Bombay High Court
Trammo Dmcc (Formerly Known As … vs Nagarjuna Fertilizers And Chemicals … on 5 March, 2026
2026:BHC-OS:5643
CARBP-441-2017.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL ARBITRATION PETITION NO. 441 OF 2017
WITH
INTERIM APPLICATION (L) NO. 27655 OF 2024
WITH
CONTEMPT PETITION IN COMMERCIAL DIVISION MATTERS (L)
NO.212 OF 2025
WITH
COMMERCIAL ARBITRATION PETITION NO.508 OF 2017
Trammo DMCC
(Formerly known as Transammonia DMCC) Petitioner
Versus
Nagarjuna Fertilizers and Chemicals Ltd. Respondents
Mr. Darius Khambata, Senior Advocate a/w. Omar Ahmad, Arun
Siwach, Suraj Iyer, Adv.Vikram Shah, Adv. Vidhi Shah, Adv.
Ritik Rath, Adv. Gauri Joshi, i/b Ganesh & Co. for the Petitioner.
Mr. Prateek Seksaria, Senior Advocate a/w. Mr Pratik Poojary,
Adv. Divyam Agarwal, Adv. Harsh Agarwal i/b Pratik Amin
Associates for the Respondents.
CORAM : SOMASEKHAR SUNDARESAN, J.
RESERVED ON : FEBRUARY 17, 2026
PRONOUNCED ON: MARCH 5, 2026
JUDGEMENT:
Context and Factual Background:
1. Commercial Arbitration Petition No. 441 of 2017 is a petition
filed under Part II of the Arbitration and Conciliation Act, 1996 (“the
Act”), seeking recognition and enforcement of five foreign arbitral
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signed by
AARTI MPBalekar/Aarti Palkar
AARTI GAJANAN
GAJANAN PALKAR
PALKAR Date:
2026.03.05
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CARBP-441-2017.docawards (“Foreign Awards”) in which the Petitioner, Trammo DMCC
(“Trammo”), is the judgement creditor while the judgement debtor is
the Respondent, Nagarjuna Fertilizers and Chemicals Ltd.
(“Nagarjuna”), a company whose shares are listed on Indian Stock
Exchange.
2. The Foreign Awards are :- i) First Interim Final Award dated
December 4, 2015 (“First Award”), as amended on July 4, 2016; ii) First
Cost Award dated February 5, 2016 (“First Cost Award”), as amended
on July 4, 2016. iii) Costs of Costs Award dated March 10, 2016
(“Second Cost Award”), as amended on July 4, 2016; iv) Second
Interim Final Award dated September 20, 2016 ( “Second Award”); and
v) Third Interim Final Award dated December 14, 2016 ( “Third
Award”).
3. The Learned Arbitral Tribunal that passed the Foreign Awards
was an ad-hoc Arbitral Tribunal seated in London. The Learned
Arbitral Tribunal was constituted by the parties with Trammo’s
nominee, Sir Simon Tuckey, a former Judge of the Court of Appeal;
Nagarjuna’s nominee Lord Collins, a former Justice of the Supreme
Court of England and Wales; and Sir Mark Waller, a former Judge of
the Court of Appeal, acting as the Presiding Arbitrator. The ad-hoc
arbitration agreement between the parties is dated January 21, 2014
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(“Arbitration Agreement”), by which the parties agreed to form the
Arbitral Tribunal.
4. It would be appropriate to summarise the relevant history to the
Arbitration Agreement and the formation of the Learned Arbitral
Tribunal as follows:
A) Between April 2011 and January 2012, Trammo and
Nagarjuna entered into various spot contracts for supply of
two types of fertilizer, namely Di-Ammonium Phosphate
(“DAP”) and Nitrogen Phosphorus Sulphate (“NPS”). Each
spot contract would be backed by confirmation notes and
agreements being executed through correspondence,
containing the main terms of supply, such as the
identification of the product, quantity, and price. In each
case, the communications exchanged between the parties
would be supplemented by written confirmations with more
detailed terms being executed between the parties;
B) Between April 12, 2012 and February 2013, the
parties entered into a long-term contract. The general
terms and conditions appended to that contract provided
that disputes between the parties would be referred to
arbitration in London under the Rules of the London Court
of International Arbitration (“LCIA”);
C) On May 17, 2013, representatives of Trammo and
Nagarjuna met in Dubai and wrote down by hand an
instrument indicating the essential terms of supply of DAPPage 3 of 32
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CARBP-441-2017.docand NPS by Trammo to Nagarjuna. Trammo claims that
during this meeting, it was orally agreed that the general
terms and conditions last used by the parties in the long-
term contract would apply (“Dubai Claimed Contracts”);
D) On May 27, 2013, Trammo sent an email to
Nagarjuna, attaching three confirmation notes, setting
forth the general terms and conditions governing the
supplies agreed upon between the parties ( “Emailed
Purported Contracts”). These three confirmations
contained provisions governing the sale of cargo by
Trammo to Nagarjuna, with arbitration to be conducted in
London. However, one contract for supply of NPS
provided for the LCIA Rules to be applicable, while two
contracts for supply of DAP referred to Rules of London
Maritime Arbitrators Association (“LMAA”) as applicable;
E) The Emailed Purported Contracts provided for a
deemed acceptance of the general terms and conditions
governing them. Trammo claimed to have kept the cargo
ready for shipment and pressed Nagarjuna to open the
requisite letters of credit to enable the shipment of the
cargo as purportedly agreed between the parties.
