INTERNATIONAL NUT ALLIANCE LLC Vs. JOHNS CASHEW CO

JUDGEMENT

(1.) The question involved in this petition, seeking enforcement of an International Arbitration Award, is whether the court which is enforcing the award is empowered to direct payment of interest on the amount awarded, from the date of the award till the date of payment, when the award does not contemplate payment of any interest.

(2.) The petitioner is a company incorporated in USA. They entered into a contract with the respondent for the purchase of 700 cartons of W320-grade cashew kernels. The respondent supplied the goods and received payment. Contending that the goods supplied did not conform to the standards prescribed in the contract, the petitioner raised a claim against the respondent. When the respondent did not honour the claim, the petitioner issued notice to the respondent demanding arbitration of the dispute by the Association of Food Industries Inc. ('the AFI' for short). On 7/1/2010, the AFI issued a notice of arbitration to the petitioner and the respondent. The respondent did not attend the arbitral proceedings but sent a reply to the AFI stating that the AFI does not have jurisdictional competence to entertain the dispute, since the contract did not contain any provision for submission to the arbitration by the AFI. The respondent contended that the clause in the contract had been altered by the petitioner without the consent of the respondent. The petitioner contended that the contract was revised after correspondence with the broker who was representing the respondent. The AFI proceeded with the hearing of the matter, and it resulted in Annexure- A1 award in favour of the petitioner allowing them to realise USD 10,225 from the respondent.

(3.) The respondent challenged the award in proceedings under Sec. 34 of the Arbitration and Conciliation Act, 1996 ('the Act' for short). The District Court found that an application under Sec. 34 which comes under Part I of the Act was maintainable. OP No.1106 of 2013 filed by the petitioner was dismissed by judgment dtd. 16/7/2014 and the judgment was affirmed by the Hon'ble Supreme Court. During that time, the judgment in Bhatia International v. Bulk Trading S.A. and Anr. [(2002) 4 SCC 105] which said that Part I of the Act will apply to international arbitration, was holding the field. The District Court heard O.P.(Arb.)No.167 of 2010 and by judgment dtd. 6/7/2017, set aside the award. Against the decision in OP(Arb) No.167 of 2010, the petitioner filed Arbitration Appeal No.61 of 2017 before this Court contending that Part I of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) will not apply. In the meanwhile, the judgment of the Constitution Bench of the Hon'ble Supreme Court in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. [(2012) 9 SCC 552] ('BALCO' for short) had been rendered, wherein it was categorically held that Part I of the Act will apply only to the domestic arbitration. The Division Bench of this Court considered Arbitration Appeal No.61 of 2017 relied on the decision in BALCO (supra) and allowed the appeal finding that Sec. 34 of the Act will not apply. The judgment of the Division Bench was challenged unsuccessfully before the Hon'ble Supreme Court. It is thereafter that the present petition for enforcement has been filed. Thus, in the earlier stages of these proceedings, this Court had specifically found that Part I of the Act would not apply to the case on hand and dismissed the petition filed under Sec. 34 of the Act following the decision of the Constitution Bench in BALCO (supra).