Gujarat NRE Coke Ltd. v. Gregarious Estates Incorporated
2013-01-22
ASHIM KUMAR BANERJEE, SHUKLA KABIR SINHA
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Judgment :- Ashim Kumar Banerjee, J. FACTS:- Parties entered into a Charter Party Agreement on January 29, 2008 by which it was agreed that the respondent would offer a vessel to the appellant at Dalan Ship Yard said to be in China for 82 months with a maximum limit of 86 months. Vessel was to be delivered at Dalan Ship yard on or before December 31, 2011. Appellant would contend, the agreement was signed at Calcutta. We, however, find from the Charter Party Agreement appearing at page 40 onwards, the agreement was concluded in London. The appellant would contend, they hired the vessel for the purpose of bringing coal from abroad for consumption of its power plants at various places within the country, all outside jurisdiction of this Court. The Charter Party agreement contained a clause for alternate dispute resolution. Clause 84 would inter-alia provide as follows: - “Clause 84 – Arbitration General Average/Arbitration in London and English Law to apply. Latest BIMCO/LMAA Arbitration Clause to apply with US $100,000 for Small Claims Procedure. Dispute Resolution Clause English Law, London Arbitration a) This contract shall be governed by and construed in accordance with English Law and any dispute arising out of or in connection with this Contract shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause. The Arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA). Terms current at the time when the arbitration proceedings are commenced.” The dispute arose when despite notice of intention given by the respondent to deliver the vessel within the stipulated period the appellant declined to accept it on the ground, the ownership had changed without any notice to them in breach of the Charter Party Agreement. On June 23, 2011 the respondent gave notice tentatively fixing the date of delivery on July 23, 2011. The respondent approached this Court in its Original Side by filing a suit being CS No. 161 of 2011 on July 13, 2011 inter-alia praying for a declaration that the Arbitration Agreement was illegal null and void and prayed for consequential injunction restraining the respondent from taking any step in terms thereof. On August 01, 2011 filed an interim application to the said extent.
On August 01, 2011 filed an interim application to the said extent. On the same day the respondent approached the Queen’s Bench Division, London High Court of justice of England and obtained an anti-suit injunction directing the appellant to withdraw their suit and the application before this Court. There was correspondence with regard to appointment of arbitrator between the respective advocates. On August 4, 2011 appellant filed its second suit before the City Civil Court inter-alia asking for an order of restraint as against the respondent from proceeding with the English suit on the ground that there would be conflict of decision in case parallel proceedings were allowed to continue. The City Civil Court suit was subsequently transferred to this Court and renumbered as E.O. Suit No. 6 of 2011. The City Civil Court initially did not pass any interim order, subsequently on an appeal appellant got a time bound order of restraint that spent its force by efflux of time. The respondent subsequently appeared and contested the proceedings culminating in an order of dismissal of the application. The learned Judge observed, this Court is not competent to pass order of restraint or interfere with the Arbitration. Hence, this appeal. The Division Bench permitted the appellant to nominate their arbitrator without prejudice to their contentions in the appeal. We are told, the arbitrators possibly appointed their third arbitrator. However, the arbitration proceeding is not going on in view of pendency of the appeal. JUDGEMENT AND ORDER IMPUGNED:- The learned Single Judge by judgment and order dated on July 31, 2012 dismissed the application principally on the following counts: - i) Plaintiff filed the suit, as they felt aggrieved on their failure to achieve “super profit” to the extent of Rs.56.25 crores which they had expected to achieve during 7 years of existence of the Charter Party. ii) The defendants were obliged to give 30 days’ notice of change of management, which they had failed. The agreement thus became voidable and the plaintiff was entitled to be relieved. iii) The cause of action in the second suit arose when the English Court granted an anti-suit injunction where the respondent threatened to proceed with the Arbitration. The appellant prayed for order of restraint on the respondents from proceeding with the Arbitration as well as the Civil Suit. His Lordship dealt with the cases cited by the parties.
