Supreme Court of India
M/S. CENTROTRADE MINERALS AND METALS INC.versusHINDUSTAN COPPER LTD.
- Citation
- 2020 INSC 411
- Decided
- 2 June 2020
- Disposal
- Disposed off
- Bench
- R F NARIMAN
Holding
The ICC award is a foreign award that is enforceable in India because the two‑tier arbitration clause is valid and Hindustan Copper Ltd. was given ample opportunity to present its case, satisfying Section 48(1)(b).
Summary
Centrotrade Minerals & Metals Inc., a US corporation, contracted with Hindustan Copper Ltd. (HCL) for the sale of copper concentrate and included a two‑tier arbitration clause: first arbitration in India, with a right to appeal to an ICC arbitration in London. After an Indian arbitrator gave a nil award, the parties proceeded to the ICC arbitration, which awarded Centrotrade sums of money. HCL challenged enforcement of the London award under Section 48 of the Arbitration and Conciliation Act, 1996, claiming it was not given a proper opportunity to present its case. The Supreme Court examined whether the two‑tier clause was valid, whether the London award qualified as a foreign award, and whether HCL was denied natural‑justice rights. The Court held that the arbitration clause was permissible, the award was a foreign award, and the ICC arbitrator had afforded HCL multiple extensions and opportunities to submit its defence, so no breach of natural justice occurred. Consequently, the foreign award is enforceable. The Court allowed Centrotrade's appeal, dismissed HCL's appeal, and ordered enforcement of the award.
Issues considered
- Whether a two‑tier arbitration clause, with a second tier before the ICC in London, is valid and permissible under Indian law.
- Whether the ICC award constitutes a foreign award within the meaning of Section 48 of the Arbitration and Conciliation Act, 1996.
- Whether Hindustan Copper Ltd. was given proper notice and a fair opportunity to present its case before the ICC arbitrator, satisfying the natural‑justice requirement of Section 48(1)(b).
- Whether the award can be enforced in India despite the objections raised.
Legislation cited
- Arbitration and Conciliation Act, 1996s. 23, s. 48
- Indian Contract Act, 1872s. 23
Subjects
ArbitrationForeign awardSection 48Natural justiceTwo‑tier arbitrationICC arbitrationEnforcementNew York ConventionContract of saleProcedural fairness
Judgment
[2020] 9 S.C.R. 73 73
M/S. CENTROTRADE MINERALS AND METALS INC. A
v.
HINDUSTAN COPPER LTD.
(Civil Appeal No.2562 of 2006)
JUNE 02, 2020 B
[R. F. NARIMAN, S. RAVINDRA BHAT AND
V. RAMASUBRAMANIAN, JJ.]
Arbitration and Conciliation Act, 1996: s.48 – Enforceability
of the foreign award – Contract of sale of commodity between the C
parties – The agreement contained two tier arbitration by which the
first tier was to be settled in India and if either party disagreed with
the result, that party had right to appeal to a second arbitration to
be held by the ICC in London – Dispute arose between the parties –
Appellant invoked the arbitration clause – Arbitrator held against
D
the appellant – Appellant invoked second part of arbitration
agreement – Foreign award held against the respondent –
Enforceability of foreign award challenged under s.48 – Respondent
objected to the enforceability of the award on the ground that it
was unable to present its case before ICC arbitrator – Held: ICC
arbitrator had given large number of opportunities to respondent E
to file documents and legal submissions – Arbitrator was extremely
fair to respondent – Despite being informed time and again to appear
before the Tribunal and submit their response and evidence in
support thereof, it was only after the arbitrator indicated that he
was going to pass an award that the respondent’s attorney woke up F
and started asking for time to present their response – This too was
granted by the arbitrator by not only granting extension of time but
by extending this time even further – Finally when the legal
submissions of 75 pages were sent even beyond the time that was
granted, the arbitrator took this into account and then passed his G
award – This being the case, on facts there was no fault whatsoever
with the conduct of the arbitral proceedings – Foreign award shall
be enforced.
H
73
74 SUPREME COURT REPORTS [2020] 9 S.C.R.
A Allowing Centrotrade’s appeal and dismissing HCL’s
appeal, the Court
HELD: 1. The arbitrator had given a large number of
opportunities to respondent to file documents and legal
submissions. On 03.05.2001, the arbitrator directed that the
appellant serve submissions along with supporting documents,
B
following the respondent’s response and evidence therein, with
a right in the appellant to put in a reply, in accordance with a clear
time table that was set out. On 30.07.2001, since no defence
submissions or supporting evidence was served by the respondent
within the time prescribed, the time was extended, giving the
C respondent one last opportunity to put in their defence and to
seek extension of time for so doing. Until August 2001, the
respondent did not participate in the arbitral proceedings, even
though invited to do so. It was only on 09.08.2001, when the
arbitrator informed the parties that he is proceeding with the
award, that on 11.08.2001, the arbitrator received a fax from Fox
D & Mandal, Attorneys for HCL, requesting for an extension of
one month’s time to put in their defence. This was acceded to by
the arbitrator on 16.08.2001, giving time upto 31.08.2001.
However, on 27.08.2001, Fox & Mandal sought for a further three
weeks’ extension of time, which was also granted by the arbitrator,
allowing a final extension of time until 12.09.2001. Despite the
E
fact that the legal submissions running into 75 pages were
submitted beyond time, that was only on 13.9.2001, in view of
the 11.09.2001 attack in New York, the arbitrator received the
same and took the same into account despite being beyond time.
It was only on 29.09.2001 that the arbitrator then passed his
F award. The arbitrator was extremely fair to the respondent. Thus,
there was no fault whatsoever with the conduct of the arbitral
proceedings. [Para 34][106-H; 107-A-E, G]
Centrotrade Minerals & Metals Inc. v. Hindustan
Copper Ltd. (2006) 11 SCC 245 : [2006] 2 Suppl. SCR
146; Centrotrade Minerals & Metal Inc. v. Hindustan
G Copper Ltd. (2017) 2 SCC 228 : [2016] 9 SCR 83;
Vijay Karia v. Prsymian Cavi E Sistemi SRL 2020 (3)
SCALE 494; Kavalappara Kottarathil Kochuni v. States
of Madras and Kerala [1960] 3 SCR 887; Ganges
Waterproof Works (P) Ltd. v. Union of India (1999) 4
H SCC 33; Sohan Lal Gupta v. Asha Devi Gupta (2003)
M/S. CENTROTRADE MINERALS AND METALS INC. 75
v. HINDUSTAN COPPER LTD.
7 SCC 492 : [2003] 3 Suppl. SCR 249; Hari Om A
Maheshwari v. Vinitkumar Parikh (2005) 1 SCC 379–
referred to.
Minmetals Germany GmbH v. Ferco Steel Ltd. (1999)
C.L.C. 647; JorfLasfar Energy Co. v. AMCI Export
Corp. 2008 WL 1228930; Monck v. Hilton 46 LJNC B
167; Cuckurova Holding A.S. v. Sonera Holding B.V.
(2014) UKPC 15; Eastern European Engineering v.
Vijay Consulting (2019) 1 LLR 1 (QBD); Consorcio
Rive v. Briggs of Cancun 134 F. Supp 2d 789; Four
Seasons Hotels v. Consorcio Barr S.A. 613 Supp 2d
1362 (S.D. Fla. 2009); Nanjing Cereals v. Luckmate C
Commodities XXI Y.B. Com. Arb. 542 (1996); De Maio
Giuseppe v. Interskins Y.B. Comm. Arb. XXVII (2002)
492 – referred to.
Case Law Reference
[2006] 2 Suppl. SCR 146 referred to Para 5 D
[2016] 9 SCR 83 referred to Para 7
2020 (3) SCALE 494 referred to Para 9
[1960] 3 SCR 887 referred to Para 16
(1999) 4 SCC 33 referred to Para 19
[2003] 3 Suppl. SCR 249 referred to Para 20
E
(2005) 1 SCC 379 referred to Para 21
CIVIL APPEALATE JURISDICTION: Civil Appeal No. 2562
of 2006.
From the Judgment and Order dated 28.07.2004 of the High Court
at Calcutta in A.P.O.T. No. 182 of 2004 F
With
Civil Appeal No. 2564 of 2006
Gourab Banerjee, Siddharth Bhatnagar, Sr. Advs., Ms. Ruby Singh
Ahuja, Vishal Gehrana, Shravan Sahny, Ashutosh, P. Shukla, Ankit Yadav
(for M/s. Karanjawala & Co.), Advs. for the Appellant. G
Harin P. Raval, Sr. Adv., Ms. Nandini Sen Mukherjee, Nipun
Saxena, Ms. Sukanya Singh, Kartikey Kanojiya, Siddharth H. Raval,
S.S. Jauhar, Advs. for the Respondent.
H
76 SUPREME COURT REPORTS [2020] 9 S.C.R.
A The Judgment of the Court was delivered by
R. F. NARIMAN, J.
1. This matter comes to this Bench after two previous forays to
this Court.
B 2. The appellant before us, in Civil Appeal No.2562 of 2006, is a
U.S. Corporation who had entered into a contract for sale of 15,500
DMT of copper concentrate to be delivered at the Kandla Port in the
State of Gujarat, the said goods to be used at the Khetri Plant of the
respondent Hindustan Copper Ltd. (hereinafter referred to as “HCL”/
“the respondent”), who is the appellant in the other Civil Appeal No.2564
C of 2006. After all consignments were delivered, payments had been made
in accordance with the contract. However, a dispute arose between the
parties as regards the quantity of dry weight of copper concentrate
delivered. Clause 14 of the agreement contained a two-tier arbitration
agreement by which the first tier was to be settled by arbitration in
D India. If either party disagrees with the result, that party will have the
right to appeal to a second arbitration to be held by the ICC in London.
