Background Matrix
In the Matter of Jaldhi Overseas Pte Ltd. v. Steer Overseas P Ltd., Iron ores will be transported from Indian ports to China’s major port under an agreement between the petitioner and respondent. A provision for arbitration in Singapore was included in the business agreements. Demurrage and detention fees gave rise to a disagreement. The Singapore International Arbitration Centre was requested to arbitrate a dispute by the petitioner. The Arbitrator disproved the respondent’s argument that there wasn’t a legally binding contract because they simply had email correspondence and didn’t reach a consensus ad idem. Since there existed a legitimate contract, the Arbitrator issued a partial award in the petitioner’s favour. In order to enforce the agreement, the petitioner opted to use Order 21 of the Code of Civil Procedure, 1908 and Section 46 of the Arbitration and Conciliation Act, 1996.
Issue
- Should a foreign award be refused to be enforced?
- Did the parties sign a contract that included a clause requiring arbitration?
Observation of the Court
Justice Shekhar B. Saraf of the Calcutta High Court ruled on a single-judge bench that the arbitrator’s opinion is inviolable and should not be replaced with a different perspective or opinion that this court could have after reconsidering the facts. The Court ruled that in order to deny enforcement, there must be clear and convincing proof that there was no completed contract between the petitioner and respondent and that the arbitrator did not fulfil his obligations in any way. The Court noted that if it came to the opinion that there was no arbitration agreement or that there was no contract between the parties, the Court would have to refuse to enforce the Award and would be subject to Sections 48(2)(a) and (b) of the Act.
The Bench had noted that unless it is blatantly obvious that there was no agreement, this court should not substitute its view for the arbitrator’s and move beyond this preliminary determination after the arbitrator has determined the existence of an arbitration agreement after analysing the facts and applying the law.
The Court held that there is no reason to believe that no contract was made or that no arbitration agreement could have been made in light of the relevant facts and circumstances, authorities, and the law as it relates to Section 48 of the Act. Additionally, the Court noted that the present dispute cannot be resolved by arbitration in India, which shocked the Court given the forcible imposition of a contract that the parties did not voluntarily enter into. The court ordered to enforce the award and execute it as a decree of this court, rejecting the respondent’s challenge over the award’s enforceability.
CASE NAME – Jaldhi Overseas Pte Ltd. v. Steer Overseas Ltd. EC 100/22