GLENCORE INTERNATIONAL AG vs. INDIA POTASH LTD.
This case was related to the seat of arbitration and enforcement of the foreign award in the country. The Delhi High Court rules in the favour of foreign arbitration which was seated in The Singapore.
Facts of the case
Glencore International is the appellant in this case and Indian potash ltd. is respondent which was engaged in the business of supplying metallic iron ores. Appellant entered into the contract with India potash ltd. i.e. respondent. The agreement consisted of the arbitration clause in the case of dispute between the parties related to the agreement. Appellant ordered forty thousand tonnes of iron ore with as special specification of 61% iron in it. Later on dispute arose between the parties regarding the percentage of iron in iron ore. Appellant said that iron ore supplied by the respondent were not as per the specifications which means that percentage of the iron in the iron ore supplied was less than sixty one percent. The arbitration clause in the agreement stated that dispute settlement will be done by Singapore International Arbitration of Chambers of Commerce but it was found that there is no such arbitration institution in Singapore. Without any prior consultation, appellant instituted arbitral proceedings in Singapore International Arbitration Centre (SIAC) and issued notice to the respondent. Replying to the notice respondent requested for more time and also said that request for more time shall not be regarded as an acceptance to SIAC rules by the respondent. Despite the resistance by respondent SIAC proceeded to settle the dispute and rules that according to rule 25 of SIAC rules agreement exist between the parties. It also made an arbitral award in favour of the appellant. Appellant proceeded to enforce the foreign award in India under section 48 of the Arbitration and Conciliation Act, 1996.
Whether the foreign award passed by SIAC can be enforced in India?
Contention of the parties
Indian potash ltd. contented that institution mentioned under the agreement was non – existent and there was no arbitration agreement related to SIAC rules to be applied in case of disputes. They also said that award made by the arbitrator was insufficiently stamped. Replying to these contention Glencore said that foreign awards need not be stamped according to provisions given in the Arbitration and Conciliation Act, 1996 that is why this ground is not maintainable. Another contention taken by the Indian potash ltd. was that they were not given the opportunity of being heard which is against the public policy of India and violates natural justice. Glencore said that tribunal has the power to allow amendments in pleadings so no public policy is being harmed.
Decision of the Court
Regarding the first contention of stamp duty court accepted that the contention of glencore and said that the objection raised by Indian potash ltd. related to award being insufficiently stamped was not maintainable. Answering the contention of non existence of tribunal mentioned in the agreement, court said that as no such tribunal existed so glencore was correct in making the interpretation and applying the SIAC rules which closely resembled to name of the tribunal mentioned in the agreement. The resemblance signifies what parties have in mind while choosing the seat of arbitration. Finally, the court affirmed jurisdiction of the tribunal to allow amendments and allowed the enforcement of the foreign award.