' JAMAL KHAN MANDOKHAIL, J.--The plaintiff contended that the defendants Nos.1 to 5 are part of "Fal Group" owned and run by the defendant No.6. The plaintiff purchased a vessel m.t. "GAMMA" from the defendant No.1, for the price of US$7,899,547.24 through a Memorandum of Agreement (the MoA) dated 17th December, 2014. The plaintiff deposited as amount of US$1,379,909.44 as advance in the bank account of Fal group, maintained in the name of Fal Energy FZCO (the defendant No.5). A dispute arose between the plaintiff and the defendant No.1, as such, in terms of clause 10 of the agreement, the matter was referred to panel of the Arbitrators at England with the intervention of the London Maritime Arbitrators Association (LMAA). Before the Arbitrators, the claim of the plaintiff was for the recovery/return of the deposited amount of US$ 1,379,909.44 with damage and interest. The Arbitral Tribunal announced its Award on 14th July 2015 in the following terms: "...The following sums to be paid to the Plaintiff by the Defendant No.1, being part of the Defendant Fal Group: a) US$ 1,379,909.44 with interest at the contractual rate (i.e.5% per annum) from 21-01-2015 until payment. b) .56,301 towards recoverable cost. c) Interest on the sum of 56,301 at the rate of 5% per annum and pro rata, compounded at three monthly rest from the date of award until payment.
2. The plaintiff approached the High Court of Justice Queens Bench Division Commercial Court for enforcement of the award, which was ordered on 14th July 2016. According to the plaintiff, the defendants Nos.1 to 5 in order to avoid the arbitral award, agreed to sell one of its another vessel named m.t. "ZETA", to the defendant No.7, who despite knowledge of the claim of the plaintiff, agreed to purchase the same, with mala fide intention, and renamed the vessel as m.t. "MALIN" without proper documentation and legal authority. The plaintiff alleged that the vessel' is beached within the territorial jurisdiction of the Province of Balochistan, therefore, this Court has the jurisdiction to entertain the suit. The plaintiff stated that after the Arbitral Award, the defendants Nos.1 to 6 were not permitted to sell their asset including the vessel in question, but they did do, therefore, through the suit, the plaintiff has prayed as under: "It is, therefore, prayed that this Hon'ble Court may be pleased to:- A. Order that the Foreign Award dated 14-7-2015 may be recognized and enforced in the same manner as a judgment or order of a court in Pakistan for the following sums: - i) US$ 1,379,909.44 with interest at the contractual rate (i.e.5% per annum) from 21-01-2015 until payment. Ii) 56,301 towards recoverable cost. Iii) Interest on the sum of 56,301 at the rate of 5% per annum and pro rata, compounded at three monthly rest from the date of award until payment.
B. Grant an injunction in the nature of Mareva Injunction directly the vessel m.t "ZETA" (IMO No. 8706167) or called with any other name, her equipments, apparels and tackles be attached/arrested and may not be allowed to leave the jurisdiction of this Hon'ble High Court and further may not be allowed to be beached and or dismantled, until the amount awarded in the Foreign Award is paid. C. Upon failure of the Defendants to make payment of the amount awarded in the Foreign Award, direct that the said vessel m.t "ZETA" (IMO No. 8706167) or called with any other name be sold along with her equipments apparels and tackles and the claim of the Plaintiff be satisfied against the sale proceeds of the said vessel. D. Grant cost of the application. E. Grant any further and better relief as may be deemed appropriate by this Hon'ble Court in the interest of justice."
3. The learned counsel for the defendant. No.7 filed an application under Order VII, Rule 11, C.P.C.
Along with the relevant documents, with a prayer to reject the plaint. The learned counsel stated that the defendant No.7 is neither a party, nor is the vessel in question a subject matter of the award, therefore, the suit is not maintainable under the law. He further alleged that the plaintiff has already approached the High Court of Justice, Queens Bench Division, Commercial Court for enforcement of the award, wherefrom he has obtained a decree against the defendant No.1 for the amount specified therein, therefore, enforcement of the award for the second time through this suit cannot be done. The learned .Counsel added that the vessel in question was purchased prior to the recognition and enforcement of the award and that the defendant No.7 was unaware of the award, therefore, the suit against the vessel is not maintainable, as such, the learned counsel requested for rejection of the plaint.
4. The application was opposed by the respondent/plaintiff through reply. The learned counsel for the respondent/plaintiff stated that the vessel belongs to the defendants Nos.1 to 6, who with mala fide intention sold out the same to the defendant No.7, just to frustrate the award. He added that the moment the award is passed, the owners were not allowed to sell their assets, before realization of the amount, subject matter of the award, therefore, the transaction between the defendants Nos.1 to 6 and the defendant No.7 is illegal. The learned counsel stated that since the award is undisputed therefore, this Court can recognize and enforce it by arresting and auczioni:12 the vessel for the purpose of realization of the amount lie in the end stated that the suit is competent under the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act 2011, as such, the application is liable to be dismissed.
5. I have heard the learned counsel for the parties and have gone through the relevant provision of law. Pakistan is a signatory to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Award, therefore, the Parliament has enacted the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act 2011 (the Act). Pursuant to the Act, the High Court has the exclusive jurisdiction to adjudicate and settle the matters related to or arising from this Act, therefore, an application for the recognition and enforcement of a Foreign Arbitral Award can be filed under section 6 of the Act, which is reproduced herein-below:
6. Enforcement of foreign arbitral award.-(1) Unless the Court pursuant to section 7, refuses the application seeking recognition and enforcement of a foreign arbitral award, the Court shall recognize and enforce the award in the same manner as a judgment or order of a court in Pakistan.
(2) A foreign arbitral award which is enforceable under this Act. Shall be treated as binding for all purposes on the persons as between whom it was made and may accordingly be relied on by any of those persons by way of defence, set off or otherwise in any legal proceedings in Pakistan."
' The phrase "Foreign Arbitral Award" has been defined it sub-clause (e) of section 2 of the Act as under: "2(e) 'foreign arbitral award" means a foreign arbitral award made in a Contracting State and such other State as may be notified by the Federal Government, in the official Gazette."
6. The Arbitral Award means a decision by a person(s), who is/are chosen to settle differences between people or group of people, arising out of legal relationships, whether contractual or not.
According to subsection (2) of section 6 of the Act, the Foreign Arbitral Award shall be treated as binding for all purposes on persons as between whom it was made. Thus, it is evidently clear that the award shall be enforceable against those who are party to it, therefore, an application for recognition and enforcement of a Foreign Arbitral Award shall be filed by the parties to the agreement/award. The party applying for recognition and enforcement of the Foreign Arbitral Award must at the time of filing application, furnish the following documents as evidence before the Court in accordance with Article IV of the Convention: I. To obtain the recognition and enforcement mentioned in the preceding article, the party applying for recognition and enforcement shall, at the time of the application, supply: -
(a) The duly authenticated original award or a duly certified copy thereof;
(b) The original agreement referred to in Article 11 or a duly certified copy thereof,
2. If the said award or agreement is not made in an official language of the country in which the award is relied upon, the party applying for recognition and enforcement of the award shall produce a translation of these documents into such language. The transaction shall be certified by an official or sworn translator or by a diplomatic or consular agent."
' The aforesaid documents if prima facie prove that the Foreign Arbitral Award is genuine, then the applicant is not required to produce any further evidence.
7. A suit for Recognition and Enforcement of a Foreign Arbitral Award is to be filed in a Court of any contracting country, in whose territorial jurisdiction, the asset/person against which/whom, the enforcement of the Foreign Arbitral Award is sought, is/are located. If the subject matter of the award is money, the application shall be filed in the Court .Within whose jurisdiction, the Bank Account of the defaulting party is located. If the applicant does not find assets or money in the account maintained by the defaulting party, within the Court's jurisdiction, he may file another application for enforcement of the award in the Court, within whose jurisdiction another Bank Account of the defaulting party is maintained. Thus, selection of the Court by a party, seeking to enforce a Foreign Arbitral Award internationally, depends upon location of the assets/bank account of the losing party.
8. The Act emphasizes on two expressions, i.e. Recognition and enforcement, which are distinct and connote separate meanings. Recognition means the act of accepting that something is true, important or does exist for the purpose of legal proceedings. Whereas the expression enforcement means to give force to any law, rule, award, decision, etc. Thus, the party applying for the enforcement of the Foreign Arbitral Award, must produce enough material before the Court for its satisfaction to recognize the award as genuine. The Court shall thereafter start legal proceedings for enforcement of the foreign arbitral award, either to obtain title of the assets of the defaulting party or to realize the decretal amount of the award from the Bank account or through the sale proceeds of such properties.
9. The Act assigns power to the High. Court to exercise exclusive jurisdiction to adjudicate and settle matters related to or arising from a foreign arbitral award. Similarly, the Court can refuse recognition and enforcement of Foreign Arbitral Award on the grounds mentioned in Article V of the Convention, which is reproduced herein-below:
1. Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that:-
(a) The parties to the agreement referred to in Article II 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
(b) The parry against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; 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 recognized and 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
(e) The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority if the country in which, or under the law of which, that award was made.
2. Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that.:-
(a) The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or
(b) The recognition or enforcement of the award would be contrary to the public policy of that country".
10. In the case in hand, the execution of the award is undisputed, however, the defendant No.7 has raised an objection of its enforceability against him. In such view of the matter and considering the evidence produced by the plaintiff, the award in question is proved to be genuine, therefore, it is accordingly recognized. This is a fact that the defendant No.7 was not a party to the Arbitral Award, therefore, a question arises whether such an award can be enforced against third person?
Arbitration is a concessional process, in which the parties voluntarily agree for the determination of their dispute through their chosen person(s). The A moment an award is completed, it is permissible only against a party to the arbitration. It is, therefore, not true and enforceable against a person(s) not a party to the arbitration agreement. Besides, the subject matter of the award is money. As has been discussed above that for the enforcement of the award, the subject matter of which is money, the suit has to be tiled in the Court, within whose jurisdiction, the Bank Account of the defaulting party is located. Admittedly, the bank account of the defaulting party, i.e. Defendant No.1 is not located within the jurisdiction of this Court. The plaintiff emphasis that after passing of the award, the defendants Nos.1 to 6 were not permitted to sell the vessel, hence the plaintiff wants realization of the award through the sale proceeds of the vessel. I am not in agreement with the learned counsel for the simple reason that the vessel in question is not the subject matter of the award. The Court can enforce the money award, either through the bank account or to order realization of the amount through the assets or sale proceeds of the assets of the defaulting party.
Since the vessel has been sold by the defendants Nos. 1 to 6 before the enforcement of the award, therefore, she did not remain as their assets. Thus, there is no movable or immovable asset of the defendants Nos.1 to 6, within the jurisdiction of this Court, nor the defendant is party to the award, therefore, no effective order could be passed.
11. Moreover, this is an admitted fact that earlier, the plaintiff approached the Court at England, which not only recognized the award, but also decreed the amount. It is now for that Court to give effect to its own order. In view of the fact that already an application for recognition and enforcement of the award in question has been filed in a competent Court of law, which has passed an order thereon, therefore, unless and until it is proved that the award before that Court is unenforceable, this second application is not competent.
' Thus, in view of above, it is proved that in the given circumstances, the award cannot be enforced through this Court, therefore, the application is allowed, consequently the plaint stands rejected.
The office to prepare a decree sheet.
Plaint rejected.