Case: Brace Transport Corporation of Monrovia, Bermuda Vs. Orient Middle East Lines Limited, Saudi Arabia &amp; Others

enforcement will not be chosen by or on behalf of the parties. It will depend upon the circumstances of each particular case.So far as recognition of an international award is concerned, the successful party only needs to seek recognition if proceedings are brought against him in respect of a matter which has already been dealt with and made the subject of an award. The party who is sued will then wish to rely on the award by way of defence, or set off, or in some other way in the Court proceedings. For this purpose, he will ask the Court concerned to recognise the award as binding on the persons between whom it was made. It is impossible to know in what Court or in what country such proceedings are likely to be brought, and this fact emphasises once again how important it is that international awards should be truly inter?national in their validity and effect.Where it becomes necessary to enforce an international award, the position is different. The first step is to determine the country or countries in which enforcement is to be sought. In order to reach this decision, the party seeking enforcement needs to locate the State or States in which the losing party has (or is likely to have) assets available to meet the award.12. Now Section 5(1) of the said Act says that any person interested in a foreign award may apply to any Court having jurisdiction over the subject matter of the award that the award be filed in Court. Dr. Ghosh learned Counsel for the appellant submitted that the said vessel was within the jurisdiction of the Bhavnagar Court and the Bhavnagar Court had, therefore, jurisdiction to take the award on file. The jurisdiction paragraph of the application to the Bhavnagar Court reads thus:The petitioners submit that the respondent Nos. 1 and or 2 have no assets whatsoever with the jurisdiction of this Honble Court or elsewhere in India. The only assets which is available within the jurisdiction of this Honble Court is the said vessel, ?SAUDI CLOUD.? The petitioners submit that the respondent Nos. 1 and/or 2 and/or 3. With intent to delay obstruct and defeat the execution of any decree that may be passed in this petition against them have sold the said vessel ?SAUDI CLOUD.? The petitioners further submit that they have a maritime lien on the said vessel ?SAUDI CLOUD? and the respondent Nos.1 and/or 2 and/or submit that it is just necessary and in the interest of justice that this Honble Court be pleased to order attachment before judgment of the vessel ?SAUDI CLOUD? at present lying in port Alang in the district of Bhavnagar, Gujarat.The said vessel having been sold to the 3rd and 4th respondents it is no more an asset of the 1st or 2nd respondents and the award cannot be executed there against, which is why the appellants claim in the application to have a maritime lien. But the Bhavnagar Court has, admittedly, no jurisdiction to enforce a maritime lien, assuming it to exist.13. It was then submitted by Mr. Ghosh that the subject-matter of the award was money and the 1st and 2nd respondents had money in the jurisdiction of the Bhavnagar Court in the form of part of the purchase price of the said vessel payable to them by the 3rd and 4th respondents.14. This being an award for money its subject matter may be said to be money, just as the subject-matter of a money-decree may be said to be money.15. The appellants application to the Bhavnagar Court stated, as reproduced above, that the first and second respondents had no assets within the jurisdiction of the Bhavnagar Court or elsewhere in India. However, having regard to the object of the said Act, note may be taken of events that have transpired subsequently. The case of the 4th respondent before the Bhavnagar Court was that it had paid over the full purchase price of the said vessel to the 3rd respondent. Thereupon the Bhavnagar Court injuncted the 3rd respondent from paying the amount of Rs. 6,40,000 to the 1st and 2nd respondents and permitted the 4th respondent to break the said vessel. When this Court called upon the 3rd and the 4th respon?dents to deposit the amount of Rs. 6,40,000 in its Registry, it was as we find from the record, the 3rd respondent which made the deposit. The deposit was made without protest and the 3rd respondent has not appeared before this Court to contend that the amount of Rs. 6,40,000 was not due to the 1st and 2nd respondents as part of the purchase price of the said vessel. It can, therefore, be said that the 3rd respondent was holding monies, in the amount of Rs. 6,40,000, of the 1st and 2nd respondents.16. The 3rd respondent as the cause title shows, is a Government company that has its registered office at Calcutta and a regional office at Bombay. It is not known where the 3rd respondent held the said amount of Rs. 6,40,000.17. It is now for the appellant to ascertain where the monies were so held and, if they were held within the jurisdiction of the Bhavnagar Court, to apply for an amendment of the jurisdiction paragraph of its application to the Bhavnagar Court accordingly. The Bhavnagar Court would then, after notice to the parties, consider whether or not the amendment should be allowed. It would, ordinarily having regard to the object of the said Act and the fact that these events have transpired after the application to it was filed, allow the amendment. Thereafter, it would determine whether the averment in the amendment is correct. In the event that it came to the conclusion that the 1st and 2nd respondents had monies within its jurisdiction, it could be said to have jurisdiction to take the award on file under Section 5 of the said Act and it would proceed thereafter under the subsequent provisions of the said Act.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 1

Reasoning from the judgment:
