# M/S. CENTROTRADE MINERALS AND METALS INC v. HINDUSTAN COPPER LTD

- **Citation:** [2020] 9 S.C.R. 73
- **Court:** Supreme Court of India
- **Decided:** 2020-06-02
- **Case number:** Civil Appeal No.2562 of 2006
- **Bench:** R. F. Nariman, S. Ravindra Bhat, V. Ramasubramanian
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-s-centrotrade-minerals-and-metals-inc-v-hindustan-copper-ltd-34879
- **Pages:** 36

## Headnote

Arbitration and Conciliation Act, 1996: s.48 - Enforceability
of the foreign award - Contract of sale of commodity between the
parties - The agreement contained two tier arbitration by which the
first tier was to be settled in India and if either party disagreed with
the result, that party had right to appeal to a second arbitration to
be held by the ICC in London - Dispute arose between the parties -
Appellant invoked the arbitration clause - Arbitrator held against
the appellant - Appellant invoked second part of arbitration
agreement - Foreign award held against the respondent -
Enforceability of foreign award challenged under s.48 - Respondent
objected to the enforceability of the award on the ground that it
was unable to present its case before ICC arbitrator - Held: ICC
arbitrator had given large number of opportunities to respondent
to file documents and legal submissions - Arbitrator was extremely
fair to respondent - Despite being informed time and again to appear
before the Tribunal and submit their response and evidence in
support thereof, it was only after the arbitrator indicated that he
was going to pass an award that the respondent's attorney woke up
and started asking for time to present their response - This too was
granted by the arbitrator by not only granting extension of time but
by extending this time even further - Finally when the legal
submissions of 75 pages were sent even beyond the time that was
granted, the arbitrator took this into account and then passed his
award - This being the case, on facts there was no fault whatsoever
with the conduct of the arbitral proceedings - Foreign award shall
be enforced.
[2020] 9 S.C.R. 73
73
A
B
C
D
E
F
G
H
74
SUPREME COURT REPORTS
[2020] 9 S.C.R.
Allowing Centrotrade's appeal and dismissing HCL's
appeal, the Court
HELD: 1. The arbitrator had given a large number of
opportunities to respondent to file documents and legal
submissions. On 03.05.2001, the arbitrator directed that the
appellant serve submissions along with supporting documents,
following the respondent's response and evidence therein, with
a right in the appellant to put in a reply, in accordance with a clear
time table that was set out. On 30.07.2001, since no defence
submissions or supporting evidence was served by the respondent
within the time prescribed, the time was extended, giving the
respondent one last opportunity to put in their defence and to
seek extension of time for so doing. Until August 2001, the
respondent did not participate in the arbitral proceedings, even
though invited to do so. It was only on 09.08.2001, when the
arbitrator informed the parties that he is proceeding with the
award, that on 11.08.2001, the arbitrator received a fax from Fox
& Mandal, Attorneys for HCL, requesting for an extension of
one month's time to put in their defence. This was acceded to by
the arbitrator on 16.08.2001, giving time upto 31.08.2001.
However, on 27.08.2001, Fox & Mandal sought for a further three
weeks' extension of time, which was also granted by the arbitrator,
allowing a final extension of time until 12.09.2001. Despite the
fact that the legal submissions running into 75 pages were
submitted beyond time, that was only on 13.9.2001, in view of
the 11.09.2001 attack in New York, the arbitrator received the
same and took the same into account despite being beyond time.
It was only on 29.09.2001 that the arbitrator then passed his
award. The arbitrator was extremely fair to the respondent. Thus,
there was no fault whatsoever with the conduct of the arbitral
proceedings. [Para 34][106-H; 107-A-E, G]
Centrotrade Minerals & Metals Inc. v. Hindustan
Copper Ltd. (2006) 11 SCC 245 : [2006] 2 Suppl. SCR
146; Centrotrade Minerals & Metal Inc. v. Hindustan
Copper Ltd. (2017) 2 SCC 228 : [2016] 9 SCR 83;
Vijay Karia v. Prsymian Cavi E Sistemi SRL 2020 (3)
SCALE 494; Kavalappara Kottarathil Kochuni v. States
of Madras and Kerala [1960] 3 SCR 887; Ganges
Waterproof Works (P) Ltd. v. Union of India (1

## Text

_Characters 0–39,756 of 85,045. This is a partial read: ask again with offset=39756 for what follows._

A
B
C
D
E
F
G
H
73
M/S. CENTROTRADE MINERALS AND METALS INC.
v.
HINDUSTAN COPPER LTD.
