Madras High Court
Glencore International Ag vs Dalmia Cement (Bharat) Ltd on 17 November, 2014
1
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Reserved On : 01.10.2018
Delivered On : 04.01.2019
CORAM
THE HONOURABLE MRS. JUSTICE R. THARANI
C.R.P.(MD)No.916 of 2015
Glencore International AG
Rep. by constituted attorney P.N.Surendran,
Having its office at:
Baarermattstrasse 3,
PO Box 1363, CH 6341,
Switzerland. ... Petitioner
Vs.
Dalmia Cement (Bharat) Ltd.
Dalmiapuram District,
Tiruchirappalli,
Tamil Nadu - 621 651
rep. by its authorized signatory
Ambuj Kumar Sirvastava. ... Respondent
Prayer : This revision petition is filed under Article 227 of Constitution of India,
to strike off the petition in Arbitration O.P.No.5 of 2015 on file of the Principal
District Judge, Trichy.
For Petitioner : Mr.Raguvaran Gopalan
For Respondent : Mr.S.Anwar Sameem
ORDER
This petition is filed to strike off the petition in Arb.O.P.No.5 of 2015, on file of the learned Principal District Judge, Trichy. http://www.judis.nic.in 2
2.The respondent herein is the petitioner and the petitioner herein is the respondent in Ar.O.P.No.5 of 2015. The respondent herein has filed an Arbitration O.P.No.5 of 2015 before the learned Principal District Judge, Tirchy under Section 34 of the Arbitration and Conciliation Act, to set aside the award dated 17.11.2014 passed by the London Court of International Arbitration in Case NO.132448 dated 17.11.2014 and prayed that Arb. O.P.No.5 of 2015 is to be strike off and that there is fault and illegality in the award and the Tribunal has violated the principles of natural justice and acted in the biased manner and that the Tribunal has wrote the conclusion in arbitrary manner.
3.The facts of the case is that the petitioner and the respondent have entered into a sale agreement. The respondent is a cement manufacturing Company and Steam Coal is a major raw material for manufacturing cement and an agreement for sale of shipments of Steam Coal was executed between the petitioner and the respondent on 22.02.2012. An addendum, dated 19.07.2012 and another addendum, dated 06.09.2012 were executed between the parties and the Contract is for nine shipments of Coal between March 2011 till January 2012. The contract has stipulated the Coal quality in accordance with specifications and quality parameters were fixed and ceiling quality parameters as to rejection also was fixed. If the Coal was superior to the typical specifications, the petitioner will be entitled for bonurs in payment and if the http://www.judis.nic.in 3 quality of Coal was inferior to the technical specifications, the petitioner herein will be penalised for the same and standard price was agreed to be USD 100 per MT of coal, subject to increase or decrease on the basis of the quality of the coal. It is stated that sampling, testing and analysis of the coal to determine the weight of the consignments was to be in accordance with the American Standard for Testing and Materials and the testing and analysis was agreed to be carried out by Independent Inspection Agencies appointed by the petitioner.
4.It was stated that all the shipments were supplied to the respondent through various ports in India. It is stated that shipments 1 to 5 were supplied between March and October 2011.
5.On the side of the respondent, it is stated that the quality was below the quality parameter. The petitioner has belatedly delivered those shipments between 15.09.2012 to 17.09.2012 and the quality was below the typical specifications. The petitioner has pressurized the respondent to accept the same and to accept the further shipments of low quality coal. When negotiations were going on to fix the price, the petitioner herein has terminated the contract and initiated arbitrary proceedings before the London Court of International Arbitration. The Arbitration Tribunal has passed an order without looking into the merits of the case but simply dismissed the request of the respondent irrespective of the self serving documents produced by the petitioner herein. An http://www.judis.nic.in 4 arbitral award was passed against the respondent herein and that the arbitral award was passed in a biased manner without following the principles of natural justice and the arbitral award is to be strike off and filed a petition under Section 34 of Arbitration Act.
6.On the side of the petitioner, it is stated that this award was a foreign award and Section 48(1)(e) of the Arbitration and Conciliation Act, 1996 is not applicable and the learned Principal District Judge, Trichy has erred in taking the arbitration O.P. On file.
7.It is stated that the petitioner has filed an execution petition in E.P.No.78 of 2015 before the Delhi High Court for enforcement and for execution of the award and the Delhi High Court has declined to accept the above contention of the respondent under Arbitration and Conciliation Act. The petition filed by the respondent before the learned Principal District Judge, Trichy is only on the ground of jurisdiction of the Court which is not applicable.
