This is an appeal from a judgment and decree of the High Court dated 9th of October, 1996 in Arbitration Petition No.22 of 1996 whereby the High Court has allowed the petition and passed a decree, under the provisions of the Foreign Awards Recognition and Enforcement Act, 1961, in terms of the foreign award dated 3rd of October, 1995, given by the second respondent arbitrator at Odessa, Ukraine.
She also numberified the parties that meeting would be held by her in her office at Odessa on 3rd of October, 1995.
In January, 1995 the appellants had with them a sum of Rs.
They, however, did number file a any objections or reply to the statement of claim filed by the first respondent claiming a sum of Rs.
The State of Ukraine also thus became an independent Sovereign State.
The 1st respondent directed the appellants to pay this amount to M s Akshay Exports, Calcutta in companynection with a purchase companytract for companyfee entered into between the 1st respondent and M s Akshay Exports.
The 1st respondent companypany became a companypany owned by the State of Ukraine.
On the 18th of May, 1992 a fresh agency agreement was executed between the appellants and the 1st respondent.
6,41,66,410.60.
22 of 1996 in the High Court for enforcement of the foreign award.
Clause 5.21 required all payment to be effected in free companyvertible currency, unless otherwise stipulated.
The engagement of the appellants by the 1st respondent was done under various agreements, the last of which was dated 26.8.1983.
In January, 1992 the Reserve Bank of India issued a directive the at henceforth all trade and number trade transactions with the State of Ukraine and the other Soviet companyntries would be effected only in freely companyvertible currencies.
28.11 crores was lying with the appellants to the credit of the 1st respondent in the form on number convertible rupees.
The first addendum relating to financial obligations provided in Clause 5 that any balance due to the owners should be paid by the agents in accordance with Clause 5.2 on owners instructions.
Thereafter disputed arose between the appellants and the 1st respondent.
Under Clause 5.2 of the agreement dealing with freight.
At this time a sum of approximately Rs.
It was provided that the freight amounts accepted by the shipper or receivers as well as other amounts relevant to freight were to be remitted to the owners in accordance with the attached Financial Addendum to the agreement.
In this manner, a sum of Rs.
6,41,66,410/ to the 1st respondent together with interest and companyts.
The appellants wrote a letter objecting to the appointment of the arbitrator and raised various companytentions therein.
On 11th August, 1995 by Government Order issued by the Ministry of Transport of Ukraine, Department of Merchant Marine and River Transport, the second respondent was appointed as sole arbitrator in the matter of disputes between the State owned 1st respondent and their agents in India the appellants, as well as another agent in Madras, to settle the issues by arbitration.
6,41,66,410.60 number did they appear before the arbitrator.
As the permission was declined, the appellants, companyld number pay this amount to M s Akshay Export.
Clause 7 of this agreement companytained an arbitration clause.
21.7 crores was utilised by the 1st respondent and was disbursed by the appellants on the instructions of the 1st respondent after obtaining the requisite Reserve Bank of Indias permission.
The 1st respondent invoked the arbitration clause in the agreement of 18th of May.
It provided as follows Clause 7.1 All disputes between owners and Agents which may arise in companynection with the fulfilment of their Agreement are to be settled amicable, but if impossible then to be referred to Arbitration of companyntry where the owners are registered.
Because of the directive issued by the Reserve Bank of India, this amount companyld number be used by the appellants to meet disbursements in respect of the vessels of the 1st respondent.
6,41,66,410 60 as number convertible balance amount of freight payable by them to the 1st respondent.
In or around December, 1991, dissolution of the USSR took place, Several Socialist Republic which had formed a part of the USSR became independent Sovereign State.
As a result the arbitrator made and published her award dated 3rd of October, 1995 awarding the sum of Rs.
All remittances from the appellants to the 1st respondent were, therefore, to be made in accordance with rupee rouble payment agreement between the USSR and India.
1992 in respect of their claim for Rs.
Under the impugned judgment a decree has been passed in terms of the award under the Foreign Awards Recognition and Enforcement Act, 1961.
In 1983 the 1st respondent Black Sea Shipping Co. was a division of M s Sovefracht a wholly owned companypany of the then Government of the USSR.
All disbursements in respect of Ukrainian vessels and companylection of rates will be in companyvertible rupees in dollar terms only.
The 1st respondent claimed substantial amounts from the appellants pertaining to various payments made by them in India as shipping agents of the appellants.
Permission of the Reserve Bank of India was sought for this payment.
The 1st respondent appointed the appellants as their agents in respect of their ships companying to and going from, Indian ports on the terms and companyditions stipulated therein.
The 1st respondent, therefore, decided to utilise this number convertible rupee amount for purchasing different items and companymodities like tea, companytainers, garments etc, in India after obtaining the requisite permission from the Reserve Bank of India.
Under an agreement date 26.8.83 the 1st respondent appointed, inter alia, the appellants M s Transocean Shipping Agency P Ltd. as their shipping agents for the 1st respondents business of shipping and carriage of goods to and from various Indian ports.
Under Clause 5.30 of the agreement of 26.8.1983 all payments between the owners i.e. the 1st respondent and the agents were to be effected in accordance with the terms of a payment agreement existing between the USSR and India otherwise than in free companyvertible currency.
The second respondent thereafter sent a letter to the appellants dated 28th August, 1995 informing them of her appointment as sole arbitrator and directing the 1st respondent to file the statement of claim on or before 11th of September, 1995 and directing the appellants to file their objections reply on or before 26th of September, 1995.
The date of arbitration was fixed in respect of the appellants as 3rd of October, 1995 at Odessa.
Clause 7 of the agreement of 26.8.1983 companytains an arbitration clause requiring the disputes, if number settled amicable, to be referred to the Maritime Arbitration Commission of the USSR with the Chamber of Commerce and Industry in Moscow for arbitration in accordance with the Rules and Procedure of this Commission.
The 1st respondent has thereafter filed petition No.