iii) The cause of action in the second suit arose when the English Court granted an anti-suit injunction where the respondent threatened to proceed with the Arbitration. The appellant prayed for order of restraint on the respondents from proceeding with the Arbitration as well as the Civil Suit. His Lordship dealt with the cases cited by the parties. His Lordship heavily relied on the decision in the case of Smith Kline & French Laboratories Ltd. & Ors. –VS- Bloch reported in 1983 Volume-I Weekly Law Reporter Page-730. Relying on the decision, particularly the observation of Lord Denning, His Lordship observed, “it was only in the case of threatened violation of international law or injustice or vexation that the Court can interfere to stay foreign proceedings.” His Lordship also relied on the decision in the case of Modi Entertainment Network and Anr. Vs. W.S.G. Cricket Pte. Ltd. reported in 2003 Volume IV Supreme Court Cases page- 341. The principle enunciated in the said decision and stated in paragraph 24 was referred to by His Lordship. His Lordship observed as follows: - “A plaintiff may become entitled to sue in more than one international jurisdiction. A defendant has a corresponding right of not being sued in a place where litigation is likely to be vexatious or oppressive to him. The court is called upon to adjudicate the issue. It may be the Court where the defendant wants the litigation to proceed. It would have to consider issuing an injunction restraining the other party from proceeding in a foreign court. It may be the Court where the defendant wants the litigation to proceed. It would have to consider issuing an injunction restraining the other party from proceeding in a foreign court. It may be the foreign court also. In that case it would have to stay its proceedings permanently to relegate the parties to the forum of the defendant. In considering the issue the natural forum is very important, that it, the court where the litigation would most naturally have been instituted. In other words, the place, having the closest connection with the case. A foreign court is presumed to be competent to evaluate these relative advantages and disadvantages of a party. An anti-suit injunction is not granted against a foreigner not within the jurisdiction of the court and not amenable to its jurisdiction.
In other words, the place, having the closest connection with the case. A foreign court is presumed to be competent to evaluate these relative advantages and disadvantages of a party. An anti-suit injunction is not granted against a foreigner not within the jurisdiction of the court and not amenable to its jurisdiction. Furthermore, if a forum has been agreed upon by the parties, the court will sparingly interfere on the presumption that the parties were the best judge of their convenience and inconvenience. The court should be extremely cautious in passing orders in this area as they have the potentiality of interfering with the jurisdiction of a foreign court. On the above facts, I am quite convinced that the United Kingdom has a much closer connection with the agreement than India. There is no evidence to suggest that the contract was executed in Kolkata. On the contrary there is compelling evidence, that it was executed in the United Kingdom. The vessel was to be delivered from a yard in that country. The agreement stipulated that the contract was to be governed by English law. The arbitration was to be held in London according to the arbitration laws of that country. Therefore the natural forum is without question England. In addition to that it is the forum of choice. There is no evidence that the chosen forum would be vexatious or oppressive for the plaintiffs. So following the Modi Entertainment Network case, this Court is reluctant to grant an injunction. Furthermore, there is no case like forgery of an arbitration agreement as in the case of Albon and Naza Motors so as to warrant issuing an anti-suit and anti-arbitration injunction. Since the validity of the arbitration is not disputed, the arbitrator is competent to adjudicate the controversies. Moreover, there is a difficulty in principle. An injunction can only be issued against a foreigner who is amenable to the jurisdiction of this Court. A foreigner may be amenable if he has submitted to the jurisdiction of this Court or has assets within its jurisdiction. Mr. Bimal Kumar Chatterjee, learned Senior advocate appearing for the first defendant flatly submitted that his client was not submitting to the jurisdiction of this Court. Neither do they have any assets within jurisdiction.
A foreigner may be amenable if he has submitted to the jurisdiction of this Court or has assets within its jurisdiction. Mr. Bimal Kumar Chatterjee, learned Senior advocate appearing for the first defendant flatly submitted that his client was not submitting to the jurisdiction of this Court. Neither do they have any assets within jurisdiction. In fact the House of Lords in the case of Airbus Industries GIE Vs Patel and Ors reported in 1998 (z) AER 257 observed that an order of injunction granted by an Indian Court could not be enforced by the Indian Court since the defendants were British subjects, in spite of the fact that the cause of action had arisen substantially in India. The House Lords could not issue the injunction as that country had no connection with the case. Yet the High Court of Justice of England and Wales has issued an injunction against the plaintiffs, who are foreign to that country.” After stating the law on the subject and considering the factual matrix involved herein, His Lordship concluded as follows:- “But it can firmly be said that on the above authorities the English arbitration and the English action have to proceed. Any subsisting injunction by our Court restraining the parties to proceed in that country is discharged, subject to the condition below. Whilst all these proceedings were being undertaken, the first defendant has appointed their appointed arbitrator in the absence of the plaintiffs appointing an arbitrator. If he is allowed to be sole arbitrator, that would deprive the plaintiffs of appointing their arbitrator, which is against the normal working of the arbitration clause. Therefore the injunction on arbitration can only be discharged if the first defendant allows the plaintiffs to appoint their arbitrator or the parties agree to a sole arbitrator in terms of the arbitration clause. Otherwise, the arbitration would become vexatious and oppressive for the plaintiffs. If such an opportunity is provided then and then only, automatically the existing injunction will stand vacated. I would only like to add that section 45 of the Arbitration and Conciliation Act, 1996 does not say that a party has to make an application. It says that a mere request for reference to arbitration would do.
