9911796707
TMI Blog2020 (6) TMI 734X X X X Extracts X X X X X X X X Extracts X X X X ..... petitions. Since common questions of law arise in both the petitions, common order is being passed. 3. Brief facts necessary to decide the question of maintainability, shorn of unnecessary details are that the Decree Holder (hereinafter referred to as "DH‟) and the Judgment Debtor (hereinafter referred to as "JD‟) entered into a Contract on 13.12.2011 for supply 10,000 mts. of MRM concentrate from Australia to India. The Governing Law of the Contract was the Law of England and Wales and the Contract had an Arbitration Clause being Clause 27.2. The Venue of Arbitration was London, United Kingdom and the proceedings were to be conducted in accordance with Rules of the London Court of International Arbitration. DH and JD entered into another Contract on 28.03.2012 for supply of 25,500 mts. of MRM with an option to purchase further quantity. The law governing the Contract and the procedure and Venue of the Arbitration was similar to the terms in the earlier Contract. 4. Disputes arose between the parties and consequently JD invoked Arbitration on 03.06.2014 under the Contracts, by submitting its request to the Registrar, London Court of International Arbitration. 5. Und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ussion, the applications filed by the applicant under Section 34 of the Act against the impugned Arbitral Awards dated 17.08.2017 are not maintainable, the same are therefore, dismissed." 11. An appeal was filed by JD before the Division Bench of the Rajasthan High Court against the said judgment and is stated to be pending. 12. On 18.03.2019, DH sent a legal notice to the JD requesting for payment of costs and interest on costs, under the final Awards, in both the matters. Since payments were not made by the JD, Petitioners took recourse to the present proceedings. 13. It is averred in the petitions that the Awards have been made in London, UK to which New York Convention on Recognition and Enforcement of Foreign Arbitral Awards 1958 applies, under Section 44 of the Act and the Awards are thus Foreign Awards. It is averred that the Awards are final and binding on the parties and enforceable in India as prescribed under Chapter-I of part-II of the Act, as a Decree of this Court. It is further averred that the JD has its office in Delhi. The assets/properties including bank accounts, which are sought to be attached in the present proceedings, are within territorial jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uting Court. Since the issue of enforceability is sub-judice before Rajasthan High Court, where the assets of the JD are located, it is that Court which would be the executing Court and once the Court is satisfied that the Award is enforceable, then the Award holder can seek transfer of the proceedings to this Court under Sections 38 & 39 CPC. It is further argued that even assuming without conceding that the said proceedings are not maintainable in the Rajasthan High Court under Section 34 of the Act, it is still open to the Court to go into the enforceability of the Award under Section 48 of the Act and an application under Section 48 of the Act, has been filed. Reliance is placed on the judgments of the Supreme Court in the case of Bharat Aluminum and Co. v. Kaiser Aluminium and Co., (2012) 9 SCC 552 (BALCO) and LMJ International Limited v. Sleepwell Industries Company Limited, (2019) 5 SCC 302. 16. It is further contended that even assuming that this Court has jurisdiction, even then, on principles of comity, this Court ought to await the decision of the petition pending in the Rajasthan High Court. It is argued that even the Act does not contemplate two Courts within one Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is submitted that there is no specific denial on affidavit to any of these averments. Rather in the application filed by the JD, it is specifically mentioned in para 6.11 that the JD does not have any assets in the territorial jurisdiction of this Court, other than an "Administrative Office‟. In the rejoinder to the application, an attempt has been made to improve the said averment to state that the asset is a small liaison office with only 3-4 employees and is on lease from the Govt. of India with no disposing power on the said property. 19. It is contended that the premises are non-residential in nature and are not subject to the Rent Control Law. It is well settled that interest in property can be attached by a DH and sold in execution under Section 60 CPC. In Ramesh Himmatlal Shah v. Harsukh Jadhavji Joshi, (1975) 2 SCC 105, Supreme Court has held that Section 60 CPC refers to any other saleable property, moveable or immovable, whether the same is or is not held in the name of the JD. Right to occupation of a flat is property, both attachable and saleable. A Full Bench of the Bombay High Court considered the interest of a tenant of a non-residential premises under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside, proceedings Section 48 of the Act are only like a shield against the Foreign Award. It is further submitted that the Single Judge of the Rajasthan High Court has already dismissed the petitions by a judgment dated 02.05.2019, on ground of maintainability as the seat of Arbitration was London and the governing law was English Law. Though an Appeal is pending, but it is not correct for the JD to submit that proceedings under Section 48 of the Act are pending. 