Bombay High Court
Cetaco Sa vs Bombay Export International on 14 December, 1999
Equivalent citations: 2000(3)BOMCR97, 2000(3)MHLJ311
Author: D.K. Deshmukh
Bench: D.K. Deshmukh
ORDER D.K. Deshmukh, J.
1. This petition has been filed for enforcing a foreign award under the Foreign Awards (Recognition and Enforcement) Act, 1961 (hereinafter referred to as the said Act). Section 5 of the said Act lays down that any person interested in foreign award can apply to the competent Court for filing of the award. Section 6 of the said Act lays down that if the Court is satisfied that the foreign award is enforceable under the Act, then the Court shall direct to file the award and the Court shall proceed to pronounce the judgment according to the award. The present petition therefore has been filed for filing of the award dated 30th October 1995 and also for an order in terms of that award. By the said award dated 30th October 1995, the arbitrators have awarded a sum of 1,50,000 U.S dollars to the petitioners with interest.
2. The petition has been opposed by the respondents. The first objection that is raised by the respondent is that the petitioners have not complied with the requirements of section 8 of the said Act inasmuch as neither original award nor a duly authenticated copy thereof was filed with the petition. The second objection is that the original agreement for arbitration or certified copy thereof has also not been filed. The third objection raised by the respondents is that the respondents had raised an objection before the arbitrators to the effect that there is no arbitration agreement in existence between the parties inasmuch as the respondents by their fax message dated 24th November 1994 had informed that fosfa terms, which includes the arbitration clause, are not acceptable to them. According to the learned Counsel appearing for the respondents, the arbitrators were therefore under a duty to consider the question of existence of arbitration Clause while making the award. According to the learned Counsel, the arbitrators have not decided the question of existence of arbitration clause and therefore, the award is illegal.
3. It is further urged that in any case, it is clear from the material produced before this Court that the respondents had not agreed to inclusion of fosfa terms in the contract and therefore, there was no arbitration agreement in existence between the parties and therefore, the award is illegal as the arbitrators had no jurisdiction to make the award.
4. So far as the first objection raised by the learned Counsel for the respondent is concerned, it is true that when the petition was filed, neither original nor duly authenticated copy of the award was filed. However, alongwith the affidavit dated 13th December 1999, the petitioners have filed the duly authenticated copy of the award. In my opinion therefore, the objection raised by the learned Counsel for the respondents does not survive. The requirement of filing a duly authenticated or certified copy of the award is a procedural requirement. The petitioners had filed a true copy of the award with the petition. There is no dispute raised that the copy of the award that was filed by the petitioners alongwith the petition is not really a true copy of the award. In these circumstances therefore, in view of the presentation of duty authenticated copy of the award by the petitioners, the objection does not survive.
5. Now the second objection raised by the respondents that a certified copy of the arbitration agreement has not been filed and the question whether the respondents had disagreed to accept the fosfa terms can be taken up for consideration together. According to the petitioners, the petitioners have filed with the affidavit of Joseph B. Barrett, true copies of the contracts between the parties dated 23rd November 1994 and 18th January 1995. It is the case of the petitioners that the documents dated 23rd November 1994 and 18th January 1995 are a concluded contract between the parties which includes the stipulation that fosfa terms are applicable to the parties. It is submitted on behalf of the petitioners that the documents dated 23rd November 1994 and 18th January 1995 are addressed to the petitioners and the respondents by I.T.A.C. Ltd., who is the common broker of both the parties. According to the petitioners, there were negotiations held between the parties through the common broker and at the conclusion of the negotiations, the concluded contract was faxed by the common broker to both the parties. The petitioners rely on a judgment of the Division Bench of this Court in the case of Promatha Nath Mullick v. Batliwalla and Karani, reported in A.I.R. 1942(29) Bom. 224 in support of the proposition that when a common broker is employed by both the parties, confirmation note sent by the broker represents concluded contract between the parties. The learned Counsel for the petitioners pointed out that the judgment of the Division Bench of this Court in Mullick's case referred to above had been approved by the Supreme Court in its judgment in the case of Jugal Kishore Rameshwardas v. Mrs. Goolbai Hormusji, . The learned Counsel appearing for the respondents, on the other hand, submits that the communication dated 23rd November, 1994 is not a concluded contract between the parties but it is merely a proposal received by the respondents from the common broker. He submits that the contemporaneous conduct of the respondents indicates that the document dated 23rd November 1994 is merely a proposal and not a concluded contract. The learned Counsel points out that after receiving the document dated 23rd November 1994 on the next day, the respondents addressed a fax message where in the document dated 23rd November 1994 has been described as a firm bid and the respondents have given a counter offer in relation to the prices of the commodity. The learned Counsel further submits that by fax message dated 24th November 1994, the common broker also incorporated certain modifications in the alleged contract and confirmation from the respondents was sought to the modifications. The learned Counsel submits that on 24th November 1994, the respondents communicated that fosfa terms are not acceptable to the respondents and only if the buyer agrees to this, then only the letter of credit should be opened. The learned Counsel, relying on this messages, submits that the documents dated 23rd November 1994 does not disclose a concluded contract.
