ALCATEL INDIA LIMITED Vs. KOSHIKA TELECOM LIMITED

JUDGEMENT

(1.) The above named petitioners have filed the present application for enforcement of foreign award (award of the London Court of International Arbitration No. 1291) dated 28.5.2003 under Part-II Chapter-I of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act' and for execution thereof .

(2.) The relevant facts leading to the filing of the present application, in brief, are that petitioner No. 1 Alcatel India Limited had supplied to respondent No. 1 Koshika Telecom Limited, telecom equipments for a contract price of Rs. 207.80 crores pursuant to certain agreements entered in 1996. It is alleged that in breach of the contract, Koshika did not pay any monies for the telecom equipments supplied to it. On 07.9.2000 petitioners No. 1 and 2 on one hand and respondents No. 1 to 3 on the other had entered into a settlement agreement under which the respondents were made jointly and severally liable to pay to Alcatel India Limited a total sum of Rs. 75.00 crores in two instalments. First instalment of Rs. 35.00 crores was to be paid within 45 days of the settlement agreement i.e. by 22.10.2000 and the second instalment of balance amount of Rs. 40.00 crores was to be paid within two years i.e. by 07.9.2002. It was further provided in the settlement that if the first instalment was not paid by the due date, both instalments aggregating to Rs. 75.00 crores would become immediately and automatically payable by the respondents. The respondents did not pay the monies under the settlement agreement and so Alcatel initiated arbitration proceedings in London under LCIA Rules, as per arbitration clause contained in the settlement agreement.

(3.) The arbitral tribunal consisting of M/s Axel H.Baum (Chairman), Mr. Ian Glick QC (Co-arbitrator) (nominated by the petitioners) and Mr. P.V.Kapur, Senior Advocate appointed by the respondent Koshika was constituted in accordance with the arbitration rules of London Court of International Arbitration ("The LCIA Rules"). The petitioners made its claim for the recovery of Rs. 75.00 crores and interest thereon from the respondents while the respondents refuted its liability to pay the amount on the ground of alleged failure of Alcatel in cooperating with Koshika in getting the charge over the equipments released as per the terms of agreement. Hearings of the Arbitral Tribunal commenced in London but were stalled for some period on the plea of the respondent that an ex parte stay of the Arbitral proceedings had been granted by a City Court in Calcutta. The said stay order was ultimately vacated by the Court and the Arbitral proceedings re-commenced before the Arbitral Tribunal. It appears that the respondent through a representation to the LCIA expressed their apprehension of bias against the independence and impartiality of Mr. Axel H.Baum, Chairman of the Tribunal, which representation was considered by an independent Division comprising of three members constituted by the LCIA, who unanimously reached to the conclusion that Mr. Baum "had acted fairly and impartially with respect to the parties" and rejected the challenge.