ESCORTS LTD. versus UNIVERSAL TRACTOR HOLDING LLC

Citation: [2013] 2 S.C.R. 389 · Decided: 13-03-2013 · Supreme Court of India · Bench: H.L. GOKHALE, DIPAK MISRA

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2013] 2 S.C.R. 389 
ESCORTS LTD. 
v. 
UNIVERSAL TRACTOR HOLDING LLC 
(Special Leave Petition (Civil) No. 35092 of 2012) 
MARCH 13, 2013 
[H.L. GOKHALE AND DIPAK MISRA, JJ.] 
A 
B 
Arbitration and Conciliation Act, 1996 - ss.48(1 )(e) and 
202 - New York ~tion, as adopted under the Act -
Respondent-company and Escorts AMI were respectively C 
. holding 49% and 51% shares in another company, "BCH"-
Agreement whereby respondent sold its shareholding in BCH 
to Escorts AMI for a price to be paid in installments - Escorts 
AMI defaulted in payment of installments - Suit filed by 
respondent against Escorts AMI in a North Carolina Court in 
D 
the United States - Consent order passed therein wherein both 
the parties agreed to refer the matter to arbitration - Arbitration 
followed by award in favour of the respondent - Respondent 
sought execution of that award by filing execution petition in 
India, since the Escorts AMI subsequently merged with the 
E 
petitioner - Execution objected to by the petitioner, and those 
objections rejected by the High Court - Whether under the 
terms of agreement, it was necessary for the respondent to 
go for confirmation of the award in the concerned Court in 
United States and unless a confirmation of the award by the 
F 
foreign Court was obtained, the award could not be executed 
in India - Held: Even as per the requirement of the US Law, a 
notice of three months is required to be given in case a party 
does not want the award to be enforced - In the instant case, 
the consent order clearly recorded that the award given by the 
G 
arbitrator shall be final and binding on the parties - If the 
petitioner wanted to dispute it, it was required of them to have 
issued necessary notice which it had not done - The 
submission that the respondent ought to proceed for 
389 
H 
390 
SUPREME COURT REPORTS 
(2013) 2 S.C.R. 
A confirmation of the award under the US Law and then come 
to India for execution is not tenable in view of the changed 
law and doing away of the rule of double excequatur - Federal 
Arbitration Act of U.S. - s. 9. 
8 
Oil and Natural Gas Commission vs. Western Company 
of North America (1987) 1 sec 496: 1987 (1) SCR 1024 and 
Harendra H. Mehta an Ors. Vs. Mukesh H. Mehta and Ors. 
(1995) 5 sec 108 - referred to. 
Russeel N. V. v. Oriental Commercial & Shipping Co. 
C (U.K.) Ltd. and Others (1991) Vol. 2 Lloyd's Law Reports 
625 and Florasynth, Inc. v. Alfred Pickholz 750 F. 2d 171 - . 
referred to. 
Case Law Reference: 
D 
1987 (1) SCR 1024 
referred to 
Para 5 
(1991) Vol. 2 LLR 625 .referred to 
Para 7 
750 F. 2d 171 
referred to 
Para 7 
E 
(1995) 5 sec 108 
referred to 
Para 9 
CIVIL APPELLATE JURISDICTION : SLP (Civil) No. 
35092 of 2012. 
From the Judgment and Order dated 13.07.2012 of the 
F High Court of Delhi at New Delhi in Exp. No. 372·of 2010. 
Parag P. Tripathi, Simran Mehta, Chanchal Kumar 
Ganguli, Yogita Sunari, Vipul Sharma for the Petitioner. 
Dharmendra Rautray, Tara Shahani, Meera Mathur for the 
G Respondent. 
The following order of the Court was delivered 
ORDER 
H 
1. This special leave petition seeks to challenge the 
·ESCORTS LTD. v. UNIVERSAL TRACTOR HOLDING 391 
LLC 
judgment and order dated 13th July, 2012 passed by the 
A 
learned Single Judge of the Delhi High Court in Execution 
Petition No.372 of 2010. 
2. The short facts leading to this petition are this wise: The 
respondent herein and Escorts Agri Machinery Inc., ("Escorts 
B 
AMI") which was a subsidiary of the petitioner, were holding 
following percentage of shares in another company, by name, 
Beever Creek Holdings ("BCH"). The respondent held 49% of 
shares and Escorts AMI held 51%. There was an agreement 
between the two parties whereby the respondent sold its 
shareholding in BCH for a price of Rs.1.2 Million Dollars which 
C 
was to be paid in four installments. The Escorts AMI paid the 
first two installments but defaulted in. the payment of the other 
two. This led to a suit being filed by the respondent in the Wake 
Country Superior Court in the State of North Carolina, USA. A 
consent order was passed therein on 19th June, 2009, wherein 
D 
both the parties agreed to refer the matter to arbitration. The 
arbitration was followed by an award in favour of the respondent 
herein. The respondent sought the execution of that award by 
filing the aforesaid execution petition in India, since the Escorts 
AMI has subsequently merged with the petitioner herein. The 
E 
execution was o

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