R.D. Dhanuka JUDGMENT
R.D. Dhanuka, J.
1. Arbitration Petition No. 1359 of 2010 and the Arbitration Petition No. 1360 of 2010 are filed by the petitioner under Sections 47, 48 and 49 of the Arbitration and Conciliation Act, 1996 for declaration that the foreign awards both dated 16th February 2010 are enforceable as decrees of this Court and for direction to enforce and/or execute the said two awards as decrees in favour of the petitioner and against the respondent.
2. Chamber Summons Nos. 639 of 2011 and 638 of 2011 are filed by the petitioner in the arbitration petitions respectively for an order and direction to the respondent to disclose the details of various assets, all pending litigations, list of all creditors, debtors etc. and for furnishing security in favour of the petitioner, for an injunction and for attachment of the assets.
3. Notices of Motion No. 373 of 2013 and 374 of 2013 are filed by the respondent inter alia praying for dismissal of the Arbitration Petition Nos. 1359 of 2010 and 1360 of 2010 respectively. Notices of Motion No. 657 of 2014 and 656 of 2014 are filed by the petitioner inter alia praying for an injunction against the respondent from proceeding with or prosecuting with the Miscellaneous Application Nos. 196 of 2013 and 284 of 2013 in BIFR Case No. 34/2011 filed by the respondent against the petitioner respectively. By consent of parties, all the aforesaid proceedings were heard together and are disposed of by a common judgment.
4. Arbitration Petition No. 1359 of 2010 has been filed for enforcement of the foreign award dated 16th February 2010 arising out of the dispute between the parties under COA dated 12th April 2008. The Arbitration Petition No. 1360 of 2010 has been filed for enforcement of the foreign award dated 16th February 2010 arising out of the dispute between the parties under COA dated 4th April 2008.
5. Some of the relevant facts in Arbitration Petition No. 1359 of 2010 are set out hereinafter which was argued as a main matter by the learned senior counsel for both the parties. The facts of the Arbitration Petition No. 1360 of 2010 are similar to the facts in Arbitration Petition No. 1359 of 2010.
6. By a Contract of affreightment dated 12th April 2008 based on an amended Gencon Form with additional clauses, the petitioner as owner or disponent owner contracted with the respondent as charterer for the carriage of 32 cargoes on the terms and conditions therein. It was the case of the petitioner that by its email dated 30th September 2008, the respondent sought to terminate the contract falsely alleging frustration and/or force majeure for the reasons stated therein. The petitioner disputed the termination maintaining that there was no justification on the part of the respondent to terminate the said contract. On 4th November 2008, the petitioner invoked the arbitration agreement recorded at clause 28 of the said contract. Clause 28 of the said contract is extracted as under :-
"Clause 28 :
Any dispute arising under this C.O.A. is to be settled and referred to Arbitration in London. One Arbitrator to be employed by the Charterers and one by the Owners and in case they shall not agree then shall appoint an Umpire whose decision shall be final and binding, the Arbitrators and Umpire to be Commercial Shipping Men. English Law to apply. Notwithstanding anything to the contrary agreed in the C.O.A., all disputes where the amount involved is less than USD 50,000/- (fifty thousand) the Arbitration shall be conducted in accordance with the Small Claims Procedure of the L.M.A.A."
7. On 4th November 2008, the solicitors of the petitioner appointed Mr. Michael Baker as an arbitrator and called upon the respondent to appoint its own arbitrator. The respondent, however, failed to appoint its own arbitrator. On or about 11th November 2008, the respondent filed a Special Civil Suit No. 56 of 2008 and moved an ex parte application in the Court of Principal Senior Civil Judge at Jam- Khambhalia in Gujarat seeking an injunction restraining the petitioner (and the arbitral tribunal) from continuing with the arbitration in London. On 11th November 2008, the Principal Senior Civil Judge at Jam- Khambhalia granted ex parte order as prayed by the respondent.
