•^ s.€^ IN THE HIGH COURT OF JUDICATURE AT BILASPUR (C.G.) CIVIL REVISION PETITION N0. l1^2—OF2004 Bencli IN THE MATTER OF: /BHARAT ALUMINIUM CO. LIMITED Balconagar, Korba - 495684, Chhattisgarh. VERSUS KAISER ALUMINIUM 'TECHNICAL SERVICES, Inc. 6177 Sunol Boulevard Pleasanton, California 94566-7769 PETITIONER RESPONDENT ^ CIVIL REVISION AGAINST THE ORDER DATED 20^7.2004 PASSED BY THE'^DISTRICT JUDGE BILASPUR IN MJC N0.3y/2003.UNDER SECTION^ll 5 OF THE CODE OF CIVIL PROCEDURE. ^^ mGH COURT OF CHHATTI8&ARB AT BILA&PUR CIVEL RBVI8I01I N0. 142 OF 2004 PETITIONER BHARAT ALUMINBJM COMPANY LIMITED (BALCO) vs. RESPONDEN'F KAISER ALUMINUM TECHNICAL SERVICES ING. (EATSI) ^^- Qrder post far Sl -o^ - 2@07 Sd/- DHStENDRA MISHRA Judge II { w :5^^.;m^''<:z3^^.F®w"""-"-T mOH COURT OF CHHATTI80ARH AT BILASPUR CIVIL REVI8ION N0. 142 OF 2004 PETITIONER BHARAT ALUMINIUM COMPANY LIMrTED (BALCO) vs. RESPONDENT v "\^ ^^ KAISER ALUMINUM TECH3TICAL SERVICES INC. (KATS^ Present: Shri S.N. Muldierjee, Sr. Advocate with Shri Tarun Aith, Shri Rataanko Banerjee, Shri Abhishek Sitiha aad Shri Ohanshyam Patel, Advocates for the petitioner. Shri Ravish Agrawal^ Sr. Advocate with Shri V.K. Munshi, Shri Cicu Mukhopodhya, Shri Sargay S. Agrawal, Shri Abhijeet Smha andShri Vivek Swamy, Advocates for fhe respondent. ORDER (Passed on2,J /01/2007) Dhirendra Mishra, J The circuinstaaces givmg rise to iastltution of this civil revision are fhat the petitioner made aa appUcation under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referr^i to as Act) before the District Judge, Bilaspur for settiag aside of fordign award dated 12.11.2002 (Aimaaire A/2) which was registered^as M.J<C. No. 14/2003. The respondent also nioved aii applicadon being M.J»C.No. 38/2003 under Section 47 and 49 offhe Act for enforcenieait ofthe above foreiga award. The learned District Judge decided fhe above inatter by common order dated 20th July 2004 (Aniiexure A/ 1). Tlie applicatlon under Section 34 of the Act was disiaissed as not maiatadnable and the appUcation fiiled by the respondeat under Seetions 47 aad 49 of the Act uo^j^iqje o^ suoissiTOqns ^q^ jo STOJ^TL 91^ :qRTM §UT[PJ^ou je ^q p3^B];dTO^^noo ^ou ^ou^jsigip wf^ X^IM s]^3>p pjeM8 ^qj, (TO:) •sap.jed ^xpljo tioTO^^jS^ uoip?j^iqj^ oq^ xyiiiM ^oiropjooo^ ui ^ou S^M PJBMB s>xp in §iipi^uiuiin3 ^jnpooojd p^qjH ^xp SB 9]:qB30Joja9 ^ou S^M pjeAW 9itA (T?) •^OV aq^ jo (g) ^ (i) gfr uopoas jo ^H 3tp III pJHA^ U§pJOJ3lp JO Aqii[iq^30joju^ ^q^ §UTJ3pi8Uoo^notpiM ^oy ^^ J° 6fr PIre L^ suoi^o^g j^pirn. pj^Me ^j^iqje ^q^ jo ^BSiTO^ojojix^ o^ §up^pi^j^inopjed s^jed ax^ Aq p^oireAp^? |^H9t(in§j^ Qip IB TB9P ^ou s^op »pjo p9u§ndnn: ^IIL (T) I :spuno.iS giiLflftoncg: ^q^ uo ^iurora ^usipuod^^j ^q^jo ^ov^^jo 6fr Plre Afr SUOTE^O^S ^pun uor^oTidd^ 3ip SIHAOHB ^pjo p^iagndun ^i^ p^§u9]j^qo s^q^ ^uoi^^d ^qj, 'e •Sxxipu^d ST ^nres ^xp pire SQOS jsiqTreAoy ^sl g no ponTTcqp^ S^AI qoiqM ^jnoo ^nx^jdng 9ip ^jopq uopiipd SlAB^q IBTO^dg ^ p^lg: »UOT^9d OIR, ^us»io§pnfSAoq^ ^xp ^sureSv 'S 'jndsBug <^§pnfk ^O^SIQ ^qi Qjopq ^q^ure^ureui ^an STSM ^g uop.o^g .opun uo^oTidd^ ^ip ^ip punoj§ ^q^ uo t?oOS ^YiSnv q^OI P^^P ^T»Ta§pnf 8p|A ^jnOQ 91^ Aq p98STY(ISTp S^A qoTq-M ^ov ^ip jo ^ UOT^OOS .opun uop^DTidd^ jpxp jo pssiiiisTp jo »pjow^ ^iqceSB ^oy aip. jo ^g uop.o^s jcspcEn p?s>dd^ sno9TO61iposi:m ^ p^ig j^uoit^d aiy, 's^P 06 ^pTO^ P^A^ jod s^ ^IXOKI 3q^ ^isod^p o^ p^o^jrp SBM j^uoi^Tpd ^qjL 'P^AOJ^ S^M N f- -y or it contairis decision on xiiatters beyond tlie scope of subniissions to arbitration. (iv) The enforcemeat of the award would be contrary to pubUc poUcy of ladia. 4. As per contoract of Annexure A/3 arbitratioii was to be held pursuant to EngLlsh Arbitoration Law aad the agreement was to be governed toy the prewailiag law ia the India and fhe Court of artoitration was to be held only in London, England. 