CIVIL REVISION APPLICATION NO. 99 OF 1997. Date of decision: 21-4-1997 For approval and signature The Honourable Mr. Justice R. R. Jain Mr. Suresh M. Shah & Mr. Mehul S. Shah, advocates for the applicants. Mr. R.S. Sanjanwala, advocate for the respondent. 1. Whether Reporters of Local Papers may be allowed to see the judgment? Yes 2. To be referred to the Reporter or not? Yes 3. Whether their Lordships wish to see the fair copy of judgment? No 4. Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder? No 5. Whether it is to be circulated to the Civil Judge? No Coram: R.R.Jain, J. April 21, 1997. Oral judgment: Rule. Mr. Sanjanwala waives service of rule. The dispute relates to execution of a foreign award, in India, under the provisions of Arbitration and Conciliation Ordinance, 1996 ( which now has become "Act"). The applicant is a foreign corporate body whereas the opponent is a partnership firm carrying on business in India. It appears that as some disputes arose between the parties, the same were referred to a domestic Tribunal as per the provisions of the Arbitration Act, 1950, in force in United Kingdom. The domestic Tribunal resolved the disputes and passed award on 25.2.1996 in favour of the applicant for a sum of US $1,53,650 (equivalent to Rs.56,69,685/-) with interest at the rate of 18% per annum from 1.1.1995 till the date of the award. Since the opponent against whom the award operates is carrying on business and is having property within the territory of India, the applicant initiated execution proceedings No.3 of 1996 in the Court of District Judge, Bhavnagar (Gujarat), India, under sections 36, 49 and 58 of the Arbitration and Conciliation Ordinance, 1996 (hereinafter referred to as the "said Ordinance" or the "said Act"). After institution, the matter was assigned to the Court of Joint District Judge, Bhavnagar, who, after hearing, issued appropriate process. In response to the process, the opponent appeared and filed objections Ex.16, challenging maintainability on several grounds. However, the learned Joint District Judge, Bhavnagar, after hearing both the parties, rejected the objections and directed the applicant to take further steps for execution of award. Aggrieved by this order, the opponent has filed this application under Section 115 of the Civil Procedure Code ("the Code" for short) (since the liabilities arise under an award, the petitioner is also referred as "judgment creditor" and the respondent as "judgment debtor" hereinafter). This is a very interesting matter wherein as regards facts there is no dispute between the parties. Practically both the parties rely upon the same provisions of law in support of their respective contentions but giving different interpretations, therefore, the only question would be about interpretation of relevant provisions of the Ordinance and its applicability. The statement of object and reasons for enacting present Ordinance may be of little help for appreciating rival contentions. But, before going to the statement of object and reasons, it would be worthwhile to make a short reference to various enactments relating to Arbitral proceedings in India prevailing prior to promulgation of the Ordinance, 1996. Indian Arbitration Act, 1940 relates to domestic arbitral proceedings. It is a consolidated and self-contained Act providing for reference of dispute and appointment of arbitrator, initiation of proceedings, publication of award, procedure for shaping award as decree so as to make it executable, the extent of interference by Court in arbitral proceedings, etc. At the same time, the Arbitration Act, 1940 was silent about foreign awards, its binding nature, enforcement and execution. Therefore, in order to recognise foreign awards and its enforceability, two enactments were in force (i) Foreign Awards (Recognition and Enforcement), Act, 1961 based on the convention for the recognition and enforcement of foreign arbitral awards executed at New York in the year 1958 and (ii) Arbitration (Protocol and Convention) Act, 1937, based on Geneva Convention making foreign arbitral awards binding to the signatory countries to that award. Since India was also signatory to both the conventions, both the Acts were in force in India. By and large, the provisions of Foreign Awards (Recognition and Enforcement) Act, 1961 and Arbitration (Protocol and Convention Act, 1937 are almost identical. Both these Acts refer to the effect of foreign award, and procedure for execution in India and its recognition as an award passed by domestic Tribunal giving shape of decree and making enforceable, fulfillment of conditions before enforcement of foreign awards and the evidence to be produced by the parties for arriving satisfaction qua enforceability and shaping foreign award as a decree of civil