22. Learned Senior Counsel submits that there is no legal impediment for this Court to proceed under Section 48 of the Act for enforcement of the Award and the petition is maintainable. Reliance is placed on the judgment in Eitzen Bulk A/S v. Ashapura Minechem Limited and Another, [(2016) 11 SCC 508] where Ashapura Minechem Limited had filed a petition against Eitzen Bulk under Section 34 of the Act, before the Court in Gujarat and subsequently, Eitzen Bulk filed an application for enforcement under Section 47 of the Act, before the Bombay High Court. Contention of Ashapura Minechem Limited was that in view of Section 42 of the Act, the application ought to have been made before the Gujarat Court. This contention was re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Hon'ble Court other than an administrative office which is evident from the list of assets given by the Petitioner/Decree holder itself. By arraying the administrative address of the Applicant, the Petitioner/Decree holder with an ulterior motive has filed the present proceedings before this Hon'ble Court. Even the Petitioner/Decree holder is aware of the same which is evident from the documents filed by the Petitioner/Decree holder." 27. The next ground on which the JD objects to the present petitions is that no cause of action has arisen within the territorial jurisdiction of this Court inasmuch as the contracts between the parties were signed outside the jurisdiction, the seat of arbitration was not Delhi and that Rajasthan High Court is seized of the petitions filed by the JD under Section 34 read with Section 48 of the Act. It is also the stand of the JD that the assets of the JD are mostly in Rajasthan. Relevant paras in this regard from the Rejoinder to the application are as under: "2. That the Respondent reiterates that this Hon'ble court does not have the territorial jurisdiction to entertain and adjudicate upon the present lis in as much as none of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and where an objection to territorial jurisdiction of the Court was taken, dealt with the distinction and the interplay between the two provisions mentioned above. It was held that these two provisions relate to two different aspects. In an Arbitration, the Court considers the subject matter of the arbitration while in the enforcement of an Award, it is the subject matter of the Award which is the relevant factor. Bombay High Court held as under: "4. We then come to the issue as to the meaning of the expression subject matter of the Award and whether that would mean also subject matter of the arbitration proceedings. This is important because under Section 2(e) the expression with reference to the expression Court means the subject matter of the arbitration. The subject matter of the arbitration would include contracts. The subject matter of an Award cannot include a contract as adjudication in respect of the claims under the contract has been done and has resulted into an award. The subject matter of the Award therefore, is liable to be construed to mean what is the relief finally awarded by the Award. It may be in the form of money, it can be for specific performance, or the lik ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planation itself permits forum hunting if that expression can be used. After considering all these provisions a similar view was taken in Arbitration Petition Lodg. No. 427 of 2001 in the case of Naval Gent Marline Ltd. v. Shivnath Rai Harnarain (I) Ltd. and Ors., decided on 5th July, 2001 in which at the ad interim stage, apart from other issues, the issue as to the meaning of the expression "subject matter of the award" was in issue and has been similarly answered. In the instant case, defendants do not have their office or carry on business within the jurisdiction of this Court. The Offices are either at Gandhidham or Ahmedabad. It is not averred in the petition that the respondents have any money within the jurisdiction of this Court. In these circumstances, to my mind in the absence of the subject matter of the Award being within the jurisdiction of this Court, this Court would have no jurisdiction to hear and decide this petition." 30. The issue of territorial jurisdiction of a Court in the context of Sections 47 and 48 of the Act again came up before the Bombay High Court in Wireless Developers Inc. vs. India Games Ltd. 2012 (2) ALLMR 790. Relying on the judgment in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed where the respondent would have properties, movable or immovable, which could be attached and sold in execution of the award." 