The appellant M/s Centrotrade Minerals and Metals Inc. (hereinafter
referred to as “Centrotrade”/ “the appellant”) invoked the arbitration
clause. By an award dated 15.06.1999 the arbitrator appointed by the
Indian Council of Arbitration made a Nil Award. Thereupon, Centrotrade
E invoked the second part of the arbitration agreement, as a result of which
Jeremy Cook QC, appointed by the ICC, delivered an award in London,
dated 29.09.2001, in which the following amounts were awarded:
“27.For the above reasons I THEREFORE AWARD and
ADJUDGE that
F
(1) HCL do pay Centrotrade the sum of $152,112.33,inclusive of
interest to the date of the Award in respect of the purchase price
for the firstshipment.
(2) HCL do pay Centrotrade the sum of $15,815.59, inclusive of
interest to the date of this Award in respect of demurrage due on
G
the first shipment.
(3) HCL, do pay Centrotrade the sum of $284,653.53,inclusive of
interest to the date of this Award in respect of the purchase price
on the second shipment.
H
M/S. CENTROTRADE MINERALS AND METALS INC. 77
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
(4) HCL do pay Centrotrade their legal costs in this arbitration in A
the sum of $82,733 and in addition the costs of the International
Court of Arbitration, the Arbitrator’s fees and expenses totalling
$29,000.
(5) HCL do pay Centrotrade compound interest on the above
sums from the date of this Award at 6% p.a. with quarterly rests B
until the date of actual payment.”
3. Even before Jeremy Cook QC could deliver his award, HCL,
during the pendency of the proceedings before the arbitrator in London,
filed a suit in the Court at Khetri, in the State of Rajasthan, challenging
the arbitration clause. By an Order dated 27.04.2000, in a revision petition C
filed against the Order of the Khetri Court, the High Court at Rajasthan
restrained the appellant from taking further steps in the London arbitration,
pending hearing and disposal of the revision petition. This ad interim ex
parte stay granted by the High Court was ultimately vacated by the
Supreme Court only on 08.02.2001. Meanwhile, we are reliably informed
that Mr. Cook, the learned arbitrator, referred the matter of stay of the D
parties from proceeding with the London arbitration to the ICC Court,
which then decided that the arbitrator could continue with the arbitral
proceedings.
4. When the said award dated 29.09.2001 was sought to be
enforced by Centrotrade in India, a learned Single Judge of the Calcutta E
High Court, after considering the objections of HCL, dismissed the
Section 48 petition filed by HCL, as a result of which the aforesaid
foreign award became executable in India. However, a Division Bench
of the Calcutta High Court, by its judgment dated 28.07.2004, held that
an appeal would be maintainable inasmuch as the London award could F
not be said to be a foreign award, but that a two-tier arbitration clause
would be valid. However, since the Indian award and the London Award,
being arbitration awards by arbitrators who had concurrent jurisdiction,
were mutually destructive of each other, neither could be enforced, as a
result of which the appeal was allowed and the judgment of the learned
single Judge was set aside. G
5. At this juncture, the matter came to a Division Bench of this
Court. Two separate judgments were delivered by S.B. Sinha, J. and
Tarun Chatterjee, J. reported in Centrotrade Minerals & Metals Inc.
v. Hindustan Copper Ltd. (2006) 11 SCC 245. After setting out the
facts of the case, S.B. Sinha, J. held that a two tier clause of the kind H
78 SUPREME COURT REPORTS [2020] 9 S.C.R.
A contained in clause 14 of this agreement is non est in the eye of law and
would be invalid under Section 23 of the Indian Contract Act. In this
view of the matter, the foreign award could not enforced in India and
Centrotrade’s appeal was therefore dismissed, the appeal filed by HCL
being allowed. Tarun Chatterjee, J. set out four questions in paragraph
134 as follows:
B
“134. We have heard Mr Sarkar, learned Senior Counsel appearing
for Centrotrade and Mr Debabrata Ray Choudhury, learned Senior
Counsel for HCL. I have also examined the entire material on
record including the arbitration agreement, the awards and
judgments of the Division Bench as well as the learned Single
C Judge. Before us, the following issues were raised by the learned
counsel for the parties for decision in the appeals:
(1) Whether the second part of clause 14 of the agreement
providing for a two-tier arbitration was valid and permissible in
India under the Act?
D
(2) If it is valid, on the interpretation of clause 14 of the agreement,
can it be said that the ICC arbitrator sat in appeal against the
award of the Indian arbitrator?
(3) Whether the ICC award is a foreign award or not?
E (4) Whether HCL was given proper opportunity to present its
case before the ICC arbitrator?”
6. These questions were answered by stating that the two-tier
arbitration process was valid and permissible in Indian law; that the ICC
arbitrator sat in appeal against the award of the Indian arbitrator; that
F the ICC award was a foreign award; but that since HCL was not given
a proper opportunity to present its case before the ICC arbitrator,
Centrotrade’s appeal would have to be dismissed and HCL’s appeal
allowed.
7. The matter then came on a reference before a 3-Judge bench
G of this Court and is reported in Centrotrade Minerals & Metal Inc.
v. Hindustan Copper Ltd. (2017) 2 SCC 228. The reference order
was referred to in paragraph 1 of the judgment of Lokur, J., as follows:
“These appeals have been referred [Centrotrade Minerals &
Metals Inc. v. Hindustan Copper Ltd., (2006) 11 SCC 245] to a
H Bench of three Judges in view of a difference of opinion between
M/S. CENTROTRADE MINERALS AND METALS INC. 79
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
the two learned Judges of this Court. The controversy is best A
understood by referring to the proceedings recorded on 9-5-2006:
Hon’ble Mr Justice S.B. Sinha pronounced his Lordship’s judgment
of the Bench comprising his Lordship and Hon’ble Mr Justice
Tarun Chatterjee.
Leave granted. For the reasons mentioned in the signed judgment, B
civil appeal arising out of SLP (C) No. 18611 of 2004 filed by
M/s Centrotrade Minerals and Metal Inc., is dismissed and civil
appeal arising out of SLP (C) No. 21340 of 2005 (actually 2004)
preferred by Hindustan Copper Ltd. is allowed. In the peculiar
facts and circumstances of the case, the parties shall pay and C
bear their own costs. Hon’ble Mr Justice Tarun Chatterjee
pronounced his Lordship’s judgment disposing of the appeals in
terms of the signed judgment. In view of difference of opinion,
the matter is referred to a larger Bench for consideration. The
Registry of this Court shall place the matter before the Hon’ble
the Chief Justice for constitution of a larger Bench. D
The decisions rendered by Sinha and Chatterjee, JJ. are reported
as Centrotrade Minerals & Metals Inc. v. Hindustan Copper
Ltd. [Centrotrade Minerals & Metals Inc. v. Hindustan Copper
Ltd., (2006) 11 SCC 245]”
E
Paragraph 5 of the aforesaid judgment set out the two questions
that arose in this case as follows:
“5. The issues that have arisen for our consideration, as a result
of the difference of opinion between the learned Judges, are as
under: F
(1) Whether a settlement of disputes or differences through a
two-tier arbitration procedure as provided for in Clause 14 of the
contract between the parties is permissible under the laws of India?
(2) Assuming that a two-tier arbitration procedure is permissible
under the laws of India, whether the award rendered in the G
appellate arbitration being a “foreign award” is liable to be enforced
under the provisions of Section 48 of the Arbitration and
Conciliation Act, 1996 at the instance of Centrotrade? If so, what
is the relief that Centrotrade is entitled to?
H
80 SUPREME COURT REPORTS [2020] 9 S.C.R.
A For the present, we propose to address only the first question and
depending upon the answer, the appeals would be set down for
hearing on the remaining issue. We have adopted this somewhat
unusual course since the roster of business allowed us to hear the
appeals only sporadically and therefore the proceedings before
us dragged on for about three months.”
B
Since the first question was answered in the affirmative, the Court
concluded:
“Conclusion
48. In view of the above, the first question before us is answered
C in the affirmative. The appeals should be listed again for
consideration of the second question which relates to the
enforcement of the appellate award.”
8. This is how the appeals have been listed again for consideration
of the second question, which relates to enforcement of the London
D award.
9. Shri Gourab Banerjee, learned senior counsel appearing on
behalf of Centrotrade, has taken us through the record and has relied
strongly on this Court’s recent judgment in Vijay Karia v. Prsymian
Cavi E Sistemi SRL 2020 (3) SCALE 494. He then referred in detail
E to the portions of the award which dealt with the natural justice aspect
of the case, as well as the judgment of the Single Judge of the Calcutta
High Court which dealt with the same. He then read out to us Chatterjee
J’s views contained in Centrotrade [2006] (supra) and contended that
ample opportunity had been given by the arbitrator to HCL to present its
F case, but that HCL, having an Indian award in its pocket, wanted
somehow to abort the London arbitration proceedings. It first filed the
suit that has been referred to, and obtained exparte ad interim stay
against parties from proceeding in the arbitration on 27.04.2000, which
was vacated by the Supreme Court only on 08.02.2001. Jeremy Cook
QC afforded as many as six opportunities to HCL to present its case
G and bent over backwards by extending time for filing of submissions and
documents several times, and even considered documents that were
filed by HCL after the last deadline had been extended, and then passed
the award. He, therefore, attacked Chatterjee J’s judgment, stating that
it was factually incorrect when it stated that a fair opportunity had not
been given to HCL to present its case. Several other judgments both
H
M/S. CENTROTRADE MINERALS AND METALS INC. 81
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
Indian and foreign were cited by Shri Banerjee in support of his A
submission. Apart from relying heavily on the judgment in Vijay Karia
(supra), he relied upon the approach to a Section 48 proceeding by quoting
from Redfern and Hunter on International Arbitration 6thEdn. and
Merkin and Flannery on the Arbitration Act, 1996.
