1. This application (T. No. 597 of 2003) is for recalling any order dated November 11th, 2003 passed in T. No. 595 of 2003. The order dated November 11th, 2003 is an interim order passed at the instance of the petitioner in E.O.S No. 11 of 2003. The interim order is in terms of prayers (a) & (c) of the Master's Summons (T. No. 595 of 2003). The said prayers (a) & (c) are as follows:—
“(a) Injunction restraining the respondent company, i.e, Hindustan Copper Limited from selling, transferring, alienating and/or encumbering, in any manner whatsoever, the premises being “Tamra Bhavan/Copper House” situated at 1, Ashutosh Chowdhury Avenue, P.S Karya, Calcutta-700019 till the disposal of Extraordinary Suit No. 11 of 2003.
(c) An order of attachment be passed attaching the said Tamra Bhavan for a sum of U.S $ 564.314.45”
2. The order dated November 11th, 2003 was passed after hearing the parties, and the respondent in E.O.S No. 11 of 2003 which has taken out the present application was given opportunity to file opposition to the application (T. No. 595 of 2003). The application (T. No. 595 of 2003) was directed to come up for final disposal after three weeks from November 11th, 2003.
3. After the order was passed, the respondent in E.O.S No. 11 of 2003 has taken out the present application for recalling of the said order on the ground that the petitioner in E.O.S No. 11 of 2003 obtained the order by exercising fraud upon the Court. The ground of fraud has been based on the facts that while praying for the order the learned counsel for the petitioner in E.O.S No. 11 of 2003 described this application as an execution application, and described the petitioner of this application as the decree-holder, when the application was not an execution application and the petitioner of this application (E.O.S No. 11 of 2003) was not a decree-holder.
4. The facts of the case relevant for the present purpose are these. A foreign award was passed by the International Chamber of Commerce on September 29th, 2001. This foreign award had been preceded by a domestic award dated June 15th, 1999. Such domestic award was a ‘Nil Award’. On December 6th, 2001 Hindustan Copper Limited filed an application under Section 48 read with Section 49 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”). Such application was filed in the Court of the District Judge at Alipore, South 24-Parganas. It was registered as Misc. Case No. 422 of 2001. Hindustan Copper Limited initiated proceedings for declaration that the foreign award passed in favour of the petitioner in E.O.S No. 11 of 2003 is a nullity, and hence not enforceable. In the circumstances, on January 22nd, 2002 the award holder, i.e the petitioner in E.O.S No. 11 of 2003, filed an application under Section 48 read with Section 49 of the Act. This application filed in the Court of the District Judge at Alipore, South 24-Parganas, was registered as Arbitration Execution Case No. 1 of 2002. On February 11th, 2002 Hindustan Copper Limited filed an application under Section 24 of the Code of Civil Procedure, and this application was filed before the District Judge at Alipore, South 24-Parganas. It was registered as Misc. Case No. 53 of 2002. It was filed for transfer of the arbitration execution case from the Court of the 5th Additional District Judge at Alipore to the Court of the District Judge at Alipore. The petitioner in E.O.S No. 11 of 2003 then filed an application before this Court under clause 13 of the Letters Patent. It was filed for transfer of its execution case pending in the Alipore Court as also for transfer of the Section 24 application filed by Hindustan Copper Limited in the Alipore Court. By an order dated September 18th, 2003 this Court directed transfer of the Arbitration Execution Case No. 1 of 2002 and Misc. Case No. 53 of 2002 from the Alipore Court to this Court. On transfer and in terms of an order dated August 28th, 2003 the Arbitration Execution Case No. 1 of 2002 has been numbered in this Court as Extraordinary Suit No. 11 of 2003. In it the application (T. No. 595 of 2003) was taken out by the petitioner, i.e the award holder, for interim reliefs, and in such application the order was passed on November 11th, 2003 as stated before.
5. The learned counsel appearing for Hindustan Copper Limited submits that the application which has been registered in this Court as E.O.S No. 11 of 2003 is not an execution application, and hence no order could be passed in the same treating it as such. He contends that the award holder who has filed the application in connection with its E.O.S No. 11 of 2003 cannot be treated to be a decree-holder within the meaning of Section 49 of the Act; and hence the order was obtained by making misrepresentation of material facts. He refers to Chapter I of Part II of the Act, which contains provisions regarding enforcement of certain foreign awards. He submits that in the scheme of the things, and particularly having regard to the provisions contained in Section 48 of the Act, an award holder has no right to apply for enforcement of a foreign award. It is his contention that the question of enforcement of a foreign award will arise only when the person against whom such an award has been given makes an application for nullifying such an award. He also contends that in view of sub-section (3) of Section 48 of the Act the award holder may, however, apply to the appropriate Court seeking furnishing of security by the person against whom the award has gone, if such a person makes an application for setting aside or suspension of the award. It is his further contention that so long as a decision is not taken under Section 48 of the Act so as to record the satisfaction by a Court about the enforceability if a foreign award, such a foreign award is not enforceable. According to his further contention a foreign award will be enforceable as a decree only after the Court records its satisfaction that it is enforceable under the Indian law, and this is the legal position particularly in view of the provisions contained in Chapter I of Part II of the Act. He submits that since the application filed by his client (Hindustan Copper Ltd.) against whom the award has gone was pending decision, there was no scope for the award holder to initiate the proceeding under Section 48 of the Act. The application filed by the award holder, he submits, is totally misconceived and not maintainable. In support of his submissions he relies on a decision of the Supreme Court given in the case of Bhatia International v. Bulk Trading SA, reported in (2002) 1 LRI 703 : AIR 2002 SC 1432; and submits that a foreign award, as such, is not automatically enforceable as a decree.