Nagarjuna did not respond, and on August 22, 2013,
Trammo accused Nagarjuna of repudiating the contracts
and incurring damages;
F) On August 29, 2013, Nagarjuna denied the very
existence of the contracts, which eventually led to
arbitration. It is in this backdrop that the parties entered
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into the Arbitration Agreement, which recorded that the
following issues would be referred to arbitration:
1. The Tribunal shall:
a. firstly, determine whether the Dubai Claimed
Contracts or the Emailed Purported Contracts were entered
into by the Parties;
b. secondly, if the Tribunal finds that either the Dubai
Claimed Contracts or the Emailed Purported Contracts were
entered into by the Parties, determine whether the Parties
entered into valid arbitration agreements in respect of
disputes arising under the Dubai Claimed Contracts or the
Emailed Purported Contracts (as the case may be); andc. if, and only if, the Tribunal finds that the Dubai
Purported Contracts or the Emailed Purported Contracts were
entered into by the Parties and that the parties entered into
valid arbitration agreements in respect of disputes arising
under the Dubai Claimed Contracts or the Emailed Purported
Contracts (as the case may be), hear and decide upon the
substantive merits of Trammo’s claims against Nagarjuna for
breach of contract and damages.
[Emphasis Supplied]
5. The ad-hoc Arbitration Agreement dated January 21, 2014
recorded that the laws of England would apply to it.
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Contentions of the Parties:
6. Against this backdrop, I have heard Mr. Darius Khambata,
Learned Senior Advocate on behalf of Trammo and Mr. Prateek
Seksaria, Learned Senior Advocate on behalf of Nagarjuna. With their
assistance, I have examined the material on record and assessed the
Foreign Awards, bearing in mind the scope of jurisdiction of this Court
under Part II of the Act.
7. Mr. Khambata would submit that the Foreign Awards meet the
six-fold test set out in Gemini Bay1, with particular reference to
paragraph 30, indicating that the awards pertain to differences arising
out of legal relationships under the Dubai Claimed Contracts said to
have been entered into in Dubai on May 17, 2013 by a manuscript, and
the Email Claimed Contracts, emailed on May 27, 2013. He would
submit that the contracts and the relationship between the parties were
commercial in nature and that all five Foreign Awards were made after
October 11, 1960, and would be governed by the New York Convention.
8. Mr. Khambata would submit that it is undisputed that the United
Kingdom is a territory to which the New York Convention would apply.
He would submit that the deemed acceptance of terms sent by email
and the approach of confirming the terms of supply entered into
1 Gemini Bay Transcription (P) Ltd. v. Integrated Sales Service Ltd .- (2022) 1 SCC 753
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between the parties were consistent with past practice of other similar
confirmations that had been sent by Trammo to Nagarjuna in the past,
with Nagarjuna not raising any objection thereto and instead acting
consistently with the existence of a contract.
9. The Arbitration Agreement, he would submit, clearly evidences
the commitment to arbitrate. Indeed, as a preliminary issue, the
Learned Arbitral Tribunal was to first establish whether the Dubai
Claimed Contract or the Emailed Purported Contracts had been
entered into by the parties. Thereafter, if it was found that an
agreement had indeed been entered into, the Learned Arbitral Tribunal
would determine whether the parties had entered into a valid
arbitration agreement for reference of disputes thereunder. If this was
held in the affirmative and the reference to arbitration were to be
affirmatively ruled upon, the Learned Arbitral Tribunal would hear and
decide the merits of Trammo’s claims against Nagarjuna for breach of
contract and damages. Therefore, the parties agreed to confer on the
Learned Arbitral Tribunal the power to determine the existence of the
arbitration agreement and the power to adjudicate on merits.
Therefore, he would submit that the parties had indeed a commitment
to arbitrate with the aforesaid framework, and nothing contained in the
Foreign Awards could be said to be in violation of the framework to
which the parties had agreed. There is no basis to deny enforcement of
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the Foreign Awards, he would submit, to contend that the Foreign
Awards may be recognised as a decree of an Indian court for
enforcement.
10. In contrast, Mr. Seksaria on behalf of Nagarjuna, would submit
that the Foreign Awards purport to be ‘interim’ in nature, and since the
First Award had not been presented for recognition and enforcement
by Trammo, it would not be open to Trammo to seek enforcement of
the Second Award or the Third Award, or for that matter, the First Cost
Award or the Second Cost Award.
11. The Ad-hoc arbitration agreement was assailed by Mr. Seksaria,
indicating that if and only if the Dubai Claimed Contracts or the
Emailed Purported Contracts were found to be validly executed, could
the Learned Arbitral Tribunal have proceeded to adjudicate the merits.
Mr. Seksaria would submit that the Learned Arbitral Tribunal had
rendered a perverse finding about the existence of these contracts, and
therefore, the awards in question would not be enforceable at all as a
matter of Indian law. He would submit that the arbitration agreement
is not valid under the law of England, to which the parties had agreed
to subject the Arbitration Agreement. He would submit that the Dubai
Claimed Contracts did not at all contain an arbitration agreement,
while the Emailed Purported Contracts were based on deemed
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acceptance which, as a matter of English law, could never be considered
as concluded contracts.
