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Badat and Co. Vs. East India Trading Co. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtSupreme Court of India
Decided On
Judge
Reported inAIR1964SC538; (1964)66BOMLR402; [1964]4SCR19
ActsCode of Civil Procedure (CPC), 1908 - Order XIX, Rule 13
AppellantBadat and Co.
RespondentEast India Trading Co.
Cases ReferredWilliams v. Jones
Books referredHalsbury's Laws of England, Vol. 7, 3rd Edn.; Dicey's "Conflict of Laws", 7th edn.; Cheshire's Private International Law, 5th Edn. Ch. XVII
Excerpt:
the case debated on jurisdiction of the court to entertain the suit filed in bombay high court based on foreign award and judgment documents - it was held that apart from the provisions of the arbitration protocol and conventions act, 1937, the foreign awards and foreign judgments based upon award were enforceable in india on the same grounds and in the same circumstances in which they were enforceable in england under the common law on grounds of justice, equity and good conscience - indian penal code, 1890.sections 376 & 366: [dr.arijit pasayat & dr.mukundakam sharma, jj] abduction and rape - accused persons assaulted brother of prosecutrix and others and abducted victim -accused no. 1 did bed work like husband -wife with prosecutrix for two nights accused no. 1 claimed to have.....subba rao, j. 1. i regret my inability to agree with the judgment prepared by my learnedbrother mudholkar j. 2. this appeal by certificate raises the question of jurisdiction of thebombay high court to entertain a suit on an award in respect whereof a judgmentwas made in a foreign court and other incidental questions. 3. the facts that have given rise to the present appeal may be brieflystated. i shall only narrate such facts which are relevant to the questionraised, for in the pleadings a wider field was covered, but it has graduallybeen narrowed down when the proceedings reached the present stage. theappellants are badat & co., a firm formerly carrying on business at bombay.the respondents, east india trading co., are a private limited companyincorporated under the laws of the state of.....
Judgment:

Subba Rao, J.

1. I regret my inability to agree with the judgment prepared by my learnedbrother Mudholkar J.

2. This appeal by certificate raises the question of jurisdiction of theBombay High Court to entertain a suit on an award in respect whereof a judgmentwas made in a foreign court and other incidental questions.

3. The facts that have given rise to the present appeal may be brieflystated. I shall only narrate such facts which are relevant to the questionraised, for in the pleadings a wider field was covered, but it has graduallybeen narrowed down when the proceedings reached the present stage. Theappellants are Badat & Co., a firm formerly carrying on business at Bombay.The respondents, East India Trading Co., are a private limited companyincorporated under the laws of the State of New York in the United States ofAmerica and having their registered officer in the State of New York. The respondentsinstituted Suit No. 71 of 1954 against the appellants in the High Court ofJudicature at Bombay, in its Ordinary Original Civil Jurisdiction, for therecovery of a sum of Rs. 92,884/4/10 with interest thereon. It was alleged thatthe plain that by correspondence the details whereof were given in the plaint,the appellants agreed to do business with the respondents on the terms of theAmerican Spice Trade Association contract. Thereafter, by subsequentcorrespondence the parties entered into two different contracts whereunder theappellants agreed to sell to the respondents different quantities of AllepeyTurmeric Fingers on agreed terms. Though the respondents forwarded to theappellants in respect of the said transactions two contracts in duplicate on thestandard form issue by the said Trade Association with a request to theappellants to send them after having duly signed, the appellants failed to doso. Under the terms and conditions of the said Trade Association Contract, allclaims arising under the contract should be submitted to, and settled by,arbitration under the rules of the said Association. It was stated thatpursuant to a relevant rule of the said Association, the dispute was referredto arbitration and two awards were made in due course i.e., on July 12, 1949.Following the procedure prescribed for the enforcement of such awards in NewYork, the respondents initiated proceedings in the Supreme Court of the Stateof New York to have to have the said awards confirmed and a judgment entered thereonin the said Court. In due course, the said Court pronounced judgment confirmingthe said awards. On those allegations a suit was filed in the High Court ofBombay for recovery of the amounts payable under the said two awards by theappellants to the respondents. The suit was tried, in the first instance, byMody J. The learned Judge, inter alia, held that the suit on the foreignjudgment would not lie in the Bombay High Court, as there was no obligationunder the said judgment for the appellants to pay any amount to the respondentsat any place within the jurisdiction of the Bombay High Court. Adverting to theclaim based on the agreement resulting in the awards, the learned Judgeobserved that there was no proof of such agreement and that there were noadmissions in the written-statement in regard to the facts sustaining such anagreement. On those findings he held that the respondents had failed to provethat the Bombay High Court had jurisdiction to try the suit. As the suit washeard on merits also, he considered other issues and held that there wasneither proof nor admissions in the written-statement in regard to the allegedcontracts. He found that the arbitrators and the umpire had jurisdiction tomake the awards, but the said awards merged in the judgment and that the suitwas not maintainable on the said two awards. It is not necessary to give theother findings of the learned Judge, as nothing turns on them in the presentappeal. In the result, the suit was dismissed with costs. On appeal, a divisionBench of the said High Court, consisting of Chagla C.J. and S. T. Desai J.,disagreed with Mody J., on the material question decided by him and allowed theappeal with costs. The learned Judges held that the awards did not merge in thejudgment, that the suit on the awards was maintainable and that the Bombay HighCourt had jurisdiction to entertain the suit as part of the cause of actionarose within its limits. The learned Judges further held that all the factsnecessary to sustain the respondents' suit on the awards had been proved eitherby public documents produced in the case or by the admissions made by theappellants in the written-statement. The present appeal, as aforesaid, has beenpreferred by certificate against the judgment of the division Bench.

4. The learned Solicitor General, appearing for the appellants, raisedbefore us the following points : (1) The awards merged in the judgment made bythe Supreme Court of the State of New York and, therefore, no suit would lie onthe awards. (2) Even if the suit could be filed on the awards, it was notproved that any part of the cause of action accrued within the jurisdiction ofthe Bombay High Court. To state it differently, the respondents have not provedthat the agreements resulting in the awards were entered into or concludedwithin the jurisdiction of the Bombay High Court. And (3) the respondentsfailed to prove the three necessary conditions for the enforcement of theawards namely, (i) that there was an arbitration agreement, (ii) that thearbitration was conducted in accordance with the agreement, and (iii) that theawards were made pursuant to the provisions of the agreement and, therefore,valid according to the lex fori of the place where the arbitration was carriedout and where the awards were made.

5. Mr. Setalvad appearing for the respondents, sought to sustain thefindings of the Division Bench of the High Court given in favour of therespondents on the said questions raised by the appellants.

6. The first question is whether the awards merged in the judgment of theSupreme Court of the State of New York for all purposes; if so, the awardswould lose their individuality or separate existence and no suit could,therefore, be filed to enforce them. In Halsbury's Laws of England, Vol. 7, 3rdEdn., at p. 141, the relevant principle is stated under the heading'Foreign Judgments' thus :

'Since the foreign judgment constitutes a simplecontract debt only, there is no merger of the original cause of action, and itis therefore open to the plaintiff to sue either on the foreign judgment or onthe original cause of action on which it is based, unless the foreign judgmenthas been satisfied.'

7. The same idea is expressed in Dicey's 'Conflict of Laws', 7thedn., at p. 1059 :

'For historical and procedural reasons, a foreignjudgment is treated in England as a contractual debt, and the fact that, incertain instances, it can be enforced by registration does not appear to alterthe traditional view.'

8. Though the learned author in the course of his commentary criticizes thisview, the passage represents the accepted view on the subject. An interestingdiscussion of the evolution of the rule of non-merger of the cause of action inthe foreign judgment is found in Piggott's 'Foreign Judgment', Part Iat p. 17. The various steps in its evolution may be stated thus : (1) Actionbrought on a foreign judgment was an action brought to recover the judgmentdebt : ........ necessarily then, the judgment must be evidence of the debt.(2) It was not made clear which debt it evidenced, whether it was the judgmentdebt or the original debt. (3) As it was an action on a debt, an action on thejudgment debt soon came to be confused with, and perhaps looked upon as, anaction on the original debt. (4) Having come to that stage, the courts declaredthat the original debt or cause of action had not merged in the foreignjudgment pronounced upon it. Whatever may be the origin, the doctrine ofnon-merger of the original cause of action with the foreign judgment has nowbeen well established in spite of the fact that some text-book writers are notable to discover a logical basis for the doctrine. In 'Smith's LeadingCases', the learned author says :

'Foreign judgments certainly do not occasion amerger of the original ground of action.'

9. In Cheshire's Private International Law, 5th Edn., the learned authorsays in Ch. XVII under the heading 'Foreign Judgments', thus, at p.598 :

'It is a rule of domestic English law that aplaintiff who has obtained judgment in England against a defendant is barredfrom suing again on the original cause of action. The original cause of actionis merged in the judgment - transit in rem judicatum - and it would bevaxatious to subject the defendant to another action for the purpose ofobtaining the sane result. It has been held, however, in a series ofauthorities, that this is not so in the case of foreign judgments. Such ajudgment does not, in the view of English law, occasion a merger of theoriginal cause of action, and therefore the plaintiff has his option, either toresort to the original ground of action or to sue on the judgment recovered,provided, of course, that the judgment has not been satisfied.'

10. The learned author gives the following different reason for thisdistinction between a foreign and a domestic judgment, at p. 599 :

'The most plausible justification for non-merger,perhaps, is that a plaintiff suing in England on a foreign judgment, ascontrasted with one who sues on an English, judgment possesses no higher remedythan he possessed before the foreign action. The effect of judgment in Englishproceedings is that 'the cause of action is changed into matter of record,which is of a higher nature, and the inferior remedy is merged in the higher';but the view which English law takes of a foreign judgment is that it createsmerely a simple contract debt between the parties. The doctrine of non-mergerhas, however, been too often repeated by judges to justify any prospect of itsabandonment.'

