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CASE NO.:

Appeal (civil) 3594 of 2001

PETITIONER:

M/S. FUERST DAY LAWSON LTD.

Vs.

RESPONDENT:

JINDAL EXPORTS LTD.

DATE OF JUDGMENT: 04/05/2001

BENCH:

D.P. Mohapatra & Shivaraj V. Patil

JUDGMENT:

Shivaraj V. Patil J.

Leave granted.

L...I...T.......T.......T.......T.......T.......T.......T..J

An agreement was entered into between the appellant and

the respondent on 1.8.1994 under which the respondent was to

supply certain goods to the appellant during the period

January, 1995 to June, 1996. Certain disputes cropped up in

the course of the execution of the agreement. The agreement

provided for arbitration. The appellant filed a claim

petition before the International General Produce

Association (IGPA) a body nominated by the appellant as the

Arbitrators. The Arbitrators, after entering into

reference, received evidence and thereafter passed an Award

on 13.8.1996 allowing the claims of the appellant. The

appeal filed by the respondent against the Award before the

IGPA Appellate Board was dismissed on 14.11.1998. Further

the appeal filed by the respondent before the Queens Bench

Division of the High Court of Justice at London was also

dismissed on 29.1.1999. The appellant filed an execution

application in August 1998 before the High Court of Delhi

for enforcement of said foreign Award dated 13.8.1996. An

order of attachment was issued by the High Court against the

respondent. The respondent filed an application under

Section 151 CPC (E.A. 347 of 1998) seeking dismissal of the

execution petition. The respondent also filed O.M.P. No.

203 of 1998 under Section 48 of the Arbitration and

Conciliation Act, 1996 (for short the `Act). The High

Court varied its order of attachment and ordered the

respondent to lodge security. A learned Single Judge of the

High Court held that the execution application filed by the

appellant for enforcement of foreign Award dated 13.8.1996

was not maintainable under the Act as the arbitration

proceedings were commenced prior to the coming into force of

the Act and dismissed the execution petition, consequently

released the security of 1.74 crores furnished by the

respondent. The appellant filed Special Leave Petition No.

7674 of 1999 before this Court challenging the order passed

by the learned Single Judge. This Court disposed of the

Special Leave Petition observing that the order of the

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learned Single Judge was appealable under Section 50(1)(b)

of the Act. In this view, the appellant filed FAO (OS) No.

284 of 1999 before Division Bench of the High Court. The

Division Bench of the High Court by the impugned judgment

and order dismissed the appeal saying that there was no

fallacy in the reasoning of the learned Single Judge. Under

these circumstances, the appellant is before this Court in

this appeal assailing the impugned judgment and order.

Mr. Ashwani Kumar, learned Senior Counsel appearing for

the appellant, contended that the learned Single Judge as

well as the Division Bench of the High Court manifestly

erred in holding that since the arbitration proceedings were

commenced prior to 25.1.1996, i.e., before the commencement

of Act, the foreign Award dated 13.8.1996 could not be

enforced under Act in terms of Section 85 read with Section

21 of the Act; this Court has ruled in Thyssen Stahlunion

GMBH vs. Steel Authority of India Ltd. [1999(9) SCC 334]

that a foreign award passed after the commencement of Act is

to be enforced/executed under the said Act alone being

stamped as decree; in this ruling the reasoning and

conclusions of Gujarat High Court in Western Ship Breaking

Corporation vs. Clarehaven Ltd U.K. [1988 (1) Raj 367

(404)] were affirmed; at no stage before the High Court,

either before the learned Single Judge or before the

Division Bench, the respondent questioned the date of

commencement of the Act on 25.1.1996; in fact the Division

Bench proceeded on the admitted position that new Act

commenced from 25.1.1996 and, therefore, it cannot be raised

for the first time in these proceedings; even otherwise the

question is no longer `res integra having been conclusively

decided by this Court in Shettys Constructions Co. Pvt.

Ltd. vs. Konkan Railway Constructions & Another [ 1998 (5)

SCC 599], Thyssen Stahlenion GMBH vs. Steel Authority of

India Ltd. (supra) and NALCO vs. Metalimpex [2000 (3)

A.L.R. 422]; it is firmly established by these judgments

that the new Act came into force on 25.1.1996; the

principal contention advanced on behalf of the respondent

that these judgments are `per incuriam on the ground that

they hold 25.1.1996 as the date of commencement of the Act

ignoring the specific provision and the Gazette notification

according to which the Act came into force on 22.8.1996;

this Court was using the word `Act interchangeable with the

first ordinance which came into force on 25.1.1996; article

367 of the Constitution and Section 30 of the General

Clauses Act equate an Act with the ordinance and vice versa.