12. Mr. Seksaria would submit that there has to be an unequivocal
and absolute acceptance of an offer made by one party to the other
party for a contract to come into existence. The unilateral issuance of
the Emailed Purported Contracts could never lead to a binding contract
coming into existence by the mere silence of the offeree. Towards this
end, he would rely on judgements of the Supreme Court in Rickmers2
and Bhagwandas3. Therefore, he would submit, enforcement must be
refused in reliance upon Section 48(1)(a) of the Act since the agreement
itself was invalid.
13. In reliance on Sections 48(1)(c) and 48(1)(d) of the Act, Mr.
Seksaria would contend that the Foreign Awards sought to be enforced
deal with matters beyond the scope of submission to arbitration
because the very composition of the Learned Arbitral Tribunal was not
consistent with the purported agreement found to be in existence
between the parties.
14. The Arbitral Tribunal under the Emailed Purported Contracts
was to be governed by LMAA terms and any Tribunal that was
constituted outside the scope of the LMAA terms would be invalid. He
2 Rickmers Verwaltung GMBH v. Indian Oil Corpn. Ltd. – (1999) 1 SCC 1
3 Bhagwandas Goverdhandas Kedia v. Girdharilal Parshottamdas & Co. – 1965 SCC OnLine SC 38
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would submit that the Tribunal has written a speculative finding in the
First Award by recording that there was a likelihood that the parties
having agreed to the essential terms, would have agreed that the last of
the general terms and conditions would constitute the terms of the
contract. Therefore, he would attack the findings of the Learned
Arbitral Tribunal suggesting that the previous trading and negotiation
history of the parties had all contained a provision for arbitration in
London, and the reference to the last spot contract could have been an
error in pleading.
15. The Learned Arbitral Tribunal had held that there is no reason to
reject Trammo’s witness’ evidence that the last used terms should
apply. Mr. Seksaria would submit that the Learned Arbitral Tribunal’s
finding as to what would be the likely thing for the parties to do, is a
speculative finding. At the time of the First Award, the Learned Arbitral
Tribunal concluded that as of May 17, 2013, under the Dubai Claimed
Contracts, the parties had agreed that the terms applicable in the last
used terms would bind the parties. He would submit that this is a
perverse finding because Nagarjuna had not accepted this position
anywhere, either orally or in writing. The Tribunal would necessarily
have had to bring to bear three separate contracts along with the three
separate confirmations sent in the email on May 27, 2013 and
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necessarily reject all of them since these were based on a deemed
acceptance clause.
16. Mr. Seksaria would also contend that the Tribunal’s acceptance
of Trammo’s witness’s evidence that there had been an error in
attaching the wrong set of terms and conditions in relation to the
supply of DAP would negate its own earlier findings that the last of the
terms and conditions would bind the parties. He would submit that if
the last of the three Emailed Purported Contracts were to be accepted,
then that arbitration clause and the rules of arbitration applicable to
the same would need to be applied by the Learned Arbitral Tribunal.
17. In short, Mr. Seksaria would submit that the Dubai Claimed
Contracts were held to have been overridden by the Emailed Purported
Contracts, and the Emailed Purported Contracts contained varying
arbitration clauses which by itself is a factor that vitiates the arbitration
with contradictory arbitration clauses. Therefore, the Learned Arbitral
Tribunal proceeding to pronounce upon the merits without
affirmatively holding as to which of the terms and conditions would
actually be applied to the parties, brings the Foreign Awards within the
scope of rejection under Section 48(1)(a), Section 48(1)(c) and Section
48(1)(d) of the Act. On this premise alone, he would submit that the
enforcement of the Foreign Awards ought to be refused since no
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Arbitral Tribunal could generically hold that the parties had generally
agreed to arbitration in London without reference to which
institutional arbitration centre’s rules ought to govern the conduct of
arbitration. He would also submit that the Dubai Contracts did not
refer to any incorporation of general terms and conditions by reference,
while the Email Contracts contained varying institutional references.
18. That apart, Mr. Seksaria would submit that the Foreign Awards
are contrary to public policy of India because admittedly, Trammo has
supplied no fertilizer under the purported agreements that are said to
have been entered into. The award of damages is on the basis of
estimated losses of fertilizers that were meant to have been supplied
but did not get supplied due to letters of credit not being opened. The
damage suffered is not attributable directly and naturally in the
ordinary course of events from Nagarjuna’s alleged breach, Mr.
Seksaria would contend.
19. The Foreign Awards also ought to shock the conscience of this
Court because the admitted position is that the meeting is said to have
been held in Dubai on May 17, 2013 for supply of DAP; the loading
dates were spread between second half of May 2013 to June, 2013; but
damages have been granted by reference to the full optimal quantity of
DAP referred to even while Trammo had paid only a sum of USD 6
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million to the entity from whom it had correspondingly placed a
contract for purchase of DAP. As regards the supply of NPS, the
Learned Arbitral Tribunal has conducted a reasonable estimate of
market price during the relevant period. He would submit that it is
unconscionable that Trammo had entered into a supply contract with a
third party one day prior to the Dubai meeting, and admittedly did not
have the material in its own possession, and yet, it is permitted to
enforce an award of damages without supplying even one gram of such
material.
