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TMI Blog2020 (6) TMI 734X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. It was held that impugned order refusing to exercise jurisdiction on the ground that merely because the bank account of the respondent was within its territorial jurisdiction is, therefore, incorrect and must be set aside. This Court would have to exercise its jurisdiction to enforce the award. Thus, this Court would have territorial jurisdiction to entertain the petition. Mr. Banerjee is right in his contention that the subject matter of the Award is money and the JD has its assets within the territorial jurisdiction of this Court. The Award holders have made a categorical averment in the petitions that the JD has an Administrative Office in Delhi, as also some moveable properties lying in those premises. It is also averred that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... territorial jurisdiction of this Court would be finally decided. List the petitions on 13.07.2020. - O.M.P. (EFA) (COMM.) 9/2019, Ex. Appl. (OS) 875/2019, O.M.P. (EFA) (COMM.) 10/2019, Ex. Appl. (OS) 876/2019 - - - Dated:- 8-6-2020 - Hon ble Ms. Justice Jyoti Singh For the Petitioner : Mr. Gaurab Banerji, Sr. Advocate with Mr. Sumeet Lall, Mr. Sidhant Kapoor, Ms. Ananya Pratap Singh, Ms. R. Chatterjee and Ms. Devyani Sharma, Advocates. For the Respondent : Mr. Prashanto Chandra Sen, Sr. Advocate with Ms. Anne Mathew and Mr. Kaustubh Singh, Advocates. JUDGMENT 1. O.M.P (EFA) (COMM.) No. 9/2019 has been filed for enforcement of final Award on costs dated 01.05.2018 and final Award on interest on costs dated 06.08.2018 passed by the Tribunal in LCIA No. 142768 (hereinafter referred to as Petition No. I). O.M.P (EFA) (COMM.) No. 10/2019 has been filed for enforcement of final Award on costs dated 01.05.2018, as amended, and final Award on interest on costs dated 06.08.2018 in LCIA No. 142703 (hereinafter referred to as Petition No. II). 2. Arguments were heard and order was reserved on the issue of maintainability of the petitions. Since common questions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or damages. Tribunal thereafter passed a final Award dated 01.05.2018 on costs, as amended, and awarded a sum of GBP 823,162.22, excluding interest, thereof, and reserved its rights to make a further Award as necessary. DH thereafter applied to the Tribunal for an Award for interest on costs. The Tribunal passed its final Award on interest on costs on 06.08.2018. 9. In the meantime, on 09.10.2017, JD filed an application S.B. Arbitration Application No. 28/2017 before the Rajasthan High Court at Jodhpur under Section 34 read with Section 48 of the Act and challenged the final Award dated 17.08.2017. 10. DH contested the said challenge and the Rajasthan High Court by judgment dated 02.05.2019 dismissed both the Applications by a common judgment as non-maintainable. Relevant part of the judgment is as under:- In view of the above, it is apparent that the seat of arbitration being at London, United Kingdom, the applications under Section 34 of the Act would not be maintainable. The submissions made by learned counsel for the applicant, cannot be accepted and the preliminary objections raised by the respondents deserve acceptance. In view of the above discussion, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and fishing enquiry and file a petition, in any Court, with the hope that it may be able to identify certain properties in a particular jurisdiction. It is contended that in the case of Krishna Gopal Saha v. Nityananda Saha Ors., 1982 SCC OnLine Cal 221 , Court has held that the basic requirements of Section 60(1) of the CPC have to be fulfilled before the property in question can be attached or sold in execution of the decree and one of the said basic requirement is that the property sought to be attached must belong to the JD and he must have disposing power, which he may exercise for his own benefit. Therefore, the submission is that the property sought to be attached being a property on Lease and not owned by the JD, is not within its disposing power. 15. The next contention of the learned Senior Counsel, without prejudice to the objection of territorial jurisdiction, is that an application to decide the enforceability of the Award is already pending in the High Court of Rajasthan. Section 49 of the Act provides that once a particular Court decides the enforceability of an Award, the Award shall be deemed to be a decree of that Court. The Act thus, contemplates a Singl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) SCC 280] held that the only relevant factor to establish territorial jurisdiction is the location of assets and property of the JD. The subject matter of the Award herein being money, the questions forming the subject matter of the Award would be a question relating to money i.e. assets of the JD. Post the 2015 Amendment to the Act, petitions under Section 47 of the Act are to be now filed only before the High Court. Reliance is placed for this proposition on the judgment in the case of Precious Sapphire v. Amira Pure Foods Private Ltd., 2018 SCC OnLine Del 12699 and Trammo DMCC v. Nagarjuna Fertilizers, 2017 SCC OnLine Bom 8676. 