Karnataka High Court
Vikrant Tyres Limited And Anr. vs Techno Export Foreign Trade Company ... on 15 April, 2005
Equivalent citations: ILR2005KAR4738
Author: K. Sreedhar Rao
Bench: K. Sreedhar Rao
JUDGMENT K. Sreedhar Rao, J.
1. RFA 152/2000, CRP 2703/2003 and CRP 2624/2003 relates to same subject matter of dispute and between the same parties. As such all the three cases are heard together for passing common order.
2. The Vikrant Tyres Limited (hereinafter called the 'Plaintiff') is a State owned company manufacturing Pneumatic tyres and tubes entered into supply of contract of certain machineries and technical service with Techno Export Foreign Trade Company Limited (hereinafter called the 'Defendant') incorporated in Czechoslovakia. The written contract is marked at Ex.P2 in the suit. The terms contained certain compensatory and penalty clauses for delays and breach committed by either of the party to the contract. The Clauses 2(2), 3(2) and 7(2) in the Contract germane for adjudication in this proceeding are extracted hereunder for convenient glance:
"2(2) The above mentioned prices are understood in Indian Rupees CIF Madras as per INCOTERMS 1980 including seaworthy packing but without erection on site, without customs duties and customs expenses and without any other dues and fees, except those levied by the Czechoslovak Authorities. The prices are firm for the entire delivery period of the contract and are not subject to any escalation whatsoever.
However, the Prices will be governed by Clause No. 3.2 of this Contract."
"3(2) In case the value of the Indian Rupee in terms of Special Drawing Rights (SDR) issued by the International Monetary Fund changes by more than 2.5% (two point five per cent) either way as compared to the value as on the date of the CONTRACT, the payment of the amounts due will be made in such a manner that their value in terms of the SDR will remain the same. The value of the Indian Rupee in terms of the SDR to be taken for the purpose of this CONTRACT and payments thereunder will be the value of the Rupee in terms of the SDR with reference to which the balance in the Central Account of the Ceskoslovenska obchodni banka, a.s. Praha with the Reserve Bank of India, Bombay, stood protected on the relevant dates. The rupee amount of the payments will be adjusted as above only in cases where the date of payment of the amount or installment falls beyond one year from the date of, the signature of this CONTRACT".
"7(2) The Annexes I up to VIII enumerated in the contract contents form an integral part of this CONTRACT."
3. Annexure 8 of the contract pertains to General Terms and Conditions of Delivery for Export in short referred to as (GT and CDE) and Clause 7.5.2 and Clause 14 in the document reads thus:
"7.5.2. If on the day when the price of the goods or any portion of it is to be paid, the rate of exchange of the contractual currency changes in respect of the basic rate of exchange by more than 5 per cent, the Buyers shall be obliged to pay the price of the goods or any payment of it according to the rate of exchange of contractual currency prevailing on the day when such payment is to be effected (see Article 8.2.). As for difference resulting from such regulation to the debit of either party to the contract, the respective party shall be obliged to effect additional payment (return overpaid amounts), unless the originally due payment was effected by amounts adjusted accordingly. However, if the party to whose benefit such a difference accrued, fails to present the claim for its payment (refund) at the latest within 6 months following the last payment effected by the Buyers on account of the price of the goods, the claim shall become void."
"14. PROPER LAW AND ARBITRATION 14.1 Legal relations arising out of this contract as well as its interpretation shall be governed by the law of the Sellers' Country.
14.2 Any dispute arising out of, or in connection with, the present contract or out of breach of contract, as well as the disputes concerning its validity and consequences of its nullity shall be finally settled by the Arbitration Court of the Czechoslovak Chamber of Commerce and Industry in Prague under its Rules and in accordance with the Czechoslovak substantive law and both parties engage to execute forthwith its arbitral award.
4. According to first defendant supplies are made as per the terms of contract, but there are dues relating to difference in SDR rates according to Clause 3.2 of Ex.P.2. The plaintiff contends full discharge of the monetary liability under the contract.