(Civil Appeal No.2562 of 2006)
JUNE 02, 2020
[R. F. NARIMAN, S. RAVINDRA BHAT AND
V. RAMASUBRAMANIAN, JJ.]
Arbitration and Conciliation Act, 1996: s.48 - Enforceability
of the foreign award - Contract of sale of commodity between the
parties - The agreement contained two tier arbitration by which the
first tier was to be settled in India and if either party disagreed with
the result, that party had right to appeal to a second arbitration to
be held by the ICC in London - Dispute arose between the parties -
Appellant invoked the arbitration clause - Arbitrator held against
the appellant - Appellant invoked second part of arbitration
agreement - Foreign award held against the respondent -
Enforceability of foreign award challenged under s.48 - Respondent
objected to the enforceability of the award on the ground that it
was unable to present its case before ICC arbitrator - Held: ICC
arbitrator had given large number of opportunities to respondent
to file documents and legal submissions - Arbitrator was extremely
fair to respondent - Despite being informed time and again to appear
before the Tribunal and submit their response and evidence in
support thereof, it was only after the arbitrator indicated that he
was going to pass an award that the respondent's attorney woke up
and started asking for time to present their response - This too was
granted by the arbitrator by not only granting extension of time but
by extending this time even further - Finally when the legal
submissions of 75 pages were sent even beyond the time that was
granted, the arbitrator took this into account and then passed his
award - This being the case, on facts there was no fault whatsoever
with the conduct of the arbitral proceedings - Foreign award shall
be enforced.
[2020] 9 S.C.R. 73
73
A
B
C
D
E
F
G
H
74
SUPREME COURT REPORTS
[2020] 9 S.C.R.
Allowing Centrotrade's appeal and dismissing HCL's
appeal, the Court
HELD: 1. The arbitrator had given a large number of
opportunities to respondent to file documents and legal
submissions. On 03.05.2001, the arbitrator directed that the
appellant serve submissions along with supporting documents,
following the respondent's response and evidence therein, with
a right in the appellant to put in a reply, in accordance with a clear
time table that was set out. On 30.07.2001, since no defence
submissions or supporting evidence was served by the respondent
within the time prescribed, the time was extended, giving the
respondent one last opportunity to put in their defence and to
seek extension of time for so doing. Until August 2001, the
respondent did not participate in the arbitral proceedings, even
though invited to do so. It was only on 09.08.2001, when the
arbitrator informed the parties that he is proceeding with the
award, that on 11.08.2001, the arbitrator received a fax from Fox
& Mandal, Attorneys for HCL, requesting for an extension of
one month's time to put in their defence. This was acceded to by
the arbitrator on 16.08.2001, giving time upto 31.08.2001.
However, on 27.08.2001, Fox & Mandal sought for a further three
weeks' extension of time, which was also granted by the arbitrator,
allowing a final extension of time until 12.09.2001. Despite the
fact that the legal submissions running into 75 pages were
submitted beyond time, that was only on 13.9.2001, in view of
the 11.09.2001 attack in New York, the arbitrator received the
same and took the same into account despite being beyond time.
It was only on 29.09.2001 that the arbitrator then passed his
award. The arbitrator was extremely fair to the respondent. Thus,
there was no fault whatsoever with the conduct of the arbitral
proceedings. [Para 34][106-H; 107-A-E, G]
Centrotrade Minerals & Metals Inc. v. Hindustan
Copper Ltd. (2006) 11 SCC 245 : [2006] 2 Suppl. SCR
146; Centrotrade Minerals & Metal Inc. v. Hindustan
Copper Ltd. (2017) 2 SCC 228 : [2016] 9 SCR 83;
Vijay Karia v. Prsymian Cavi E Sistemi SRL 2020 (3)
SCALE 494; Kavalappara Kottarathil Kochuni v. States
of Madras and Kerala [1960] 3 SCR 887; Ganges
Waterproof Works (P) Ltd. v. Union of India (1999) 4
SCC 33; Sohan Lal Gupta v. Asha Devi Gupta (2003)
A
B
C
D
E
F
G
H
75
7 SCC 492 : [2003] 3 Suppl. SCR 249; Hari Om
Maheshwari v. Vinitkumar Parikh (2005) 1 SCC 379referred to.
Minmetals Germany GmbH v. Ferco Steel Ltd. (1999)
C.L.C. 647; JorfLasfar Energy Co. v. AMCI Export
Corp. 2008 WL 1228930; Monck v. Hilton 46 LJNC
167; Cuckurova Holding A.S. v. Sonera Holding B.V.
(2014) UKPC 15; Eastern European Engineering v.
Vijay Consulting (2019) 1 LLR 1 (QBD); Consorcio
Rive v. Briggs of Cancun 134 F. Supp 2d 789; Four
Seasons Hotels v. Consorcio Barr S.A. 613 Supp 2d
1362 (S.D. Fla. 2009); Nanjing Cereals v. Luckmate
Commodities XXI Y.B. Com. Arb. 542 (1996); De Maio
Giuseppe v. Interskins Y.B. Comm. Arb. XXVII (2002)
492 - referred to.
Case Law Reference
[2006] 2 Suppl. SCR 146
referred to
Para 5
[2016] 9 SCR 83
referred to
Para 7
2020 (3) SCALE 494
referred to
Para 9
[1960] 3 SCR 887
referred to
Para 16
(1999) 4 SCC 33
referred to
Para 19
[2003] 3 Suppl. SCR 249
referred to
Para 20
(2005) 1 SCC 379
referred to
Para 21
CIVIL APPEALATE JURISDICTION: Civil Appeal No. 2562
of 2006.
