M/S. CENTROTRADE MINERALS & METAL INC. versus HINDUSTAN COPPER LTD.

Citation: [2006] SUPP. 2 S.C.R. 146 · Decided: 09-05-2006 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Matter referred to larger bench

Judgment (excerpt)

A 
B 
c 
D 
E 
MIS. CENTROTRADE MINERALS & MET AL INC. 
v. 
HIND UST AN COPPER LTD. 
MAY 9, 2006 
[S.B. SINHA AND TARUN CHATTERJEE, JJ.] 
Arbitration and Conciliation Act, 1996--Sections 34. 35. 36, 48(1)(bF· 
Arbitration agreement providing that at first instance disputes to be settled 
by arbitration in Indian and if either party was in disagreement with the 
arbitration result therein they had right to appeal to a second arbitration 
in London, U.K. results of which were to be binding on both parties--
Arbitrator in the Indian arbitration making a NIL award-.()n appeal to 
Arbitrator in London, award passed directing one of the parties to pay the 
other the amounts quantified therein--High Court rejecting execution of 
award-- Validity of arbitration agreement-·On appeal. difference of opinion--· 
Matter referred lo larger bench-Section 2 3 of Contract Ad, 1872 
Appellant entered into contract with respondent for supply of goods. 
The contract had an arbitration agreement which provided that all 
disputes between the parties relating to the contract were to be settled 
by arbitration in India through the arbitration panel of the Indian 
Council of Arbitration in accordance with the Rules of Arbitration of the 
Indian Council of Arbitration, and if either party was in disagreement 
with the arbitration result in India, they had the right to appeal to a 
second arbitration in London, U.K. in accordance with the rules of 
conciliation and arbitration of the International Chamber of Commerce, 
F 
and the results of this second arbitration were to be binding on both the 
parties. 
Disputes arose between the parties. Appellant invoked the arbitration 
clause. The Arbitrator appointed by the Indian Council of Arbitration 
made a NIL award. Appellant thereupon invoked the second part of the 
G 
said arbitration agreement whereupon Arbitrator held his sittings in 
London. Respondent in a series of letters to the International Court of 
Arbitration and to the Arbitrator, maintained that the arbitration 
agreement was void being opposed to public policy. However, they received 
copies of all correspondence passed between appellant and the arbitrator 
H 
and of all submissions made. When no defence submission or supporting 
146 
CENTROTRADE MINERALS AND METAL INC. v. HINDUSTAN COPPER LTD. 
14 7 
evidence was produced by respondent within the time prescribed, 
A 
Arbitrator gave them one last opportunity to inform him any intention 
on their part to put in a defence and to seek an extension of time for doing 
so. A further fax was sent to them whereby the Arbitrator informed the 
parties that he was proceeding with the award. On 1 lth August, 2001, 
the Arbitrator received a fax from firm representing the respondent 
requesting for extension of time for one month to put in a defence, 
pursuant whereto on 16th August, 2001 it was directed that submissions 
in support of an application for extension of time for a defence and on 
the substantive merits of the dispute together with any evidence relied 
B 
in relation thereto should be received by him by 31st August, 2001 in 
absence whereof he would not give any consideration thereto. On 27th 
C 
August, 2001, the firm again sought for a further three weeks' extension 
of time for making their submissions and serving supporting evidence, 
pursuant whereto time for filing those submissions of evidence was 
extended till 12th September, 2001. However, the submissions were 
received by the Arbitrator on 13th September, 2001. In l,Jis award, 
arbitrator directed the respondent to pay appellant sums quantified by 
him. 
Respondent filed an application under Section 48(1)(b) of the 
Arbitration and Conciliation Act, 1996 stating that the arbitrator did not 
give them sufficient opportunity to present their case. They also filed a 
suit before Civil Judge praying for a declaration that the award was void 
and a nullity, as also for permanent injunction and damages. Appellant, 
on the other hand filed an application for enforcement of the award in 
the Court of the District Judge, which was considered as Execution Case. 
However, on application of appellant, these proceedings were transferred 
to the High Court. A Single Judge of the High Court allowed the execution 
of the award. Aggrieved therewith, respondent preferred an appeal which 
was allowed by a Division Bench, Appellant and respondent are both 
questioning the correctness of the said judgment in the present appeal. 
D 
E 
F 
Ap

Excerpt shown. Read the full judgment & AI analysis in Lexace.