Case Note & Summary
The dispute arose from a charter party agreement between the appellant and the respondent for transporting oil from the Arabian Gulf to India. Following disagreements, the matter was referred to arbitration in London, where the arbitrator awarded a sum to the appellant along with interest and costs of the reference, which were to be taxed if there was no agreement. The respondent paid the principal amount but failed to pay interest and the costs of reference. The appellant filed an application under the Foreign Awards (Recognition & Enforcement) Act, 1961 in the High Court of Bombay, which directed the respondent to pay interest and costs of the award but rejected the appellant's claim for costs of reference. The appellant appealed to the Division Bench, which upheld the Single Judge's decision, stating that there was no agreement for taxing the costs at the time of the petition. The Supreme Court found that the award was clear in stipulating that costs of reference should be paid and that the appellant had taken all necessary steps to have these costs taxed. The court emphasized that foreign awards are enforceable under the Act and should be executed as per their terms. The Supreme Court allowed the appeal, directing that the costs as taxed should be payable by the respondent, modifying the High Court's order accordingly.
Headnote
A) Arbitration Law - Enforcement of Foreign Awards - Costs of Reference - The appellant was entitled to costs of reference as awarded by the arbitrator, which were to be taxed in case of disagreement. The court held that the award must be executed as it is, and the costs of reference should be paid as determined by the arbitrator, as the parties failed to agree on the costs. The Division Bench's refusal to grant these costs was found to be erroneous. - Foreign Awards (Recognition & Enforcement) Act, 1961, Sections 6 - The court emphasized that the award clearly stipulated the payment of costs of reference and that the appellant had taken all necessary steps to have these costs taxed. - Held that the appellant should receive the costs as taxed (Paras 75-77).
Issue of Consideration
Whether the appellant is entitled to the costs of reference to arbitration as awarded by the arbitrator.
Final Decision
The Supreme Court allowed the appeal, directing that the costs of reference as taxed should be payable by the respondent, modifying the High Court's order to that extent.
Law Points
- Enforcement of foreign awards
- interpretation of arbitration awards
- costs of arbitration
- jurisdiction of courts in arbitration matters
