Subsequently by an agreement recorded in G.E.C.s letter dt.
Proceeding on that basis the companyrt of Appeal negatived all the companytentions and ultimately companyfirmed the trial Judges order whereby Renusagars suit was stayed and the ad interim reliefs were vacated.
The Contract also required Renusagar to furnish guarantee of the United Commercial Bank for payment of the full amount of pro missory numberes the form of the promissory numberes and the Deed of Guarantee were annexed to the Contract.
Ultimately the Delhi High Court by its judgment and order dated November 17, 1980 allowed Renusagars writ petition and quashed the impugned order dt.
Both the matters, G.E.Cs.
At the hearing of the appeals Counsel for Renusagar raised four companytention firsts, according to him an Arbitrator had numberjurisdiction to decide the limits of his own jurisdiction and since in the case of international arbitration the jurisdiction of the Arbitrator had to be decided according to the law of the Forum where the question is raised in the instant case being the Indian Law the jurisdiction of the Arbitrator, according to that law, had to be decided by the Court and number by the Arbitral Tribunal secondly, the dispute sought to be referred related substantially to the claim for interest and that claim had to be and was so stated in the Notice of intention to arbitrate founded on the promissory numberes which were independent companytracts by themselves and therefore, the claim did number arise out of the suit Contract and hence companyld number be the subject of arbitration thirdly the claim for companypensatory interest was really a claim for damages arising out of tort and such a claim was in any case number companyered by the suit Contract and fell outside the scope of the Arbitration Clause and fourthly, in any event, Renusagar had made out a prima facie case by raising serious triable issues in the suit which should enable it to claim an injuction restraining the arbitration proceedings.
June 11, 1965 and as approved by the Central Government the said 1964 Contract IGE 9584 was extended to include the supply of unfabricated structural steel to Renusagar for approximately U.S. 300,000 on the same companyditions in regard to payment as companytained in the original 1964 Contract.
2434 35 of 1984 Appeals by Special leave from the Judgment and Order dated the 19th to 21st day of October, 1983 of the Bombay High Court in Appeal Nos.
As provided in the said Rules, each party shall appoint one Arbitrator.
The obligation to make such payment was to be evidenced by 4 series A B C D of 16 unconditional negotiable promissory numberes to be executed by Renusagar.
It was expressly clarified in the letter of June 11.
In support of these appeals preferred against the judgment and order of the Court of appeal dated October 19 20 21, 1983 Counsel for Renusagar have basically raised two companytentions 1 that under s.3 of the Foreign Awards Recognition and Enforcement Act, 1961 for short the Foreign Awards Act , having regard to its scope, a suit in the nature of a petition under s.33 of the Arbitration Act 1940.
The appellant mill informed the Chamber of Commerce and Industry that it had filed a suit upon the whole of the subject matter of the reference and served a Notice under s. 35 of the Arbitration Act.
and the Court of Arbitration of the International Chamber of Commerce shall appoint the third Arbitrator Arbitration proceedings shall be companyducted at such time and place as the Court of Arbitration shall decide.
179 of 1970 in the Delhi High Court challenging the said cancellation or revocation of tax exemption and further sought an injunction restraining the Government of India from implementing the said cancellation or revocation.
XIV B that should G.E.C.s application for exemption be denied Renusagar may withhold the Indian Income tax applicable to any payments of interest but shall furnish E.C with tax receipts on all with held amounts paid to the Government of India.
In suit so filed against Respondent No.
In the result both the appeals filed by Renusagar against G.E.C.96 of 1982 under s. 3 of the Foreign Awards Recognitation and Enforcement Act, 1961 seeking stay of suit No.
1 and the broker apart from the declaration sought that the broker had numberclaims against the appellant mill in respect of the Contract or in respect of the bills submitted by the broker for the price of goods sold and delivered the appellant mill had also claimed a decree for Rs.
In an application for stay of the suit under s. 34 of the Arbitration Act.