10. Shri Harin P. Raval, learned senior counsel appearing on behalf B
of HCL, has taken a preliminary submission that the only point of
difference between S.B. Sinha, J. and Tarun Chatterjee, J. was on whether
the two-tier arbitration clause was valid in law. Once that point had been
answered, the question of being unable to present one’s case, not having
been decided by S.B. Sinha, J., was not referred to the larger bench as
there was no difference of opinion between the learned Judges on this C
aspect and therefore this aspect cannot now be adjudicated upon. Even
otherwise, he argued, basing his submissions on a list of dates and a
paper book of documents filed before this Court for the first time, to
show that as a matter of fact once the arbitrator had extended time, the
last extension being till 12.09.2001, he ought to have allowed further D
time in which, apart from legal submissions furnished, documents could
have been furnished in support of HCL’s case. This is particularly in
view of the fact that on 11.09.2001, a terrorist attack had taken place in
New York as a result of which globally, there was disruption of transport
and communication, and therefore it was very difficult for HCL to send
documents within the requisite time. He argued that had such documents E
been seen, there can be no doubt that this one-sided award might well
have been in his client’s favour, as a result of which serious prejudice
had been caused to his clients. Even otherwise, he argued that the issue
of jurisdiction was to be taken as a preliminary question before the learned
arbitrator, after which further proceedings were to take place. This was F
never done by the learned arbitrator. Also, the learned arbitrator in
proceeding with the arbitration despite the ex parte ad interim stay
being granted by an Indian court resulted in his client being unable to
present his case before the arbitrator.
11. Having heard learned senior advocates for both parties, it is G
first necessary to set out the portions of the award dated 29.09.2001
which deal with the aspect of HCL being unable to present its case
before the learned arbitrator. The learned arbitrator, after referring to
the Rajasthan High Court proceedings and the Supreme Court’s vacation
of the stay, then found:
H
82 SUPREME COURT REPORTS [2020] 9 S.C.R.
A “7. As set out in paragraph 6 above, HCL, by a series of letters to
the International Court of Arbitration and to me, in my capacity as
arbitrator, maintained that any arbitration commenced under the
second paragraph of Clause 14 of the contract is null and void
and until August 2001, refused to participate in it, even though
they were invited by me to do so without prejudice to their
B
jurisdictional objections. Despite this stance, Fox & Mandal were
at all times consulted about the procedural aspects of this
arbitration, were asked for their submissions in relation to the
procedure, progress and substance of the dispute, received copies
of all correspondence passing between Centrotrade and myself
C and of all submissions made and have been given every opportunity
to take any point which they wished to take in their defence. By
Orders made on 20th December 2000, 19th January 2001 and 3rd
May 2001, I directed that Centrotrade serve submissions and
supporting evidence, followed by HCL’s Response and evidence
in support, with a right in Centrotrade to put in a reply in
D
accordance with a clear time table. When no Defence Submissions
or supporting evidence was served by HCLwithin the time
prescribed, I sent them a fax on 30th July 2001, giving them one
last opportunity to inform me by return of any intention on their
part to put in a Defence and to seek an extension of time for
E doing so.
8. Following a further fax on 9th August 2001, in which I informed
the parties that I was proceeding with the Award, on 11th August
I received a fax from Fox & Mandal requesting anextension of
time of one month to put in a defence. On 16thAugust I ordered
F that any submissions in support of an application for anextension
of time for a defence and any submissions on the substantive
merits of the dispute, together with any evidence relied on in
relation to the application and any submissions should be received
by me by 31st August 2001, in the absence of which I would not
give them any consideration. On 27thAugust Fox & Mandal sought
G a further 3 weeks’ extension of time for making their submissions
and serving supporting evidence. I allowed a final extension
forthese submissions and evidence until 12th September 2001.
Seventy - five pages of submissions were received by me on
13thSeptember 2001, without any supporting evidence or any
H justification for not complying with my earlier orders. No grounds
M/S. CENTROTRADE MINERALS AND METALS INC. 83
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
were put forward for any application for an extensionof time for A
putting in Defence submissions. Indeed no formal application was
made for an extension of time to do so. HCL have therefore not
attempted to justify their earlier stance nor to give me any reason
for considering their submissions on the merits which are made
out of time. Centrotrade have objected to these submissions
B
contending that they are inadmissible because of HCL’s persistent
breaches of my orders. Nonetheless, though not bound to do so
because of their belated nature, I have considered those
submissions and taken them fully into account in making this
Award. I made plain in my orders that no further material provided
thereafter would be taken into account, and I have not done so. C
9. In their submissions HCL maintained their arguments as to
lack of jurisdiction and the invalidity of this London Arbitration but
without prejudice to that, put forward submissions both on the
jurisdictional arguments, the nullity of the second paragraph of
the Arbitration clause in the contract and on the merits of the D
dispute. It is clear that this dispute can be determined on the
documents turning, as it does essentially on points of construction
of the contract and matters of Indian law.”
(emphasis supplied)
Ultimately, the arbitrator awarded costs for the London proceeding, E
declining to award costs for the arbitration that had taken place in India.
12. The learned Single Judge of the Calcutta High Court, while
dealing with the objections as to breach of natural justice, dismissed the
aforesaid objections as follows:
F
“Mr. Roy Choudhury then submits that in view of Section 48(1)(b)
of the Act, the award is not enforceable, as neither notice of
appointment of arbitrator was given to the respondent, nor was it
given opportunity to present its case. The arbitrator followed the
ICC Arbitration and Conciliation Rules, though they were not
mentioned by the parties in the arbitration agreement, hence in G
view of Section 48(1)(b) of the Act the award was not enforceable.
Mr. Sarkar replies that the respondent was given all opportunities
to present its case, but it showed total non-cooperation with the
arbitrator. The arbitral procedure followed by the arbitrator does
not militate against the arbitration agreement. H
84 SUPREME COURT REPORTS [2020] 9 S.C.R.
A I find that the petitioner approached the ICC International Court
of Arbitration on February 22nd, 2000. The respondent filed a suit
in the Court of Civil Judge, Junior Division, Khetry on March 28 th
2000; it wanted to stop the second arbitration in terms of the
arbitration agreement. The arbitrator was appointed on June 7th,
2000. Till August 2001 the respondent maintained that the second
B
part of the arbitration agreement being against the public policy of
India, the arbitration through the ICC International Court of
Arbitration was not permissible. On this ground the respondent
refused to participate in the arbitral proceeding. It took the matter
upto the Apex Court. Ultimately when it failed to obtain any order
C to stop the arbitration, it filed its submissions running into seventy-
five pages. Though the papers reached the arbitrator beyond the
stipulated date, he has considered such submissions. He, however,
did not find any merit in the case made out by the respondent.
The arbitrator has recorded that at every stage he consulted the
procedural aspects with the solicitors representing the respondent.
D
There is no proof that the respondent ever objected to the rules
and procedure followed by the arbitrator orthat the arbitrator
followed a procedure not contemplated in the agreement. It is
apparent from the award that all opportunities were given to the
respondent to present its case. I find no merit in the contentions
E that notice regarding appointment of the arbitrator was not given
to the respondent or that the terms of reference were settled
behind its back. The respondent had full knowledge of everything;
it was informed about everything. Hence I find no substance in
the grievance that the respondent was unable to present its case
or that procedure not contemplated by the agreement of the parties
F
was followed by the arbitrator.”
13. In appeal, the Division Bench, in view of its finding that the
award is not a foreign award, declined to apply Section 50 of the
Arbitration Act, 1996 (hereinafter referred to as “Arbitration Act”), and
then stated that the London award is declared to be inexecutable so long
G as the Indian Nil Award stands. In view of this finding, it did not go into
the natural justice point argued by HCL.
14. In the first round in this court, S.B. Sinha, J. did not go into the
natural justice point, in view of his finding that the arbitration clause
itself was null and void. Chatterjee, J., after agreeing with Centrotrade’s
H
M/S. CENTROTRADE MINERALS AND METALS INC. 85
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
case on the arbitration clause, then went into issue no. 4 and held as A
follows:
“Issue 4
Whether HCL was given proper opportunity to present its case
before the ICC arbitrator?
B
164. Under Section 48(1)(b) enforcement of a foreign award
can be refused if:
“48. (1)(b) the party against whom the award is invoked was not
given proper notice of the appointment of the arbitrator or of the
arbitral proceedings or was otherwise unable to present his C
case;”(emphasis supplied)
165. In the case at hand, HCL had the knowledge of appointment
of the arbitrator. In fact, it had approached the Indian courts to
stall the ICC arbitral proceedings. On a special leave petition filed
by Centrotrade against the order of the Rajasthan High Court D
staying the ICC arbitral proceedings, an order was passed by this
Court by which the stay order of the Rajasthan High Court was
vacated on 8-2-2001 and directions were given for the ICC
proceedings to continue in accordance with law.
