Bombay High Court
Pacific Basin Ihx (Uk) Ltd vs Ashapura Minechem Ltd on 3 July, 2015
Author: R.D. Dhanuka
Bench: R.D. Dhanuka
ppn 1 arbp-24.10 (j).doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO.24 OF 2010
Pacific Basin IHX (UK) Ltd. )
(formerly know as IHX (UK) Ltd. )
a company incorporated under the laws of )
the United Kingdom and having its office )
at 7th Floor, Swan House, 17-19 Stratford )
Place, London W1C 1BQ ) .. Petitioner
Vs.
Ashapura Minechem Ltd. ig )
a company incorporated under the )
provisions of the Indian Companies Act, )
1956 and having its registered office at )
rd
Jeevan Udyog Building, 3 Floor, 278, )
D.N. Road, Fort, Mumbai - 400 001. ) .. Respondent
---
Mr.Sunip Sen a/w Mr.Vishal Sheth a/w Ms.Viloma Shah a/w Mr.Ameya
Deosthale a/w Mr.Dhiren Durante i/by M/s.Hariani & Co. for the
petitioner.
Mr.Mustafa Doctor, Senior Advocate a/w Mr.Gaurav Mehta a/w
Mr.Rushabh Sheth a/w Ms.Pooja Bafna i/by M/s.M.S. Bodhanwalla &
Co. for the respondent.
---
CORAM : R.D. DHANUKA, J.
DATE : 3rd July 2015.
Judgment :-
. By this petition filed under Section 49 of the Arbitration and Conciliation Act, the petitioner seeks a declaration that the arbitral award dated 8th July 2009 read with 15th March 2010 is enforceable as the decree of this Court and seeks an order of payment of costs. Some of the relevant facts for the purpose of deciding this petition are as under :-::: Downloaded on - 08/07/2015 23:57:52 :::
ppn 2 arbp-24.10 (j).doc
2. On 25th October 2007, the parties entered into a Contract of Affreightment under which the respondent had agreed to load a minimum of 6 shipments annually of 45,000 MTs to 50,000 MTs of Bauxite from various ports in Gujarat to be carried out on board of the petitioner's vessels for discharge at various ports in China. Clause 28 of the said contract of affreightment provided for an arbitration. It was agreed under the said clause that the disputes were to be referred to English Law Arbitration in London. The said contract of affreightment was amended on 24th November 2007.
3.
On 30th September 2008, the respondent terminated the said contract of affreightment. On 11th November 2008, the respondent filed a Special Civil Suit No.58 of 2008 before the Court in Khambaliya, Gujarat inter alia praying for declaration that the said contract of affreightment was null and void. The said suit was transferred to the Court of Principal Senior Civil Judge, Jamnagar.
The Principal Senior Civil Judge at Jamnagar passed an order dated 12 th January 2009 in the said suit. It is held that the said Court did not possess the jurisdiction to entertain the said suit. The respondent filed an Appeal from Order No.22 of 2009 against the said order before the High Court of Gujarat in the month of January 2009.
4. On 6th February 2009, the petitioner invoked arbitration agreement as per clause 28 of the contract of affreightment and called upon the respondent to nominate their arbitrator. The petitioner nominated Mr.Alan Oakley as the arbitrator. Since the respondent failed to nominate the arbitrator within the stipulated time, Mr.Alan Oakley entered upon the said reference as the sole arbitrator.
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5. The petitioner filed a claim before the learned arbitrator inter alia claiming an amount of US$ 24,644,942 against the respondent. On 8th July 2009, the learned arbitrator made an ex parte award in favour of the petitioner since the respondent did not file any reply and directed the respondent to pay a sum of US$ 24,157,442 with interest and costs. On 10th July 2009, the respondent withdrew their appeal from order filed before the High Court of Gujarat. The order passed by the Principal Senior Civil Judge, Jamnagar attained finality. The petitioner thereafter issued a notice of demand calling upon the respondent to make payment of amounts due under the said award. The respondent refused to pay the said amounts on the ground that they had already filed an application under Section 34 of the Arbitration Act for impugning the said award before the Court at Khambaliya, Gujarat.