8. The petitioner filed proceedings (2008 folio 1207) before the Queens' Bench, UK and obtained an ex parte injunction against the respondent restraining the respondent from breaching the arbitration agreement in terms of clause 28 of the said contract. The petitioner also preferred an Appeal from Order No. 373 of 2008 challenging the said ex parte order dated 11th November 2008 and the order dated 28th November 2008 in Special Civil Suit No. 56 of 2008 before the Gujarat High Court. By an order dated 15th December 2008, the Gujarat High Court quashed and set aside the orders dated 11th November 2008 and 28th November 2008 and remanded the application in the said Special Civil Suit filed by the respondent and directed that the matter be reheard before another Judge. The said civil suit was accordingly transferred from Jam-Khambhalia to Jamnagar and was re-numbered as Special Civil Suit No. 129 of 2008.
9. By an order dated 29th December 2008, the said interim application filed by the respondent came to be dismissed by the learned Principal Senior Civil Judge, Jamnagar holding that the respondent had not come to the Court with clean hands and the plea of force majeure/ frustration of the contract were after thought contentions.
10. Learned Principal Senior Civil Judge, Jamnagar also made various observations about the suppression of material facts by the respondent in the said order. The respondent challenged the said order dated 29th December 2008 by filing an Appeal from Order No. 17 of 2009 before the Gujarat High Court. The said appeal was withdrawn by the respondent. Since the respondent failed to appoint their own arbitrator after having given 7 days' notice pursuant to Section 17 of the English Arbitration Act, 1996, on 8th June 2009, Michael Baker- Harber was appointed as the sole arbitrator. The petitioner filed a claim submission before the learned arbitrator on 21st August 2009. The respondent did not file written statement within the time prescribed by the learned arbitrator. Learned arbitrator passed further orders to file defence submission, however, the respondent failed to comply with the said order also.
11. Learned arbitrator, therefore, made a final award dated 16th February 2010 directing the respondent to make payment to the petitioner in the sum of US$ 28,196,000 together with interest thereon @5% p.a. compounded with three monthly rests running from the date of the award until the date of payment. The respondent was also directed to bear its own costs and to pay to the petitioner the costs of awards together with interest @4.5% p.a. coupled with three monthly rests running from the date of the award until payment. The respondent was also ordered to pay costs of £ 4,875. The respondent did not challenge the said award dated 16th February 2010 before the English Courts within the prescribed period of limitation and the said award became final and binding on the parties under the laws of England. The said award is a subject matter of enforcement in the Arbitration Petition No. 1359 of 2010.
12. Some time in the year 2010, the respondent filed an application under Section 34, Part I of the Arbitration and Conciliation Act, 1996 impugning the said foreign award dated 16th February 2010 before the District Court at Jam-Khambhalia vide Civil Misc.Application No. 59 of 2010.
13. Similarly by COA dated 4th April 2008 based upon an amended Gencon form with additional clauses, the petitioner agreed to provide totally 37 vessels and the respondent agreed to provide cargoes for each vessel so provided for the carriage of bulk bauxite from 1-2 safe anchorages Bedi (West Coast India) to 1 safe port 1-2 safe berths or anchorages Qingdao or Rizhao or Yantai or Lanshan or Longkou (China) on the terms set out in the COA. The dispute between the parties culminated into a final award dated 16th February 2010. By the said award, learned arbitrator directed the respondent to pay a total sum of US $37,353,524.10. The enforcement of the said award is subject matter of the Arbitration Petition No. 1360 of 2010. The respondent has impugned the said award also in a Court at Gujarat under Section 34 of the Arbitration and Conciliation Act, 1996.
14. It is the case of the petitioner that since the Corporate Head Quarter of the respondent was in Mumbai, the bank accounts with various banks of the respondent are in Mumbai, monies payable under the awards was at Mumbai and the subject matter of the awards i.e. money was located in Mumbai, the petitioner filed both these petitions for enforcement of these foreign awards in this Court.
15. During the pendency of these two arbitration petitions, the respondent herein filed various interlocutory proceedings. This Court by an order dated 11th January 2013 dismissed the Notice of Motion No. 2444 of 2012 and Notice of Motion No. 2390 of 2012 filed by the respondent herein inter alia praying for dismissal of the arbitration petitions filed by the petitioner for enforcement of both the foreign awards on the ground that the respondent had already filed applications under Section 34 of the Arbitration Act in the Court of Principal Senior Civil Judge at Jamnagar, Gujarat and placed reliance on Section 42 of the Arbitration Act. By the said order dated 11th February 2013, this Court held that Part I of the Arbitration and Conciliation Act, 1996 was impliedly excluded by the parties and therefore, Section 42 would not apply to the present case and accordingly dismissed both the notices of motion. Similar view was also taken by the Court at Gujarat in the proceedings filed by the respondent under Section 34 of the Arbitration Act and in the interlocutory proceedings filed by the respondent in the Court at Gujarat.