Analysis and Findings:
20. Initially, this matter was heard with Trammo pressing for re-
visiting the absence of interim relief in Commercial Arbitration Petition
No. 508 of 2017, which is a petition filed under Section 9 of the Act,
citing change in circumstances. After a couple of hearings, the
consensus built was that Commercial Arbitration Petition No. 441 of
2017, the main Petition under Part II of the Act, may be taken up for
final hearing and disposal. The parties were heard at length. Due to
efflux of time, by consent of the parties, the Part II Petition was re-
heard to get clarifications and refresh the submissions made, and
judgement in the Petition filed under Part II of the Act was reserved
afresh on the date mentioned above.
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Core Issues:
21. Contentions on behalf of Nagarjuna need to be tested on the
anvil of the provisions of Section 48 of the Act. While Nagarjuna has
raised an issue of the awards all being labelled as “interim” and the
First Award not having been presented for recognition and
enforcement, Nagarjuna’s core contentions for purposes of Section 48
of the Act may be summarised thus:
a) The Arbitration Agreement is invalid under the laws
of England, which is the law to which the parties have
subjected it, thereby attracting Section 48(1)(a) of the Act;
b) The Foreign Awards sought to be enforced deal with
matters beyond the scope of submission to arbitration and
therefore cannot be enforced in view of Section 48(1)(c) of
the Act;
c) The Learned Arbitral Tribunal had no jurisdiction to
pass the Foreign Awards since the composition of the
Tribunal was not in accordance with the agreement between
the parties, thereby attracting Section 48(1)(d) of the Act;
and
d) The Foreign Awards are unenforceable since their
enforcement is contrary to public policy of India for
purposes of Section 48(2)(b) of the Act.
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22. At the threshold, the relevant provisions of Section 48 of the Act
sought to be relied upon for resisting enforcement of the Foreign
Awards would bear reproduction and are extracted below:
48. Conditions for enforcement of foreign awards.
(1) Enforcement of a foreign award may be refused, at the request
of the party against whom it is invoked, only if that party furnishes to
the court proof that-
(a) the parties to the agreement referred to in section 44 were,
under the law applicable to them, under some incapacity, or the said
agreement is not valid under the law to which the parties have
subjected it or, failing any indication thereon, under the law of the
country where the award was made; or*****
(c) the award deals with a difference not contemplated by or not
falling within the terms of the submission to arbitration, or it contains
decisions on matters beyond the scope of the submission to
arbitration:
Provided that, if the decisions on matters submitted to arbitration can
be separated from those not so submitted, that part of the award
which contains decisions on matters submitted to arbitration may be
enforced; or
(d) the composition of the arbitral authority or the arbitral
procedure was not in accordance with the agreement of the parties,
or, failing such agreement, was not in accordance with the law of the
country where the arbitration took place ; or*****
(2) Enforcement of an arbitral award may also be refused if the
Court finds that;
*****
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(b) the enforcement of the award would be contrary to the public
policy of India.
Explanation 1- For the avoidance of any doubt, it is clarified
that an award is in conflict with the public policy of India, only if,-
(i) the making of the award was induced or affected by fraud or
corruption or was in violation of section 75 or section 81; or
(ii) it is in contravention with the fundamental policy of Indian
law; or
(iii) it is in conflict with the most basic notions of morality or
justice.
Explanation 2.- For the avoidance of doubt, the test as to
whether there is a contravention with the fundamental policy of
Indian law shall not entail a review on the merits of the dispute.
[Emphasis Supplied]
23. The Arbitration Agreement was consciously executed by the
parties. They agreed on a three-tier layered approach – first, the
Learned Arbitral Tribunal would consider the validity of execution of
the Dubai Claimed Contracts and the Emailed Purported Contracts;
second, if either of these were found to have been validly executed, the
Learned Arbitral Tribunal would consider if the parties had entered
into valid arbitration agreements to govern disputes arising under
them; and third, if both these were answered in the affirmative, the
parties agreed that the Learned Arbitral Tribunal would deal with the
disputes under them, on merits.
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24. Therefore, the Arbitration Agreement was a comprehensive
reference to arbitration and the parties conferred on the Learned
Arbitral Tribunal, the scope and jurisdiction of the adjudication. This
was a conscious exercise of party autonomy. The parties empowered
the Learned Arbitral Tribunal to consider the existence of the
agreement, the existence of an arbitration agreement, and upon finding
such existence, the power to resolve the disputes by arbitration. Each
party nominated its arbitrator, and the Learned Arbitral Tribunal was
formed. The parties wholeheartedly participated in the arbitration, and
the Learned Arbitral Tribunal conducted the proceedings in terms of
the Arbitration Agreement.
English Law and Invalidity of Deemed Acceptance:
25. Upon examination of the record and the Foreign Awards, it is
indeed apparent that the Learned Arbitral Tribunal considered the
evidence led by the parties, appreciated it, and returned findings of fact
about Dubai Claimed Contracts having been contracted. The Learned
Arbitral Tribunal found that the parties agreed that confirmation
emails would follow, consistent with past practice. The Learned
Arbitral Tribunal found that Nagarjuna had consistently accepted this
process of contract formation in the past and therefore the deemed
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acceptance process by way of exchange of emails was a positive finding
of fact rendered upon appreciation of evidence.
26. The Learned Arbitral Tribunal found that there was a
commitment to refer disputes to arbitration in London. Therefore, the
Learned Arbitral Tribunal found that the first two layers of the
Arbitration Agreement led to conclusions of existence of valid
agreements and a commitment to arbitrate. The Learned Arbitral
Tribunal then went on to consider the matter on merits and returned
findings on merits upon appreciation of evidence.