166. It is true, in his award, Mr Jeremy Lionel Cooke, the ICC
E
arbitrator has noted that he was appointed by ICC on 7-6-2000
and that HCL refused to participate in the arbitral proceedings on
the ground that the second arbitration clause in the contract was
null and void. He directed Centrotrade and HCL to file submissions
and supporting evidence through orders dated 20-12-2000,
19-1-2001 and 3-5-2001. However, HCL did not comply with these F
orders. On 30-7-2001, he sent a fax to HCL to find out whether
they intended to file their defence. He sent a further fax on
9-8-2001 informing them that he was proceeding with the
award. (emphasis supplied) Then on 11-8-2001, the ICC arbitrator
received a reply seeking extension of time. He granted time till
G
31-8-2001. He received another request from HCL’s
representatives on 27-8-2001 for further extension of time. He
granted extension till 12-9-2001. He received the first set of
submissions filed by HCL, without supporting evidence, on
13-9-2001. He considered those submissions and took them into
H
86 SUPREME COURT REPORTS [2020] 9 S.C.R.
A account while making the award. He has further recorded in his
award that:
“I made plain in my orders that no further material provided
thereafter would be taken into account, and I have not done
so.”
B (emphasis supplied)
This last statement indicates that he received further material from
HCL, which he did not consider while making the award. On the
face of it, it seems that HCL was given sufficient opportunity to
present its case by the arbitrator. However, this question must be
C looked into from the then existing situation.
167. It must be noted that this Court vacated the stay on the
proceedings on 8-2-2001. The first direction of the ICC arbitrator
to the parties, after the order of this Court on 8-2-2001, to serve
submissions to him was made on 3-5-2001 i.e. after a time gap of
D nearly 3 months. Cooperation of HCL was next requested only
on 30-7-2001 i.e. after a time gap of nearly 2 months. Then the
communication on 9-8-2001 stated that the arbitrator was
proceeding with the award. This time there was a response from
HCL. Upon these requests, a time-limit of nearly one month ending
E on 12-9-2001 was given to HCL. The arbitrator received the first
set of submissions filed by HCL on 13-9-2001. Then he made the
award 16 days later on 29-9-2001. It seems that between
13-9-2001 and 29-9-2001, he did receive further material from
HCL which he did not consider while making the award on the
ground that they were received after the time-limit granted by
F him to HCL had lapsed.
168. It is clear from the above layout of facts that there have
been delays in the arbitral proceedings right from the beginning
when Centrotrade approached ICC on 22-2-2000. Most of the
delays were due to HCL’s refusal to participate in the proceedings.
G However, there were some delays which cannot be related to
HCL’s conduct. For instance, the period from 8-2-2001 when the
order of this Court was made to 3-5-2001 when the first direction
of the arbitrator was made. The whole arbitral proceeding was
conducted in a manner indicative of lack of urgency. Further, I
find merit in the submission of HCL that due to the total dislocation
H
M/S. CENTROTRADE MINERALS AND METALS INC. 87
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
of air traffic caused by the terrorist attack of 11-9-2001, the A
materials sent by HCL to the ICC arbitrator reached late. Under
these circumstances, a delay of few days in serving their
submissions with supporting evidence, after having accepted to
participate in the arbitral proceedings, seems excusable and should
have been excused. Considering the overall picture of the
B
circumstances and the delays, refusal of the arbitrator to consider
the material received by him after 13-9-2001 and before
29-9-2001, seems to be based on a frivolous technicality. The
arbitrator ought to have considered all the material received by
him before he made the award on 29-9-2001. Considering the
decisions in Hari Om Maheshwari v. Vinitkumar Parikh [(2005) C
1 SCC 379] and Minmetal Germany GmbH v. Ferco Steel Ltd.
[ (1999) 1 All ER (Comm) 315] it is true that where a party is
refused an adjournment and where it is not prevented from
presenting its case, it cannot, normally, claim violation of natural
justice and denial of a fair hearing. However, in the light of the
D
delays, some of which were not attributable to HCL’s conduct, it
was only fair to excuse HCL’s lapse in filing the relevant material
on time. Therefore, it can be said that HCL did not get a fair
hearing and could not effectively present its case.
169. For the reasons aforesaid, I am of the view that HCL could
not effectively present its case before the ICC arbitrator and E
therefore enforcement of the ICC award should be refused in
view of Section 48(1)(b) of the Act. Accordingly, the judgment of
the Division Bench and also the judgment of the learned Single
Judge of the Calcutta High Court must be set aside and the matter
be remitted back to the ICC arbitrator for fresh disposal of the F
arbitral proceedings in accordance with law after giving fair and
reasonable opportunity to both the parties to present their cases
before him. In view of the fact that I have set aside the award of
the ICC arbitrator on the ground that HCL was unable to
effectively present its case before the ICC arbitrator, in compliance
with Section 48(1)(b) of the Act, I direct the ICC arbitrator to G
pass a fresh award within three months from the date of
commencement of the fresh arbitral proceedings.”
15. The law on the subject matter of Section 48(1)(b) of the
Arbitration Act has been laid down in a recent judgment of this Court in
H
88 SUPREME COURT REPORTS [2020] 9 S.C.R.
A Vijay Karia (supra). In paragraph 21 of the aforesaid judgment, this
Court stated that it was important to note that no challenge was made to
the aforesaid award under the English arbitration law, though available,
just as in the facts of the present case. This Court then set out the
parameters of a Section 48 challenge which reaches this Court as follows:
B “24. Before referring to the wide ranging arguments on both sides,
it is important to emphasise that, unlike Section 37 of the Arbitration
Act, which is contained in Part I of the said Act, and which provides
an appeal against either setting aside or refusing to set aside a
‘domestic’ arbitration award, the legislative policy so far as
recognition and enforcement of foreign awards is that an appeal
C is provided against a judgment refusing to recognise and enforce
a foreign award but not the other way around (i.e. an order
recognising and enforcing an award). This is because the policy
of the legislature is that there ought to be only one bite at the
cherry in a case where objections are made to the foreign award
D on the extremely narrow grounds contained in Section 48 of the
Act and which have been rejected. This is in consonance with the
fact that India is a signatory to the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards, 1958 (hereinafter
referred to as “New York Convention”) and intends - through this
legislation - to ensure that a person who belongs to a Convention
E country, and who, in most cases, has gone through a challenge
procedure to the said award in the country of its origin, must then
be able to get such award recognised and enforced in India as
soon as possible. This is so that such person may enjoy the fruits
of an award which has been challenged and which challenge has
F been turned down in the country of its origin, subject to grounds to
resist enforcement being made out under Section 48 of the
Arbitration Act. Bearing this in mind, it is important to remember
that the Supreme Court’s jurisdiction under Article 136 should not
be used to circumvent the legislative policy so contained. We are
saying this because this matter has been argued for several days
G before us as if it was a first appeal from a judgment recognising
and enforcing a foreign award. Given the restricted parameters
of Article 136, it is important to note that in cases like the present
- where no appeal is granted against a judgment which recognises
and enforces a foreign award - this Court should be very slow in
H interfering with such judgments, and should entertain an appeal
M/S. CENTROTRADE MINERALS AND METALS INC. 89
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
only with a view to settle the law if some new or unique point is A
raised which has not been answered by the Supreme Court before,
so that the Supreme Court judgment may then be used to guide
the course of future litigation in this regard. Also, it would only be
in a very exceptional case of a blatant disregard of Section 48 of
the Arbitration Act that the Supreme Court would interfere with a
B
judgment which recognises and enforces a foreign award however
inelegantly drafted the judgment may be. With these prefatory
remarks we may now go on to the submissions of counsel.”
The Court then went on to refer to Minmetals Germany GmbH
v. Ferco Steel Ltd. (1999) C.L.C. 647 in paragraph 59, and Jorf Lasfar
Energy Co. v. AMCI Export Corp. 2008 WL 1228930 in paragraph C
61 as follows:
“59.The English judgments advocate applying the test of a
person being prevented from presenting its case by matters
outside his control. This was done in Minmetals Germany
GmbH v. Ferco Steel Ltd. (1999) C.L.C. 647 as follows: D
“In my judgment, the inability to present a case to arbitrators
within s.103(2)(c) contemplates at least that the enforcee has
been prevented from presenting his case by matters outside
his control. This will normally cover the case where the
procedure adopted has been operated in a manner contrary to E
the rules of natural justice. Where, however, the enforcee has,
due to matters within his control, not provided himself with the
means of taking advantage of an opportunity given to him to
present his case, he does not in my judgment, bring himself
within that exception to enforcement under the convention. In F
the present case that is what has happened”
xxx xxxxxx
61. An application of this test is found in Jorf Lasfar Energy
Co. v. AMCI Export Corp. 2008 WL 1228930, where the U.S
District Court, W.D. Pennsylvania decided that if a party fails to G
obey procedural orders given by the arbitrator, it must suffer the
consequences. If evidence is excluded because it is not submitted
in accordance with a procedural order, a party cannot purposefully
ignore the procedural directives of the decision-making body and
then successfully claim that the procedures were unfair or violative
H
90 SUPREME COURT REPORTS [2020] 9 S.C.R.
A of due process. Likewise, in Dongwoo Mann+Hummel Co.
Ltd. v. Mann+Hummel GmbH (2008) SGHC 275, the Singapore
High Court held:
“145. A deliberate refusal to comply with a discovery order is
not per se a contravention of public policy because the
B adversarial procedure in arbitration admits of the possible
sanction of an adverse inference being drawn against the party
that does not produce the document in question in compliance
with an order. The tribunal will of course consider all the
relevant facts and circumstances, and the submissions by the
parties before the tribunal decides whether or not to draw an
C adverse inference for the non-production. Dongwoo also had
the liberty to apply to the High Court to compel production of
the documents under s 13 and 14 of the IAA, if it was not
content with merely arguing on the question of adverse
inference and if it desperately needed the production by M+H
D of those documents for its inspection so that it could properly
argue the point on drawing an adverse inference. However,
Dongwoo chose not to do so.
