Lmj International Ltd. vs Sleepwell Industries Co. Ltd.

Dismissing the Special Leave Petitions, the Court

HELD: 1.1 The petitioner contends that on the earlier occasion, the objections were limited to the questions of maintainability of the execution case on grounds as were urged at the relevant time and not in reference to the enforceability of the subject foreign awards as such. This argument, to say the least, is an attempt to indulge in hair-splitting and nothing more. It is an argument in desperation only to protract the execution of the foreign award on untenable grounds. Indeed, the petitioner had not filed any formal application to raise the issue of maintainability of the execution case but the Court had permitted the petitioner to orally urge “all available grounds”. The Judge had then reproduced the five points, which alone were orally urged on behalf of the petitioner through its counsel. The High Court examined the said grounds which, obviously, were transcending in the realm of enforceability of the subject foreign awards. In the special leave petitions filed before this Court, the petitioner had articulated questions of law and the grounds also in reference to the scope of Section 48 of the Arbitration and Conciliation Act, 1996, which included the enforceability of the subject foreign awards. Additionally, the Single Judge of the High Court vide order date 17th March, 2015 had made it amply clear that the subject foreign awards were deemed to be decrees, which presupposes that the same were enforceable. That order came to be upheld by the Division Bench whilst disposing of the appeals preferred by the petitioner. These orders have become final and have not been challenged by the petitioner. The petitioner thereafter unsuccessfully resorted to the remedy of review before the High Court. Even the order passed in review petition has become final. [Para 13] [638-D-H; 639-A]

1.2 The grounds urged by the petitioner in the earlier round regarding the maintainability of the execution case could not have been considered in isolation and de hors the issue of enforceability of the subject foreign awards. For, the same was intrinsically linked to the question of enforceability of the subject foreign awards. In any case, all contentions available to the petitioner in that regard could and ought to have been raised specifically and, if raised, could have been examined by the Court at that stage itself. The scheme of Section 48 of the Act, does not envisage piecemeal consideration of the issue of maintainability of the execution case concerning the foreign awards, in the first place; and then the issue of enforceability thereof. Whereas, keeping in mind the legislative intent of speedy disposal of arbitration proceedings and limited interference by the courts, the Court is expected to consider both these aspects simultaneously at the threshold. Taking any other view would result in encouraging successive and multiple round of proceedings for the execution of foreign awards. Such a situation cannot be countenanced keeping in mind the avowed object of the Arbitration and Conciliation Act, 1996, in particular, while dealing with the enforcement of foreign awards. For, the scope of interference has been consciously constricted by the legislature in relation to the execution of foreign awards. Therefore, the subject application filed by the petitioner deserves to be rejected, being barred by constructive res judicata, as has been justly observed by the High Court in the impugned judgment. [Para 14] [639-B-F]

1.3 The conduct of the petitioner is indicative of an attempt to overreach this Court. For, after an interim order was passed in favour of the respondent, permitting withdrawal of part of the deposited amount, the petitioner lost no time in changing the name of the company within three days thereafter on 23rd April, 2018. The petitioner also changed its registered office address on 26th April, 2018 and had no compunction in moving the NCLT, Kolkata on 27 th April, 2018 to prevent the respondent from enjoying the fruits of the subject awards, and saying so brazenly in the petition filed by it under Section 10 of the I & B Code. Strikingly, attention of this Court was invited to these facts by the respondent by moving a formal application. The petitioner has not offered any explanation, much less a plausible one. On this count also, the special leave petitions deserve to be rejected. [Para 15] [639-G-H; 640-A-B]

1.4 Any other argument of the petitioner not examined, including on merits of the enforceability of the subject foreign awards. Even if it were to be done so, we would have agreed with the High Court that the grounds urged by the petitioner to question the enforceability of the subject foreign awards are untenable, not being within the purview of Section 48 of the Act. The High Court has considered every aspect of the grounds urged by the petitioner; and the view so expressed by the High Court in reference to each of the points considered by it is a possible view. The High Court has correctly noted the limited scope for interference in the matter of foreign awards under Section 48 of the Act, keeping in view the principles enunciated by this Court. The High Court has justly noted that the attempt of the petitioner was to call upon the executing court to have a re-look at the award. That cannot be countenanced. All the relevant documents submitted to buttress the claim of the respondent before the Arbitral Tribunal, have been adverted to in the award and the findings reached in the award are based on the interpretation and meaning given to the said documents. That can be discerned from the discussion and findings recorded by the Arbitral Tribunal in the award under consideration. [Para 16] [640-B-F]

1.5 The Arbitral Tribunal has considered all aspects of the matter and even if it has committed any error, the same could, at best, be a matter for correction by way of appeal to be resorted to on grounds as may be permissible under the English Law, by which the subject arbitration proceedings are governed. Court may not be understood to have expressed any opinion on the correctness of those issues. In view of the above, the amount towards the exemplary costs, quantified at an aggregate amount of Rs.20,00,000/- (Rupees Twenty Lakh only) be paid to the respondent within six weeks from today. The Registrar (OS), Calcutta High Court is directed to forthwith encash the FDs lying deposited in the credit of the concerned stated execution case and, after obtaining the Reserve Bank of India’s permission forthwith, remit the entire amount, including the interest accrued in US Dollars, to the respondent. That shall be done within eight weeks from today and compliance report be submitted in the Registry of this Court within two weeks thereafter. The above directions shall be complied with by the Registrar (OS), Calcutta High Court, irrespective of any order passed by any other Court/Tribunal in India. [Paras 17-19] [646-D-H; 647-A]

Shri Lal Mahal Ltd. v. Progetto Grano SPA (2014) 2 SCC 433 : Renusagar Power Company Ltd. v. General Electric Co. (1994) 1 Suppl. SCC 644 : [1993] 3 Suppl. SCR 22; Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd. (2003) 5 SCC 705 : [2003] 3 SCR 691 – referred to.