FORCE SHIPPING LIMITED Vs. ASHAPURA MINECHEM LIMITED

JUDGEMENT

(1.) PETITIONERS by the present application have sought enforcement of the foreign Award dated 16-10-2001 and 11-6-2002. The respondents have put in appearance and have opposed enforcement principally on two grounds. It is firstly contended that the agreement between the parties only provides that the place of arbitration will be London. The clause does not set out the law to be followed by the Arbitral Tribunal. Considering this to be a foreign Award and in the light of the judgment of the Apex Court in (Bhatia international v. Bulk Trading S. A. and another) J. T. 2002 (3) S. C. 150, the challenge to the Award would have to be under section 34 of the Act of 1996 and consequently the application as filed is not maintainable. It is secondly contended that it is fundamental policy of Indian Law that the Awards has to be reasoned. In the instant case, though the arbitrator has given reasons, yet at the same time, it is set out that the reasons do not form part of the Award and the reasons should not be used. It is therefore, contended that this would be violation of public policy considering both the fundamental policy of law and violation of principal of natural justice and fair play by which the Court is precluded from examining the reasons.

(2.) AT the hearing of the petition, the learned Counsel for the parties have relied on judgments which will be adverted to, to the extent they are necessary in the course of the judgment. In the first instance, it will be necessary to consider the judgment of the Apex Court in Bhatia International (supra) to find out whether it supports the contention as canvassed before this Court by the learned Counsel for the respondent. At the stage of admission there was another petition also before this Court wherein a foreign Award had been challenged under section 34 of the Arbitration and Conciliation Act, 1996 relying on the judgment in Bhatia International (supra ). It was in that context and as it was contended that the judgment in Bhatia requires consideration that this petition as well as other petitions were admitted. To my mind after hearing learned Counsel for the parties and after examining the ratio decedendi of the judgment in Bhatia International (supra), it is not possible to accept the contention advanced on behalf of the respondents that section 34 would be attracted to challenge a foreign Award before this Court. For that purpose, it will be necessary to reproduce the following portion of the judgment in Bhatia international (supra) which will shed light on the matter.

(3.) WE then come to the second contention of no reason or when after giving reasons the order of the Arbitral Tribunal that the reasons should not be looked into amounts to violation of public policy of India and consequently award shall not be enforced. To examine this contention, it will be first necessary to consider clauses in the agreement itself. Clause 23 may now be reproduced as that is the essential clause in which there is provision provided whether the reasons ought to be given or not and some other situations. The clause reads as under: