JINDAL EXPORTS LIMITED Vs. FUERST DAY LAWSON LIMITED

JUDGEMENT

(1.) The preliminary objection raised by the respondent is about maintainability of this appeal, which has been filed against the order passed on 19.2.1999 by learned Single Judge. Appeal has been preferred under Section 10 of the Delhi High Court Act with a prayer to set aside the execution proceedings instituted by the respondent.

(2.) Facts in brief are that on 1.8.1994 parties entered into an agreement by which the appellant agreed to supply 108 Metric Tonnes of Menthol Crystals to the respondent during the period January, 1995 to June, 1996. The appellant could not supply the stipulated quantity of goods within time, therefore, sought extension of time from the respondent. A notice was issued by the respondent to the appellant in repudiatory breach on the appellant's obligation under the contract for supply of remaining quantity of good. On 18.12.1995 claim was filed by the respondent before the International General Produce Association, London, U.K. (hereinafter referred to as "the IGPA"), the Arbitral body nominated by the respondent. The claim was for short fall in supply of goods in respect of the period July to December, 1995. Protest was raised by the appellant before the IGPA that there did not exist any Arbitral disputes and as such the Arbitrator had no jurisdiction to proceed with the reference. On 13.8.1996 Award No. 1030 was passed by the IGPA against the appellant. Two notices were issued by the respondent holding the appellant in repudiatory breach of contractual obligation in respect of the remaining supplies for the period January to June, 1996. Claim was lodged by the respondent with IGPA on which also Award No. 1034 was passed by the IGPA on 16.10.1996. The respondent straightaway filed two execution petitions No. 168 and 169 of 1998 in this Court in respect of the two aforementioned Awards dated 13.8.1996 and 16.10.1996 respectively. On 4.8.1998 learned Single Judge directed issuance of order of attachment in respect of the properties of the appellant company to secure execution of the foreign awards. On coming to know of filing of the execution petitions and of the order of attachment, two separate applications, namely, EA. 347/98 and EA. 346/98 were filed in the two execution proceedings No. 168 and 169 of 1998 respectively. In those applications, the appellant challenged the maintainability of the execution proceedings and validity of the orders passed therein. By order dated 9.9.1998 learned Single Judge recalled the order of attachment in both the execution proceedings subject to the appellant's furnishing security to the extent of Rs. 4.24 Crores.

(3.) The main objection raised by the appellant about the maintainability of the execution proceedings has been that the Awards are covered by the New York Convention and whether the Foreign Awards Recognition & Enforcement Act, 1961 (hereinafter referred to as "FARE Act") or the Arbitration & Conciliation Act. 1996 (hereinafter referred to as "the A&C Act") applied, the awards being foreign awards are not liable to be executed proprio vigore. The awards under the two Acts had to be sued upon, when the objection, set out in Section 7 of the FARE Act, 1961 or under Section 48 of the A&C Act could be raised by the party against whom awards have been made. On such questions being raised, issues would then have to be framed, which would have to be tried before a judgment is delivered. Only then a decree capable of execution would come into existence.