[Foreign Award]: Refusal to adjourn by Arbitrator is not perverse, remand back is outside the jurisdiction of enforcing Court, SC

The SC on June 02, 2020 {M/S. CENTROTRADE MINERALS AND METALS INC. vs HINDUSTAN COPPER LTD.} held that remanding the matter to the ICC arbitrator to pass a fresh award is clearly outside the jurisdiction of an enforcing court under Section 48 of the 1996 Act. 

It was held by the Bench, comprising of Justice R.F. Nariman, Justice S. Ravindra Bhat and Justice V. RAMASUBRAMANIAN, that the learned arbitrator had given a large number of opportunities to file documents and legal submissions. It was held that it is clear that the learned arbitrator was extremely fair to the respondent. It was observed that having noticed that the respondent wanted to stall the arbitral proceedings by approaching the Courts in Rajasthan and having succeeded partially, at least till February 2001, the conduct of the respondent leaves much to be called for. It was held that despite being informed time and again to appear before the Tribunal and submit their response and evidence in support thereof, it is only after the arbitrator indicated that he was going to pass an award that the respondent’s attorneys woke up and started asking for time to present their response. It was further held that this too was granted by the learned arbitrator, by not only granting extension of time, but by extending this time even further. It was held that finally, when the legal submissions of 75 pages were sent even beyond the time that was granted, the learned Arbitrator took this into account and then passed his award. The SC held that this being the case, on facts it can find no fault whatsoever with the conduct of the arbitral proceedings. 

The issue before the SC was whether the award rendered in the appellate arbitration being a “foreign award” is liable to be enforced under the provisions of Section 48 of the Arbitration and Conciliation Act, 1996 at the instance of Centrotrade? The argument of breach of natural justice was raised by the respondent/ HCL before the SC - opposing enforcement of foreign award. 

The SC held that an arbitrator’s refusal to adjourn the proceedings at the behest of one party cannot be said to be perverse, keeping in mind the object of speedy resolution of disputes of the Arbitration Act. In earlier judgment, in present case, the SC had already answered that a settlement of disputes or differences through a two-tier arbitration procedure as provided for in Clause 14 of the contract between the parties is permissible under the laws of India.

As a result, Centrotrade’s appeal was allowed by the SC, setting aside the Calcutta High Court (DB) judgment whereby the HC ruled that the present award is not liable to be enforced in India. Resultantly, it was directed by the SC that the foreign award, dated 29.09.2001, shall now be enforced.