1996 (10) TMI 477 - HC - Companies Law

Summary

Issues Involved:
1. Jurisdiction of the Court to file the arbitration award.
2. Applicability of Indian law versus English law to the arbitration agreement.
3. Classification of the award as a 'Foreign Award' or 'Domestic Award'.
4. Impact of the Arbitration and Conciliation Act, 1996 on the proceedings.
5. Whether the filing of an award in court is ministerial work or a substantive right.

Detailed Analysis:

1. Jurisdiction of the Court to file the arbitration award:
The petitioner sought directions for the 1st respondent to file the arbitration award in the Bombay High Court. The court examined whether it had jurisdiction over the matter. It was noted that ONGC, the petitioner, had its registered office in Dehra Dun and also carried on business in Bombay, giving the court jurisdiction under Section 31(1) of the Arbitration Act, 1940, read with Section 2(c). The court concluded it had jurisdiction to file the award.

2. Applicability of Indian law versus English law to the arbitration agreement:
The contract between the parties included Clause 17.1, which subjected all disputes to Indian law, and Clause 17.2, which stipulated arbitration in London under ICC rules. The court analyzed whether the arbitration agreement was governed by Indian law or English law. It was determined that the proper law of the contract, including the arbitration agreement, was Indian law, as there was no unmistakable intention to the contrary.

3. Classification of the award as a 'Foreign Award' or 'Domestic Award':
The court examined whether the award was a 'Foreign Award' under the Foreign Awards (Recognition and Enforcement) Act, 1961, or a 'Domestic Award' under the Arbitration Act, 1940. It was concluded that the award was not a 'Foreign Award' merely because it was made in London. Since the arbitration agreement was governed by Indian law, the award was classified as a 'Domestic Award'.

4. Impact of the Arbitration and Conciliation Act, 1996 on the proceedings:
The court considered the impact of the Arbitration and Conciliation Act, 1996, which came into force after the arbitration proceedings had commenced. Section 85 of the new Act repealed the Arbitration Act, 1940, but saved the applicability of the old Act for proceedings commenced before the new Act's enforcement. The court held that the substantive rights under the old Act were preserved, and the petition to file the award was valid.

5. Whether the filing of an award in court is ministerial work or a substantive right:
Mr. Salve argued that filing the award was ministerial work and not a substantive right, citing the judgment in Dhansukhalal C. Mehta v. Navnitlal Chunilal. However, the court disagreed, stating that the filing of the award was part of exercising substantive rights vested in the party. The court emphasized that the terminology "commenced" in Section 85(2) of the new Act indicated that ongoing proceedings under the old Act were preserved.

Conclusion:
The petition was allowed, directing the 1st respondent to file the award with all depositions in the court within eight weeks. The court concluded that the arbitration agreement was governed by Indian law, the award was a 'Domestic Award', and the court had jurisdiction to file the award. The filing of the award was considered a substantive right preserved under the old Act despite the new Act's enactment. No order as to costs was made.