HIGH COURT OF CHATTISGARH AT BILASPUR
Writ Petition C No 4633 of 2008
Bharat Aluminium Company Ltd
...Petitioners
Versus
M/s Trafigura A G
...Respondents
! Shri M L Verma, Sr. Advocate with Shri
P C Sen and Shri Abhishek Sinha, counsel
for the petitioner
^
Honble Shri Satish K. Agnihotri, J
Dated: 28/08/2008
: Judgment
O R D E R
(Passed on this 28th day of August, 2008)
By this petition, the petitioner impugns the
legality and validity of the order dated 5-8-2008
(Annexure-A) passed by the District Judge, Korba, in
civil suit No.5-A/2008 whereby the application for
amendment filed under Order VI Rule 17 read with
Section 151 of the Code of Civil Procedure, 1908 (for
short “the CPC”) was rejected and the order dated 11-
8-2008 (Annexure-B) whereby the application filed
under Order XXXIX Rule 3 read with Section 151 of the
CPC for grant of interim injunction against the
respondent-M/s Trafigura A.G. was also rejected.
2) Shri Verma, learned senior counsel appearing on
behalf of the petitioner-Bharat Aluminium Company
Ltd., submits that the petitioner has filed the
application under Order XXXIX Rule 3 of the CPC in
the pending suit No.5-A/2008. Learned counsel
submits that the respondent under the threat of
contempt is obstructing the petitioner to prosecute
the remedies available under Section 34 of the
Arbitration and Conciliation Act, 1996 (for short
“the Act, 1996”). Shri Verma further submits that
the petitioner has every right to take recourse to
Section 34 of the Act, 1996 in Indian Courts. In
support of his contention he relies on a decision of
the Hon’ble Supreme Court in the case of Venture
Global Engineering vs. Satyam Computer Services Ltd.
and another1.
3) According to Shri Verma, there is no express or
implied exclusion to any provisions of the Act, 1996.
The learned District Judge has misdirected himself by
taking recourse to Section 41 (b) of the Specific
Relief Act, 1963 (for short “the Act, 1963”) and
refused to grant ex parte order of protection and
injunction which would render the pending suit
infructuous. The properties of the petitioner are
situated in India and execution of the award may be
in India only. The respondent’s Solicitor in his
notice dated 21-7-2008 (Annexure-H) has held out a
threat of contempt, in case, the petitioner commence
or prosecute any other proceedings seeking to
challenge or set aside the First Interim Award dated
21 December 2007 or the Second Interim Award dated 18-
7-2008 other than proceedings in England or with the
permission of the Commercial Court in London. The
petitioner has, prima facie, good case and balance of
convenience is also in favour of the petitioner.
Thus, as an interim measure, an interim injunction
may be granted against the respondent-M/s Trafigura
A.G. not to prevent the petitioner from challenging
the Second Interim Award under provisions of Section
34 of the Act, 1996 in Courts in India. If an
interim protection is not granted the suits i.e.
civil suit No.5-A/2008 and civil suit No.6-A/2008
pending in the District Court, Korba, may be rendered
as infructuous. The present writ petition may also be
rendered as infructuous. The District Court has
jurisdiction to restrain a party from proceeding
further with an action in a foreign Court. In
support of this contention, he relies on a decision
of the Hon’ble Supreme Court in the matter of Oil and
Natural Gas Commission vs. Western Company of North
America2, wherein the Supreme Court observed that :
“18. In the result we are of the
opinion that the facts of this case
are eminently suitable for granting a
restraint order as prayed by ONGC.
It is no doubt true that this Court
sparingly exercises the jurisdiction
to restrain a party from proceeding
further with an action in a foreign
court..”
