TMI Blog1985 (4) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... the original Arbitration Petition No. 1 of 1984. 2. The undisputed facts leading to the filing of this Revision Application may be briefly stated as follows: - M/s. Brace Transport Corporation of Monrovia, a Corporation incorporated under the laws of Liberia, the original petitioner, by an agreement dated 24-2-1981 sold a vessel named 'Saudi Cloud' to M/s Orri Navigation Lines of Saudi Arabia, Jeddah (original respondent No. 2) through the Orient Middle East Lines Ltd., Saudi Arabia, Jeddah (original respondent No. 1). There was a provision in the agreement between the parties to refer the disputes arising under the said agreement to arbitration in England. Certain disputes arose between them and, therefore, the matter was referred to arbitrators in England. The Arbitrators gave an award on 25-8-1983 directing respondents Nos. 1 and 2 to pay U. S. $185,518 towards balance of purchase price etc. and #1172 as costs, to the petitioner. The directions, it seems, were not carried out and, therefore, the petitioner filed Arbitration Petition No. 1 of 1984 in the Court of the Civil Judge, Senior Division at Bhavnagar against four respondents, respondents Nos. 1 and 2 being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng on business within the local limits of the Civil Court at Bhavnagar, while respondent No. 3 had not come forward to raise any objection to the jurisdiction of the Court at Bhavnagar and that way, acquiesced in the jurisdiction and, therefore, the Civil Court at Bhavnagar had jurisdiction to entertain the petition, even though respondents Nos. 1 and 2 had raised objections to the Jurisdiction. Being dissatisfied with the decision of the learned trial Judge on the question of jurisdiction, respondents Nos. 1 and 2 have filed this Civil Revision Application. If this Civil Revision Application is allowed and it is held that the Civil Court at Bhavnagar had no jurisdiction to entertain the petition in question, then naturally the Appeal from Order will not, survive as in that case, the interim orders passed by the trial Court will have to be set aside on the ground of want of jurisdiction. The question of hearing the Appeal from Order would arise only if this Revision Application is dismissed. In view of this, the hearing of the Appeal from Order has been kept back for the present with the consent of the learned advocates for all the parties appearing before this Court in this Revisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sdiction of the Bhavnagar Court and that M/s Sai Shipping. Co. Ltd. were general agents carrying on business and that too, outside Bhavnagar and that they were not special agents of respondents Nos. 1 and 2. The affidavit filed by Mr. Bhesaniathus clearly, reveals that respondents Nos. 1 and 2 were not carrying on any business either themselves or through any special agent of theirs at Bhavnagar. Respondents Nos. 1 and 2 did not acquiesce in the filing of the petition in Bhavnagar Court because they at the earliest opportunity raised objection to the jurisdiction, as stated earlier. Clause (b) of section 20 C.P.C does not help the petitioner assuming that respondent No. 3 acquiesced in the filing of the petition in Bhavnagar Court. What Clause, (b) of section 20 requires is that when there are more than one defendants and one of them carries on business or resides etc. within the jurisdiction of the Court, then the said Court will have jurisdiction to entertain the proceedings, provided the defendants who do not reside or carry on business or personally work for gain within the jurisdiction of that Court acquiesce in such institution. This shows that not only one but all the defend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he jurisdictional aspect is concerned, but this being a pure question of law to be decided on interpretation of the provisions of the Foreign Awards Act and particularly, section 5 of the said Act, I have allowed him to make submissions in this regard and have fully heard the teamed Counsel appearing in this Revision Application. 5. To understand the submissions made by Mr. Patel, it will be proper to refer to some of the provisions of the Foreign Awards Act which are relevant for our purpose, Section 4(1) of the Foreign Awards Act reads as follows : - (1) A foreign award shall, subject to the provisions of this Act, be enforceable in India as if it were an award made on a matter referred to arbitration in India. Section 5(l) of the said Act reads as follows: - (1) Any person interested in a foreign award may apply to any court having jurisdiction over the subject-matter of the award that the award be filed in Court. 6. The learned Counsel Mr. D. V. Patel urged that the Foreign Awards Act with which we are concerned is a self-contained Code and we cannot look into the provisions of the Arbitration Act, 1940 or any other law for deciding the question of juri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0, which is referred to in section 41 reproduced above, provides for the preservation, interim custody or sale of any goods which are the subject-matter of the reference and issuing interim injunctions. 