From the Judgment and Order dated 28.07.2004 of the High Court
at Calcutta in A.P.O.T. No. 182 of 2004
With
Civil Appeal No. 2564 of 2006
Gourab Banerjee, Siddharth Bhatnagar, Sr. Advs., Ms. Ruby Singh
Ahuja, Vishal Gehrana, Shravan Sahny, Ashutosh, P. Shukla, Ankit Yadav
(for M/s. Karanjawala & Co.), Advs. for the Appellant.
Harin P. Raval, Sr. Adv., Ms. Nandini Sen Mukherjee, Nipun
Saxena, Ms. Sukanya Singh, Kartikey Kanojiya, Siddharth H. Raval,
S.S. Jauhar, Advs. for the Respondent.
M/S. CENTROTRADE MINERALS AND METALS INC.
v. HINDUSTAN COPPER LTD.
A
B
C
D
E
F
G
H
76
SUPREME COURT REPORTS
[2020] 9 S.C.R.
The Judgment of the Court was delivered by
R. F. NARIMAN, J.
1. This matter comes to this Bench after two previous forays to
this Court.
2. The appellant before us, in Civil Appeal No.2562 of 2006, is a
U.S. Corporation who had entered into a contract for sale of 15,500
DMT of copper concentrate to be delivered at the Kandla Port in the
State of Gujarat, the said goods to be used at the Khetri Plant of the
respondent Hindustan Copper Ltd. (hereinafter referred to as "HCL"/
"the respondent"), who is the appellant in the other Civil Appeal No.2564
of 2006. After all consignments were delivered, payments had been made
in accordance with the contract. However, a dispute arose between the
parties as regards the quantity of dry weight of copper concentrate
delivered. Clause 14 of the agreement contained a two-tier arbitration
agreement by which the first tier was to be settled by arbitration in
India. If either party disagrees with the result, that party will have the
right to appeal to a second arbitration to be held by the ICC in London.
The appellant M/s Centrotrade Minerals and Metals Inc. (hereinafter
referred to as "Centrotrade"/ "the appellant") invoked the arbitration
clause. By an award dated 15.06.1999 the arbitrator appointed by the
Indian Council of Arbitration made a Nil Award. Thereupon, Centrotrade
invoked the second part of the arbitration agreement, as a result of which
Jeremy Cook QC, appointed by the ICC, delivered an award in London,
dated 29.09.2001, in which the following amounts were awarded:
"27.For the above reasons I THEREFORE AWARD and
ADJUDGE that
(1) HCL do pay Centrotrade the sum of $152,112.33,inclusive of
interest to the date of the Award in respect of the purchase price
for the firstshipment.
(2) HCL do pay Centrotrade the sum of $15,815.59, inclusive of
interest to the date of this Award in respect of demurrage due on
the first shipment.
(3) HCL, do pay Centrotrade the sum of $284,653.53,inclusive of
interest to the date of this Award in respect of the purchase price
on the second shipment.
A
B
C
D
E
F
G
H
77
(4) HCL do pay Centrotrade their legal costs in this arbitration in
the sum of $82,733 and in addition the costs of the International
Court of Arbitration, the Arbitrator's fees and expenses totalling
$29,000.
(5) HCL do pay Centrotrade compound interest on the above
sums from the date of this Award at 6% p.a. with quarterly rests
until the date of actual payment."
3. Even before Jeremy Cook QC could deliver his award, HCL,
during the pendency of the proceedings before the arbitrator in London,
filed a suit in the Court at Khetri, in the State of Rajasthan, challenging
the arbitration clause. By an Order dated 27.04.2000, in a revision petition
filed against the Order of the Khetri Court, the High Court at Rajasthan
restrained the appellant from taking further steps in the London arbitration,
pending hearing and disposal of the revision petition. This ad interim ex
parte stay granted by the High Court was ultimately vacated by the
Supreme Court only on 08.02.2001. Meanwhile, we are reliably informed
that Mr. Cook, the learned arbitrator, referred the matter of stay of the
parties from proceeding with the London arbitration to the ICC Court,
which then decided that the arbitrator could continue with the arbitral
proceedings.
4. When the said award dated 29.09.2001 was sought to be
enforced by Centrotrade in India, a learned Single Judge of the Calcutta
High Court, after considering the objections of HCL, dismissed the
Section 48 petition filed by HCL, as a result of which the aforesaid
foreign award became executable in India. However, a Division Bench
of the Calcutta High Court, by its judgment dated 28.07.2004, held that
an appeal would be maintainable inasmuch as the London award could
not be said to be a foreign award, but that a two-tier arbitration clause
would be valid. However, since the Indian award and the London Award,
being arbitration awards by arbitrators who had concurrent jurisdiction,
were mutually destructive of each other, neither could be enforced, as a
result of which the appeal was allowed and the judgment of the learned
single Judge was set aside.
5. At this juncture, the matter came to a Division Bench of this
Court. Two separate judgments were delivered by S.B. Sinha, J. and
Tarun Chatterjee, J. reported in Centrotrade Minerals & Metals Inc.
v. Hindustan Copper Ltd. (2006) 11 SCC 245. After setting out the
facts of the case, S.B. Sinha, J. held that a two tier clause of the kind
M/S. CENTROTRADE MINERALS AND METALS INC.