If such an opportunity is provided then and then only, automatically the existing injunction will stand vacated. I would only like to add that section 45 of the Arbitration and Conciliation Act, 1996 does not say that a party has to make an application. It says that a mere request for reference to arbitration would do. I would treat the affidavit in opposition of the first defendant and the submissions of their learned counsel as a request for the purposes of that section.” ANALYSIS:- If we analyse the judgment and order impugned we would find, His Lordship was of the view, an injunction could be issued against a foreigner once he was amenable to the jurisdiction of the Court. A foreigner could only be amenable once he would submit to the jurisdiction or had asset within the jurisdiction, otherwise he was beyond reach. His Lordship was also of the view that English Arbitration and the Civil Suit pending therein must proceed and the subsisting injunction of this Court should be vacated. According to His Lordship, there was no need for making any application under Section 45 of the Arbitration and Conciliation Act, 1996 sending the matter to foreign Arbitration. A mere request would be sufficient. His Lordship treated the affidavit-in-opposition of the respondent as a request for arbitration and accordingly asked the appellant to nominate their arbitrator. APPEAL AND CROSS APPEAL:- Being aggrieved the appellant filed the instant appeal since the order of injunction stood vacated. The respondent filed cross-objection inter-alia contending, the learned Judge could not have treated the affidavit-in-opposition as a request for arbitration. According to them, the appellant missed the bus by not appointing their arbitrator within the stipulated period. Hence, their nominee became the sole arbitrator. However, the issue stood diluted when the Division Bench permitted the respondent once more to nominate their arbitrator and the respondent seemingly did not object to the same. RIVAL CONTENTIONS:- Mr. Abhrajit Mitra, learned counsel appearing for the appellant contended as follows:- i) So long the other party did not apply for stay of the suit or for revocation of leave granted under Clause 12 of the Letters Patent in the first suit or dismissal of the application under order 7 Rule 11 of the Code of Civil Procedure in the second suit, the plaintiff would be entitled to proceed with their suit despite the arbitration agreement being enforced.
ii) The plaintiff filed the first suit inter-alia restraining the defendant from enforcing the agreement to Arbitration and the second suit staying the English suit that was filed after the first suit on the ground of conflict of decision in parallel proceedings. According to him, despite the Arbitration agreement providing London as a venue the Indian Court would be free to examine as to whether such forum was convenient for the plaintiff or the cost factor involved in it. In this regard he heavily relied on the observations of the Smith Kline & French Laboratories (supra). According to him, the agreement was entered into at Camac Street, Calcutta as stated in the plaint. This Court, once granted leave under Clause 12, was entitled to proceed with the same so long the leave was not revoked. Similarly, the second suit was maintainable until it was dismissed. Considering the factual matrix Mr. Mitra contended, this Court being the natural forum must have precedence over the forum even if stipulated in the agreement. On the performance of contract Mr. Mitra contended, under the agreement he was to receive 30 days’ notice of change of management that the respondent had failed to give that had given them right to sue the defendant, hence , this Court would have jurisdiction to try the same. To support his contentions, Mr. Mitra relied on the following decisions:- 1. All India Reporter 2006 Rajasthan Page-56 (Mahesh Kumar –VS- Rajasthan State Road Transport Corporation, Jodhpur) 2. 