NDLI: Oil & Natural Gas Commission Vs. Western Company of North America

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Arbitration Act Arbitration (Protocol and Convention) Act
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Specific Relief Act, 1963 (47 of 1963) Arbitration Act, 1940 (10 of 1940) Arbitration (protocol and Convention) Act, 1937 (30 of 1937)
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Arbitration Act, 1940-Sections 2(e), 14, 17, 30 and 33- Award-Only when transformed into a judgment and decree under Section 17 becomes enforceable-New York Convention-Article V(l)(e)-Expression 'not yet become binding on the parties'-lnterpretation and significance of-Test applicable-Enforceability as per law of the country which governs the award-Arbitration proceedings between American Company and ONGC-Award rendered in favour of American Company-ONGC invoking jurisdiction of Bombay High Court under Sections 30 & 33 to set aside award-Held Indian Court alone has jurisdiction to pronounce on validity/enforceability of award. Arbitration (Protocol and Convention) Act, 1937-Section 7- Conditions for enforcement of foreign awards-New York Convention-Article V( I )(e)-Effect of expression 'not yet become binding on the parties'-The clause-Recognition and enforcement of award-When arises. Specific Relief Act 1963-Section 41(b)-Conditions for applicability. Word & Phrases-'Not yet become binding on the parties'. A drilling contract was entered into by the appellant and the respondent which provided that in the case of differences arising out of the aforesaid contract, the matter shall be referred to arbitration, that the arbitration proceedings shall be held in accordance with the provisions of the Indian Arbitration Act, 1940, and that the validity and interpretation thereof shall be governed by the laws of India. The agreed venue for hearing was London. A dispute arose between the parties and it was referred to Arbitration. Consequent upon the inability of the two Arbitrators to agree on the matters outstanding in the reference, the Umpire entered upon the arbitration and straight away rendered his interim award, without affording any hearing to the parties and the same was lodged in the High Court at the instance of the respondent. Subsequently, the Umpire rendered a final award relating to costs. About a month after the lodging of the award in the High Court, the respondent filed a plaint in the U.S. District Court seeking an order confirming the interim and final awards and a judgment against the appellant for the payment of a sum of $ 256,815.45 by way of interest until the date of judgment and costs etc. The appellant, however, instituted a Petition under Sections 30 and 33 of the Arbitration Act for setting aside the aforesaid awards and for an interim order restraining the respondent from proceeding further with the action instituted in the U.S. Court. A Single Judge of the High Court granted exparte interim restraint order but vacated the same after hearing the parties. The High Court held that the action to enforce the award as a foreign award in the U.S. Court was quite in order and that the mere fact that a Petition to set aside the award had already been instituted in the Indian Court and was pending at the time of the institution of the action in the V .s. Court was a matter of no consequence for the purposes of consideration of the question as to whether or not the respondent should be restrained from proceeding further with the action in the U.S. Court, that it was open to the respondent to enforce the award in the U .S. Court and, therefore, it would not be appropriate to grant the injunction restraining enforcement, and that it was open to the appellant to contend before the U.S. Court that the petition for setting aside the award cannot be said to be vexatious or oppressive.In the appeal to this Court it was submitted on behalf of the appellant that the award sought to be enforced in the U .S. Court may itself be set aside by the Indian Court and in that event, an extremely anomalous situation would be created, that since the validity of the award in question and its enforceability have to be determined by an Indian Court which alone has jurisdiction under the Indian Arbitration. Act of 1940, the American Court would have no jurisdiction in this behalf, that the enforceability of the award must be determined in the context of the Indian Law as the Arbitration proceedings are subject to the Indian Law and are governed by the Indian Arbitration Act of 1940, and that if the award in question is permitted to be enforced in U.S. Court without its being confirmed by a court in India or U.S. Court it would not be in conformity with law, justice or equity. On behalf of the respondent it was contended that the action in the U.S.A. Court could not be considered as being oppressive lo the appellant and that even if it is so, the High Court has no jurisdiction to grant such a restraint order, and that the appellant had suppressed the fact that it had appeared in the USA court and succeeded in pursuading the USA Court to vacate the seizure order obtained by the respondent and thereby disentitled itself to seek any equitable order.
Judge	Hon'ble Mr. Justice M.P. Thakkar
Neutral Citation	1987 INSC 14
Petitioner	Oil & Natural Gas Commission
Respondent	Western Company Of North America
SCR	[1987] 1 S.C.R. 1024
Judgement Date	1987-01-16
Case Number	1557

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