- Calcutta High Court: Courts cannot re-appreciate the evidence or substitute its view with that of the arbitrator while considering the issue of enforcement of a foreign award.
- NCLAT: Notice period of 30 days should be given for E-Auction, even though there are no timelines under Liquidator Regulations
- Supreme Court: Section 327(7) of the Companies Act, 2013 which excludes the application of Section 326 and Section 327 of the Companies Act, 2013 to a company undergoing liquidation under the Insolvency and Bankruptcy Code, is constitutionally valid.
- NCLAT: Avoidance application can continue after the completion of CIRP.
I. Calcutta High Court: Courts cannot re-appreciate the evidence or substitute its view with that of the arbitrator while considering the issue of enforcement of a foreign award.
The Calcutta High Court ("Calcutta HC") has, in its judgement dated June 23, 2023, in the matter of Jaldhi Overseas Private Limited v. Steer Overseas Private Limited [(2023) SCC OnLine Cal 1628], held that courts cannot re-appreciate the evidence or substitute its view with that of the arbitrator while considering the issue of enforcement of a foreign award under Section 48 (Conditions for enforcement of foreign awards) of the Arbitration and Conciliation Act, 1996 ("Act").
Jaldhi Overseas Private Limited, a company incorporated under the laws of Singapore ("Petitioner"), by way of its e-mail dated December 24, 2009 ("E-mail Correspondence") addressed to Steer Overseas Private Limited ("Respondent") offered to carry the Respondent's cargo of iron ore fines from Haldia and Visakhapatnam ports to a main port in China, in accordance with the terms of the E-mail Correspondence. The Respondent, upon receipt of the E-mail Correspondence, altered the commercial terms therein and returned its counter offer to the Petitioner by way of a separate e-mail and also requested the Petitioner to nominate a vessel to carry the cargo.
The Petitioner prepared a fixture note in furtherance of the terms and conditions of its E-mail Correspondence ("Fixture Note 1"), although this Fixture Note 1 was circulated to the Respondent only on January 27, 2010. The Fixture Note 1 provided for an arbitration clause specifying that arbitration was to be held in Singapore and English law was to apply. The Petitioner had separately circulated a fixture note dated December 24, 2009 ("Fixture Note 2") to Global Up International Limited, a 100% subsidiary of the Respondent ("Sister Company") and raised succeeding invoices pertaining to Fixture Note 2 on the Sister Company.
Upon receipt of Fixture Note 1, the Respondent amended two terms pertaining to discharge and detention rates and re-circulated the modified note ("Modified Fixture Note 1") to the Petitioner on January 29, 2010. However, prior to the Respondent circulating the Modified Fixture Note 1 to the Petitioner, the Petitioner had already nominated the vessel namely; MV Dong Jun ("Vessel"), which first arrived at Haldia on January 21, 2010, loaded the Respondent's cargo at Haldia and then sailed for Visakhapatnam where the Respondent accepted the notice of readiness to load at Visakhapatnam. Subsequently, the Vessel reached Vishakhapatnam on February 2, 2010, for loading the remaining cargo of the Respondent, however, it did not berth at Visakhapatnam due to non-readiness of the cargo documents. Moreover, the Respondent utilized some days in excess of the lay time at the discharge port of Zhenjiang, China, which resulted in the accrual of demurrage and damages worth $299,047. Additionally, the Respondent through its Sister Company also owed funds to the Petitioner, in relation to fixtures where other vessels were appointed.
In a meeting dated January 24, 2011, the Respondent offered $200,000 to the Petitioner, as a full and final settlement of all dues, however, this settlement was not accepted by the Petitioner. The Petitioner, by way of its letter dated May 4, 2012, initiated arbitral references before the Singapore International Arbitration Centre ("SIAC") in relation to all the fixtures between the Petitioner, the Respondent and the Sister Company. The SIAC through its letter dated June 25, 2012, informed the Petitioner and the Respondent of the appointment of Mr. Marcus Gordon as the sole arbitrator ("Arbitrator"), in all the arbitral references instituted by the Petitioner. The Petitioner had discontinued all other arbitral references, except the issue pertaining to Fixture Note 1. On January 20, 2017, the Arbitrator issued a partial award in favour of the Petitioner thereby deciding the Respondent's liability as $12,645.83 and $299,047 on account of detention in Visakhapatnam and demurrage at Zhenjiang, China, respectively ("Award").
The Petitioner applied to the High Court of the Republic of Singapore ("Singapore HC") for enforcing the Award in Singapore, which application was contested by the Respondent. The Respondent also preferred an appeal before the Singapore HC to set aside the Award, however the said appeal was dismissed by the Singapore HC vide its judgement dated November 27, 2017. Further, by way of an order dated December 1, 2017, the Singapore HC granted the Petitioner with leave to enforce the Award in Singapore.
In light of the above, the Petitioner approached the Calcutta HC seeking enforcement of the Award in India, by filing an application under Section 46 (When foreign award binding) of the Act ("Application"). Issue
Whether a court can re-appreciate the evidence or substitute its view with that of the arbitrator while considering the issue of enforcement of a foreign award.
Contentions of the Petitioner:
The Petitioner submitted that the Award had been passed in terms of the (Singaporean) International Arbitration Act, 1994 with the arbitral proceedings conducted in consonance with the SIAC rules. Both, India and Singapore, being signatories to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) would make Chapter I (New York Convention Awards) of Part II (Enforcement of certain foreign awards) of the Act relevant, and as such the Petitioner had complied with Section 47 (Evidence) of the Act, by providing the original Award as an annexure to its Application, along with a duly certified copy of the arbitration agreement, the validity of which had not be disputed.
The Petitioner further submitted that foreign awards could not be challenged under the Act, except in the country in which it was made. Further, the Respondent had sought to strike out the leave granted to the Petitioner by the Singapore HC, wherein the Award had been elevated to a decree. However, the Respondent had not made an application to set aside the Award in itself. Moreover, the Respondent sought to challenge the Award under Section 48 of the Act on the same grounds that were put forth by the Respondent before the Singapore HC, albeit already arguing at length before the Arbitrator who had issued a well-reasoned Award after considering oral and documentary evidence submitted by both the Petitioner and the Respondent. Furthermore, the Respondent was seeking to challenge the Award on grounds of merits which was not permissible under the Act. In order to support its submissions, the Petitioner placed reliance on the judgement passed by the Hon'ble Supreme Court ("SC") in the case of Shri Lal Mahal Limited v. Progetto Grano Spa [(2014) 2 SCC 433], wherein it was held that Indian courts cannot have a second look at foreign awards at the enforcement stage. Further, reliance was placed by the Petitioner on the judgement passed by the SC in the case of Gemini Bay Transcription Private Limited v. Integrated Sales Service Limited and Another [(2022) 1 SCC 753] ("Gemini Bay Case"), wherein it was held that Indian courts cannot refuse the enforcement of a foreign award when it was found to be contrary to the substantive law agreed to amongst the parties.
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