Gujarat High Court

Image Mine Products Pvt. Ltd vs Mercuria Energy Trading Pte Ltd on 10 April, 2023

Bench: Biren Vaishnav

      C/LPA/858/2022                              JUDGMENT DATED: 10/04/2023




              IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                 R/LETTERS PATENT APPEAL NO. 858 of 2022
              In R/SPECIAL CIVIL APPLICATION NO. 1107 of 2020

                                     With

                 CIVIL APPLICATION (FOR STAY) NO. 1 of 2022
                 In R/LETTERS PATENT APPEAL NO. 858 of 2022

FOR APPROVAL AND SIGNATURE:


HONOURABLE THE ACTING CHIEF JUSTICE MR. JUSTICE A.J.DESAI

and

HONOURABLE MR. JUSTICE BIREN VAISHNAV

==========================================================

1     Whether Reporters of Local Papers may be allowed                  Yes
      to see the judgment ?

2     To be referred to the Reporter or not ?                           Yes

3     Whether their Lordships wish to see the fair copy                 Yes
      of the judgment ?

4     Whether this case involves a substantial question                 Yes
      of law as to the interpretation of the Constitution
      of India or any order made thereunder ?

==========================================================
                         IMAGE MINE PRODUCTS PVT. LTD.
                                     Versus
                       MERCURIA ENERGY TRADING PTE LTD.
==========================================================
Appearance:
MR MI HAVA(348), ADVOCATE WITH MS. SWATI SINGHAL, ADVOCATE
WITH MS. ANJASI SHAH, ADVOCATE for the Appellant(s) No. 1
MR. AMITAVA MAJUMDAR, ADVOCATE WITH MR. SURAJ SONOWAL
WITH MR HARSH N PAREKH(6951) for the Respondent(s) No. 1
==========================================================

    CORAM:HONOURABLE THE ACTING CHIEF JUSTICE MR.
          JUSTICE A.J.DESAI


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       C/LPA/858/2022                             JUDGMENT DATED: 10/04/2023




              and
              HONOURABLE MR. JUSTICE BIREN VAISHNAV

                             Date : 10/04/2023

                             ORAL JUDGMENT

(PER : HONOURABLE THE ACTING CHIEF JUSTICE MR. JUSTICE A.J.DESAI)

(1) By way of present Appeal under Clause 15 of Letters

Patent, the appellant - original respondent has challenged an

oral judgment dated 29.04.2022 passed by the learned Single

Judge in the captioned writ petition, by which the learned Single

Judge has accepted the petition filed by the present respondent

by holding that High Court of Gujarat has jurisdiction to execute

the foreign award dated 26.04.2016 passed by the learned

London Court of International Arbitration (hereinafter referred

to as 'the LCIA' for short), under section 47 of the Arbitration

and Conciliation Act, 1996.

(2) The Appeal came to be admitted on 05.07.2022. In

response to the notice issued by this Court, the respondent has

appeared and contested the Appeal. The matter is taken up for

final hearing today.

C/LPA/858/2022 JUDGMENT DATED: 10/04/2023

(3) The short facts emerged from the records are as

under : -

(3.1) That the parties to the present proceedings entered

into a contract for supply of coal on 05.12.2014. The said

contract was executed on certain terms and conditions. One of

the condition was to refer the dispute, if arises, between the

parties to LCIA for its resolution. In view of the dispute that

arose between the parties, the matter was referred to LCIA and

thereafter the award was passed by the said LCIA.

(3.2) The present appellant filed a suit being Special Civil

Suit No. 1 of 2015 before the District Court, Mehsana being

Principal Senior Civil Judge for declaration and injunction

against the present respondent raising contention about the

applicability of the arbitration clause. It was the case of the

present appellant that there was no arbitration clause. The said

suit is pending before the concerned Court.

(3.3) Meanwhile, the present respondent has filed the

C/LPA/858/2022 JUDGMENT DATED: 10/04/2023

petition for execution of award under section 47 of the Act being

IAAP No. 106 of 2016 for execution of the award. The said

proceedings were pending. During the pendency of the said

proceedings, by an amendment i.e. Act No. 33 of 2019, Section

87 was amended and by amending the said provision, the

jurisdiction of the execution of the arbitration award was to be

decided by the concerned Court having jurisdiction.

(3.4) The effect of Section 33 of 2019 was given from

23.10.2015. Considering the amended provision, the learned

Single Judge by common oral dated 19.09.2019 disposed of the

said arbitration petition being IAAP No. 106 of 2016 by holding

that the Mehsana Court has jurisdiction to execute the award.

The amended provisions were a subject matter of challenge as

the constitutional validity of the provisions of the amended

section 87 was pending before the Hon'ble Apex Court in the

case of Hindustan Construction Company Limited and

Another versus Union of India and Others reported in

(2020) 17 SCC 324. The Hon'ble Apex Court by its judgment

dated November 27, 2019 held that amended provisions of

C/LPA/858/2022 JUDGMENT DATED: 10/04/2023

Section 87 which gave retrospective effect from 23.10.2015 is

contrary to the provisions of Article 14 of the Constitution of

India and struck down the said provision.

(3.5) The present respondent therefore, immediately

approached this Court by way of filing captioned writ petition

and by relying upon the said decision of Hindustan

Construction Company Limited and Another versus Union

of India and Others, which is reported as (2020) 17 SCC

324, prayed as under : -

"24. (A) Your Lordships may be pleased to declare that this Hon'ble Court has the jurisdiction to hear the petition under Arbitration Act IAAP No. 106 of 2016 in terms of the explanation to section 47 of the Arbitration Act. (B) Your Lordships may be pleased to pass appropriate directions restraining the District Court at Mehsana from hearing the petition under Arbitration Act i.e. IAAP No. 106 of 2016;

(C) Your Lordships may be pleased to direct the Registry of the District Court at Mehsana to return the records and proceedings of the petition under Arbitration Act, i.e. IAAP No. 106 of 2016, to this Hon'ble Court and further pass appropriate directions to have the petition under Arbitration Act i.e. IAAP No. 106 of 2016 listed before the Hon'ble Judge of this Court vested with the roster to hear such matters."

(3.6) In response to notice issued by this Court, the

present appellant appeared before the learned Single Judge and

C/LPA/858/2022 JUDGMENT DATED: 10/04/2023

filed reply opposing the grant of reliefs prayed for by the

original petitioner - present respondent. Learned Single Judge

after considering various provisions of law and judgments, laid

down by the Hon'ble Apex Court in the case of Hindustan

Construction Company Limited (supra), held that in view of

provisions of Section 47 of the Act, only High Court of Gujarat

has jurisdiction to execute the foreign award, for which the

Arbitration Petition being IAAP No. 106 of 2016 was filed by the

present respondent and the arbitration petition being IAAP No.

106 of 2016 which was disposed of, was revived and ordered to

be placed before the Bench taking up the proceedings under the

Arbitration Act. Hence, this Appeal.

(4) Mr. M.I. Hava, learned advocate appearing with Ms.

Swati Singhal and Ms. Anjasi Shah, Advocates for the appellant

has vehemently submitted that the trial court has committed

grave error in accepting the petition filed by the present

respondent under Article 227 of the Constitution of India. He

would submit that learned Single Judge has indirectly quashed

and set aside the oral order dated 19.09.2019 passed by the

C/LPA/858/2022 JUDGMENT DATED: 10/04/2023

learned Single Judge, by which it was held that this Court has

no jurisdiction to deal with the execution proceedings of foreign

award. He would submit that the original petitioner has never

challenged the oral order dated 19.09.2019 before higher forum

and it had become final. The learned Single Judge ought not to

have entertained the petition as, by doing so he has indirectly

quashed and set aside the order of a co-ordinate Bench under

the provisions of the Arbitration Act as if sitting in Appeal

against the order passed by the learned Single Judge. Mr. Hava

would further submit that as per the roster, the petition filed by

the respondent has been decided on 29.04.2022 and as per the

roster on the said date, the learned Single Judge who has

decided the petition, had no jurisdiction to decide the petition in

the form in which it has been filed. By taking us through the

roster granted to the learned Single Judge, he would submit

that no orders passed by any Subordinate Civil Court was under

challenge before the learned Single Judge and therefore, the

learned Single Judge ought not to have entertained the petition.

(4.1) In support of his submission, he has relied upon the

C/LPA/858/2022 JUDGMENT DATED: 10/04/2023

decision of the Hon'ble Apex Court in the case of State of

Punjab versus Davinder Pal Singh Bhullar reported in

(2011) 14 SCC 770. He would submit that it has been held by

the Hon'ble Apex Court that the concerned Judge of a High

Court can decide only those cases which have specifically been

assigned to him / her by the Chief Justice and cannot travel

beyond the scope of roster assigned to him, therefore, he would

submit that the order is required to be quashed and set aside.

(4.2) Similarly on the same point, he has relied upon

another decision of the Allahabad High Court in the case of

Smt. Maya Dixit and Others versus State of U.P. (2010

SCC Online All 1740).