11. This doctrine has been accepted and followed by Indian Court : see Popatv. Damodar, Oppenheim and Company v. Mahomed Haneef and Nil Ratan Mukhopadhyayav. Cooch Behar Loan Office, Ltd.

12. If the contract does not merged in a judgment, by parity of reasoning, theaward on which a foreign judgment is made cannot also merge in the judgment.While conceding the said legal position, the learned counsel for the appellantcontends that the award to furnish a valid cause of action shall be one whichis legally enforceable in the country in which it is made. An award made in NewYork, the argument proceeds, by its own force does not create rights or imposeliabilities thereunder and therefore, such an inchoate document cannot afford acause of action. This contention has not been raised for the first time, buthas been noticed in 'Russel On Arbitration', 16th Edn. and answeredat p. 282. The learned author places the following two propositions injuxtaposition : (1) 'An award made by foreign arbitrators, which requiresan enforcement order to render it enforceable be the local law, is not ajudgment of a foreign tribunal which can be enforced by action in Englishcourts'. (2) 'But an award which is complete and could be enforced inthe country where it was made is enforceable in England at Common Law, quitapart from any rights given by Part II of the Act.' In Halsbury's Laws ofEngland, Vol. II 3rd edn., the following note is given at p. 52 :

'A foreign arbitration award which is complete andenforceable in the country in which it was made is enforceable in England atCommon Law.'

13. The learned Solicitor-General seeks to draw a subtle distinction betweenan award made by foreign arbitrators which require an enforcement order torender it enforceable by the local law and an award which could not be enforcedexcept by obtaining a judgment on its basis. On this distinction an argument isadvanced, namely, that in the case of the former award, the award has beenvitalized by the enforcement order, while in the case of the latter the awardqua the judgment has not become enforceable, but it it the judgment thatbecomes enforceable. In support of this contention reliance is placed upon thefollowing observations found in Dicey's Conflict of Laws, 17th edn., at p. 1059:

'If the foreign award is followed by judicialproceedings in the foreign country resulting in a judgment of the foreign courtwhich it not merely a formal order giving leave to enforce the award,enforcement proceedings in England must be brought on the foreign judgment (orpossibly not on the original cause of action), but probably not on theaward.'

14. These observations are not supported by any direct decision; theyrepresent only the author's doubts on the question. On principle I cannot seewhy a distinction should be made between the two categories of cases. Anenforcement order as well as a judgment on an award serves the same purpose :they are two different procedures prescribed for enforcing an award. In thecase of an enforcement order a party applies to a court for leave, the award;and on the granting of such leave, the award can be enforced as if it were adecree of a court. In the alternative procedure, an action either in the shapeof a suit or a petition will have to be filed on an award and a judgmentobtained thereon. In that event, the award, vis-a-vis the country in which itis made, merges in the judgment and thereafter the judgment only becomesenforceable. But, as explained earlier, there is no merger in the context ofits enforcement in another country. in both the cases the award in the countryof its origin is complete and enforceable. If an award gets vitality by a mereenforcement order, it gets a higher sanctity by the court of its origin makinga judgment on it. Both of them afford a guarantee of its vitality andenforceability in the country of its origin and, therefore, a different countrycan safely act upon it. In both the cases the award is complete in the countryof its origin and if the doctrine of merger cannot be invoked in the case offoreign judgment, as I have held it cannot, there is no principle on which thedistinction sought to be made can be sustained. To sanction the distinction inthe context of a foreign judgment is to prefer the form to substance and toaccept a lesser guarantee and reject a higher one. The decision in Merrifield,Ziegler, and Co., v. Liverpool Cotton Association Limited (1911) 105 I.T.R. 97 does not lay down any different proposition. There, the plaintiffbrought an action in England against Liverpool Cotton Association forrestraining the said Association from expelling them from membership of theAssociation. The Association field a counter claim demanding a large amountfrom the plaintiffs payable by them under an award made in Germany. The claimwas based on the award and in effect it was a claim to enforce the award. ByGerman Law an enforcement order was necessary before an award can be enforced.But no such order was made there. The High Court rejected the counter claim. Indoing so, it made the following observations :

'The sole point, therefore, remains whether theaward is a decision which the court here ought to recognize as a foreignjudgment. In my opinion it is not, although as between the parties it isconclusive upon all matters thereby adjudicated upon, and is therefore in adifferent category to the 'remate' judgment dealt with by the Houseof Lords in Nouvin v. Freeman; (1889) 15 App. Cas. 1. it has no further forceor effect unless and until the court determines that it is an adjudication madein proceedings regularly conducted upon matters really submitted to thejurisdiction of the tribunal. It is not even as though the award wereenforceable unless the court stays its operation; the country is really thecase, and for all practical purposes it is still born until vitality is infusedinto it by the court. It is then, for the first time, endowed with one, atleast, of the essential characteristics of a judgment - the right to enforceobedience to it.'

15. This passage in clear terms brings out the principle underlying theproposition that an award cannot afford a cause of action till it is completein the country of its origin. The reason of the rule is that unless and untilthe appropriate court determines its regularity, it is inchoate and it becomesenforceable only when an enforcement order or judgment puts its seal ofapproval on it. For the application of this principle the distinction betweenan enforcement order and a judgment on the award is not material. In either case,the Court approves it. Indeed, the Judicial Committee in Oppenheim & Co. v.Mahomed Hanef I.L.R. (1922) Mad. 496 sanctioned the maintainability of asuit to enforce an award which ended in a judgment. There, in respect of amercantile dispute that arose between merchants carrying on business in Londonand a merchant at Madras, an award was obtained in England. The merchants inEngland field a suit on the award on the King's Bench Division of the HighCourt in England for the amounts payable thereunder and obtained an ex-partejudgment against the merchant at Madras. Thereafter, they brought a suitagainst the Madras merchant in the High Court of judicature at Madras claimingthe sum due under the said judgment, or in the alternative, for the amount dueunder the award. Coutts Trotter J., who heard the case in the first instance,held that the suit was not maintainable on the judgment that was an ex-parteone, and gave a decree on the award. But on appeal, a Division Bench of thatCourt took a different view. On further appeal, the Privy Council restored thedecree made by Coutts Trotter J. : but they concluded their judgment with thefollowing caution :

'In order to prevent misconception, it appearsdesirable to add that it was not pleaded or contended at any stage of theproceedings that the award had merged in the English judgment, and accordinglytheir Lordships do not deal with that point.'

16. This decision is certainly an authority for the position that on theassumption that an award does not merge in a foreign judgment, it affords acause of action in another country. I have already indicated earlier on thesame reasoning applicable to the doctrine of non-merger of a contract in aforeign judgment that an award also will not merge. For the reasons given byme, I hold that a suit would lie on the basis of an award in a foreign country,provided it is completed in the manner prescribed by the law of that country.

17. I shall now take the third question, for the discussion thereon wouldalso solve the problem raised by the second question. The learnedSolicitor-General contends that there is no proof of the facts to satisfy theaforesaid three condition and the Division Bench of the High Court went wrongin holding to the contrary on the basis of the alleged admissions found in thepleadings. Mr. Setalvad, learned counsel for the respondents, on the otherhand, while conceding that the said three conditions must be satisfied before aforeign award can be enforced, argues that the relevant facts were proved notonly by the admissions made by the appellants in the written-statement,expressed or implied, but also by the production of the certified copy of thejudgment of the foreign court.

18. In Norake Atlas Insurance Co. Ltd. v. London General Insurance CompanyLimited (1927) 43 T.L.R.), an award made in Norway was sought to be enforcedin England. Action was brought not on the contract but on the award. Mac-KinnonJ., laid down in that case that three things had to be proved for obtaining adecree thereon, namely, (1) the submission; (2) the conduct of the arbitrationin accordance with the submission; and (3) the fact that the award was validaccording to the law of country where it was made. So too, in Halsbury's Lawsof England, 3rd edn., Vol. II, in para 116, at p. 53, the said conditions ofenforcement are given with further elaboration. I need not pursue this matter,as there is no dispute on this aspect of the question.

19. Have the conditions been proved in the present case I shall first takethe arguments based on the pleadings. Before doing so, it would be convent toread the relevant provisions of the Code of Civil Procedure on the subject, asthe arguments turn upon the application of those provisions to the pleadings.

20. Order VII of the Code of Civil Procedure prescribes, among others, thatthe plaintiff shall give in the plaint the facts constituting the cause ofaction and when it arose, and the facts showing that the court hasjurisdiction. The object is to enable the defendant to ascertain from theplaint the necessary facts so that he may admit or deny them. Order VIIIprovides for the filing of a written-statement, the particulars to be containedtherein and the manner of doing so; rules 3, 4 and 5 thereof are relevant to thepresent enquiry and they read :

21. Order VIII Rule 3. It shall not be sufficient for a defendant in hiswritten statement to deny generally the grounds alleged by the plaintiff, butthe defendant must deal specifically with each allegation of fact of which hedoes not admit the truth, except damages r. 4 Where a defendant denies anallegation of fact in the plaint, he must not do so evasively, but answer thepoint of substance. Thus if it is alleged that he received a certain sum ofmoney, it shall not be sufficient to deny that he received that particularamount, but he must deny that he received that sum or any part thereof, or elseset out how much he received. And if an allegation is made with diversecircumstances, it shall not be sufficient to deny it along with those .circumstances.

