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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AARTI

GAJANAN

PALKAR

Digitally

signed by

AARTI

GAJANAN

PALKAR

Date:

2026.03.05

15:32:31

+0530

CARBP-441-2017.doc

awards (“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 DAP

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and 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); and

c. 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 Bay

1

, 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 cour t 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 Rickmers

2

and Bhagwandas

3

. 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 th at 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 an d

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

Mahal

4

and Vijay Karia

5

. 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

Enercon

6

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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being 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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