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Rajasthan High Court · body

2018 DIGILAW 408 (RAJ)

Django Navigation Ltd v. Indo Ferro Metal Private Ltd.

2018-02-02

MOHAMMAD RAFIQ

body2018
ORDER : 1. This application, under Section 48 in Chapter-I of Part-II of the Arbitration and Conciliation Act 1996, (for short- ‘the Act of 1996’) has been filed in the matter of foreign arbitral award dated 18.05.2016 passed by Mr. David Aikman, the Sole Arbitrator at London, in the arbitral reference titled as the “vantage key” between Django Navigation Ltd. of Liberia and Indo Ferro Metal Pvt. Ltd. of Jaipur, India, in relation to the vessel MV vantage key and charter party dated 24.12.2015. The petitioner company- Django Navigation Ltd. has prayed that the aforesaid award dated 18.05.2016 passed by Mr. David Aikman be declared as decree of this Court for being enforced. 2. The petitioner-company is incorporated under the laws of Liberia having its registered office at 80 Broad Street Monrovia, Liberia. Petitioner-company is in the business of owning and Chartering out ships. Respondent is a private company limited by shares having its registered office at Jaipur and engaged in the business of exporting, importing various commodities such as Minerals, Ores and Indonesian Coal. The above-referred to award is a “foreign award” as contemplated under Section 44 of the Arbitration and Conciliation Act, 1996 and published in the United Kingdom, which is a reciprocating territory notified by the Indian Government and is therefore enforceable under the provisions of Chapter-I of Part-II of the Act of 1996. As per averments of the application, the foreign award is final and binding under the English Law pursuant to Section 47 (1)(c) of the Act of 1996. In this regard, one Mrs. Electra Panayotopoulou, an English Solicitor and Partner of Holman Fenwick Willan LLP of Friary Court, 65 Crutched Friars, London EC3N 2AE United Kingdom, practicing in the aforementioned firm’s Piraeus office located at 83 Akti Miaouli & Flessa Street, 185 38 Piraeus, Greece, which is the Solicitor on record of the Award Holder in the arbitration proceedings, has affirmed an affidavit on 29th August, 2016 authenticating the Foreign Award in accordance with English law as required by Section 47 (1)(a) of the Arbitration and Conciliation Act, 1996 and has confirmed that the Foreign Award has become final and binding under English law. Foreign award has been passed in favour of the petitioner pursuant to the Charterparty and the arbitration clause contained therein as evidenced by way of the fixture recap dated 24.12.2015 (“the Charterparty”) between the respondent as the charterer and the petitioner as the owner of the vessel MV Vantage Key (“the Vassel”) chartered to the respondent. In this regard, one Konstantinos Savvidis, General Manager of Vantage Shipping Lines SA, the appointed Commercial Managers of the Vessel on behalf of the petitioner company, has sworn an affidavit dated 29.08.2016, enclosing a copy of the Charterparty as evidenced by way of the fixture recap dated 24.12.2015, in which he has certified that the arbitration agreement concluded in the Charterparty by way of the arbitration clause is in writing and was made by exchange of communications in writing, so far as relevant, through email, telex or other means of telecommunications, as contemplated under Section 47 (1) (b) of the Arbitration and Conciliation Act, 1996. Pursuant to the Charterparty, the respondent agreed to take on charter and the Owners agreed to charter, the vessel to carry a cargo of 12,500 mts bagged rice from Krishnapatnam, East Coast, India to Lattakia, Syria (‘the Cargo”). The fixture note dated 24.12.2015 makes specific reference to the Charterparty, which in its Clause 20 states as under: “(20) ENGLISH LAW/ARB LONDON/LMAA RULES TO APPLY”. 3. As per the contents of the application, the petitioner on 28.12.2015 informed the respondent of the vessel’s expected arrival at the landport of Krishnapatnam and requested confirmation that the cargo would be ready for loading. The respondent informed the petitioner of delay of 2-3 days due to alleged documentation issues of the Shipper, but confirmed that respondent would pay any applicable demurrage for delay as per the Charterparty. Subsequently between 02.01.2016 and 11.01.2016, the respondent kept assuring, but failed to provide any cargo for loading as per the Charterparty. In fact, on 07.01.2016, the respondent requested that the Charterparty be called and refixed for cargo at a later date to which the petitioner agreed only on the respondent’s confirmation to reimburse the petitioner for damages suffered. Subsequently, on respondent’s failure to provide cargo even by 12.01.2016, the petitioner was constrained to accept the respondent’s conduct, (including the attempt on 07.01.2016 to cancel the Charterparty), as evidence of the respondent’s renunciation and termination of the Charterparty and sailed the vessel out. Subsequently, on respondent’s failure to provide cargo even by 12.01.2016, the petitioner was constrained to accept the respondent’s conduct, (including the attempt on 07.01.2016 to cancel the Charterparty), as evidence of the respondent’s renunciation and termination of the Charterparty and sailed the vessel out. Subsequent to termination, the petitioner attempted to find alternative employment for the vessel, but no fixture could be concluded due to the collapse of the dry bulk market. Therefore, the petitioner was constrained to lay up the vessel in Malaysia on 22.01.2016 to mitigate the losses due to the respondent’s breach and the prevailing market conditions. The respondent’s failure to provide cargo for the vessel amounted to a repudiatory breach of contract entitling the petitioner to terminate the Charterparty and recover damages suffered as a result of the breach. The petitioner calculated its damages on the basis of the freight and demurrage and what it would have earned, had the cargo been shipped, less the costs that would have been incurred, had the voyage being performed. The damages calculated were amounted to a sum of US$ 172,255.17, for which the petitioner issued a final freight invoice on 15.01.2016. Petitioner on 13.01.2016 received a payment of only US$ 18000/- from the shippers/cargo interests, which the petitioner has offset with its claim against the respondent to reduce the total sum claimed in the arbitral proceedings to US$ 154,255.17. 