The High Court held that petitions under Section 34 to set aside an award governed by New York law are not maintainable as Part-I does not apply to such foreign awards, and set aside the lower court's order.
Original petitions under Section 34 held not maintainable and dismissed; impugned orders set aside.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE
TUESDAY, THE 6TH DAY OF OCTOBER 2015/14TH ASWINA, 1937
OP(C).No. 821 of 2015 (O)
O.P(ARB)NO.87/2012 OF III ADDITIONAL DISTRICT COURT, KOLLAM
PETITIONER(S) :
M/S.CHI COMMODITIES HANDLERS INC., 3950 14TH AVENUE, SUITE 504, MARKHAM, ONTARIO L 3R 0A9, CANADA, REP. BY ITS AUTHORISED SIGNATORY, ANILKUMAR S., S/O.DR.SREEDHARAN, 237, 13TH STREET, GIRINAGAR, KADAVANTHRA PO, COCHIN-682 020.
BY ADV. SRI.T.R.ASWAS
RESPONDENT(S):
RANJITH LAL, PROPRIETOR, M/S.MAHAVISHNU CASHEW FACTORY, EDAVATTOM, KOLLAM-691 505.
BY SRI.E.K.NANDAKUMAR (SENIOR ADVOCATE) ADVS. SRI.M.GOPIKRISHNAN NAMBIAR
SRI.P.GOPINATH SRI.P.BENNY THOMAS SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS
THIS OP (CIVIL) HAVING BEEN FINALLY HEARD ON 03-09-2015, ALONG WITH OP(C).No.903 OF 2015 AND CONNECTED CASES, THE COURT ON 06-10-2015DELIVERED THE FOLLOWING:
Msd.
OP(C).No. 821 of 2015 (O)
APPENDIX
PETITIONER(S)' EXHIBITS :
| EXT P1 : | TRUE COPY OF FIVE INTERNATIONAL COMMERCIAL CONTRACTS EXECUTED BETWEEN PARTIES. |
|---|---|
| EXT P2 : | TRUE COPY OF FOREIGN ARBITRATION AWARD PASSED BY AFI, USA. |
| EXT P3 : | CERTIFICATE ISSUED BY AFI DATED 16.01.2013. |
| EXT P4 : | TRUE COPY OF PRELIMINARY OBJECTION FILED QUESTIONING MAINTAINABILITY OF O.P(ARB)NO.87/12. |
| EXT P5 : | TRUE COPY OF JUDGMENT DATED 09.03.2003 IN OP(C).No.1390/13. |
| EXT P6 : | IMPUGNED ORDER DATED 12.03.2015 IN O.P(ARB) NO.87/12 OF IIIRD ADDL. DISTRICT COURT, KOLLAM. |
RESPONDENT(S)' EXHIBITS :
NIL
//TRUE COPY//
P.S.TO JUDGE.
Msd.
“C.R.”
A.MUHAMED MUSTAQUE, J.
O.P.(C).Nos.821/2015, 903/2015, 904/2015 & 905/2015
Dated this the 6th Day of October, 2015
J U D G M E N T
These original petitions are arising from the orders passed by the District Court, Kollam rejecting preliminary objection raised by the petitioners on the maintainability of Original Petitions (Arbitration) filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, the “Arbitration Act, 1996”). Since common questions of law are involved in all these original petitions, the same are being disposed of by this common judgment.
“Any controversy or claim arising out of or relating to this contract or breach thereof shall be settled by Arbitration in New
O.P.(C).Nos. 821, 903, 904 & 905 of 2015
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York, NY, by the Association of food industries in Inc in accordance with its rules and judgment.”
Accordingly, an Award has been passed in the matter by the Arbitrators of AFI.
O.P.(C).Nos. 821, 903, 904 & 905 of 2015
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O.P.(C).Nos. 821, 903, 904 & 905 of 2015
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the Arbitration are in accordance with the AFI. It does not state anything about the governing law of the contract. The question is, even if its governing law of contract is Indian law, would it be suffice to hold, to treat it as a Domestic Award governed by Part-I of Arbitration Act, 1996.