Court for the purpose of execution. Since signatories to both the conventions were different countries, two separate enactments are made, otherwise all the provisions are same. Hence recognition of a foreign award under either of the Act does not make any difference. NEED FOR PROMULGATION OF ORDINANCE 1996: Well recognised mode of recognition of disputes is through the mechanism of sovereign powers, i.e., Courts. The judicial system prevalent in Courts is governed by procedure prescribed under various enactments. Many provisions are very technical and have become synonym for technicalities, obstructions causing delay. The procedure is so cumbersome that many a times decades are taken for final resolution of disputes. The cumbersome procedure and protracted litigation becomes very costly in terms of money, time and energy and once a person gets in it, finds difficult to extricate himself even if he manages and gets frustrated, exhausted mentally, physically and financially. Businessmen are now very much concerned in the finality than in the legality of differences so that they know as to where they stand and to what extent the fruits are to be ripen. Therefore, alternative mechanism for resolution of disputes is evolved by reference of disputes to domestic Tribunal i.e., arbitral proceedings. It is indeed intended to ensure fair and efficient and speedy trial giving finality to the decision. It is also intended to minimise the supervisory role of Courts and enhance the assistance. In other words, the main object is to drastically curtail supervisory role of Courts, demolish various stages and proceedings through which an award was required to pass through in the mechanism of old enactments so that the object of speedy resolution of dispute is achieved. As discussed above, the Indian Arbitration Act, 1940 dealt with domestic arbitration only, whereas two other enactments were in force for recognition of foreign awards. Thus, a litigant was required to take recourse to the provisions of several enactments for execution of foreign award. Hence, the object of this Ordinance is also consolidated and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards and to define the law relating to conciliation. Keeping in mind the mandate, the willing Nations came on International Trade Law so as to make Indian Law relating to arbitration responsive to the contemporary requirement and make its economic requirements effective. We now come to the Arbitration and Conciliation Ordinance, 1996 which was promulgated on 16.1.1996 and brought into force with effect from 25.1.1996. The second Ordinance 1996 was also promulgated on 26.3.1991 as a supplement to main Ordinance giving retrospective effect from 25.1.1996. The ordinance received assent of the President on 16.8.1996, giving the retrospective effect from 25.1.1996. Thus, the Ordinance has now become an Act. All the provisions of the Ordinance as well as Act are same. Therefore, the use of word "The Ordinance" shall also mean the Act and vice a versa. With this brief introduction to the law of arbitration in India prevailing prior to the Ordinance now I deal with rival contentions. UNDISPUTED/ADMITTED FACTS: The arbitral proceedings commenced in England on 1.1.1995 under the provisions of Arbitration Act, 1950 in force in United Kingdom. Award was passed on 25.2.1996. The Arbitration and Conciliation Ordinance 1996 (now the Act) came into force with effect from 25.1.1996. Section 85 of the Ordinance/Act deals with repeal and savings clause. Section 85 of the Act is reproduced as under: "85. (1) The Arbitration (Protocol and Convention) Act, 1937 (6 of 1937), the Arbitration Act, 1940 (10 of 1940) and the Foreign Awards (Recognition and Enforcement) Act, 1961 (45 of 1961) are hereby repealed. (2) Notwithstanding such repeal,-- (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties but this Act shall apply in relation to arbitral proceedings which commenced on or after the Act comes into force; (b) all rules made and notifications published, under the said enactments shall, to the extent to which they are not repugnant to this Act, be deemed respectively to have been made or issued under this Act." Thus, three Acts relating to arbitral proceedings referred to in sub-section (1) are repealed. However, the provisions are saved in relation to arbitral proceedings commenced before the enforcement of this Ordinance/Act. The petitioner/judgment debtor has mainly harped upon maintainability of execution proceedings on following grounds: (i) provisions of Ordinance are not applicable by virtue of the saving clause i.e., Section 85 (2) and (ii) alternatively, if the provisions of the Ordinance are applicable then execution in present form is not maintainable as the Indian Court has not arrived at