4. Further case of the petitioner is that disputes and differences having arisen between the petitioner and respondent under the Charterparty, the petitioner instructed Messer’s Holman Fenwick Willan LLP as their English Solicitors in the London arbitration to commence arbitration proceedings against the respondent by appointing Mr. David Aikman residing at 64, Aligton Drive, Tonbridge, Kent, TN104HH United Kingdom, on 08.02.2016 as their arbitrator. The letter of request for appointment dated 08.02.2016 sent to Mr. David Aikman by HFM along with Mr. David Aikman’s letter of acceptance dated 08.02.2016 has been placed on record. Petitioner sent an arbitration notice on 08.02.2016 to the respondent invoking the arbitration clause and requesting them to appoint their Arbitrator as per the terms of the Charterparty. The letter of request for appointment dated 08.02.2016 sent to Mr. David Aikman by HFM along with Mr. David Aikman’s letter of acceptance dated 08.02.2016 has been placed on record. Petitioner sent an arbitration notice on 08.02.2016 to the respondent invoking the arbitration clause and requesting them to appoint their Arbitrator as per the terms of the Charterparty. Petitioner through their lawyers further sent a notice to the respondent on 23.02.2016 both via brokering channels and to the personal email addresses of the respondent’s principals affording the respondent a further time of 7 days to appoint their arbitrator or agree to the appointment of the sole arbitrator as per Section 17(2) of the English Arbitration Act, 1996. Since the respondent failed to appoint an arbitrator on their behalf as per the English Arbitration Act, 1996, the Arbitrator appointed by the petitioner Mr.David Aikman could be appointed as Sole Arbitrator in the matter. The notice of appointment of Mr. Aikman as Sole Arbitrator was served by the petitioner on the respondent through their lawyers on 04.03.2016 both via brokering channels and to the email addresses of the respondent principals. Petitioner submitted their claim submissions to the Sole Arbitrator and served a copy of the same on Indo Ferro on 11.03.2016 both via the brokers and email IDs of respondent’s principals. The petitioner also requested the respondent to notify them if they required hard copies of the submissions sent to their officers. The petitioner also requested the respondent to submit their defence submissions within the customary 28 days. But the respondent failed to serve their defence submissions even by 11.04.2016. The petitioner then vide an email dated 12.04.2016 requested the arbitrator to direct extension of time for service of defence submissions. The arbitrator by an order dated 13.04.2016 directed the respondent to submit their submission by 27.04.2016. However in view of respondent’s failure to file defence submissions even by 27.04.2016, the Sole Arbitrator issued a final and peremptory order for service of defence submissions by 06.05.2016, vide an email dated 28.04.2016. In the said email, the arbitrator notified the respondent that if they fail to comply with this order and serve their defence submissions in time, the Sole Arbitrator would be constrained to proceed on the basis of the submission filed by the petitioner. In the said email, the arbitrator notified the respondent that if they fail to comply with this order and serve their defence submissions in time, the Sole Arbitrator would be constrained to proceed on the basis of the submission filed by the petitioner. Petitioner vide an email dated 17.05.2016 requested the arbitrator to proceed with the award as the respondent failed to serve their defence submissions by the final deadline of 06.05.2016. The arbitrator confirmed that he would proceed with the award vide an email on the same day. It was thereafter that the Sole Arbitrator after due consideration of the documents and evidence before it and after hearing the submissions and arguments on behalf of the petitioner, passed its final reasoned award on the merits of the case on 18.05.2016 and held as follows, “(a). That the petitioner’s claim for damages and/or compensation succeeds in the amount of US$ 154,255.17/-. (b). That the respondent will pay to the petitioner the sum of US$ 154,255.17/- along with interest thereon at 4% per annum, compounded quarterly from 18.01.2016 till the date of payment. (c). That the respondent shall pay the petitioner costs in relation to this arbitration award, together with interest thereon at the rate of 4% per annum compounded quarterly from the date of the foreign award of the date of payment. (d). That the respondent shall bear and pay the costs of the arbitration award in the sum of GBP 2,080 which is to be reimbursed to the petitioner with interest thereon at the rate of 4% per annum compounded quarterly from the date of the foreign award to the date of payment.” 5. The award in original and its copy has been placed on record. A copy of the arbitral award was duly served on the respondent by the arbitrator vide an email of 19.05.2016 and the respondent’s copy of the original foreign award was also served by courier at its registered address i.e. 311, Brij Anukampa, K-13, Ashok Marg, C-Scheme, Jaipur 302001 on 19.05.2016. 6. A copy of the arbitral award was duly served on the respondent by the arbitrator vide an email of 19.05.2016 and the respondent’s copy of the original foreign award was also served by courier at its registered address i.e. 311, Brij Anukampa, K-13, Ashok Marg, C-Scheme, Jaipur 302001 on 19.05.2016. 6. Shri Amitava Majumdar, learned counsel appearing for the petitioner, argued that the arbitrator in the foreign award has adjudged the respondent liable to pay a sum of US$ 154,255.17/- towards the petitioner’s claim of outstanding freight earnable, demurrage and damages under the Charterparty, together with interest at the rate of 4% per annum compounded quarterly, from 18.01.2016 till the date of payment and sums recoverable as costs. After the foreign award was issued, the petitioner through its English Solicitor, M/s. Holman Fenwick Willan, made a demand upon the respondent, requesting them to honour the foreign award on 19.05.2016 and make payment of US$ 156,337,34 plus GBP 2,080 towards arbitration costs. In this regard, copy of the email sent to the respondent and the enclosed demand notice is placed on record. Petitioner stated that even though the foreign award is final and binding, the arbitrator has not yet made a determination on the recoverable legal costs incurred by the petitioner, but has reserved its powers and jurisdiction for the same. 7. Learned counsel submitted that the Charterparty expressly stipulates that disputes would be resolved by arbitration and English law would apply. The arbitration agreement is valid under English law, which is the law to which the parties have subjected themselves to. The claim for damages for breach of the Charterparty as sought by the petitioner in the London arbitration proceedings is capable of settlement by arbitration under the laws of India. The respondent was at all times served with all necessary documents in the London arbitration proceedings. The respondent out of its own volition had taken a conscientious decision of not taking part in the London arbitration proceedings. The Sole Arbitrator has arrived at a finding on fact and law in publishing the said foreign award. The said foreign award does not deal with a dispute not contemplated by, or not falling within the terms of the submission to arbitration of the arbitration agreement. There is no allegation of any irregularity in the composition of the arbitral tribunal and the arbitral procedure. The said foreign award does not deal with a dispute not contemplated by, or not falling within the terms of the submission to arbitration of the arbitration agreement. There is no allegation of any irregularity in the composition of the arbitral tribunal and the arbitral procedure. The said foreign award is binding on the respondent and has not been set aside or suspended by the English High Court, which is the competent authority of the country where the said foreign award was made. The time limit for leave to appeal under English law is 28 days which has since expired and no appeal has been filed. 