(4.3) Mr. Hava would further submit that when the

learned Single Judge by its order dated 19.09.2019, has held

that this Court has no jurisdiction to deal with execution of

foreign award, the learned Single Judge could not have

entertained the writ petition filed under Article 227 of the

Constitution of India with regard to the arbitration proceedings.

C/LPA/858/2022 JUDGMENT DATED: 10/04/2023

In support of his submission, he has relied upon a decision of

the Hon'ble Apex Court in the case of Sterling Industries

versus Jayprakash Associates (2019 SCCOnline SC 1154),

another decision of Bhaven Construction versus Sardar

Sarovar Narmada Nigam Ltd. reported in 2021 SCCOnline

SC 8. He would submit that if the original petitioner was

aggrieved by the judgment dated 19.09.2019 passed by the

learned Single Judge, he should have filed an Appeal before

higher forum and could not have filed petition under Article 227

of the Constitution of India, which is indirectly challenging the

said order dated 19.09.2019. It was further argued that

Arbitration and Conciliation Act is a self-contained code and

therefore under Section 50 of the said Act, any order passed

under the said Act is appealable and therefore, the petitioner

ought to have availed the remedy provided under section 50 of

the said Act. In support of his submission, he has relied upon

the decision in the case of Kandla Export Corporation versus

OCI Corporation reported in (2018) 14 SCC 715, Vijay

Karia versus Prysmian Cavi E Sistemi SRL reported in

(2020) 11 SCC 1, Furest Day Lawson Limited versus Jindal

C/LPA/858/2022 JUDGMENT DATED: 10/04/2023

Exports Limited reported in 2011 (8) SCC 333. By relying

upon the said decisions, he would submit that the learned Single

Judge ought not to have entertained the petition which came to

be filed under Article 227 of the Constitution of India.

(4.4) He would submit that subsequent to the order

passed by the learned Single Judge on 19.09.2019 in IAAP No.

106 of 2016, only Mehsana Court had jurisdiction to deal with

the proceedings which were filed before this Court being IAAP

No. 106 of 2016 and in absence of any order passed by the

Mehsana Court, the learned Single Judge ought not to have

entertained the petition in absence of any order passed by the

Subordinate Court.

(4.5) Learned advocate Mr. Hava by relying upon the

decision of the Hon'ble Apex Court in the case of Government

of India versus Vedanta Limited (Formerly Cairn India

Ltd.) and Others reported in 2020 (10) SCC 1, would submit

that once the proceedings are pending, the trial court only had

the jurisdiction to decide the issue, and therefore also, the

C/LPA/858/2022 JUDGMENT DATED: 10/04/2023

learned Single Judge ought not to have entertained the petition.

He would further submit that the arbitration clause itself is

under challenge at the instance of present appellant in Special

Civil Suit No. 1 of 2015 which is pending before the Court and

therefore, all the issues could have been decided by the trial

court and particularly when the proceedings were forwarded to

the trial court by an order dated 19.09.2019 by the learned

Single Judge in IAAP No. 106 of 2016. Mr. Hava further

submits that subsequent change of law would not be the ground

for entertaining a subsequent petition. He therefore, would

submit that the Appeal be allowed and the order be quashed

and set aside.

(5) On the other hand learned advocate Mr. Amitava

Majumdar with learned advocate Mr. Harsh Parekh has opposed

this Appeal and supported the reasons assigned by the learned

Single Judge. He would submit that when the arbitration

petition being IAAP No. 106 of 2016 was filed by the present

respondent for execution of foreign award, under section 47 of

the Arbitration Act, only this High Court has jurisdiction to

C/LPA/858/2022 JUDGMENT DATED: 10/04/2023

execute the said award. During the pendency of the said

proceedings, an amendment was made under section 87 and

relying upon the amended provisions of law, the petition was

disposed of by an order dated 19.09.2019 by the learned Single

Judge holding that in view of the amended provision, this Court

has no jurisdiction to deal with the execution of foreign award.

However, before the order dated 19.09.2019 was infact

executed and the papers which were produced for execution

before this Court, were sent back to Mehsana, the Hon'ble Apex

Court struck down the amended provision on November 27,

2019 i.e. within a period of two months from the date of order

dated 19.09.2019. Therefore, the petitioner immediately filed

the present petition and prayed accordingly. He would submit

that when the petition being Special Civil Application No. 1107

of 2020 was filed, learned Single Judge was aware about the

order dated 19.09.2019 and therefore when this was placed

before learned Single Judge for the first time on 17.01.2020,

considering the decision of Hon'ble Apex Court in the case of

Hindustan Construction Company Limited (supra), and

therefore, the proceedings which were initiated in the year 2016

C/LPA/858/2022 JUDGMENT DATED: 10/04/2023

i.e. IAAP No. 106 of 2016 is taken back to this Court, issued the

notice for final disposal which was made returnable on

03.02.2020. It was further observed that if the Registry has not

sent back the papers to the learned District Court as per the

order dated 19.09.2019, the same shall be tagged along with the

petition in question. He would further submit that since the

papers were not sent, all the papers were retained and kept

with the petition which was filed by the present respondent.

