SLEEPWELL INDUSTRIES CO LTD Vs. LMJ INTERNATIONAL LTD

JUDGEMENT

(1.) This is an application by the judgment-debtor company challenging the enforcement of a foreign award.

(2.) Before I deal with the scope and ambit of Section 48 of the Arbitration and Conciliation Act with regard to the power of the Court in scrutinizing a foreign award it is necessary to consider the facts of the case and the nature of the objection raised by Mr.Anindya Kumar Mitra, learned senior Counsel in assailing the award in this forum.

(3.) Briefly stated, the objections are that the Arbitral Tribunal has made out a third case for the parties and have passed an award disregarding the written terms of the contract. The Tribunal has disregarded the fact that the amounts claimed before the Tribunal representing 2.22 per cent of the invoice value of the goods are to be released only upon presentation of the quality inspection certificate at the port of destination and that being the only source and mode of payment, the award-holder having failed to produce such quality inspection certificate, is not entitled to any amount. There is no obligation on the part of the award-debtor to discharge de hors the terms mentioned in the Letter of Credit. The award-holder has not even alleged that the award-debtor was under an obligation to produce the quality inspection certificate at the port of destination and has acted in breach thereof. In the absence of any such pleading and allegation and having regard to the payment terms in the Letter of Credit, the award-holder could not have maintained an action before the Tribunal. The Tribunal had no jurisdiction to refer to the GAFTA Rules in order to find out ways and means for the award-holder to obtain an award as such rules were never part of the contract.