8. Learned counsel argued that the enforcement and execution of the said foreign award is not contrary to the public policy of India. The terms of the Charterparty with reference to the demurrage rate, cargo to be carried, charges and landport and discharge port have not been disputed and the parties to the contract of carriage have also not been disputed. Moreover, calculation of the initial payment of the damages has also not been disputed. 9. Shri Susshil Daga, learned counsel for the respondent has contended that the petitioner has miserably failed to establish an agreement between the petitioner and the respondent. Bare perusal of the alleged agreement show that there is no clarity on the law to be applied in case of dispute between the parties. In the instant case, it is clear that the parties have not entered into any formal written agreement, therefore, the pre-requisites to initiate any arbitral proceedings are not proved, argued the learned counsel. Alternatively, learned counsel argued that even if it is presumed that the agreement dated 24.12.2015 has been executed by the parties, then also the dispute resolution clause itself shows that there was no clarity in relation to arbitration proceeding to be initiated by the parties as a bare perusal of clause 19 of the alleged agreement states conditions as to when London Law of Arbitration would apply and when US Law of Arbitration will apply. The condition forming base of application of London Law of Arbitration or US Law of Arbitration was required to be stated in Box 25 of the alleged agreement, but that Box was left empty. The condition forming base of application of London Law of Arbitration or US Law of Arbitration was required to be stated in Box 25 of the alleged agreement, but that Box was left empty. Hence when the law relating to arbitration itself is not clear, neither the agreement can be taken to have been executed validly, nor the award arising out of such agreement can be enforced. The award passed pursuant to the said agreement would thus be a nullity because the Arbitrator has failed to fathom that the parties have not come to terms in relation to the Arbitrator clause. Hence in absence of proper agreement between the parties, the very initiation of proceedings by the Arbitrator was not competent. 10. It is contended that perusal of the award would show that it has been passed contrary to the public interest as losses beyond the alleged agreement has also been awarded against the respondent. This act of the Arbitrator reflects that the award has been passed with ill intention and hence execution of an award arising out of an unexecuted agreement and an incomplete dispute resolution clause cannot be allowed. Present application is therefore liable to be dismissed. 11. Shri Susshil Daga, learned counsel for the respondent submitted that the Cargo to be shipped by the petitioner was delayed because of force majeure reasons like the Port Authorities were regularly questioning the respondent as to why the goods had to be shipped to Syria which was disturbed because of on going major international dispute in that country. The Arbitrator while passing his award has not considered this aspect at all. The award of the Arbitrator is thus against the Public Policy and cannot be sustained in law. The Arbitrator failed to consider the genuine reasons of delay of Cargo. The original consignee of goods delayed the entire transaction and hence passing an award against the respondent for no fault of his, clearly shows that the Arbitrator did not attempt to go to the root cause of the loss. It is contended that M/s. Guru Group India, the company responsible for sending the goods to be shipped on the vessel, had in their letter dated 7.1.2016 to the petitioner undertaken a guarantee to pay for any claims, which arises out of cancellation of contract and the petitioner is fully aware of this fact. It is contended that M/s. Guru Group India, the company responsible for sending the goods to be shipped on the vessel, had in their letter dated 7.1.2016 to the petitioner undertaken a guarantee to pay for any claims, which arises out of cancellation of contract and the petitioner is fully aware of this fact. Even if therefore it is assumed that the petitioner has suffered losses, the same has to be recovered from M/s. Guru Group India. Even then, the petitioner has not impleaded M/s. Guru Group India as party-respondent to the present proceedings. Therefore, the present application is liable to be dismissed as it suffers from non-joinder of necessary parties. Learned counsel further argued that it was agreed between the parties that the respondent shall compensate the petitioner for the loss attributable to it by way of payment of US$ 18,000, which the respondent has already paid. No further compensation was therefore payable. Initiation of arbitral proceedings and consequential award being contrary to law, are liable to be ignored. Moreover, the loss against which the petitioner is demanding execution of this award is already insured and hence further award of compensation to the petitioner would amount to unjust enrichment of the petitioner. The present application is therefore liable to be dismissed. 12. Shri Amitava Majumdar, learned counsel for the petitioner, has submitted in rejoinder that contracts of carriage could be concluded even by way of email communications and a fixture recap, as in the present case. It is therefore that the parties entered into Charterparty dated 24.12.2015 by way of a fixture recap. This practice has been recognised by the Apex Court in the case of Shakti Bhog Food Ltd. vs. Kola Shipping Ltd.- (2009)2 SCC 134 . The respondent has wrongly disputed Clause 20 in the Fixture recap relating to the arbitration clause with regard to the contract of carriage being a valid agreement. Without prejudice to the fact that a Charterparty by way of fixture recap does not need to be signed, it is contended that in the instant case, the fixture recap was also signed by each party and exchanged by e-mail, copies whereof have been placed on record. An affidavit dated 29.8.2016 of Mr. Konstantinos Savvidis, the General Manager of owners of the vessel, would substantiate the conclusion of the said Charterparty by way of email exchanges and fixture recap. 13. An affidavit dated 29.8.2016 of Mr. Konstantinos Savvidis, the General Manager of owners of the vessel, would substantiate the conclusion of the said Charterparty by way of email exchanges and fixture recap. 