1993 (10) TMI 361 - SC - Companies Law

Summary

Issues Involved:
1. Jurisdiction of Bhavnagar Court to entertain the appellant's petition.
2. Enforcement of a foreign award under the Foreign Awards (Recognition and Enforcement) Act, 1961.
3. Attachment and injunction related to the sale proceeds of the vessel "Saudi Cloud."

Summary:

1. Jurisdiction of Bhavnagar Court:
The appellant, M/s. Brace Transport Corporation, filed a petition in the Bhavnagar court seeking enforcement of an arbitration award under the Foreign Awards (Recognition and Enforcement) Act, 1961. The Bhavnagar court initially held that it had jurisdiction to entertain the petition. However, the Gujarat High Court set aside this decision, stating that the Bhavnagar court lacked jurisdiction and ordered the petition to be returned for presentation to the proper court. The Supreme Court noted that the Bhavnagar court could have jurisdiction if the appellant could prove that the 1st and 2nd respondents had monies within its jurisdiction. The appellant was given 16 weeks to apply for an amendment to its petition to establish this jurisdiction.

2. Enforcement of a Foreign Award:
The arbitration award, made in England, awarded the appellant various sums totaling US $56,789.47 plus costs and interest. The appellant sought to enforce this award in India under the said Act. The Supreme Court emphasized that the said Act, aligned with the New York Convention, allows for the recognition and enforcement of foreign awards in India. The Bhavnagar court was directed to consider the amendment application and, if allowed, to determine the correctness of the claim that the 1st and 2nd respondents had monies within its jurisdiction. If confirmed, the Bhavnagar court would then proceed to enforce the award under Section 5 of the said Act.

3. Attachment and Injunction:
The appellant sought various reliefs, including attachment of the sale proceeds of the vessel "Saudi Cloud" and injunctions to prevent the respondents from disposing of the vessel or its proceeds. The Bhavnagar court initially issued an ex parte ad-interim injunction restraining the 3rd and 4th respondents from disposing of the vessel. The Supreme Court noted that the 3rd respondent, an Indian Government company, had deposited Rs. 6,40,000 in the court's registry without protest. The Supreme Court directed that if the appellant applied for the amendment within the stipulated time, the deposited amount would be transferred to the Bhavnagar court's credit for further proceedings. If no application was made, the 3rd respondent would be entitled to withdraw the deposited amount.

Conclusion:
The Supreme Court allowed the appeal to the extent of permitting the appellant to apply for an amendment to establish jurisdiction in the Bhavnagar court. The Bhavnagar court was directed to consider the amendment and, if allowed, to proceed with the enforcement of the award. If no amendment application was made within 16 weeks, the 3rd respondent could withdraw the deposited amount. No order as to costs was made.