27. In doing so, the Learned Arbitral Tribunal also factored in the
absence of the key personnel of Nagarjuna who was present at the
meeting in Dubai and also the person communicating on email that led
to the formation of the Emailed Purported Contracts, but did not lead
evidence or provide a written statement in lieu of evidence. The
Learned Arbitral Tribunal was entitled to draw inferences and
appreciate the evidence as it did.
28. Having examined the record, I am unable to accept the absolute
proposition advanced on behalf of Nagarjuna that, applying English
law, there was simply no scope for the Learned Arbitral Tribunal to
have held that the “deemed acceptance” approach led to valid contract
formation. The Learned Arbitral Tribunal has applied its mind to this
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facet of the matter and relied upon English case law to hold that the
binding nature of an agreement that envisages a formal contract to be
formally executed in future would not stand eroded because the formal
contract did not get executed in future.
29. This is a matter of assessment of evidence and application of
English law by three former English law judges. Nagarjuna has not
obtained any declaration of English law in interpreting the Foreign
Awards from English Courts. In these circumstances, it is not for this
Court to sit in judgement on a matter of English law without anything
more than the submissions made in India to show that the Learned
Arbitral Tribunal has taken a view that is so manifestly arbitrary and
perverse and cuts to the root of the matter in such a manner as to shock
the conscience of this Court.
30. The law on Section 48 of the Act is now well declared in multiple
iterations by the Supreme Court, in particular, in two judgements
rendered by three-judge benches of the Supreme Court in Shri Lal
Mahal4 and Vijay Karia5. The scope of jurisdiction of the Section 48
Court is narrow and it would not be open to this Court to conduct a
second innings, wading into the merits. In Shri Lal Mahal, the Court
held thus:
4 Shri Lal Mahal Limited Vs. Progetto Grano SPA – (2014) 2 SCC 433
5 Vijay Karia and others Vs. Prysmian Cavi E Sistemi SRL and others – (2020) 11
SCC 1
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45. Moreover, Section 48 of the 1996 Act does not give an
opportunity to have a “second look” at the foreign award in the
award enforcement stage. The scope of inquiry under Section 48 does
not permit review of the foreign award on merits. Procedural defects
(like taking into consideration inadmissible evidence or
ignoring/rejecting the evidence which may be of binding nature) in
the course of foreign arbitration do not lead necessarily to excuse an
award from enforcement on the ground of public policy.
[Emphasis Supplied]
31. Likewise, in Vijay Karia, the Supreme Court held thus:
83. Having said this, however, if a foreign award fails to determ-
ine a material issue which goes to the root of the matter or fails to de-
cide a claim or counter-claim in its entirety, the award may shock the
conscience of the Court and may be set aside, as was done by the
Delhi High Court in Campos (supra) on the ground of violation of the
public policy of India, in that it would then offend a most basic notion
of justice in this country. It must always be remembered that poor
reasoning, by which a material issue or claim is rejected, can never
fall in this class of cases. Also, issues that the Tribunal considered es-
sential and has addressed must be given their due weight – it often
happens that the Tribunal considers a particular issue as essential
and answers it, which by implication would mean that the other issue
or issues raised have been implicitly rejected. For example, two
parties may both allege that the other is in breach. A finding that one
party is in breach, without expressly stating that the other party is not
in breach, would amount to a decision on both a claim and a counter-
claim, as to which party is in breach. Similarly, after hearing the
parties, a certain sum may be awarded as damages and an issue as to
interest may not be answered at all. This again may, on the facts of a
given case, amount to an implied rejection of the claim for interest.
The important point to be considered is that the foreign award must
be read as a whole, fairly, and without nit-picking. If read as a whole,
the said award has addressed the basic issues raised by the parties
and has, in substance, decided the claims and counter-claims of the
parties, enforcement must follow.
[Emphasis Supplied]
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32. Importing the aforesaid principles, in my view, the contention
about English law not permitting deemed acceptance clauses does not
inspire confidence. When as a matter of fact, it has found, on
appreciation of evidence, that these very parties have, in the past, taken
part in contract formation activity in the very same manner as seen in
the instant case, and English case law has been cited by the Learned
Arbitral Tribunal in support of its findings, it is not for the Section 48
Court to re-visit this issue at the recognition and enforcement stage.
33. On the existence of a commitment to arbitrate, the Learned
Arbitral Tribunal’s findings again appear logical and reasonable. It is
apparent that the Learned Arbitral Tribunal has explained that under
English law, an agreement in writing would be discernible from
exchange of correspondence and reduction to writing even if not signed
by the parties. Even as a matter of Indian law, indeed the law on the
need for a signature on an arbitration agreement has moved forward,
with even non-signatories being considered veritable parties to an
arbitration agreement; or for that matter, arbitration agreements
contained in invoices or contract notes leading to binding arbitration.
The issue of whether the parties had, by past conduct, established a
precedent of accepting terms that included arbitration clauses, and
whether or not they actually ended up in arbitration, are all matters
that fall within the domain of appreciation of evidence and within the
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jurisdiction of the Learned Arbitral Tribunal. In the Arbitration
Agreement, the parties agreed that the Learned Arbitral Tribunal would
decide this issue and it has done so in application of English law. It is
not open to this Court to second-guess this issue and sit in judgement
over it at the Section 48 stage.