13. Learned counsel further argued that contention of the respondent that there is ambiguity as to the choice of law, whether US law or English law, would apply is absolutely without any foundation. The law applicable to the Charterparty is clearly stated in clause 20 of the Fixture recap signed by both parties. Clause 20 expresses the choice of the place and law to be applied for the adjudication of disputes in arbitration to be “ENGLISH LAW/ARB LONDON/LMAA RULES TO APPLY.” It is further submitted that even otherwise, Box 25 of a proforma Gencon Form states that when the Box is left empty, the default Clause to be read is Clause 19(a) of Part II of the Gencon Charterparty, which provides for “English Law” and “London Arbitration.” Even in case of a conflict between the Fixture recap/note and the proforma Charterparty, the Court is to try and interpret the two clauses by way of harmonious construction. If there is any conflict between the two, the Fixture recap would prevail. 14. Learned counsel for the petitioner further argued that allegation of the respondent that there is ‘patent illegality’ in the award is wholly untenable. This cannot be a ground of rejection of the enforcement under Section 48 of the Arbitration Act. Relying on the judgment of the Supreme Court in Shri Lal Mahal Ltd. vs. Progetto Grano Spa- (2014) 2 SCC 433 , learned counsel argued that the grounds for refusing the enforcement of the award under Section 48 of the Arbitration Act are limited to award being contrary to (1) fundamental policy of Indian law, (2) the interest of India and (3) justice or morality. Learned counsel in this respect has made specific reference to explanation (1) to Section 48 of the Arbitration and Conciliation (Amendment) Act, 2015 where legislature has by way of amendment clarified that an award would be in conflict only if it was hit by anyone of three clauses enumerated therein. 15. It is argued that invocation of the force majeure conditions by the respondent is absolutely without any justification. 15. It is argued that invocation of the force majeure conditions by the respondent is absolutely without any justification. Contention that the shipment of the cargo was delayed because of force majeure reasons like the Port Authority raised questions in respect of the destination of the Cargo or that the destination would amount to an alleged force majeure condition do not have any merit. At no time during the exchange of correspondence between the petitioner and respondent, did the respondent contend or declare force majeure conditions as the basis for delay in shipping of the cargo. The respondent itself vide an email dated 7.1.2016 stated that the supplier-M/s.Guru Group India has failed to “bring the cargo load ready” and, therefore, they were left with no other option but to cancel the fixture. 16. It is contended that Charterparty provided that the respondent as charterers of the vessel had the option of nominating an alternative port. Such failure or inability to provide the cargo does not imply force majeure conditions and delays and costs arising out of such failure are to the respondent’s account. It was duty of the respondent to procure cargo for the purpose of carrying out its obligations under the Charterparty. Learned counsel in support of his arguments has relied on the english judgment of the Court of Appeal in Triton Navigation Ltd. vs. Viol S.A. (The Nikmary) reported in (2004) Vol.1 Lloyd’s Law Reports 55. 17. Shri Amitava Majumdar, learned counsel for the petitioner has denied the assertion made by the respondent that loss attributed to the petitioner would be limited to US $ 18,000. As per the letter of the respondent dated 12.01.2016, the payment of US $ 18000 (US $ 17,96.67) was made only as ‘initial payment liability’. This was calculated on the basis of US $ 5,000 being the agreed demurrage rate into the time period calculated from the date of cancelling the CP (7.1.2016) till the first day of the next week (11.1.2016). This was anticipated to be the earliest date by which the petitioner could try and arrange for an alternate fixture. The remaining losses would be determined on the basis of the petitioner being able to find an alternate fixture. 18. Learned counsel contended that the respondent cannot at the stage of enforcement of the award revisit the merits of the case. The remaining losses would be determined on the basis of the petitioner being able to find an alternate fixture. 18. Learned counsel contended that the respondent cannot at the stage of enforcement of the award revisit the merits of the case. Further contention of the respondent that the loss claimed against the respondent is insured and award of compensation on that account would be unjust enrichment, is totally false. There has been no insurance recovery in respect of the losses awarded in the award. The stand of the respondent that the awarded amount is to be recovered from M/s. Guru Group India, the supplier of the respondent, which failed to arrange the cargo, and not from the respondent and on that basis further contention that there was non-joinder of necessary parties, is liable to be rejected being wholly untenable. The petitioner is not a party to any alleged guarantee or any alleged contract between M/s. Guru Group India and the respondent. The petitioner has no nexus or privity of contract with M/s. Guru Group India and is therefore in no way connected and concerned with them. The award arising out of a Charterparty between only the petitioner and the respondent, there is no scope of initiating any proceedings against a third party, who is neither a party to the Charterparty or a debtor under the award for sums due from the respondent under the Charterparty. 19. I have given my anxious consideration to the rival submissions and perused the material on record and studied the cited case laws. 20. Contention of the respondent that there was no written/signed agreement or that the petitioner has failed to establish any written or signed agreement between the parties, is liable to be rejected in view of the Charterparty dated 24.12.2015 entered into between the petitioner and the respondent by way of fixture recap. It is a common and accepted practice in the shipping industry to conclude contracts of carriage by way of email communications and a fixture recap. The email from the brokers attaching the countersigned Charterparty, along with enclosed countersigned fixture recap, has been produced on record of this application as Annexure-A, which clearly show the affixation of seal of the petitioner as well as of the respondent and also the signatures of their representatives. The email from the brokers attaching the countersigned Charterparty, along with enclosed countersigned fixture recap, has been produced on record of this application as Annexure-A, which clearly show the affixation of seal of the petitioner as well as of the respondent and also the signatures of their representatives. The affidavit of Konstantinos Savvidis, the General Manager of Owners of the vessel produced at Annexure-3 to the application gave complete details of more than a dozen emails exchanged between the petitioner and respondent and many of them, through broker, giving offers and counter offers, in which the agreed fixture recap of the main terms of the Charterparty which included arbitration clause, as agreed between the parties, being English Law Arbitration in London as per LMAA Rules, throughout remained unamended, though there were variations in laycan period and rate of freight. Copies of all such e-mails have been enclosed with the said affidavit. It would be seen therefrom that the petitioner sent email dated 28.12.2015 at 09:28 hours and