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TMI Blog2012 (10) TMI 1270X X X X Extracts X X X X X X X X Extracts X X X X ..... Global Logistics Pvt. Ltd. ('Aargus') has filed objections under Section 48 of the Act. Aargus has also filed OMP No. 201 of 2012 under Section 34 of the Act seeking the setting aside of the foreign Award. The grounds for setting aside the foreign Award are identical to the grounds urged by Aargus in the objection to the enforcement petition, i.e., OMP No. 61 of 2012. Background The background to the petitions is that Aargus is a company incorporated in India having its registered office in Delhi and is engaged in the business of freight forwarding and associated international cargo services in India and abroad. NNR is a company incorporated under the laws of Peoples Republic of China having its head office in Shanghai. NNR is a joint venture between NNR Global Logistics (Japan) and Shanghai YUD International Forwarding Co. Ltd. NNR is engaged in the business of international freight forwarding and other international cargo services. 2. An agency agreement was executed on 15th October 2003 between NNR and Aargus in terms of which both Aargus and NNR were to act as each other's non-exclusive agent in the business of freight forwarding and associated internatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 34 of the Act is that in order for it to be maintainable the place of arbitration must be India. It is submitted that since the seat of the arbitration was KL, the curial law of the arbitration was Malaysian law (as was the proper law of the arbitration agreement). NNR states that Part I of the Act is not applicable to foreign Awards. It is submitted that the competent authority to set aside or suspend the foreign Award as such is a Court in Malaysia, i.e., the country in which the Award was made. Reliance is placed on the decisions in Videocon Industries Limited v. Union of India (2011) 6 SCC 161 and Yograj Infrastructure Limited v. Ssang Yong Engineering and Construction Company Limited (2011) 9 SCC 735. 7. On its part, Aargus argued that Part I of the Act applies to the impugned foreign Award since the substantive law governing the contract was Indian law. Reliance is placed on the decisions in National Thermal Power Corporation v. Singer Company (1992) 3 SCC 551, Aastha Broadcasting Network Limited v. Thaicom Public Company Ltd 2011 (4) Arb. LR 28 (Delhi), Anita Garg v. Glencore Grain Rotterdam B.V. 182 (2011) DLT 365, Bhatia International v. Bulk Trading S.A. (2002) 4 SCC 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shipment with the relevant airline. Aargus would clear the goods at customs upon arrival in India and prior to delivery to the recipient. Aargus would collect payment from the client in India for the amount invoiced by NNR as well as air freight. Aargus would remit to NNR the amount so collected. NNR would pay to Aargus a share of the profits earned from air freight. The invoices were to be raised on a monthly basis under Clause 5 (v) of the agency agreement. 11. It is submitted by Aargus that since NNR invoked the arbitration clause on 2nd July 2010 when it submitted to the ICC its request for arbitration, any claim by NNR which pertained to an invoice three years earlier to that date would be barred in terms of Article 137 of the Schedule to the Indian Limitation Act, 1963 ('ILA') which applied to arbitral claims as mandated in Section 43 of the Act which is under Part I of the Act. Aragus has in a tabulated form shown how the claims in respect of 16 invoices dated between 21st May 2005 and 20th May 2007 for a total sum of US Dollar ('USD') 102,083.95 are barred by limitation. Aargus contends that since Indian law is applicable to the contract between the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anuary 2009 that Aargus for the first time sought to raise the dispute that the figures were wrong or inflated. 13. It is contended by NNR that since the seat of arbitration was Malaysia, the learned Arbitrator rightly applied the Malaysian curial law. It is further submitted that the limitation is a matter of procedure and lex fori applies to matters of limitation. It is submitted that the view taken by the learned Arbitrator that ILA did not apply was a plausible one. It is further pointed out that since the invoices from 1st May 2007 to 23rd June 2007 were not due prior to 31st July 2007, even as per the ILA, claims pertaining to invoices totaling USD 97,024.55, were not time barred. Indian Limitation Act is a procedural law 14. In light of the above submissions, the issue that is to be considered first is whether the law of limitation is a procedural law or a substantive law so far as time limits barring the remedy such as for breach of contract is concerned. The Madras High Court in Chairman, Railway Board, Government of India v. P. Chandrasekaran [decision dated 17th January 2006 in Writ Petition No. 29444 of 2003] held that the principle of limitation bars the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but the procedure for filing the appeal including the period of limitation cannot be called a substantive right, and an aggrieved person cannot claim any vested right claiming that he should be governed by the old provision pertaining to period of limitation. It was categorically held that unless the language used plainly manifests in express terms or by necessary implication a contrary intention a statute divesting vested rights is to be construed as prospective, a statute merely procedural is to be construed as retrospective and a statute which while procedural in its character, affects vested rights adversely is to be construed as prospective. The Court while discussing limitation further held that the law of limitation is generally regarded as procedural and its object is not create any right but to prescribe periods within which legal proceedings be instituted for enforcement of rights which exist under substantive law. 18. The Law Commission of India in its 193rd report on 'Transnational Litigation - Conflict of Laws - Law of Limitation' discussed how in the context of expansion of international trade it has become necessary to take notice of the fundamental c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) may also differ from (3). 23. The following observations of Mustill and Boyd have been relied upon by the Supreme Court in Dozco India Private Limited v. Doosan Infracore Company Limited (2011) 6 SCC 179 and Sumitomo Heavy Industries Ltd. v. ONGC Ltd. (1998) 1 SCC 305: there is a strong prima facie presumption that the parties intend the curial law to be the law of the 'seat' of the arbitration, i.e., the place at which the arbitration is to be conducted, on the ground that that is the country most closely connected with the proceedings. 24. Likewise in Bharat Aluminium Co. it has been held that the legal position that emerges from a conspectus of all the decisions, seems to be that the choice of another country as the seat of arbitration inevitably imports an acceptance that the law of that country relating to the conduct and supervision of arbitrations will apply to the proceedings. 25. In the instant case, the conclusion drawn by the learned Arbitrator that it is the MLA which would apply is perfectly plausible and consistent with the internationally accepted legal position which has been reaffirmed by the Constitution Bench of the Supreme Court in Bharat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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