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TMI Blog2020 (6) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... e was going to pass an award that the respondent s attorneys woke up and started asking for time to present their response. This too was granted by the learned arbitrator, by not only granting extension of time, but by extending this time even further. Finally, when the legal submissions of 75 pages were sent even beyond the time that was granted, the learned Arbitrator took this into account and then passed his award. This being the case, on facts we can find no fault whatsoever with the conduct of the arbitral proceedings. Factually, there is no supporting material to show that any such further material was received by the learned arbitrator, except documents that have been presented by Shri Raval for the first time before us. They were clearly not before Chatterjee,J. when this surmise was made by the learned Judge, Further, the arbitrator cannot be faulted on this ground as, given the authorities referred to by us hereinabove, the arbitrator is in control of the arbitral proceedings and procedural orders which give time limits must be strictly adhered to. Even otherwise, Chatterjee, J., refers to the judgment in Hari Om Maheshwari (supra) as well as Minmetals (supra), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Metals Inc. (hereinafter referred to as Centrotrade / the appellant ) invoked the arbitration clause. By an award dated 15.06.1999 the arbitrator appointed by the Indian Council of Arbitration made a Nil Award. Thereupon, Centrotrade invoked the second part of the arbitration agreement, as a result of which Jeremy Cook QC, appointed by the ICC, delivered an award in London, dated 29.09.2001, in which the following amounts were awarded: 27. For the above reasons I THEREFORE AWARD and ADJUDGE that (1) HCL do pay Centrotrade the sum of $152,112.33, inclusive of interest to the date of the Award in respect of the purchase price for the first shipment. (2) HCL do pay Centrotrade the sum of $15,815.59, inclusive of interest to the date of this Award in respect of demurrage due on the first shipment. (3) HCL, do pay Centrotrade the sum of $284,653.53, inclusive of interest to the date of this Award in respect of the purchase price on the second shipment. (4) HCL do pay Centrotrade their legal costs in this arbitration in the sum of $82,733 and in addition the costs of the International Court of Arbitration, the Arbitrator's fees and expenses totalling $29 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the matter, the foreign award could not enforced in India and Centrotrade s appeal was therefore dismissed, the appeal filed by HCL being allowed. Tarun Chatterjee, J. set out four questions in paragraph 134 as follows: 134. We have heard Mr Sarkar, learned Senior Counsel appearing for Centrotrade and Mr Debabrata Ray Choudhury, learned Senior Counsel for HCL. I have also examined the entire material on record including the arbitration agreement, the awards and judgments of the Division Bench as well as the learned Single Judge. Before us, the following issues were raised by the learned counsel for the parties for decision in the appeals: (1) Whether the second part of clause 14 of the agreement providing for a two-tier arbitration was valid and permissible in India under the Act? (2) If it is valid, on the interpretation of clause 14 of the agreement, can it be said that the ICC arbitrator sat in appeal against the award of the Indian arbitrator? (3) Whether the ICC award is a foreign award or not? (4) Whether HCL was given proper opportunity to present its case before the ICC arbitrator? 6. These questions were answered by stating that the tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a two-tier arbitration procedure as provided for in Clause 14 of the contract between the parties is permissible under the laws of India? (2) Assuming that a two-tier arbitration procedure is permissible under the laws of India, whether the award rendered in the appellate arbitration being a foreign award is liable to be enforced under the provisions of Section 48 of the Arbitration and Conciliation Act, 1996 at the instance of Centrotrade? If so, what is the relief that Centrotrade is entitled to? For the present, we propose to address only the first question and depending upon the answer, the appeals would be set down for hearing on the remaining issue. We have adopted this somewhat unusual course since the roster of business allowed us to hear the appeals only sporadically and therefore the proceedings before us dragged on for about three months. Since the first question was answered in the affirmative, the Court concluded: Conclusion 48. In view of the above, the first question before us is answered in the affirmative. The appeals should be listed again for consideration of the second question which relates to the enforcement of the appellate award. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between the learned Judges on this aspect and therefore this aspect cannot now be adjudicated upon. Even otherwise, he argued, basing his submissions on a list of dates and a paper book of documents filed before this Court for the first time, to show that as a matter of fact once the arbitrator had extended time, the last extension being till 12.09.2001, he ought to have allowed further time in which, apart from legal submissions furnished, documents could have been furnished in support of HCL s case. This is particularly in view of the fact that on 11.09.2001, a terrorist attack had taken place in New York as a result of which globally, there was disruption of transport and communication, and therefore it was very difficult for HCL to send documents within the requisite time. He argued that had such documents been seen, there can be no doubt that this one-sided award might well have been in his client s favour, as a result of which serious prejudice had been caused to his clients. Even otherwise, he argued that the issue of jurisdiction was to be taken as a preliminary question before the learned arbitrator, after which further proceedings were to take place. This was never done ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the substantive merits of the dispute, together with any evidence relied on in relation to the application and any submissions should be received by me by 31st August 2001, in the absence of which I would not give them any consideration. On 27th August Fox Mandal sought a further 3 weeks extension of time for making their submissions and serving supporting evidence. I allowed a final extension for these submissions and evidence until 12th September 2001. Seventy - five pages of submissions were received by me on 13th September 2001, without any supporting evidence or any justification for not complying with my earlier orders. No grounds were put forward for any application for an extension of time for putting in Defence submissions. Indeed no formal application was made for an extension of time to do so. HCL have therefore not attempted to justify their earlier stance nor to give me any reason for considering their submissions on the merits which are made out of time. Centrotrade have objected to these submissions contending that they are inadmissible because of HCL s persistent breaches of my orders. Nonetheless, though not bound to do so because of their belated nature, I have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al proceeding. It took the matter upto the Apex Court. Ultimately when it failed to obtain any order to stop the arbitration, it filed its submissions running into seventy-five pages. Though the papers reached the arbitrator beyond the stipulated date, he has considered such submissions. He, however, did not find any merit in the case made out by the respondent. The arbitrator has recorded that at every stage he consulted the procedural aspects with the solicitors representing the respondent. There is no proof that the respondent ever objected to the rules and procedure followed by the arbitrator or that the arbitrator followed a procedure not contemplated in the agreement. It is apparent from the award that all opportunities were given to the respondent to present its case. I find no merit in the contentions that notice regarding appointment of the arbitrator was not given to the respondent or that the terms of reference were settled behind its back. The respondent had full knowledge of everything; it was informed about everything. Hence I find no substance in the grievance that the respondent was unable to present its case or that procedure not contemplated by the agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime. He granted time till 31-8-2001. He received another request from HCL's representatives on 27-8-2001 for further extension of time. He granted extension till 12-9-2001. He received the first set of submissions filed by HCL, without supporting evidence, on 13-9-2001. He considered those submissions and took them into account while making the award. He has further recorded in his award that: I made plain in my orders that no further material provided thereafter would be taken into account, and I have not done so. (emphasis supplied) This last statement indicates that he received further material from HCL, which he did not consider while making the award. On the face of it, it seems that HCL was given sufficient opportunity to present its case by the arbitrator. However, this question must be looked into from the then existing situation. 167. It must be noted that this Court vacated the stay on the proceedings on 8-2-2001. The first direction of the ICC arbitrator to the parties, after the order of this Court on 8-2-2001, to serve submissions to him was made on 3-5-2001 i.e. after a time gap of nearly 3 months. Cooperation of HCL was next requested only o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HCL's conduct, it was only fair to excuse HCL's lapse in filing the relevant material on time. Therefore, it can be said that HCL did not get a fair hearing and could not effectively present its case. 169. For the reasons aforesaid, I am of the view that HCL could not effectively present its case before the ICC arbitrator and therefore enforcement of the ICC award should be refused in view of Section 48(1)(b) of the Act. Accordingly, the judgment of the Division Bench and also the judgment of the learned Single Judge of the Calcutta High Court must be set aside and the matter be remitted back to the ICC arbitrator for fresh disposal of the arbitral proceedings in accordance with law after giving fair and reasonable opportunity to both the parties to present their cases before him. In view of the fact that I have set aside the award of the ICC arbitrator on the ground that HCL was unable to effectively present its case before the ICC arbitrator, in compliance with Section 48(1)(b) of the Act, I direct the ICC arbitrator to pass a fresh award within three months from the date of commencement of the fresh arbitral proceedings. 