circulated a copy of the clean Fixture recap duly signed and stamped by the petitioner and requested the Charterers (through brokers) to countersign and stamp the same. The respondent vide email dated 28th December at 12.31 hours returned the duly countersigned and stamped Fixture recap, which represents the signed Charterparty as and between the parties. Contention of the learned counsel for the respondent that there is ambiguity as to the choice of law in that whether US law or English law, would be applicable is therefore noted to be rejected for the stated reasons. The law applicable to the Charterparty has been clearly stated in Clause 20 of the Fixture recap, which has been jointly signed by both the parties. Clause 20 expresses the choice of the place and the law to be applied for adjudication of disputes in arbitration to be “ENGLISH LAW/ARB LONDON/LMAA RULES TO APPLY”. Besides, the Box 25 of the proforma Gencon Form, which in this case was left empty states that when the Box is left empty, the default Clause to be read is Clause 19(a) of Part II of the Gencon Charterparty which provides for “English Law” and “London Arbitration.” The arbitration procedure adopted by the Tribunal in passing the award, as agreed to in the fixture recap, was thus English Law in London. 21. 21. The facts of the case before the Supreme Court in Shakti Bhog, supra are somewhat identical to the present case. In that case too, the appellant addressed an email to the respondent whereby it promised to load 13,500 MT of the cargo at Kakinada Port for transportation to Cotonou. The respondent therein, issued a bill of lading. As per the terms and conditions of the Charter Party Agreement, the appellant had to load the said cargo within nine days on or before 6th of August, 2005. The vessel M.V. Kapitan Nazarev arrived at Kakinada Port on 24th of July, 2005. The surveyor of the appellant inspected the vessel on 25th of July, 2005. For some reason or the other, the proposal of the appellant did not fructify. On 9th of August, 2005, the appellant informed the respondent that he could not get the export order from the State of Niger due to some unreasonable conditions imposed by it. As per the Charter Party Agreement, existence of which was alleged by the respondent and denied by the appellant, the appellant had to load maize to Colombo from Kakinada Port, in case he failed to get the export order from Niger. On 19th of August, 2005, the appellant addressed an e-mail to the respondent stating that he was ready to compensate the respondent for the loss suffered by it. On 24th of August, 2005, the respondent addressed an email back to the appellant stating that it was not satisfied with the demurrage amount offered to be paid by the appellant. The appellant therein loaded 1100 MT of the cargo in the vessel from 6th of August, 2005 to 9th of August, 2005 as against 13,500 MT of the agreed cargo. On 5th of September, 2005, the appellant sent an email to the respondent requesting it to unload the cargo from the vessel. But the cargo was not unloaded from the vessel due to the ongoing disputes between the parties. After various proceedings, the respondent moved an application under Section 45 of the Act of 1996 to refer the dispute between the parties to arbitration in London under the provisions of the English Arbitration Act, 1996 and for staying all further proceedings in the suit pending arbitration. The Additional District Judge, Kakinada, allowed the application by order dated 30th of November, 2006. The Additional District Judge, Kakinada, allowed the application by order dated 30th of November, 2006. Feeling aggrieved, the appellant filed a Civil Revision Petition before the High Court of Andhra Pradesh at Hyderabad which was dismissed on a finding that there was a Charter Party Agreement in existence and the appellant could not deny the existence of the same. It was against this order that an appeal was filed before the Supreme Court. The case of the appellant before the Supreme Court was that the appellant agreed to load and respondent agreed to carry 13,500 MT of the cargo from Kakinada Port to Cotonou pursuant to a Charterparty agreement, which provided for arbitration in Box 25 and clause 19 and thus dispute pertaining to the same were to be referred to arbitration in London under the English Arbitration Act. In that case too, the front page of the Charterparty contained signature of the appellant. The Supreme Court refused to accept the argument that such a signature would not amount to a valid arbitration agreement. The Supreme Court referring to Section 7 of the Arbitration Act held that arbitration agreement can be inferred from a document signed by the parties, or an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement. The Supreme Court repelled the contention of the appellant that under Section 7 of the Act, the letter/faxes or mails or any other communications, in the absence of any agreement, will have to contain the arbitration clause. The expressions of Section 7 do not specify any requirement to this effect, held the Supreme Court. The Supreme Court in para 17 of the judgment has held as under: “17. The appellant contended that the respondent did not file the original charter party agreement in any of the proceedings before any of the lower courts. The expressions of Section 7 do not specify any requirement to this effect, held the Supreme Court. The Supreme Court in para 17 of the judgment has held as under: “17. The appellant contended that the respondent did not file the original charter party agreement in any of the proceedings before any of the lower courts. We would want to reiterate that as far as the provision of Section 7 of the Act is concerned, an arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement and furthermore an arbitration is considered to be in writing if it is contained in a document signed by the parties or in an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement or an exchange of statement of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other. So from the provisions of Section 7, it is clear that a charter party agreement need not be in writing signed by both parties and this could as well be made out from the acts of the parties to the agreement by way of their exchange of letters and information through fax, e-mails etc.” 22. The Supreme Court in Groupe Chimique Tunisien SA vs. Southern Petrochemicals Industries Corporation Ltd.- (2006) 5 SCC 275 held that under Section 7(5) of the Arbitration and Conciliation Act, 1996 if there is reference in a contract to a document containing arbitration clause, such reference constitutes an arbitration agreement, if the contract was in writing and the reference was such as to make that arbitration clause a part of the contract. In the present case, there is a reference to the entire contract of the Charterparty including Gencon Form, which includes the arbitration agreement. The respondent was well aware of the said arbitration agreement as signatory to the Charterparty agreement. This fully satisfies the requirement of Section 7 read with Section 47(1)(b) of the Act of 1996. 