5. The first defendant invoked the arbitration remedy as per Clause 14 of GT and CDE before the Arbitration Court attached to Economic Chamber of Czech Republic and Agriculture Chamber of Czech Republic in RSP 57/1996. The Secretary of the arbitral body sent notice at Ex.P. 16 to the plaintiff to nominate his arbitrator. The plaintiff sent objection that arbitrator has no jurisdiction. The plaintiff even before the proper constitution of the arbitral tribunal and commencement of arbitration filed a suit in OS 94/97 on the file of Civil Judge, (SD) Mysore against the first defendant and one M/s. Sagittarians International Limited for a declaration that there is no arbitration contract between the parties muchless there exists any dispute for reference to arbitration and that the arbitration proceedings before the Economic Chamber of Czech Republic and Agriculture Chamber of Czech Republic at Prague is null and void further seek permanent injunction against the defendants not to proceed with the arbitration proceedings in RSP 57/96 before the Arbitration Court at Prague.
6. The first defendant authorised the second defendant to negotiate in the matter on its behalf. In the suit both the defendants are served. The second defendant remained absent, the first defendant sent its objections by post contending that the issues in the suit are subject matter of arbitration proceedings, hence suit is not maintainable.
7. The first defendant paralelly pursued the arbitration proceedings before the Arbitration Court at Prague. The suit in OS 94/97 came to be dismissed on the ground that the parties are bound by the arbitration contract and that the plaintiff has not challenged specifically the validity of the contract relating to arbitration. Further the contention of the plaintiff that 1st defendant has forfeited rights under contract in view of assignment of rights made under Ex.P.7 in favour of second defendant is held to be untenable.
8. The arbitration Court at Prague granted an award in favour of the first defendant. The plaintiff filed the arbitration case in AC 4/ 2000 for setting aside the Award passed by the Arbitration Court dated 8-3-2000 and to restrain the defendants 1 and 2 from exercising the Award, setting forth almost similar pleas raised in the suit. The Prl. District Judge, Mysore in AC. 4/2000 held that the petition Under Section 34 is not maintainable however, the petition Under Section 48 is maintainable.
9. The plaintiff Aggrieved by the order of rejection of petition Under Section 34 filed CRP 2703/2003, the defendants aggrieved by the order of entertaining the petition Under Section 48 filed CRP No. 2624/2003.
10. In RFA No. 152/2000 the following question would arise for consideration:
(i) Whether under Ex.P7 the first defendant has assigned all his rights under the contract in favour of the Second defendant and as such the arbitration proceeding in favour of first defendant is not sustainable?
(ii) Whether an arbitration agreement as per the terms of Ex.P2 exists, if so, whether the jurisdiction of the Civil Court is excluded? If not, whether the plaintiff has validly challenged the arbitration agreement by seeking appropriate reliefs?
11. In CRP 2703/2003 the following question would arise for consideration:
Whether the petitioner is entitled to reliefs under Section 34 of the Arbitration Act?
12. In CRP No. 2764/2003 the following question would arise for consideration:
Whether an application Under Section 48 is premature without an execution proceedings in that behalf?
13. One of the shareholders filed the suit in OS 677/96 on the file of Civil Judge (Junior Division), Mysore for permanent injunction restraining the plaintiff-company entering into settlement with the first defendant herein. In the said suit the first defendant herein appeared and contested the proceedings by filing the written statement.
14. The content of Ex.P.7 reads as under:
"As discussed over telephone on date with our Mr. Hazara we enclose the authorisation letter from Technoexport authorising us to negotiate regarding SDR. We request you to inform us your suitability enabling Mr. Hazar to visit your office and discuss in details.
A line in confirmation from your end per return fax will highly be appreciated."
15. The contents of Ex.P. 7 only authorise the second defendant to negotiate with the plaintiff as an agent of the first defendant and there is no assignment of rights under the contract in favour of second defendant in any manner. The Trial Court has rightly rejected the contention. Accordingly the first question of law is answered in the negative.
16. The contention in the appeal that the cryptic reference to the terms of GT and CDE in Ex.R2 does not constitute a valid agreement for arbitration is untenable. The ratio laid down by Supreme Court in Alimenta S.A. v. National Agricultural Co-Operative Marketing Federation of India Limited and Anr., squarely applies to the facts of the case. It is permissible for the parties to adopt the terms of some other contract or the terms of model standard contract by reference as a part of the contract by general words without reproducing the entire text of the same. Such a reference by general words would constitute valid incorporation of terms of such contract, if it is not inconsistent with the terms of the contract in which it is incorporated. In the present case the adoption of terms of GT and CDE constitute valid incorporation of the arbitration agreement by reference.