8. Now, before this Act of 1940 was brought on the statute-book, provision was made in this regard in Second Schedule to the Code of Civil Procedure, 1908. In the Second Schedule of the Code of Civil Procedure, 1908 Court was not defined as is the case with the Foreign Awards Act with which we are concerned, but paragraph 20(l) of the said Schedule which provided for jurisdiction read as follows: - Where any matter has been referred to arbitration without the intervention of a court, and an award has been made thereon, any person interested in the award may apply to any court having jurisdiction over the subject matter of the award that the award be filed in court. A comparison of the provisions of Paragraph 20(l) of the Second Schedule of the Code of Civil Procedure, 1908 with the provisions of section 5 of the Foreign Awards Act shows that the wordings of Paragraph 20(l) are pari materia with those of section 5 of the Foreign Awards Act. It may also be mentioned eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also held in the case of B. Upendra Nath Basu v. B. Het Lal MANU/UP/0244/1933 : AIR1933All380 that in order to decide whether the Court has jurisdiction over the subject-matter of the award, if is necessary to consider the reliefs granted by the award and determine whether the Court would have jurisdiction to try a regular suit between the parties in which the reliefs claimed, were the reliefs granted by the award. Those observations are more or lesson the same lines as those made in Rethamalai Servai v. Ramaswami Servai (AIR 1919 Mad 22) (supra) and this decision also supports the submission of Mr. Patel that the subject matter of the award means the relief or reliefs granted by the award. 11. The learned Counsel Mr. D. V. Patel submitted that the Foreign Awards Act was enacted to give effect to the Convention on the recognition and enforcement of foreign arbitral awards at New York on the 10th day of June 1958 to which India was a party and for the purposes indicated therein also the Convention can be referred to while interpreting the provisions of this Act. He drew my attention to the decision reported in Salomon v. Commr. of Customs and Excise, (1966) 3 All ER 871 in suppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of its powers invalid. If the narrow and technical concept of sale is discarded and it be assumed that the Legislature sought to use the expression sale in a. wider sense as including transactions in which property was transferred for consideration from one person to another without any previous contract of sale, it would be attributing to the Legislature an intention to enact legislation beyond its competence. In interpreting a statute the Court cannot ignore its aim and object. The above observations made by the Supreme Court have certainly to be borne in mind while interpreting the words subject matter of the award used in section 5 of the Foreign Awards Act, 1961 and also while considering as to whether any Court in India would have jurisdiction over the subject matter of the award and if so, which Court. But at the same time, the observations made by the Supreme Court in a latter decision [1970]3SCR53 which I shall discuss a little later also shall have to be borne in mind. 14. In the case of Renusagar Power Co. Ltd. v. General Electric Company [1985] 1 SCR 432 , the question that Arose before the Supreme Court was whether the provisions of the Arbitration Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned to subserve the cause of facilitating international trade and promotion thereof by providing for speedy, settlement of disputes arising in such trade through arbitration, any expression or phrase occurring therein should receive, consistent with its literal and grammatical sense, a liberal construction. The above observations of the Supreme Court show that any expression or phrase occurring in this Act should receive, consistent with its literal and grammatical sense, a liberal construction. In this connection, I would like to refer to another decision of the Supreme Court reported in Taractoro export, Moscow v. Tarapore and Co. [1970] 3 SCR 53, where in the Supreme Court was called upon to consider the meaning of the expression submission in section 3 of the Foreign Awards Act, 1961. The provisions of section 3 have since been amended after this decision of the Supreme Court so as to provide for stay of legal proceedings even when there is no actual submission but only agreement to refer to arbitration because the Supreme Court in that elm held that the word submission used in section 3 means actual submission or completed reference and does not mean an agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuss a little later, but on the contrary, support the view which I am inclined to take in this matter. 15. The learned Advocate Mr. D. V. Patel submitted that the phrase subject matter of the award used in section 5 clearly rules out consideration of other aspects of jurisdiction of the Court, such as territorial and that the only question that has to be considered while considering the question of jurisdiction is the subject matter of the award. Now, let us consider as to what is the meaning of the word jurisdiction . Jurisdiction means the extent of the authority of a court to administer justice not only with reference to the subject matter of the suit but also to the local and pecuniary limits of its jurisdiction. By jurisdiction is meant the authority which a Court has to decide matters that are litigated before it or to take cognizance of matters presented in a formal way for its decision. The limits of this authority are imposed by the statute, charter, or commission under