6. The petitioner also filed proceedings in New York for seeking enforcement of the arbitral award against the respondent's funds garnished pursuant to the Rule B action filed by the petitioner. On 8 th July 2009, the learned arbitrator made a final award. On 15 th March 2010, the learned arbitrator awarded costs in favour of the petitioner. The petitioner thus filed this petition for seeking enforcement of the said two awards dated 8th July 2009 and 15th March 2010 respectively. The petitioner has annexed a Certified Copy of the contract of affreightment dated 25th October 2007 and has also annexed Certified Copy of the final awards dated 8th July 2009 and 15th March 2010.
7. The petitioner has annexed an affidavit sworn by Mr.Michael Henry Phillips, Solicitor in London confirming that the said award has become final and binding and not susceptible to the challenge under ::: Downloaded on - 08/07/2015 23:57:52 ::: ppn 4 arbp-24.10 (j).doc the laws of England. The present petition was opposed by the respondent by filing an affidavit-in-reply on 12th October 2010.
8. On 20th December 2010, this Court granted adjournment to the respondent on the ground that the respondent had already filed an application under Section 34 of the Arbitration Act in the Court of Khambaliya, Gujarat, on the condition that the respondent shall furnish security in the sum of US$ 24,157,442 and Sterling Pounds 5000 within the period of 12 weeks from the date of the said order. The said order was challenged by the respondent by filing an appeal.
9. On 5th July 2011, the division bench of this Court dismissed the said Appeal (L) No.88 of 2011. A Special Leave Petition being (Civil) No.21242 of 2011 filed by the respondent was pending on 16 th August 2011. It was, however, made clear that the issuance of notice by the Supreme Court would not operate as stay of the said order passed by this Court directing the petitioner to furnish security.
10. The respondent did not comply with the order passed by this Court on 20th December 2010 which was upheld by the division bench. The petitioner thereafter filed a Notice of Motion No.2347 of 2012 in this Court inter alia praying for an order and direction against the respondent under Order XXXI Rule 11 of the Code of Civil Procedure, 1908 for striking out the defence of the respondent in the Arbitration Petition No.24 of 2010. This Court allowed the said notice of motion. The division bench of this Court has set aside the said order passed by the learned Single Judge and directed the learned Single Judge to hear and decide the matter on merits.
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11. Mr.Doctor, learned senior counsel appearing for the respondent invited my attention to some of the paragraphs of the affidavit-in-reply dated 12th October 2010 and fairly submits that various preliminary objections/grounds raised by the respondent in paragraph 4 of the affidavit-in-reply do not survive in view of the order passed by this Court on 20th December 2010 which is upheld by the division bench and in view of the law laid down by the Supreme Court and this Court and therefore, he does not press the said objections accordingly.
12. Learned senior counsel submits that other objections raised by the respondent in paragraph 5 be considered by this Court as objection to the enforcement of the two arbitral awards. In so far as the objection of the petitioner that Indian law was applicable to the contract of affreightment is concerned, the said objection is contrary to the affreightment agreement entered into between the parties. The parties were governed by Laws of England and not Laws of India. Even the said objection raised by the petitioner is contrary to the view already taken by the Supreme Court and this Court. Part I of the Arbitration and Conciliation Act, 1996 is not applicable to the parties. The parties were governed by the Laws of England. The arbitral awards have been rendered by the arbitrators out of India.
13. In so far as the objection of the respondent that the arbitration agreement was not valid under the Indian Law to which the parties had subjected is concerned, there is no merit in this submission of the learned senior counsel for the respondent. Learned senior counsel could not demonstrate as to how the arbitration agreement was not valid ::: Downloaded on - 08/07/2015 23:57:52 ::: ppn 6 arbp-24.10 (j).doc under the Indian Law. A perusal of paragraph 5.1 of the affidavit-in- reply clearly indicates that the said objection is totally vague. In my view, there is thus no substance in that objection raised by the respondent in the affidavit-in-reply and also across the bar. There are no other objections raised in the affidavit-in-reply for enforcement of the arbitral awards.
14. On perusal of the arbitration petition, I am satisfied that the petitioner has complied with the provisions of the Arbitration and Conciliation Act, 1996 and also the High Court (Original Side) Rules in filing the present petition. The awards dated 8th July 2009 and 15th March 2010 are enforceable as the decree of this Court.
15. I therefore pass the following order :-
a) Arbitration petition is made absolute in terms of prayer clause (a).
b) There shall be no order as to costs.
R.D. DHANUKA, J.
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