2009 Volume-I Arbitration Law Reporter Page-304 (Delhi) (Roshan Lal Gupta –VS-Parasram Holdings Pvt. Ltd. & Ors.) 3. 2007 [Supplementary] Arbitration Law Reporter Page-179 [Delhi] (Punjab State Electricity Board –VS- Vee Kay General Industries) 4. 1986 Volume-II Lloyd’s Law Reports Page-301(Compagnie Europeene De Cereals S.A. –VS- Tradax Export S.A.) 5. 2010 Volume-IV Calcutta Law Tribunal (HC) [South City Projects (Kolkata) Limited – VS- Jugal Kishore Sadani & Ors.) 6. All India Reporter 2009 Calcutta Page-231 (Bhagwandas Auto Finance Ltd. & Ors. – VS- Citicorp Finance [India] Ltd. 7. 2010 Volume-XI Supreme Court Cases Page-744 (Nicco Corporation Limited –VS-Prysmian Cavi E Sisteri Energia Srl & Anr.) 8. 2008 Volume-I Lloyd’s Law Reports Page-1 (Albon –VS- Naza Motor Trading Sdn Bhd) 9. 1983 Volume-II Lloyd’s Law Reports Page-384(Tracomin S.A. –VS- Sudan Oil Seeds Co. Ltd.) 10. All India Reporter (38) 1951 Bombay Page-190 (Chunnilal Kasturchand –VS-Dundappa Damappa) 11.
2010 Volume-XI Supreme Court Cases Page-744 (Nicco Corporation Limited –VS-Prysmian Cavi E Sisteri Energia Srl & Anr.) 8. 2008 Volume-I Lloyd’s Law Reports Page-1 (Albon –VS- Naza Motor Trading Sdn Bhd) 9. 1983 Volume-II Lloyd’s Law Reports Page-384(Tracomin S.A. –VS- Sudan Oil Seeds Co. Ltd.) 10. All India Reporter (38) 1951 Bombay Page-190 (Chunnilal Kasturchand –VS-Dundappa Damappa) 11. All India Reporter (38) 1951 Bombay Page-125 (Bhagwan Shankar –VS- Rajaram) 12. All India Reporter 1987 Supreme Court Page-674 (Oil & Natural Gas Commission – VS- Western Company of North America) 13. All India Reporter 1971 Supreme Court Page-1 (M/s. V/o. Tractoroexport –VS- M/s. Tarapore & Co. Madras & Anr.) 14. 1987 Volume-I Calcutta Law Tribunal Page-491 (Dipak Banerjee –VS- Sudipta Banerjee) 15. All India Reporter 1954 Calcutta Page-67 (The Owners & Partners of the firm named Shah Kantilal –VS-Dominion of India Owning East India Railway) 16. 1983 Volume-I Weekly Law Reporter Page-730 (Smith Kline & French Laboratories Ltd. & Ors. –VS- Bloch) 17. All India Reporter 1964 Calcutta Page-418 (State of Punjab – VS- A.K. Raha [Engineers] Ltd.) 18. All India Reporter 1953 Supreme Court Page-1 (Ganeshi Lal –VS- Joti Pershad) 19. Volume-XXIII Calcutta Weekly Notes Page-258 (Baijnath – VS- Mansukrai Pannalall) 20. 1937 AC Page-587 (Mayor, Councillors & Citizens of the City of Auckland & Anr. – VS- Alliance Assurance Company Ltd.) 21. 2009 Volume-II Arbitration Law Reporter Page-198 [Gujarat] (Marwadi Shares & Finance Pvt. Ltd. –VS- Kishorkumar Nagjibhai Mavani) CONTENTION OF THE RESPONDENT:- Mr. Bimal Kumar Chatterjee, learned senior counsel appearing for the respondent contended, under the Charter Party Agreement the obligation of the respondent would be completed once the vessel had been offered for charter. The notice was duly given on July 23, 2011 inter-alia asking the appellant to take delivery of the same at Dalan Ship Yard on July 13, 2011. Hence, the cause of action as per the performance was admittedly outside the country. He referred to Clause 82 in this regard. Referring to the arbitration clause Mr. Chatterjee contended, the seat was specified as London, Applicable Law was specified as English Law and the procedure to be followed was Maritime Arbitration Procedure London. Hence, the parties agreed and understood that the arbitration would be held at London under the English Law. This Court was not competent to restrain such arbitration.