18. Learned counsel submits that it has been clearly stated in para 7 of the Petition that the JD has its office at New Delhi and the address has also been mentioned being, First Floor, Core-6, Scope Complex Lodhi Road, New Delhi. In the list of assets, the description of the property has been furnished. It is also mentioned that all the assets of the JD including moveable property such as cars, bank accounts, fixed deposits, etc. are at Delhi. Other assets such as office furniture, machinery, computers, TV sets, refrigerators etc. are lyi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om attachment under Section 60(1) (kc) of CPC would not apply. In the present case, JD has not shown any Statutory Bar to the disposition of a Leasehold interest and the tenancy is not a residential tenancy, so as to be exempted under Section 60 CPC. Even otherwise, there is no denial that JD has moveable assets within the jurisdiction of this Court and even if the assets are not sufficient to satisfy the decree, this aspect will not be relevant at this stage to decide the maintainability of the present proceedings, as held in the case of Motorola Inc. (supra). 21. In so far as the contention of the JD regarding the pending proceedings in the Rajasthan High Court is concerned, learned Senior Counsel for the Petitioner contends that firstly, it is even doubtful in law whether a composite petition can be filed under Section 34 and Section 48 of the Act. Supreme Court in Hindustan Petroleum Co. Ltd. v. Videocon Industries Ltd., (2012 SCC Online Del 3610) has held that Part-I and Part-II of the Act operate in different spheres. Section 34 is for setting aside of an Arbitral Award, while Part-II deals with enforcement of certain Foreign Awards and thus, while proceedings unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed an application objecting to the maintainability of the petitions on the ground that no part of cause of action in respect of the subject matter of the Award has arisen within the jurisdiction of this Court. Since the assets of the JD are not located within the jurisdiction of this Court, there is lack of territorial jurisdiction to entertain the petitions. 26. Petitioners have sought to enforce the Awards on the ground that the JD has an immoveable property within the Territorial Jurisdiction of this Court, where it admittedly runs its business and is using the same as an Administrative Office and also has various Bank accounts, within the jurisdiction of this Court. In the application filed by the JD objecting to the jurisdiction, it is significant to note that while a categorical stand has been taken with respect to the immoveable property, that the premises are owned by the Government and the JD is using the premises as an Administrative Office only as a Lessee, but there is no denial to the averment of the Petitioner with respect to the Bank Accounts or other moveables. The stand of the JD in the application is as under: 6.11 The Petitioner/Decree holder is well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y objection of the JD, it is necessary to examine certain provisions of the Act and CPC. Section 2 (1) (e) which is in Part-I Chapter 1 of the Act is as under: 2. Definitions:- (e) Court means the principal civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any civil Court of a grade inferior to such principal civil Court, or any Court of Small Causes. Explanation to Section 47 is as under: Explanation. In this section and all the following sections of this Chapter, Court means the principal civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction over the subject-matter of the award if the same had been the subject-matter of a suit, but does not include any civil Court of a grade inferior to such principal civil Court, or any Court of Small Causes. 29. Bombay High Court in the case of Tata International ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn as in the case of Part I where the subject matter is the subject matter of the arbitration. In other words, if the party has a foreign award in its favour, it can seek to enforce the award in any part of the country where it is sought to be enforced as long as money is available or suit for recovery of money can be filed. In my opinion, therefore, expression subject matter of the award to the explanation under Section 47 is different from the expression subject matter of the arbitration under Section 2(e) of Part I of the Act. A foreign award if allowed to be enforced is a deemed decree. It can be enforced anywhere that the respondents may have money. In other words it is in the nature of forum hunting. The expression subject matter of the award and the subject matter of the arbitration agreement are two different and distinct expressions. In respect of a foreign award, if the expression subject matter of the award was to mean the same thing as the subject matter of the arbitration agreement, in most cases there would be no Court available where the award could be enforced as the entire cause of action in respect of the subject matter of the arbitration could be the foreig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enforced in a Court which the respondent claimed, lacked territorial jurisdiction. In paragraph 2 of the judgment, the Court considered the distinction between the aforesaid two provisions relating to the subject matter of the two aspects: in an arbitration the Court would consider the subject matter of the arbitration; in the enforcement of the award the Court would consider the subject matter of the award as the determining factors. This stands to reason and logic. The subject matter of the arbitration may be a certain contract, a certain property etc., The territorial jurisdiction of the Court would be where the contract was entered into