Emailed Purported Contracts and scope of Arbitration:
34. The next two grounds are inter-connected. According to
Nagarjuna, the Learned Arbitral Tribunal did not have jurisdiction to
pass the Foreign Awards since they deal with matters outside the scope
of submission to arbitration and since the composition of the Learned
Arbitral Tribunal was not in conformity with the Emailed Purported
Contracts, which have been held by the Learned Arbitral Tribunal to be
valid arbitration agreements. The upshot of the submission is that
Trammo cannot have it both ways – either the Emailed Purported
Contracts are in existence and therefore, the parties ought to adhere to
them; or they ought to be held as non-existent. This issue would deal
with Section 48(1)(c) and Section 48(1)(d) of the Act.
35. To my mind, this issue is rather straightforward. Mr. Seksaria is
right that on the face of it, if the Emailed Purported Contracts are held
to be validly executed, it would follow that the rules governing
arbitration contained in the respective general terms and conditions
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cannot be wished away. However, to my mind, the parties solved this
problem in the Arbitration Agreement they executed to constitute the
Learned Arbitral Tribunal. In clause (c) of the scope of reference in the
Arbitration Agreement (extracted above), the parties positively agreed
that if it is found that the Dubai Claimed Contracts and the Emailed
Purported Contracts existed, and it is also found that the parties had an
arbitration agreement, then the Learned Arbitral Tribunal would hear
the matter on merits. The only logical way to read this would mean
that the parties agreed that upon the Learned Arbitral Tribunal finding
that there was an agreement to arbitrate discernible from the Emailed
Purported Contracts, the dispute resolution would switch to the
Learned Arbitral Tribunal.
36. That apart, even otherwise, the worst that can be said about the
varying rules of arbitration referred to in the email attachments would
be that two competing forums for arbitration would be discernible and
the parties would otherwise have had to fragment their disputes across
two forums. Another way to read this position would be that the same
Learned Arbitral Tribunal would conduct the arbitration but apply
varying rules of LCIA and LMAA to adjudicate the deeply-
interconnected issues across the Emailed Purported Contracts.
However, there is a simpler and more benign, commonsensical and
logical way to reconcile the same. That would be to read the scope of
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arbitration created by the parties themselves, by constituting the
Learned Arbitral Tribunal on an ad hoc basis, and empowering it to
adjudicate the disputes under one roof as one forum. This is what the
Learned Arbitral Tribunal has held and that is a logical, reasonable,
commercially commonsensical and rational finding.
37. The Learned Arbitral Tribunal having returned a reasonable view
that the commitment to arbitrate having been discerned, and the
parties also having agreed that the Learned Arbitral Tribunal appointed
in the Arbitration Agreement would adjudicate on merits, the Foreign
Awards do not stand vitiated. The parties consciously agreed that the
Learned Arbitral Tribunal would adjudicate the dispute on merits. At
worst, the conflicting references in the email attachments lead to
ironing out a seemingly unworkable clause, which the Supreme Court
has held ought to be ironed out. The following extracts from Enercon6
would be noteworthy:
88. In our opinion, the courts have to adopt a pragmatic approach
and not a pedantic or technical approach while interpreting or
construing an arbitration agreement or arbitration clause. Therefore,
when faced with a seemingly unworkable arbitration clause, it would
be the duty of the court to make the same workable within the
permissible limits of the law, without stretching it beyond the
boundaries of recognition. In other words, a common sense approach
has to be adopted to give effect to the intention of the parties to
arbitrate. In such a case, the court ought to adopt the attitude of a
reasonable business person, having business common sense as well as
6 Enercon (India) Ltd. v. Enercon Gmbh. – (2014) 5 SCC 1
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CARBP-441-2017.docbeing equipped with the knowledge that may be peculiar to the
business venture. The arbitration clause cannot be construed with a
purely legalistic mindset, as if one is construing a provision in a
statute. We may just add here the words of Lord Diplock in Antaios
Compania Naviera S.A. v. Salen Rederierna A.B. [1985 AC 191 :
(1984) 3 WLR 592 : (1984) 3 All ER 229 (HL)] , which are as follows:
(AC p. 201 E)
“… if detailed semantic and syntactical analysis of words in a
commercial contract is going to lead to a conclusion that flouts
business commonsense, it must be made to yield to business
commonsense.
We entirely agree with the aforesaid observation.
89. This view of ours is also supported by the following judgments
which were relied upon by Dr Singhvi:
89.1. In Visa International Ltd. [Visa International
Ltd. v. Continental Resources (USA) Ltd., (2009) 2 SCC 55 : (2009) 1
SCC (Civ) 379] , it was inter alia held that: (SCC pp. 64-65, paras
25-26)
“25. No party can be allowed to take advantage of inartistic
drafting of arbitration clause in any agreement as long as clear
intention of parties to go for arbitration in case of any future
disputes is evident from the agreement and material on record
including surrounding circumstances.
26. What is required to be gathered is the intention of the
parties from the surrounding circumstances including the conduct
of the parties and the evidence such as exchange of
correspondence between the parties.