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
A
B
C
D
E
F
G
H
78
SUPREME COURT REPORTS
[2020] 9 S.C.R.
contained in clause 14 of this agreement is non est in the eye of law and
would be invalid under Section 23 of the Indian Contract Act. In this
view of the matter, the foreign award could not enforced in India and
Centrotrade's appeal was therefore dismissed, the appeal filed by HCL
being allowed. Tarun Chatterjee, J. set out four questions in paragraph
134 as follows:
"134. We have heard Mr Sarkar, learned Senior Counsel appearing
for Centrotrade and Mr Debabrata Ray Choudhury, learned Senior
Counsel for HCL. I have also examined the entire material on
record including the arbitration agreement, the awards and
judgments of the Division Bench as well as the learned Single
Judge. Before us, the following issues were raised by the learned
counsel for the parties for decision in the appeals:
(1) Whether the second part of clause 14 of the agreement
providing for a two-tier arbitration was valid and permissible in
India under the Act?
(2) If it is valid, on the interpretation of clause 14 of the agreement,
can it be said that the ICC arbitrator sat in appeal against the
award of the Indian arbitrator?
(3) Whether the ICC award is a foreign award or not?
(4) Whether HCL was given proper opportunity to present its
case before the ICC arbitrator?"
6. These questions were answered by stating that the two-tier
arbitration process was valid and permissible in Indian law; that the ICC
arbitrator sat in appeal against the award of the Indian arbitrator; that
the ICC award was a foreign award; but that since HCL was not given
a proper opportunity to present its case before the ICC arbitrator,
Centrotrade's appeal would have to be dismissed and HCL's appeal
allowed.
7. The matter then came on a reference before a 3-Judge bench
of this Court and is reported in Centrotrade Minerals & Metal Inc.
v. Hindustan Copper Ltd. (2017) 2 SCC 228. The reference order
was referred to in paragraph 1 of the judgment of Lokur, J., as follows:
"These appeals have been referred [Centrotrade Minerals &
Metals Inc. v. Hindustan Copper Ltd., (2006) 11 SCC 245] to a
Bench of three Judges in view of a difference of opinion between
A
B
C
D
E
F
G
H
79
the two learned Judges of this Court. The controversy is best
understood by referring to the proceedings recorded on 9-5-2006:
Hon'ble Mr Justice S.B. Sinha pronounced his Lordship's judgment
of the Bench comprising his Lordship and Hon'ble Mr Justice
Tarun Chatterjee.
Leave granted. For the reasons mentioned in the signed judgment,
civil appeal arising out of SLP (C) No. 18611 of 2004 filed by
M/s Centrotrade Minerals and Metal Inc., is dismissed and civil
appeal arising out of SLP (C) No. 21340 of 2005 (actually 2004)
preferred by Hindustan Copper Ltd. is allowed. In the peculiar
facts and circumstances of the case, the parties shall pay and
bear their own costs. Hon'ble Mr Justice Tarun Chatterjee
pronounced his Lordship's judgment disposing of the appeals in
terms of the signed judgment. In view of difference of opinion,
the matter is referred to a larger Bench for consideration. The
Registry of this Court shall place the matter before the Hon'ble
the Chief Justice for constitution of a larger Bench.
The decisions rendered by Sinha and Chatterjee, JJ. are reported
as Centrotrade Minerals & Metals Inc. v. Hindustan Copper
Ltd. [Centrotrade Minerals & Metals Inc. v. Hindustan Copper
Ltd., (2006) 11 SCC 245]"
Paragraph 5 of the aforesaid judgment set out the two questions
that arose in this case as follows:
"5. The issues that have arisen for our consideration, as a result
of the difference of opinion between the learned Judges, are as
under:
(1) Whether a settlement of disputes or differences through a
two-tier arbitration procedure as provided for in Clause 14 of the
contract between the parties is permissible under the laws of India?
(2) Assuming that a two-tier arbitration procedure is permissible
under the laws of India, whether the award rendered in the
appellate arbitration being a "foreign award" is liable to be enforced
under the provisions of Section 48 of the Arbitration and
Conciliation Act, 1996 at the instance of Centrotrade? If so, what
is the relief that Centrotrade is entitled to?
M/S. CENTROTRADE MINERALS AND METALS INC.
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
A
B
C
D
E
F
G
H
80
SUPREME COURT REPORTS
[2020] 9 S.C.R.
For the present, we propose to address only the first question and
depending upon the answer, the appeals would be set down for
hearing on the remaining issue. We have adopted this somewhat
unusual course since the roster of business allowed us to hear the
appeals only sporadically and therefore the proceedings before
us dragged on for about three months."
Since the first question was answered in the affirmative, the Court
concluded:
"Conclusion
48. In view of the above, the first question before us is answered
in the affirmative. The appeals should be listed again for
consideration of the second question which relates to the
enforcement of the appellate award."
8. This is how the appeals have been listed again for consideration
of the second question, which relates to enforcement of the London
award.