16. During the pendency of these petitions, the respondent also applied before the Board for Industrial and Financial Reconstruction (BIFR) on 15th April 2013 under Section 15 of the SICA for various reliefs. The said application is pending before the BIFR and is registered. The petitioner herein in the said proceedings filed by the respondent is opposing the reliefs claimed by the respondent before the BIFR. The application filed by the petitioner before the BIFR as well as the application filed by the respondent under the provisions of SICA is pending. It is not in dispute that the respondent herein has not challenged any of the foreign awards both dated 16th February 2010 before the appropriate Court at Singapore according to English Law.
17. Mr. Doctor, learned senior counsel for the respondent invited my attention to some of the objections raised by the respondent in the affidavit-in-reply objecting to the enforcement of both the foreign awards both dated 16th February 2010. It is submitted by the learned senior counsel for the respondent that in view of the respondent having filed an application under Section 34 of the Arbitration Act in the Court of competent jurisdiction at Gujarat, the present proceedings filed for enforcement of the foreign awards which were subject matter of the said application under Section 34 are not maintainable before this Court in view of Section 42 of the Arbitration Act.
18. It is submitted by the learned senior counsel that on 31st May 2011, the respondent has already filed a reference before the Registrar, BIFR, New Delhi under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and submitted the same on 2nd June 2011, the BIFR has already declared the respondent as a sick industrial company under Section 3(1)(o) of the said SICA. He submits that in view of the said order passed by the BIFR, the present application for execution of the foreign awards is not maintainable. He submits that in any event, no coercive order can be passed by this Court in view of pendency of the proceedings before the BIFR in view of Section 22 of SICA.
19. It is submitted by the learned senior counsel that the Deputy Director, General of Shipping vide letter dated 3rd November 2008 had refused to grant permission for chartering of foreign flag vessel under the COA as per the provisions of the Merchant Shipping Act. He submits that for such rejection of permission for chartering of foreign flag vessel, the respondent was prevented by way of force majeure and could not have performed the said COA in view of prohibition under the provisions of the said Merchant Shipping Act. He submits that initiation of arbitration of COA was thus prohibited by the Indian Law. He submits that in view of refusal of permission by the Directorate General of Shipping, the respondent was under some incapacity to perform an obligation under the COA and thus the award is not enforceable in view of Section 48(1)(a) of the Arbitration Act on the ground of incapacity of the respondent to perform the contract.
20. The next submission of the learned senior counsel for the respondent is that the respondent vide its email dated 5th December 2008, through its agents, novated the Charter Party in respect of COA No. 1/4/2008 and 12th April 2008 to Armada Shipping S.A. Switzerland, as the Disponent Owners and also stated that all other terms and conditions of the Charter Party shall remain in force.
21. The next submission of the learned senior counsel for the respondent is that by an order dated 1st June 2009, Singapore Court had appointed a judicial manager of the petitioner to achieve one or more of the Section 227B goals under the provisions of the Singapore Companies Act. He submits that in view of appointment of the judicial manager, no other proceedings including execution proceedings could be commenced or continued except with the consent of the judicial manager or with the leave of the Court. It is submitted that at the time of filing of the claim submission before the learned arbitrator, the petitioner was already declared bankrupt and judicial managers were duly appointed to run the affairs of the petitioner company pursuant to the order dated 1st June 2009. It is submitted that the claim submissions were filed by the petitioner directly and not through the judicial managers. He submits that the entire proceedings before the learned arbitrator were thus without jurisdiction and thus the said foreign awards cannot be enforced in India.
22. Learned senior counsel for the respondent then submits that notices of motion filed by the respondent for dismissal of the arbitration petitions in both the arbitration petitions be allowed and both the petitions inter alia praying for enforcement of the foreign awards be dismissed.