15. The law on the subject matter of Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rameters of Article 136, it is important to note that in cases like the present - where no appeal is granted against a judgment which recognises and enforces a foreign award - this Court should be very slow in interfering with such judgments, and should entertain an appeal only with a view to settle the law if some new or unique point is raised which has not been answered by the Supreme Court before, so that the Supreme Court judgment may then be used to guide the course of future litigation in this regard. Also, it would only be in a very exceptional case of a blatant disregard of Section 48 of the Arbitration Act that the Supreme Court would interfere with a judgment which recognises and enforces a foreign award however inelegantly drafted the judgment may be. With these prefatory remarks we may now go on to the submissions of counsel. The Court then went on to refer to Minmetals Germany GmbH v. Ferco Steel Ltd. (1999) C.L.C. 647 in paragraph 59, and Jorf Lasfar Energy Co. v. AMCI Export Corp. 2008 WL 1228930 in paragraph 61 as follows: 59. The English judgments advocate applying the test of a person being prevented from presenting its case by matters outside his contro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not one where a party hides even the existence of the damning document and then dishonestly denies its very existence so that the opposing party does not even have the chance to submit that an adverse inference ought to be drawn for non-production. M+H in fact disclosed the existence of the documents but gave reasons why it could not disclose them. Here, Dongwoo had the full opportunity to submit that an adverse inference ought to be drawn, but it failed to persuade the tribunal to draw the adverse inference. The tribunal examined the other evidence before it, considered the submissions of the parties and rightfully exercised its fact finding and decision making powers not to draw the adverse inference as it was entitled to do so. It would appear to me that the tribunal was doing nothing more than exercising its normal fact finding powers to determine whether or not an adverse inference ought to be drawn. The Court finally summed up its conclusion on this aspect of the case, as follows: 76. Given the fact that the object of Section 48 is to enforce foreign awards subject to certain well-defined narrow exceptions, the expression was otherwise unable to present his case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is contended, must be construed by applying the rule of ejusdem generis. The rule is that when general words follow particular and specific words of the same nature, the general words must be confined to the things of the same kind as those specified. But it is clearly laid down by decided case that the specific words must form a distinct genus or category. It is not an inviolable rule of law, but is only permissible inference in the absence of an indication to the contrary. On the basis of this rule, is contended, that the right or the custom mentioned in the clause is a distinct genus and the words or otherwise must be confined to things analogous to right or contract such as lost grant, immemorial user etc. It appears to us that the word otherwise in the context only means whatever may be the origin of the receipt of maintenance . One of the objects of the legislation is to by-pass the decrees of courts and the Privy Council observed that the receipt of maintenance might even be out of bounty. It is most likely that a word of the widest amplitude was used to cover even acts of charity and bounty. If that be so, under the impugned Act even a payment of maintenance out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C 33, this Court was faced with the legality and validity of the arbitration proceedings, three grounds being raised as follows: 2. Challenge to the legality and validity of the arbitration proceedings has been laid on three grounds: firstly, that the claimant-Union of India (respondent herein) filed an additional statement accompanied by documents before the arbitrator on 11-8-1982, which was the last day of hearing, and that was taken into consideration by the arbitrator without affording the petitioner an opportunity for contesting the same or even delivering a copy thereof to the petitioner; secondly, though no oral evidence was adduced by any of the parties, yet the arbitrator has in his award expressed having heard the evidence which shows inapplication of mind to the record of the proceedings and material available before the arbitrator; and thirdly, that the arbitrator in the sitting held on 11-8-1982 heard the parties hardly for five or seven minutes in which limited time, no real hearing could have taken place. It is submitted that the manner in which the arbitrator has conducted himself, has resulted in violation of the principles of natural justice and vitiated the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party appears to have presented oral evidence. Thus, the question of cross-examination of the witnesses appearing on behalf of the other parties did not arise. Submissions must have