5. Arguments advanced by the petitioner is (i) that the award of coinpound iaterest by the learned arbitrator was contorary to fhe publio poUcy of ladia aad was also contrary to fhe agreemeat of the parties i.e. fhe contract^ (ii) that the. question of liiaitation is a procedural law and fhe same is governed by the Indiaa Limitation Act, (iii) fhat fhe dismissal of the petitioner's counterclaim on the ground of liiaitatioii was contrary to the arbitoral procedure as the saoie was contrary to fhe agreement of the parties aad ia these circunistaaces fhe award could not be enforced as per Section 48 (1) (d) oftheAct. 6. On the other hand, learned counsel for the respondent vehemently chaUcnged fhe maintairiabiUty of fhe civil revision. It was oonteaded that Part-II of the Act is a Code by itselfwhich rdates to enforcemeat of fhe foreign award and the general provisions of fhe Code of Civil Procedure (C.P.C.) relatiiig to revision camiot be read iato the Act. As per Section 49 of the Act enforceable ford.ga award is deeined to be a decree of the Court enforeiag the award. A decree is either expressly appealable by a ^ ^' statute or not. No revision under Section 115 ofthe Aet can Ue agaiEist a decree. A revision under Section 115 of the C.P.C. lies only against the orders passed by subordiaate courts from which appeals are not specifically provided by statute. Thus, the foreign award beiiig a deemed decree, the question of revision being mabitaiaable against such a decree siinply carmot arise. 7. The further conteation of tih.e respondent is that the pedtioner cannot be permitted to raise objection agabist the award af compound interest aad disniissal ofBalco's counterclaioi on fhe ground of limitation as fhe same amounts to arbitral procedure contrary to ttie ag?reement of the parties and therefore^ award could not be aaforced on aecount of Section 48 (1) (d) offhe Act as the same was agitated ndther before the arbitration Tribunal nor before fhe leamed District Judge aiid a new plea camiot be allowed to be raised ia the revision. It was argued fhat fhe graat of com.pound uiterest is not opposed to pubUc poHcy of Icdia as there is no absolute prohibition m any statute agaiast ttie award of compound iiiterest. Section 48 (2) (b) contcmplates eiiforcemeait and not the award niust be opposed to pubUc poMcy. There was no issue befbre the arbitral Tribunal that the arbitrator could not award compound ititerest, on the contrary^ Balco itself clainied compound interest at fhe rate of 18%per aruiuni. This plea was not raised even. before fhe learned District Judge in fhe form that has beea raised ia the fevisioii. Evea othenvise, Article 12.1 of fhe contract orily limits the maxiiiium rate of iaterest i.e. 7.5% per aiiaum. It does not stipulate aiiy agreement betweea fhe parties as to fhe niode of coinputation Le. whefh.er siiaiple or •^ ^ coinpound or fhe <s<rests?? on which the rate and the mode are to be calculated and the stipulation of 7.5% per annuia indicates that aiMiual rests are clearly perHiissible siace the arbitradoii was governed fey Engtish law in all respeets aad Section 49 of the En^ish Act empowers the arbitrator to graat compound iaterest. 8. Wifh respect to fhe ground fhat disniissal of Balco9s counterclaim on the ground of limitadon xiiade fhe arbitoral procedure coiifrary to the agreemeat of the parties aad hencey the award could not be enforoed on account of Section 48 (1) (d) of the Actg it is contended that Balco could not be permitted to raise such a plea at fhe stage of enforceinent of tlie award on fhe pretext that Umitation is a procedural law and therefore Section 48 (1) (d) of the Act wfll apply. This plea was only raised ia objection fitled under Section 48 of the Act before fhe learned District Judge and no such plea has been evea takea ia fhe revisiein pedtioM, therefore, the petitioner carmot be permitted to take a nmy plea at the stage ofreyision. It was J&irther submitted tliat Balco did Mot raise a plea before fhe learned Ttibunal that it iavoked the arbitration on 26th WovetHber, 1997 by using fhe word <<counter claim" in its reply< No such plea was takea iri aay of the writtea submissions fiiled before fhe arbitrator, therefore, fhe arbitrator had no opportuidty to decide the above issue and KATSI had no opportuiuty to demonstrate before fhe arbitration Tribunal. The plea of Umitation is a mixed question o£fact and law which requires investigation