23. Mr. Narichania, learned senior counsel for the petitioner submits that the respondent cannot be allowed to raise an issue of jurisdiction of this Court under Section 42 of the Arbitration Act in view of order passed by this Court on 11th January 2013 in Notice of Motion No. 2444 of 2012 and Notice of Motion No. 2390 of 2012 holding that Part I of the Arbitration and Conciliation Act, 1996 was impliedly excluded by the parties and therefore, Section 42 would not apply to the present case. He submits that the similar orders are also passed by the Gujarat High Court in the proceedings filed by the respondent which orders are binding on the parties.
24. In so far as the issue of alleged incapacity of the respondent canvassed before this Court is concerned, it is submitted that no such objection about alleged incapacity has been raised by the respondent in the affidavit filed before this Court. He submits that in any event, under Sections 406 and 407 of the Merchant Shipping Act, such contract could be executed. However, a ship cannot be taken to the sea from a port or place except under a license. Permission from the Directorate General of Shipping can be obtained post facto after execution of the contract. He submits that the respondent was required to obtain permission under Section 406 of the Merchant Shipping Act which the respondent failed to obtain. The respondent thus cannot be allowed to take benefit of its own wrong. He submits that if according to the respondent, the Directorate General of Shipping had wrongly rejected the permission, the respondent could have challenged the said order of Directorate General of Shipping. He submits that as a matter of fact, the respondent did not have cargo available with the respondent for loading on vessel. It is submitted that the contract was already terminated by the respondent on 30th September 2008 whereas the Directorate General of Shipping refused to grant permission on 3rd November 2008 i.e. after termination of COA. He submits that the learned arbitrator considered this issue and thus rendered a finding of fact in the impugned award which had attained finality. It is submitted that in any event, even if there is any violation of Indian Law simplicitor that could not be a ground for enforcement of the foreign award.
25. In so far as the issue raised by the learned senior counsel for the respondent that in view of the respondent already having filed an application under Section 15(1) of the SICA before the BIFR and the said application is registered, no such proceedings for enforcement of the foreign awards are maintainable is concerned, it is submitted by the learned senior counsel that under Section 22 of the SICA, the Court can still declare that the foreign award is enforceable as a decree. In support of this submission, learned senior counsel placed reliance on the judgment of this Court in the case of Tropic Shipping Co. Ltd. Vs. Kothari Global Limited, reported in MANU/MH/0790/2001 : 2002 (2) Bom CR 93 and in particular paragraph 3 thereof. It is held by the Supreme Court in the case of Renusagar Power Co. Ltd. Vs. General Electric Co., reported in MANU/SC/0195/1994 : AIR 1994 SC 860 that mere contravention of law even if proved would be no answer for refusal to the enforcement of the foreign award.
26. In so far as the pendency of the application filed by the respondent before the BIFR is concerned, learned senior counsel for the petitioner submits that the petitioner has already made an application before the BIFR for opposing the application filed by the respondent before the BIFR and seeks liberty to raise an issue of maintainability of the said application filed by the respondent and for modification and/or vacating the order passed by the BIFR before the BIFR. He submits that the petitioner would pursue the said application before the BIFR. It is submitted that the notices of motion filed by the respondent for dismissal of the arbitration petitions are also totally frivolous and deserve to be dismissed.
27. In so far as the submission of the learned senior counsel for the respondent that in view of appointment of the judicial managers by the Court at Singapore, the proceedings could not have been commenced and/or continued by the petitioner is concerned, the learned senior counsel invited my attention to the affidavit dated 30th April 2013 filed by Mr. Andrew Grimmett of Deloitte & Touche LLP and submits that the said deponent is a partner and head of Reorganisation Services of the said M/s. Deloitte & Touche LLP for South East Asia. The said deponent in the said affidavit has stated that since the appointment of the judicial managers were made on 1st June 2009, he reported to and assisted the judicial managers of the petitioner and was authorised to make this affidavit.