been made by the parties themselves. Ghanshyamdas Gupta does not say that he had difficulty in appearing on 15-6-1976 or any subsequent date and he had asked for an adjournment. Even otherwise, a party has no absolute right to insist on his convenience being consulted in every respect. The matter is within the discretion of the arbitrator and the Court will intervene only in the event of positive abuse. (See Montrose Canned Foods Ltd. [(1965) 1 Lloyd's Rep 597] ) If a party, after being given proper notice, chooses not to appear, then the proceedings may properly continue in his absence. (See British Oil and Cake Mills Ltd. v. Horace Battin Co. Ltd. [(1922) 13 LI L Rep 443] ) (emphasis supplied) In a significant paragraph which foreshadowed the law as it is today, this Court referred to the Minmetals (supra) judgment and held as follows: 43. Furthermore, in this case Ghanshyamdas Gupta expressly relinquished his right by filing an application stating that he would withdraw his objec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenged under Section 30 of the Arbitration Act, 1940 before the learned Single Judge by the respondent which came to be allowed by the learned Single Judge. While doing so learned Single Judge observed: the cross-examination of M/s D. Jain and Co. was over in 1997, the cross-examination of witness examined in Shri Maheshwari's reference was completed on 8-4-1999 and the arbitrators adjourned the matter to 10-5-1999 and 11-5-1999 for the petitioner to lead his evidence. However, it appears that the petitioner noted a wrong date and therefore, he did not appear on 10-5-1999. It is clear from the record that there is an application submitted by the petitioner before the arbitrators on 20-5-1999 regarding the mistake committed by him in recording the date of hearing and requested the arbitrators to give an opportunity to lead the evidence. One can understand if the arbitrators have after closing the matter for award delivered the award immediately but since the arbitrators had not delivered their award by 20-5-1999, they also did not deliver their award immediately thereafter, but waited till November 1999 to make their award, the arbitrators could have easily permitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for enforcing foreign arbitral awards [it] clearly shifted the burden of proof to the party defending against enforcement and limited his defences to seven set forth in Article V. In IPCO (Nigeria) v Nigerian National Petroleum [2005] 2 Lloyd s Rep 326, Gross J said at para 11, when considering the equivalent provision of the English Arbitration Act 1996: there can be no realistic doubt that section 103 of the Act embodies a pre-disposition to favour enforcement of New York Convention awards, reflecting the underlying purpose of the New York Convention itself The Board agrees. There must therefore be good reasons for refusing to enforce a New York Convention award. The Board can see no basis upon which it should refuse to enforce the award here if Cukurova fails to show that it was unable to present its case for reasons beyond its control. The Privy Council, on facts, then dealt with the natural justice ground by rejecting it as follows: 53. The approach of the Tribunal described above and the reasoning in the First Partial Award shows that it gave Cukurova every opportunity to develop its case. The basis upon which the Tribunal reached its conclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was prejudiced by Large 3. If it was prejudiced it was by its failure to avail itself of the opportunity given it to respond. (emphasis supplied) 24. Jorf Lasfar (supra), referred to in paragraph 61 of Vijay Karia (supra), is also instructive. This case deals with a specific plea relating to natural justice in relation to a Tribunal s procedural orders as follows: 7. We disagree. AMCI was given a full and fair opportunity to present its case. However, AMCI failed to meet its obligations under the Tribunal's procedural orders, 3 and suffered the consequences. It failed to submit any witness statements by the deadline set forth by the Tribunal. Rather, AMCI attempted to name Mr. Thrasher as a witness after the deadline, and without submitting a witness statement. AMCI submitted no documentary evidence save a governmental report indicating that coal was in short supply around the time of the alleged breach. xxx xxx xxx 9. The requirements of Procedural Order No. 4 are clear, reasonable, and common in international arbitration practice. There is no dispute that AMCI understood what the Order required at the time. A party cannot purposefully ignore the procedural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Convention is narrowly construed. Parsons Whittemore Overseas Co. v. Societe Generale de L'Industrie du Papier, 508 F.2d 969, 975 (2d Cir.1974). 29. In the instant case, the Court finds that Briggs of Cancun was not unable to present its case, because Briggs of Cancun could have participated by means other than David Briggs's physical presence at the arbitration. For instance, Briggs of Cancun could have sent a company representative to attend; could have sent its attorney to attend; or David Briggs could have attended by telephone. 