89.2. Similar position of law was reiterated in Nandan Biomatrix
Ltd. [Nandan Biomatrix Ltd. v. D1 Oils Ltd., (2009) 4 SCC 495 :
(2009) 2 SCC (Civ) 227] , wherein this Court observed inter alia as
under: (SCC pp. 501-02, paras 28-30)
“28. This Court in Rukmanibai Gupta v. Collector [(1980) 4
SCC 556] has held (at SCC p. 560, para 6) that what is required
to be ascertained while construing a clause is
‘whether the parties have agreed that if disputes arise between
them in respect of the subject-matter of contract such dispute
shall be referred to arbitration, then such an arrangement
would spell out an arbitration agreement’.
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29. In M. Dayanand Reddy v. A.P. Industrial Infrastructure
Corpn. Ltd. [(1993) 3 SCC 137] this Court has held that: (SCC p.
142, para 8)
‘8. … an arbitration clause is not required to be stated in
any particular form. If the intention of the parties to refer the
dispute to arbitration can be clearly ascertained from the
terms of the agreement, it is immaterial whether or not the
expression arbitration or arbitrator or arbitrators has been
used in the agreement.’
30. The Court is required, therefore, to decide whether the
existence of an agreement to refer the dispute to arbitration
can be clearly ascertained in the facts and circumstances of
the case. This, in turn, may depend upon the intention of the
parties to be gathered from the correspondence exchanged
between the parties, the agreement in question and the
surrounding circumstances. What is required is to gather the
intention of the parties as to whether they have agreed for
resolution of the disputes through arbitration. What is required to
be decided in an application under Section 11 of the 1996 Act is:
whether there is an arbitration agreement as defined in the said
Act.”
(emphasis in original)
92. Further, we find support in this context from the following
extract of Halsbury’s Laws of England (Vol. 13, 4th Edn., 2007
Reissue):
“The words of a written instrument must in general be taken in
their ordinary or natural sense notwithstanding the fact that such
a construction may appear not to carry out the purpose which it
might otherwise be supposed the parties intended to carry out; but
if the provisions and expressions are contradictory, and there are
grounds, appearing on the face of the instrument, affording proof
of the real intention of the parties, that intention will prevail
against the obvious and ordinary meaning of the words; and
where the literal (in the sense of ordinary, natural or primary)
construction would lead to an absurd result, and the words used
are capable of being interpreted so as to avoid this result, the
literal construction will be abandoned.”
93. Mr Rohinton Nariman had very fairly submitted that it is
permissible for the court to construe the arbitration clause in a
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particular manner to make the same workable when there is a defect
or an omission in it. His only caveat was that such an exercise would
not permit the court to rewrite the contract. In our opinion, in the
present case, the crucial line which seems to be an omission or an
error can be inserted by the Court. In this context, we find support
from judgment of this Court in Shin Satellite Public Co. Ltd. [Shin
Satellite Public Co. Ltd. v. Jain Studios Ltd., (2006) 2 SCC 628] ,
wherein the “offending part” in the arbitration clause made
determination by the arbitrator final and binding between the parties
and declared that the parties have waived the rights to appeal or an
objection against such award in any jurisdiction. The Court, inter
alia, held that such an objectionable part is clearly severable being
independent of the dispute that has to be referred to be resolved
through arbitration. By giving effect to the arbitration clause, the
Court specifically noted that
“it cannot be said that the Court is doing something which is not
contemplated by the parties or by ‘interpretative process’, the
Court is rewriting the contract which is in the nature of ‘novatio’.
The intention of the parties is explicitly clear and they have
agreed that the dispute, if any, would be referred to an arbitrator.
To that extent, therefore, the agreement is legal, lawful and the
offending part as to the finality and restraint in approaching a
court of law can be separated and severed by using a ‘blue
pencil'”. (SCC p. 637, para 26)
[Emphasis Supplied]
38. To my mind, the aforesaid discourse squarely covers the
multifarious strands of contentions about the seeming incongruity in
the finding of existence of the Emailed Purported Contracts and the
Arbitration Agreement. In the instant case, the Learned Arbitral
Tribunal has not even had to supply some material to fill any gaps. The
parties had agreed that if the first two layers were covered, then the
Learned Arbitral Tribunal would have jurisdiction to adjudicate on
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merits. Therefore, on these two grounds too, no reason is found to
invoke the provisions of Section 48(1)(c) and Section 48(1)(d) to not
enforce the Foreign Awards.
Public Policy Considerations:
39. Finally, the public policy considerations are to be dealt with.
Nagarjuna contends that the Foreign Awards are unenforceable since
their enforcement is contrary to public policy of India.
40. Initially, the Foreign Awards were assailed on the premise that
they were in conflict with Indian exchange controls made under the
Foreign Exchange Management Act (“FEMA”) and copious
submissions had been made on this count verbally and in written
submissions. However, on a later date, this was withdrawn. When the
matter was re-argued, it was again confirmed by Nagarjuna, on a
specific query from the Bench, that the alleged violation of FEMA is not
being pressed. This was the main plank of the public policy objection,
and having been given up, it need not be dealt with. In any case, the law
in this regard is well declared by the Supreme Court, and Indian
exchange controls ought not to stand in the way of Arbitral awards and
court orders. In any case, Nagarjuna itself is not invoking exchange
controls against the Foreign Awards.