6. The learned counsel for the award holder submits that the contentions raised by the learned counsel for Hindustan Copper Ltd. are absolutely without any merit. He refers to the arbitration clause, and submits that the parties were free to approach the International Chamber for Commerce for a foreign award, once either of them was dissatisfied with the domestic award. By referring to the provisions contained in Sections 48 and 49 of the Act, he submits that the award holder of a foreign award is quite entitled to file an application under them for enforcing the foreign award. He contends that an application under Section 48 read with Section 49 of the Act is to be treated as a combined application for enforcement of the award and execution thereof. By referring to the Supreme Court decision given in the case of Fuerst Day Lawson Ltd. v. Jindal Exports Ltd.., reported in (2001) 6 SCC 356 : AIR 2001 SC 2293 he submits that in this case the Supreme Court has clearly held that for enforcing and executing a foreign award the award holder is not required to initiate separate proceedings one after another. He relies on Paragraphs 31 and 32 of this judgment, and submits that the application (E.O.S No. 11 of 2003) filed by the award holder is quite maintainable under the provisions of the Act. He further submits that the execution application having been transferred from the Alipore Court, though was registered as an Extraordinary Suit before this Court, has to be treated as an application for enforcement of the foreign award as also an application for execution of the same; and hence, if occasion arises for the petitioner in it to apply for interim relief and it applies, the Court is fully empowered to pass orders for granting necessary interim reliefs. It is his contention that if such a power is not visualized, the application for enforcement as well as for execution of the foreign award can be frustrated by the unbridled and unchecked unilateral actions of the person against whom the foreign award goes.
7. After hearing the learned counsel for the parties, and considering the provisions of the Act; and the decisions relied on by the learned counsel for the parties, I am of the view that there is no ground to recall my previous order wherein the application (that has been registered in this Court as E.O.S No. 11 of 2003) was referred to as an execution application, and the petitioner thereof was described as a decree-holder. In my considered view, the representations made by the learned counsel for the petitioner in E.O.S No. 11 of 2003, in the facts and circumstances of the case, cannot be said to be a fraud exercised upon the Court. As noted before, the application was registered in Alipore Court as an execution case, and while passing the order for transferring it to this Court, it was described as such once again. The registration of the application in this Court as an Extraordinary suit does not change the nature and character of the application, because, as held by the Supreme Court in Fuerst Day's case, it is to be treated as a combined application for enforcement of the foreign award as also for execution of the same. Since in its application the petitioner of E.O.S No. 11 of 2003 has prayed for enforcement of the foreign award by execution thereof, in my considered view, it cannot be said that by describing the application as an execution application, and by representing the petitioner of such application as the decree-holder, the counsel for the award holder exercised any fraud upon the Court and obtained the order by practising fraud as alleged.
8. I find no merit in the contention that in the scheme of the things as intended in the provisions of the Act, the person in whose favour a foreign award goes is not entitled to apply for its enforcement. The contention that the question of enforcement of a foreign award arises only when the person against whom such a foreign award has gone approaches the Court, in my considered view, is totally misconceived.
9. From the provisions contained in Sections 47, 48 and 49 of the Act it is clear that both the parties can approach the appropriate forum with their respective prayers, i.e the person in whose favour a foreign award goes can definitely apply before the competent Court for enforcement and execution of the award, and at the same time the person against whom the foreign award has gone can approach the Court for setting aside such an award. True that before proceeding to execute a foreign award as a decree of the Court, the Court is required to record its satisfaction that such a foreign award is enforceable; but this, however, does not mean that in a pending application for enforcement and execution of a foreign award the Court cannot pass any interim order in order to protect the interest of the person who applies for enforcement and execution of a foreign award. The interim reliefs can be granted in such an application in aid of the final reliefs.
10. In the present case after hearing the parties, I passed an interim order holding that in the absence of the interim order the application (E.O.S No. 11 of 2003) filed by the award holder for enforcement and execution of the foreign award given in its favour is likely to become infructuous. This being the position, I find absolutely no reason, legal or factual, to recall my earlier order dated November 11th, 2003. The decision in the case of Bhatia International, relied on by the learned counsel for Hindustan Copper Ltd., is totally misplaced, and in my view it has no manner of application to the legal question raised in this matter.
11. The application, although is appearing as a ‘New Motion’ in the day's list, on the agreement of the learned counsel for the parties, has been treated as an ‘Adjourned Motion’, and has been heard as such.
12. For the foregoing reasons, I find no merit in this application (T. No. 597 of 2003), and hence it is hereby rejected.
13. In the facts and circumstances of the case, there will, however, be no order as to costs.
14. While rejecting this application filed by the respondent in E.O.S No. 11 of 2003 I, however, make it clear that if the respondent furnishes bank guarantee to the satisfaction of the Registrar, Original Side, in the sum of U.S $ 564.314.45, the interim order passed by me on November 11th, 2003 shall stand modified to the effect that the interim order in terms of prayers (a) and (c) of the Master's Summons shall no more remain operative once the guarantee is furnished, and the bank guarantee furnished shall remain with the Registrar, Original Side, subject to its regular renewal by the respondent at least 15 days before the date of its expiry, and on failure to renew the bank guarantee as directed herein, the Registrar shall enforce it at once, and keep the amount deposited in the United Bank of India, High Court Branch to the credit of E.O.S No. 11 of 2003. This modification of the interim order is made considering the submissions of the learned counsel for the parties for the same.
15. Urgent xeroxed certified copy of this judgment and order may be made available to the parties, if applied for. The Registrar and all concerned shall act upon on a signed copy of the operative part of this judgment and order.
Order accordingly.