Section 86(2) of the new Act itself says that all actions

and orders under the ordinance as deemed to have been under

the Act. Reference is invited to T.V.Venkata Reddy & Ors.

vs. State of Andhra Pradesh [1985 (3) SCC 198]. Thus the

learned Senior Counsel submitted that the contentions

advanced by the respondent are untenable and unavailable and

they cannot be permitted to re-open settled legal issues in

relation to enforcement of a foreign award which has become

final.

Shri K.K. Venugopal, learned Senior Counsel for the

respondent urged that the date from which the Act came into

force is an issue of fact and not an issue of law; this

Court in the cases relied on behalf of the appellant has

wrongly mentioned the date of commencement as 25.1.1996

instead of 22.8.1996; the error will have to be corrected

as the decision would be `per incuriam. Punjab Land

Development & Reclamation Corporation Ltd. Chandigarh vs.

Presiding Officer, Labour Court, Chandigarh and Ors. [1990

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(3) SCC 682] and State of U.P. & Another vs. Synthetics &

Chemicals Ltd. & Another [1991 (4)SCC 139] are cited in

support of the submissions; the decisions in Shettys

Construction Co. Pvt. Ltd. vs. Konkan Railway (supra),

Thyssen Stahlunion vs. Steel Authority of India (supra) and

NALCO vs. Metalimpex (Supra) will have far reaching

consequences. The Gazette of India produced before this

Court shows that the statement of some publications of the

Act to the effect it shall be deemed to have come into

force on 25.1.1996 is a total error. On the other hand,

Section 1(3) as shown in the Gazette is to the effect that

it shall come into force on such date as the Central Govt.,

may by notification in the official Gazette, appoint; the

Government of India by Notification GSR 375 (E) dated

22.8.1996 has notified 22.8.1996 as the date of coming into

force of the Act; in Thyssen (supra) it is held that a

foreign award given after the commencement of the new Act

can be enforced only under the new Act; in the present

case, the Award was passed on 13.8.1996 i.e. 9 days prior

to coming into force of the Act. In the instant case, both

events are before 22.8.1996. As such the Foreign Awards

(Recognition & Enforcement) Act, 1961 (for short the `1961

Act) will apply in which case enforcement could only be

through a suit; the execution petition was rightly

rejected. Article 367(2) of the Constitution or Section 30

of the General Clauses Act have nothing to do with the

question as to the date on which the Act comes into force;

they could not alter this date to 25.1.1996 from 22.8.1996;

the entire enforcement proceedings would be governed by the

1961 Act; hence the execution petition could not have been

directed to be converted into an application under Section

46 or 47 of the Act for various reasons.

In the light of the rival contentions and submissions,

the principal legal issue that arises for consideration is

as to the very date of the commencement of the Act.

In substance and effect, similar contentions were raised

in Thyssen (supra) in regard to construction and

interpretation of Section 85(2)(a) as to the enforceability

of foreign award passed after coming into force of the Act,

although the arbitration proceedings had commenced prior to

the commencement of the Act. This Court having heard the

learned counsel for the parties elaborately and after

referring to number of decisions of this court as well as

English Courts, arrived at the conclusions as stated in para

22 of the judgment. Conclusion relevant for the immediate

purpose, is in para 22(7) which reads :-

7. A foreign award given after the commencement of the

new Act can be enforced only under the new Act. There is no

vested right to have the foreign award enforced under the

Foreign Awards Act (Foreign Awards (Recognition and

Enforcement) Act, 1961).

It is clear from conclusion extracted above that a

foreign award given after the commencement of the Act can be

enforced only under the new Act. In brief, the facts that

gave rise to three appeals decided in the said case are: In

the case of Thyssen (C.A. No. 6036 of 1998), contract for

the sale and purchase contained an arbitration agreement.

