LAXMICHAND DAYABHAI EXPORT CO Vs. PRESTIGE FOODS LIMITED

JUDGEMENT

(1.) THIS petition has been filed under sections 5 and 6 of The Foreign Awards (Recognition and Enforcement) Act, 1961 ( for short, the Act ) for an order to file the Award dated 29th January, 1992 in this Court and for pronouncement of judgement in terms thereof.

(2.) THREE Contracts, all dated 12th September, 1990, were concluded at Bombay whereby the respondent agreed to sell to the petitioner 36 MT, 54 MT and 36 MT respectively of Indian HPS groundnut kernels bold 60/70 new crop (for short, the said goods) at the price and on the terms and conditions contained therein. Except as to quantity, the said three Contracts were identical. The terms of Federation of Oils Seeds and Fats Association Limited (FOSFA) Contract No. 34 were made part of the said three Contracts. FOSFA Contract No. 34 amongst other terms and conditions incorporate terms Nos. 23 and 25 pertaining to domicile and arbitration, which read as under :

(3.) NEITHER party hereto, nor any persons claiming under either of them, shall bring any action or other legal proceedings against the other of them in respect of any such dispute and such dispute shall first have been heard and determined by the arbitrators, umpire or Board of Appeal (as the case may be) in accordance with the Rules of Arbitration and Appeal of the Federation, and it is hereby expressly agreed and declared that the obtaining of an Award from the arbitrators, umpire or Board of Appeal (as the case may be) shall be a condition precedent to the right of either party hereto or of any person claiming under either of them to bring any action or other legal proceedings against the other of them in respect of any such dispute". Since disputes arose, the petitioner by its telex dated 15th January, 1991 claimed arbitration as per arbitration agreement contained in each of the said contracts and appointed its arbitrator and called upon the respondent to nominate its arbitrator. The petitioner informed the respondent that if the respondent did not appoint its arbitrator, the petitioner might approach FOSFA to nominate arbitrator on behalf of the respondent. The respondent failed to appoint an arbitrator. The petitioner, in accordance with the FOSFA Rules, applied for an arbitrator to be appointed on behalf of the respondent. On 17th January, 1991, an arbitrator was appointed by FOSFA on behalf of the respondent. The parties filed their papers, documents and pleadings before the Arbitrators. On 29th January, 1992, the Arbitrators have made and published their Award and have held that the respondent was in default for having failed and neglected to ship the said goods. By the Award, the respondent is required to pay to the petitioner a sum of US $ 25,200 plus interest thereon at the rate of 9?% from 1-1-1991 till the date of the Award and the costs of the arbitration including the costs of appointment of the Arbitrators. By its letter dated 12th March, 1992, the petitioner forwarded to the respondent a copy of the Award and its debit note in the sum of US $ 28,191/- and called upon the respondent to remit the said amount. The respondent failed and neglected to pay the said amount. By its letter dated 1st February 1993. FOSFA informed the respondent that it had decided that the respondent be faulted for non-fulfillment of the Award unless the settlement was made within 28 days therefrom. The respondent failed and neglected to make payment under the Award which became final and binding under the Laws of United Kingdom by which it was governed. .