with the Court is constituted and may be extended or restricted by the like means. A limitation may be (1) as to the subject matter; (2) as to person, (3) as to the pecuniary value of the suit; or ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this matter. In view of this, I am not inclined to agree with Mr. Patel that the words subject matter of the award are used in section 5 of the Act so as to exclude other aspects of jurisdiction. But by its very nature, the foreign award will always be in respect of money because the word commercial itself suggests that it pertains to commerce and, therefore, ultimately money. Even the dictionary meaning of the word commerce supports the view that I am inclined to take. According to the Oxford English Dictionary, Vol. 11, page 677/678, the word commerce means merchandise, exchange between men of the products of nature or art; trading; mercantile dealings. According to the said Dictionary, Chamber of commerce means a board organized to protect the interests of commerce in a town or district; company of merchants; commercial body (see pages 256 and 677). According to Webster's New Twentieth Century Dictionary, Second Edition, page 364, the word commerce means an interchange of goods, wares, productions, or property of any kind, between nations or individuals. This clearly indicates that the phrase subject matter of the award is not used in section 5 with a view to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to look into the provisions of the Code of Civil procedure while registering the matter as a suit. Section 5(3) provides for issuance of notices to the parties requiring them to show cause. The Act does not prescribe any forms of such notices. We may not attach much importance to this aspect because form is not material, but it is pertinent to note that section 5(3) does not provide how the notices are to be served. There is no provision in the Act as to how the notices are to be served. Unless we have recourse to the Code of Civil procedure, it cannot be said that the notices have to be served in a particular manner. The Code of Civil, Procedure lays down as to how a summons or a notice is to be served. If a notice is sent to a party who refuses to accept the same, certain procedure is prescribed in the Code of Civil Procedure for serving the same in such circumstances. If the person to whom the notice is to be served is not found, then the notice can be served upon any adult member of the family as provided by the Code of Civil Procedure. There is also a provision for substituted service in the Code of Civil Procedure. The Act being silent on all these points, one has naturall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stive go to show that unless we have a look at the provisions of the Code of Civil Procedure and/or other relevant statutes of this country so far as the procedural aspect is concerned, it may be difficult, well-nigh impossible, to proceed further with the application presented under this Act for filing the award. It is, therefore, difficult to agree with the submission of Mr. Patel that the Act is such a self-contained Code that we cannot have recourse to the Code of Civil Procedure or any other statute while considering the procedure to be adopted for enforcing a foreign award under this Act. In this connection, I may mention here that section 4(l) of the Foreign Awards Act reads as under:- A foreign award shall, subject to the provisions of this Act, be enforceable in India as if it were an award made on a matter referred to arbitration in India. This prima facie shows that a foreign award is to be deemed to be an award made under the Arbitration Act, 1940 and the procedure laid down in the Arbitration Act, 1940 is to be followed while enforcing such. an award provided, of course, that if there is any special procedure laid down in the Foreign Awards Act, 1961, that p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of section 4(l) of the Act of 1961. It was sought to be argued before the Bombay High Court that a foreign award is to be deemed to be an award made under the Arbitration Act, 1940 because section 4(l.) provides that a foreign award is enforceable in India as if it were an award made on a matter referred to arbitration in India. It was sought to be urged that Article 178 of the Limitation Act would apply to an application for filing a foreign award in a Court in India. This contention was negatived by the Bombay High Court. An unreported decision of the Madras High Court rendered by Bashir Ahmed in C.R.A. No. 446 of 1954 and No. 2369 of 1953 delivered on 13-3-1956 was cited before the learned judge of the Bombay High Court. The learned Judge of the Madras High Court took the view that by analogy the provisions contained in section 4 of the Arbitration (Protocol and Convention) Act, 1937 that a foreign award shall, subject to the provisions of the said Act, be enforceable in the province as if it were an award made on a matter referred to arbitration in the province would mean that the foreign award, when it is sought to be enforced, shall conform to all the procedure provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imitation Act does not apply referred to a decision of the Division Bench of the Bombay High Court reported in Madhavprasad v. S. G. Chandavarkar AIR 1949 Bom 104. The question which arose before the Division Bench of the Bombay High Court was as to which article of the Limitation