Case: P.E.C. LIMITED THROUGH ITS GENERAL MANAGER Vs. AUSTBULK SHIPPING SDN BHD

regime governing international commercial arbitration Dardana Limited v. Yukos Oil Company, [2002] 1 ALL ER (Comm.) 819. 17. According to the ICCA Guide, the approach of the Court for enforcement should be having a strong pro enforcement bias, a pragmatic, flexible and non formalist approach. The Courts in several countries have been liberal in interpreting the formal requirements of Article IV of the New York Convention. Excessive formalism in the matter of enforcement of foreign awards has also been deprecated. 18. It is relevant to take note of the Preamble of the Act wherein it is mentioned that the United Nations Commission on International Trade Law (UNCITRAL) has adopted the UNCITRAL Model law on International Commercial Arbitration ("Model Law") in 1985 and that the Act is made taking into account the Model law and Rules. Chapter VIII of the Model Law governs the recognition and enforcement of Awards. Article 35 (2) provides that the party applying for enforcement of the award shall supply the original award or a copy thereof. The Model Law does not lay down procedural details of recognition and enforcement, which are left to national procedural laws and practices. However, Article 35 (2) was amended in 2006 to liberalise formal requirements. Presentation of a copy of the arbitration agreement is no longer required Under Article 35 (2). 19. The object of the New York Convention is smooth and swift enforcement of foreign awards. Keeping in view the object and purpose of the New York Convention, we are of the view that the word "shall" in Section 47 of the Act has to be read as "may". The opposite view that it is obligatory for a party to file the arbitration agreement or the original award or the evidence to prove that the award is a foreign award at the time of filing the application would have the effect of stultifying the enforcement proceedings. The object of the New York Convention will be defeated if the filing of the arbitration agreement at the time of filing the application is made compulsory. At the initial stage of filing of an application for enforcement, non-compliance of the production of the documents mentioned in Section 47 should not entail in dismissal of the application for enforcement of an award. The party seeking enforcement can be asked to cure the defect of non-filing of the arbitration agreement. The validity of the agreement is decided only at a later stage of the enforcement proceedings. 20. It is relevant to note that there would be no prejudice caused to the party objecting to the enforcement of the Award by the non-filing of the arbitration agreement at the time of the application for enforcement. In addition, the requirement of filing a copy of the arbitration agreement under the Model Law which was categorized as a formal requirement was dispensed with. Section 48 which refers to the grounds on which the enforcement of a foreign award may be refused does not include the non-filing of the documents mentioned in Section 47. An application for enforcement of the foreign award can be rejected only on the grounds specified in Section 48. This would also lend support to the view that the requirement to produce documents mentioned in Section 47 at the time of application was not intended to be mandatory. 21. Reading the word "shall" in Section 47 of the Act as "may" would only mean that a party applying for enforcement of the award need not necessarily produce before the Court a document mentioned therein "at the time of the application". We make it clear that the said interpretation of the word "shall" as "may" is restricted only to the initial stage of the filing of the application and not thereafter. It is clear from the decisions relied upon by the counsel for the Appellant that Courts in certain jurisdictions have taken a strict view regarding the filing of the documents for enforcement of a foreign award. Courts in many other jurisdictions have taken the opposite view that the application for enforcement of the foreign awards does not warrant rejection for non-filing of the relevant documents including the award and the arbitral agreement. We need not adjudicate on this issue as the subject matter of this case does not relate to the non-filing of the arbitration agreement during the enforcement proceedings. There is no dispute that the arbitration agreement has been brought on record by both the parties. 22. The learned Counsel for the Appellant also submitted that the Appellant did not sign the Charter Party and cannot be treated as a party to the agreement. There is no dispute that the contract is governed by the English law under which there is no requirement for the Charter Party to be signed by the parties to make it binding. We have no doubt in approving the conclusion of the High Court on this point and rejecting the submission made on behalf of the Appellant. Abundant material was examined by both the Arbitrator and the High Court to record a finding that there existed a valid arbitration agreement. Article II of the First Schedule of the Act defines arbitration agreement as including an arbitral Clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams. The High Court found that the Charter Party which contained the arbitration agreement was agreed to and entered upon by the parties and the same is supported by the correspondence between the parties. The term "agreement in writing" in Article II is very wide. An arbitral Clause need not necessarily be found in a contract or an arbitral agreement. It can be included in the correspondence between the parties also. In the present case the arbitration agreement is found in the Charter Party which has been accepted by both the Arbitrator and the High Court. We see no reason to differ from the view taken by the High Court on this point.