LexGENERAL ELECTRIC COMPANY versus RENUSAGAR POWER COMPANY
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A B GENERAL ELECTRIC COMPANY v. RENUSAGAR POWER COMPANY AUGUST 11, 1987 [O. CHINNAPPA REDDY AND K. JAGANNATHA SHETTY, JJ.) The Foreign Awards (Recognition and Enforcement) Act, 1961- S. 3-Stay of Proceedings in a Court of law while arbitration proceed- ings are in progress-The expression "before filing a written statement C or taking any other step in the proceedings" should be construed in the light of the construction put upon that expression appearing in s. 34 of the Indian Arbitration Act, 1940. Section 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961, which is analogous to s. 34 of the Indian Arbitration Act, D 1940, provides that, if any party to an agreement to which Art. II of the convention set forth in the Schedule thereto applies, commences any legal proceedings in any court against any other party to the agreement in respect of any matter agreed to be referred to arbitration in such agreement, any party to such legal proceedings may, at any time after appearance and before tiling a written statement or taking any other E step in the proceedings, apply to the court to stay the proceedings and the court, unless satisfied that the agreement is null and void, inopera- tive or incapable of being performed or that there is not, in fact, any dispute between the parties with regard to the matter agreed to be referred, shall make an order staying the proceedings. F The appellant (GEC), a multi-national company, which had entered into a contract with the respondent (Renusagar), an Indian company, regarding sale of equipment for a thermal plant, submitted certain disputes between them for arbitration to the International Chamber of Commerce (ICC), whereupon, the respondent filed a suit in the Bombay High Court for a declaration that the claims were not G arbitrable in terms of the contract. On an application filed by the appellant, the High Court stayed further proceedings in the suit in terms of s. 3 of the Foreign Awards (Recognition and Enforcement) Act, 196 I. Appeals filed by the respondent against that order were dismissed by the Division Bench of the High Court and this Court holding that the H claims were arbitrable. Meanwhile, the appellant had liled a suit against a bank in the Calcutta High Court for enforcement of a bank 858 -- it' GENERAL ELECTRIC v. RENUSAGAR 859 guarantee given by it at the instance of the respondent, following which, A the respondent had also filed a suit-the suit from which the present appeal arose-in the Court of Civil Judge, Mirzapur praying for a declaration that t!ie guarantee given by the bank stood discharged and had become ineffective and unenforceable. ~ A number of applications were filed by the appellant during the B .(._/ proceedings of the suit. In application 7-C, the appellant purported to put on record its complaint that it had not received the annexures to the plaint. In application 8-C, it prayed for rejection of the plaint and the suit under s. 26 and O.VII, r. 11 read withs. 151 C.P.C. In application 10-C, the appellant requested the court to call upon the respondent to furnish a complete record of the suit and annexures. On the date fixed c for filing of written statement, the appellant filed applications 11-C, 12-C and 13-C: ll·C was an application under O.VIII r. 9 ands. 151 C.P.C. seeking postponement of the striking of issues, 12-C was an application under O.Vlll, r.9 to grant leave to the appellant to file a subsequent pleading as written statement on merits if the court rejected "'Jli the objections taken in the 'preliminary written statement'; 13-C, D ~ which was, referrecrto as the 'preliminary written statement' in ll·C and 12-C, was an application styled as "Objectiom by the defendant to the jurisdiction or the Conrt to entertain this snit for declaration and injunction" setting forth seven reasons in support of the objections raised, the seventh ground asserting that the suit was liable to be stayed inter alia under s. 3 of the Foreign Awards (Recognition and Enforce- E ~· ment) Act, 1961 and/or s. 34 of the Iaclian Arbitration Act, 1940. In application 36·C, the appellant requested the court to decide the issues ~ regarding maintainability of the suit and the jurisdiction of the court before proceeding with the suit. In application 65-C, the appellant reiterated that the two issues referred to in 30-C should be heard first and decided before the case was proceed
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