2012 (7) TMI 1098 - HC - Companies Law

Summary

Issues Involved:
1. Maintainability of the petition under Section 48 of the Arbitration and Conciliation Act, 1996.
2. Whether the foreign award has been "invoked" or "enforced" under the Act.

Summary:

1. Maintainability of the Petition under Section 48 of the Act:
The petitioners, Hindustan Petroleum Corporation Limited (HPCL) and Bongaigaon Refinery & Petrochemicals Limited (BRPL), along with Union of India and the Directorate General of Hydrocarbons (DGH), sought a declaration under Section 48 of the Arbitration and Conciliation Act, 1996, that the partial award dated 31.03.2005 and the demand letter dated 22.08.2005 are unenforceable against them. The respondents raised a preliminary objection regarding the maintainability of the petition, arguing that Section 48 does not provide for a challenge to a foreign award unless enforcement is sought.

2. Invocation vs. Enforcement of the Foreign Award:
The respondents contended that a petition under Section 48 is only maintainable when the party in whose favor the award is made seeks its enforcement. They argued that the term "invoked" in Section 48 means the formal application for enforcement under Section 47. The petitioners countered that the demand letter dated 22.08.2005 amounted to invoking the award, and thus, they had the right to challenge it under Section 48. The court noted that Section 46 allows a foreign award to be relied upon by way of defense, set-off, or otherwise, and such reliance is considered enforcement under the Act. However, it concluded that an independent proceeding under Section 48 is not maintainable unless the foreign award is sought to be enforced in legal proceedings.

Conclusion:
The court dismissed the petitions as not maintainable at this stage, holding that the respondent, Videocon Industries Ltd., had not initiated any enforcement proceedings in respect of the foreign award. The petitions were dismissed while allowing the preliminary objection of the respondents, with parties left to bear their respective costs.