4) I have heard learned counsel appearing for the
petitioner, perused the pleadings and the documents
appended thereto. It is evident that the petitioner
has filed an application under Section 34 of the Act,
1996 for setting aside the First Interim Award under
the provisions of the Act, 1996 on 19-1-2008 being
civil suit No.01-A/2008. The District Judge had
taken cognizance of the matter on 18-2-2008 wherein
the respondent had appeared through his counsel and
took part in the proceedings before the District
Court. The Second Interim Award was passed on 18-7-
2008. The respondent’s Solicitor sent a notice dated
21-7-2008 (Annexure-H), inter alia, as under :
“In the circumstances, we require
your client’s undertaking, by 16.00
hours today, that it will take no
steps to:
1. continue or prosecute or take
any further steps in the
proceedings commenced by it
against our client in the Court
of the District Judge at Korba,
India, Application 01 A/08; and
2. commence or prosecute any other
proceedings by which it seeks to
challenge or set aside the First
Interim Award dated 21 December
2007 or the Second Interim Award
dated 18 July 2008 other than
proceedings in England or with
the permission of the Commercial
Court in London.”
5) The Hon’ble Supreme Court in the case of Venture
Global Engineering (supra) held that :
“31…It is also clear that even
in the case of international
commercial arbitrations held out
of India provisions of Part I
would apply unless the parties
by agreement, express or
implied, exclude all or any of
its provisions. We are also of
the view that such an
interpretation does not lead to
any conflict between any of the
provisions of the Act and there
is no lacuna as such. The
matter, therefore, is concluded
by the three-Judge Bench
decision in Bhatia
International.”
6) The Hon’ble Supreme Court in the same judgment
further in para 33 held that :
“33..In any event, to apply
Section 34 to foreign
international awards would not
be inconsistent with Section 48
of the Act, or any other
provision of Part II as a
situation may arise, where, even
in respect of properties situate
in India and where an award
would be invalid if opposed to
the public policy of India,
merely because the judgment-
debtor resides abroad, the award
can be enforced against
properties in India through
personal compliance of the
judgment-debtor and by holding
out the threat or contempt as is
being sought to be done in the
present case. In such an event,
the judgment-debtor cannot be
deprived of his right under
Section 34 to invoke the public
policy of India, to set aside
the award. As observed earlier,
the public policy of India
includes – (a) the fundamental
policy of India; or (b) the
interests of India; or (c)
justice or morality; or (d) in
addition, if it is patently
illegal. This extended
definition of public policy can
be bypassed by taking the award
to a foreign country for
enforcement.”
7) The petition is admitted.
8) Issue notice to the respondent, in accordance
with the High Court of Chhattisgarh Rules, 2007.
Necessary process fee shall be paid within two days.
Notice be made returnable on 30-9-2008.
9) Also heard on I.A.No.1 of 2008, for interim
relief
10) In view of the settled principle of law as laid
down by the Hon’ble Supreme Court with regard to
applicability of Section 34 of the Act, 1996 and
grant of anti suit injunction in case of
international award to the facts of case on hand, it
is expedient to grant ex parte interim injunction.
It is found that the respondent through Solicitor has
held out the threat of contempt to preclude the
petitioner from taking recourse to Section 34 of the
Act, 1996 under the Indian law. Every person has a
right to take recourse to judicial remedy under
provisions of the law. Prima facie a case has been
made out for grant of interim injunction against the
respondent. The balance of convenience is also in
favour of the petitioner. In the facts and
circumstances of the case, I am constrained to grant
interim injunction in the case on hand. If interim
injunction is not granted, at this stage, to the
petitioner, the suits being civil suit No.
5-A/2008 and civil suit No.6-A/2008 pending in the
Court of District Judge, Korba may be rendered as
infructuous. Therefore, it is ordered that, as an
interim measure, until the returnable date of hearing
i.e. 30-9-2008 :
i) The respondent-M/s
Trafigura A.G. shall not
take any steps pursuant to
the notice dated 21-7-2008
(Annexure-H) issued by the
Solicitor of the
respondent.
ii) The petitioner shall not be
prevented from challenging
the Second Interim Award
dated 18-7-2008, under
Section 34 of the Act, 1996
in Indian Courts.
iii) The respondent shall not
take any steps to commence
or continue any proceedings
in Courts in England,
pursuant to the Second
Interim Award dated 18-7-
2008.
11) In view of the foregoing, the application
(I.A.No.1 of 2008) for interim relief stands disposed
of.
12) Certified copy, as per rules.
13) Call it on 30th September, 2008.
J U D G E