(5.1) He therefore would submit that in view of the above

fact that though the order was passed, the papers were never

sent back to Mehsana Court and were kept in the Registry of

this Court. He would further submit that learned Single Judge

therefore while deciding the matter finally has considered all

the submissions made by present appellant - original

respondent and has properly dealt with in the impugned

judgment which does not call for any interference.

(5.2) He would submit that as per Section 47 of the

Arbitration Act, a foreign award can be executed by the High

C/LPA/858/2022 JUDGMENT DATED: 10/04/2023

Court only, however, for interregnum period i.e. from the

amendment of the Act and till the same is declared

unconstitutional, such anomaly arose and therefore in similar

type of the case, the Division Bench of this High Court dealing

with such issue held that in view of the decision of the

Hindustan Construction Company Limited (supra), such

matters pending before the trial court shall be forwarded to the

Courts having jurisdiction according to the Act. By relying upon

the decision of Division Bench of this Court in the case of M/s.

OCI Corporation versus Kandla Export Corporation and

Others, which was delivered in Misc. Civil Application (For

transfer) No. 2969 of 2016 and others, on November 11, 2016

i.e. prior to the amendment of 2019 has held as per various

provisions under Commercial Courts Act including Section 47

of the Arbitration Act, it was held that all the proceedings

pending before the trial court shall be sent to those Courts

having jurisdiction and therefore subsequent to the decision of

Hindustan Construction Company Limited (supra), the law

laid down by the Division Bench in the case of M/s. OCI

Corporation versus Kandla Export Corporation and Others

C/LPA/858/2022 JUDGMENT DATED: 10/04/2023

(supra), hold the field and therefore, the learned Single Judge

has rightly held that only this Court has jurisdiction to deal with

proceeding under section 47 i.e. execution of a foreign award

under the Arbitration Act. Mr. Majumdar appearing for the

respondent would submit that it is an undisputed fact as per the

provisions of the Law i.e. under section 47 of the Arbitration Act

and as per the law laid down by the Hon'ble Apex Court in the

case of Hindustan Construction Company Limited (supra),

only High Court of Gujarat has jurisdiction to deal with the

proceedings for execution of foreign award. The trial court has

no jurisdiction to deal with the execution of a foreign award. He

further submits that submissions made about the subsequent

change would not held the present appellant in view of the fact

that only High Court has jurisdiction to deal with the

proceedings which has been filed for execution of foreign award

and the trial court cannot proceed with the same and we do not

find any force in the same. He therefore would submit that

learned Single Judge has committed no error in allowing the

petition and it does not call for any interference and the same

may be dismissed.

C/LPA/858/2022 JUDGMENT DATED: 10/04/2023

(6) We have heard learned advocates appearing for the

respective parties.

(7) It is an undisputed fact that a foreign award has

been passed for which the petition under section 47 was filed by

the present respondent before this Court being IAAP No. 106 of

2016. The present appellant has also filed a suit for declaration

and injunction being Special Civil Suit No. 1 of 2015 in the court

of learned Senior Civil Judge at Mehsana which is pending for

disposal. During the pendency of said IAAP No. 106 of 2016, an

amendment was made in Section 87 of the Arbitration Act. The

amended section 87 of the Act reads as under : -

"Section 87: Effect of arbitral and related court proceedings commenced prior to 23rd October, 2015 -Unless the parties otherwise agree, the amendments made to this Act by the Arbitration and Conciliation (Amendment) Act, 2015 shall -

(a) not apply to -

(i) arbitral proceedings commenced before the commencement of the Arbitration and Conciliation (Amendment) Act, 2015;

(ii) court proceedings arising out of or in relation to such arbitral proceedings irrespective of whether such court proceedings are commenced prior to or after the commencement of the

C/LPA/858/2022 JUDGMENT DATED: 10/04/2023

Arbitration and Conciliation (Amendment) Act, 2015;

(b) apply only to arbitral proceedings commenced on or after the commencement of the Arbitration and Conciliation (Amendment) Act, 2015 and to court proceedings arising out of or in relation to such arbitral proceedings."

