2012 (9) TMI 1151 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the arbitration award is enforceable against the petitioner who was not a party to the agreement.
2. Whether the arbitration award is unenforceable due to it not being duly stamped.

Summary:

Issue 1: Enforceability of Arbitration Award Against Non-party

The petitioner contended that the arbitration award passed by GAFTA is not executable against them as they were not a party to the arbitration agreement. The lower court dismissed this objection, noting that the petitioner had participated in the arbitration proceedings and filed an appeal against the original award. Therefore, it cannot be said that the petitioner is not a party to the agreement. The High Court upheld this view, stating that the petitioner's participation in the arbitration process implies acceptance of the arbitration agreement.

Issue 2: Requirement of Stamp Duty on Foreign Award

The petitioner argued that the award is not enforceable as it is not duly stamped, relying on clause (bb) of the proviso to Section 3 of the Indian Stamp Act and Article 11 of Schedule 1-A, which mandates stamp duty on awards. The lower court dismissed this objection, stating that there is no specific provision under the Indian Stamp Act requiring stamp duty on a foreign award. The respondent supported this by citing Section 44 of the Arbitration & Conciliation Act (A & C Act), which defines a "foreign award" and argued that foreign awards are enforceable without stamp duty. The High Court agreed, referencing the Supreme Court's decision in M/s Fuerst Day Lawson Ltd. Vs. Jindal Exports Ltd., which held that a foreign award is enforceable as a decree and does not require separate proceedings for enforcement and execution. The court concluded that the foreign award is already stamped as a decree and is enforceable without additional stamp duty.

Conclusion:

The High Court dismissed the petition, holding that the foreign award is enforceable as a decree and does not require additional stamp duty, thus upholding the lower court's decisions.

No order as to costs.