23. Contention of the respondent that there was patent illegality in the award also cannot be countenanced as this cannot be a ground for rejecting the prayer for enforcement of the award under Section 48 of the Act. This fully satisfies the requirement of Section 7 read with Section 47(1)(b) of the Act of 1996. 23. Contention of the respondent that there was patent illegality in the award also cannot be countenanced as this cannot be a ground for rejecting the prayer for enforcement of the award under Section 48 of the Act. The grounds for refusing such a prayer are limited to the award being contrary to (i) fundamental policy of Indian law, (ii) the interest of India and (iii) justice or morality. Reference in this connection may be made to judgment of the Supreme Court in Shri Lal Mahal Ltd., supra. The argument before the Supreme Court in that case was whether in the light of two decisions of the Supreme Court in ONGC Ltd. vs. Saw Pipes Ltd.- (2003) 5 SCC 705 and Phulchand Exports Ltd. vs. O.O.O. Patriot- (2011) 10 SCC 300 , the Court can refuse to enforce a foreign award if it is contrary to the contract between the parties and/or is patently illegal. It was argued on behalf of the appellant that the expression “public policy of India” in Section 48(2)(b) is an expression of wider import than the expression “public policy” in Section 7(1)(b)(ii) of the Foreign Awards (Recognition and Enforcement) Act, 1961. The expansive construction given by this Court to the term “public policy of India” in Saw Pipes must also apply to the use of the same term “public policy of India” in Section 48(2)(b). The Supreme Court, upon revisiting its two previous judgment s in Saw Pipes Ltd. and Phulchand Exports Ltd., supra and Renusagar Power Co. Ltd. vs. General Electric Co.- 1994 Supp (1) SCC 644, held as under: “25. In Saw Pipes, the ambit and scope of the court’s jurisdiction under Section 34 of the 1996 Act was under consideration. The issue was whether the court would have jurisdiction under Section 34 to set aside an award passed by the Arbitral Tribunal, GAFTA which was patently illegal or in contravention of the provisions of the 1996 Act or any other substantive law governing the parties or was against the terms of the contract. This Court considered the meaning that could be assigned to the phrase “public policy of India” occurring in Section 34(2)(b)(ii). This Court considered the meaning that could be assigned to the phrase “public policy of India” occurring in Section 34(2)(b)(ii). Alive to the subtle distinction in the concept of ‘enforcement of the award’ and ‘jurisdiction of the court in setting aside the award’ and the decision of this Court in Renusagar, this Court held in Saw Pipes that the term “public policy of India” in Section 34 was required to be interpreted in the context of the jurisdiction of the court where the validity of the award is challenged before it becomes final and executable in contradistinction to the enforcement of an award after it becomes final. Having that distinction in view, with regard to Section 34 this Court said that the expression “public policy of India” was required to be given a wider meaning. Accordingly, for the purposes of Section 34, this Court added a new category – patent illegality – for setting aside the award. While adding this category for setting aside the award on the ground of patent illegality, the Court clarified that illegality must go to the root of the matter and if the illegality is of trivial nature it cannot be held that award is against public policy. Award could also be set aside if it was so unfair and unreasonable that it shocks the conscience of the court. 26. From the discussion made by this Court in Saw Pipes in paragraph 18, para 22 and para 31 of the Report, it can be safely observed that while accepting the narrow meaning given to the expression “public policy” in Renusagar in the matters of enforcement of foreign award, there was departure from the said meaning for the purposes of the jurisdiction of the Court in setting aside the award under Section 34. 27. In our view, what has been stated by this Court in Renusagar with reference to Section 7(1)(b)(ii) of the Foreign Awards Act must equally apply to the ambit and scope of Section 48(2)(b) of the 1996 Act. In Renusagar, it has been expressly exposited that the expression “public policy” in Section 7(1)(b)(ii) of the Foreign Awards Act refers to the public policy of India. The expression “public policy” used in Section 7(1)(b)(ii) was held to mean “public policy of India”. In Renusagar, it has been expressly exposited that the expression “public policy” in Section 7(1)(b)(ii) of the Foreign Awards Act refers to the public policy of India. The expression “public policy” used in Section 7(1)(b)(ii) was held to mean “public policy of India”. A distinction in the rule of public policy between a matter governed by the domestic law and a matter involving conflict of laws has been noticed in Renusagar. For all this there is no reason why Renusagar should not apply as regards the scope of inquiry under Section 48(2)(b). Following Renusagar, we think that for the purposes of Section 48(2)(b), the expression “public policy of India” must be given narrow meaning and the enforcement of foreign award would be refused on the ground that it is contrary to public policy of India if it is covered by one of the three categories enumerated in Renusagar. Although the same expression “public policy of India” is used both in Section 34(2)(b)(ii) and Section 48(2)(b) and the concept of “public policy in India” is same in nature in both the Sections but, in our view, its application differs in degree insofar as these two Sections are concerned. The application of “public policy of India” doctrine for the purposes of Section 48(2)(b) is more limited than the application of the same expression in respect of the domestic arbitral award. 28. We are not persuaded to accept the submission of Mr. Rohinton F. Nariman that the expression “public policy of India” in Section 48(2)(b) is an expression of wider import than the “public policy” in Section 7(1)(b)(ii) of the Foreign Awards Act. We have no hesitation in holding that Renusagar must apply for the purposes of Section 48(2)(b) of the 1996 Act. Insofar as the proceeding for setting aside an award under Section 34 is concerned, the principles laid down in Saw Pipes would govern the scope of such proceedings. 29. We accordingly hold that enforcement of foreign award would be refused under Section 48(2)(b) only if such enforcement would be contrary to (1) fundamental policy of Indian law; or (2) the interests of India; or (3) justice or morality. The wider meaning given to the expression “public policy of India” occurring in Section 34(2)(b)(ii) in Saw Pipes is not applicable where objection is raised to the enforcement of the foreign award under Section 48(2)(b).” 24. The wider meaning given to the expression “public policy of India” occurring in Section 34(2)(b)(ii) in Saw Pipes is not applicable where objection is raised to the enforcement of the foreign award under Section 48(2)(b).” 