Referring to the arbitration clause Mr. Chatterjee contended, the seat was specified as London, Applicable Law was specified as English Law and the procedure to be followed was Maritime Arbitration Procedure London. Hence, the parties agreed and understood that the arbitration would be held at London under the English Law. This Court was not competent to restrain such arbitration. The appellant claimed damage as per Clause 129 of the Charter Party Agreement concluded in London. Once they demanded damage under a clause of the Charter Party that was denied by the other party the appellant must approach the arbitral forum named in the agreement to resolve their dispute. Taking it over from Mr. Chatterjee, Mr. Tilak Bose, learned senior counsel also appearing for the respondent contended, the agreement being the Charter Party was admitted. The appellant pleaded breach under the agreement. Even if the appellant terminated the agreement, the arbitration clause stipulated therein being an independent contract would survive despite such termination. The seat being London and the law being the English Law, the parties could not resile from the said agreement. As and by way of alternative submission, Mr. Bose contended, even if the Indian suits would proceed there could be no fatter to proceed with the arbitration and both the proceedings must be conducted as per the English Law that would not permit the appellant to proceed with the suits ignoring the arbitration clause. Distinguishing the cases cited by Mr. Mitra, Mr. Bose contended, Lord Denning considered the natural forum and observed that the natural forum would have precedence. In the instant case, nothing happened at Calcutta that would permit the appellant to claim Calcutta as a natural forum. The decision in the case of Roshan Lal Gupta Vs. Parasram Holdings Pvt. Ltd. and Ors. reported in 2009 Volume-I Arbitration Law Reporter page-304 would have no application as it considered a domestic arbitration and had no reference to the foreign arbitration. Similarly, the decision in the case of Punjab State Electricity Board (supra) would relate to domestic arbitration. In the said case the agreement contained an arbitration clause that was held to be forged. Similar was in the case of Albon (supra) where one of the parties contended that he had not signed the agreement that contained an arbitration clause. According to him, his signature was “lifted” from some other place. Distinguishing the other decisions cited by Mr.
In the said case the agreement contained an arbitration clause that was held to be forged. Similar was in the case of Albon (supra) where one of the parties contended that he had not signed the agreement that contained an arbitration clause. According to him, his signature was “lifted” from some other place. Distinguishing the other decisions cited by Mr. Mitra, Mr. Bose contended that none would apply as facts completely differed. The provision of Section 41(b) of the Specific Relief Act could not have any application in a foreign proceeding. According to him, once the forum was selected by the parties, the purported cause of action pleaded in the proceedings would have no relevance. According to him, in the Apex Court decision in Tractor export (supra) the Foreign Exchange Regulation Act was in vogue and the Apex Court considered the cost factor that would involve in the arbitration. However, the Foreign Exchange Regulation Act (FERA) would not have any role to play in the present case as the law was simplified by introduction of Foreign Exchange Management Act (FEMA). Similarly, the ONGC case (supra) relied on by Mr. Mitra would not apply herein as the Apex Court considered an agreement where the Arbitration Act, 1940 was the guiding force that would have no control over the foreign arbitration that was taken care of by the Act of 1937 and Act of 1961. He contended, learned Judge, although erroneously held that the mere request was enough to send the dispute to arbitration on the basis of the pleadings as contained in the affidavit-in-opposition, the ultimate decision of His Lordship declining to pass injunction was apt and would not deserve any interference by this Court. REPLY:- Mr. Abhrajit Mitra reiterated what he had submitted earlier. In addition, he distinguished the unreported decision cited by Mr. Bose in the case of LMJ International Limited Vs. Sleep well Industries Company Limited and Anr. wherein almost in an identical situation the Division Bench declined to interfere with the order of dismissal of the petition by the learned Single Judge. According to Mr. Mitra, the facts would completely differ. In the instant case the issue of parallel proceeding was involved that was conspicuously absent in the other matter.