9. Shri Gourab Banerjee, learned senior counsel appearing on
behalf of Centrotrade, has taken us through the record and has relied
strongly on this Court's recent judgment in Vijay Karia v. Prsymian
Cavi E Sistemi SRL 2020 (3) SCALE 494. He then referred in detail
to the portions of the award which dealt with the natural justice aspect
of the case, as well as the judgment of the Single Judge of the Calcutta
High Court which dealt with the same. He then read out to us Chatterjee
J's views contained in Centrotrade [2006] (supra) and contended that
ample opportunity had been given by the arbitrator to HCL to present its
case, but that HCL, having an Indian award in its pocket, wanted
somehow to abort the London arbitration proceedings. It first filed the
suit that has been referred to, and obtained exparte ad interim stay
against parties from proceeding in the arbitration on 27.04.2000, which
was vacated by the Supreme Court only on 08.02.2001. Jeremy Cook
QC afforded as many as six opportunities to HCL to present its case
and bent over backwards by extending time for filing of submissions and
documents several times, and even considered documents that were
filed by HCL after the last deadline had been extended, and then passed
the award. He, therefore, attacked Chatterjee J's judgment, stating that
it was factually incorrect when it stated that a fair opportunity had not
been given to HCL to present its case. Several other judgments both
A
B
C
D
E
F
G
H
81
Indian and foreign were cited by Shri Banerjee in support of his
submission. Apart from relying heavily on the judgment in Vijay Karia
(supra), he relied upon the approach to a Section 48 proceeding by quoting
from Redfern and Hunter on International Arbitration 6thEdn. and
Merkin and Flannery on the Arbitration Act, 1996.
10. Shri Harin P. Raval, learned senior counsel appearing on behalf
of HCL, has taken a preliminary submission that the only point of
difference between S.B. Sinha, J. and Tarun Chatterjee, J. was on whether
the two-tier arbitration clause was valid in law. Once that point had been
answered, the question of being unable to present one's case, not having
been decided by S.B. Sinha, J., was not referred to the larger bench as
there was no difference of opinion between the learned Judges on this
aspect and therefore this aspect cannot now be adjudicated upon. Even
otherwise, he argued, basing his submissions on a list of dates and a
paper book of documents filed before this Court for the first time, to
show that as a matter of fact once the arbitrator had extended time, the
last extension being till 12.09.2001, he ought to have allowed further
time in which, apart from legal submissions furnished, documents could
have been furnished in support of HCL's case. This is particularly in
view of the fact that on 11.09.2001, a terrorist attack had taken place in
New York as a result of which globally, there was disruption of transport
and communication, and therefore it was very difficult for HCL to send
documents within the requisite time. He argued that had such documents
been seen, there can be no doubt that this one-sided award might well
have been in his client's favour, as a result of which serious prejudice
had been caused to his clients. Even otherwise, he argued that the issue
of jurisdiction was to be taken as a preliminary question before the learned
arbitrator, after which further proceedings were to take place. This was
never done by the learned arbitrator. Also, the learned arbitrator in
proceeding with the arbitration despite the ex parte ad interim stay
being granted by an Indian court resulted in his client being unable to
present his case before the arbitrator.
11. Having heard learned senior advocates for both parties, it is
first necessary to set out the portions of the award dated 29.09.2001
which deal with the aspect of HCL being unable to present its case
before the learned arbitrator. The learned arbitrator, after referring to
the Rajasthan High Court proceedings and the Supreme Court's vacation
of the stay, then found:
M/S. CENTROTRADE MINERALS AND METALS INC.
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
A
B
C
D
E
F
G
H
82
SUPREME COURT REPORTS
[2020] 9 S.C.R.
"7. As set out in paragraph 6 above, HCL, by a series of letters to
the International Court of Arbitration and to me, in my capacity as
arbitrator, maintained that any arbitration commenced under the
second paragraph of Clause 14 of the contract is null and void
and until August 2001, refused to participate in it, even though
they were invited by me to do so without prejudice to their
jurisdictional objections. Despite this stance, Fox & Mandal were
at all times consulted about the procedural aspects of this
arbitration, were asked for their submissions in relation to the
procedure, progress and substance of the dispute, received copies
of all correspondence passing between Centrotrade and myself
and of all submissions made and have been given every opportunity
to take any point which they wished to take in their defence. By
Orders made on 20th December 2000, 19th January 2001 and 3rd
May 2001, I directed that Centrotrade serve submissions and
supporting evidence, followed by HCL's Response and evidence
in support, with a right in Centrotrade to put in a reply in
accordance with a clear time table. When no Defence Submissions
or supporting evidence was served by HCLwithin the time
prescribed, I sent them a fax on 30th July 2001, giving them one
last opportunity to inform me by return of any intention on their
part to put in a Defence and to seek an extension of time for
doing so.
8. Following a further fax on 9th August 2001, in which I informed
the parties that I was proceeding with the Award, on 11th August
I received a fax from Fox & Mandal requesting anextension of
time of one month to put in a defence. On 16thAugust I ordered
that any submissions in support of an application for anextension
of time for a defence and any submissions on the substantive
merits of the dispute, together with any evidence relied on in
relation to the application and any submissions should be received
by me by 31st August 2001, in the absence of which I would not
give them any consideration. On 27thAugust Fox & Mandal sought
a further 3 weeks' extension of time for making their submissions
and serving supporting evidence. I allowed a final extension
forthese submissions and evidence until 12th September 2001.