22. Rule 5. Every allegation of fact in the plaint, if not deniedspecifically, or by necessary implication, or stated to be not admitted in thepleading of the defendant, shall be taken to be admitted except as against aperson under disability.

23. Provided that the Court may in its discretion require any fact soadmitted to be proved otherwise than by such admission.

24. These three rules from an integrated code dealing with the manner inwhich allegations of fact in the plaint should be traversed and the legalconsequences flowing from its non-compliance. The written-statement must dealspecifically with each allegation of fact in the plaint and when a defendantdenies any such fact, he must not do so evasively, but answer the point ofsubstance. If his denial of a fact is not specific but evasive, the said factshall be taken to be admitted. In such an event, the admission itself beingproof, no other proof is necessary. The first paragraph of r. 5 is a re-productionof O. XIX, r. 13, of the English rules made under the Judicature Acts. But inmofussil Courts in India, where pleadings were not precisely drawn, it wasfound in practice that if they were strictly construed in terms of the saidprovisions, grave injustice would be done to parties with genuine claims. To dojustice between those parties, for which Courts are intended, the rigor of r. 5has been modified by the introduction of the proviso thereto. Under thatproviso the Court may, in its discretion, require any fact so admitted to beproved otherwise than by such admission. In the matter of mofussil pleadings,Courts, presumably relying upon the said proviso, tolerated more laxity in thepleadings in the interest of justice. But on the Original side of the BombayHigh Court, we are told, the pleadings are drafted by trained lawyers bestowingserious thought and with precision. In construing such pleadings the provisocan be invoked only in exceptional circumstances to prevent obvious injusticeto a party or to relieve him from the results of an accidental slip oromission, but not to help a party who designedly made vague denials andthereafter sought to rely upon them for non-suiting the plaintiff. Thediscretion under the proviso must be exercised by a Court having regard to thejustice of a cause with particular reference to the nature of the parties, thestandard of drafting obtaining in a locality, and the traditions andconventions of a Court wherein such pleadings are filed. In this context thedecision in Tildesley v. Harper will be useful. There, in an action against alessee to set aside the lease granted under a power the statement of claimstated that the done of the power had received from the lessee a certain sum asa bribe, and stated the circumstances; the statement of defence denied thatthat sum had been given, and denied each circumstance, but contained no generaldenial of a bribe having been given. The Court held, under rules correspondingto the aforesaid rules of the Code of Civil Procedure, that the giving of thebribe was not sufficiently denied and therefore it must be deemed to have beenadmitted. Fry J. posed the question thus : What is the point of substance inthe allegations in the statement of claim and answered in as follows :

'The point of substance is undoubtedly that a bribewas given by Anderson to Tildesley, and that point of substance is nowhere met........ no fair and substantial answer is, in may opinion, given to theallegation of substance, namely that there was a bribe. In my opinion it is ofthe highest importance that this rule of pleading should be adhere to strictly,and that the Court should require the Defendant, when putting in his statementof defence, and the Plaintiff, when replying to the allegations of theDefendant, to state the point of substance, and not to give formal denials ofthe allegations contained in the previous pleadings without starting thecircumstances. As far as I am concerned, I mean to give the fullest effect tothat rule. I am convinced that it is one of the highest benefit to suitors inthe Court.'

25. It is true that in England the concerned rule in inflexible and thatthere is no proviso to it as is found in the Code of Civil Procedure. But thereis no reason why in Bombay on the original side of the High Court the sameprecision in pleadings shall not be insisted upon except in exceptionalcircumstances. The Bombay High Court, in Laxminarayan v. Chimniram Girdhari Lal(1917) I.L.R. 41 Bom. 89, construed the said provisions and applied themto the pleadings in a suit filed in the court of the Joint Subordinate Judge ofAhmednagar. There the plaintiffs sued to recover a sum of money on an accountstated. For the purpose of saving limitation they relied in their plaint upon aletter sent by the defendant-firm. The defendants in their written statementsated that the plaintiffs suit was not in time and that 'the suit is notsaved by the letter put in from the bar of limitation'. The question wasraised whether in that state of pleadings, the letter could be taken asadmitted between the parties and, therefore, unnecessary to be proved.Batchelor, Ag. C.J., after noticing the said provisions, observed :

'It appears to us that on a fair reading ofparagraph 6, its meaning is that though the letter put in by the plaintiff isnot denied the defendants contend that for one reason or another its effect isnot to save the suit from the bar of limitation. We think, therefore, that....... the letter, Exhibit 33, must be accepted as admitted between theparties, and therefore, unnecessary to be proved.'

26. The written statement before the High Court in that case was one filedin a court in the mofussil; yet, the Bombay High Court applied the rule andheld that the letter need not be proved aliunde as it must be deemed to havebeen admitted in spite of the vague denial in the written statement. I,therefore, hold that the pleadings on the original side of the Bombay HighCourt should also be strictly construed, having regard to the provisions of Rules3, 4 and 5 of Order VIII of the Code of Civil Procedure, unless there arecircumstances wherein a Court thinks fit to exercise its discretion under theproviso to r. 5 of O. VIII.

27. The first condition for the enforceability of an award is the proof ofsubmission to arbitration. A claim based on an award is in effect a claim toenforce the award on the footing that the submission implied a contract to giveeffect to the award. In the plaint the details of the preliminary contractbetween the parties containing an arbitration clause has been specifically andprecisely stated in paras 2 and 3. As much of the argument turns upon the saidallegations, it may conveniently be read here.

'2. By their letter dated7th September 1948 the plaintiffs intimated to the defendants that they wereprepared to do business with them on the terms of the American Spices TradeAssociation contract, net landed weights, less 1 1/2 per cent. discount, letterof credit to be opened for 95 per cent. of the amount of the transaction andthe balance to be settled immediately after the goods were weighted anddelivered and if there was any difference in the plaintiffs' favour the samewas to be remitted to them by the defendants by telegraph. By their letterdated 13th September, 1948 the defendants agreed to the said terms. Thereafterby their cable dated 3rd March, 1949 the defendants offered to sell to theplaintiffs 30 tons of Alleppey Turmeric Fingers at 22 1/2 cents per lb. C.& F. New York less 2 per cent. March / April shipment. On the same day theplaintiffs cabled to the defendants their acceptance of the said offer. Bytheir cable dated 7th March, 1949 the defendants offered to sell to theplaintiffs further 30 tons of Alleppey Turmeric Fingers at 22 cents per Ib. C. &F.; New York less 2 per cent March/April shipment. On the same day theplaintiffs cabled to the defendants their acceptance of the said offer. Bytheir letter dated 8th March 1949 the defendants confirmed the said contractarrived at between the parties on 3rd March, 1949. By their letter dated 9thMarch, 1949 the plaintiffs confirmed both the said contracts and furtherintimated to the defendants that they had opened the necessary letters ofcredit. The plaintiffs forwarded to the defendants in respect of the saidtransactions two contracts in duplicate on the standard form issued by the saidAmerican Spice Trade Association with a request to the defendants to return tothe plaintiffs a copy of each of them after signing the same. The defendants,however, failed and neglected to do so. The plaintiffs crave leave to refer toand rely upon the cables and letters above referred to and standard form ofcontract issued by the said American Spice Trade Association, whenproduced.'

'3. The plaintiff say thatthe standard form of contract issued by the said American Spice TradeAssociation is known in the spice and herb market as 'The American SpiceTrade Association Contract' and contains terms and conditions on which thedefendants had agreed to do business with the plaintiff as aforesaid. Theplaintiff further say that the said standard form of contract is in common usewith firms dealing in spices and herbs both in the New York market andelsewhere. The plaintiff further say that the defendants have been dealing inspices and herbs with American firms in the United States and also on theUnited States market and had previously entered into several American SpiceTrade Association Contracts and were well aware of and knew what the terms andconditions of the said American Spice Trade Association Contract were. One ofthe said terms was as follows :-

'All questions andcontroversies and all claims arising under this contract shall be submitted toand settled by Arbitration under the Rules of the American Spice Trade Associationprinted on the reverse side hereof. This contract is made as of in NewYork.'

28. Then the plaint proceeds to give how the dispute should be referred toarbitration and how arbitrators and umpire should be appointed by the parties. Fromthe said allegation in the plaint it is clear that the plaintiffs haveprecisely and definitely give the particulars of the correspondence that passedbetween the parties on the basis of which they claimed the preliminary contractcontaining an agreement to submit their dispute to arbitration and thesubsequent contracts in respect of the goods made and concluded between theparties.

29. The defendants, adverting to the said allegations dealt with them inparagraphs 7 and 8 of their written statement. The said paragraphs read :

'7. With reference toparagraph 2 of the plaint the defendants deny that they at any time enteredinto any contract with the plaintiff as alleged in the said paragraph orotherwise. The defendants deny that they at any time signed or were bound tosign a standard form of contract issued by the American Spice TradeAssociation.'

'8. With reference toparagraph 3 of the plaint, the defendants deny that they at any time agreed todo any business or enter into any contract with the plaintiffs as allegedtherein or otherwise. The defendants say that they did not at any time sign norwere they bound to sign the said American Spice Trade Association Contract andthat they are not therefore bound by or concerned with the terms and/or conditionsof the said contract. The defendants deny the rest of the statements containedin the said paragraph.'