Sleep well Industries Company Limited and Anr. wherein almost in an identical situation the Division Bench declined to interfere with the order of dismissal of the petition by the learned Single Judge. According to Mr. Mitra, the facts would completely differ. In the instant case the issue of parallel proceeding was involved that was conspicuously absent in the other matter. Moreover, the suit in LMJ International (supra) was filed much after commencement of arbitration whereas in the instant case the respondent referred the dispute to arbitration after filing of the Calcutta suit by the appellant. According to Mr. Mitra, Mr. Chatterjee was not correct to say that performance of the contract would end on delivery of the vessel. Under the agreement the Respondent was to maintain the vessel whereas the appellant was supposed to pay the hire charges. Hence, performance would only end on the expiry of the period covered under the Charter Party and the facts subsequent to handing over would also have vital role in performance that would arise within the jurisdiction of this Court. OUR VIEW Law on the subject as it appears from the precedents cited at the Bar. (A) Court’s jurisdiction over a foreigner. The learned Judge held, the Court could pass order of injunction against a foreigner when he was amenable to the Court’s jurisdiction and that too, would only happen when he would submit to the jurisdiction. Mr. Mitra as well as Mr. Bose would contend, such proposition of law was perhaps not correct. In this regard, Mr. Mitra cited one Calcutta decision and one Apex Court decision. In the case of Chunnilal Kasturchand Vs. Dyndappa Damappa reported in All India Reporter 1951 Volume- 38 Bombay page-190 the Division Bench of the Bombay High Court observed, “it is open to a Court executing a foreign Court’s decree to enquire whether the foreign Court had jurisdiction to pass the decree”. Even where there are reciprocity agreements under which decrees of Courts of one State are enforceable by the Courts of another State, a judgment-debtor is entitled to raise all defence arising out of Section 13 as if he was sued on a foreign judgment. In the case of Bhagwan Shankar (supra) similar view was taken. The Calcutta High Court observed, in case legislature conferred jurisdiction on the Court that would have an overriding force on the Private International Law.
In the case of Bhagwan Shankar (supra) similar view was taken. The Calcutta High Court observed, in case legislature conferred jurisdiction on the Court that would have an overriding force on the Private International Law. (B) Pendency of the arbitration proceedings Civil Court jurisdiction how far valid Four decisions were cited by Mr. Mitra. In the case of Mahesh Kumar (supra) the learned Single Judge of the Rajasthan High Court considered a domestic arbitration and observed, mere existence of arbitration clause would not debar a suit to be proceeded with. Here, the learned Single Judge interpreted Section 8 that would have no application in a case of foreign arbitration. Section 45 of the said Act of 1996 was not considered. In the case of Marwadi Shares (supra) the learned Single Judge of the Gujarat High Court considered a domestic arbitration. Similarly, Delhi High Court considered a domestic arbitration in case of Punjab State Electricity Board (supra). However, in the said case fraud was pleaded that was absent in the present case. In the case of Roshan Lal Gupta (supra) learned Single Judge of the Delhi High Court considered Sections 5 and 8 that would have no effect in the present case. (C) Clause – 12 unless revoked Court would have jurisdiction Mr. Mitra relied upon the decision of State of Punjab (supra) where the Division Bench of this Court held that the Court was competent enough to proceed with the suit so long the leave granted under Clause – 12 was not revoked. This was a settled proposition of law and would require no further deliberation. (D) Venue would not create jurisdiction. Mr. Mitra initially cited two decisions on this issue. In the case of Indian Oxygen Ltd. Vs. National Oxygen Ltd. & Anr. reported in 1990 Volume-I Calcutta Law Times page-275, learned Single Judge held that the cause of action was the relevant factor in deciding the jurisdiction and not the venue. Similar view was taken by the Delhi High Court in the case of Mikuni Corporation –VS- UCAL Fuel Systems Limited, Carburettors Limited & Siemens VDO Automotive reported in 2008 Volume-I Arbitration Law Reporter Page503 (Delhi) while deciding an application under Section 9. However, this is no more the correct proposition of law in view of paragraph – 95 of the Constitution Bench decision in the case of Balco reported in 2012 Volume-IX Supreme Court Cases page-552.