Seventy - five pages of submissions were received by me on
13thSeptember 2001, without any supporting evidence or any
justification for not complying with my earlier orders. No grounds
A
B
C
D
E
F
G
H
83
were put forward for any application for an extensionof time for
putting in Defence submissions. Indeed no formal application was
made for an extension of time to do so. HCL have therefore not
attempted to justify their earlier stance nor to give me any reason
for considering their submissions on the merits which are made
out of time. Centrotrade have objected to these submissions
contending that they are inadmissible because of HCL's persistent
breaches of my orders. Nonetheless, though not bound to do so
because of their belated nature, I have considered those
submissions and taken them fully into account in making this
Award. I made plain in my orders that no further material provided
thereafter would be taken into account, and I have not done so.
9. In their submissions HCL maintained their arguments as to
lack of jurisdiction and the invalidity of this London Arbitration but
without prejudice to that, put forward submissions both on the
jurisdictional arguments, the nullity of the second paragraph of
the Arbitration clause in the contract and on the merits of the
dispute. It is clear that this dispute can be determined on the
documents turning, as it does essentially on points of construction
of the contract and matters of Indian law."
 (emphasis supplied)
Ultimately, the arbitrator awarded costs for the London proceeding,
declining to award costs for the arbitration that had taken place in India.
12. The learned Single Judge of the Calcutta High Court, while
dealing with the objections as to breach of natural justice, dismissed the
aforesaid objections as follows:
"Mr. Roy Choudhury then submits that in view of Section 48(1)(b)
of the Act, the award is not enforceable, as neither notice of
appointment of arbitrator was given to the respondent, nor was it
given opportunity to present its case. The arbitrator followed the
ICC Arbitration and Conciliation Rules, though they were not
mentioned by the parties in the arbitration agreement, hence in
view of Section 48(1)(b) of the Act the award was not enforceable.
Mr. Sarkar replies that the respondent was given all opportunities
to present its case, but it showed total non-cooperation with the
arbitrator. The arbitral procedure followed by the arbitrator does
not militate against the arbitration agreement.
M/S. CENTROTRADE MINERALS AND METALS INC.
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
A
B
C
D
E
F
G
H
84
SUPREME COURT REPORTS
[2020] 9 S.C.R.
I find that the petitioner approached the ICC International Court
of Arbitration on February 22nd, 2000. The respondent filed a suit
in the Court of Civil Judge, Junior Division, Khetry on March 28th
2000; it wanted to stop the second arbitration in terms of the
arbitration agreement. The arbitrator was appointed on June 7th,
2000. Till August 2001 the respondent maintained that the second
part of the arbitration agreement being against the public policy of
India, the arbitration through the ICC International Court of
Arbitration was not permissible. On this ground the respondent
refused to participate in the arbitral proceeding. It took the matter
upto the Apex Court. Ultimately when it failed to obtain any order
to stop the arbitration, it filed its submissions running into seventyfive pages. Though the papers reached the arbitrator beyond the
stipulated date, he has considered such submissions. He, however,
did not find any merit in the case made out by the respondent.
The arbitrator has recorded that at every stage he consulted the
procedural aspects with the solicitors representing the respondent.
There is no proof that the respondent ever objected to the rules
and procedure followed by the arbitrator orthat the arbitrator
followed a procedure not contemplated in the agreement. It is
apparent from the award that all opportunities were given to the
respondent to present its case. I find no merit in the contentions
that notice regarding appointment of the arbitrator was not given
to the respondent or that the terms of reference were settled
behind its back. The respondent had full knowledge of everything;
it was informed about everything. Hence I find no substance in
the grievance that the respondent was unable to present its case
or that procedure not contemplated by the agreement of the parties
was followed by the arbitrator."
13. In appeal, the Division Bench, in view of its finding that the
award is not a foreign award, declined to apply Section 50 of the
Arbitration Act, 1996 (hereinafter referred to as "Arbitration Act"), and
then stated that the London award is declared to be inexecutable so long
as the Indian Nil Award stands. In view of this finding, it did not go into
the natural justice point argued by HCL.
14. In the first round in this court, S.B. Sinha, J. did not go into the
natural justice point, in view of his finding that the arbitration clause
itself was null and void. Chatterjee, J., after agreeing with Centrotrade's
A
B
C
D
E
F
G
H
85
case on the arbitration clause, then went into issue no. 4 and held as
follows:
"Issue 4
Whether HCL was given proper opportunity to present its case
before the ICC arbitrator?
164. Under Section 48(1)(b) enforcement of a foreign award
can be refused if:
"48. (1)(b) the party against whom the award is invoked was not
given proper notice of the appointment of the arbitrator or of the
arbitral proceedings or was otherwise unable to present his
case;"(emphasis supplied)
165. In the case at hand, HCL had the knowledge of appointment
of the arbitrator. In fact, it had approached the Indian courts to
stall the ICC arbitral proceedings. On a special leave petition filed
by Centrotrade against the order of the Rajasthan High Court
staying the ICC arbitral proceedings, an order was passed by this
Court by which the stay order of the Rajasthan High Court was
vacated on 8-2-2001 and directions were given for the ICC
proceedings to continue in accordance with law.