31. In the case of Brace Transport Corporation of Monrovia, Bermuda vs. Orient Middle East Lines Ltd., Saudi Arabia & Ors. 1995 Supp (2) SCC 280, Supreme Court was considering the enforcement of a Foreign Award under the Foreign Awards (Recognition & Enforcement) Act. One of the provisions under consideration before the Court was Section 5(1) of the said Act which reads as under: "Any person interested in a foreign award may apply to any Court having jurisdiction over the subject-matter of the award that the award be filed in Court." 32. The Court placed reliance on certain passages from "Law and Practice of International Commercial Arbitration" by Redfern and Hunter (1986 Edn.), which, in my view, are relevant to the present case and are extracted hereunder: "A party seeking to enforce an award in an international commercial arbitration may have a choice of country in which to do so; as it is sometimes expressed, the party may be able to go forum shopping. This depends upon the location of the assets of the losing party. Since the purpose of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction, it could be said to have jurisdiction to take the award on file under Section 5 of the said Act and it would proceed thereafter under the subsequent provisions of the said Act." 34. The reasoning for the observation made by the Court is easily discernible from Para 13 of the said judgment. The arbitration can be at a neutral Forum between the two parties and the assets may or may not be at either of the two places. This is the Forum where parties to an Arbitration Agreement agree to the arbitration proceedings being held and is the subject matter of arbitration. However, if an enforcement of the Award is filed, it is maintainable only where the properties/assets of the JD are located, which may or may not be the chosen place of the parties for subject matter of arbitration. 35. In Wireless Developers (supra), Bombay High Court also examined the provisions of CPC with regard to execution of decrees and orders. The Court examined Section 51 CPC which enumerates powers of the Court to enforce execution by delivery of any property, attachment and/or sale of the property, arrest and detention of the JD, appointment of a Receiver or any other manner as may be required i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be in New Delhi in the form of both bank accounts and shares of Spice Communications Ltd." 37. It needs to be noticed that in Wireless Developers (supra), the Appellant had an Arbitral Award which was a Foreign Award in its favour and filed an application for its execution. Respondent had challenged the Award in a petition filed under Section 34 of the Act. The Appellant had sought enforcement on the ground that the Bank Account of the Respondent was within the jurisdiction of the Bombay High Court. Learned Single Judge did not entertain the enforcement petition on the ground of lack of territorial jurisdiction. In a challenge before the Division Bench, the Bench observed as under: "13. The case of the parties to this litigation is wholly different. The appellant claims that there is money within the territorial jurisdiction of this Court which would satisfy the foreign award obtained by the applicant in an arbitration proceeding held in the USA. The subject matter of the award which is a money award, being money is within the territorial jurisdiction of this Court and consequently, under the explanation to Section 47 of the Act this Court having jurisdiction over the subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication, objecting to the maintainability, has admitted that there is an Administrative/ liaison office, though on a Lease from the Government. There is no document on record at present to corroborate the stand that the premises are on Lease. Insofar as the averment of Bank Accounts or other movables are concerned, there is not even a denial. In any case, in present times, there is a Centralized Banking Systems and Accounts can be operated from any part of the country. 39. In the case of Brace Transport (supra), Court had specifically brought out that a Foreign Award is a deemed decree when allowed to be enforced and can be enforced anywhere depending on the location of the assets of the JD or where his money lies. In fact, the words used were that it is in the nature of "Forum Hunting". Paras 13 and 19 of the judgement in Wireless Developers (supra) are relevant in this regard where the Court has clearly observed that it is for the Award Holder to locate the money of the JD and in case after filing the Application it is unable to find money, it can file another application at another place and locate another property. Explanation to Section 47 was also relied upon by the Court. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