28. In the said affidavit, the said deponent clarified that the petitioner had applied for US recognition of the pending application for a Section 210 Scheme of Arrangement in Singapore. It is submitted that the petitioner was not declared bankrupt under the US Bankruptcy Code or the Singapore Companies Act. On 29th May 2009, the creditors did not approve the Scheme of Arrangement. The Singapore High Court passed an order on 1st June 2009 and ordered that the petitioner be placed under judicial management. On 16th July 2009, the United States Bankruptcy Court of the Southern District of New York made orders recognising the Judicial Management Order and granted stay to the enforcement action against any of the petitioner's assets in the United States of America. In the said affidavit, it was clarified that the claim submissions were in fact filed by the petitioner's English Solicitors, Winter Scott, with full knowledge of and/or on instructions from the judicial managers. A copy of the letter dated 14th August 2009 signed by the said Mr. Winter Scott shows that the claim submissions on behalf of the petitioner was filed by the said solicitors.
29. Learned senior counsel invited my attention to the annexures to the said affidavit dated 30th April 2013 filed by the said Mr. Andrew Grimmett of Deloitte & Touche LLP and also to a certificate issued by the judicial manager of the petitioner thereby authorising four persons including Mr. Andrew Grimmett as their representatives to act on their behalf on any matter relating to the affairs of the petitioner.
30. Learned senior counsel for the petitioner also invited my attention to the affidavit filed by Mr. Sarjit Singh Gill, partner of Shook Lin & Bok LLP, dated 30th April 2013. He submits that the said Mr. Sarjit Singh Gill was a partner of the said law firm based in Singapore and was overall in-charge of representing the judicial managers of the petitioner in this matter and have been so, since the appointment of the judicial managers on 1st June 2009. He submits that the High Court at Singapore extended the judicial management from time to time. Reliance is placed on Sections 227B and 227G of the Singapore Companies Act and it is submitted that the judicial managers have power to bring or defend any action or other legal proceedings in the name and on behalf of the company. It is submitted that under Section (f) of the same schedule, the judicial managers have power to refer to arbitration any question affecting the company. It is clarified in the said affidavit that the fact that the petitioner was under judicial management could not and did not have any impact on the reference to arbitration or on the quantum of the claim or the petitioner's ability to perform the COA with the respondent.
31. Learned senior counsel for the petitioner also invited my attention to the cause title of the petition and would submit that the petitioner has been described as a company under the judicial management of three persons who were appointed as judicial managers by the High Court of Singapore. Even in paragraph 1 of the petition, there is a reference to the names of those three persons who are appointed as judicial managers. My attention is also invited to the power of attorney filed by the petitioner signed by Mr. Andrew Grimmett for and on behalf of the judicial managers of the petitioner in favour of Mr. Krinshnan Choudhary to file present proceedings. He submits that the objection thus raised by the respondent on this issue is totally frivolous and contrary to the documents on record.
32. Learned senior counsel for the petitioner placed reliance on the judgment of the Supreme Court in the case of Shri Lal Mahal Ltd. Vs.Progetto Grano Spa, reported in MANU/SC/0655/2013 : (2014) 2 SCC 433 and in particular paragraphs 45 and 47 and it is submitted that the Courts in India do not have appellate jurisdiction to entertain foreign award and once the foreign award has attained finality, there is no opportunity to have a 'second look' at the foreign award at the award enforcement stage. Learned senior counsel also placed reliance on the judgment of this Court in the case of Pol India Projects Limited Vs. Aurelia Reederei Eugen Friederich GmbH decided on 8th April 2015 in Arbitration Petition No. 76 of 2012 and in particular paragraphs 147, 148, 156 and 158 and would submit that even if Directorate General of Shipping had refused to grant any permission under the provisions of the Merchant Shipping Act, the same cannot be a ground for refusal to enforce the foreign award under Section 48 of the Arbitration Act. He submits that the scope of objection under Section 48 to the enforcement of the foreign award is very limited. He submits that both the foreign awards have attained finality in view of the respondent not having challenged the said awards under the English Law applicable to the said proceedings. He submits that submission of novatio made by the respondent is devoid of merits and in any event can not be a ground of objection under Section 47 of the Arbitration Act.
33. Mr. Doctor, learned senior counsel for the respondent in rejoinder submits that in the affidavit filed by the law firm, the deponent of the said affidavit was not conversant with the fact as to how the arbitration proceedings would be continued even after the management of the High Court of Singapore and the fact that whether such judicial managers had come on record in the arbitration proceedings or not has not been disclosed in the said affidavit. He submits that even the learned arbitrator had taken cognizance of the fact that without permission of the Directorate General of Shipping, performance of the contract by the respondent was not permitted and thus enforcement of such foreign award can be objected to as permissible under Section 48(1)(a) of the Arbitration Act.
