2001 (5) TMI 881 - SC - Companies Law

Whether the award would be governed by the Act for its enforcement or whether the provisions of the old Act would apply? Held that - Appeal allowed by way of remand. From the plain and literal reading of the said provision and the Gazette Notification, it is clear that the Act came into force on 22-8-1996. Thus the Act was brought into force with effect from 22-8-1996 vide Notification No. G.S.R. 375(E) dated 22-8-1996 published in the Gazette of India and that the Act being a continuation of the Ordnance is deemed to have been effective from 25-1-1996 when the first Ordinance came into force. Section 47 states as to what evidence the party applying for the enforcement of a foreign award should produce before the court. Section 48 states as to the conditions for enforcement of foreign awards. As per section 49, if the Court is satisfied that a foreign award is enforceable under this Chapter, the award shall be deemed to be a decree of that court and that court has to proceed further to execute the foreign award as a decree of that court. If the argument advanced on behalf of the respondent is accepted, the very purpose of the Act in regard to speedy and effective execution of foreign award will be defeated. Thus, none of the contentions urged on behalf of the respondent merit acceptance so as to uphold the impugned judgment and order. We have no hesitation or impediment in concluding that the impugned judgment and order cannot be sustained.

Issues Involved:
1. Date of the commencement of the Arbitration and Conciliation Act, 1996.
2. Applicability of the Act to the enforcement of foreign awards.
3. Whether the judgment in Thyssen Stahlunion GMBH was 'per incuriam'.
4. Whether separate proceedings are required for enforcement and execution of foreign awards.

Detailed Analysis:

1. Date of the commencement of the Arbitration and Conciliation Act, 1996:
The principal legal issue was determining the exact date when the Arbitration and Conciliation Act, 1996 ("the Act") came into force. The appellant argued that the Act commenced on 25-1-1996, while the respondent contended it was 22-8-1996. The Court noted that the Act was a continuation of the Ordinance effective from 25-1-1996, and thus, for practical and legal purposes, the Act was deemed effective from 25-1-1996 despite the official commencement date being 22-8-1996.

2. Applicability of the Act to the enforcement of foreign awards:
The Court examined whether the foreign award dated 13-8-1996 could be enforced under the Act. It was held that a foreign award given after the commencement of the Act could only be enforced under the new Act, even if the arbitration proceedings had commenced before the enforcement of the Act. This was in line with the precedent set in Thyssen Stahlunion GMBH v. Steel Authority of India Ltd., where it was determined that the new Act applies to foreign awards passed after its commencement.

3. Whether the judgment in Thyssen Stahlunion GMBH was 'per incuriam':
The respondent argued that the Thyssen judgment was 'per incuriam' as it incorrectly stated the commencement date of the Act as 25-1-1996 instead of 22-8-1996. The Court rejected this argument, emphasizing that the Thyssen judgment correctly interpreted the continuous effect of the Ordinance and the Act. The Court reiterated that unless there is a glaring omission or oversight of a statutory provision or binding precedent, the principle of 'per incuriam' does not apply.

4. Whether separate proceedings are required for enforcement and execution of foreign awards:
The respondent contended that separate proceedings were necessary for determining the enforceability of a foreign award and its execution. The Court disagreed, stating that the Act aimed to minimize supervisory roles of courts and expedite the arbitration process. Sections 46 to 49 of the Act were designed to ensure that a foreign award, once deemed enforceable, is treated as a decree of the court, thus eliminating the need for separate proceedings. This interpretation aligns with the objective of providing speedy and effective resolution of disputes.

Conclusion:
The Supreme Court set aside the impugned judgment and remitted the case to a learned Single Judge of the High Court for further proceedings in line with the observations made. The Court upheld that the foreign award dated 13-8-1996 should be enforced under the Arbitration and Conciliation Act, 1996, and confirmed that the Act was effectively in force from 25-1-1996 due to the continuity of the Ordinance. The appeal was allowed, and the enforcement of the foreign award was directed to proceed without the need for separate proceedings for its execution.

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