Delhi High Court
Marina World Shipping Coporation ... vs Jindal Exports Private Limited on 21 March, 2007
Equivalent citations: 2007(3)ARBLR46(DELHI), AIR 2008 (NOC) 326 (DEL.) = 2007 C L C 1606, 2008 AIHC (NOC) 550 (DEL.) = 2007 C L C 1606
Author: Sanjay Kishan Kaul
Bench: Sanjay Kishan Kaul
JUDGMENT Sanjay Kishan Kaul, J.
1. A Charter Party Agreement was executed on 5.11.1994 in terms whereof the judgment debtor chartered the vessel of the decree holder. Disputes arose about the claim of the decree holder for demurrage which resulted in arbitration proceedings between the parties. This was a sequittor to arbitration Clause 19 of the Charter Party Agreement. The sole arbitrator Andreas Savva Christofides made and published his award dated 26.9.2000 at London, England. It may be noticed that the judgment debtor participated in the arbitration proceedings by filing replies and counter claims. The judgment debtor also addressed a letter dated 2.8.2000 to the arbitrator that they would like to proceed in the arbitration on documents and would like to submit further submissions which were so submitted. In terms of letter dated 1.9.2000 the judgment debtor called upon the arbitrator to give a reasoned award after going through its submission. It may be noticed at this stage that these facts are available from the records of company petition 278/2002 filed by the decree holder against the judgment debtor and the said records were called for in view of there being some controversy as to the extent of participation of the judgment debtor before the arbitrator.
2. The decree holder thereafter filed a petition before the Queens Bench Division which resulted in a judgment/decree dated 12.8.2004 under the Foreign Judgments (Reciprocal Enforcement) Act 1933 (hereinafter referred to as the Act of 1933). Pursuant to the said judgment a certificate was issued dated 21.10.2004. The purpose of this certificate was specified in the note appended at the end of the certificate which reads as under:
Note. This certificate is given in order to comply with Section 44A(2) of the Code of Civil Procedure (Amendment) Act 1937, which was an Act of the Indian Legislation (being Act No. VIII of 1937).
3. Another certificate has also been issued under Section 10 of the Act of 1933 dated 6.10.2004 certifying that the judgment granted by the Queens Bench Division was not stayed or suspended and the time available for its enforcement has not expired and thus the judgment was accordingly enforceable.
4. The decree holder thereafter filed the present petition for execution of the said judgment/decree. This execution has been contested by the judgment debtor. In view of the pleadings of the parties it was agreed that the following preliminary issue be framed and it was so framed on 1.2.2007:
Whether the execution petition is maintainable in view of the provisions of explanation to Section 44A of the Code of Civil Procedure, 1908?
5. Learned Counsels for the parties have thereafter proceeded to address their submissions on the aforesaid preliminary issue which goes to the root of the matter.
6. In order to appreciate the controversy it is necessary to first reproduce the provisions of Section 44A of the Code of Civil Procedure, 1908 (hereinafter referred to as the said Code), which reads as under:
44A. Execution of decrees passed by Courts in reciprocating territory.
[44A. Execution of decrees passed by Courts in reciprocating territory.
(1) Where a certified copy of decree of any of the superior Courts of any reciprocating territory has been filed in a District Court, the decree may be executed in India as if it had been passed by the District Court.
(2) Together with the certified copy of the decree shall be filed a certificate from such superior Court stating the extent, if any, to which the decree has been satisfied or adjusted and such certificate shall, for the purposes of proceedings under this section, be conclusive proof of the extent of such satisfaction or adjustment.
(3) The provisions of Section 47 shall as from the filing of the certified copy of the decree apply to the proceedings of a District Court executing a decree under this section, and the District Court shall refuse execution of any such decree, if it is shown to the satisfaction of the Court that the decree falls within any of the exceptions specified in Clauses (a) to (f) of Section 13.
[Explanation 1- "Reciprocating territory" means any country or territory outside India which the Central Government may, by notification in the Official Gazette, declare to be a reciprocating territory for the purposes of this section; and "superior Courts", with reference to any such territory, means such Courts as may be specified in the said notification.
Explanation 2.- "Decree" with reference to a superior Court means any decree or judgment of such Court under which a sum of money is payable, not being a sum payable in respect of taxes or other charges of a like nature or in respect to a fine or other penalty, but shall in no case include an arbitration award, even if such an award is enforceable as a decree or judgment.]]