REASONS AND CONCLUSIONS :-
Whether the arbitration petitions filed by the petitioner under Section 48 for enforcement of the foreign awards are not maintainable in this Court in view of the respondent having filed an application under Section 34 of the Arbitration Act before the Court at Gujarat under Section 48 of the Arbitration and Conciliation Act, 1996.
34. It is not in dispute that the seat of arbitration was at Singapore. Be that as it may, this Court by its order dated 11th January 2013 in the Notice of Motion No. 2444 of 2012 along with Notice of Motion No. 2390 of 2012 which were filed by the respondent for dismissal of the arbitration petitions in view of Section 42 of the Arbitration Act has already dismissed both the notices of motion holding that Part I of the Arbitration and Conciliation Act, 1996 was impliedly excluded by the parties and therefore, Section 42 would not apply to the present case. Similar order had been passed also by the Court at Gujarat in the proceedings filed by the respondent. Both these orders attained finality. Be that as it may, since the seat of arbitration was at Singapore, parties have impliedly excluded the applicability of Part I of the Arbitration and Conciliation Act, 1996 and thus Section 42 of the Arbitration Act would not be attracted to this case. In view of the said proceedings having been filed under Section 34 of the Arbitration and Conciliation Act, 1996 for impugning the foreign awards itself are not maintainable under Part I of the Arbitration and Conciliation Act, 1996, the respondent thus cannot be allowed to raise this plea again in the present proceedings.
Whether the proceedings for enforcement of the foreign awards are maintainable in view of the application filed by the respondent under the provisions of SICA is registered and is pending.
35. A perusal of the prayers in the arbitration petitions clearly indicates that the petitioner had prayed for an order and/or declaration that the foreign awards in both the petitions are enforceable as a decree of this Court under the provisions of Section 48(2) of the Arbitration Act and the petitioner also seeks an order and direction to enforce and/or to execute the said awards both dated 6th February 2010 as decree in favour of the petitioner and against the respondent.
36. This Court in the case of Tropic Shipping Co. Ltd.(supra) has held that it is only when the Court is satisfied that the foreign award is enforceable that the award is deemed to be a decree of that Court and if the proceedings in execution are initiated under Section 22 of SICA. It is held that proceedings under Sections 46 to 48 would not be the proceedings in execution or distress as contemplated under Section 22 of SICA. It is held that Section 49 empowers the Court to declare such foreign award as enforceable. In my view, the said judgment of this Court in the case of Tropic Shipping Co. Ltd. (supra) applies to the facts of this case. There is no bar under Section 22 of SICA to declare that the foreign awards rendered in favour of the petitioner are enforceable as decrees of this Court.
37. As and when any application for execution of the said award as a decree is pressed by the petitioner and if any coercive orders are proposed to be passed which are prohibited under Section 22 of SICA, the executing Court can consider the effect thereof. Be that as it may, the petitioner has already applied for appropriate direction before the BIFR and thus I am inclined to accept the submission of the learned senior counsel for the respondent that no coercive orders can be passed by this Court for execution of the said foreign award as a decree of this Court at this stage.
Whether the proceedings are not maintainable in view of the appointment of the judicial managers.
38. A perusal of the record clearly indicates that the High Court of Singapore had appointed three judicial managers of the petitioner under the provisions of the Singapore Companies Act. The said judicial managers had authorized various persons to file and pursue the proceedings on behalf of the petitioner. The petitioner has already filed two affidavits on record which clearly indicates that the arbitration proceedings were filed to the knowledge and under authority of the judicial managers. Even the present proceedings have been filed by the petitioner described as a company under the judicial management. The petitioner has already annexed the power of attorney executed in favour of authorized persons duly signed by Mr. Andrew Grimmett of Deloitte & Touche LLP for and on behalf of the executive managers of the petitioner. Under the provisions of the Singapore Companies Act, the arbitration proceedings as well as the present petitions are rightly filed by the authorized persons duly authorized by the executive managers who were appointed by the High Court of Singapore. In my view, there is thus no merit in this submission of the learned senior counsel for the respondent.