30. It will be seen from the said paragraphs that though the defendantsdenied that at any time they entered into a contract with the plaintiffs asalleged in the plaint or otherwise they have not denied that the lettersparticularized in the plaint passed between the parties. LearnedSolicitor-General relied upon the expression 'as alleged' inparagraphs 7 and 8 of the written statement and contended that the said wordsimplied necessarily that the defendants denied the passing of thecorrespondence. No such necessary implication can arise from the use of thesaid expression. That expression is consistent with the admission by thedefendants of the passing of the letters mentioned in paragraphs 2 and 3 of theplaint, coupled with a denial that such correspondence does not constitute abinding contract between them. Indeed, Rules 3 and 4 of O. VIII are aimed at suchgeneral allegations in written statements. Rule 3 demands that each allegationof fact made in the plaint must specifically be denied and r. 4 emphasizes thatsuch a denial shall be of the point of substance and shall not be vague. Here,in the plaint the contents of the letters dated September 7, 1948, September13, 1948, March 8, 1949 and March 9, 1949 are given and it is specificallystated that they passed between the parties. Nowhere in the written statementthere is a denial as regards the passing of the letters or the contents of thoseletters. The general and vague allegations in the written statement cannotpossibly be construed, expressly or by necessary implication, as a denial ofthe specific allegations in the plaint in regard to the said correspondence. Onthis aspect of the case, to some extent, there is unanimity between Mody J.,and the learned Judges of the Division Bench of the Bombay High Court.Adverting to para 7 of the written statement, Mody, J., says :

'In my opinion, paragraph 7 of the writtenstatement does not at all, directly or indirectly, specifically or byimplication, deal with any of the said three statements of facts. A denial of acontract is not a denial of the receipt or of the contents of the said letterdated 7th September 1948 or the writing of the letter dated 13th September1948. The defendants can conceivably admit the said three statements of factbut still deny that any contract resulted thereby. Therefore the said threestatements of facts must be deemed to have been admitted.'

31. Dealing with para 8 of the written statement, the learned Judge saysthat these two statements of facts have not been pleaded to in the writtenstatement and must, therefore, be deemed to have been admitted. But having goneso far, the learned Judge rules against their admissibility on the ground thatthere are no allegations that the defendants wrote the letters attributed tothem and that there is no description of the contents of the letters. This, ifI may say so, is rather hypercritical. The allegations in para 2 of the plaintin express terms say that the letters emanated from the defendants and alsogive their gist. The Division Bench of the High Court in the context of thesaid denials said :

'Therefore, there is no denial of thiscorrespondence. Indeed there could not be, because before the Written Statementwas filed inspection was given by the plaintiffs of this correspondence andagain the conscientious draftsman of the written statement could not possiblyhave controverted the statement that these letters passed between the parties.Therefore, in our opinion, these two letters of the 7th September, 1948 and13th September, 1948 are admissible in evidence, and we will formally admitthem in evidence.'

32. Then they proceed to state :

'Now, we read this denial to mean not a denial ofthe exchange of letters and telegrams, not a denial of the correctness of thecopies of the documents of which the Defendants have taken inspection, but asubmission in law that no contract emerges from the exchange of these lettersand telegrams.

33. For the reasons already given by me, I entirely agree with the viewexpressed by the Division Bench on the interpretation of the pleadings and holdthat the said letters have been rightly admitted in evidence. If the saidletters can go in as evidence, the first condition, namely, the factum ofsubmission has been proved in this case.

34. As regards the question whether the arbitration was conducted inaccordance with the submission, the pleadings again afford the answer. In paras3, 4 and 5 of the plaint it is specifically stated that the parties agreed tothe arbitration clause and to the procedure prescribed for carrying out thearbitration. It is stated therein that pursuant to r. 5 and clauses B, C and Eof r. 15 of the Rules of the said American Spice Trade Association, arbitratorsand umpire were appointed, that the arbitrators and the umpire subscribed totheir oaths of office and proceeded to hear the matter on 27th June, 1949, and12th July, 1949, that the defendants, though duly notified of the hearings, didnot attend the same, that on 12th July, 1949, the said arbitrators and umpireduly made, signed, acknowledge and published their awards and thereby theyunanimously held that the defendants had committed a breach of the said twocontracts and awarded that the defendants should pay to the plaintiffs specificamounts in respect of the said contract as and by way of damages. Paragraph 7of the plaint describes how the defendants did not meet the demand, howproceedings were taken before the Supreme Court of the State of New York, hownotice of the said proceedings was duly served on the defendants and how thesaid Court pronounced its judgment confirming the said awards. Paragraph 9, 10,11 and 12 of the written statement deal with the said allegations. In the saidparagraphs the defendants do not deny the factum of the appointment ofarbitrators and the procedure followed by them in making the awards. They arecontent to say that they are not bound by or concerned with the appointment ofthe arbitrators by the plaintiffs as alleged therein or otherwise, that theyare not bound by or concerned with any of the statements contained in para 7 ofthe plaint and that the awards passed by the arbitrators and the umpire are notbinding on them. As regards the allegations in para 7 they only say that thearbitrators acted without jurisdiction and that the judgment of the SupremeCourt of the State of New York made thereon is not binding on them. It will beseen from the said denial that neither the appointment of the arbitrators northe steps taken by them are denied. If so it must be held on the same reasoningwhich I have adopted in the context of the allegations pertaining tosubmission, that in the absence of specific denials it must be held that it isadmitted that the awards were made in strict compliance with the terms ofsubmission.

35. Now coming to the third condition, namely, the proof of the fact thatthe awards are valid according to the law of the country where they were made,the same equivocal attitude is adopted by the defendants in their writtenstatement. In para 8 of the plaint there is the following specific allegationin that regard :

'...... the said arbitration having been duly heldand the said awards having been duly made, signed acknowledged and publishedaccording to the said rule and the laws of the State of New York, and thedefendants not having taken step to have the said awards or either of them setaside or modified, as provided in the said rules and by the laws of the Stateof New York, the said awards are binding on the defendants and the defendantsare now precluded and estopped from disputing the same.'

36. Here there is a definite averment that the awards were made according tothe laws of the State of New York. In the written statement of the defendants,though they generally deny that the awards are binding on them, there is nospecific denial that the awards are not in accordance with the laws of theState of New York. Applying the same rules of construction which I invoked inthe case of the other averments in the plaint, I must also hold that thedefendants must be held to have admitted the fact that the awards were made inaccordance with the laws of the State of New York.

37. There is one important circumstance which must be borne in mind inconstruing the terms of the written statement. It is not disputed that theplaintiffs have filed affidavits disclosing the copies of the documentsmentioned in the plaint. The defendants' Advocate had inspection of the saiddocuments before he filed his written statement. It is not disputed that thedefendants received a copy of the petition filed by the plaintiffs in theSupreme Court of the State of New York, along with a copy of the awards and theorder of the Court to show cause. With the knowledge of the contents of thecopies of the letters and the contends of the awards, the Advocate for thedefendants rightly and properly was not in a position to deny the factualaspect of the passing of the letters and the making of the awards and thedelivery of the judgment by the Supreme Court of the State of New Yorkconfirming the said awards. That is why the written statement contained vagueand general denials only specifically raising disputes on legal questions, anddesignedly giving equivocal answers to factual aspects. It is said that noinference of tacit acceptance on the part of the defendants or their counselcan be drawn, for the defendants' Advocate, after inspection of the documents,asked the plaintiffs' Advocate to produce the originals, but the plaintiffsfailed and neglected to do so. But this circumstance does not detract from theknowledge of the defendants and their Advocate of the existence of the saiddocuments and their contents before the written statement was drafted. Thiscircumstance gives a satisfactory explanation for the vagueness of theallegations in the written statement of the defendants. They were designedlymade vague as the Advocate presumably could not bring himself to go the wholelength of denying the facts. I, therefore, hold on a fair and reasonableconstruction of the pleadings and written statement that the existence of thethree conditions for enforcing the awards have been admitted by the defendantsin their pleadings and that, therefore, they need not be independently proved.

38. I would go further and hold that the said three conditions are alsoproved by Ex. X-9. The said exhibit is the record of proceedings of the SupremeCourt of the State of New York relating to the arbitration between theplaintiffs and the respondents. That record contains the certificate issued bythe Consul-General, and other papers relating to the proceedings including theorder and judgment of the said Supreme Court. The Certificate reads thus :

'THIS IS TO CERTIFY (a) thatthe annexed proceedings have been duly had in accordance with the laws of theState of New York.

(b) that the annexed proceedingsare duly certified by the officer having the legal custody of the originalsthereof at the time such annexed proceedings were issued by the Supreme Courtof New York.

(c) that the several personsnamed in the annexed proceedings as holding the respective offices statedtherein in respect of each of them did in fact hold such respective office atthe time the same took place.

The Consulate-General of Indiaassumes no responsibility for the contends of this document.

Sd. /- M.Gopalcharan

Dated : New York, N.Y. CONSUL-GENERAL

June 18th, 1957 Seal of CONSULATE

GENERAL OFINDIA.

New York, N.Y.

39. The order and judgment of the Supreme Court of New York dated March 21,1950, give in detail the filing of the application by the respondents for anorder confirming the two awards; the consideration given to the saidapplication by the Court; the Court's satisfaction, after perusing the awardsand the connected papers, that the said proceedings were in all respectsregular; and the terms of the order made on the said application. The decretal portionof the order confirms the awards. The judgment is signed by Archibald R.Watgon, Clerk, and certified both by the said Clerk and the Clerk of theSupreme Court of New York Country. If the Judgment goes into evidence, thethree conditions are satisfied, namely, that there was a submission, that thearbitrators gave the awards in terms of the submission and that a judgment wasmade on those awards on the ground that the awards were made in accordance withlaw.

40. But it is argued by the learned Solicitor-General that the said judgmenthas not been proved in the manner prescribed by the Indian Evidence Act. Therelevant sections of the Evidence Act may now be read :

Section 74 : The followingdocuments are public documents :-

(1) documents forming the acts,or records of acts - ..........................

(iii) of public officers,legislative, judicial and executive of any part of India or of theCommon-wealth or of a foreign country.