146. Further, the present case was not one where a party
hides even the existence of the damning document and then
E dishonestly denies its very existence so that the opposing party
does not even have the chance to submit that an adverse
inference ought to be drawn for non-production. M+H in fact
disclosed the existence of the documents but gave reasons
why it could not disclose them. Here, Dongwoo had the full
opportunity to submit that an adverse inference ought to be
F drawn, but it failed to persuade the tribunal to draw the adverse
inference. The tribunal examined the other evidence before it,
considered the submissions of the parties and rightfully
exercised its fact finding and decision making powers not to
draw the adverse inference as it was entitled to do so. It would
G appear to me that the tribunal was doing nothing more than
exercising its normal fact finding powers to determine whether
or not an adverse inference ought to be drawn.””
The Court finally summed up its conclusion on this aspect of the
case, as follows:
H
M/S. CENTROTRADE MINERALS AND METALS INC. 91
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
“76. Given the fact that the object of Section 48 is to enforce A
foreign awards subject to certain well-defined narrow exceptions,
the expression “was otherwise unable to present his case”
occurring in Section 48(1)(b) cannot be given an expansive meaning
and would have to be read in the context and colour of the words
preceding the said phrase. In short, this expression would be a
B
facet of natural justice, which would be breached only if a fair
hearing was not given by the arbitrator to the parties. Read along
with the first part of Section 48(1)(b), it is clear that this expression
would apply at the hearing stage and not after the award has
been delivered, as has been held in Ssangyong(supra). A good
working test for determining whether a party has been unable to C
present his case is to see whether factors outside the party’s
control have combined to deny the party a fair hearing. Thus,
where no opportunity was given to deal with an argument which
goes to the root of the case or findings based on evidence which
go behind the back of the party and which results in a denial of
D
justice to the prejudice of the party; or additional or new evidence
is taken which forms the basis of the award on which a party has
been given no opportunity of rebuttal, would, on the facts of a
given case, render a foreign award liable to be set aside on the
ground that a party has been unable to present his case. This
must, of course, be with the caveat that such breach be clearly E
made out on the facts of a given case, and that awards must
always be read supportively with an inclination to uphold rather
than destroy, given the minimal interference possible with foreign
awards under Section 48.”
16. Shri Raval took exception to the interpretation of the word F
“otherwise” occurring in Section 48(1)(b) and cited a Constitution Bench
judgment of this Court in Kavalappara Kottarathil Kochuni v. States
of Madras and Kerala(1960) 3 SCR 887, for the proposition that the
expression “otherwise” cannot be read ejusdem generis with words
that precede it.
G
17. Kochuni’s case (supra) was concerned with the constitutional
validity of the Madras Marumakkathayam (Removal of Doubts) Act,
1955. Section 2(b) of the aforesaid Act reads as follows:
“2. Notwithstanding any decision of Court, any sthanam in respect
of which: H
92 SUPREME COURT REPORTS [2020] 9 S.C.R.
A (b) the members of the tarwad have been receiving maintenance
from the properties purporting to be sthanam properties as of right,
or in pursuance of a custom or otherwise”
The Constitution Bench then held:
“The word “otherwise” in the context, it is contended, must be
B construed by applying the rule of ejusdem generis. The rule
is that when general words follow particular and specific words
of the same nature, the general words must be confined to the
things of the same kind as those specified. But it is clearly laid
down by decided case that the specific words must form a
C distinct genus or category. It is not an inviolable rule of law, but
is only permissible inference in the absence of an indication to
the contrary. On the basis of this rule, is contended, that the
right or the custom mentioned in the clause is a distinct genus
and the words “or otherwise” must be confined to things
analogous to right or contract such as lost grant, immemorial
D user etc. It appears to us that the word “otherwise” in the
context only means “whatever may be the origin of the receipt
of maintenance”. One of the objects of the legislation is to by-
pass the decrees of courts and the Privy Council observed
that the receipt of maintenance might even be out of bounty. It
E is most likely that a word of the widest amplitude was used to
cover even acts of charity and bounty. If that be so, under the
impugned Act even a payment of maintenance out of charity
would destroy the character of an admitted sthanam which ex
facie is expropriatory and unreasonable.”
F Given the object of the 1955 Act, the Constitution Bench was
careful to state that the word “otherwise” in the context only means
“whatever may be the origin of the receipt of maintenance”.
18. P. Ramanatha Aiyar’s Advanced Law Lexicon defines the
expression “otherwise” as follows:
G “Otherwise. By other like means; contrarily; different from that
to which it relates; in a different manner; in another way; in any
other way; differently in other respects in different respects; in
some other like capacity.”
The Law Lexicon then refers to an early judgment of Cleasby B.
H in Monck v. Hilton 46 LJNC 167, in which it is stated as follows:
M/S. CENTROTRADE MINERALS AND METALS INC. 93
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
“As a general rule “otherwise” when following an enumeration, A
should receive an ejusdem generis interpretation (per CLEASBY,
B. Monck v. Hilton, 46 LJMC 167, The words ‘or otherwise,’ in
law, when used as a general phrase following an enumeration of
particulars, are commonly interpreted in a restricted sense, as
referring to such other matters as are kindred to the classes before
B
mentioned.”
As has been held in paragraph 76 of Vijay Karia (supra), the
context of Section 48 is recognition and enforcement of foreign awards
under the New York Convention of 1958. Given the context of the New
York Convention, and the fact that the expression “otherwise” is
susceptible to two meanings, it is clear that the narrower meaning has C
been preferred, which is in consonance with the pro-enforcement bias
spoken about by a large number of judgments referred to in Vijay Karia
(supra). Kochuni’s case (supra) dealing with an entirely different Act
with a different object cannot, therefore, possibly apply to construe this
word in the setting in which it occurs. D
19. As a matter of fact, three earlier judgments of this Court, all
under the Arbitration Act, 1940, are also instructive. The ground on which
a domestic award could be set aside under Section 30 of the 1940 Act,
inter alia, was if the arbitrator misconducted himself or the proceedings.
It will be seen that “misconduct” as a ground for setting aside an award E
is conceptually much wider than a party being unable to present its case
before the arbitrator, which is contained in Section 48(1)(b). Thus, in
Ganges Waterproof Works (P) Ltd. v. Union of India (1999) 4 SCC
33, this Court was faced with the legality and validity of the arbitration
proceedings, three grounds being raised as follows:
F
“2. Challenge to the legality and validity of the arbitration
proceedings has been laid on three grounds: firstly, that the
claimant-Union of India (respondent herein) filed an additional
statement accompanied by documents before the arbitrator on
11-8-1982, which was the last day of hearing, and that was taken
into consideration by the arbitrator without affording the petitioner G
an opportunity for contesting the same or even delivering a copy
thereof to the petitioner; secondly, though no oral evidence was
adduced by any of the parties, yet the arbitrator has in his award
expressed having heard the evidence which shows inapplication
of mind to the record of the proceedings and material available H
94 SUPREME COURT REPORTS [2020] 9 S.C.R.
A before the arbitrator; and thirdly, that the arbitrator in the sitting
held on 11-8-1982 heard the parties hardly for five or seven minutes
in which limited time, no real hearing could have taken place. It is
submitted that the manner in which the arbitrator has conducted
himself, has resulted in violation of the principles of natural justice
and vitiated the arbitration proceedings. Similar grounds were
B
raised before the learned Single Judge as also in the intra-court
appeal before the High Court and have been turned down. Having
heard the learned counsel for the parties, we are also of the opinion
that here too the petitioner must meet the same fate.”
So far as the first ground was concerned, it was held that as a
C matter of fact, nothing was filed by the Union of India on 11.08.1982 and
the additional statement and documents that were filed by the Union of
India before the learned arbitrator was way before on 31.05.1982. This
being so, and as no specific case was made out in an additional affidavit
before the learned single Judge supporting the plea that the additional
D statement and documents that were furnished could not be effectively
dealt with by the appellant, plea no.1 was turned down. The third
contention was then disposed of as follows:
“6. The third and the last plea urged is equally devoid of any
merit. The burden of substantiating the averment urged as an
E objection tantamounting to misconduct on the part of the arbitrator
or complaining of violation of the principles of natural justice was
on the petitioner. No evidence was adduced to substantiate the
plea. The best person to depose as to what had actually transpired
at the hearing and whether the same was a real hearing or an
eyewash merely was the counsel who actually made submissions
F on behalf of the petitioner before the arbitrator. The least that
was expected of the petitioner was to have filed an affidavit of
the counsel before the Court. That was not done. No timely protest
was raised before the arbitrator. The hearing was concluded on
11-8-1982 and the award was made on 23-8-1982. During these
G 12 days also, the petitioner-Company never urged before the
arbitrator that submissions on its behalf were not permitted to be
made by the arbitrator. The learned Single Judge, as also the
Division Bench, have arrived at a finding that the plea was an
afterthought and certainly not substantiated. We also do not find
any reason to take a view different from the one taken by the
H High Court.”
M/S. CENTROTRADE MINERALS AND METALS INC. 95
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
20. In Sohan Lal Gupta v. Asha Devi Gupta (2003) 7 SCC A
492, this Court dealt with the arbitrator misconducting the proceedings
as follows:
“27. The arbitrator, as appears from the minutes of the meeting,
proceeded only on the documentary evidence. No party appears
to have presented oral evidence. Thus, the question of cross- B
examination of the witnesses appearing on behalf of the other
parties did not arise. Submissions must have been made by the
parties themselves. Ghanshyamdas Gupta does not say that he
had difficulty in appearing on 15-6-1976 or any subsequent date
and he had asked for an adjournment. Even otherwise, a party
has no absolute right to insist on his convenience being consulted C
in every respect. The matter is within the discretion of the arbitrator
and the Court will intervene only in the event of positive abuse.