17. The A and C Act of 1996 is conceived by the compulsions of globalisation leading to adoption of the UNCITRAL (United Nations Commission of International Trade Law) Model Law. The A and C Act 1996 is by and large an integrated version of the earlier Arbitration Act of 1940 which governed the domestic arbitration, and the Arbitration (Protocol and Convention) Act 1937, the Foreign Award (Recognition and Enforcement) Act, 1961 which governed international Arbitration awards. Apparently the Chapters I to VIII of the UNCITRAL is the replica of Chapter I to VIII of Part I of A and C Act 1996 except with a difference that in the UNCITRAL the provision is called article whereas under the Act it is called Section.
18. The Part I of A and C Act 1996 consisting of Chapter I to X are made applicable where the arbitration venue is within India. The Part II of the Act applies to arbitration where the venue is outside India. For the State of Jammu and Kashmir Part I, II and IV of the Act apply in so far as they relate to International Commercial Arbitration and Conciliation and not whole of the Act. Obviously for the reason that the said State enjoys a special constitutional legislative autonomy by virtue of the Article 370 of the constitution and it can have its own state legislation. But to the extent of fulfilling obligations under the international treaty Part I, III and IV of the A and C Act is made applicable to the State by Act of Parliament.
19. On deep comparative scrutiny, the A and C Act 1996 makes to some extent departure from UNCITRAL pertaining in judicial intervention and judicial remedies in respect of domestic arbitration and International arbitration. When the venue of the judicial arbitration is in India the Part I of the Act is made applicable obviously for the fact that the proceedings, are governed by the Indian Law. The provisions in Section 5, 8, 9, and 11 permit judicial intervention and deal with pre-arbitration stage, they are basically designed to discourage Civil Court's intervention and intended to aid in favour of arbitration.
20. The Arbitral Tribunal under Arbitration Act 1940 was not competent to decide its-jurisdiction and it was within the domain of the Civil Court to decide. As a marked departure, the provisions of Section 16 declare that "the arbitral tribunal may rules its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement." (emphasis supplied) The Supreme Court in the Hindustan Petroleum Corporation v. Pink City Midway Petroleums, while interpreting Section 8 has laid down that the arbitrator alone has jurisdiction to decide the questions relating to existence and validity of the arbitration agreement.
21. Section 37(2) reads thus:
(2) An appeal shall also lie to a Court from an order of the arbitral tribunal-
(a) accepting the plea referred to in Sub-section (2) or Sub-section (3) of Section 16; or
(b) granting or refusing to grant an interim measure under Section 17.
The provisions of Section 37(2) gives effect to the provisions of Article 16(3) of the UNCITRAL by virtue of which an appeal is provided against the order of the arbitral tribunal regarding its jurisdiction to adjudicate the dispute. The provisions in Article 16 of the UNCITRAL although invests jurisdiction on the arbitral tribunal to rule on its jurisdiction, an appeal is provided against such order to the Court under Article 16(3). The Court Under Section 37(2) pending appeal, has incidental and ancillary jurisdiction to grant stay of the arbitral proceedings. Similar is the position in Article 16(3) read with Article 9 enables the appellate Court to pass an interim order staying the arbitration proceeding. Therefore in the UNCITRAL it is to be noticed that the judicial intervention is not totally excluded to test the order of the arbitral tribunal by the Court pending arbitration.
22. The method and manner of judicial intervention and judicial remedies envisaged in UNCITRAL is not verbatim adopted by A and C Act 1996 but the Act keeps wise and salient distinction between the domestic arbitrations and the international arbitrations. In the UNCITRAL the competence of the arbitrator to rule on its jurisdiction, (Article 16) the Civil Court's intervention to set aside the award Under Section 34 is made applicable to domestic arbitration governed by Part I of the Act. The Part II of the Act governs the international arbitrations. A distinction is made between the awards based on New York Convention governed by Chapter I and awards based on Geneva convention governed by Chapter II. In so far as the awards based on New York Convention in Chapter I, Section 45 permits judicial intervention at pre-arbitration stage on certain conditions. Similarly Section 54 in Chapter n relating to Geneva Convention awards permits judicial intervention at pre-arbitration stage on certain conditions. Chapter I and Chapter II of Part II provide self contained procedures for judicial intervention and judicial remedy, and the provisions in both the Chapters are para materia.