7. A reading of the aforesaid provision shows that a decree is enforceable in case of a reciprocating territory. It is not in dispute that United Kingdom is such a reciprocating country. The preliminary issue arises out of Explanation 2 to Section 44A of the said Code. The explanation makes it clear that the decree in question would in no case include an arbitration award even if such an award is "enforceable as a decree or judgment". In the present case in pursuance to the arbitration award a decree has been passed. The question which arises is as to whether the said expression includes a situation where only an arbitration award per se is sought to be enforced as a decree of the Court or whether it would also include an award which has culminated in a decree or judgment. If the exception carved out includes a judgment/decree based on an arbitration award, then the judgment debtor is liable to succeed in its preliminary objection.
8. It is the submission of the learned Counsel for the decree holder that Explanation 2 is applicable only in respect of an endeavor to obtain the execution of an award per se and would not include in its ambit an award which has been sanctified by the Court by a decree or judgment being passed in pursuance to the award. In order to substantiate his submissions, learned Counsel for the decree holder sought to explain the history of the development of the law of enforcement of awards under different Acts in the United Kingdom.
9. Learned Counsel referred to the English Arbitration Act, 1899 (hereinafter referred to as the Act of 1899) where Section 12 reads as under:
12. Enforcing award. - An award on a submission may, by leave of the Court or judge be enforced in the same manner as a judgment or order to the same effect.
10. Learned Counsel submitted that the legal position thus under the Act of 1899 is that an award by the leave of the Court or judge be enforced in the same manner as a judgment or order to the same effect.
11. Learned Counsel next referred to the English Arbitration Act, 1934 (hereinafter referred to as the Act of 1934) where Section 10 reads as under:
10. Entry of judgment in terms of award. - Where leave is given under Section 12 of the principal Act to enforce an award in the same manner as a judgment or order, judgment may be entered in terms of the award.
12. The reference to the principal Act is to the Act of 1899 and Section 10 provides that where leave is given under Section 12 of the Act of 1899 to enforce an award in the same manner as a judgment or order, judgment may be entered in terms of the award. This was submitted to be similar to the scheme under Section 17 of the Indian Arbitration Act, 1940 where on an arbitration award being made proceedings would be initiated to call upon the arbitrator to file the award in Court and thereafter either on no objections being filed or objections being dismissed a decree would follow in pursuance thereto. Learned Counsel for the decree holder also referred to the Commentary of Dicey and Morris on The Conflict of Laws (13th Edition) Volume 1 where the question of enforcement of the award under the Act of 1933 has been discussed. Rule 65 (1) has been set out as under:
Rule 65 - (1) An arbitration award made in a country outside the United Kingdom to which Part II of the Administration of Justice Act 1920 or Part I of the Foreign Judgments (Reciprocal Enforcement) Act 1933 applies is enforceable in the same manner as a judgment given by a court in that country, provided that the award has, in pursuance of the law in force in the country where it was made, become enforceable in the same manner as a judgment given by a court in that country.
13. The Commentary explains that the Act of 1933 was amended so as to make it applicable to awards which were made enforceable in the same manner as a judgment/order by a Court of a country in which the award was made. This was distinct from the Administration of Justice Act, 1920.
14. Learned Counsel also drew the attention of this Court to the provisions of Section 26 of the English Arbitration Act, 1950, which reads as under:
26. Enforcement of award (1) An award on an arbitration agreement may, by leave of the High Court or a Judge thereof, be enforced in the same manner as a judgment or order to the same effect, and where leave is so given, judgment may be entered in terms of the award.
(2) If a country court so orders, the amount sought to be recovered shall be recoverable (by execution issued from the country court or otherwise) as if payable under an order of that court and shall not be enforceable under Sub-section (1) above.
(3) An application to the High Court under this section shall preclude an application to the High Court.
15. Learned Counsel submits that this Clause gave a dual option to a party where the award itself could be enforced as a decree of the Court or leave could be taken of the Court in the form of a judgment or decree. The object of this is stated to be as enunciated in The Law and Practice of Commercial Arbitration in England (2nd Edition) by Sir Michael J. Mustill and Steward C. Boyd, which reads as under:
CHAPTER 28 Enforcement of the award A. INTRODUCTION An arbitrator's award, unlike an order or judgment of a court, does not immediately entitle the successful party to levy execution against the assets of the unsuccessful party or to apply to have him committed for contempt. It is first necessary to convert the award into a judgment or order of the court. Only then can the successful party levy execution. In this chapter we discuss first the various ways in which the successful party can invoke the assistance of the English court in order to obtain a judgment or order on which he can levy execution. Second, we discuss the conditions which have to be satisfied before a judgment or order can be obtained on an award which has been made in a foreign arbitration. Finally, we discuss the disciplinary action which may be taken by trade associations for on-compliance with awards.
16. The object is thus enunciated as one to facilitate enforcement of a decree in a foreign court.
17. Learned Counsel also sought to draw strength from the judgment of the Apex Court in Harendra H. Mehta and Ors. v. Mukesh H. Mehta and Ors. . In fact, the said judgment was also referred to by the learned Counsel for the judgment debtor in respect of his plea. The relevant portion is extract as under:
32. The judgment of this Court in Badat & Co., () is based on the English Common Law. Provisions of the Arbitration (Protocol and Convention) Act, 1937 were held to be inapplicable to the facts of the case. Here we are concerning with the provisions of Foreign Awards Act which give effect to the convention on the Recognition and Enforcement of Foreign Arbitral Awards held at New York on June 10, 1958 to which India was a party. To enforce a foreign award, what we have to see is: if it is a foreign award within the meaning of Section 2 of the Foreign Awards Act and conditions as prescribed by Section 7 for its enforcement exist. Under Section 4 of this Act, a foreign award shall, subject to the provisions of the Act, be enforceable in India as if it were an award made on a matter referred to arbitration in India. The Court has to apply the provisions of the foreign Awards Act to enforce a foreign award within the meaning ofSection 2 of the said Act. It would not be relevant to consider if the foreign award has attained finality in the country where it was made. Further, if a judgment has been obtained on the basis of the award in the country of its origin, the person in whose favor the judgment is made may also be entitled to file suit in this country based on that judgment if it satisfies the criteria laid by law in this country. That may give that person on alternative mode to enforce the award but that would not mean that the provision of foreign Awards Act can be given a go by. We, therefore, find no force in the submission of Mr. Ganesh that once the award attained finality in the Supreme Court of New York, proceedings to enforce foreign award would not be maintainable and that only suit could be filed on the foreign judgment, being the judgment given by the Supreme Court of New York. In Renusagar's case (AIR 1985 SC 1156) this Court said (at pp. 1181-82):
Moreover, an examination of the relevant provisions of this Act (Foreign Awards Act) and the Arbitration Act, 1940 will show that the schemes of the two Acts are not identical and as will be pointed out at the appropriate stage there are various differences which have a material bearing on the question under consideration and as such decisions on similar and analogous provisions contained in the Arbitration Act may not help in deciding the issue arising under the Foreign Awards Act because just as the Arbitration Act, 1940 is a consolidating enactment governing all domestic awards the Foreign Awards Act constitutes a complete code by itself providing for all possible contingencies in relation to foreign awards made pursuant to agreement to which Article II of the Convention Applies.
33. Thus, as held in Renusagar's case (1984) 4 SCC 679 : AIR 1985 SC 1156 Foreign Awards Act is a complete code in itself providing for all the possible contingencies in relation to foreign awards. Once it is held that an award is a foreign award, the provisions of the Foreign Awards Act would apply and where the conditions for enforcement of such an award exist as mentioned in Section 7 of this Act, the Court shall order the award to be filed and shall proceed to pronounce judgment granting award and upon the judgment so pronounced, decree shall follow. It is not material for the purpose of enforcement of a foreign award under the Foreign Awards Act that in any other country than India, a judgment has already been passed by a Court of competent jurisdiction in terms of that award. A party may have other remedy for filing a suit passed on a foreign judgment but that will not oust jurisdiction of the Court to enforce a foreign award under the Foreign Awards Act. Provisions as contained in Sections 13 and 14 of the Code of Civil Procedure (for short, the 'Code') would apply when a suit is brought on a foreign award. under section 44A of the Code, there is a provision for execution of decrees passed by Courts in reciprocating territory. Explanation I to this section defines "reciprocating territory" to mean any country or territory outside India which the Central Government may, by notification, in the Official Gazette, declare to be a reciprocating territory for the purposes of this section. Reciprocating territory specified inSection 44A of the Code may not be same as that specified in Clause (b) ofSection 2 of the Foreign Awards Act. We are not called upon to decide in the present proceedings what is the effect of the judgment given on the award in question in the United States and how the High Court would proceed in the matter when a suit has been filed on the basis of the judgment. The argument that the foreign award has merged in the judgment of the Supreme Court of the State of New York has, therefore, to be rejected.