The arbitration proceedings commenced on 14.9.1995 under the

Arbitration Act, 1940 (for short the `old Act). Award was

given on 24.9.1997 by the time the Act had come into force

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on 25.1.1996; Thyssen filed petition in Delhi High Court on

13.10.1997 under Sections 14 & 17 of the old Act for making

the award rule of the Court; subsequently Thyssen filed an

application in the High Court for execution of the award

under the Act contending that the arbitration proceedings

had been terminated with the making of the award on

24.9.1997 and, therefore, the Act was applicable for

enforcement of the Award. The question as to the

maintainability of the execution petition was raised to the

effect whether the award would be governed by the Act for

its enforcement or whether the provisions of the old Act

would apply. A learned Single Judge of the Delhi High Court

held that the proceedings should be governed by the old Act.

Hence, the appeal was filed in this Court.

In the case of Western Shipbreaking Corporation (C.A.

No. 4928 of 1997), arbitration proceedings were held in the

United Kingdom prior to the enforcement of the Act; the

award was made in London on 25.2.1996; the question that

arose for consideration was whether the award was governed

by the provisions of the Act for its enforcement or by the

Foreign Awards Act, 1961, the learned Single Judge of the

Gujarat High Court held that the Act would be applicable.

Aggrieved by the same, the above appeal was filed in this

Court.

In the case of Rani Constructions (P) Ltd. (C.A. No.

61 of 1999), disputes were referred to the sole arbitrator

on 4.12.1993. The Arbitrator gave his award on 23.2.1996

after the Act had come into force. The Division Bench of

Himachal Pradesh High Court held that Clause 25 of the

Agreement does not admit of interpretation that this case

is governed by the Act of 1996.

In para 13 of the judgment, it is noticed that arguments

had been addressed in considerable detail for and against

the application of the new Act or the old Act in the three

appeals mentioned above. We consider it useful to reproduce

hereinbelow paras 39 to 42 of the said judgment:

39.The Foreign Awards Act gives the party the right to

enforce the foreign award under that Act. But before that

right could be exercised the Foreign Awards Act had been

repealed. It cannot, therefore, be said that any right had

accrued to the party for him to claim to enforce the foreign

award under the Foreign Awards Act. After the repeal of the

Foreign Awards Act a foreign award can now be enforced under

the new Act on the basis of the provisions contained in Part

II of the new Act depending whether it is a New York

Convention award or a Geneva Convention award. It is

irrespective of the fact when the arbitral proceedings

commenced in a foreign jurisdiction. Since no right has

accrued Section 6 of the General Clauses Act would not

apply.

40. In the very nature of the provision of the Foreign

Awards Act it is not possible to agree to the submission

that Section 85(2)(a) of the new Act would keep that Act

alive for the purpose of enforcement of a foreign award

given after the date of commencement of the new Act though

arbitral proceedings in a foreign land had commenced prior

to that. It is correct that Section 85(2)(a) uses the words

the said enactments which would include all the three

Acts, i.e., the old, the Foreign Awards Act and the

Arbitration (Protocol and Convention) Act, 1937. The

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Foreign Awards Act and even the 1937 Act contain provisions

only for the enforcement of the foreign award and not for

the arbitral proceedings. Arbitral proceedings and

enforcement of the award are two separate stages in the

whole process of arbitration. When the Foreign Awards Act

does not contain any provision for arbitral proceedings it

is difficult to agree to the argument that in spite of that

the applicability of the Foreign Awards Act is saved by

virtue of Section 85(2)(a). As a matter of fact if we

examine the provisions of the Foreign Awards Act and the new

Act there is not much difference for the enforcement of the

foreign award. Under the Foreign Awards Act when the court

is satisfied that the foreign award is enforceable under

that Act the court shall order the award to be filed and

shall proceed to pronounce judgment accordingly and upon the

judgment so pronounced a decree shall follow. Sections 7

and 8 of the Foreign Awards Act respectively prescribe the

conditions for enforcement of a foreign award and the

evidence to be produced by the party applying for its

enforcement. The definition of foreign award is the same in

both the enactments. Sections 48 and 47 of the new Act

correspond to Sections 7 and 8 respectively of the Foreign

Awards Act. While Section 49 of the new Act states that

where the court is satisfied that the foreign award is

enforceable under this chapter (Chapter I Part II, relating

to New York Convention awards) the award is deemed to be a

decree of that court. The only difference, therefore,

appears to be that while under the Foreign Awards Act a

decree follows, under the new Act the foreign award is

already stamped as the decree. Thus if provisions of the

Foreign Awards Act and the new Act relating to enforcement

of the foreign award are juxtaposed there would appear to be

hardly any difference.