Section 78 : The following publicdocuments may be proved as follows :

(6) Public documents of any otherclass in a foreign country,

By the original, or by a copycertified by the legal keeper, thereof with a certificate under the seal of anotary public, or of an Indian Consul or diplomatic agent, that the copy is dulycertified by the officer having the legal custody of the original, and uponproof of the character of the document according to the law of the foreigncountry.'

Section 86 : The Court maypresume that any document purporting to be certified copy of any judicialrecord of any country not forming part of India or of Her Majesty's Dominionsis genuine and accurate, if the document purports to be certified in any mannerwhich is certified by any representative of the Central Government in or forsuch country to be the manner commonly in use in that country for thecertification of copies of judicial records ..........'

41. It is not disputed that the copy of the judgment is certified by thelegal keeper of the original within the meaning of section 78(6) of theEvidence Act; nor is it contended that there is no certificate under the sealof an Indian Consul certifying that the copy is certified by the officer havingthe legal custody of the original. But what is contended is that under section78(6) of the Evidence Act three conditions must be complied with before thejudgment can be admitted in evidence and the third condition, namely, proof ofcharacter of the document according to the law of the foreign country, is notforthcoming in this case. A perusal of section 78(6) of the Evidence Act makesit clear that apart from the two certificates - one by the legal keeper of theoriginal documents and the other by the Consul-General - there shall also beproof of the character of the document according to the law of the foreigncountry before the document is admitted. It is a condition precedent. The shortquestion, therefore, is whether there is such proof in this case. Proof can beby direct or circumstantial evidence. Proof can also be given by placing beforethe Court facts giving rise to presumptions, rebuttable or irrebuttable.Section 86 of the Evidence Act lays down that a Court may presume thegenuineness and accuracy of any document purporting to be a certified copy ofany judicial record of any foreign country, if such a copy is duly certified inthe manner and according to the rules in use in the country for certificationof copies of judicial records. To give rise to this presumption it is notnecessary that the judgment of the foreign country should have already beenadmitted in evidence. While section 78(6) of the Evidence Act lays down threeconditions for admitting the judgment in evidence, the admission of thejudicial record is not a condition precedent for drawing the requisitepresumption under section 86 of the Evidence Act. That presumption may be drawnbefore the said record is admitted. The document may be looked into for thepurpose of ascertaining whether there is the requisite certificate, viz., acertificate issued by any representative of the Central Government in theconcerned country to the effect that the said document was certified in themanner commonly in use in that country for the certification of copies ofjudicial record. If the distinction between the certificate and the judgment isborne in mind, the fallacy of the argument becomes apparent. The requisitecertificate makes the document admissible and not vice versa. If there was sucha certificate forthcoming - in this case there is such a certificate - thedocument may be presumed to be genuine and accurate. If it is presumed to begenuine and accurate, it shows its character, viz., that it is a genuinejudgment made by the Supreme Court of New York. This is a fit case for raisingthe said presumption and with the aid of this presumption the third conditionis also complied with i.e., it is a judgment of the Supreme Court of the Stateof New York made in accordance with law. As the three conditions laid down insection 78(6) of the Evidence Act are fulfilled, the document can legitimatelybe admitted in evidence, and if it is admitted, the document, by its own force,establishes that the aforesaid three conditions for the enforceability of theawards have been fulfilled.

42. Now I come to the second contention. This deals with the jurisdiction ofthe Bombay High Court on its original side to entertain the suit. Clause 12 ofthe Letters Patent for Bombay enables a party to file a suit with the leave ofthe Court, if the cause of action arises in part within the local limits of theordinary original jurisdiction of the said High Court. The cause of action inthe plaint is given as follows :

'..... the terms of business were accepted by thedefendants in Bombay and the proposal or acceptance of the said contracts bythe defendants took place in Bombay. The defendants' refusal to pay the saidsum also took place in Bombay.'

43. On those allegations the leave of the High Court of Bombay was obtainedand the suit was filed in the said Court. I have already pointed out that inthe case of a claim based on an award, it is in effect a claim to enforce theaward on the footing that the submission implied a contract give effect to theaward. I have also held that all the necessary documents relating to thepreliminary as well as subsequent contracts are admitted in the writtenstatement. The said documents clearly establish that the parties agreed thattheir disputes under the contracts should be submitted to arbitration in themanner prescribed by the rules of the American Spices Trade Association. Thosecontracts were concluded within the local limits of the original jurisdictionof the Bombay High Court. It follows that a part of the cause of action accruedwithin the said limits and that as the leave of the High Court was obtained,the said High Court had jurisdiction to entertain the claim. No other point isargued before us.

44. In the result, I agree with the conclusions arrived at by the HighCourt. The appeal is dismissed with costs.

Mudholkar, J.

45. This is an appeal by a certificate granted by the High Court of Bombayfrom its judgment dated September 12, 1958 reversing that of Mody J., who, byhis judgment had dismissed a suit instituted by the East India Trading Co.,respondents before us, against the defendants Badat & Co., on the originalside of the High Court for a sum of Rs. 92,884-4-10 with interest and costs onthe basis of a judgment of the Supreme Court of New York affirming awards givenby a domestic tribunal or alternatively on the awards themselves.

46. The plaintiff-company was incorporated in the State of New York andamong other things, engages in the import of spices. The defendant-company, wasa partnership firm and at the relevant time was carrying on import and exportbusiness in Bombay. According to the plaintiffs, by two letters dated September7, 1948, and September 13, 1948, the first written by the plaintiffs and thesecond by the defendants, the parties agreed to do business upon the terms ofthe American Spice Trade Association. One of the terms agreed between theparties was that the plaintiffs at the time of placing an order for the supplyof spices with the defendants were to open a letter of credit to the extent of95 per cent of the value of the commodity ordered to be supplied and thebalance to be settled immediately after the goods were weighed and delivered.By their cable dated March 3, 1949, the defendants offered to sell to theplaintiffs 30 tons of Alleppey Turmeric Fingers at a certain rate, to beshipped in March/April. This offer was immediately accepted by the plaintiffs.A somewhat similar offer was again made by the defendants to the plaintiffs onMarch 7, 1949, which offer also was accepted by the plaintiffs. The plaintiffsclaim to have forwarded to the defendants in respect of the said transactionstwo contracts in duplicate on the standard forms issued by the American SpiceTrade Association with a request to the defendants to return to them a dulysigned from in respect of each of the transactions and their grievance is thatthe defendants failed to comply with the request. The plaintiffs further averthat though they opened letters of credit, the defendants committed a breach inrespect of both the contracts by failing to supply turmeric.

47. The plaintiffs have alleged in para 3 of the plaint that the defendantswere well aware of and knew what the terms and conditions of the American SpiceTrade Association were. One of the terms of the Association which they have setout is as follows :

'All questions and controversies and all claimsarising under this contract shall be submitted to and settled by Arbitrationunder the Rules of the American Spice Trade Association printed on the reverseside thereof. This contract is made as of in New York.'

48. In pursuance of this term, the plaintiffs who had declared thedefendants in default appointed one Edward B. Polak as their Arbitrator and onMay 24, 1949, called upon the defendants to appoint an arbitrator on theirbehalf. They also informed the defendants that if they failed to do so, they,the plaintiffs, would request the Association to appoint an arbitrator on thedefendants' behalf. The defendants not having appointed any arbitrator on theirbehalf, the Association at the plaintiffs' request appointed one Michael F.Corio to act as an arbitrator on the defendants' behalf. This person informedthe defendants of his appointment as Arbitrator and requested then to furnishhim with all documents and information which might be necessary or useful inthe matter of arbitration and further informed them that in the absence of suchdocuments and information the Arbitrators will have to proceed with thearbitration upon the documents and information made available by theplaintiffs. The defendants did not replay to this communication. TheArbitrators before entering upon arbitration, selected one James F. Knight asUmpire and Chairman as required by the rules of the Association. Thereafter theArbitrators and the Umpire entered upon arbitration and gave two awards, in thesum of Pounds. 9,538.64 in respect of the first contract and in the sum ofPounds. 9,209.36 in respect of the second contract by way of damages. Theplaintiffs thereupon drew a bill of exchange on the defendants at Bombay forPounds. 18,748 being the aggregate sum awarded by the two awards. According tothem, though it was presented to the defendants several times in Bombay they'failed and neglected to accept or to pay the same.'

49. Then, according to the plaintiffs, they adopted proceedings in theSupreme Court of the State of New York to have the said awards confirmed andjudgment entered thereon. Notices of the proceedings were said to have beenserved on the defendants and judgment confirming the said awards and orderingthe defendants to pay Pounds. 19,554.17, including interest and costs, waspronounced on April 13,1950. The plaintiffs eventually instituted the suit outof which this appeal arises in the High Court of Bombay on January 14, 1954.

50. According to the plaintiffs, the defendants have, by the terms of thecontract voluntarily submitted themselves to the jurisdiction of the SupremeCourt of New York and have agreed to the said Court, which was a Court havingjurisdiction in that behalf, confirming the said awards and entering judgmentthereon. Further, according to them, the parties had expressly agreed thatjudgment might be entered on any award that might be made in respect of anyquestion, controversy or claim between the parties arising under or out of thesaid contracts in accordance with the practice of any Court havingjurisdiction. Alternatively they have contended that if the Court held that thejudgment was not a judgment of a foreign Court on which action would lie in theHigh Court the defendants having by the terms of the said contracts expresslyagreed to have any dispute arising under the contracts settled by arbitrationin New York under the rules of the Spice Trade Association and the arbitrationupon which the awards are founded having been duly made and published accordingto the rules and laws of the State of New York and further having become finalare binding on the defendants, the defendants are bound to carry out the termsof the said awards and to pay to the plaintiffs the sums awarded under them.Thus the suit is substantially based on a foreign judgment and in thealternative on the two awards given by a domestic tribunal functioning in NewYork.

