PENIEL CASHEW COMPANY Vs. AHCOM SARL

JUDGEMENT

(1.) This is a petition filed under Article 227 of the Constitution of India. The petitioners herein are the respondents and the respondent herein is the petitioner in E.A. 267/2016 in E.P. 97/2013 on the files of the II Additional District Court, Kollam. The challenge is against the order passed by the court below in E.A.267/2016, dated 23rd September 2017.

(2.) Shorn of unnecessary details, the facts necessary for disposal of this petition are as follows : It is stated that the petitioners are engaged in the business of processing of raw cashew nuts and exporting cashew kernels, whereas the respondent is a seller of raw cashew nuts to processors in Kerala. There was a business transaction in between the petitioners herein and the respondent for supply of raw cashew nuts. There arose some disputes in respect of payments. Earlier there was a proceeding initiated by the respondent herein against the petitioners herein before the II Additional District Court, Kollam as O.P.(Arb)No.324/2012 under Section 9 of the Arbitration and Conciliation Act , 1996 (for short, the 'Act") and the same was finally disposed of on 20.12.2013. In that order, it was stated that, the petitioner therein has no objection if the petition was closed in view of the undertaking filed by the respondent that he would not alienate the property sought to be attached. The undertaking made by the respondent was accepted and recorded. There was also a direction not to alienate the property until further orders from that court. Meanwhile, a Foreign Arbitration Award was passed by the Combined Edible Nut Trade Association (CENTA) in London and an application for enforcement of the said award was moved before the II Additional District Court, Kollam by the respondent herein. The said award was sought to be set aside under Section 34 of the Act, at the instance of the petitioners herein. The said OP (Arb) No.1/2013 was dismissed stating that, being a foreign award it is beyond the provisions of Section 34 of the Act. The dismissal was challenged before this court by the petitioners herein filing Appeal (Arb)No.54/2017. The said appeal was dismissed by this court through judgment dated 25.10.2017. Pending the said appeal before this court, in the execution/enforcement petition, an order dated 23.9.2017 was passed by the court below in EA No.267/2016 directing the petitioners herein to furnish fresh security. That order is under challenge in this petition.

(3.) The question to be considered by this court is whether the above said order will sustain. Admittedly, the respondent is a foreign award holder. Part I of the Act ordinarily will not be applicable in a foreign arbitration. Surely, after the amendment brought by the Act 3 of 2016, in the case of foreign award also Section 9 , 27 and Clause (a) of sub- section (1) and sub-section (3) of Section 37 are applicable with retrospective effect from 23.10.2015.