41. Again a bare reading of the Foreign Awards Act and

the Arbitration (Protocol and Convention) Act, 1937 would

show that these two enactments are concerned only with

recognition and enforcement of the foreign awards and do not

contain provisions for the conduct of arbitral proceedings

which would, of necessity, have taken place in a foreign

country. The provisions of Section 85(2)(a) insofar these

apply to the foreign Awards Act and the 1937 Act, would

appear to be quite superfluous. A literal interpretation

would render section 85(2)(a) unworkable. Section 85(2)(a)

provides for a dividing line dependent on commencement of

arbitral proceedings, which expression would necessarily

refer to Section 21 of the new Act. This Court has relied

on this Section as to when arbitral proceedings commence in

the case of Shettys Constructions Co. (P) Ltd. vs.

Konkan Rly. Construction. Section 2(2) read with Section

2(7) and Section 21 falling in Part I of the new Act make it

clear that these provisions would apply when the place of

arbitration is in India, i.e., only in domestic proceedings.

There is no corresponding provision anywhere in the new Act

with reference to foreign arbitral proceedings to hold as to

what is to be treated as date of commencement in those

foreign proceedings. We would, therefore, hold that on a

proper construction of Section 85(2)(a) the provision of

this sub-section must be confined to the old Act only. Once

having held so it could be said that Section 6 of the

General Clauses Act would come into play and the foreign

award would be enforced under the Foreign Awards Act. But

then it is quite apparent that a different intention does

appear that there is no right that could be said to have

been acquired by a party when arbitral proceedings are held

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in a place resulting in a foreign award to have that award

enforced under the Foreign Awards Act.

42. We, therefore, hold that the award given on

24.9.1997 in the case of Thyssen Stahlunion GMPH v. Steel

Authority of India Ltd. (Civil appeal No. 6036 of 1998)

when the arbitral proceedings commenced before the

Arbitration and Conciliation Act, 1996 came into force on

25.1.1996, would be enforced under the provisions of the

Arbitration Act, 1940. We also hold that clause 25

containing the arbitration agreement in the case of Rani

Constructions (P) Ltd. vs. H.P. SEB (Civil Appeal No. 61

of 1999) does admit of the interpretation that the case is

governed by the provisions of the Arbitration and

Conciliation Act, 1996. We further hold that the foreign

award given in the case of Western Shipbreaking Corporation

v. Clareheaven Ltd. (Civil appeal No. 4928 of 1997) would

be governed by the provisions of the Arbitration and

Conciliation Act, 1996. Thus, we affirm the decisions of

the Delhi High Court in Execution Petition No. 47 of 1998

and of the Gujarat High Court in Civil Revision Application

No. 99 of 1997, and set aside that of the Himachal Pradesh

High Court in Civil Suit No. 52 of 1996.

It may be stated here again that this Court affirmed the

judgment of Gujarat High Court in the case of Western

Shipbreaking Corporation (supra) and held that the foreign

award given after the commencement of the Act would be

governed by the Act although arbitration proceedings had

commenced in that case prior to the enforcement of Act. In

view of the law laid down by this Court as to the

enforcement of foreign award passed after the commencement

of the Act even in cases where the arbitration proceedings

were commenced prior to enforcement of the Act after

consideration of various aspects, in particular, question

relating to the construction and interpretation of section

85(2)(a) of the Act, we do not think it necessary to

consider the same contentions again when we are in

respectful agreement with the law laid down in the Thyssen

judgment.

It may be noticed that the provisions of the Ordinance

as well as the Act are same. Article 367 (2) of the

Constitution states that any reference in the Constitution

to Acts or laws of, or made by Parliament, or to Acts or

laws of or made by the Legislature of a State shall be

construed as including a reference to an Ordinance made by

the President or to an Ordinance made by a Governor as the

case may be. This Article read with Clause 30 of the

General Clauses Act clearly indicate that when a reference

is made to an Act, it shall be construed including a

reference to an Ordinance. Under Articles 123 and 213,

subject to the limitation, stated therein, an Ordinance

promulgated shall have the same force and effect as an Act

of Parliament or an Act of a Legislature of a State.

A Constitution Bench of this Court in A.K. Roy vs.

