BRACE TRANSPORT CORPORATION OF MONROVIA, BERMUDA versus ORIENT MIDDLE EAST LINES LTD., SAUDI ARABIA & ORS.

Citation: [1993] SUPP. 3 S.C.R. 227 · Decided: 12-10-1993 · Supreme Court of India · Bench: KULDIP SINGH · Disposal: Appeal(s) allowed

Judgment (excerpt)

BRACE TRANSPORT CORPORATION OF 
MONROVIA, BERMUDA 
v. 
ORIENT MIDDLE EAST LINES LTD., SAUDI ARABIA & ORS. 
OCTOBER 12, 1993 
[KULDIP SINGH AND S.P. BHARUCHA, JJ] 
Foreign Awards (Recognition and Enforcement) Act, 1961-Sections 
A 
B 
5,6 and 7-ATbilration award-Allowing of claims relating to sale of a vessel--
Injunction restraining further sale-Attachment of sale proceeds-Jurisdiction C 
of Civil Coul't--74scertaining o~Amendment of petition before the Civil 
Court-Directions issued. 
The appellant owned a vessel and agreed to sell the same in an 
amended Norwegian sale rorm, to the second respondent, or its nominee. 
Clause 15 o(the sale rorm provided that disputes arising thereunder would D 
be rererred to arbitration in England. The first respondent, who has the 
nominee or the second respondent purchased the vessel. Certain disputes 
arose and they were rererred to arbitration. The arbitrators were ap-
pointed by the parties and they made an award allowing certain claims or 
the appellant-claimant. Pursuant to the award, the appellant recovered a E 
part of the amount awarded. 
Later, the appellant ~me to know that the said vessel was being sold 
to the third respondent. The appellant gave·notice to the third respondent 
of its above-mentioned claim. However, the third respondent sold the 
vessel to the· fourth respondent. 
F 
The appellant filed a petition be(ore the Civil Judge, Bhavnagar 
praying for various reliers keeping in view the claims awarded by the 
Arbitrator. The appellant also applied (or attachment or the sale proceeds 
of the said vessel and ror an injunction restraining the third and fourth G 
respondents from parting with the sale proceeds without first satist'ying 
the claim or the appellant. 
The Civil Court, Bhavnagar, restrained the third respondent rrom 
paying to the first respondent an amount or US$62,000 equivalent to Rs. 
6,40,000 out or the price of the said vessel. The Civil Court also held that H 
227 
228 
SUPREME COURT REPORTS (1993) SUPP. 3 S.C.R. 
A 
it had jurisdiction to entertain the application of the appellant. Against 
this order, the first respondent preferred revision petition before the High · 
Court. The revision petitions were allowed and the order of the Bhavnagar 
Civil Court was set aside. It was ordered that the petition should be 
returned to the appellant for presentation to the proper Court. The 
B 
injunctions issued by the Civil Court were also vacated. 
The present appeals were preferred against the High Court's orders. 
Allowing the appeals, this Court 
HELD: .1. The New York Convention speaks of recognition and 
C enforcement of an award. An award may be recognised without being 
enforced; but if it is enforced, then it is necessarily recognised. Recognition 
alone may be asked for as a shield against re-agitation of issues with which 
the awards deals. Where a court is asked to enforce an award, it must 
recognise not only the legal effect of the award but must use legal sanctions 
D to ensure that it is carried out. [237·B·D] 
Law and Practice of International Commercial Arbitration by Redfren 
and Hunter, 1986 Edition pp.337 & 338, referred to. 
2. In the ins~nt case, the vessel having been sold to the 3rd and 4th 
E 
respondents it is no more an asset of the 1st or 2nd respondents and the 
award cannot be executed there against: that is why the appellants claim 
·in the application to have a maritime lien. But the Bhavnagar court has, 
admittedly, no jurisdiction to enforce a martime lien, assuming it to exist. 
[239·B·CJ 
F 
3. This being an award for money its subject matter may be paid to 
be money. It is for the appellant to ascertain where the monies were held 
and, if they were held within the jurisdiction of the Bhavnagar court, to 
apply for an amendment of the jurisdiction paragraph of its application 
to the Bhavnagar court accordingly. The Bhavnagar court would then, 
after notice to the parties, consider whether or not the amendment should 
G 
be allowed. It would, ordinarily, have in regard to the object of the Foreign 
Awrads (Recognition and Enforcement) Act, 1961, and the fact that these 
events have transpired aft~r the application to it was fil~d, allow the 
amendment. Thereafter, it would determine whether the averment in the 
amendment is correct. In the event of its coming to the conclusion that the 
H 1st and 2nd respondents had monies within its jurisdiction, it would be 
TRANSPORT CORP. v. V.S. ARABIA [BHARUCHA, J:) 
229 
said 

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