18. Learned Counsel submitted that though the said case deals with a situation where the award emanated in USA which is not a reciprocal country, the proposition which emerged from the judgment was that if the award culminated into a judgment or decree in the foreign court, then the option even to file a suit to enforce the said judgment or decree was available. The proposition thus sought to be advanced is that though in the present case one is dealing with a judgment and decree of a reciprocal country, the basic principle would remain which is that the option is not only to proceed under the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the said Act). Since it is a reciprocal country the decree is contended to be one which is executable under Section 44A of the said Code. Learned Counsel also referred to the judgment of the Apex Court in Badat & Co. v. East India Trading Co. which has, in fact, been referred to in Harendra H. Mehta case (supra). The relevant discussion is as under:
44. It would be desirable at this stage to compare foreign judgments with foreign awards and bear in mind the difference between them. No doubt, both of them create new obligations. The judgment of a foreign sovereign is acommand of that sovereign which has to be obeyed within the territorial limits of that sovereign's jurisdiction. On the principles of comity it is, therefore, accorded international recognition provided it fulfillls certain basic requirements. A foreign award, on the other hand, which is founded on a contract of the parties and is not given the status of a judgment in the country in which it is made, cannot claim the same international status as the act of a foreign sovereign. As pointed out by Schmitthoff on the English Conflict of laws, at p. 489:
It follows that unless the plaintiff can satisfy the English court that the award is treated, in the country where it was made, like a judgment of the court he should sue on the original cause of action, but even in that case he should plead the award because it might in appropriate cases, be regarded by the English courts as conclusive between the parties.
These observations would perhaps now stand slightly modified by the view taken by the Court of Appeal in the Union Nationale case(1) in the sense that even an award which has not obtained the status of a judgment in the country in which it was rendered but which possesses an essential attribute of a judgment, that is, finality, it could be sued upon in another country.
45. Bearing in mind these principles we must consider what are the requirements of the laws of New York State for giving an award finality. In Appendix I to Sturges' Cases on Arbitration Law, the New York Arbitration Law, Article 84 of the New York Civil Practice Act, as in force on September 1, 1952, has been set out. Section 1461 which deals with confirmation of an award runs thus:
Motion to confirm award: At any time within one year after the award is made, as prescribed in the (1) (1959) 2 Q.B. 44. last section, any party to the controversy which was arbitrated may apply to the court having jurisdiction, as provided in section fourteen hundred fifty-nine for an order confirming the award; and thereupon the court must grant such an order unless the award is vacated, modified or corrected, as prescribed in the next two sections or unless the award is unenforceable under the provisions of section fourteen hundred fifty-eight. Notice of the motion must be served upon the adverse party or his attorney, as prescribed by law-for service of notice of a motion upon an attorney in an action in the same court. In the Supreme Court, the motion must be made within the judicial district embracing the country where the judgment is to be entered.
Then follows Section 1462 which deals with a motion to vacate award; Section 1462-a, which deals with a motion to modify or correct an award; Section 1463 which deals with 'notice of motion and stay'; Section 1464 which deals with 'entry of judgment on award and costs'; Section 1465 which deals with the judgment roll and Section 1466 which deals with effect of a judgment and its enforcement. It is clear from Section 1462 that in the motion to vacate an award a party to the arbitration can challenge the award on the following five grounds:
1. Whether the award was procured by corruption, fraud or other undue means.
2. Where there was evident partiality or corruption in the arbitrators or either of them.
3. Where arbitrators were guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced.
4. Where the arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, final and definite award upon the subject-matter submitted was not made.
5. If there was no valid submission or contract, and the objection has been raised under the conditions set forth in section fourteen hundred fifty-eight.
It will thus be seen that despite the finality spoken of by Rule 15E, this section enables the defendants to apply for vacating the award on certain grounds and thus imperil the finality accorded to the award by his contract. It is only after the objections under Section 1462 are disposed of that a judgment putting an end to all controversy, can be entered under Section 1464 which reads thus:
Entry of judgment on award and costs: Upon the granting of an order confirming, modifying or correcting an award, judgment may be entered in conformity therewith, as upon a referee's report in an action, except as is otherwise prescribed in this article. Costs of the application and of the proceedings subsequent thereto; not exceeding twenty-five dollars and disbursements, may be awarded by the court in its discretion. If awarded, the amount thereof must be included in the judgment.
After the judgment is pronounced a judgment roll is prepared and the judgment docketed as if it was rendered in an action. The effect of the judgment as enunciated in Section 1466 is as follows:
Effect of judgment and enforcement: The judgment so entered has the same force and effect, in all respects as and is' subject to all the provisions of law relating to, a judgment in an action ; and it may be enforced as if it had been rendered in an action in the court in which it is entered.