Union of India & Ors. (1982 (1) SCC 271) has in clear terms

stated that an ordinance issued by the President or the

Governor is as much law as an Act passed by the Parliament

and is, fortunately and unquestionably, subject to the same

inhibitions. In those inhibitions lies the safety of the

people

Para 18 of the said judgment reads thus:

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In one sense, these contentions of Shri Garg stand

answered by what we have already said about the true nature

and character of the ordinance-making power. The contention

that the word `law in Article 21 must be construed to mean

a law made by the legislature only and cannot include an

ordinance, contradicts directly the express provisions of

Article 123(2) and 367(2) of the Constitution. Besides, if

an ordinance is not law within the meaning of Article 21, it

will stand released from the wholesome and salutary

restraint imposed upon the legislative power by Article

13(2) of the Constitution.

In another Constitution Bench Judgment of this Court in

R.K. Garg vs. Union of India & Ors. (AIR 1981 SC 2138),

in para 5 has observed thus:-

...................................... It may also be

noted that Clause (2) of Article 123 provides in terms clear

and explicit that an Ordinance promulgated under that

Article shall have the same force and effect as an Act of

Parliament. That there is no qualitative difference between

an ordinance issued by the President and an Act passed by

Parliament is also emphasized by Clause (2) of Article 367

which provides that any reference in the Constitution to

Acts or laws made by Parliament shall be construed as

including a reference to an Ordinance made by the

President.................

A Constitution Bench of this Court again in T.Venkata

Reddy and Others vs. State of Andhra Pradesh (1985 (3) SCC

198) while reiterating the position in para 14 observed:

14. The above view has been approved by another

Constitution Bench of this Court in A.K. Roy vs. Union of

India. Both these decisions have firmly established that an

ordinance is a `law and should be approached on that basis.

The language of clause (2) of Article 123 and of clause (2)

of Article 213 of the Constitution leaves no room for doubt.

An Ordinance promulgated under either of these two Articles

has the same force and effect as an Act of Parliament or an

Act of the State Legislature, as the case may be.

Thus an Ordinance operates in the field it occupies,

with same effect and force as an `Act as stated in the

aforementioned Articles of the Constitution.

A foreign Award passed on 13.8.1996 could be enforced

with the same vigour under the Ordinance as it could be

under the Act. May be that is a reason why this point was

not raised by the respondent before the High Court. The

learned senior counsel for the appellant reminded us that

now attempt is made by the respondent to overcome Thyssen

judgment. It is not understandable as to how any prejudice

is caused to the respondent. Thus, the contention advanced

in this regard by the learned senior counsel for the

respondent does not help the respondent in any way.

The other argument with emphasis was that the Thyssen

judgment is `per incuriam as it was pronounced ignoring

Section 1(3) and the notification bringing Act into force

from 22.8.1996. It is useful to refer to certain decisions

of this Court before taking a decision whether the Thyssen

judgment is `per incuriam or not as to the date of

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commencement of the Act in the given situation.

In Mamleshwar Prasad and Another vs. Kanhaiya Lal

(Dead) through L.Rs. (1975 (2) SCC 232) reflecting on the

principle of judgment per incuriam, in paras 7 & 8, this

Court has stated thus:-

7. Certainty of the law, consistency of rulings and

comity of courts all flowering from the same principle

converge to the conclusion that a decision once rendered

must later bind like cases. We do not intend to detract

from the rule that, in exceptional instances, where by

obvious inadvertence or oversight a judgment fails to notice

a plain statutory provision or obligatory authority running

counter to the reasoning and result reached, it may not have

the sway of binding precedents. It should be a glaring

case, an obtrusive omission. No such situation presents

itself here and we do not embark on the principle of

judgment per incuriam.

8. Finally it remains to be noticed that a prior

decision of this Court on identical facts and law binds the

Court on the same points in a later case. Here we have a

decision admittedly rendered on facts and law,

indistinguishably identical, and that ruling must bind.

This Court in A.R.Antulay vs. R.S. Nayak & Another

(1988 (2) SCC 602), in para 42 has quoted the observations

of Lord Goddard in Moore vs. Hewwit [(1947) 2 All.ER 270]

and Penny vs. Nicholas [(1950) 2 All.ER 89] to the

following effect:-

Per incuriam are those decisions given in ignorance or

forgetfulness of some inconsistent statutory provision or of

some authority binding on the court concerned, so that in

such cases some part of the decision or some step in the

reasoning on which it is based, is found, on that account to

be demonstrably wrong..................