Act will apply and while considering that question, the Division Bench observed that it is an. elementary principle of construction that the scope of the Limitation Act cannot be extended by implication, and a parts right to come to Court cannot be taken away unless 'the Limitation Act expressly provides that his right is so barred. These observations were made by the Division Bench while considering as to which article of the Limitation Act will apply and ultimately the Division Bench held that article 11A did not apply but either article 120 or article 144 would apply and, therefore, the suit was not barred by limitation. If there was some provision regarding limitation in the Act of 1961, then certainly one can say that we cannot look to the Limitation Act of India while considering that question. If there were different provisions in the Limitation Act and if there was some doubt as to which provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in an action is brought or other legal proceeding is taken belongs. According to the same authors, all matters of procedure are governed by the domestic law of the country legal to which the Court wherein a proceeding are taken belongs (Lex fori) and the term procedure includes the statute of limitation amongst other things. Even according to Cheshire's Private International Law, Ninth Edition, page 687, statutes of limitation, if they merely specify a certain time after which right cannot be enforced by action, affects procedure and not substance. From these provisions of International Law as can be culled out from the above two standard books, it can be said that the provisions of the Indian Limitation Act could have been invoked, even apart from the provisions of section 4(l) of the Act of 1937 in that case which I have discussed earlier. But it appears to me that section 4(1) of the said Act of 1937 and section 4(l) of the Act of 1961 read with the corresponding Articles of the Convention which I have already referred, to earlier clearly go to show that the procedural laws of the country in which the award is relied upon would govern the procedural aspect of the filing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he question of stay of proceedings under section 3 of the Foreign Awards Act, 1961. Specific provision is made in section 3 of the Foreign Awards Act as regards stay of proceedings in respect of matters referred to arbitration. When there is a specific provision made in the said Act, we cannot look to the provisions of the Arbitration Act, 1940 because even section 4(l) of the Act says that a foreign award shall be enforceable in India subject to the provisions of the said Act. It was in view of this specific provision made in section 3 of the Foreign Awards Act read with section 4(l) of the said Act that the Supreme Court held in the above case that the provisions of the Arbitration Act, 1940 (Indian statute) cannot be looked into while considering the question:)n of stay. The observations made in the above case by the Supreme Court at para 50 are that the Foreign Awards Act constitutes a complete Code by itself providing for all possible contingencies in relation to foreign awards made pursuant to agreements to which Article II of the Convention applies. The Act can be said to be a complete Code so far as provisions are made with regard to different contingencies, but it cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a distinction must be made between substance and procedure, between right and remedy. The substantive rights of the parties to an action may be governed by a foreign law, but all matters appertaining to procedure are governed exclusively by the lex fori. At first sight the principle seems almost self-evident. It is observed in the same book on the same page that a person who resorts to an English Court for the purpose of enforcing a foreign claim cannot expect to occupy a different procedural position from that of a domestic litigant. The department of procedure constitutes perhaps the most. technical part of any legal, system and it comprises many rules that would be unintelligible to a foreign judge and certainly unworkable by a machinery designed on different lines. A suitor in England must take the law of, procedure as he finds it. He cannot by virtue of some rule in his own country enjoy greater advantages than other suitors in England neither must he be deprived, of any advantages that English law may confer upon a litigant in the particular form of action. The above observations which are made in the above standard book equally apply to a person who comes forward to enforc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, loss of fife or personal injury arising out of a collision or like navigational incident involving two or more ships, or over a limitation action, if, but only if - (a) the defendant has his habitual residence or a place of business within England; or (b) the cause of action arose within inland waters of England or within the limits of an English port; or (c) an action arising out of the same incident is proceeding in the court or has been heard and determined by the court; or (d) the defendant has submitted or agreed to submit to the jurisdiction of the court. 