Read Order: CTI FUTURE CORPORATION v. DUCGIANG CHEMICAL AND DETERGENT POWDER JOINT STOCK COMPANY 

Tulip Kanth

Bangalore, April 4, 2022: The Karnataka High Court has recently emphasized that all the countries which are signatories to the New York Convention should enable execution of a foreign arbitral award rendered in a reciprocating country in the event of a property, against which the arbitral award is sought to be enforced, being situated within the jurisdiction of that particular country.

Referring to a Notification of the Central Government dated July 6, 1999, the Division  Bench of Justice Raj Awasthi and Justice Suraj Govindaraj said, “…it is clear that any award which has been rendered in Singapore could be enforced in India.”

The petitioner herein, sought enforcement of an international commercial arbitral award dated August 18, 2021 delivered by the Sole Arbitrator in international arbitration proceedings held in Singapore. The final award was registered with the Singapore International Arbitration Centre (SIAC) Registry of Awards. In this matter, both the petitioner and respondent are body corporates which are incorporated outside India, the petitioner having its registered office at Korea and the respondent having its registered office at Vietnam. 

The main issue pertained to the enforcement of an international commercial arbitral award rendered outside India between the Non-Indian parties by filing proceedings under Sections 47, 48 and 49 of the Arbitration and Conciliation Act, 1996.

Delving on the interpretation of a foreign arbitral award, the Division Bench observed that for an award to be recognised as a foreign award, it should pertain to a commercial relationship as per the laws in India and rendered in a territory where the Convention has been made applicable by a suitable notification by the Central Government.Applying Section 2(f) of the Act, the Bench made it clear that the arbitration in question was an international commercial arbitration.

The Petitioner’s counsel submitted that in view of the aforementioned notification, an arbitral award rendered in the Republic of Singapore can be enforced in the Republic of India in a Court which would have territorial jurisdiction to pass the necessary orders relating to execution sought for. It was submitted that this Court would have the jurisdiction since the property belonging to the respondent against which interim orders are being sought for are likely to dock in New Mangalore Port.

The Bench was of the view that the enforceability of this international commercial arbitral award in India was not in dispute in view of the notification issued by the Central Government.

Stating that a foreign award under a New York Convention has been given a special status, the Bench remarked that India being a signatory to the said New York Convention it is required that all countries which are signatories to the New York Convention enable execution of a foreign arbitral award rendered in a reciprocating country in the event of a property against which the arbitral award is sought to be enforced is situated within the jurisdiction of that particular country

Considering that the property belonging to the respondent against which interim orders were being sought for were likely to dock in New Mangalore Port, the Court held that it could exercise jurisdiction to enforce a foreign award in the event the properties of the respondent against which the enforcement was sought for is situated within the territorial limits of this Court.

 “In this background considering that the above application which is filed under Sections 44 to 52 of the Act of 1996 which deals with New York Convention awards under Chapter I of Part II of the Act of 1996 and the obligations of the Republic of India in terms of Article 51 (c) of the Constitution of India, we are of the considered opinion that this Court could exercise jurisdiction to enforce a foreign award in the event the properties of the respondent against which the enforcement is sought for is situated within the territorial limits of this Court in view of later part of Section 2 (e) (ii) of the Act of 1996 as also later part of the explanation to Section 47(2) of the Act of 1996.”said the Bench.

Thus, issuing notice to the respondent, the Court took the petition on record.

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