24. Section 58 of the English Arbitration Act, 1996 provides that an award made by the Arbitral Tribunal pursuant to an arbitration agreement is final and binding on both the parties and on any persons claiming through or under them, however, subject to right to challenge such award by any available arbitral process of appeal or review or in accordance with the provisions of the said English Arbitration Act. Section 67 of the English Arbitration Act provides that a party to arbitral proceedings may apply to the Court for challenging any award of the arbitral tribunal as to its substantive jurisdiction; or for an order declaring an award made by the tribunal on the merits to be of no effect because the tribunal did not have substantive jurisdiction. Section 68 of the Act provides that a party to arbitral proceedings may apply to the court for challenging an award in the proceedings on the ground of serious irregularity affecting the tribunal, the proceedings or the award. Section 68 (2) of the said Act enumerated the type of serious irregularities referred to in sub-section (1) thereof. Section 69 of the English Arbitration Act provides that a party to arbitral proceedings may file an appeal to the court on a question of law arising out of an award made in the proceedings in which appeal the Court has power to confirm the award, vary the award, remit the award to the tribunal, in whole or in part, for reconsideration in the light of the court’s determination, or set aside the award in whole or in part. According to Section 70 of the English Arbitration Act, an application or appeal must be brought within 28 days of the date of the award or on the grounds set out therein. According to Section 70 of the English Arbitration Act, an application or appeal must be brought within 28 days of the date of the award or on the grounds set out therein. Section 72 of the English Arbitration Act, which in the present case may be of some relevance, provides that a person alleged to be a party to arbitral proceedings but who takes no part in the proceedings, may question – (a) whether there is a valid arbitration agreement, (b) whether the tribunal is properly constituted, or (c) what matters have been submitted to arbitration in accordance with the arbitration agreement, by proceedings in the court for a declaration or injunction or other appropriate relief. He also has the same right as a party to the arbitral proceedings to challenge an award – (a) by an application under section 67 on the ground of lack of substantive jurisdiction in relation to him, or (b) by an application under section 68 on the ground of serious irregularity (within the meaning of that section) affecting him. Section 73 of the English Arbitration Act provides for right to object a party to raise objection, the Tribunal lacks jurisdiction or that proceedings have been improperly conducted or that there has been a failure to comply with the arbitration agreement or with any provision of the Act or that there has been any other irregularity etc. Subsection (2) of Section 73 provides of arbitral tribunal rules that it has substantive jurisdiction, if the party concerned does not file appeal, review or challenge the award within time allowed, he may not object to it later. 25. The Supreme Court in Eitzen Bulk A/S Vs. Ashapura Minechem Ltd. - (2016) 11 SCC 508 , was dealing with a dispute between the parties arising out of a contract for charterers for shipment of bauxite from India to China. Clause 28 of the Contract provided that any dispute arising out of the C.O.A, is to be settled by arbitration in London and that English Law shall apply. The Arbitration was held in London according to English Law. The respondent Ashapura Minechem Limited was held liable and was directed to pay a sum of US$ 36,306,104/- together with compound interest at the rate of 3.75% per annum. The Arbitration was held in London according to English Law. The respondent Ashapura Minechem Limited was held liable and was directed to pay a sum of US$ 36,306,104/- together with compound interest at the rate of 3.75% per annum. It was further directed to pay US$ 74,135 together with compound interest at the rate of 3.75% per annum and another sum of 90,233.66 Pounds together with compound interest at the rate of 2.5% per annum. Before the arbitration had commenced, respondent Ashapura Minechem Limited filed a suit along with an application for injunction before the Civil Judge at Jam-khambalia, Gujarat, praying for declaration of the Arbitration Clause contained therein as illegal, null and void ab-initio. The civil suit was dismissed for want of jurisdiction and appeal filed by respondent Ashapura before the Gujarat High Court was dismissed as withdrawn. The respondent Ashapura Minechem Limited thereafter resorted to Section 34 of the Arbitration and Conciliation Act, 1996 in respect to the award passed in London before the District Judge, Jamnagar, together with an injunction application. The appellant Eitzen Bulk A/S applied for enforcement of the award in the countries of Netherlands, USA, Belgium, UK. The Courts in various jurisdictions held the Award to be enforceable in the same manner as a judgment of the Court. The District Judge, Jamnagar dismissed the injunction application whereagainst a writ of certiorari under Articles 226 and 227 of the Constitution of India was filed by the respondent Ashapura Minechem Limited before the Gujarat High Court at Ahmedabad to quash and set aside the order passed by the District Judge and for a direction not to enforce the execution of the award on the plea that their objections under Section 34 of the Arbitration and Conciliation Act, 1996 were pending. The Single Bench of the High Court set aside the order of the District Judge, dismissing the injunction application and remanded the matter for decision in accordance with the law. In Letters Patent Appeal filed by respondent Eitzen Bulk A/S, the Division Bench of the High Court of Gujarat directed the District Judge to consider all contentions. The appellant Eitzen Bulk A/S thereupon filed writ petition before the High Court questioning the very jurisdiction of a Court in India to decide objections under Section 34 of Arbitration and Conciliation Act, 1996 in respect of a Foreign Award. The appellant Eitzen Bulk A/S thereupon filed writ petition before the High Court questioning the very jurisdiction of a Court in India to decide objections under Section 34 of Arbitration and Conciliation Act, 1996 in respect of a Foreign Award. The Single Bench of the High Court issued notice and stayed further proceedings before the Jamnagar Court. The respondent Ashapura Minechem Limited however filed Letters Patent Appeal challenging the Order of the Single Judge. The Division Bench of the High Court reversed the judgment of the Single Bench and held that the respondent Ashapura Minechem Limited was entitled to challenge the Foreign Award under Section 34 of Part I of the Arbitration and Conciliation Act, 1996 and further held that the territorial jurisdiction is a mixed question of fact and law and is required to be decided by the Trial Court in accordance with the Plaint and Written Statement and Evidence before it. It was this judgment which was challenged by the appellant Eitzen Bulk A/S before the Supreme Court. In those facts, the Supreme Court, while interpreting Clause 28 of the contract for charterers for shipment, held in Para 26 and 27 of the report as under:- “26. According to the learned counsel, Clause 28, which is the Arbitration Clause in the Contract, clearly stipulates that any dispute under the Contract “is to be settled and referred to Arbitration in London”. It further stipulates that English Law to apply. The parties have thus clearly intended that the Arbitration will be conducted in accordance with English Law and the seat of the Arbitration will be at London. 