mto fhe facts aad oaimot be aUowed to be raised at fhe stage of enforcement of a fordgn award aiid/or in. revision. The refereace of arbitoral procedure in Section 48 (1) (d) ia a '4 1. reference to the agreemeat betweea the parties as to conduct of thc arbitration m accordaace with Ardcle 17 of the contract. A wrong decision, if any^ on Imiitadon is an issue involviag nierits of fhe cdaim and fhe sam.e cannot be a ground to chaUenge the etiforeeiiictit under Section 48 (1) (d) of the Act, Even otherwise^ the counterclaim of Balco was based on assumption that fhere was breaeh of contractual obUgations on the part of KATSI who failed in coinniission of Oeltrol System and failed to nieet the firm target figures. However, by the impugaed award it has been categoricaUy held fhat KATSI was not ia breach and ia fact Balco was ia breach of its obligations under fhe contract. 9. I have heard learned counsel for fhe parties, 10. First of alls I propose to consider the mamtaiaatoitity of tfae civU revision. 11. So far as maintaiaability of the mstaat civil revlsion is concCTned, learned counsel for the petitioner relymg upon fhe decisioiis reported ia (20021 S SCC 510 in the matter bf I.T.I. LTD. VS. 8IEMEN8 PVBLIC COMMUmCATIOlIS 1TETWORK LTD.. (20021 5 8CC 520 in the matter of NIRMA LTD. V8. LVRQ1 LE1TTJE8 BNERGIE^SCHHIK ©MBH submiitted fhat a civil revision petition will Ue froaii aa order passed under the Act which is not appealable. 12. On the ofher haiid, learned counsei for the respondeats vehemeatly contended fhat tfae orders cited by fhe petitioner are claarly J} distmguishable as neither of tfae two cases deals with the f©rdgnaward or wlfh Part-H ofthe Act but are ia connectlonwttli Section 37 faUing m Part-IoftheAct. 13. In fhe matter of I.T.I. Ltd. (supra) aa iaterun order wa& passed by tiie arbitral Tribunal agaiast which an appeal was preferred under Section 37 (2) (b) of the Act, which was dismissed by the learned Civil Judge. Agahist dismissal of fhe appeal, a civil appeal was preferred direcfly to fhe Supretae Court. In fhe aforesaid oircMinstaiices, fhe question for consideration was - whether a revision petition under Section 115 ofthe C.P.C. liesto fhe High Court as agauist an order niade by a Civil Court in. appeal preferred under Section 37 of the Act? ApprcKvmg the view expressed ia fhe ease of Nirma Ud. ^siipra) m paragraph 1, fhe Supreme Court ia the matter of I.T.LLtd. (supra) ia paragraph 13 held as under; •t <<13. We also do not find much force ia the argumeat of learned counsdl for the appdlant based on SectixMi 5 ofthc Act. It is to be noted that it is under this Part, namely, Part I of the Act that Section 37(1) of the Act is foiuid, which provides for aa appeal to a civil court. The term <<court?? referred to in fhe said provision is delSned under Section 2 (e) of the Act. From. the said definition, it is dear that fhe appeal is not to any desigtiated pCTson but to a crudl court. Jn such a situatioa, ttie proeeeduigs before such court will have to be controUed by the provisions of the Code, therefore, fhe remedy by way of a revision undcr Section 115 of fhe Code will not aaiouiit to a judidal intervention aaot provided for by Part I of tlie Aot. To put it ia other words^ whea the Act under Section 37 prowded for aa appeal to the civil court aad the appUeatioxi of fbe Code not having beea expressly barred, fhe revisional jurisdiction of the High Court gets attract^l. If that be so^ fhe bar under Seetion 5 witl not be attracted because conferm.eat of appdlate power on fhe civU. court ia Part I of theAct attracts the provisions offhe Code also. 14. It is not ia dispute fhat m fhe case of I.T.L Ltd. (szrpra) enforcemeat of fordgn award was not ia issue. Enforcenient of foreiga award has beea dealt with ia Part-II of the Act. Section 49 of the Act eavisages that where fhe Court is satisfied that fhe forciga award is enforceable under this Chapter, fhe award shaU be deemed to be a decree offhat Court. 15. Section 48 of fhe Act deals with the circumstaiices under which enforcemeat of the ford.gn award may be refused at fhe request of the party agaiast whom it is iavoked. 