From all these provisions it would be abundantly clear that the award has no finality till the entire procedure is gone through and that the award as such can never be enforced. What is enforceable is the judgment. There is no provision in the law providing for taking proceedings for the confirmation of an award in which all objections to the award could be made except Section 1461. The proceedings taken there under must, however, culminate in a judgment. In this respect the procedure under the law of the New York State is quite different from that under the Arbitration law of Denmark. Apparently, that is why the plaintiffs, after obtaining the awards, went up to the Supreme Court of New York for obtaining a judgment confirming the awards. No doubt, as a result of the judgment the decision of the arbitrators became unchallengable in the New York State and for all practical purposes in India as well but in the process the award made by them has given way to the judgment of the Supreme Court of New York. It is this judgment which can now furnish a cause of action to the plaintiffs and not the awards.
46. No doubt, an award can furnish a fresh cause of action. But the award must be final. If the law of the country in which it was made gives finality to judgment based upon an award and not to the award itself, the award can furnish no cause of action for a suit in India. In these circumstances we hold that though the High Court of Bombay has jurisdiction to enforce a final award made in a foreign country in pursuance of a submission made within the limits of its original jurisdiction, the awards in question being not final, cannot furnish a valid cause of action for the suit. Upon this view we allow the appeal and dismiss the suit with costs throughout. The normal rule as to costs must apply because the choice of forum made by the plaintiffs was deliberate and with the knowledge that they were taking a risk in not seeking out the defendants at the place where they reside or carry on business. By Court-Following the opinion of the majority, the appeal is allowed with costs.
19. Learned Counsel for the judgment debtor, on the other hand, has drawn the attention of this Court to the order passed by the Queens Bench Division to submit that the wordings therein are akin to explanation II of Section 44A of the said Code. The relevant portion is as under:
IT IS ORDERED THAT
1. The Claimant has permission under Section 26 of the Arbitration Act 1950 to enforce an arbitration award between the parties made on 26th September 2000 by Andreas Savva Christofides as sole arbitrator, and relating to a charterparty between the parties dated 5th November 1994, in the same manner as a judgment or order of the Court.
20. The sum and substance of the submissions of the learned Counsel for the judgment debtor is that the said Act is a complete Code in itself and enforcement of any award must be in terms of the said Act alone. In this behalf it may be noticed that Part-II of the said Act deals with enforcement of certain foreign awards. Foreign awards have been defined in Section 44 of the said Act which reads as under:
44 Definition. - In this Chapter, unless the context otherwise requires, "foreign award" means an arbitral award on differences between persons arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India, made on or after the 11th day of October, 1960 -
(a) in pursuance of an agreement in writing for arbitration to which the Convention set forth in the First Schedule applies, an
(b) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made may, by notification in the Official Gazette, declare to be territories to which the said Convention applies.
21. Section 48 deals with the conditions for enforcement of foreign awards, which reads as under:
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
(b) the party against whom the award is invoked was not given proper notice to the appointment of the arbitrator or of the arbitral 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 decision 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
(e) the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.
(2) Enforcement of an arbitral award may also be refused if the court finds that -
(a) the subject-matter of the difference is not capable of settlement by arbitration under the law of India; or
(b) the enforcement of the award would be contrary to the public policy of India.
Explanation. - Without prejudice to the generality of Clause (b) of this section, it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption.
(3) If an application for the setting aside or suspension of the award has been made to a competent authority referred to in Clause (e) of Sub-section (1) the court may, if it considers it proper, adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable security.
22. Section 49 deals with the enforcement of foreign awards, which reads as under:
49. Enforcement of foreign awards. - Where the court is satisfied that the foreign award is enforceable under this Chapter, the award shall be deemed to be a decree of that court.
23. Learned Counsel for the judgment debtor submits that in terms of Clause (e) of Sub-section 1 of Section 48 of the said Act the enforcement of a foreign award may be refused if proof is furnished to the court that the award has not yet become binding on the parties or has been set aside or suspended. Learned Counsel submits that the object of obtaining the certificates which the decree holder has so obtained was to ensure that when the decree holder came for enforcement of the award the same was so enforceable. It is, thus, submitted that the objections which are available to the judgment debtor in terms of Section 48 of the said Act can be exercised by the judgment debtor. Learned Counsel fairly states that possibly the objections may be more restrictive in nature than what may be available in the present case in respect of enforcement of the decree of a foreign court but contends that the legal position is as stated above.