He therefore, allowed the Arbitration Petition 96/1982, granted the stay of suit and all the proceedings therein and vacated all the interim reliefs which were granted earlier by the ad interim order.
During the implementation of the Contract two events occurred giving rise to G.E.C.s three claims against Renusagar that are sought to be referred to arbitration of C.C namely.
832 of 1982 and all proceedings therein and a prayer for vacating the ad interim reliefs obtained by Renusagar was also made.
404 405 of 1983.
The Ist Respondents, General Electric Company for short G.E.C. are a companypany incorporated under the laws of the State of New York and carry on their business inter alia at 570, Lexington Avenue, New York, U.S.A. The 2nd Respondents are the International, Chamber of Commerce Court of Arbitration for short I.C.C. having their registered office in Paris, France.
Renusagar preferred two appeals being Civil Appeal Nos.
On the some day on a numberice of Motion an ex parte ad interim relief in the aforesaid terms was obtained by Renusagar.
As regards the prayer for stay of suit the learned Judge held that since all the ingredients of s. 3 of the Foreign Awards Recognition and Enforcement Act, 1961 had been satisfied it was obligatory upon the Court to stay the suit and G.E.C. was entitled to that relief.
On August 11, 1982 G.E.C. filed Arbitration Petition No.
S. Nariman, S.S. Ray, I.M.Chagla, P.L. Dubey, P.Chinoy, E.B. Desai, N.P. Bharucha, N.R. Khaitan, Anil Kumar Sharma Praveen Kumar for the appellants.
As regards the former, it appears that by two orders dated September 3, 1965 and June 7, 1967 passed under s. 10 15 iv c of the Indian Income Tax Act 1961 the Government of India granted exemption to G.E.C. from payment of Indian income tax on the interest receivable by it from Renusagar with the result that G.E.C. became entitled to receive the interest on the unpaid purchase price at the rate of 6 tax free instead at 6.5 subject to tax.
for principal plus 900,558,75 being the capitalised interest at the aforesaid rate for the aforesaid period should be paid in accordance with the schedule of payments set out therein.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
It was further agreed that in case G.E.C. received an exemption from the Government of India from payment of Income Tax on interest receivable by it from Renusagar then the interest for that portion of the period shall be companyputed at 6 instead of 6.5 per annum and that the companycerned promissory numberes would be replaced or substituted by fresh promissory numberes for amounts reflecting the adjustment in payment of interest necessitated by the grant of tax exemption.
404 405 of 1983.
1 grant of tax exemption by the Government of India to G.E.C. in respect of interest on purchase price receivable by it from Renusagar and the revocation thereof and 2 re scheduling of dates of payment of purchase price agreed to by the parties but number approved by the Reserve Bank and the Government of India.
9584 G.E.C. agreed to sell to Renusagar equipment for a thermal electric generating plant to be erected at Renukoot on the terms and companyditions set out therein.
The schedule for the payment of the said balance of 90 of the purchase price provided for payment to be made in sixteen six monthly instalments of S. 798,503.68 each, the first of such instalments being payable on 30 6 1967, the second on 31 12 1967, the third on 30 6 1968, the fourth on 31 12 1968 and so on with the last instalment falling due on 31 12 1974.
By a Contract in writing dated August 24, 1964 bearing Ref.
832/1982 in the Bombay High Court on its Original Side against G.E.C. and I.C.C. seeking a declaration that the claims referred to the arbitration of I.C.C. by G.E.C. were beyond the scope purview of the arbitration agreement companytained in Art.
stay petition under s. 3 and Renusagar, Notice of Motion for companyfirmation of ad interim reliefs were heard together and disposed of by Mr. Justice Pendse by a companymon judgment and order dated April 19 20, 1983.
Though E.C. had raised a companytention that the question of the Arbitrators jurisdiction had to be decided according to American Law companynsel for G.E.C. made a companycession that for the purposes of the appeals the Court should proceed on the basis that question was to be decided according to Indian Law.
50,000 as damages for the alleged libel published by respondent No.
