1947 (7) TMI 8 - Other - Indian Laws

Summary

Issues Involved:
1. Validity of the arbitration award.
2. Competence of the High Court of Indore.
3. Applicability of the law of British India versus the law of Indore.
4. The conclusive nature of foreign judgments under the Code of Civil Procedure, 1908.

Detailed Analysis:

1. Validity of the Arbitration Award:
The dispute arose from a deed of partnership entered into on 17th July 1935, which included an arbitration clause. By the end of 1940, disputes among the partners were referred to the Prime Minister of Holkar State, Indore, as arbitrator. The arbitrator's award, made on 8th February 1941, suggested a dissolution of the partnership, which led to the appellants filing a suit in the High Court of Bombay seeking declarations that the award was invalid. The High Court of Indore, after a full hearing, upheld the award, stating that the arbitrator had not exceeded his authority or jurisdiction and was not guilty of misconduct.

2. Competence of the High Court of Indore:
The appellants contended that the transfer of proceedings from the District Judge to the High Court of Indore was erroneous, questioning the High Court's jurisdiction. This argument was dismissed by both Chagla J. and the Appellate Court, who affirmed that the question of whether a foreign court is the "proper Court" to deal with a matter is for the courts of that country to decide. It was concluded that the High Court of Indore was competent to handle the case, and the appellants had consented to the transfer.

3. Applicability of the Law of British India versus the Law of Indore:
The appellants argued that the arbitration should have been governed by the law of British India. However, the High Court of Indore did not adjudicate on this issue as it was common ground between the parties that the law of Indore applied. The appellants had initially asserted that the arbitration was governed by the Indore Arbitration Act. The Privy Council held that it would be unjust to allow the appellants to raise this point for the first time at this stage, and even if the arbitration was subject to the law of British India, the judgment of the High Court of Indore would still be conclusive unless there was a refusal to recognize the law of British India, which was not the case here.

4. The Conclusive Nature of Foreign Judgments under the Code of Civil Procedure, 1908:
The law relating to foreign judgments is stated in Sections 2 and 13 of the Code of Civil Procedure, 1908. The Privy Council agreed with the interpretation that a "foreign judgment" means "an adjudication by a foreign Court upon the matter before it." None of the exceptions under Section 13 (a) to (f) applied to the present case. The judgment of the High Court of Indore was conclusive as to the validity of the arbitration award. The appellants' argument that the foreign judgment did not prevent the courts of British India from making a declaratory decree was also dismissed, as it was conceded that if the award was valid, it would be futile to declare that the partnership was still subsisting.

Conclusion:
The Privy Council advised that the appeal should be dismissed, upholding the decisions of the High Court of Indore and the High Court of Bombay. The appellants were ordered to pay the respondents' costs of the appeal.