8.It is stated that Clause 17 of the agreement shows that governing law of the contract has been mutually decided by the parties to be the substantive law of England and the parties are agreed to settle the dispute by referring the matter to arbitration under the Rules of London Court of International Arbitration and that the place of arbitration is at London and that the respondent has http://www.judis.nic.in 5 participated in the arbitration proceedings and filed counter claim and the applicability of Part I of arbitration and Conciliation Act, 1996 was excluded and that the petition filed by the respondent under Section 34 of the Arbitration and Conciliation Act is not maintainable.
9.On the side of the petitioner, it is stated that Section 48(1)(e) of Arbitration and Conciliation Act, 1996 provides a foreign arbitral award attains finality unless the award has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made. It is stated that under Sections 67, 68 or 69 of the English Arbitration Act, 1996, the arbitral award can be challenged only before the Hon'ble Court of England. No appeal was filed by challenging the arbitral award within a period of 28 days as per Section 70 of English Arbitration Act.
10.On the side of the petitioner, it is stated that the Hon'ble Supreme Court in numerous Judgments has decided this issue regarding the applicability of a foreign award in Bhatia International v. Bulk Trading S.A. And another reported in (2002) 4 SCC 105, Reliance Industries Ltd. v. Union of India reported in (2014) 7 SCC 603, Harmony Innovation Shipping v. Gupta Coal India Ltd. And Others reported in 2015(3) SCALE 295 and Videocon Industries Limited v. Union of India and Another reported in (2011) 6 SCC 161, held that the applicability of Part I of the Arbitration and Conciliation Act, 1996. The present case is squarely covered http://www.judis.nic.in 6 by these decisions in as much as it is apparent on the face itself that Part I of the Act is excluded as the Laws of England has been chosen as the applicable law and the seat of Arbitration chosen was London.
11.On the side of the petitioner, it is stated that no part of cause of action arose in Trichy and the petitioner is not having any Head Office in India and Arbitration O.P. is not maintainable before the learned Principal District Judge, Trichy.
12.On the side of the petitioner, it is stated that Section 34 of the Arbitration Act, is applicable only for a Domestic award and not for International awards and that an E.P. is pending before the Delhi High Court in E.P.No.75 of 2015 and the Civil Revision Petition to strike off the order was filed before the Hon'ble Supreme Court and that the respondent questioned the execution petition as Arbitration is pending in Trichy and the objection of the respondent is rejected and SLP was before the Hon'ble Supreme Court was dismissed and that the award is enforceable and the petition under Section 34 is not applicable to a Foreign award and that the petition is to be striked off.
13.On the side of the respondent, it is stated that the execution petition in E.P.No.75 of 2015 & Ex.Appl.(O.S).Nos.1216 and 1217 of 2015 are disposed of by the Delhi High Court. On the side of the respondent, it is further http://www.judis.nic.in 7 stated that the award was not challenged in the Supreme Court only petition E.P.No.75 of 2015 was challenged before the Hon'ble Supreme Court. It is stated that applicability under Section 48 alone is decided and applicability under Section 34 is not decided.
14.On the side of the petitioner, it is stated that the Delhi High Court has decided that Section 48 is applicable and Section 34 is not applicable and the Hon'ble Supreme Court has upheld this and dismissed the SLP and there is nothing survives for adjudication.
15.On the side of the petitioner, it is stated that the respondent has participated in the arbitral proceedings and has filed a counter claim before the Arbitral Tribunal. Therefore, Section 34 of Arbitration Act is not maintainable.
16.A perusal of Section 34 of the Arbitration Act reveals that Section 34 of Arbitration Act was applicable only to domestic awards and it is not applicable to the foreign awards. A perusal of records reveals that the High Court of Delhi in E.P.No.75 of 2015 has observed that there is no infirmity with the procedure adopted by the Arbitral Tribunal and the SLP filed by the respondent was dismissed by the Hon'ble Supreme Court. Therefore, there is nothing survives for http://www.judis.nic.in 8 R.THARANI, J.
mrn adjudication. Hence, the petition filed under Section 34 of the Arbitration Act is to be struck off.
17.In the result, this Civil Revision Petition is allowed. No costs.
Index : Yes/No 04.01.2019
Internet : Yes/No
mrn
To
1.The Principal District Judge,
Trichy.
2.The Section Officer,
VR Section,
Madurai Bench of Madras High Court,
Madurai.
C.R.P.(MD)No.916 of 2015
04.01.2019
http://www.judis.nic.in