23. The Section 45 of the Arbitration and Conciliation Act reads thus:
45. Power of judicial authority to refer parties to arbitration: Notwithstanding anything contained in Part I or in the Code of Civil Procedure, 1908 (V of 1908), a judicial authority, when seized of an action in a matter in respect of which the parties have made an agreement referred to in Section 44, shall, at the request of one of the parties or any person claiming through or under him, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed."
24. The Counsel for the defendants strenuously contended that a party to an international arbitration agreement cannot approach the Court Under Section 45 as a plaintiff to get the agreement declared null and void, in-operative, or incapable of being performed. In this regard laid an emphasis on the words "a judicial authority when seized of an action in a matter in respect of which parties have made agreement referred to Section 44 shall at the request of one of the parties or any person claiming through or under him". Interpreting the said words it is argued that a person who wants to challenge the validity of an arbitration agreement in a Civil Court can do so only when the other party has filed a suit or proceeding before the Civil Court.
25. I am unable to be persuaded by the argument. The truncated interpretation placed on Section 45 to permit a party only as a defendant and only by way of interlocutory application to challenge the validity , of arbitration agreement is untenable. Such a position leads to anomalous and dangerous consequences, and does not give fair opportunity and hand out benefit of legal remedy in equal and equitable manner to both the parties. Further it virtually denies the right to the aggrieved party in international arbitration to approach the domestic Civil Court for a remedy Under Section 45. Further such an interpretation is contrary to the spirit and provisions of A and C Act 1996.
26. In fact Section 45 corresponds with Section 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961 which reads thus:
"3. Stay of proceedings in respect of matters to be referred to arbitration. Notwithstanding anything contained in the Arbitration Act, 1940 or in the Code of Civil Procedure, 1908, if any party to an agreement to which Article II of the convention set forth in the Schedule applies, or any person claiming through or under him commences any legal proceedings in any Court against any other party to the agreement or any person claiming through or under him in respect of any matter agreed to be referred to arbitration in such agreement, any party to such legal proceedings may, at any time after appearance and before filing a written statement or taking any other step in the proceedings, apply to the Court to stay the proceedings and the Court unless satisfied that the agreement is null and void, inoperative or incapable of being performed or that there is not, in fact, any dispute between the parties with regard to the matter agreed to be referred, shall make an order staying the proceedings".
27. The judicial remedy Under Section 45 pertains to pre arbitral stage. A party to an international arbitration if legally aggrieved can approach the Court of his natural jurisdiction to avoid the arbitration on the grounds that the agreement is null and void, inoperative or incapable of being performed. The grounds mentioned in Section 34(2)(a)(i)(ii)(v)(b)(i) and (ii) corresponding with Article 34(2)(a)(i)(iv)(b)(i) and (ii) of UNCITRAL and the grounds mentioned in Article 36 and Section 48 except Article 36(1)(v) and Section 48(1)(e) perhaps constitute valid grounds Under Section 45 to declare the arbitration agreement is null and void inoperative or incapable of being performed. An order passed Under Section 45 against conducting arbitration is a comprehensive remedy and such an order binds both the parties. The party who suffers such order Under Section 45 is totally debarred from resorting to arbitration not only in the country in which the order is passed but also in any country which is a member to the international treaty in that behalf. The order passed Under Section 45 and 48 are appealable Under Section 50.
28. The Indian Parliament in its wisdom keeping in view the intricate and delicate propositions of private international law vis-a-vis the state sovereignty has made separate provisions for domestic arbitration governed by provisions of Part I and international arbitration governed by Part II. The pre-arbitration remedy envisaged Under Section 45 although apparently appears to some extent a departure from UNCITRAL but the pre-arbitral judicial remedy Under Section 45 is not inconsistent with the spirit and the scheme of UNCITRAL which does not totally rule out judicial intervention during the pendency of arbitration. The order of an arbitrator on its jurisdiction is appealable under Article 16(3). Whereas Under Section 45 in the case of international arbitration original jurisdiction to the Civil Court is given to test the legality of the arbitration agreement before the parties are directed to subject to arbitration.
