1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION PETITION NO.164 OF 2005 M/s.Swissgen NV. ... Petitioner. vs. M/s.Goldcrest Exports & Another. ... Respondents. --- Mr.Z.Andhyarujina i/b. Ms.Rachana Kantawala, for Petitioner. Mr.Pednekar i/b. M/s.Khaitan & Jayakar, for Respondents. CORAM: D.K.DESHMUKH,J. DATED: 9th August,2005 P.C.:- 1. This petition has been filed for enforcement of the Foreign Award. The facts that are material and relevant are that admittedly, the petitioner and the Respondent no.1 had employed common broker for entering into an agreement of sale of goods. The common broker by communication dated 19.9.2003 communicated to both the parties the terms of contract arrived at between the parties and thereby requested both the parties to return one copy of the contract duly 2 signed by the parties as token of confirmation. Admittedly, the respondent no.1 has signed one copy but it appears that the buyer has not signed the confirmation copy. The respondent no.1 by letter dated 18th October,2003 cancelled the contract on the ground that the petitioner- buyer did not sign the confirmation copy. The matter was referred to arbitration. The respondent no.1 did not appear before the Arbitral Tribunal, but it appears that the respondent no.1 addressed a communication to the Administrative Assistant of FOSFA International raising objection. The objection was that there was no concluded contract between the parties as the confirmation copy was not signed by the petitioner. The Arbitral Tribunal made the Award directing the Respondent no.1 to pay the sum of US $ 81,225 and other sums. Though the Respondent no.1 did not appear before the Arbitral Tribunal, the learned Arbitrator has dealt with the objection raised on behalf of the Respondent no.1. 2. The Respondent no.1 has filed affidavit in reply to the petition. I have heard the learned Counsel appearing for both the sides. Perused the record and affidavit in reply. According to the learned counsel appearing for Respondent no.1 as the petitioner did not sign the confirmation copy, concluded contract between the parties did not come into existence. According to the learned Counsel, the Arbitral Tribunal has recorded the finding that there was 3 concluded contract between the parties, only because in the cancellation letters the respondent no.1 mentioned the contract numbers. It is further submitted that the communication from the broker was merely an offer and unless that offer made by the Respondent no.1 was accepted by the Petitioner, there would be no concluded contract between the parties. 3. Admittedly, the communication dated 19.9.2003 was from the common broker engaged by the petitioner and the respondent no.1. The communications dated 19.9.2003 and 24.9.2003 were the broker's notes. The legal effect of the broker's note has been considered by the Division Bench of this Court in the case “Promatha Nath Mullick V. Batliwalla and Karani (AIR 1942(29) Bom.224)”. The judgment of the Division Bench of this Court in Mullick's Case referred to above has been considered by this Court in the case “Cetaco Sa Vs. Bombay Export International, 2000(3) ARBLR 69 (Bom)” and it has been held that when a common broker is engaged by both the parties, confirmation note sent by the broker amounts to concluded contract between the parties. Relevant observation is to be found in paragraph 5 and 7 of the Judgment, it reads as under:- “It is the case of the petitioners that the documents dated 23rd November,1994 and 18th January,1995 are a concluded contract between the parties which 4 includes the stipulation that fosfa terms are applicable to the parties. It is submitted on behalf of the petitioners that the documents dated 23rd November,1994 and 18th January,1995 are addressed to the petitioners and the respondents by I.T.A.C. Ltd. who is the common broker of both the parties. According to the petitioners, there were negotiations held between the parties through the common broker and at the conclusion of the negotiations, the concluded contract was faxed by the common broker to both the parties. The petitioners rely on a judgment of the Division Bench of this Court in the case of Promatha Nath Mullick V. Batliwalla and Karani (AIR 1942(29) Bom. 224.), in support of the proposition that when a common broker is employed by both the parties, confirmation note sent by the broker represents concluded contract between the parties. The learned counsel for the petitioners pointed out that the judgment of the Division Bench of this Court in Mullick's case referred to above had been approved by the Supreme Court in its judgment in the case of Jugal Kishore Rameshwardas V. Mrs.Goolbai 5 Hormusji (AIR 1955 SC 812). The learned counsel appearing for the respondents, on the other hand, submits that the communication dated 23rd November,1994 is not a concluded contract between the parties but it is merely a proposal received by the respondents from the common broker. He submits that the contemporaneous conduct of the respondents indicates that the document dated 23rd November,1994 is merely a proposal and not a concluded contract. The learned counsel points out that after receiving the document dated 23rd November,1994 on the next day, the respondents addressed a fax message where in the document dated 23rd November,1994 has been described as a firm bid and the respondents have given a counter offer in relation to the prices of the commodity. The learned counsel further submits that by fax message dated 24th November,1994, the common broker also incorporated certain modifications in the alleged contract and confirmation from the respondents was sought to the modifications. The learned counsel submits that on 24th November,1994, the 6 respondents communicated that fosfa terms are not acceptable to the respondents and only if the buyer agrees to this, then only the letter of credit should be opened. The learned counsel, relying on this messages, submits that the documents dated 23rd November,1994 does not disclose a concluded contract. 7. Perusal of the judgment of this Court in Mullick's case referred to above shows that this Court was considering the question as to whether the notes sent by a common broker constitute a contract between the parties, the Division Bench has held that the notes sent to both the parties by the common broker engaged by them is an evidence of the concluded contract between the parties. It is further to be seen that the law laid down by this Court in Mullick's case has been approved by the Supreme Court in the case of Jugal Kishore Rameshwardas referred to above. In the present case, as the parties had engaged a common broker, the confirmation note dated 23rd November,1994 sent by the common broker, would constitute a concluded contract between the parties. In my 7 opinion, in view of the law laid down by this Court in Mullick's case referred to above, I have no option but to hold that the communication dated 23rd November,1994 is nothing but a concluded contract between the parties.” In the Award same finding has been recorded by the learned Arbitrator. It is further to be seen here that it is clear from the communication dated 18th October,2003 from the Respondent no.1 that the Respondent no.1 also understood the broker's notes as the concluded contracts and therefore, the Respondent no.1 cancelled the contracts. If, according to the Respondent no.1, there is no concluded contract between the parties, the Respondent no.1 would have withdrawn its offer by communication dated 18th October,2003. However, the Respondent no.1 did not withdraw its offer, instead the Respondent no.1 cancelled the contract. This clearly shows that the Respondent no.1 also understood that there is concluded contract between the parties and therefore, it is obvious that the defence that was raised by the Respondent no.1 was an afterthought and the objection was raised merely to avoid the liability to pay the amount. Thus, in my opinion, the respondent no.1 has not shown any reason as to why this Court should refuse to enforce the Foreign Award. In the result therefore, the petition is granted in terms of prayer clause (a). 8 The Respondent no.1 is directed to pay cost of this petition to the petitioner as incurred by the petitioner. ---