51. The defendants raised a number of pleas in defence. In the first placethey said that they did not reside within the limits of the originaljurisdiction of the High Court or carry on business therein and the High Courthad no jurisdiction to entertain the suit. They further contended that no partof the cause of action had arisen in Bombay. It may be mentioned that theplaintiffs had sought for and obtained ex parte leave of the court under clause12 of the Letters Patent and the defendants submitted that the leave should berevoked. The next important contention of the defendants was that the SupremeCourt of New York had no jurisdiction to pass the judgment and the order soughtto be enforced. Further, according to them, the Arbitrators and the Umpire whogave the alleged awards on which the judgment of the Supreme Court was foundedhad no jurisdiction to make those awards. They raised a number of other pleasalso and elaborate judgments have been delivered by Mody J. as well as by theappeal court consisting of Chagla C.J., and S. T. Desai J., dealing with thosecontentions. Upon the view we take on the question of the enforceability of theawards in question in the manner sought in this case it is not necessary toadvert to those pleadings.

52. It was not disputed before us that the defendants had, at the date ofsuit, ceased to reside or carry on business within the limits of the originalcivil jurisdiction of the High Court of Bombay. The appeal court, while holdingthat the judgment of the Supreme Court of New York cannot be enforced againstthe defendants in a suit brought on the original side of the High Court tookthe view that the awards upon which the judgment is based can be enforcedbecause they give rise to a cause of action and a part of that cause of actionhad arisen in Bombay. The reason why the judgment of the Supreme Court of NewYork could not be the foundation of the suit is, in the words of the learnedChief Justice, as follows :

'The foreign judgment was passed in New York andthe defendants did not reside and carry on business within jurisdiction at therelevant date. The only way that jurisdiction could possibly have beenattracted was by an averment that there was an obligation under the judgment onthe part of the defendants to pay the amount in Bombay or that the defendantshad undertaken the obligation to pay the judgment amount in Bombay. There is nosuch averment in the Plaint and in the absence of any such averment if thePlaint had been based only on the foreign judgment then we might have agreedwith the learned Judge and held that the Court had no jurisdiction.'

53. No doubt, the learned Chief Justice has further said that it wasunnecessary to decide the matter finally because in his view the plaintiffswere entitled to the relief claimed on the basis of the awards. We may pointout that Mr. Setalvad, who appeared before us for the plaintiffs, did notchallenge the finding of the appeal court on this point and did not seek toargue that the judgment of the Supreme Court could furnish a cause of action tothe plaintiffs in respect of the present suit.

54. We entertain no doubt as to the correctness of the view that theplaintiffs are not entitled to enforce the judgment of the Supreme Courtagainst the defendants by a suit instituted on the original side of the HighCourt and therefore, we should ordinarily have let the matter rest there. Ourreasons for agreeing with the High Court's conclusion on the point are,however, different and, therefore, it is necessary for us to state them. Beforewe do so, it would be desirable to examine the position regarding theenforcement of foreign awards and foreign judgments based upon awards. Underthe Arbitration Protocol and Convention Act, 1937 (VI of 1937), certaincommercial awards made in foreign countries are enforceable in India as if theywere made on reference to arbitration in India. The provisions of this Act,however, apply only to countries which are parties to the Protocol set forth inthe First Schedule to the Act or to awards between persons of whom one issubject to the jurisdiction of some one of such powers as the Central Governmentbeing satisfied that the reciprocal provision have been made, may, bynotification declare to be parties to the Convention, setforth in the SecondSchedule to the Act. It is common ground that these provisions are notapplicable to the awards in question. Apart from the provisions of theaforesaid statute, foreign awards and foreign judgments based upon awards areenforceable in India on the same grounds and in the same circumstances in whichthey are enforceable in England under the common law on grounds of justice,equity and good conscience. We may add that in cases arising on the originalside of the High Court of Bombay, English common law is applicable 'asnearly as the circumstances of the place and the inhabitants admit' byvirtue of clause 19 of the Letters Patent read with clause XLI of the Charterof the Bombay High Court.

55. The common law on the subject is crystallised thus as rule 198 inDicey's Conflict of Laws, 7th edn. at p. 1056.

'Rule 198(1) : A foreignarbitration award which has been rendered enforceable by a judgment in thecountry where it was given may be enforced by an action as a foreign judgment.

(2) A foreign arbitration awardwhich has not been rendered enforceable by a judgment in the country where itwas given may be enforced by an action at the discretion of the court if theaward is, -

(a) in accordions with theterms of the submission agreement; and

(b) valid according to the lawgoverning the arbitration proceedings; and

(c) (semble) final according tothe law governing the submission agreement.'

56. The position as summarised in Russel On Arbitration 16th edn. is set outthus at p. 282 :

'An award made by foreignarbitrators, which requires and enforcement order to render it enforceable bythe local law, is not a judgment of a foreign tribunal which can be enforced byaction in English courts. ...................................

57. But an award which is complete and could be enforced in the countrywhere it was made is enforceable in England at common law, quite apart from anyrights given by Part II of the Act. {Arbitration Act, 1950-14 Geo. 6, c.27).'

58. Dealing with actions upon foreign awards at common law, it is statedfurther at p. 283 thus :

'To succeed in such anaction the plaintiff must prove :-

(1) That there was anarbitration agreement;

(2) That the arbitration wasconducted in accordance with that agreement; and

(3) That the award was madepursuant to the provisions of the agreement and is valid according to the lexfori of the place where the arbitration was carried out and where the ward wasmade. ....................

If the award is validly made inconsequence of a valid arbitration agreement, a sum found due by the award andunpaid may be sued for in an action upon the agreement.'

59. Thus commercial arbitration awards, though based on a contract toarbitrate are not contracts and although they are decisions they are notjudgments. Even though that is so, it has been held in several cases in Englandthat even where an award has not been reduced to a judgment in a foreigncountry it can be enforced in England provided, of course, the award answersmutatis mutandis the tests for determining the enforceability of foreignjudgments. Thus, the foreign arbitration tribunal must have acted upon a validsubmission within the limits of jurisdiction conferred by the submission, andthe award must be valid and final. (see Dicey's Private International Law, p.1057). Then it is stated there :

'Others believe that enforcement in England mustdepend upon the nature of the award in the country where it was given. Thus, ifthe award must be, and has been, reduced to a judgment abroad, the judgment andnot the award must be enforced in England. If the award give rise to a claim incontract abroad, it must be enforced as a contract in England. However, as willbe shown, this is not the view generally adopted by the courts, for the awardis treated as a contract in England, no matter whether foreign law so regardsit or not. Still others assert that the enforcement of an award in England isbased not on the award, but on the contractual agreement to submit toarbitration all differences arising out of the original contract, on the groundthat the submission to arbitration itself implies a contractual agreement toabide by the award, thereby extinguishing the original cause of action.'

60. After starting this, the learned author proceeds to say :

'It is submitted that no one short formula issatisfactory and that the enforcement of a foreign award involves a complex ofquestions which must be treated separately.'

61. He has then dealt with various decisions in England and also theopinions of certain writers. The conclusions stated in so far as they arerelevant to this case are :-

1. In all enforcement proceedingsin England the plaintiff must first obtain an enforceable title in Englandi.e., he must either apply for leave to enforce the award or must bring anaction on the award.

2. In an enforcement proceedingin England the action on the award must take the form of a claim in contract.This rule is based upon the assumption that the agreement to perform the awardis implied in the submission and that the submission is the contract on whichthe action is based.

3. In order to be enforceable inEngland, the foreign award need not first be pronounced enforceable in thecountry of its origin. (see Union National des Cooperatives Agricoles deCereales v. Robert Catterall & Co. Ltd. (1959) 2 Q.B. 44 though there theaward was being enforced under the Arbitration Act, 1950). If, however, theforeign award is followed by judicial proceedings in the foreign countryresulting in a judgment of the foreign court which is not merely a formal ordergiving leave to enforce the award, enforcement proceedings in England must bebrought on the foreign judgment or possibly on the original cause of action butprobably not on the award. If the foreign judgment has the character of aformal order giving leave to enforce the award it is doubtful whether theforeign award or the foreign order is to be enforced in England. If thedistinction between foreign judgments on the award and foreign formalenforcement orders can be maintained in practice, them, it is believed that theforeign award and not the foreign order, will be enforced in England, if theenforcement order is purely formal.

4. For the purpose of enforcing aforeign award plaintiff must prove only (1) submission, (2) compliance with thesubmission in the conduct of an arbitration and (3) the validity of the awardaccording to the law of the country where it was made. This is also laid downin Norske Atlas Insurance Co. Ltd., v. London General Insurance Co., Ltd.I.L.R (1927) 43 541 and according to the learned author this decisioncorrectly indicates the conditions which must be fulfilled if a foreign awardis to be enforced in England.

62. We may, however, mention that relying upon Merrifield, Ziegler &Co.;, v. Liverpool Cotton Association Ltd. (1911) 105 L.T.R. 97 the learnedSolicitor-General contended that an award should also be one which isenforceable in the country in which it was rendered without the aid of anenforcement order or a judgment. There, a German award was sought to beexecuted in England. Eve J., who decided the case, found that under the Germanlaw the award had the effect of final judgment pronounced by a court of law.But it could not be enforced by execution unless an enforcement order was madeby the Court and further no enforcement order will be made if any groundsexists for setting the award aside. In the course of his judgment the learnedJudge observed :

'It is not even as though the award wereenforceable unless the court stays its operation; the contrary is really thecase, and for all practical purposes it is still-born until vitality is infusedinto it by the court. It is then, for the first time, endowed with one, atleast, of the essential characteristics of a judgment - the right to enforceobedience to it.'