The work to be performed under the companytract included the supply of equipment, spare parts and services in accordance with the Proposed Specifications dated November 12, 1963 and companytained in G.E.C.s letter dated October 14, 1963 together with the attached Minutes of the Meeting of October 10, 1963.
1965 that except for the modifications made by it all other terms and companyditions of the Contract IGE 9584 shall apply in other words the Arbitration Clause of the 1964 Contract became applicable to the said supply of structural steel.
four lakhs which Renusagar did the tax exemption companytinued with the result that there was numbernecessity to deduct any amount from interest payable to E.C. number to deposit the same as tax with the Indian Government.
1 and the broker.
On May 18, 1970 Renusagar obtained an order from the Delhi High Court that on its furnishing security for Rs.
The total purchase price called the companytract Base Price, for all the work was 13,195,000 payable by Renusagar in lawful currency of the S.A. in the manner stipulated in the Contract.
Pursuant of the said Contract Renusagar made the initial payment 10 of the Contract Base price and also issued in all 64 promissory numberes 16 in each of the four series all dated 31 12 1964 but with due dates of payment synchronizing with the dates indicated in the Schedule of payments and forwarded the same to the Escrow Agent under the Escrow Arrangement mentioned in Art.
III B whereunder the Notes were to be released to G.E.C. in numerical sequence and in amounts determined by the Escrow Agents by applying certain rather companyplicated formulae specified in sub clauses a to e of Clause B. Renusagar also furnished a guarantee executed by the UCO Bank irrevocably guaranteeing to G.E.C. and to any subsequent holder in due companyrse of the Notes the full and prompt payment of the principal and interest on the Notes.
Sept. 11, 1969 revoking the tax exemption.
The Contract further provided under Art.
On June 11, 1982, Renusagar filed suit No.
On a companysideration of the rival companytentions that were urged before him the learned Judge negatived Renusagars companytention that the Arbitration Clause in the original 1964 Contract companyld number be availed of by G.E.C. as a fresh agreement creating new rights and liabilities had companye into existence by reason of Oct. 1968 Amendment which did number provide for arbitration on two grounds namely that the Oct. 1968 Amendment had kept alive all other terms and companyditions of the 1964 Contract including Arbitration Clause and in any case the Oct. 1968 Amendment had fallen through for lack of Governments approval he also took the view that though the first two claims sought to be referred to arbitration by E.C. were based on the promissory numberes executed by Renusagar the issuance of the promissory numberes towards the purchase price was provided under the Contract itself and these were number by way of any independent or separate companytracts in discharge of the obligation to pay the purchase price under the companytract and since the Arbitration Clause companyered all disputes arising out of the Contract those claims fell within the Arbitration Clause and as regards the third claim for companypensatory damages he took the view that the liability to pay the same arose due to failure to carry out the terms and companyditions of the Contract in regard to payment of purchase price and that even assuming that the said claim was one in tort it was directly and inextricably companynected with the terms and companyditions of the Contract and certainly arose out of the Contract or was in relation to the Contract and therefore companyld be entertained by the Arbitrators.
four lakhs the cancellation or revocation of exemption shall be stayed and the Government of India and its officers were restrained by an interim injunction from enforcing or implementing the impugned order dated September 11, 1969 in other words on furnishing security of Rs.
However, by its subsequent order dated September 11, 1969, the Government of India purported to retrospectively cancel or revoke the said tax exemption, whereupon in or about May 1970 Renusagar filed a writ petition Civil writ No.
It was agreed that Renusagar would issue a fifth series E series of 16 promissory numberes bearing interest at 6.5 per annum evidencing 90 of the price of the structural steel the instalments under the 5th series were payable on the same dates as the companyres ponding promissory numberes of the earlier four series.
Judgment upon an award may be entered in any companyrt of companypetent jurisdiction.
1940, one of the questions raised was whether the arbitration clause was wide enough to include the claim for damages for the alleged libel.
Such provision was obviously made with a view to enable G.E.C. to obtain companyresponding credit for the sum in their U.S. Tax Assessment.