However, this is no more the correct proposition of law in view of paragraph – 95 of the Constitution Bench decision in the case of Balco reported in 2012 Volume-IX Supreme Court Cases page-552. Parallel proceeding Mr. Mitra cited four decisions on this issue. In paragraph 26 in the case of Modi Entertainment Network and Anr. Vs. W.S.G. Cricket Pte. Ltd. reported in 2003 Volume-IV Supreme Court Cases page-341 the Apex Court, considering the facts and circumstances, reversed the anti-suit injunction granted in favour of the appellants in disregard to the jurisdiction clause and passed an order of restraint against the respondent from proceeding with the English suit. In the case of Companies European De (supra), suit was filed for enforcement of the arbitration agreement. The controversy would relate to arbitration that was contemplated de hors the arbitration agreement. Hence, the suit was filed inter alia praying for enforcement of the actual agreement. The subject matter would differ. As stated earlier, the decision in the case of Tractor export (supra) was rendered when the Foreign Award Recognition and Enforcement Act, 1961 was in vogue. The question arose whether Arbitration Act, 1940 or the Act of 1961 would have a dominant role. In the case of South City Projects (supra) the learned Single Judge held that the arbitration would only commence upon conclusion of the civil suit. The decision was rendered in a domestic arbitration and would deserve no comment on the proposition of law so decided. (E) General Power of Court in Foreign Arbitration Mr. Mitra cited host of decisions on the issue. We would however rely upon the latest Division Bench decision in the case of LMJ International Limited (supra) where our Division Bench considered Section 45 as also the latest decision of the Apex Court in the case of Yograj Infrastructure Limited Vs. Ssangyong Engineering and Construction Company Limited reported in 2011 Volume IX Supreme Court Cases page-735 and ultimately the decision in the case of Bharat Aluminium(supra). The Division Bench observed, “in absence of any demonstrable injustice or harassment being caused by reason of initiation of the arbitration proceedings or participation in such proceedings and having regard to the fact that the agreement is not in dispute, in our view, the plaintiff is not entitled to an order of injunction”. Deciding the present case on the proposition of law so discussed above.
Deciding the present case on the proposition of law so discussed above. Host of decisions cited at the Bar would culminate in the latest one in the case of Balco (supra). The parties by consent agreed to resolve their dispute through alternate dispute resolution, meaning thereby they agreed to avoid the regular process of disposal of controversy through Court of Law. The parties in their wisdom agreed, they would resolve their dispute through arbitration in London in terms of the procedure laid down therein and the English Law would guide the said arbitration. We fail to appreciate, how the suits filed by the appellants in this regard would be maintainable. We however, stop there without making further deliberation on the issue as Mr. Mitra would caution us and in our view, very rightly, in absence of leave being revoked granted under Article 12 the suit would be maintainable in this Court. Similarly, the second suit being brought on the cause of action pleaded in the plaint and once entertained by the Court, would always be maintainable unless it was held otherwise that too, through an appropriate process known in law. If we look back we would find, the party fell out at the time of handing over of the Vessel. One would contend, it was offered within the stipulated period, the other would say, such offer was of no consequence as there had already been a breach by not giving valid notice of change of management. The claim for damage was in accordance with Clause–129 of the charter party agreement, hence, dispute should be resolved through arbitration under Clause–86 stipulated therein that would be done at London. Parties, keeping their eyes wide open, agreed to such clause of arbitration. We wonder, how one can resile from that either on the plea of balance of convenience or on account of cost factor. In any event, neither of such issue was raised. We are in grave doubt how the appellants could avoid the arbitration. It is however for the arbitrator or the English Court to decide on the issue, if approached. Our Court neither could take note of it nor could stop the arbitration to proceed. If the appellants would be happy to keep their both suits pending let them be so, so long those are not disturbed by the respondent with an appropriate mechanism regarded in law.
Our Court neither could take note of it nor could stop the arbitration to proceed. If the appellants would be happy to keep their both suits pending let them be so, so long those are not disturbed by the respondent with an appropriate mechanism regarded in law. The leaned Judge likely declined to pass an order of restraint. We do not wish to make any comment on the English suit filed by the respondent. The parties would be free to take appropriate steps in this regard. The Indian Court would remain content with the Indian proceedings particularly on the factual scenario and the sequence of events discussed above. We would say, we do not fell inclined to restrain either the English proceedings or the English arbitration. We however feel, the learned Judge was not correct to observe that the affidavit in opposition filed by the respondent should be treated as a request for arbitration. Such observation coupled with a direction for reference to arbitration, would be without jurisdiction and is thus set aside. Appeal succeeds in part. Cross-objection succeeds. The order of the learned Single Judge is affirmed with the little modification as above. There would be no order as to costs. Urgent certified copy of this judgment, if applied for, be given to the parties on their usual undertaking.