24. Learned Counsel also sought to derive strength from the provisions of Section 49 of the said Act that once the Court is satisfied that the foreign award is enforceable under this Chapter the award in any case is deemed to be a decree of that Court.
25. Learned Counsel submits that a closer reading of the judgment in Harendra H. Mehta case (supra) would show that what is propounded is that there is no bar to filing of a suit for enforcement of a judgment/decree but that is different and distinct from execution of a decree under Section 44A of the said Code as Explanation 2 excludes such execution process while not excluding a suit to be filed for enforcement of a judgment/decree.
26. Learned Counsel also submits that the preceding enactment to deal with the said situation prior to enactment of the said Act was the Foreign Awards (Recognition and Enforcement) Act 1961 and the observations in paragraph 33 of Harendra H. Mehta case (supra) would make it clear that the Act was held to be a complete Code in itself for the purposes of enforcement other than the remedy of filing of a suit. It is, thus, submitted that para materia situation would apply even in the present case.
27. On consideration of the submissions of the learned Counsels for the parties, in my considered view, it is obvious that Section 44A of the said Code was enacted to make the decrees of superior courts of reciprocating territories executable in the same manner as decrees passed in the Courts in India. However, the legislature in its wisdom has deemed it appropriate to carve out exceptions. The exception is really contained in Explanation 2 which excludes from within its ambit an arbitration award. The object is clear that where an award is executable as a decree, the Court should not straightaway execute the award. This position also flows from the existing legal position in India as it then was or is even now. Under the 1940 Act the process of the court had to be gone through to make the decree of the court executable. Under the 1996 Act the award is executable as a decree but the parties have an option to file objections under Section 34 of the said Act.
28. A reading of the provisions of Part-II of the said Act makes it clear that the mode and manner of enforcement of foreign award is specified therein. Section 48 itself specifies the nature of objections which can be raised by a party opposing the implementation and execution of an award which are to some extent similar to the provisions of Section 34 of the said Act. The enforceability of a foreign award is of course a pre-requisite since without the same there can be no question of even an endeavor to enforce the said award. In my considered view, the ambit and scope of Explanation 2 of Section 44 of the said Act makes it clear that the exception is carved out in case of an arbitration award "even if such an award is enforceable as a judgment or decree". A reading of the Queens Bench Division order itself makes it clear that the object of the said order was to make the award enforceable as a decree or judgment. It will not make the same equivalent to a decree of a superior court of a reciprocating territory when specifically an exception is carved out in Explanation 2.
29. I am in agreement with the submission of the learned Counsel for the judgment debtor that Part-II of the said Act is a complete Code in itself for enforcement of a foreign award other than a situation where a suit may have been filed for enforcement of such an award. This would be the position where there may be a non-reciprocating country as happened in the case of Harendra H. Mehta case (supra). The explanation carved out in Explanation 2 is in respect of execution itself. The legal position is no different in Badat & Co. case (supra).
30. Learned Counsel for the decree holder did succinctly set out as to how the legal provisions have developed in England but I see no conflict of law in the present case. The legal provisions as enacted make a decree of a superior court executable but not a foreign award even if it be sanctified in the form of a judgment or decree. One is not going into the question of consideration of the objections filed by the judgment debtor before the Court and the same being out of time without any examination on merit. Suffice to say that in case of a reciprocating country the methodology for enforcement of the award is as contained in Part-II of the said Act. This would naturally imply, as fairly conceded by learned Counsel for the judgment debtor, that the scope of objections has to be within the ambit of Section 48 of the said Act. I am thus of the considered view that the remedy of the petitioner is by filing appropriate proceedings under the said Act.
31. Learned Counsel for the decree holder expresses some apprehension that it should not be as that when those proceedings are initiated the judgment debtor starts taking an objection that the remedy is only by enforcement under Section 44A of the said Code. I do not find any reason for learned Counsel holding such an apprehension in view of the legal position which has emanated as also by categorical assertion of the learned Counsel for the judgment debtor that not only the proceedings have to be under the said Act, but the objections of the judgment debtor would be as confined other than the provisions of Section 48 of the said Act.
32. The petition accordingly is held as not maintainable and the issue is answered against the decree holder. The petitioner would further have leave to initiate legal proceedings in accordance with law under the provisions of the said Act.
33. The parties are left to bear their own costs.
34. The original award and certificates be returned to the decree holder on a copy of the same being placed on record.