63. Dicey has pointed out that this is the only case where such a view hasbeen taken and that it was not even referred to in the Norske's case (1927) 43T.L.R 541). Nor was it referred to in the Union Nationale case (1959) 2 Q.B.44). There, a Danish award, though not enforceable in Denmark in the absence ofan enforcement order was held by the court of Appeal to be enforceable underthe Arbitration Act of 1950 on the ground that it had become final and thatunder the Danish law only formal objections could be taken to such an award inthe proceedings for obtaining an enforcement order.

64. It will thus be seen that there is a conflict of opinion on a number ofpoints concerning the enforcement of foreign awards or judgments, based uponforeign awards. However, certain propositions appear to be clear. One is thatwhere the award is followed by a judgment in a proceedings which is not merelyformal but which permits of objections being taken to the validity of the awardby the party against whom judgment is sought, the judgment will be enforceablein England. Even in that case, however, the plaintiff will have the right touse on the original cause of action. The second principle is that even aforeign award will be enforced in England provided it satisfied mutatismutandis the tests applicable for the enforcement of foreign judgments on theground that it creates a contractual obligation arising out of submission toarbitration. On two matters connected with this there is difference of opinion.One is whether an award which is followed by a judgment can be enforced as anaward in England or whether the judgment alone can be enforced. The other iswhether an award which it not enforceable in the country in which it was madewithout obtaining an enforcement order or a judgment can be enforced in Englandor whether in such a case the only remedy is to sue on the original cause ofaction. The third principle is that a foreign judgment or a foreign award maybe sued upon in England as giving good cause of action provided certainconditions are fulfilled one of which is that it has become final.

65. Bearing in mind these principles let us consider whether the judgment ofthe Supreme Court could be enforced against the defendants by instituting asuit on the original side of the High Court. The appeal court has, as alreadystated taken the view that the original cause of action having arisen wholly orin part within the limits of the original jurisdiction of the High Court, thesuit was maintainable. If the plaintiffs were suing upon the original cause ofaction, there would have been no difficulty and the High Court could havegranted leave under clause 12 to the plaintiffs to institute the suit. Buthere, we are concerned not with the original cause of action but with thejudgment of the New York Supreme Court and the award. The judgment furnishes anindependent cause of action. The question would be whether the cause of actionfurnished by it arose within the limits of the original jurisdiction of theHigh Court. The judgment was rendered in New York and, therefore, the cause ofaction furnished by it arose at that place and not anywhere else. This cause ofaction is really independent of the cause of action afforded by the contractand, therefore, if advantage was sought to be taken of it, the suit would notlie at Bombay. This point does not appear to have come up for a direct decisionin any case.

66. We may, however, refer to the decision in East India Trading Co., v.Carmel Exporters & Importers Ltd (1952) 2 Q.B. 439. There, an action wasbrought in England to enforce a foreign judgment awarding damages for breach ofcontract and the question for consideration was the relevant date forconverting the amount of damages into sterling. After considering the relevantdecisions on the point Sellers J., held that the relevant date would be thedate of the foreign judgment. The ground given by him was that the plaintiff'scause of action was the foreign judgment and it is that judgment which createsthe debt which was enforceable by action in England. The principle underlyingthis case should also apply to the present one because in both cases the causeof action is founded on foreign judgments, though in the case before us it isfounded alternatively, upon foreign awards also. The only difference is thatwhile in our case the question is where it arose, in the case cited thequestion was as to when it arose.

67. The reason why a foreign judgment should be deemed to create a newobligation has not been stated in this case. But it is to be found in thejudgment of Blackburn J. in Schibsby v. Westenholz (1870) 6 Q.B. 155 where at p. 159 he has stated :

'The true principle on which judgments of foreigntribunals are enforced in England is that stated by Parke B. in Russel v. Smyth(1842) 9 M & W 810), and again repeated by him in Williams v. Jones (1845) 13 M W 628 that the judgment of a court of competent jurisdiction overthe defendant imposes a duty or obligation on the defendant to pay the sum forwhich judgment is given, which the courts in this country are bound to enforce;..........'

68. As James L.J., has said in Re Davidson's Settlement Trusts (1873)L.R./E. & 383, 386) 'It would be impossible to carry on the businessof the world if courts refused to act upon what has been done by other courtsof competent jurisdiction.'

69. Schmitthoff in The English Conflict of Laws, 3rd edn. has stated at p.459 :

'The English courts recognise that a foreignjudgment give rise to private rights which, on principle, should be protectedby them. Consequently, when referring to the recognition of a foreign judgment,what is actually meant is the recognition of the private right that is createdby the judgment and not the enforcement of a foreign judicial act of State. Inthe words of Professor Read ('Recognition and enforcement of foreign judgments(1938)' by Prof. Read. Quoted by Schmitthoff in 'The English Confictof Laws' p. 459.) - 'The true basis upon which the Anglo-Dominionauthorities ...... place the recognition of a foreign judgment is that itproves the fact that a vested right has been created through the judicialprocess by the law of a foreign law district.'........ The view that therecognition of a foreign judgment in the English jurisdiction is based on theassumption that the foreign judgment creates a new legal obligation is firmlyestablished by numerous decisions.'

70. No divergent views have been expressed upon this question. No doubt, theEnglish doctrine of merger has been consistently held in English not in Englandnot to apply to a foreign judgment with the result that despite the fact that aplaintiff has obtained a foreign judgment he may nevertheless sue in an Englishcourt upon the original cause of action instead upon the judgment. When he suesupon the original cause of action, no doubt, the court within whose jurisdictionthe cause of action arose would be entitled to entertain the suit. But, if onthe other hand, he chooses to sue upon the judgment, he cannot foundjurisdiction for the institution of the suit on the basis of the original causeof action because once he chooses to rest himself on the judgment obtained byhim in a foreign court, the original cause of action will have no relevancewhatsoever even though it may not have merged in that judgment.

71. Since the judgment with which we are concerned was pronounced in NewYork the cause of action for a suit based thereon must be said to have arisenat that place. Since that is so, it follows, that the cause of action in so faras it rests on the judgment, did not arise within the limits of the original jurisdictionof the High Court of Bombay and the suit based upon that judgment must be heldto be beyond the jurisdiction of the Court.

72. The alternative claim of the plaintiffs is for the enforcement of theawards themselves and it is this which the Appeal Court has held to be onewhich can validly form the basis of the present suit. The learnedSolicitor-General contended that the awards having merged in the judgmentcannot afford a basis to the present suit. It is true that it is pointed out inDicey's Conflict of Laws that some writers have expressed the view that where aforeign award must be, and has been, reduced to a judgment the judgment and notthe award must be enforced in England. But it has also been pointed out thatthis is not the view generally adopted by the courts in the United States ofAmerica as would appear from the Following passage from Lorenzen's 'Caseson Conflict of Laws' 4th edn. p. 1090 :

'As a judgment of a foreign country is held not tomerge the original cause of action, it would follow that an action might bebrought upon the award, notwithstanding the fact that it has been convertedinto a judgment abroad.'

73. This question was left open by the Privy Council in L. Oppenheim &Co.;, v. Mahomed Haneef I.L.R. 45 Mad. 496 as it had not been raised in thatcase. The recognition given to a foreign judgment by the English Courts is, aspointed out by Schmitthoff at p. 459 of the English Conflict of Laws, not basedupon the doctrine of merger. For, this doctrine does not apply to judgments ofcourts which are not courts of record in the English sense. It may be thatfounded as the American legal system is on the common law of England the NewYork Supreme court would be a court of record in the English sense and,therefore, the doctrine of merger could be said to apply to a judgment recordedby it. However, as no contention was raised before us that the Supreme Court ofNew York was a court to record, we would leave the matter there.

74. Just as a foreign judgment affords a fresh cause of action upon which asuit can be brought in an English court, so is the case with regard to aforeign award. Thus, in Bremer Oeltransport GMBH v. Drewry [1933] 1 K.B. 753it was held that a foreign award furnishes a new cause of action based on theagreements between the parties to perform the award. This view has beenaccepted in Halsbury's Laws of England Vol. II, p. 45. In that case it wascontended for the respondents that in so far as the submission is contractwhereby the parties to it impliedly undertake to abide by and carry out theaward of the arbitrators, the enforcement of the award would be the enforcementof a contract made within jurisdiction (the contract having been entered intoin London while the award thereunder made at Hamburg in Germany). On the otherhand it was contended for the appellant that the award having been made inHamburg the action for the enforcement in England would not be an action forthe enforcement of a contract made in England. Rejecting this contention SlesserL.J., after considering the authorities on the subject observed at p. 760 :

'So far it would appear clear that in the opinionboth common law and equity judges the award is to be regarded as merely theworking out of a term of the original agreement of submission............'

75. and then referred to the following observations of James L.J., inLlanelly Ry. and Dock Co., v. London and North Western Ry. Co. (1873) L.R. 8 Ch. 942 :

'It would be difficult to say that the realquestion between the parties could be determined by the arbitrator under thatclause; because, if the plaintiffs are right in their contention, they havedetermined that part of the agreement as well as everything else.'

76. Now, when a plaintiff uses upon a foreign award what he in fact does isto ask the court to pass a judgment in his favour for the amount stated in theaward only after proving five facts :

(1) that there was a contractbetween the parties whereunder disputes between them could be referred toarbitration to a tribunal in a foreign country;

(2) that the award is inaccordance with the terms of the agreements;

(3) that the awards is validaccording to the law governing arbitration proceedings obtaining in the countrywhere the award was made;

(4) that it was final accordingto the law of that country; and

(5) that it was a subsistingaward at the date of suit.