Whether the respondent was under some incapacity to perform their obligations under COA and thus whether the award can be objected to under Section 48(1)(a) of the Arbitration and Conciliation Act, 1996.
39. It is not in dispute that the respondent was required to obtain permission under Section 406 of the Merchant Shipping Act. Much before such permission was rejected by the Directorate General of Shipping, the COA was already terminated. Be that as it may, since the respondent could not obtain such permission, the respondent could not have raised such issue. A perusal of the record indicates that the issue of alleged incapacity has not been even raised in the affidavit-in-reply filed by the respondent.
40. Be that as it may, even if the respondent could not obtain any such permission from the Directorate General of Shipping, mere violation of Indian Law simplicitor is not sufficient to raise any objection for enforcement of the foreign awards under Section 48 of the Arbitration Act. This Court after adverting to the judgment of the Supreme Court in the case of Shri Lal Mahal Ltd.(supra) in the case of Pol India Projects Limited (supra) has held that simplicitor violation of the provisions of the regulations of the Indian law would not be contrary to the fundamental policy of the Indian law and thus enforcement of the foreign award cannot be objected to on this ground. I am respectfully bound by the judgment of this Court. In my view refusal of permission by the Directorate General of Shipping under the provisions of Merchant Shipping Act cannot fall under the expression 'some incapacity' mentioned in Section 48(1)(a) of the Arbitration and Conciliation Act, 1996.
41. Supreme Court in the case of Shri Lal Mahal Ltd.(supra) has held that Section 48 of the Arbitration Act does not give an opportunity to have a 'second look' at the foreign award at the award enforcement stage. It is held that under Section 48(2)(b) of the Arbitration Act, enforcement of the foreign award would be refused only if such enforcement is found contrary to (1) fundamental policy of Indian Law; or (2) the interests of India; or (3) justice or morality.
42. This Court in the case of Pol India Projects Limited (supra) has also adverted to the judgment of the Delhi High Court in the case of Penn Racquet Sports Vs. Mayor International Limited, reported in MANU/DE/0147/2011 : ILR (2011) Delhi 181 has held that the award should be contrary to fundamental policy of Indian law for the Court of India for recognition and enforcement of the foreign award. The judgment in the case of Shri Lal Mahal Ltd. (supra) and the judgment of this Court in the case of Pol India Projects Limited (supra) squarely apply to the facts of this case. In my view, scope of objection under Section 48 to the enforcement of the foreign award is very limited. None of the objections raised by the respondent fall under any of the grounds permissible under Section 48 of the Arbitration Act. In my view, the respondent has not furnished any proof before this Court as to why the enforcement of the foreign award may be refused. Both the foreign awards are thus enforceable under Part II of the Arbitration Act and are binding for all the purposes on the parties under Section 34 of the Arbitration Act. I am therefore of the view that the foreign awards are already stamped as decrees. However, in view of the pendency of the proceedings before the BIFR, the petitioner would not be entitled to take steps in execution of the award and seek any relief which would be in violation of Section 22 of Sick Industrial Companies (Special Provisions) Act, 1985 without permission of the BIFR.
43. In my view, there is no substance in the submission of the learned counsel for the respondent that the contract was novated or it would have effect on the objection of the parties.
44. I therefore pass the following order :-
a) It is declared that both the foreign awards dated 16th February 2010 are enforceable as decrees of this Court under the provisions of Chapter IV of the Arbitration and Conciliation Act, 1996.
b) Prayer clauses (b) to (d) of the Chamber Summons Nos. 639 of 2011 and 638 of 2011 are rejected in view of the petitioner having filed an application before the BIFR. Chamber Summons Nos. 639 of 2011 and 638 of 2011 are disposed of in aforesaid terms.
c) Notices of Motion No. 373 of 2013 and 374 of 2013 filed by the respondent are dismissed.
d) In view of the petitioner having filed an application before the BIFR objecting to the relief claimed by the respondent, Notices of Motion No. 657 of 2014 and 656 of 2014 do not survive and are disposed of accordingly.
e) Arbitration Petition Nos. 1359 of 2010 and 1360 of 2010 are disposed of in aforesaid terms. No order as to costs.
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