This Court in State of U.P. & Another vs. Synthetics &

Chemicals Ltd. & Another (1991 (4) SCC 139) in para 40 has

observed thus :-

40. `Incuria literally means `carelessness. In

practice per incuriam appears to mean per ignoratium.

English courts have developed this principle in relaxation

of the rule of stare decisis. The `quotable in law is

avoided and ignored if it is rendered, `in ignoratium of a

statute or other binding authority. (Young v. Bristol

aeroplane co. Ltd). ...............

The two judgments (1) Punjab Land Development and

Reclamation Corporation Ltd., Chandigarh vs. President

Officer, Labour Court, Chandigarh and Others (1990 (3) SCC

682) and (2) State of U.P. and Another vs. Synthetics and

Chemicals Ltd. and Another (1991 (4) SCC 139) were cited in

support of the argument. Attention was drawn to paras 40,

41 and 43 in the first judgment and paras 39 and 40 in the

second judgment. In these two judgments no view contrary to

the views expressed in the aforesaid judgments touching the

principle of judgment per incuriam is taken.

A prior decision of this court on identical facts and

law binds the Court on the same points of law in a latter

case. This is not an exceptional case by inadvertence or

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oversight of any judgment or statutory provisions running

counter to the reason and result reached. Unless it is a

glaring case of obtrusive omission, it is not desirable to

depend on the principle of judgment `per incuriam. It is

also not shown that some part of the decision based on a

reasoning which was demonstrably wrong, hence the principle

of per incuriam cannot be applied. It cannot also be said

that while deciding Thyssen, the promulgation of the first

Ordinance, which was effective from 25.1.1996, or subsequent

Ordinances were not kept in mind more so when the judgment

of Gujarat High Court in Western Shipbreaking Corporation

(supra) did clearly state in para 8 of the said judgment

thus:-

8. We now come to the arbitration and Conciliation

Ordinance, 1996 which was promulgated on 16.1.1996 and

brought into force with effect from 25.1.1996. The second

Ordinance, 1996 was also promulgated on 26.3.1991 as a

supplement to main Ordinance giving retrospective effect

from 25.1.1996. The Ordinance received assent of the

President on 16.8.1996 giving the retrospective effect from

25.1.1996. Thus the Ordinance has now become an Act. All

the provisions of the Ordinance as well as Act are same.

Therefore, the use of word The Ordinance shall also mean

the Act and vice versa.

It appears in the portion extracted above there is a

mistake as to the date of promulgation of the second

Ordinance as 26.3.1991. But the correct date is 26.3.1996.

It is noticed in the above paragraph that all provisions

of the Ordinance as well as the Act are same; therefore,

use of the word `the Ordinance shall also mean the Act and

vice-versa. The said judgment of the Gujarat High Court is

affirmed by this Court in Thyssen. The Thyssen judgment has

not failed to notice either a statutory provision in

substance and effect or a binding precedent running counter

to the reasoning and the result reached.

Having regard to the facts of the case on hand and in

the light of the position of law stated in the

aforementioned decisions, we are unable to agree that the

Thyssen judgment is per incuriam. Same is the position in

respect of Shettys Construction (supra) & NALCO (supra) on

this aspect of `per incuriam. As already noticed above,

the facts of Western Shipbreaking Corporation (supra) and

the case we are dealing with are similar as to the

commencement of arbitration proceedings and passing of

foreign award.

The Arbitration and Conciliation Ordinance, 1996 was

originally promulgated by the President on 16.1.1996 and was

made effective from 25.1.1996. The Second Ordinance came in

its place on 26.3.1996 which was again replaced by the Third

Ordinance on 26.6.1996. These Ordinances were issued,

necessitated by the circumstances for continuing the

operation of the new Law. The new Act No. 26 of 1996

received the Presidents assent on 16.8.1996 and was

published in the Gazette of India (Extra) Part II Section I

dated 19.8.1996.