77. A view has been expressed in some English cased that an award must alsobe enforceable in the country in which is was made before a suit can be broughtin England on its basis. But upon the view we are taking it is not necessary todecide this point. Now, when a suit is brought by a plaintiff on the basis ofan award it is not necessary for him to prove that the amount claimed wasactually payable to him in respect of the dispute nor is it open to thedefendants to challenge the validity of such an award on grounds like thosewhich are available in India under s. 30 of the Arbitration Act. A very limitedchallenge to the claim based on the award is permissible to the defendants andthat is one of the reasons why it is important to ascertain whether the awardhas in fact attained finality in the country in which it was made. We willassume that the plaintiffs have satisfactorily established the first of thefive conditions which we have set out above. The question then is whether thefourth and the fifth conditions have been satisfied.

78. As to when as award can be regarded as final has been consideredrecently in the Union Nationale case ((1959) 2 Q.B. 44). The facts of that caseare succinctly summarised in the head-note and we can do no better reproduceits relevant portion :

'By an agreement in French made in Paris, datedAugust 31, 1956, the appellants agreed to sell to the respondents a quantity ofwheat seed. The agreement contained as arbitration clause the Englishtranslation of which was : 'All difference arising out of the present contractwill be judge by the Arbitration Chamber of Copenhagen which will settlewithout appeal wit7h the powers of an amicable arbitrator.' Differences havingarisen between the parties they were referred pursuant to the arbitrationclause to the Copenhagen Chamber of Arbitration. Under the rules regulating theprocedure of the arbitration chamber, awards are made by a committee of thechamber. Regulation 14 of the rules provides that : award made by the Committee.... shall be final. An award can only be appealed against to the appeal courtattached to the committee ...... If the presidency decides that the appealcannot be made .... the award made by the judgment and arbitration committeeshall be final .....' By an order of October 6, 1958, the committee awards tothe respondents the sum of Pound 183,000. The presidency of the arbitrationcommittee on November 25. 1958 refused the appellants' application for leavesto appeal and notified them that the award of October 6, 1958, was final. Theaward could not be enforced in Denmark without an order of a Danish court. Therespondents, by summons under section 36 and 26 of the Arbitration Act. 1950,which applies to arbitration awards made in Denmark, applied for leave toenforce that award. The appellant claimed that the award was a foreign awardand had not become final in the country in which it was made.'

79. The contention raised on behalf of the appellants was that the award hadnot become final in the country in which it was made because it was notenforceable in that country. The Court of Appeal referred to regulation 14which gives finality to an award made in accordance with the rules regulatingthe procedure of the arbitration chamber and accepted the opinion of aqualified Danish lawyer that according to the Danish law the award had becomefinal, though it could not be enforced in Denmark without obtaining a judgmentfrom a Danish Court and that during the proceeding before such court it wouldbe open to the defendant to complain that the award suffered from formaldefects but nothing else. Thus, in this case the Court of Appeal has drawn adistinction between 'finality' and 'enforceability 'of an award and held thatwhere under the laws of the country in which an award has been made, it is nolonger open to challenge it on merits it must be regarded as final even throughin the form in which it stands it may not be enforceable there. Rule 15, clause(E) of the American Spice Trade Association whereunder the awards in theplaintiff's favour were made runs thus :

'The award of such arbitrators and umpire or solearbitrator shall be final and binding on both parties unless within threebusiness days after receipt of the award, an appeal with a fee $75 be lodgedwith the Secretary of the Association by either disputant. Settlements under anarbitration award or awards of the Arbitration Committee shall be made within10 days from the date of such award, and if not so settled, judgment may beentered therein the accordance with the practice of any Court havingjurisdiction.'

80. One point of distinction between the Danish rule and rule 15E of theAmerican Rules is that the latter requires the obtaining of a judgment forenforcing it in case the claim arising out of the award is not settled. Nodoubt, the American rule also says that the award shall become final andbinding on the parties but whether it takes away the jurisdiction of the courtto go behind its finality will have to be ascertained by reference to the lawsof New York State. For, that rule is no more than a term of the contractbetween the parties and must be subject to the laws of the State.

81. It would be desirable at this stage to compare foreign judgment withforeign awards and bear in mind the difference between them. No doubt, both ofthem create new obligation. The judgment of a foreign sovereign is a command ofthat sovereign which has to be obeyed within the territorial limits of thatsovereign's jurisdiction. On the principle of comity it is, therefore, accordedinternational recognition provided it fulfills certain basic requirements. Aforeign award, on the other hand, which is founded on a contract of the partiesand 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 satisfythe 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, buteven in that case he should plead the award because it might in appropriatecases, be regarded by the English courts as conclusive between theparties.'

82. These observation would perhaps now stand slightly modified by the view takenby the Court of Appeal in the Union Nationale case (1959) 2 Q.B. 44 in thesense that even an award which has not obtained the status of a judgment in thecountry in which it was rendered but which possesses an essential attribute ofa judgment, that is, finality, it could be sued upon in another country.

83. Bearing in mind these principles we must consider what are therequirements of the laws of New York State for giving an award finality. InAppendix I to Sturges' Cases on Arbitration Law, the New York Arbitration Law,Art. 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 runsthus :

'Motion to confirm award : At any time within oneyear after the award is made, as prescribed in the last section, any party tothe controversy which was arbitrated may apply to the court having jurisdictionas provided in section fourteen hundred fifty-nine for an order confirming theaward; and thereupon the court must grant such an order unless the award isvacated, modified or corrected, as prescribed in the next two section or unlessthe award is unenforceable under the provisions of section fourteen hundredfifty-eight. Notice of the motion must be served upon the adverse party or hisattorney, as prescribed by law for service of notice of a motion upon anattorney in an action in the same court. In the Supreme Court, the motion mustbe made within the judicial district embracing the country where the judgmentis to be entered.'

84. Then follows s. 1462 which deals with a motion to vacate award; s.1462-a which deals with a motion to modify or correct an award; s. 1463 whichdeals with 'notice of motion and stay'; s. 1464 which deals with 'entry ofjudgment on award and costs'; s. 1465 which deals with the judgment roll and s.1466 which deals with effect of a judgment and its enforcement. It is clearfrom s. 1462 that in the motion to vacate an award a party to the arbitrationcan challenge the award on the following five grounds :

'1. Whether the award wasprocured by corruption fraud or under means.

2. Where there was evidentpartiality or corruption in the arbitrators or either of them.

3. Where arbitrators were guiltyof misconduct in refusing to postpone the hearing upon sufficient cause shown,or in refusing to heat evidence pertinent and material to the controversy; orof any other misbehaviour by which the right of any party have been prejudiced.

4. Where the arbitrators exceededtheir power, or so imperfectly executed them, that a mutual, final and definiteaward upon the subject-matter submitted was not made.

5. It there was no validsubmission or contract, and the objection has been raised under the conditionset forth in fourteen hundred fifty-eight.'

85. It will thus be seen that despite that finality spoken of by Rule 15E,this enable the defendants to apply for vacating the award on certain groundsand thus imperil the finality accorded to the award by his contract. It is onlyafter the objections under s. 1462 are disposed of that a judgment putting anend to all controversy, can be entered under s. 1464 which reads thus :

'Entry of judgment on award and costs; Upon thegranting of an order confirming, modifying or correcting an award, judgment maybe enters in conformity therewith, as upon a referee's report in an action,except as is otherwise prescribed in this article. Costs of the application andof the proceedings subsequent thereto; not exceeding twenty-five dollars anddisbursements, may be warded by the court in its discretion. If awarded, theamount thereof must be include in the judgment.'

86. After the judgment is pronounced a judgment roll is prepared and thejudgment docketed as if it was rendered in an action. The effect of thejudgment as enunciated in s. 1466 is as follows :

'Effect of judgment and enforcement : The judgmentso entered has the same forced and effect, in all respects as and is subject toall the provisions of law relating to, a judgment in an action; and it may beenforced as it is had been rendered in an action in the court in which it isentered.'

87. From all these provisions it would be abundantly clear that the awardhas no finality till the enter procedure is gone through and that the award assuch can never be enforced. What is enforceable is the judgment. There is noprovision in the law providing for taking proceeding for the confirmation of anaward in which all objections to the award could be made except s. 1461. Theproceedings taken thereunder must, however, culminate in a judgment. In thisrespect the procedure under the law of the New York State is quite differentfrom that under the Arbitration law of Denmark. Apparently, that is why theplaintiffs, after obtaining the awards, went up to the Supreme Court of NewYork for obtaining a judgment confirming the awards. No doubt, as a result ofthe judgment the decision of the arbitrators became unchallengable in the NewYork State and for all practice purpose in India as well but in the process theaward made by them has given way to the judgment of the Supreme Court of NewYork. It is this judgment which can now furnish a cause of action to theplaintiffs and not the awards.

88. No doubt, an award can furnish a fresh cause of action. But the award mustbe final. If the law of the country in which it was made give finality tojudgment based upon an award and not to the award itself, the award can furnishno cause of action for a suit in India. In these circumstances we hold thatthough the High Court of Bombay has jurisdiction to enforce a final award madein a foreign country in pursuance of a submission made within the limits of itsoriginal jurisdiction, the awards in question being not final, cannot furnish avalid cause of action for the suit. Upon this view we allow the appeal anddismiss the suit with costs throughout. The normal rule as to costs must applybecause the choice of forum made by the plaintiffs was deliberate and with theknowledge that they were taking a risk in not seeking out the defendants at theplace where they reside or carry on business.

89. By Court - Following the opinion of the majority, the appeal is allowedwith costs.

90. Appeal allowed.


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