(See Montrose Canned Foods Ltd. [(1965) 1 Lloyd’s Rep 597]
)If a party, after being given proper notice, chooses not to appear,
then the proceedings may properly continue in his absence. (See D
British Oil and Cake Mills Ltd. v. Horace Battin& Co. Ltd.
[(1922) 13 LI L Rep 443] )” (emphasis supplied)
In a significant paragraph which foreshadowed the law as it is
today, this Court referred to the Minmetals (supra) judgment and held
as follows: E
“43. Furthermore, in this case Ghanshyamdas Gupta expressly
relinquished his right by filing an application stating that he would
withdraw his objection. Such relinquishment in a given case can
also be inferred from the conduct of the party. The defence which
was otherwise available to Ghanshyamdas Gupta would not be F
available to others who took part in the proceedings. They cannot
take benefit of the plea taken by Ghanshyamdas Gupta. Each
party complaining violation of natural justice will have to prove
the misconduct of the Arbitration Tribunal in denial of justice to
them. The appellant must show that he was otherwise unable to
present his case which would mean that the matters were outside G
his control and not because of his own failure to take advantage
of an opportunity duly accorded to him. (See Minmetals Germany
GmbH v. Ferco Steel Ltd. [(1999) 1 All ER (Comm) 315] ) This
Court’s decision in Renusagar Power Co. Ltd. v. General
Electric Co. [1994 Supp (1) SCC 644 : AIR 1994 SC 860] is also H
a pointer to the said proposition of law.” (emphasis supplied)
96 SUPREME COURT REPORTS [2020] 9 S.C.R.
A 21. In Hari Om Maheshwari v. Vinitkumar Parikh (2005) 1
SCC 379, this Court recorded the arguments of learned counsel appearing
on behalf of the appellant on the natural justice aspect of the case as
follows:
“7. Shri Jaideep Gupta, learned Senior Counsel appearing for the
B appellant herein contended that the grounds on which the High
Court has set aside the award are not the grounds contemplated
under Section 30 of the Act. He submitted that arbitration
proceedings having started in the year 1995 could not be completed
even in the year 1999, therefore, the High Court ought not to have
interfered with the award. He pointed out that in Reference Case
C No. 313 of 1995 pertaining to Deepa Jain the evidence had already
concluded and the explanation given by the respondent for not
leading evidence on 10-5-1999 was frivolous and the arbitrators
rightly did not entertain a prayer for granting a further opportunity
for leading evidence. Such a denial of a further opportunity by the
D arbitrators would not be a ground contemplated under Section 30
of the Act to set aside the award. Hence, the courts below have
gone beyond the scope of Section 30 of the Act while allowing
petitions to set aside the arbitration awards.”
The learned Single Judge’s finding in the aforesaid case, which
E was accepted by the Division Bench judgment on the facts of the case,
is set out in paragraph 12 of the said judgment as follows:
“12. It is the above award that was challenged under Section 30
of the Arbitration Act, 1940 before the learned Single Judge by
the respondent which came to be allowed by the learned Single
F Judge. While doing so learned Single Judge observed:
“the cross-examination of M/s D. Jain and Co. was over in 1997,
the cross-examination of witness examined in Shri Maheshwari’s
reference was completed on 8-4-1999 and the arbitrators adjourned
the matter to 10-5-1999 and 11-5-1999 for the petitioner to lead
G his evidence. However, it appears that the petitioner noted a wrong
date and therefore, he did not appear on 10-5-1999. It is clear
from the record that there is an application submitted by the
petitioner before the arbitrators on 20-5-1999 regarding the mistake
committed by him in recording the date of hearing and requested
the arbitrators to give an opportunity to lead the evidence. One
H can understand if the arbitrators have after closing the matter for
M/S. CENTROTRADE MINERALS AND METALS INC. 97
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
award delivered the award immediately but since the arbitrators A
had not delivered their award by 20-5-1999, they also did not deliver
their award immediately thereafter, but waited till November 1999
to make their award, the arbitrators could have easily permitted
the petitioner to lead evidence. I do not think that the arbitrators
were justified in denying the petitioner an opportunity to lead
B
evidence….”
This finding of the learned Single Judge has been accepted by the
Division Bench without any further discussion.”
This Court then set aside the Single Judge’s judgment in language
that is even more appropriate today, given the object of the Arbitration C
Act, 1996, as follows:
“16. From the above it is seen that the jurisdiction of the court
entertaining a petition or application for setting aside an award
under Section 30 of the Act is extremely limited to the grounds
mentioned therein and we do not think that grant or refusal of an D
adjournment by an arbitrator comes within the parameters of
Section 30 of the Act. At any rate the arbitrator’s refusal of an
adjournment sought in 1999 in an arbitration proceeding pending
since 1995 cannot at all be said to be perverse keeping in mind the
object of the Act as an alternate dispute resolution system aimed
at speedy resolution of disputes.” E
22. Shri Banerjee then referred to a number of judgments including
Cuckurova Holding A.S. v. Sonera Holding B.V. (2014) UKPC
15 of the Privy Council. In this judgment, the Minmetals (supra) test
was referred to with approval as follows:
F
“31. Section 36(2)(c) is in the same terms as section 103(2)(c) of
the Arbitration Act 1996 in England. They reflect Article V(1)(b)
of the New York Convention. In Minmetals Germany GmbH v
Ferco Steel Ltd [1999] CLC 647, 658 Colman J said that the
subsection contemplates that the enforcee has been prevented
from presenting his case by matters outside his control, which will G
normally cover the case where the procedure adopted has been
operated in a manner contrary to the rules of natural justice. In
Kanoria v Guinness [2006] EWCA Civ 222 Lord Phillips CJ held
in the Court of Appeal that, on the ordinary meaning of section
103(2)(c), a party to an arbitration is unable to present his case if
H
98 SUPREME COURT REPORTS [2020] 9 S.C.R.
A he is never informed of the case he is called upon to meet. He
referred to the statements in Minmetals referred to above with
approval.
xxx xxxxxx
34. The general approach to enforcement of an award should be
B pro-enforcement. See eg Parsons & Whittemore Overseas Co
Inc v Société Générale 508 F 2d 969 (1974) at 973:
“The 1958 Convention’s basic thrust was to liberalize procedures
for enforcing foreign arbitral awards … [it] clearly shifted the
burden of proof to the party defending against enforcement and
C limited his defences to seven set forth in Article V.”
In IPCO (Nigeria) v Nigerian National Petroleum [2005] 2
Lloyd’s Rep 326, Gross J said at para 11, when considering the
equivalent provision of the English Arbitration Act 1996:
D “… there can be no realistic doubt that section 103 of the Act
embodies a pre-disposition to favour enforcement of New York
Convention awards, reflecting the underlying purpose of the New
York Convention itself …”
The Board agrees. There must therefore be good reasons for
refusing to enforce a New York Convention award. The Board
E
can see no basis upon which it should refuse to enforce the award
here if Cukurova fails to show that it was unable to present its
case for reasons beyond its control.”
The Privy Council, on facts, then dealt with the natural justice
ground by rejecting it as follows:
F
“53. The approach of the Tribunal described above and the
reasoning in the First Partial Award shows that it gave Cukurova
every opportunity to develop its case. The basis upon which the
Tribunal reached its conclusions is clear. As stated above, the
Tribunal indicated that it assumed Mr Berkmen’s evidence to be
G true. It is therefore difficult to see on what grounds Cukurova can
properly complain. It is not suggested that the Tribunal deliberately
ignored Mr Berkmen’s evidence. Although Cukurova submits that
the outcome of the arbitration would have been different if Mr
Berkmen had had an opportunity to be heard, it does not identify
H on what basis. It is of course no part of the role of the enforcing
M/S. CENTROTRADE MINERALS AND METALS INC. 99
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
court to consider whether the decision was correct either in law A
or on the facts.”
23. In Eastern European Engineering v. Vijay Consulting
(2019) 1 LLR 1 (QBD), the Queen’s Bench Division dealt with the
“inability to present case” challenge by following CukorovaHoldings
(supra) and Minmetals(supra),and then concluding: B
“89. It was also common ground that, as indicated as a “given”
by Lord Clarke in Cukorova at [53], the party challenging the
award must also demonstrate that the outcome of the arbitration
would have been different had there been no breach of natural
justice.” C
Applying the test of “matters outside one’s control”, it was found
that VCL’s challenge on this ground was not outside its control as follows:
“98. In this specific context what VCL did not do (and perfectly
well could have done) was to raise with the arbitrator the question
of whether the form of his order in fact shut them out from putting D
in a statement from Dr du Toit Malan, or to make submissions as
to why they needed to get evidence from some other identified
person in order to respond to the submissions made. Instead they
chose to seek to challenge the decision on the basis that they
should be allowed to put in new evidence which covered all issues, E
not simply in response to Large 3. This decision to challenge on
one basis and not the other is a matter which was entirely within
VCL’s control.
99. In those circumstances too I accept the submission that the
admission of Large 3 (or failure to allow responsive evidence) F
would not have had an impact on the result of the arbitration. The
liability decision was based on the earlier reports of Mr Large and
other witnesses. That is common ground. In relation to quantum,
the arbitrator’s reliance upon Large 3 had the effect of reducing
the quantum awarded to EEEL (by some €9 million). It therefore
cannot be said that VCL was prejudiced by Large 3. If it was G
prejudiced it was by its failure to avail itself of the opportunity
given it to respond.” (emphasis supplied)
24. Jorf Lasfar (supra), referred to in paragraph 61 of Vijay
Karia (supra), is also instructive. This case deals with a specific plea
H
100 SUPREME COURT REPORTS [2020] 9 S.C.R.
A relating to natural justice in relation to a Tribunal’s procedural orders as
follows:
“7.We disagree. AMCI was given a full and fair opportunity to
present its case. However, AMCI failed to meet its obligations
under the Tribunal’s procedural orders, 3 and suffered the
B consequences. It failed to submit any witness statements by the
deadline set forth by the Tribunal. Rather, AMCI attempted to
name Mr. Thrasher as a witness after the deadline, and without
submitting a witness statement. AMCI submitted no documentary
evidence save a governmental report indicating that coal was in
short supply around the time of the alleged breach.