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]12. Admittedly, an authenticated copy of the arbitration agreement was not placed on record by the Respondent at the time of filing of the application for enforcement. It is clear from the record that the Appellant placed the arbitration agreement along with its reply and thereafter the Respondent also filed the original arbitration agreement in the Court. The submission made by the Appellant is that production of the arbitration agreement at the time of filing of the award is mandatory, theof which ought to have resulted in the dismissal of the application. The Appellant sought support for this submission from the word "shall" appearing in Section 47. We do not agree with the submission made by the learned Counsel for the Appellant. We are of the opinion that the word "shall" appearing in Section 47 of the Act relating to the production of the evidence as specified in the provision at the time of application has to be read as "may".The object of the New York Convention is smooth and swift enforcement of foreign awards. Keeping in view the object and purpose of the New York Convention, we are of the view that the word "shall" in Section 47 of the Act has to be read as "may". The opposite view that it is obligatory for a party to file the arbitration agreement or the original award or the evidence to prove that the award is a foreign award at the time of filing the application would have the effect of stultifying the enforcement proceedings. The object of the New York Convention will be defeated if the filing of the arbitration agreement at the time of filing the application is made compulsory. At the initial stage of filing of an application for enforcement,of the production of the documents mentioned in Section 47 should not entail in dismissal of the application for enforcement of an award. The party seeking enforcement can be asked to cure the defect ofof the arbitration agreement. The validity of the agreement is decided only at a later stage of the enforcement proceedings.It is relevant to note that there would be no prejudice caused to the party objecting to the enforcement of the Award by theof the arbitration agreement at the time of the application for enforcement. In addition, the requirement of filing a copy of the arbitration agreement under the Model Law which was categorized as a formal requirement was dispensed with. Section 48 which refers to the grounds on which the enforcement of a foreign award may be refused does not include theof the documents mentioned in Section 47. An application for enforcement of the foreign award can be rejected only on the grounds specified in Section 48. This would also lend support to the view that the requirement to produce documents mentioned in Section 47 at the time of application was not intended to be mandatory.Reading the word "shall" in Section 47 of the Act as "may" would only mean that a party applying for enforcement of the award need not necessarily produce before the Court a document mentioned therein "at the time of the application". We make it clear that the said interpretation of the word "shall" as "may" is restricted only to the initial stage of the filing of the application and not thereafter. It is clear from the decisions relied upon by the counsel for the Appellant that Courts in certain jurisdictions have taken a strict view regarding the filing of the documents for enforcement of a foreign award. Courts in many other jurisdictions have taken the opposite view that the application for enforcement of the foreign awards does not warrant rejection forof the relevant documents including the award and the arbitral agreement. We need not adjudicate on this issue as the subject matter of this case does not relate to theof the arbitration agreement during the enforcement proceedings. There is no dispute that the arbitration agreement has been brought on record by both theis no dispute that the contract is governed by the English law under which there is no requirement for the Charter Party to be signed by the parties to make it binding. We have no doubt in approving the conclusion of the High Court on this point and rejecting the submission made on behalf of the Appellant. Abundant material was examined by both the Arbitrator and the High Court to record a finding that there existed a valid arbitration agreement. Article II of the First Schedule of the Act defines arbitration agreement as including an arbitral Clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams. The High Court found that the Charter Party which contained the arbitration agreement was agreed to and entered upon by the parties and the same is supported by the correspondence between the parties. The term "agreement in writing" in Article II is very wide. An arbitral Clause need not necessarily be found in a contract or an arbitral agreement. It can be included in the correspondence between the parties also. In the present case the arbitration agreement is found in the Charter Party which has been accepted by both the Arbitrator and the High Court. We see no reason to differ from the view taken by the High Court on this point.