(8) The aforesaid provision was inserted by Act No. 33 of

2019 giving effect from 23.10.2015. As per the said provision,

the Judge who was dealing with arbitration proceeding being

IAAP No. 106 of 2016 has held that only High Court has no

jurisdiction to execute the foreign award. The said decision was

delivered on 19.09.2019. Meanwhile the challenge to the said

aforesaid provision was accepted by the Hon'ble Apex Court in

the case of Hindustan Construction Company Limited

(supra), and the said provision came to be struck down by the

judgment dated 27.11.2019.

(9) Having come to know about the said decision,

immediately the petition was filed at the instance of present

respondent with the prayer. When the notice was issued by the

learned Single Judge in the captioned writ petition, the Court

was aware that the papers might have gone before the trial

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court and therefore, following order was passed on

17.01.2020 :-

"1. Mr. Amitava Majumdar, learned advocate for Mr. Harsh N. Parekh, learned advocate for the petitioner submits that since the award was passed in International Arbitration Proceedings and for which all the proceedings needs to be filed before the High Court for execution and accordingly, it was also filed previously in the year 2016, but during consideration as regards to amendment and insertion of section made under the Arbitration and Conciliation Act, 1996, this Court vide order dated 19.09.2019 remitted the proceedings before the learned District Court, Mehsana. Thereafter, in view of judgment in the case of Hindustan Construction Company Limited v. Union of India rendered by the Hon'ble Supreme Court in 2019 SCC OnLine SC 1520, insertion of section as well as deletion of Section 26 of the said Act have been struck down declaring the same as unconstitutional.

2. In view of aforesaid development of law, the proceedings which were initiated before this Court in the year 2016 requires to be taken back to this Court.

3. In view of aforesaid position, issue notice for final disposal returnable on 03.02.2020.

4. In the meantime, the learned District Court, Mehsana shall not proceed with the matter. If the Registry has not sent the papers to the learned District Court, Mehsana, it shall be placed before this Court along with this matter on the next date of hearing. Direct service is permitted."

(10) It is not in dispute that the papers were not sent to

the trial court as per the order dated 19.09.2019 and were lying

with the Registry.

C/LPA/858/2022 JUDGMENT DATED: 10/04/2023

(11) As per Section 47 of the Arbitration Act and

particularly when the explanation to Section 47 which holds the

field defines the Court as High Court having original jurisdiction

to decide the question of foregoing the subject matter i.e.

enforcement of certain foreign award. Part II of the Arbitration

and Conciliation Act deal with enforcement of certain foreign

award. Section 47 which is relevant for our consideration,

reads as under : -

"47. Evidence.--(1) The party applying for the enforcement of a foreign award shall, at the time of the application, produce before the court--

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

(b) the original agreement for arbitration or a duly certified copy thereof; and

(c) such evidence as may be necessary to prove that the award is a foreign award.

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

[Explanation.--In this section and in the sections following in this Chapter, "Court" means the High Court having original jurisdiction to decide the questions forming the subject-matter of the arbitral award if the same had been the subject-matter of a suit on its original civil jurisdiction and in other cases, in the High Court having jurisdiction to hear appeals from decrees of courts subordinate to such High Court."

C/LPA/858/2022 JUDGMENT DATED: 10/04/2023

(12) As per the aforesaid provision, only and only High

Court of Gujarat has jurisdiction to deal with a petition, if filed

for enforcement of a foreign award and therefore, the learned

Single Judge has rightly held that only this Court has

jurisdiction to hear the petition under the provisions of

Arbitration Act being IAAP No. 106 of 2016. We are in

agreement with the ratio laid down by the Hon'ble Apex Court

in various decisions, wherein it has been held that only the

Court which has been assigned particular work and deal with

the cases. The roster which was assigned to learned Single

Judge on the date of hearing, reads as under : -

"ADMISSION & FINAL HEARING

1. SCAs against the orders of Subordinate Civil Courts or SCAs arising from the pending matters of Subordinate Civil Courts 2015 onwards.

2. Matters pertaining to H.M.P. and Guardian and Wards Act

3. Matters relating to transfer of cases under Section 24 of CPC.

4. First Appeals MACT (Single Judge) from 2012 to 2017.

5. Specially assigned matters."

(13) Keeping in mind the peculiar facts and

circumstances and when the papers were not sent to the trial

court, it would be a futile exercise of remitting the matter to

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learned trial court for having orders passed on an application

which might have been filed by the original petitioner

requesting him to send back the papers again to the High Court,

which has jurisdiction to execute a foreign award under section

47 of the Act. Therefore, we do not accept the submissions

made by learned advocate Mr. Hava that the learned Single

Judge has dealt with the case in question as if he was sitting in

Appeal and examining the order which was passed in past on

19.09.2019, by which it has only been dealt with the existing

prevailing legal provisions.