satisfaction about enforceability of the award as required under the Ordinance, (iii) the Court entertaining execution proceedings has no jurisdiction to try and entertain. Contention No.1 Mr. Shah for the petitioner has argued that by clause (a) of sub-section (2) of Section 85 all the arbitral proceedings before the Act came into force are saved. In this case, admittedly, as arbitral proceedings commenced prior to enforcement of the Act, shall be deemed to have been saved and provisions of old Act shall apply. It is true that saving clause saves arbitral proceedings commenced before the Ordinance came into force. But, at the same time, mere commencement does not confer or invest any right upon any of the parties. According to the saving clause, what is saved and preserved is the right accrued at a particular time. In this case, we are mainly concerned with the execution. The right of execution always depends upon existence of an award. But in this case, such an award was never in existence on the date of commencement. As rightly argued by Mr. Sanjanwala, the question of applicability of old provisions would have arisen had the arbitral proceedings commenced prior to the enforcement of the Ordinance had been continued and terminated thereafter. In support of this contention, Mr. Sanjanwala has relied upon decision of the Supreme Court in the case of Lalji Raja & Sons v. Hansraj Nathuram, AIR 1971 SC 974, and has argued that the repealing provisions always attract the rights acquired and privileges accrued under the law repealed by the amendment Act. The observations made in paragraph 18 of the judgment read as under and would be important for our purpose: ". . . . . . .Therefore the only question that we have to consider is whether it can be considered as a 'right accrued' within the meaning of S.20 (1) (b) of the Code of Civil Procedure (Amendment) Act, 1951. In the first place, in order to get the benefit of that provision, the non-executability of the decree must be a right and secondly it must be a right that had accrued from the provisions of the repealed law." In another judgment, in the case of Vinod Gurudas Raikar v. National Insurance Company Limited, AIR 1991 SC 2156, in terms the Supreme Court has observed that while considering question of applicability of repealing provisions, one must consider whether an accrued right has been affected. The question before the Supreme Court was about period of limitation for filing application for condonation of delay in an application under the Motor Vehicles Act. In that case accident had occurred prior to the enforcement of the new Act and the proceedings were initiated subsequently beyond the period of limitation. The question was whether it shall be governed by the old or new Act. The Supreme Court held that the mere right existing in a class of persons to take advantage of an enactment cannot be absence of any act done by the claimant towards availing himself of that right be deemed an accrued right. Same principle has also been laid down by the Supreme Court in the case of H.I. Trust v. Haridas Mundhra, AIR 1972 SC 1826 holding that for this purpose, the Court should consider whether the right is accrued and not mere right to take advantage on the date of repeal i.e., inchoate one. If we read the saving clause it becomes abundantly clear that what is intended to save is the right accrued or acquired. In this case, initiation of arbitral proceedings before the enforcement of the Ordinance was merely an expectation of hope of acquiring right of getting an award and reaping fruits therefrom by way of execution. It cannot be gainsaid that the right of execution was never in existence or force on the date of commencement of the new Act. Even reading clause 6 of General Clauses Act also it becomes abundantly clear that the repeal shall not revive anything not in force or existing at the time when the repeal took effect. The execution was not an accrued right under the old Act and/or had never been initiated as such hence the provisions saved can never apply. As argued by Mr. Sanjanwala, it is true that by the Ordinance all the three Acts i.e., the Arbitration (Protocol and Convention) Act, 1937, the Indian Arbitration Act, 1940 and the Foreign Awards (Recognition and Enforcement) Act, 1961 are repealed. But the 1937 and 1961 Acts simpliciter deal with execution of foreign awards. The execution proceedings which were in force and pending only would stand saved on the date of enforcement of the new Act. In this case the award was never in existence hence the question of applicability of saving clause qua the execution of a right which accrued subsequently, does not arise. I find great force in this submission because what is saved by the repealing clause is arbitral proceedings. 