23. If we examine the question of jurisdiction in the light of the above provisions of Private International Law, it is clear that the award can be enforced in India provided the person against whom the relief is claimed is residing in India or carries on business in India or if the cause of action or a part thereof has arisen in India. The result will be the same even on examining the question in the light of the provision of the Code of Civil Procedure. Part 8 contained in the above book of Dicey and Morris pertains to procedure and Chapter 36 deals with the distinction between matters of sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal Ltd. AIR1983Delhi247 , the question that came up for consideration was as to what procedure should be followed for enforcement of foreign awards in India. The question of jurisdiction, of course, did not arise before the said Court. The question whether the Code of Civil Procedure will apply or not also did not arise for consideration before the Delhi High Court in that case. It appears from the facts stated in the above case decided by the Delhi High Court that Ludwig Wunsche and Co. applied to the Delhi High Court to enforce a foreign award and prayed that the said award may be filed in the Court and a decree be made in terms thereof. This application was obviously under section 5 of the Foreign Awards Act. The original award and a duly authenticated copy of the award were also enclosed with the application as annexures as required by the provisions of the Foreign Awards Act. The application was ordered to be registered as a suit and the Registrar of the Delhi High Court further passed the order that the arbitrator be directed to file the original award, award proceedings and documents on or before the returnable date of the notice. The petitioner Company before the said date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n so far as is otherwise provided in Section 47. The learned single Judge also referred to the decision of the Bombay High Court in Francesco Corsi v. Gorakhram Gokalchand (supra) and observed that the said decision of the Bombay High Court appears to provide a complete answer to the question raised on behalf of the Indian Company. I have discussed this judgment of the Bombay High Court earlier and hence it is not necessary to enter into any detailed discussion so far as that judgment of the Bombay High Court is concerned. But it is, pertinent to note that even though the learned single Judge of the Delhi High Court observed at para 9 of his judgment that the decision of the Bombay High Court appears to provide a complete answer to the question raised High Court is concerned. But it is pertinent to note that even though the learned single Judge of the Delhi High Court observed at para 9 of his judgment that the decision of the Bombay High Court appears to provide a complete answer to the question raised on behalf of the Indian Company, he also observed at para 7 of the judgment that where there was no provision in the Acts of 1937 and of 1961, the matters will be regulated by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961, as stated by me earlier, is silent as regards the Court which will have the jurisdiction over the subject matter of the award and other procedural aspects. The learned trial Judge, as stated by me in the beginning, held, for the reasons recorded by him, that the Court at Bhavnagar had jurisdiction to entertain the application filed under section 5(l) of the Foreign Awards Act. He, of course, reached this finding taking into consideration the provisions of the Code of Civil Procedure. The original petitioner approached the Bhavnagar Coup on the premises that the Bhavnagar Court hid jurisdiction and for that purpose the petitioner relied upon the provisions of the Code of Civil Procedure and no question was raised as regards non-applicability of the Code of Civil Procedure before the learned trial Judge. The learned advocate Mr. D. V. Patel, as discussed by me a little earlier, was also unable to satisfy me that the Bhavnagar Court will have jurisdiction to entertain the present petition on the grounds on which the order was passed by the trial Court. I have shown while discussing this aspect in the beginning at pages 5 to 7 how the learned trial Judge committed an error in hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction simply because the amount payable by original respondent No. 3 to original respondents Nos. 1 and 2, which is payable at Calcutta through a Bank, can be attached before judgment under Section 136 of the Code of Civil Procedure. 30. It was, of course, contended on behalf of the original respondents Nos. 1 and 2 as also on behalf of original respondent No.3 that even the Calcutta Court will not have any jurisdiction because neither respondents Nos. 1 and 2 carry on business within the jurisdiction of the said Court nor has any cause of action or even a part thereof has arisen within the jurisdiction of that Court. I do not propose to discuss this aspect because I am only concerned in this matter with the question whether the Court at Bhavnagar has jurisdiction to deal with this matter. 31. The result of the aforesaid discussion is that the Court at Bhavnagar had no jurisdiction to entertain this application filed wider section 5(l) of the Foreign Awards Act, 1961 for enforcing the foreign award. The Revision Application is, therefore, required to be allowed and the order passed by the trial Court holding that the trial Court had jurisdiction to entertain this application ..... X X X X Extracts X X X X X X X X Extracts X X X X
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