166. It is true, in his award, Mr Jeremy Lionel Cooke, the ICC
arbitrator has noted that he was appointed by ICC on 7-6-2000
and that HCL refused to participate in the arbitral proceedings on
the ground that the second arbitration clause in the contract was
null and void. He directed Centrotrade and HCL to file submissions
and supporting evidence through orders dated 20-12-2000,
19-1-2001 and 3-5-2001. However, HCL did not comply with these
orders. On 30-7-2001, he sent a fax to HCL to find out whether
they intended to file their defence. He sent a further fax on
9-8-2001 informing them that he was proceeding with the
award. (emphasis supplied) Then on 11-8-2001, the ICC arbitrator
received a reply seeking extension of time. He granted time till
31-8-2001. He received another request from HCL's
representatives on 27-8-2001 for further extension of time. He
granted extension till 12-9-2001. He received the first set of
submissions filed by HCL, without supporting evidence, on
13-9-2001. He considered those submissions and took them into
M/S. CENTROTRADE MINERALS AND METALS INC.
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
A
B
C
D
E
F
G
H
86
SUPREME COURT REPORTS
[2020] 9 S.C.R.
account while making the award. He has further recorded in his
award that:
"I made plain in my orders that no further material provided
thereafter would be taken into account, and I have not done
so."
(emphasis supplied)
This last statement indicates that he received further material from
HCL, which he did not consider while making the award. On the
face of it, it seems that HCL was given sufficient opportunity to
present its case by the arbitrator. However, this question must be
looked into from the then existing situation.
167. It must be noted that this Court vacated the stay on the
proceedings on 8-2-2001. The first direction of the ICC arbitrator
to the parties, after the order of this Court on 8-2-2001, to serve
submissions to him was made on 3-5-2001 i.e. after a time gap of
nearly 3 months. Cooperation of HCL was next requested only
on 30-7-2001 i.e. after a time gap of nearly 2 months. Then the
communication on 9-8-2001 stated that the arbitrator was
proceeding with the award. This time there was a response from
HCL. Upon these requests, a time-limit of nearly one month ending
on 12-9-2001 was given to HCL. The arbitrator received the first
set of submissions filed by HCL on 13-9-2001. Then he made the
award 16 days later on 29-9-2001. It seems that between
13-9-2001 and 29-9-2001, he did receive further material from
HCL which he did not consider while making the award on the
ground that they were received after the time-limit granted by
him to HCL had lapsed.
168. It is clear from the above layout of facts that there have
been delays in the arbitral proceedings right from the beginning
when Centrotrade approached ICC on 22-2-2000. Most of the
delays were due to HCL's refusal to participate in the proceedings.
However, there were some delays which cannot be related to
HCL's conduct. For instance, the period from 8-2-2001 when the
order of this Court was made to 3-5-2001 when the first direction
of the arbitrator was made. The whole arbitral proceeding was
conducted in a manner indicative of lack of urgency. Further, I
find merit in the submission of HCL that due to the total dislocation
A
B
C
D
E
F
G
H
87
of air traffic caused by the terrorist attack of 11-9-2001, the
materials sent by HCL to the ICC arbitrator reached late. Under
these circumstances, a delay of few days in serving their
submissions with supporting evidence, after having accepted to
participate in the arbitral proceedings, seems excusable and should
have been excused. Considering the overall picture of the
circumstances and the delays, refusal of the arbitrator to consider
the material received by him after 13-9-2001 and before
29-9-2001, seems to be based on a frivolous technicality. The
arbitrator ought to have considered all the material received by
him before he made the award on 29-9-2001. Considering the
decisions in Hari Om Maheshwari v. Vinitkumar Parikh [(2005)
1 SCC 379] and Minmetal Germany GmbH v. Ferco Steel Ltd.
[ (1999) 1 All ER (Comm) 315] it is true that where a party is
refused an adjournment and where it is not prevented from
presenting its case, it cannot, normally, claim violation of natural
justice and denial of a fair hearing. However, in the light of the
delays, some of which were not attributable to HCL's conduct, it
was only fair to excuse HCL's lapse in filing the relevant material
on time. Therefore, it can be said that HCL did not get a fair
hearing and could not effectively present its case.
169. For the reasons aforesaid, I am of the view that HCL could
not effectively present its case before the ICC arbitrator and
therefore enforcement of the ICC award should be refused in
view of Section 48(1)(b) of the Act. Accordingly, the judgment of
the Division Bench and also the judgment of the learned Single
Judge of the Calcutta High Court must be set aside and the matter
be remitted back to the ICC arbitrator for fresh disposal of the
arbitral proceedings in accordance with law after giving fair and
reasonable opportunity to both the parties to present their cases
before him. In view of the fact that I have set aside the award of
the ICC arbitrator on the ground that HCL was unable to
effectively present its case before the ICC arbitrator, in compliance
with Section 48(1)(b) of the Act, I direct the ICC arbitrator to
pass a fresh award within three months from the date of
commencement of the fresh arbitral proceedings."