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41. The core issue under this head is therefore what Nagarjuna
would submit ought to shock the conscience of this Court. Specifically,
this is based on the fact that Trammo placed a back-to-back order for
supply of DAP one day before the Dubai Claimed Contracts i.e. on May
16, 2013 when the parties met in Dubai on May 17, 2013. The
assessment of damages is based on the optional supply order placed by
Trammo for DAP and on the difference between market price and
contracted price in relation to NPS. The upshot of the submission is
that insofar as DAP is concerned, it is shocking that a party that has not
supplied “one gram” of DAP has been granted damages and that large
amounts would flow out of the country on such awards.
42. As stated above, the facet of exchange controls is not being
pressed any more. That apart, the contention about the back-to-back
supply having been contracted one day before the meeting in Dubai is a
bit incoherent when seen from the perspective of Nagarjuna always
being aware that Trammo was a trader in fertilisers. Just prior to the
Dubai Claimed Contracts, the parties had executed a long-term
contract too and in any case, a trading supplier would need to place an
order at some point of time or the other. The dispute between the
parties is that despite the orders having been agreed upon, Nagarjuna
resiled from the commitment to place an order, which led to Trammo
losing out and suffering damage. This is the subject matter of the
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adjudication based on evidence, and the findings of the Learned
Arbitral Tribunal cannot be revisited by the Section 48 Court.
The ‘Interim’ Contention:
43. Finally, the contention that all the orders are “interim” and that
Trammo had not sought recognition of the First Award, giving the
foundation a go-by, calls for a mention. The Foreign Awards are all
presented and covered by the Petition filed under Part II. They are one
composite whole. Each deals with one element or the other of a larger
resolution of all disputes and differences between the parties.
Therefore, the contention that the Foreign Awards ought not to be
enforced does not inspire confidence. Each of the Foreign Awards
speaks for itself and none of the grounds pressed into service invoking
Section 48 are meritorious in a manner that enforcement must be
denied.
44. The following summary from Vijay Karia would be instructive:
58. When the grounds for resisting enforcement of a foreign
award under Section 48 are seen, they may be classified into three
groups – grounds which affect the jurisdiction of the arbitration pro-
ceedings; grounds which affect party interest alone; and grounds
which go to the public policy of India, as explained by Explanation 1
to Section 48(2). Where a ground to resist enforcement is made out,
by which the very jurisdiction of the Tribunal is questioned – such as
the arbitration agreement itself not being valid under the law to which
the parties have subjected it, or where the subject-matter of difference
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is not capable of settlement by arbitration under the law of India, it is
obvious that there can be no discretion in these matters. Enforcement
of a foreign award made without jurisdiction cannot possibly be
weighed in the scales for a discretion to be exercised to enforce such
award if the scales are tilted in its favour.
59. On the other hand, where the grounds taken to resist
enforcement can be said to be linked to party interest alone, for
example, that a party has been unable to present its case before the
arbitrator, and which ground is capable of waiver or abandonment,
or, the ground being made out, no prejudice has been caused to the
party on such ground being made out, a court may well enforce a
foreign award, even if such ground is made out. When it comes to the
“public policy of India” ground, again, there would be no discretion
in enforcing an award which is induced by fraud or corruption, or
which violates the fundamental policy of Indian law, or is in conflict
with the most basic notions of morality or justice. It can thus be seen
that the expression “may” in Section 48 can, depending upon the
context, mean “shall” or as connoting that a residual discretion
remains in the court to enforce a foreign award, despite grounds for
its resistance having been made out. What is clear is that the width of
this discretion is limited to the circumstances pointed out
hereinabove, in which case a balancing act may be performed by the
court enforcing a foreign award.
[Emphasis Supplied]
45. I have dealt with above, the grounds pressed into service. For the
reasons set out above, the ground of jurisdiction has been rejected. The
grounds of party interest have been woven into the ground of public
policy of India, but considering the scope of how public policy is to be
examined, for the reasons set out above, there is no merit in the
objections raised by Nagarjuna.
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46. In the result, the Petition filed under Part II being Commercial
Arbitration Petition No. 441 of 2017 deserves to be allowed in terms of
prayers clauses (a) to (c) which read thus:
(a). That this Hon’ble Court be pleased to enforce and execute the
Monetary Awards viz.- Awards B, C, D and E (at Exhibits ‘C’ to ‘F’
hereto), In which the Arbitral Tribunal awarded to Trammo the
aggregate principal sums of USD 16,427,310.80 and GBP 606,628.29
together with interest on those amounts;
(b) That this Hon’ble Court be pleased to order and direct the
Respondent/ Judgment Debtor to pay the aggregate principal sums of
USD 16,427,310.80 and GBP 606,628.29 together with interest on
those amounts as awarded by the Arbitral Tribunal in full and final
satisfaction of the Monetary Awards viz.- Awards B, C, D and E (at
Exhibits ‘C’ to ‘F’ hereto);
(c) That this Hon’ble Court be pleased to order and direct the
Respondent/ Judgment Debtor to deposit the· aggregate principal
sums of USD 16,427,310.80 and GBP 606,628.29 together with
interest on those amounts as awarded by the Arbitral Tribunal under
the Monetary Awards viz.- Awards B, C, D and E (at Exhibits ‘C’ to
‘F’ hereto), with this Hon’ble Court;
47. After the pronouncement of this Judgement, a request for stay of
this Judgement has been made. Considering the sheer length of time
for which the matter has gone on, the request is rejected.
48. All actions required to be taken pursuant to this order shall be
taken upon receipt of a downloaded copy as available on this Court’s
website.
[ SOMASEKHAR SUNDARESAN, J.]
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