30. Moreover, the evidence indicates that Briggs of Cancun did participate to the extent that it designated an arbitrator and filed over 80 pages of legal argument and documentation in support of its position. Because Briggs of Cancun has brought forward no additional information or evidence that it would have presented at the arbitration if it had the opportunity to do so, the Court finds that Briggs of Cancun did have an opportunity to meaningfully participate in the arbitration. xxx xxx xxx 33. For the foregoing reasons, the Court finds that Briggs of Cancun's defense under article V(1) (b) of the Convention must f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court of Hong Kong, reported in Nanjing Cereals v. Luckmate Commodities XXI Y.B. Com. Arb. 542 (1996). In paragraph 5 of the judgment the court held: 5. However, it appeared that the Defendants had had ample opportunity to present their own evidence as to quantum to the Tribunal, but by their own admission they had failed to do so. In addition, regarding the issue of whether I should exercise my discretion in refusing in any case to set aside the Award, Mr. Chan conceded that the fact that the final Award was lower than that claimed by the Plaintiffs was against his clients. xxx xxx xxx 7. At all events, the Defendants maintain that they did not submit their own figures to the Tribunal, though this was clearly going to be an issue before the Tribunal, nor, it appears, did they avail themselves of the opportunity to submit them later. That decision was up to them. They must now live with its consequences. 8. Their omission was similar to that of the Defendants in another case, namely Qinghuangdao Tongda Enterprise Development Co. v. Million Basic Co. Ltd. [1993] 1 HKLR 173, where I held:- It is not accepted that the defendant had no opportunity to pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that, according to the spirit of the Convention, the recognition of arbitral awards depends on specific requirements which must be interpreted narrowly. [8] Since in the present case it is undisputed that Interskins informed De Maio that it had appointed an arbitrator, the reasons given in the lower decision, which deems that this information and the time limit [given to De Maio] guaranteed due process, suffice, independent of a failure to give reasons on the objections raised by De Maio. [9] Second, we must consider that the ground for refusal under letter (b) concerns the impossibility rather than the difficulty to present one's case. De Maio does not argue and certainly does not prove that it could not present its case when the arbitration was commenced or while it was held. 29. We now come to the facts of the present case. Shri Raval s plea that this Court cannot go into the question posed before it as there was no difference of opinion on HCL being unable to present its case, Justice Chatterjee J s being the only judgment on this score, has no legs to stand. The reference order that is extracted by us in paragraph 7 above, and that is contained in paragrap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the arbitrator it was directed only against the parties to the proceeding. Secondly, the learned arbitrator initially began the proceedings, after the green signal given to him by the ICC Court to proceed with the arbitration, by directing that the appellant serve submissions along with supporting evidence, followed by the respondent s response and evidence on 19.01.2001. This, however, was reiterated only on 03.05.2001, by which time the Supreme Court had vacated the ad-interim ex parte order on 08.02.2001. This plea taken by Shri Raval, also taken before us for the first time, has no legs to stand on. 32. Shri Raval then strenuously argued that considering that the last extension expired on 12.09.2001, the learned arbitrator ought to have taken onboard two other bundles of documents and granted time for the same, given the terrorist attack in New York on 11.09.2001. 33. The sequence of events, even from the documents presented by Shri Raval for the first time, is that legal submissions were furnished after 11.09.2001 and received by the arbitrator s office on 13.09.2001. The arbitrator then stated that these submissions have been fully taken into account in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Given the aforesaid timeline, it is clear that the learned arbitrator was extremely fair to the respondent. Having noticed that the respondent wanted to stall the arbitral proceedings by approaching the Courts in Rajasthan and having succeeded partially, at least till February 2001, the conduct of the respondent leaves much to be called for. Despite being informed time and again to appear before the Tribunal and submit their response and evidence in support thereof, it is only after the arbitrator indicated that he was going to pass an award that the respondent s attorneys woke up and started asking for time to present their response. This too was granted by the learned arbitrator, by not only granting extension of time, but by extending this time even further. Finally, when the legal submissions of 75 pages were sent even beyond the time that was granted, the learned Arbitrator took this into account and then passed his award. This being the case, on facts we can find no fault whatsoever with the conduct of the arbitral proceedings. 35. Justice Chatterjee, however, in his judgment, made several errors of fact. First and foremost, in paragraph 166 of Centrotrade [2006] (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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