1937 and 1961 Acts do not refer to any arbitral proceedings and deal with execution of foreign awards only. The arbitral proceedings are dealt with under the Indian Arbitration Act 1940 only consequently what could have been saved is any proceedings initiated under the old Act and continued at the time of commencement. 1937 and 1961 Foreign Awards Acts refer to availing the fruits of accrued right only. Execution of foreign award cannot be termed as arbitral proceedings as the arbitral proceedings come to an end, the moment award is made and published. Thereafter the award is executed as a decree of Civil Court under the provisions of Code of Civil Procedure. Therefore, even if such an execution initiated under the old Act could not have been saved as is no more an arbitral proceedings. Thus, keeping in mind the ratio laid down by the Supreme Court in the judgments discussed above it is clear that as the right of execution did not accrue in favour of the respondent on the date of commencement of Ordinance the saving clause cannot be invoked insisting the applicability of old provisions. For the sake of repetition, I say that repealing Section 85 is self-contained and provides for positive and negative aspect therefore is to be interpreted keeping in mind intention of legislation without taking recourse to any other provision much less section 6 of the General Clauses Act as held by the Supreme Court in the case of Indira Sohanlal v. Custodian of E.P., AIR 1956 SC 77. Even for the sake of arguments, if we refer to clause (a) to Section 6 of the General Clauses Act, it is abundantly clear that what is saved by repealing clause is the right in force and in existence unless a different intention appears that the repeal shall not revive anything not in force and not in existence at the time at which repeal takes effect. Thus, the contention about maintainability of application under old provisions being devoid of merits deserves to be rejected. Contention No.2: In the alternative, Mr. Shah for the petitioner has argued that even assuming that the provisions of Ordinance apply then also the procedure adopted for execution is not in consonance with the mandate and spirit of various sections and the execution in present form would not be maintainable. Inviting my attention to part II of the Act regarding enforcement of foreign awards Mr. Shah has vehemently argued that the foreign award would be binding under this Chapter and can be executed only after arriving at satisfaction about enforceability for which a separate procedure is laid down. As argued by Mr. Shah, Section 47 of the Ordinance deals with enforcement of foreign award and contemplates a separate procedure preceding actual execution. According to Mr. Shah, it is incumbent upon the party holding a foreign award to file a separate application and to produce evidence as contemplated under Section 47 and also to fulfil the conditions laid down under Section 48 and if the Court is satisfied about enforceability then only such an award shall be deemed to be a decree under Section 49 available for execution. According to Mr. Shah, before applying for execution of a foreign award the party must separately apply to complete the stages mentioned in Sections 47, 48 and 49. In this case, admittedly, the respondent- judgment creditor has straight way applied for execution, treating the award as a decree, therefore, according to Mr. Shah, the execution is not maintainable. Mr. Shah for the petitioner has tried to distinguish between the word "enforcement" and "execution". According to him, a foreign award is not a decree and cannot be executed straight way unless tested on the anvil of the provisions of sections 47, 48 and 49 of the Act. On careful reading of all these provisions, I am of the view that the Act does not make any distinction between "enforcement" and "execution". All throughout Part II of the Act the word used is "enforcement" only and not 'execution'. The dictionary meaning of the word "enforcement" as given in different dictionaries is as under: The dictionary meaning of 'enforcement' given in Black's Law Dictionary, Fifth Edition reads as under: Enforcement. The act of putting something such as a law into effect; the execution of a law; the carrying out of a mandate or command. In P. Ramanatha Aiyar's The Law Lexicon, 1997 Edition, the meaning is given as under: Enforcement: In the case of contracts, doing something to make the opposite party to perform his part of the contract. In Legal Thesaurus by William C. Burton, Second Edition, the meaning is given as under: Enforcement. administration, carrying into effect, carrying out, coaction, compulsion, compulsory execution, constraint, dictation, effectuation, exaction, execution, force, forcible urging, implementation, imposition, insistence, insistence