29. The decision of the Supreme Court in Bhatia International v. Bulk Trading and Anr., (2002) 4 SCC 105 lays down the ratio that Section 9 in Part I being a general provision relating to interim relief is also applicable to international arbitration governed by Part II. The relief granted in the decision in a sense lays down that even in a case where the arbitration venue is outside India, a party can approach an Indian Court of natural jurisdiction for interim relief Under Section 9. In other words it is not compulsory for the parties to approach only the Court of the country where arbitration is to be held. The decision in Bhatia's case has no application to the facts. In the said case the scope and effect of Section 45 is not dealt with. The relief granted Under Section 45 is comprehensive in its purport and scope. The Court in its incidental and auxiliary jurisdiction can grant any adverse interim relief against the arbitration proceeding Under Section 45 in contrast to the interim relief granted Under Section 9 is in aid and furtherance of the arbitration proceedings.
30. In the light of the scheme of the Act and the propositions of law discussed it is to be held that an aggrieved party to international arbitration can approach the Court of his/its natural jurisdiction to seek relief Under Section 45 and not necessarily as a defendant. The present suit is filed before competent Court of jurisdiction invested with the power Under Section 45.
31. In the instant case, the plaintiff has set up the following pleas:
(1) the payment of all liabilities under the contract, in other words set up plea of discharge.
(2) the plea of limitation by virtue of Clause 7.5.2 of GT and CDE that the difference in SDR rights is claimed beyond the period of six months from the date of last payment.
(3) the named Arbitrator under Clause 14.2 of Ex.P2 is arbitration Court of Czechoslovak Commerce and Industry in Prague. Whereas the arbitration is conducted by Economic Chamber of Czech Republic and Agriculture Chamber of Czech Republic which is not an agreed arbitral body between the parties. Therefore the arbitration is void.
32. The Unigied State of Czechoslovakia on account of internal revolution split into two states viz., Czech Republic and Slovak Republic from 1st January 1993. The agreement Ex.P.2 was made during the Unified State of Czechoslovakia. The named arbitrator under Clause 14(2) refers to the arbitral body constituted by the erstwhile-unified state. After the dismemberment of the unified state, the new State Czech Republic constituted a different arbitral body called Economic Chamber of Czech Republic and Agriculture Chamber of Czech Republic.
33. The Trial Court in para 5 of its judgment finds that the plaintiff has not challenged the validity of agreement and there is in ordinate delay in seeking relief of declaration. This view appears to be untenable. The allegations in the plaint and the relief sought for makes it abundantly clear that the very jurisdiction of the arbitral tribunal is seriously challenged. A relief of declaration is sought for in that behalf.
34. The contention of the Counsel for the defendant that Economic Chamber of Czech Republic and Agriculture Chamber of Czeck Republic is the successor body and entitled to arbitrate the matter as per Clause 14(2) of GT and CDE is an untenable argument. The parties under Ex.P.2 with reference to Clause 14(2) of CT and CDE specifically agreed to the arbitration by Czeck Chamber of Commerce and Industries of the State of Czechoslovakia. The State of Czechoslovakia and the said arbitral body both have become extinct on account of political changes. There is no provision in Ex.P.2 that in the event of the named arbitrator becoming extinct in a situation of this nature, a successor body to arbitrate the matter.
35. The Court has jurisdiction Under Section 11 corresponding to Article 11 of the UNCITRAL to appoint the arbitrator when there is a disagreement between the parties in nominating the arbitrator or the named arbitrator refuses to arbitrate. The Counsel for the defendant even in the appeal has failed to place material to show whether the unified State of Czechoslovakia or the new State of Czeck Republic has enacted any law on the model of UNCITRAL akin to Article 11. In fact Article 11 of UNCITRAL or Section 11 of A and C Act does not envisage contingency of Court's intervention to appoint arbitrator when the named arbitrator becomes extinct. Such a situation perhaps should be governed by the agreement between the parties, otherwise the entire agreement for arbitration would fail as inoperative or incapable of being performed as envisaged in Section 45.
36. The plaintiff has filed the suit well before the constitution of the arbitral tribunal and commencement of arbitration proceeding. The plaintiff has not produced any evidence to show the plea of discharge and that there exists no dispute in law. The details of the last payment are also not produced to appreciate the contention whether the claim is barred by time by virtue of Clause 7.5.2 of GT. and S.D. However the third contention that the arbitral body had no jurisdiction is a well-founded contention. Admittedly the named arbitrator under Ex.P.2 is extinct and there is no agreement between the parties in Ex.P2 or in the adopted arbitration clause that in a situation of this nature the parties agree for another arbitrator to be appointed by mutual consent. Further there is no agreement that the successor body of the extinct arbitral tribunal to adjudicate the dispute. Therefore the assertion of the jurisdiction by the arbitral tribunal in question to adjudicate the dispute is bad in law since the named country and the arbitrator have become extinct. The arbitration clause in Ex.P.2 has become inoperative and incapable of performance. Therefore the arbitration conducted by the arbitral tribunal in question is bad in law and without jurisdiction. The plaintiff has sought for permanent injunction against the defendant not to proceed with the arbitration proceeding, none the less the arbitration is concluded and the award is passed. The facts and circumstances warrant moulding of the relief and as an ancillary to the main relief granted, it is declared that all the consequent proceeding before the arbitral tribunal and the award is null and void.