9. In Bharat Aluminium Company v. Kaiser Aluminium
Technical Service (INC) [(2012) 9 SCC 552] , it was held by the Hon'ble Supreme Court as follows:
“In view of the above discussion, we are of the considered opinion that the Arbitration Act, 1996 has accepted the territoriality principle which has been adopted in the UNCITRAL Model Law. Section 2(2) makes a declaration that Part I of the Arbitration Act, 1996 shall apply to all arbitrations which take place within India. We are of the considered opinion that Part I of the Arbitration Act, 1996 would have no application to International Commercial Arbitration held outside India. Therefore, such awards would only be subject to the jurisdiction of the Indian courts when the same are sought to be enforced in India in accordance with the provisions contained in Part II of the Arbitration Act, 1996. In our opinion, the provisions contained in, Arbitration Act 1996 make it crystal clear that there can be no overlapping or intermingling of the provisions contained in Part I with the provisions contained in Part II of the Arbitration Act, 1996.”
O.P.(C).Nos. 821, 903, 904 & 905 of 2015
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[(2011) 6 SCC 161], the Hon'ble Supreme Court at para.33 held as follows:
“In the present case also, the parties had agreed that notwithstanding Article 33.1, the Arbitration agreement contained in Article 34 shall be governed by laws of England. This necessarily implies that the parties had agreed to exclude the provisions of Part I of the Act. ..............”
O.P.(C).Nos. 821, 903, 904 & 905 of 2015
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that of SIAC Rules, the same would shut out applicability of Part-I of Arbitration Act, 1996.
O.P.(C).Nos. 821, 903, 904 & 905 of 2015
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considered as a mere Award, based on venue of the Arbitration. The substantial law relating to Arbitration would determine whether the Arbitration Award is to be governed by law of the domestic or that of a Foreign Country.
i) whether the parties have expressly or impliedly agreed to be governed by the law relating to Arbitration;
O.P.(C).Nos. 821, 903, 904 & 905 of 2015
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ii) in the absence of any express or implied choice, the law that has proximate relation to the Arbitration agreement has to be considered; to determine this, the law relating to the contract also can be relied upon or looked into.
These original petitions are allowed holding that the original petitions filed by the respondents before the Additional District Court, Kollam are not maintainable and the impugned orders are set aside. The original petitions
O.P.(C).Nos. 821, 903, 904 & 905 of 2015
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filed by the respondents before the Additional District Court, Kollam are
dismissed as not maintainable.
Sd/-
A.MUHAMED MUSTAQUE, JUDGE
ms
2 issues framed by the court
Whether the maintainability of petitions under Section 34 of the Arbitration Act can be decided at the threshold without evidence.
Whether an arbitration award governed by New York law and AFI rules constitutes a Foreign Award under Part-II or a Domestic Award under Part-I of the Act.
Colour shows how this judgement treated each authority
International Nut Alliance LLC v. Binu JohnReferred¶4
International Nut Alliance LLC v. Binu John [2014 (3) KLT 355]
Bharat Aluminium Company v. Kaiser Aluminium Technical ServiceFollowed¶10
Bharat Aluminium Company v. Kaiser Aluminium Technical Service (INC) [(2012) 9 SCC 552] · Who else cites this
Videocon Industries Ltd. v. Union of IndiaFollowed¶11
Videocon Industries Ltd. v. Union of India and another [(2011) 6 SCC 161] · Who else cites this
Sakuma Exporters Limited v. Louis Dreyfus Commodities Suisse SAFollowed¶12
Sakuma Exporters Limited v. Louis Dreyfus Commodities Suisse SA [(2015) 5 SCC 656] · Who else cites this
Yograj Infrastructure Limited v. Ssang YongFollowed¶13
Yograj Infrastructure Limited v. Ssang Yong and Engineering and Construction Company Limited [(2011) 9 SCC 735] · Who else cites this
Reliance Industries Limited v. Union of IndiaFollowed¶14
Reliance Industries Limited and Another v. Union of India [(2014) 7 SCC 603] · Who else cites this
2 provisions across 2 enactments
M/S.CHI COMMODITIES HANDLERS INC.
RANJITH LAL
A.MUHAMED MUSTAQUE
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court