upon, necessitation, necessity, obligation, obligement, pressure, requirement, strengthening, support. Keeping in mind the meaning of word "enforcement" it becomes abundantly clear that what is meant by enforcement under Section 47 is nothing else but the execution as contemplated under Order 21 of the Civil Procedure Code. It is true that the award is a foreign award and before going for execution, the Indian Courts have to arrive at satisfaction about its genuineness and authenticity so that the Court may not be misled and be an instrument for recognising an illegal, unlawful, fabricated, bogus or got up document. Section 47 provides for production of original award or copy thereof duly authenticated and the original agreement as well as any such evidence as may be necessary to the satisfaction to hold that the award is a foreign award. This procedure ensures legality, validity and existence so that the same can be executed as a decree of that Court. Once a decree is produced for execution under the provisions of Ordinance 21 of the Civil Procedure Code, there is a presumption that the same is validly in existence and is passed by a Court of competent jurisdiction after following due procedure since the executing Court is not competent to go behind and examine the relations between parties and merits of lis in existence. In case of a decree passed by any Indian Court if any doubt is created about existence or genuineness it would be within the reach of Courts to examine. In case of a foreign award, it would not be open for Indian Courts to call for records and satisfy about genuineness and authenticity, therefore, before effective steps are taken for execution as a decree, the Court must satisfy itself about the authenticity and genuineness which can only be done by taking recourse to original agreement and evidence. Original agreement would enable the Court to ensure the relationship between the parties and source of lis cropping for resolution and reference to arbitration. The object of making provisions can be further culled out from sub-section (2) of Section 47 which says that if the award or agreement referred in sub-section (1) is foreign then the party seeking to enforce the award shall produce a translation into English certified as correct by a diplomatic or consular agent of the country to which that party belongs or certified as correct in such other manner as may be sufficient according to the law in force in India. In my view, this is done just to strengthen the belief of the Court about relationship, lis, reference and resolution by following due procedure and that the award for execution as a decree is a genuine and authenticated one. Section 48 lays down provisions for enforcement of foreign award and also the discretion of Indian Court to refuse execution. If the contesting party, i.e., a party against whom execution is invoked furnishes to the Court proof that (1) the parties to the agreement were under some incapacity or that the agreement was not valid under the law to which the parties have subjected, (2) that the party against whom award is invoked was not given proper notice of appointment of arbitrator or of the arbitral proceedings or was otherwise unable to present his case, (3) that the award deals with a difference not contemplated by or not falling within the terms of the submissions to arbitration or it contains decisions on matters beyond the scope of the submission to arbitration, (4) the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties and (5) the award has not yet become binding on parties or has been set aside or suspended by competent authority of the country in which the award is made. Thus it become clearly evident that the conditions to be fulfilled before enforcement are to satisfy the Court about the validity, legality and correctness of award so that it can be executed as a decree. Enforcement of such an award can also be refused if the Court finds that the subject matter of award is not capable of settlement by arbitration law of India or that enforcement of award would be contrary to the public policy of India. Explanation further provides that if the award is in conflict with the public policy of India and the making of the award was induced or affected by fraud or corruption, enforcement can be refused. Similarly, if an application for setting aside or suspension of the award has been made to a competent authority, enforcement can be refused. If we look at the provisions of Order 21 of Civil Procedure Code relating to execution of an ordinary decree passed by Civil Court same and similar grounds are available for challenging execution and the Court may in its discretion refuse execution. It cannot be gainsaid that if the decree is nullity or against