27. The question is whether the above stipulations show the intention of the parties to expressly or impliedly exclude the provisions of Part I to the Arbitration, which was to be held outside India, i.e., in London. We think that the clause evinces such an intention by providing that the English Law will apply to the Arbitration. The clause expressly provides that Indian Law or any other law will not apply by positing that English Law will apply. The intention is that English Law will apply to the resolution of any dispute arising under the law. This means that English Law will apply to the conduct of the Arbitration. It must also follow that any objection to the conduct of the Arbitration or the Award will also be governed by English Law. The intention is that English Law will apply to the resolution of any dispute arising under the law. This means that English Law will apply to the conduct of the Arbitration. It must also follow that any objection to the conduct of the Arbitration or the Award will also be governed by English Law. Clearly, this implies that the challenge to the Award must be in accordance with English Law. There is thus an express exclusion of the applicability of Part I to the instant Arbitration by Clause 28. In fact, Clause 28 deals with not only the seat of Arbitration but also provides that there shall be two Arbitrators, one appointed by the charterers and one by the owners and they shall appoint an Umpire, in case there is no agreement. In this context, it may be noted that the Indian Arbitration and Conciliation Act, 1996 makes no provision for Umpires and the intention is clearly to refer to an Umpire contemplated by Section 21 of the English Arbitration Act, 1996. It is thus clear that the intention is that the Arbitration should be conducted under the English law, i.e. the English Arbitration Act, 1996. It may also be noted that Sections 67, 68 and 69 of the English Arbitration Act provide for challenge to an Award on grounds stated therein. The intention is thus clearly to exclude the applicability of Part I to the instant Arbitration proceedings.” 26. The Bombay High Court in POL India Projects Ltd. vs. Aurelia Reederei Eugen Friederich GmbH-2015 SCC OnLine Bom 1109 faced with somewhat similar situation where the enforcement of an English Award was sought and the opposite party asserted that they were not governed by the English Law and that there existed no arbitration agreement and that the composition of the arbitration proceeding was not in accordance with the agreement, rejected the arguments and held in para 97 as under: “97. A perusal of the aforesaid provisions of English Arbitration Act makes it clear that the petitioners who had raised an objection about existence of arbitration agreement, composition of arbitral tribunal etc. had a right and remedy of challenging such declaratory arbitration award by filing an appropriate proceedings within the time prescribed under English Arbitration Act on the ground set out therein. had a right and remedy of challenging such declaratory arbitration award by filing an appropriate proceedings within the time prescribed under English Arbitration Act on the ground set out therein. Even if according to the petitioners, they were not governed by the English law and that there existed no arbitration agreement or that the composition of the arbitral tribunal was not in accordance with the agreement, once the declaratory arbitration award came to be passed by the arbitral tribunal, the same ought to have been challenged by the petitioners by exercising its remedy available under the provisions of English Arbitration Act and the petitioners not having exercised such remedy under the provisions of English Arbitration Act has lost its right to object the correctness of such declaratory arbitration award in this proceeding filed under Section 34 or while raising objection to the enforcement of the foreign award under Section 48 in the arbitration petition filed by the respondents.” 27. The Arbitrator in the present case has passed a reasoned award after considering the claim submissions of the petitioner. This Court in the scope of Section 48 of the Act cannot look into the merits of the case. The respondent did not participate in the arbitral proceedings, though it had ample opportunity to do so and despite being repeatedly asked by the Arbitrator to file the defence submissions, respondent failed to do so for the reasons best known to it. Invocation of force majeure reasons for the first time in the present proceedings and the reasons of delay now given by the respondent in not being able to load the Cargo pertains to the merits of the dispute. The enforcement of the foreign award cannot be withheld only because the award is in contravention of any law in India. Explanation (1) to Section 48 of the amended Arbitration Act in that respect has amply clarified that whether there is contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute. Indisputably, the award in the present case has attained finality. The respondent having not filed appeal within the stipulated law under the English Arbitration Act, 1996, would be estopped from raising arguments on merits to stall the present proceedings. Indisputably, the award in the present case has attained finality. The respondent having not filed appeal within the stipulated law under the English Arbitration Act, 1996, would be estopped from raising arguments on merits to stall the present proceedings. Since the respondent in the present case has failed to avail any of the remedies enumerated above within the prescribed time before the English High Court or any other Court as per the relevant law, it is therefore now precluded from questioning the correctness of the award on merits. 28. Since this Court in the scope of Section 48 is not entitled to examine merits of the foreign award, therefore, arguments on merits advanced by the respondent need not be entered into greater details. In proceedings seeking enforcement of the foreign award and making the foreign award a decree of this Court, this Court cannot sit in appeal on the findings recorded by the arbitral Tribunal. 29. In view of the analysis of the afore-discussed facts and laws, the subject foreign award deserves to be declared as decree of this Court and is accordingly so declared. Consequent upon being declared decree of this Court, the said award is binding on the parties under Section 46 of the Act of 1996 and is now liable to be enforced under Section 48 of the Act. As such the petitioner, upon taking further and necessary steps, is entitled to get the same executed as decree of this Court in accordance with relevant provisions and the laws. 30. The application is disposed off in the terms indicated above with no order as to costs.