16. Section 50 of the Act deals wifh the appcalable orders which is bemg reproduced as under; "50. Appealable orders.- (1) An appeal shall Ue from the order reftisirig to - (a) rdfer the parties to arbitratioii under sectioia 45; (b) enforce a foreiga award under secti^n 48^ ^. to the court aufhorized by law to hear appeals froni auch order. (2) No second appeal shaU Ue firom aii order passed ia appeal under this section, but nofhmg in this seetion shall afEect or take away any right to appeal to the Supreme Oourt. 17. As reproduced herdnabove, it has been held in the iiiatter of I<T.I. Ltd (supra) in paragraph 13 that Section 37 of fhe Act provtdes far an appeal to CivU Courty the Court is defiiied under Section 2(e) of the Act and thus holding fhat aa appeal is not to any designated person but to a Civil Court. la such a situation fhe proceedin.gs before such Court witl have to be controUed by tiie provisions oftlie Code, th^reforCy the reniedy by way of revision under Section 115 of the Code witl not aanount to a judicial iatenrerition not provided by Part-I ofthe act as fhe appMcation of the Code has not beea expressly barred. Thus froHi fhe above observation of the Supreme Court it may be deduced that where no appeal is provided by the statute froin the decree of a subordiaate court, the provisions of the C.P.C. could not conie into play and Section 115 thereof could not be available. 18. It is clear from Section 49 of fhe Act fhat where fhe Court i.e. trial Court ia the instant case, enforces a foreign awardy the foreiga award is deemed to be a decree of that Court. Whea appeal is not provided for, fhe provisions offfae Code do not come into play at all. 19. Even. otherwise, froni a bare perusal ofSection 50 offhe Act, it is clear fhat appeal Ues to fhe Courts autihiorized by law to hear appeals agamst the order refusmg to refer the parties to arbitration under Section 45 and refusing to aaforce a foreign award under Section 48 of the Act 10 and no second appeal Ues from an order passed in appeal under fhis Section, however, right to appeal to the Suprecae Coi^t has beeii saved under sub-section 2 ofSection 50 offheActwhichreads as under; \ \. l / "50. Appealable orders.-(1) xxxx x?ooc xxxxx (2) No seeond appeal shall Ue froin aja order passed in appeal under this sectionp but nofhmg in this section shaU affect or take away any right to appeal to the Supreme Court/9 Section 50 provides for appeal to the Court aufhorized by law to hear appeals from the orders reftising to refer the parties to arbitration under Section 45 and refusing to eaforce a foreign award under Section 48 of fhe Act, meaniag fh.ereby that ofher orders passed by fhe Court under this Part are not appealable to the Courts authorized by law to hear appeai'» from such order, however, sub-section 2 of Section 50 ^/ envisages any right to appeal to fhe Supreme Court against any order passed by the Court ia this Part which is ofherwise not appealable to fhe Courts authorteed by law to hear appeal froxD. such order under Section 50(1) of fhe Act^ is appealable before fhe Supreme Court. Ftoni the readmg of sub-section 2 of Section 50 it is clear fhat the conatituttonal right under Article 136 of Constitution of ladia for special leave to appeal to th.e Supreme Court is avattable to the petitioner. 20. Placiag reliaace on,various judgmeats of fhe Hon'ble Supreme Court, learned counsel for the respondeat submits fhat, it is settied law that scope of enquiry in proceedings for enforcemeat of a foreiga award is limited aad fhe awards camiot be impeached on merits. In fhe matter of 11 \ fc< \ .' ( ' Renusaaar Power Co. Ltd. Vs. General Electric Co. reoorted m (1994^ Supp 1 8CC 644 whUe consideriag fhe scope of enquiry under Sectioxi 7 ofthe Foreiga Awards Act, 196 1, the Supreme Court held thus; "37. Ia our opinion^ tfaereforey in proceediags for enforcemeat of a forelgn award under the Fordgti Awards Act, 1961, the scope of enquiry before the Court m which award is sought to be enforced is Umited to grounds ineatloned in S. 7 oftheAct aad does not eaable a party to the said proceedings to impeach fhe award on medts. bi the matter of Thyssen Stahlunion QMBH Vc^ Steel Authority of India Ltd. Rqiorted in (19991 9 8CC 334, the Hon'ble Supreme Court held as under; "40. ........................ As a m.atter offactifwe examine fhe provisions of Foreiga Awards Act aad fhe newr Act there is not m.iich diflGereace for fhe enforcement crf the foreiga award. Under thie Ford.ga Awards Act whea fhe Coiirt m satisfied that the ford.ga award is enforceable under that Act fhe Court shaU order fhe award to be filed and shall proceed to pronounce judgmeat accordiagly aad upon the judgmeat so pronounced a decree shaU follow. Sections 7 aad 8 of fhe Foreiga Awards Act respectivdy prescribe fhe conditions for enforcemeat of a foreiga award aad the ewdence to be produced by the party applymg for its enforceoient. DejBrdtion of foreiga award is same in. bofh the eaactments. Sections 48 & 47 of the newr Act correspond to Ss. 7 and 8 respectively of the Foreiga Awards Aet. While S, 49 of fhe new^ Act states tfaat where the Court is satisfied that fhe foreiga award is enforceable under fhis Chapter (Chapter I, Part II, relating to new^ York Convention Awards) the award is deemed to be decree of that Court. The only difference, therefore, appears to be that whtle under fhe Foreign Awards 12 \. ^-^ '.^ Aet a decree foUows, undor fhe newr Act foreign award is already stam.ped as the decree. Thus if provisions of the Foreiga Awards Act aad the newr Act relatmg to enforceaiient of fhe foreign award are juxtaposed there would appear to be hardly aay difference." The above position has beea reaffirmed by fhe HonUe Supreme Court ia tfae matter of Bhatia Internattonal Vs. Bulk Tradtne Company, reported ia (2002^ 4 8CC 10S ia paragraph 28 which is beiag reproduced: "28. ..........thus it is clear that an appMcation fot iateriai measure caa be made to the courts in ladia, whefher or not the arbitoration takes place io. India;, before or duriag arbitral proceedings. Once aa award is passed^ tiben that award itself caa be executed. Sections 49 & 58 provlde that awards covered by Part II are deemed to be a decree of fhe court. Thus 'Yoreign awards?? which are enforceable ia India are deemed to be decrees A doniestic award has to be enforced under the provisions ofthe Civtl Procedure Code ..<.......?? 21. Takmg into consideration fhe submissions made by learaaed counsd for the respondent and fiirther considering fhe law laid dowii by the Honl^le Apex Court/fhis Court is of the coaisidered opiiuon that no appeal is provided for &gamst a deemed decree of that court resulting from enfbrcement of a fbreiga award. The orify right is the constitutional right under Article 136 of the Constitution of India for a special leawe to appeal to fhe Supreme Court, The purpose for not providiilg appeal agaiast fhe enforcemeat of a foreign award is obvious because firsfly;, the scope for refusiag to enforce the award is narrow and limited and secondly, the essential purpose of iaternational commercial arbitratioiis 13 /• <i, <. is the expeditious resolution of such disputes. Part II of fhe Act is a Code by itself for the purpose of eaforcement of a foreigti award aad general provisions of the C.P.C. cannot be read iiito fhe Aet. A decree (deemed decree in fhe present case) is either expressly appealable by statute or not, no revision under Section 115 offhe C.P.C. Ues e^aiast the decree as civil revision Ues only agaiast fhe orders passed by fhe subordiaate Courts firoaxi which appeals are not specificaUy provided by fhe statute. Foreign award bemg a deemed decree, fhe question of revision being maintaiaable agaiast such deemed decree simply carm.ot arise as there is no provision ia the C.P.C. particularly under Seetion 115, for revision against a foreiga award. As already held hereinabove, fhe judgmeat ia the xnatter of I.T.I. Ltd (supra) has no appUcation in the iastant case as fhe saaie has been distmgiiished on facts and law. 22. On fhe basis of aforesaid aaalysis, the instaat civil revision xiaider Section 115 of the C.P.C. is not inaintafcaable and the same is disxaissed with costs. Sd/- DHRENDRA MISHRA Judge ~^ r'"~—----