We have already expressed above that the Ordinance had

the same force and effect as the Act. This Court in

Thyssen, Shettys Construction and NALCO appears to have

taken the date of commencement of the Act as 25.1.1996 in

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the background of ordinances and their continuance with same

force effective from 25.1.1996. May be the Court was using

the word `Act interchangeable with the first Ordinance

which came into force on 25.1.1996 which ultimately

culminated into Act. As already noticed above, the judgment

of Gujarat High Court in Western Shipbreaking Corporation

(supra) was in appeal before this court in Thyssen and in

para 8 of the said judgment, there is specific mention that

the use of the word `the Ordinance shall mean the Act and

vice-versa. Even in the Thyssen judgment itself in para 16,

reference is made to M.S. Shivananda vs. Karnataka SRTC

(1980 1 SCC 149). In paras 12 and 13 of the said judgment,

discussion is there as to the effect of expiration of a

temporary Act and effect of repealing the Ordinance as to

the rights and liabilities. As brought to our notice that

some of the private publications mentioned that the Act came

into force on 25.1.1996, this might have also contributed in

mentioning the date of commencement of the Act as 25.1.1996.

Be that as it may, in the light of the successive Ordinances

and the provisions of the Ordinances and the Act being same

and the new Law continued with the same effect and force

from 25.1.1996. There is no alteration or change in the

legal position and effect in relation to enforcement of

foreign award including the one made between the period

25.1.1996 till 22.8.1996, the date on which the Act came

into force in terms of Section 1(3) read with the Gazette

Notification inasmuch as the first Ordinance was operative

with the same force and effect from 25.1.1996. In the

present case with which are concerned in this appeal, a

foreign Award was passed on 13.8.1996 and as such in terms

of the conclusion arrived at in Thyssen, the said Award is

to be enforced only under the Act. Even in the impugned

judgment, it is stated that it is an admitted position that

the said Act has commenced from 26.1.1996. This point that

the date of the commencement of the Act is 22.8.1996 and not

25.1.1996 was neither raised nor contested. It may be added

that the High Court of Delhi did not have the benefit of

Thyssen judgment as it was delivered subsequently on

7.10.1999 whereas the impugned judgment was passed on

27.9.1999. Section 1(3) of the Act reads thus:-

(1) Short title, extent and commencement:

(1) ..........................

(2) ..........................

(3) It shall come into force on such date as the Central

government, may by notification in the Official Gazette,

appoint.

The Gazette Notification GSR 375 (E) dated 22.8.1996 reads:

In exercise of the powers conferred by sub- section (3)

of Section 1 of the Arbitration and Conciliation Act, 1996

(26 of 1996), the Central Government hereby appoints the

22nd day of August, 1996, as the date on which the said Act

shall come into force.

From the plain and literal reading of the said provision

and the Gazette Notification, it is clear that the Act came

into force on 22.8.1996. But the purposive reading would

show that the Act came into force in continuation of the

first Ordinance which was brought into force on 25.1.1996.

This makes the position clear that although the Act came

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into force on 22.8.1996, for all practical and legal

purposes it shall be deemed to have been effective from

25.1.1996 particularly when the provisions of the Ordinance

and the Act are similar and there is nothing in the Act to

the contrary so as to make the Ordinance ineffective as to

either its coming into force on 25.1.1996 or its

continuation upto 22.8.1996. Thus we conclude that the Act

was brought into force with effect from 22.8.1996 vide

Notification No. G.S.R. 375 (E) dated 22.8.1996 published

in the Gazette of India and that the Act being a

continuation of the Ordinance is deemed to have been

effective from 25.1.1996 when the first Ordinance came into

force.

Alternatively it was contended that a party holding a

foreign award has to file a separate application and produce

evidence as contemplated under Section 47 and also satisfy

the conditions laid down under Section 48 and it is only

after the Court decides about the enforceability of the

award, it should be deemed to be a decree under Section 49

as available for execution. In other words, the party must

separately apply before filing an application for execution

of a foreign award. The Arbitration and Conciliation

Ordinance, 1996 was promulgated with the object to

consolidate and amend the law relating to domestic

arbitration, interntional commercial arbitration and

enforcement of foreign arbitral award and to define law

relating to conciliation and for matters connected therewith

or incidental thereto. In para 4 of the Statement of

Objects and Reasons contained in the Act, the main objects

of the Bill are stated. To the extent relevant for the

immediate purpose, they are: i) to comprehensive cover

international commercial arbitration and conciliation as

also domestic arbitration and conciliation;

ii) ...................

iii) ...................

iv) to minimize the supervisory role of courts in the

arbitral process;

v) ....................

vi) to provide that every final arbitral award is

enforced in the same manner as if it were a decree of the

court; ....................