1[ds]11. Before we deal with the facts of the case before us, a statement of some broad principles is necessary. The New York Convention speaks of ?recognition and enforcement? of an award. An award may be recognised, without being enforced; but if it is enforced, then it is necessarily recognised. Recognition alone may be asked for as a shield againstof issues with which the award deals. Where a Court is asked to enforce an award, it must recognise not only the legal effect of the award but must use legal sanctions to ensure that it is carried out. In the Law and Practice of International Commercial Arbitration by Redfern and Hunter (1986 edition) it is said (at pages 337 and 338):A party seeking to enforce an award in an international commercial arbitration may have a choice of country in which to do so; as it is sometimes expressed, the party may be able to go forum shopping. This depends upon the location of the assets of losing party. Since the purpose of enforcement proceedings is to try to ensure compliance with an award by the legal attachment or seizure of the defaulting partys assets, legal proceedings of some kind are necessary to obtain little to the assets seized or their proceeds of sale. These legal proceedings must be taken in the State or States in which the property or other assets of the losing party are located.X xx xIn other words, the place of arbitration will have been chosen as a neutral forum. It will be rare for the parties to have assets situated within this neutral country; and the award if it has to be enforced, must generally be enforced in a country other than that in which it was made. This is why it is so important that international awards should be recognisable and enforceable internationally, and not merely in the country in which they are made; moreover, unlike the place of arbitration, the place of recognition and enforcement will not be chosen by or on behalf of the parties. It will depend upon the circumstances of each particular case.So far as recognition of an international award is concerned, the successful party only needs to seek recognition if proceedings are brought against him in respect of a matter which has already been dealt with and made the subject of an award. The party who is sued will then wish to rely on the award by way of defence, or set off, or in some other way in the Court proceedings. For this purpose, he will ask the Court concerned to recognise the award as binding on the persons between whom it was made. It is impossible to know in what Court or in what country such proceedings are likely to be brought, and this fact emphasises once again how important it is that international awards should be trulyin their validity and effect.Where it becomes necessary to enforce an international award, the position is different. The first step is to determine the country or countries in which enforcement is to be sought. In order to reach this decision, the party seeking enforcement needs to locate the State or States in which the losing party has (or is likely to have) assets available to meet the award.12. Now Section 5(1) of the said Act says that any person interested in a foreign award may apply to any Court having jurisdiction over the subject matter of the award that the award be filed in Court. Dr. Ghosh learned Counsel for the appellant submitted that the said vessel was within the jurisdiction of the Bhavnagar Court and the Bhavnagar Court had, therefore, jurisdiction to take the award on file. The jurisdiction paragraph of the application to the Bhavnagar Court reads thus:The petitioners submit that the respondent Nos. 1 and or 2 have no assets whatsoever with the jurisdiction of this Honble Court or elsewhere in India. The only assets which is available within the jurisdiction of this Honble Court is the said vessel, ?SAUDI CLOUD.? The petitioners submit that the respondent Nos. 1 and/or 2 and/or 3. With intent to delay obstruct and defeat the execution of any decree that may be passed in this petition against them have sold the said vessel ?SAUDI CLOUD.? The petitioners further submit that they have a maritime lien on the said vessel ?SAUDI CLOUD? and the respondent Nos.1 and/or 2 and/or submit that it is just necessary and in the interest of justice that this Honble Court be pleased to order attachment before judgment of the vessel ?SAUDI CLOUD? at present lying in port Alang in the district of Bhavnagar, Gujarat.The said vessel having been sold to the 3rd and 4th respondents it is no more an asset of the 1st or 2nd respondents and the award cannot be executed there against, which is why the appellants claim in the application to have a maritime lien. But the Bhavnagar Court has, admittedly, no jurisdiction to enforce a maritime lien, assuming it to exist.13. It was then submitted by Mr. Ghosh that theof the award was money and the 1st and 2nd respondents had money in the jurisdiction of the Bhavnagar Court in the form of part of the purchase price of the said vessel payable to them by the 3rd and 4th respondents.14. This being an award for money its subject matter may be said to be money, just as theree may be said to be money.15. The appellants application to the Bhavnagar Court stated, as reproduced above, that the first and second respondents had no assets within the jurisdiction of the Bhavnagar Court or elsewhere in India. However, having regard to the object of the said Act, note may be taken of events that have transpired subsequently. The case of the 4th respondent before the Bhavnagar Court was that it had paid over the full purchase price of the said vessel to the 3rd respondent. Thereupon the Bhavnagar Court injuncted the 3rd respondent from paying the amount of Rs. 6,40,000 to the 1st and 2nd respondents and permitted the 4th respondent to break the said vessel. When this Court called upon the 3rd and the 4thto deposit the amount of Rs. 6,40,000 in its Registry, it was as we find from the record, the 3rd respondent which made the deposit. The deposit was made without protest and the 3rd respondent has not appeared before this Court to contend that the amount of Rs. 6,40,000 was not due to the 1st and 2nd respondents as part of the purchase price of the said vessel. It can, therefore, be said that the 3rd respondent was holding monies, in the amount of Rs. 6,40,000, of the 1st and 2nd respondents.16. The 3rd respondent as the cause title shows, is a Government company that has its registered office at Calcutta and a regional office at Bombay. It is not known where the 3rd respondent held the said amount of Rs. 6,40,000.17. It is now for the appellant to ascertain where the monies were so held and, if they were held within the jurisdiction of the Bhavnagar Court, to apply for an amendment of the jurisdiction paragraph of its application to the Bhavnagar Court accordingly. The Bhavnagar Court would then, after notice to the parties, consider whether or not the amendment should be allowed. It would, ordinarily having regard to the object of the said Act and the fact that these events have transpired after the application to it was filed, allow the amendment. Thereafter, it would determine whether the averment in the amendment is correct. In the event that it came to the conclusion that the 1st and 2nd respondents had monies within its jurisdiction, it could be said to have jurisdiction to take the award on file under Section 5 of the said Act and it would proceed thereafter under the subsequent provisions of the said Act.