C
xxx xxxxxx
9.The requirements of Procedural Order No. 4 are clear,
reasonable, and common in international arbitration practice. There
is no dispute that AMCI understood what the Order required at
D the time. A party cannot purposefully ignore the procedural
directives of a decision-making body, and then successfully claim
that the procedures were fundamentally unfair, or violated due
process. Under the circumstances, we find that AMCI has failed
to satisfy its burden to prove that the arbitral process violated our
basic notions of fundamental fairness and justice. As such, AMCI
E cannot avail itself of either the Article V(1)(b) defense or the
Article V(2)(b) defense.” (emphasis supplied)
25. Shri Banerjee then referred to two United States District Court
judgments. In Consorcio Rive v. Briggs of Cancun 134 F. Supp 2d
789, the US District Court, E.D. Louisiana, found that Briggs of Cancun,
F the respondent before it, refused to participate in the arbitration due to
alleged criminal proceedings in Cancun. At the trial, David Briggs
(representative of the respondent therein) testified that he did not seek
alternative ways to appear at the hearings such as by way of telephone,
nor did he send a representative of the company to appear on behalf of
G the company. In this fact situation, Article V(1)(b) of the New York
Convention was referred to, the court finding:
“26. Because Briggs of Cancun was continuously informed of all
hearing dates and was provided sufficient opportunity to present
witnesses and evidence in defense of the action, Briggs of Cancun
was given proper notice of the arbitration proceedings.
H
M/S. CENTROTRADE MINERALS AND METALS INC. 101
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
27. The due process guarantee incorporated in article V(1) (b) of A
the Convention requires that “an arbitrator must provide a
fundamentally fair hearing.” Generica Ltd., 125 F.3d at 1130. “A
fundamentally fair hearing is one that `meets “the minimal
requirements of fairness” adequate notice, a hearing on the
evidence, and an impartial decision by the arbitrator.’” Id. “[P]arties
B
that have chosen to remedy their disputes through arbitration rather
than litigation should not expect the same procedures they would
find in the judicial arena.” Id. Essentially, in exchange for the
convenience and other benefits obtained through arbitration, parties
lose “the right to seek redress from the court for all but the most
exceptional errors at arbitration.” Dean v. Sullivan, 118 F.3d 1170, C
1173 (7th Cir.1997).
28. Consistent with the federal policy of encouraging arbitration
and enforcing arbitration awards, the defense that a party was
“unable to present its case” raised pursuant to article V(1) (b) of
the Convention is narrowly construed. Parsons & Whittemore D
Overseas Co. v. Societe Generale de L’Industrie du Papier,
508 F.2d 969, 975 (2d Cir.1974).
29. In the instant case, the Court finds that Briggs of Cancun was
not “unable to present its case,” because Briggs of Cancun could
have participated by means other than David Briggs’s physical E
presence at the arbitration. For instance, Briggs of Cancun could
have sent a company representative to attend; could have sent its
attorney to attend; or David Briggs could have attended by
telephone.
30. Moreover, the evidence indicates that Briggs of Cancun did F
participate to the extent that it designated an arbitrator and filed
over 80 pages of legal argument and documentation in support of
its position. Because Briggs of Cancun has brought forward no
additional information or evidence that it would have presented at
the arbitration if it had the opportunity to do so, the Court finds
that Briggs of Cancun did have an opportunity to meaningfully G
participate in the arbitration.
xxx xxxxxx
33. For the foregoing reasons, the Court finds that Briggs of
Cancun’s defense under article V(1) (b) of the Convention must
H
102 SUPREME COURT REPORTS [2020] 9 S.C.R.
A fail. The Court also specifically finds that even if there was a
valid arrest warrant pending against David Briggs for some period
of time, Briggs of Cancun is not entitled to a defense under article
V(1) (b) of the Convention because Briggs of Cancun could have
participated through its Mexican attorney or corporate
representative or by telephone. Further, Briggs of Cancun has not
B
demonstrated that it was prejudiced in any way by whatever
restrictions the alleged criminal action might have imposed, because
it has not pointed to exonerating evidence that it would have
presented, but could not, but for the filing of the criminal Statement
of Facts.”
C 26. In Four Seasons Hotels v. Consorcio Barr S.A. 613 Supp
2d 1362 (S.D. Fla. 2009), the U.S District Court, S.D. Florida, dealt with
the respondent, having discontinued its participation in the arbitral
proceedings just prior to the final evidential hearings, as follows:
“Moreover, regardless of the decision ultimately reached by the
D Court of Appeals concerning the waiver issue in the previous action
to confirm the Partial Arbitration Award, the issue of the Arbitral
Tribunal’s jurisdiction and the propriety of the anti-suit injunction
was to be conclusively decided one way or the other in the action
to confirm the Partial Arbitration Award. With the jurisdictional
E and anti-suit injunction issues thus decided, Consorcio’s withdrawal
from the final evidentiary hearing, the proceeding governing the
issuance of the Final Award, in an attempt to preserve its right to
contest jurisdiction, was futile. Consorcio’s withdrawal was thus
ineffective to preserve its right to contest jurisdiction or the anti-
suit injunction in the appeal of the Partial Arbitration Award or in
F this action to confirm the Final Award.
Given that Consorcio’s withdrawal from the arbitration proceeding
was unnecessary to preserve its rights Consorcio was not precluded
from or unable to present its case. Even if Consorcio’s decision to
withdraw from the proceeding was taken based on a good faith
G subjective belief that such action was necessary to preserve its
rights on appeal, such a misgiving did not render Consorcio unable
to present its case within the meaning of Article V(1)(b). Therefore,
Consorcio has not met its burden of proving that Article V(1)(b)
applies as a defense.”
H
M/S. CENTROTRADE MINERALS AND METALS INC. 103
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
27. Shri Banerji then referred to a judgment of the Supreme Court A
of Hong Kong, reported in Nanjing Cereals v. Luckmate
Commodities XXI Y.B. Com. Arb. 542 (1996). In paragraph 5 of the
judgment the court held:
“5.However, it appeared that the Defendants had had ample
opportunity to present their own evidence as to quantum to the B
Tribunal, but by their own admission they had failed to do so. In
addition, regarding the issue of whether I should exercise my
discretion in refusing in any case to set aside the Award, Mr.
Chan conceded that the fact that the final Award was lower than
that claimed by the Plaintiffs was against his clients.
C
xxx xxxxxx
7.…At all events, the Defendants maintain that they did not submit
their own figures to the Tribunal, though this was clearly going to
be an issue before the Tribunal,nor, it appears, did they avail
themselves of the opportunity to submit them later. That decision D
was up to them. They must now live with its consequences.
8. Their omission was similar to that of the Defendants in another
case, namely QinghuangdaoTongda Enterprise Development
Co. v. Million Basic Co. Ltd. [1993] 1 HKLR 173, where I held:-
“It is not accepted that the defendant had no opportunity to present E
its case. On the contrary, the defendant made full use of the ample
opportunity given and only complained after the proceedings had
finally been closed, having foregone the opportunity of asking for
an extension of those proceedings. All proceedings must have a
finite end.” F
9.In conclusion, I am not satisfied that the Defendants have made
out sufficient grounds for me to refuse leave to enforce the Award
under S.44 of the Arbitration Ordinance. Even if they had made
out sufficient grounds, in my opinion this is a classic case where a
court should exercise its discretion to refuse to set aside an award,
G
due to the failure of the Defendants to prosecute their own case
properly by submitting their own evidence to the Tribunal. The
fact that the award was lower than that sought by the Claimants
is also a powerful factor against exercising discretion not to
enforce.” (emphasis supplied)
H
104 SUPREME COURT REPORTS [2020] 9 S.C.R.
A 28. Shri Banerjee then referred to a judgment to the Supreme
Court of Italy reported in De Maio Giuseppe v. Interskins Y.B. Comm.
Arb. XXVII (2002) 492. The Italian Supreme Court, in considering the
ground contained in Article V(1)(b) of the New York Convention held as
follows:
B “[5] “The first two grounds for appeal, which must be examined
together since they concern the same issues, are unfounded. Art.
V(1)(b) of the New York Convention provides that the failure to
communicate either the arbitrator’s appointment or the arbitral
proceedings, which makes it impossible to present one’s case, is a
ground for refusing enforcement of the award. De Maio maintains
C that it was unable to present its case because it was given only
fourteen days to appoint an arbitrator.
[6] “This Court deems that there was no violation of due process
as alleged by De Maio, and that one or more missing pages on
this issue in the Court of Appeal’s decision do not make this decision
D invalid. Since this is a procedural defect, we can settle the issue
directly, independent of whether the lower decision failed to give
reasons on this issue, the more so as we deal here exclusively
with the interpretation and the application of a procedural provision.
[7] “Art. V(1) provides that the party against whom the award is
E invoked has the burden to prove the ground for refusal of
enforcement under letter (b), as well as the other grounds in that
paragraph. Further, we must consider that, according to the spirit
of the Convention, the recognition of arbitral awards depends on
specific requirements which must be interpreted narrowly.