Prior to the enforcement of the Act, the Law of

Arbitration in this country was substantially contained in

three enactments namely (1) The Arbitration Act, 1940, (2)

The Arbitration (Protocol and Convention) Act, 1937 and (3)

The Foreign Awards (Recognition and Enforcement) Act, 1961.

A party holding a foreign award was required to take

recourse to these enactments. Preamble of the Act makes it

abundantly clear that it aims at to consolidate and amend

Indian laws relating to domestic arbitration, international

commercial arbitration and enforcement of foreign arbitral

awards. The object of the Act is to minimize supervisory

role of court and to give speedy justice. In this view, the

stage of approaching court for making award a rule of court

as required in Arbitration Act, 1940 is dispensed with in

the present Act. If the argument of the respondent is

accepted, one of the objects of the Act will be frustrated

and defeated. Under the old Act, after making award and

prior to execution, there was a procedure for filing and

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making an award a rule of court i.e. a decree. Since the

object of the act is to provide speedy and alternative

solution of the dispute, the same procedure cannot be

insisted under the new Act when it is advisedly eliminated.

If separate proceedings are to be taken, one for deciding

the enforceability of a foreign award and the other

thereafter for execution, it would only contribute to

protracting the litigation and adding to the sufferings of a

litigant in terms of money, time and energy. Avoiding such

difficulties is one of the objects of the Act as can be

gathered from the scheme of the Act and particularly looking

to the provisions contained in Sections 46 to 49 in relation

to enforcement of foreign award. In para 40 of the Thyssen

judgment already extracted above, it is stated that as a

matter of fact, there is not much difference between the

provisions of the 1961 Act and the Act in the matter of

enforcement of foreign award. The only difference as found

is that while under the Foreign Award Act a decree follows,

under the new Act the foreign award is already stamped as

the decree. Thus, in our view, a party holding foreign

award can apply for enforcement of it but the court before

taking further effective steps for the execution of the

award has to proceed in accordance with Sections 47 to 49.

In one proceeding there may be different stages. In the

first stage the Court may have to decide about the

enforceability of the award having regard to the requirement

of the said provisions. Once the court decides that foreign

award is enforceable, it can proceed to take further

effective steps for execution of the same. There arises no

question of making foreign award as a rule of court/decree

again. If the object and purpose can be served in the same

proceedings, in our view, there is no need to take two

separate proceedings resulting in multiplicity of

litigation. It is also clear from objectives contained in

para 4 of the Statement of Objects and Reasons, Sections 47

to 49 and Scheme of the Act that every final arbitral award

is to be enforced as if it were a decree of the court. The

submission that the execution petition could not be

permitted to convert as an application under Section 47 is

technical and is of no consequence in the view we have

taken. In our opinion, for enforcement of foreign award

there is no need to take separate proceedings, one for

deciding the enforceability of the award to make rule of the

court or decree and the other to take up execution

thereafter. In one proceeding, as already stated above, the

court enforcing a foreign award can deal with the entire

matter. Even otherwise, this procedure does not prejudice a

party in the light of what is stated in para 40 of the

Thyssen judgment.

Part II of the Act relates to enforcement of certain

foreign awards. Chapter 1 of this Part deals with New York

Convention Awards. Section 46 of the Act speaks as to when

a foreign award is binding. Section 47 states as to what

evidence the party applying for the enforcement of a foreign

award should produce before the court. Section 48 states as

to the conditions for enforcement of foreign awards. As per

Section 49, if the Court is satisfied that a foreign award

is enforceable under this Chapter, the award shall be deemed

to be a decree of that court and that court has to proceed

further to execute the foreign award as a decree of that

court. If the argument advanced on behalf of the respondent

is accepted, the very purpose of the Act in regard to speedy

and effective execution of foreign award will be defeated.

Thus none of the contentions urged on behalf of the

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respondent merit acceptance so as to uphold the impugned

judgment and order. We have no hesitation or impediment in

concluding that the impugned judgment and order cannot be

sustained.

In the light of the discussion made and the reasons

stated hereinabove, the impugned judgment and order are set

aside. The case is remitted to a learned Single Judge of

the High Court for proceeding with enforcement of the award

in the light of the observations made above. The appeal is

allowed in terms indicated above. No costs.