37. Academically it is to be noticed that the remedy available under Article 34 and Article 36 of the UNCITRAL pertain to post arbitration stage. Article 34 corresponds to Section 34 of A and C Act 1996 and Art 36 corresponds to Section 48 of the A and C Act. The grounds in Article 34 and Article 36 are substantially the same except Article 36 provide an additional ground in Article 36(1)(v) similar to Section 48(1)(e) which reads thus:
"the award has not yet become binding on the parties, or 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."
The provisions of UNCITRAL while defining jurisdictional Court in the case of international arbitration for granting relief under Article 9 and Article 34 does not specifically declare that the "Court" to mean the Court of the country of the arbitration venue. But the provisions of Article 36(1)(v) by inference suggest that an application under Article 34 for setting aside the award is to be made in the Court of the country where the award is passed. But regarding remedy under Article 9 of UNCITRAL corresponding to Section 9 of A and C Act 1996 in the context of the other provisions of UNCITRAL it is to be understood that the Court of natural jurisdiction of the party and the Court of the country where arbitration is held concurrently have jurisdiction to grant interim relief.
38. The provisions of Article 34(2)(a)(i) to (iv) and the provisions of Article 36(1)(a)(i) to (iv) are substantially the same in the UNCITRAL and both the provisions correspond to Section 34(2)(a)(i) to (v) and 2(b)(i)(ii) and Section 48(i)(a) to (d), 2(a) and (b) and they are verbatim same. The provision of Section 34(2)(a)(v) and Section 48(1)(d) reads thus:
"the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or failing such agreement, was not in accordance with the law of the country where the arbitration took place."
The effect of setting aside the award under Article 34 corresponding with Section 34 would render the award totally null and void and in-executable if the grounds mentioned in Article 34(2) are established. The UNCITRAL does not make position of law clear that when the grounds mentioned in Article 36(1)(a) to (v) and (1)(b)(i)(ii) are established, whether an order refusing the enforcement of an award afterwards would debar the award holder from executing the same through the Court of any other member country which is a party to the treaty. The proposition of law in favour of multiple enforcement in different countries endlessly, may lead to judicial harassment.
IN CRP 2703/0339. Section 34 corresponds to Article 34 of the UNCITRAL. The remedy Under Section 34 and as well under the UNCITRAL is a post arbitral remedy. The remedy Under Section 34 is made applicable only for domestic arbitration and the same is not applicable to international arbitration and award, which is governed by Part II. An award made under Part I is executable without any formal approval of the Civil Court unlike in erstwhile Arbitration Act 1940. The award passed by the arbitrator is binding on the parties Under Section 35 and executable Under Section 36 after the expiry of limitation for filing an application Under Section 34 or if the application is pending subject to the result, the award is executable. The subject matter in question being an international arbitration, no application Under Section 34 would lie. The application filed Under Section 34 of the Act is not maintainable.
IN CRP 2624/0340. The Section 48 of the A and C Act corresponds to Article 36 of the UNCITRAL and it is a post arbitral remedy to resist the enforcement of the award on proof of the grounds mentioned therein. The question whether the refusal to enforce an award Under Section 48 is a comprehensive relief and such an order debars the award holder from enforcing the award afterwards in the Court of any other member Country to the treaty is not directly an issue arising for adjudication. Besides arguments have not been addressed on this point by the Counsel. Hence the said question is kept open. However from the scheme of Section 48 it could be said that no application as a preemptive step could be filed to resist execution even before any such application for execution of the award is made in that behalf. Therefore the application filed by the plaintiff Under Section 48 is premature and not maintainable.
Accordingly, the suit is decreed in the terms indicated above with costs. CRP 2703/03 is dismissed. CRP 2624/03 is allowed.