F [8] “Since in the present case it is undisputed that Interskins
informed De Maio that it had appointed an arbitrator, the reasons
given in the lower decision, which deems that this information and
the time limit [given to De Maio] guaranteed due process, suffice,
independent of a failure to give reasons on the objections raised
G by De Maio.
[9] “Second, we must consider that the ground for refusal under
letter (b) concerns the impossibility rather than the difficulty to
present one’s case. De Maio does not argue and certainly does
not prove that it could not present its case when the arbitration
was commenced or while it was held.”
H
M/S. CENTROTRADE MINERALS AND METALS INC. 105
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
29. We now come to the facts of the present case. Shri Raval’s A
plea that this Court cannot go into the question posed before it as there
was no difference of opinion on HCL being unable to present its case,
Justice Chatterjee J’s being the only judgment on this score, has no legs
to stand. The reference order that is extracted by us in paragraph 7
above, and that is contained in paragraph 1 of the decision in Centrotrade
B
[2017] (supra), makes it clear that, “in view of difference of opinion, the
matter is referred to a larger bench for reconsideration”. That the
expression the matter was understood as meaning the entire matter and
not merely issue 1, is further made clear by paragraph 5 of the said
judgment as follows:
“For the present, we propose to address only the first question C
and depending upon the answer, the appeals would be set down
for hearing on the remaining issue. We have adopted this somewhat
unusual course since the roster of business allowed us to hear the
appeals only sporadically and therefore the proceedings before
us dragged on for about three months.” D
Finally, the 3 Judge Bench concluded:
48. In view of the above, the first question before us is answered
in the affirmative. The appeals should be listed again for
consideration of the second question which relates to the
enforcement of the appellate award.” E
In this view of the matter, we have proceeded to examine the
correctness of Chatterjee J’s views.
30. Shri Raval has argued that the London arbitrator ought to
have determined the question of jurisdiction as a preliminary question, as F
he himself had initially indicated, before going into the substantive issues
relating to the contract. We are afraid that this is an argument that has
never been raised earlier, and has been raised by Shri Raval here for the
first time. Even otherwise, and even if we were to go by the documents
that were submitted to us for the first time by Shri Raval, the fax sent on
20.12.2000 by the arbitrator to the parties is incomplete. Even otherwise, G
it speaks of issues of jurisdiction and Indian law having to be addressed
as a primary question before matters of substance relating to the dispute
on the contract. None of this clearly and unequivocally shows that the
learned arbitrator sought to take up the plea as to jurisdiction as a
preliminary objection which should be decided before other matters. This
H
106 SUPREME COURT REPORTS [2020] 9 S.C.R.
A plea of Shri Raval, being taken here for the first time and for the reasons
given by us, is devoid of substance.
31. Shri Raval then argued that HCL was unable to present its
case as the learned arbitrator did not heed the stay order of the Rajasthan
High Court dated 27.04.2000. First and foremost, the stay order of the
B Rajasthan High Court was not and could not be directed against the
arbitrator – it was directed only against the parties to the proceeding.
Secondly, the learned arbitrator initially began the proceedings, after the
green signal given to him by the ICC Court to proceed with the arbitration,
by directing that the appellant serve submissions along with supporting
evidence, followed by the respondent’s response and evidence on
C 19.01.2001. This, however, was reiterated only on 03.05.2001, by which
time the Supreme Court had vacated the ad-interim ex parte order on
08.02.2001. This plea taken by Shri Raval, also taken before us for the
first time, has no legs to stand on.
32. Shri Raval then strenuously argued that considering that the
D last extension expired on 12.09.2001, the learned arbitrator ought to have
taken on board two other bundles of documents and granted time for the
same, given the terrorist attack in New York on 11.09.2001.
33. The sequence of events, even from the documents presented
by Shri Raval for the first time, is that legal submissions were furnished
after 11.09.2001 and received by the arbitrator’s office on 13.09.2001.
E The arbitrator then stated that these submissions have been fully taken
into account in the award and that by 18.09.2001, there would be no
scope for any further material being supplied, as the publication of the
award will follow shortly. This was communicated by fax on 18.09.2001
by the learned arbitrator to Fox & Mandal, the Attorneys of HCL. It is
F only thereafter, on 19.09.2001, that a couriered letter is sent to the learned
arbitrator stating that Fox & Mandal would be deeply obliged if documents
contained in paper binder no.1 would also be taken into account. It was
then added that paper binder no.2, containing judgments of the Courts of
law and authorities are being sent separately and it may take 7 to 10
days’ more time beyond 19.09.2001.
G 34. At this stage, it is important to point out that the learned
arbitrator had given a large number of opportunities to file documents
and legal submissions. On 03.05.2001 the learned arbitrator directed
that the appellant serve submissions along with supporting documents,
following the respondent’s response and evidence therein, with a right in
H the appellant to put in a reply, in accordance with a clear time table that
M/S. CENTROTRADE MINERALS AND METALS INC. 107
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
was set out. On 30.07.2001, since no defence submissions or supporting A
evidence was served by the respondent within the time prescribed, the
time was extended, giving the respondent one last opportunity to put in
their defence and to seek extension of time for so doing. Until August
2001, it may be stated that respondent did not participate in the arbitral
proceedings, even though invited to do so. It is only on 09.08.2001, when
the learned arbitrator informed the parties that he is proceeding with the B
award, that on 11.08.2001, the learned arbitrator received a fax from
Fox & Mandal, Attorneys for HCL, requesting for an extension of one
month’s time to put in their defence. This was acceded to by the learned
arbitrator on 16.08.2001, giving time upto 31.08.2001. However, on
27.08.2001, Fox & Mandal sought for a further three weeks’ extension C
of time, which was also granted by the learned arbitrator, allowing a
final extension of time until 12.09.2001. Despite the fact that the legal
submissions running into 75 pages were submitted beyond time, that is
only on 13.9.2001, in view of the 11.09.2001 attack in New York, the
learned arbitrator received the same and took the same into account
despite being beyond time. It was only on 29.09.2001 that the learned D
arbitrator then passed his award. Given the aforesaid timeline, it is clear
that the learned arbitrator was extremely fair to the respondent. Having
noticed that the respondent wanted to stall the arbitral proceedings by
approaching the Courts in Rajasthan and having succeeded partially, at
least till February 2001, the conduct of the respondent leaves much to be
E
called for. Despite being informed time and again to appear before the
Tribunal and submit their response and evidence in support thereof, it is
only after the arbitrator indicated that he was going to pass an award
that the respondent’s attorneys woke up and started asking for time to
present their response. This too was granted by the learned arbitrator,
by not only granting extension of time, but by extending this time even F
further. Finally, when the legal submissions of 75 pages were sent even
beyond the time that was granted, the learned Arbitrator took this into
account and then passed his award. This being the case, on facts we
can find no fault whatsoever with the conduct of the arbitral proceedings.
35. Justice Chatterjee, however, in his judgment, made several
errors of fact. First and foremost, in paragraph 166 of Centrotrade G
[2006] (supra), the learned Judge quoted the penultimate line in paragraph
8 of the award, without even adverting to the line just before the aforesaid
line which indicated that the material that was received from HCL was
in fact taken into consideration while making the award, even beyond
the stipulated time of 12.09.2001. Secondly, in paragraph 167, H
108 SUPREME COURT REPORTS [2020] 9 S.C.R.
A Chatterjee, J. conjectured that between 13th and 29th September, 2001,
the Arbitrator did receive further material from HCL which he did not
consider while making the award, on the ground that they were received
after the time limit granted by him to HCL. Factually, there is no supporting
material to show that any such further material was received by the
learned arbitrator, except documents that have been presented by Shri
B
Raval for the first time before us. They were clearly not before
Chatterjee,J. when this surmise was made by the learned Judge, Further,
the arbitrator cannot be faulted on this ground as, given the authorities
referred to by us hereinabove, the arbitrator is in control of the arbitral
proceedings and procedural orders which give time limits must be strictly
C adhered to. In paragraph 168, the learned Judge then said that given the
attack in New York on 11.09.2001, the learned arbitrator should have
excused further delay and should not have acted on frivolous
technicalities. This approach of a Court enforcing a foreign award flies
in the face of the judgments referred to by us hereinabove. Even
otherwise, Chatterjee, J., refers to the judgment in Hari Om
D
Maheshwari (supra) as well as Minmetals (supra), but then does not
proceed to apply the ratio of the said judgments. Had he applied the ratio
of even these two judgments, it would have been clear that an arbitrator’s
refusal to adjourn the proceedings at the behest of one party cannot be
said to be perverse, keeping in mind the object of speedy resolution of
E disputes of the Arbitration Act. Further, the Minmetals (supra) test
was not even adverted to by Chatterjee,J., which is that HCL was never
unable to present its case as it was at no time outside its control to
furnish documents and legal submissions within the time given by the
learned arbitrator. HCL chose not to appear before the arbitrator, and
thereafter chose to submit documents and legal submissions outside the
F
timelines granted by the arbitrator.
36. Even otherwise, remanding the matter to the ICC arbitrator to
pass a fresh award in paragraph 169, is clearly outside the jurisdiction of
an enforcing court under Section 48 of the 1996 Act.
37. For all these reasons, it is clear that Chatterjee, J.’s judgment
G cannot be sustained. As a result, Centrotrade’s appeal, being Civil Appeal
No. 2562 of 2006, is allowed. The judgment of Chatterjee, J is set aside.
HCL’s appeal, being Civil Appeal No. 2564 of 2006, is dismissed.
Resultantly, the foreign award, dated 29.09.2001, shall now be enforced.
H Devika Gujral Appeal disposed of.
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