BIFR

under the provisions of the SICA filed by the respondent and thus the present proceedings are thus liable to be stayed is concerned, this Court

has considered this issue in the case of Armada (Singapore) Pte. Ltd. (supra) after adverting to the judgment of this Court in the case of Tropic Shipping Ltd. (supra). It is held that there is no bar under Section 22 of the SICA to declare that the foreign award rendered is

enforceable as decree of this Court. It is held that the proceedings under Sections 46 to 48 would not be the proceedings in execution or distress as contemplated under Section 22 of the SICA. Under Section 49 of the Arbitration Act, the Court empowers to declare such foreign award as enforceable. In my view, the said judgment squarely applies to the facts

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of this case. The judgment of the Supreme Court in the case of

Paramjeet Singh Patheja (supra) relied upon by the learned senior counsel for the respondent does not assist the case of the respondent.

The Supreme Court in the said judgment has not considered the powers under Sections 46 to 48 while hearing the petition for enforcement of the foreign award. I am thus not inclined to accept the submission of

the learned senior counsel that this Court cannot even declare that the said foreign award is enforceable as decree of this Court.

62. In so far as the execution of the said decree is concerned,

this Court has decided the said issue in the judgment of this Court in the case of Armada (Singapore) Pte. Ltd.(supra).

63. In so far as the submission of the learned senior counsel for the respondent that this Court cannot direct the respondent or its

Directors to file affidavit of disclosure in view of pendency of the

reference before BIFR is concerned, this Court has already granted such relief in the identical proceedings by an order dated 30th April 2012 in

Chamber Summons No.638 of 2011 in Arbitration Petition No.1360 of 2010 filed by Armada (Singapore) Pte. Ltd. against the same respondent. Similar order is also passed by this Court in another companion matter in which the respondent herein was a party

respondent.

64. In my view, even though the reference filed by the respondent under the provisions of the SICA is pending before the BIFR, the issuance of direction by this Court against the respondent or

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its Directors to file an affidavit of disclosure of their assets as prayed in

prayer clause (e) of the arbitration petition is not barred under Section 22 of the provisions of SICA. This Court while declaring that the

arbitration award is enforceable as decree of this Court, further simplicitor direction for disclosure of the assets would not be in the nature of execution of the said foreign award.

65. I therefore pass the following order :-

(i) It is declared that the arbitration award dated 26th May 2009 is enforceable as decree of this Court;

(ii) Arbitration Petition No.561 of 2009 is made absolute in terms of prayer clauses (a) and (e);

(iii) An affidavit of disclosure shall be filed by the respondent in terms of prayer clause (e) within four weeks from the date of this order;

(iv) In view of disposal of the arbitration petition, notice of motion

does not survive and is accordingly disposed of ;

    (v)     There shall be no order as to costs.





                                                      R.D. DHANUKA, J.