15. The law on the subject matter of Section 48(1)(b) of the
Arbitration Act has been laid down in a recent judgment of this Court in
M/S. CENTROTRADE MINERALS AND METALS INC.
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
A
B
C
D
E
F
G
H
88
SUPREME COURT REPORTS
[2020] 9 S.C.R.
Vijay Karia (supra). In paragraph 21 of the aforesaid judgment, this
Court stated that it was important to note that no challenge was made to
the aforesaid award under the English arbitration law, though available,
just as in the facts of the present case. This Court then set out the
parameters of a Section 48 challenge which reaches this Court as follows:
"24. Before referring to the wide ranging arguments on both sides,
it is important to emphasise that, unlike Section 37 of the Arbitration
Act, which is contained in Part I of the said Act, and which provides
an appeal against either setting aside or refusing to set aside a
'domestic' arbitration award, the legislative policy so far as
recognition and enforcement of foreign awards is that an appeal
is provided against a judgment refusing to recognise and enforce
a foreign award but not the other way around (i.e. an order
recognising and enforcing an award). This is because the policy
of the legislature is that there ought to be only one bite at the
cherry in a case where objections are made to the foreign award
on the extremely narrow grounds contained in Section 48 of the
Act and which have been rejected. This is in consonance with the
fact that India is a signatory to the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards, 1958 (hereinafter
referred to as "New York Convention") and intends - through this
legislation - to ensure that a person who belongs to a Convention
country, and who, in most cases, has gone through a challenge
procedure to the said award in the country of its origin, must then
be able to get such award recognised and enforced in India as
soon as possible. This is so that such person may enjoy the fruits
of an award which has been challenged and which challenge has
been turned down in the country of its origin, subject to grounds to
resist enforcement being made out under Section 48 of the
Arbitration Act. Bearing this in mind, it is important to remember
that the Supreme Court's jurisdiction under Article 136 should not
be used to circumvent the legislative policy so contained. We are
saying this because this matter has been argued for several days
before us as if it was a first appeal from a judgment recognising
and enforcing a foreign award. Given the restricted parameters
of Article 136, it is important to note that in cases like the present
- where no appeal is granted against a judgment which recognises
and enforces a foreign award - this Court should be very slow in
interfering with such judgments, and should entertain an appeal
A
B
C
D
E
F
G
H
89
only with a view to settle the law if some new or unique point is
raised which has not been answered by the Supreme Court before,
so that the Supreme Court judgment may then be used to guide
the course of future litigation in this regard. Also, it would only be
in a very exceptional case of a blatant disregard of Section 48 of
the Arbitration Act that the Supreme Court would interfere with a
judgment which recognises and enforces a foreign award however
inelegantly drafted the judgment may be. With these prefatory
remarks we may now go on to the submissions of counsel."
The Court then went on to refer to Minmetals Germany GmbH
v. Ferco Steel Ltd. (1999) C.L.C. 647 in paragraph 59, and Jorf Lasfar
Energy Co. v. AMCI Export Corp. 2008 WL 1228930 in paragraph
61 as follows:
"59.The English judgments advocate applying the test of a
person being prevented from presenting its case by matters
outside his control. This was done in Minmetals Germany
GmbH v. Ferco Steel Ltd. (1999) C.L.C. 647 as follows:
"In my judgment, the inability to present a case to arbitrators
within s.103(2)(c) contemplates at least that the enforcee has
been prevented from presenting his case by matters outside
his control. This will normally cover the case where the
procedure adopted has been operated in a manner contrary to
the rules of natural justice. Where, however, the enforcee has,
due to matters within his control, not provided himself with the
means of taking advantage of an opportunity given to him to
present his case, he does not in my judgment, bring himself
within that exception to enforcement under the convention. In
the present case that is what has happened"
xxx xxxxxx
61. An application of this test is found in Jorf Lasfar Energy
Co. v. AMCI Export Corp. 2008 WL 1228930, where the U.S
District Court, W.D. Pennsylvania decided that if a party fails to
obey procedural orders given by the arbitrator, it must suffer the
consequences. If evidence is excluded because it is not submitted
in accordance with a procedural order, a party cannot purposefully
ignore the procedural directives of the decision-making body and
then successfully claim that the procedures were unfair or violative
M/S. CENTROTRADE MINERALS AND METALS INC.
v. HINDUSTAN COPPER LTD. [R. F. NARIMAN, J.]
A
B
C
D
E
F
G
H
90
SUPREME COURT REPORTS
[2020] 9 S.C.R.
of due process. Likewise, in Dongwoo Mann+Hummel Co.
Ltd. v. Mann+Hummel GmbH (2008) SGHC 275, the Singapore
High Court held:
"145. A deliberate refusal to comply with a discovery order is
not per se a contravention of public policy because the
adversarial procedure in arbitration admits of the possible
sanction of an adverse inference being drawn against the party
that does not produce the document in question in compliance
with an order. The tribunal will of course consider all the
relevant facts and circumstances, and the submissions by the
parties before the tribunal decides whether or not to draw an
adverse inference for the non-production.