or where the some or all the properties of the respondent would be. Once the arbitration is concluded and has to be enforced it is the subject matter of the award which would have to be seen. That would be whether the award is a money award (analogous to a money decree in a litigation) or a declaration or other relief with regard to a contract or a property. The award would have to be filed for its enforcement in a Court which would be able to enforce that award. It would be futile to file it where a cause of action may have arisen, if the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances of each particular case. *** Where it becomes necessary to enforce an international award, the position is different. The first step is to determine the country or countries in which enforcement is to be sought. In order to reach this decision the party seeking enforcement needs to locate the State or States in which the losing party has (or is likely to have) assets available to meet the award. 33. Finally, the Supreme Court in the context of an Award for money held as under: 16. This being an award for money its subject-matter may be said to be money, just as the subject-matter of a money-decree may be said to be money. xxx xxx xxx 19. It is now for the appellant to ascertain where the monies were so held and, if they were held within the jurisdiction of the Bhavnagar court, to apply for an amendment of the jurisdiction paragraph of its application to the Bhavnagar court accordingly. The Bhavnagar court would then, after notice to the parties, consider whether or not the amendment should be allowed. It would, ordinarily having regard to the object of the said Act and the fact that these events have transpired after the application to it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the decree to the Court where any property of the judgment debtor is found as the Court having jurisdiction . 36. In the case of Motorola (supra), a Coordinate Bench of this Court relying on the judgment in Brace Transport (supra) and the various provisions of Order XXI CPC clearly held that the only relevant factor in execution of the Award is the location of the assets or the property of the JD and not the JD itself. Relevant paras read as under: 19. The DH is also right in contending that the present action for execution of the award is not action against personam of the JD and not even against the title of the shares but is for an attachment and sale of the assets of the JD. The only relevant factor is the location of the assets or the property and not the JD itself and in the present case the DH is right in contending that the location of the assets in question, i.e., shares and bank accounts, is in Delhi and this Court thus has jurisdiction. 20. Finally the position of law now is well settled as per the judgment of the Hon'ble Supreme Court in Brace Transport Corporation's case (supra) wherein it has been held that a party seeking enforceme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make another application for enforcement of the Award, much like another application for execution of a decree under the CPC wherever another property of the respondent may be found for execution and enforcement of the Award. 20. This, therefore, settles the territorial jurisdiction aspect under the application for execution made by the appellant. The notice issued under Order 21 Rule 22 would, therefore, be entitled to be issued by this Court having territorial jurisdiction for the enforcement of the award. The impugned order refusing to exercise jurisdiction on the ground that merely because the bank account of the respondent was within its territorial jurisdiction is, therefore, incorrect and must be set aside. This Court would have to exercise its jurisdiction to enforce the award. 38. Reading of the aforesaid judgments along with the provisions of CPC and the Arbitration Conciliation Act, 1996, leads to a prima facie conclusion that this Court would have territorial jurisdiction to entertain the petition. Mr. Banerjee is right in his contention that the subject matter of the Award is money and the JD has its assets within the territorial jurisdiction of this Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n application for enforcement of the Foreign Award before the Bombay High Court. Contention of Ashapura was that in view of Section 42 of the Act, the application for enforcement ought to have been made before the Gujarat High Court. Bombay High Court rejected the contention of Ashapura on the ground that Section 42 is in Part I of the Act and since Part I itself had no application to a Foreign Award, Section 42 would have no application. This view of the Bombay High Court was upheld by the Supreme Court. Insofar as the issue of maintainability of the petition under Section 34 filed by the JD in Rajasthan High Court is concerned, the said issue is irrelevant to the present controversy in these petitions. 41. In view of the above, the JD is directed to file an Affidavit in Form 16-A, Appendix E‟ CPC and disclose all its assets moveable immoveable and tangible/intangible within a period of five weeks from today. Documents relating to the immoveable property alleged to be on lease at the address given above would also be filed by the JD, along with the Affidavit. Depending on the disclosure in the Affidavits, the issue of territorial jurisdiction of this Court would be fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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