6. Now if in the light of these rival submissions the record of the case is perused, it becomes clear that there is no dispute between the parties that there was a common broker engaged by both the parties for the transaction. Perusal of the document dated 23rd November 1994 shows that it is styled as confirmation of the business between the parties by the common broker. The document itself does not call for any acceptance or confirmation from either of the parties. It is further to be seen here that the second contract between the parties is dated 18th January 1995. Though some of the terms in that document are different than the ones that are contained in the document dated 23rd November 1994 nevertheless, the contents of both these documents are substantially the same. The respondents did not treat the document dated 18th January 1995 as a proposal inasmuch as they did not send the communication, either accepting it or suggesting modification into it or rejecting it. It is therefore clear that in so far as the second contract dated 18th January 1995 is concerned, there is no dispute before me that the confirmation dated 18th January 1995 represents the concluded contract. The only dispute between the parties is about the first contract dated 23rd November 1994.
7. Perusal of the judgment of this Court in Mullick's case referred to above shows that this Court was considering the question as to whether the notes sent by a common broker constitute a contract between the parties, the Division Bench has held that the notes sent to both the parties by the common broker engaged by them is an evidence of the concluded contract between the parties. It is further to be seen that the law laid down by this Court in Mullick's case has been approved by the Supreme Court in the case of Jugal Kishore Rameshwardas referred to above. In the present case, as the parties had engaged a common broker, the confirmation note dated 23rd November 1994 sent by the common broker, would constitute a concluded contract between the parties. In my opinion, in view of the law laid down by this Court in Mullick's case referred to above, I have no option but to hold that the communication dated 23rd November 1994 is nothing but a concluded contract between the parties. As I have held that there was a concluded contract between the parties on 23rd November 1994 itself, the controversy between the parties as to whether the fax message dated 24th November 1994, taking exception to the inclusion of fosfa terms was actually sent by the respondents or not looses its significance because there was a concluded contract on 23rd November 1994 itself. There is no question of the respondents wriggling out of that contract by sending a fax message.
8. So far as the submission made by the learned Counsel appearing for the petitioners that inasmuch as the objection to the jurisdiction was raised, the arbitrators were obliged to consider that objection is concerned, perusal of the first paragraph of the award shows that the arbitrators have in terms held that on 23rd November 1994, there was a concluded contract between the parties which included fosfa terms. In my opinion, thus the arbitrators have held existence of the arbitration agreement to have been proved. Though it is true that the question has not been considered by the arbitrators in detail nevertheless in the award, there is a clear finding about the existence of the arbitration Clause. It is to be seen that when the foreign award is filed, the Court can decline to enforce the foreign award only on the grounds which are mentioned in section 7 of the said Act. The only objections that were raised to the enforceability of the award, are indicated above, and as I find that there is no substance in the objections raised by the respondents the petition deserves to be granted.
9. The petition is therefore granted in terms of prayer Clauses (a) and (c) thereof. At this stage at the request of the learned Counsel for the respondents enforcement of the order of this Court passed in terms of the award is stayed for a period of eight weeks from today.
Certified copy expedited.
10. Petition granted.