Case: Escorts Ltd Vs. Universal Tractor Holding Llc

The respondent herein and Escorts Agri Machinery Inc.,) which was a subsidiary of the petitioner, were holding following percentage of shares in another company, by name, Beever Creek HoldingsThe respondent held 49% of shares and Escorts AMI held 51%. There was an agreement between the two parties whereby the respondent sold its shareholding in BCH for a price of Rs.1.2 Million Dollars which was to be paid in four installments. The Escorts AMI paid the first two installments but defaulted in the payment of the other two. This led to a suit being filed by the respondent in the Wake Country Superior Court in the State of North Carolina, USA. A consent order was passed therein on 19th June, 2009, wherein both the parties agreed to refer the matter to arbitration. The arbitration was followed by an award in favour of the respondent herein. The respondent sought the execution of that award by filing the aforesaid execution petition in India, since the Escorts AMI has subsequently merged with the petitioner herein. The execution was objected to by the petitioner, and those objections have been rejected by the impugned order. Therefore, this special leave petition has been preferred by Escorts Limited.

Reasoning: We have noted the submissions of both the counsel appearing for the parties. It is also material to note that even as per the requirement of the US Law, a notice of three months is required to be given in case a party does not want the award to be enforced. In the instant case, paragraph 7 of the consent order clearly recorded that the award given by the arbitrator shall be final and binding on the parties. If the petitioner wanted to dispute it, it was required of them to have issued necessary notice which they had not done. The submission of Mr. Tripathy, which was emphasised, was that the respondent ought to proceed for confirmation of the award under the US Law and then come to India for execution.