9911796707
TMI Blog2006 (6) TMI 527X X X X Extracts X X X X X X X X Extracts X X X X ..... Company incorporated under the Companies Act. The respondent in the year 1994 entered into negotiations with a Company called Enco Engineering Chur AG of Sagenstrasse 97, 7001 Chur, Switzerland. On 30.1.1995 the respondent entered into four related agreements with Enco for setting up ascorbic acid Acid plant in India. The four agreements are as under:- (i) Engineering Contract for Ascorbic for Acid Plant (ECAAP); (ii) Supply contract for Ascorbic Acid plant (SCAAP); (iii) Service agreement for Ascorbic Acid plant (SAAAP); and (iv) License agreement for Ascorbic acid plant (LAAAP). Under the ECAAP, Enco was obliged to provide the respondent with the technical information and basic engineering documentation for the construction, commission, operation and maintenance of the Ascorbic Acid Plant. In consideration of Enco's obligation under the Agreement, the respondent was required to pay a total fee of Swiss Francs 86,00,000/- in the manner which was provided in the Agreement. ECAAP as well as the other three agreements had an arbitration clause. In March,1995 with the consent of the respondent, Enco. assigned ECAAP to the petitioner. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 of 1996/CK/AER/ACS; The Respondent No. 2 to 4 in the petition were members of the I.C.C. Arbitral Tribunal. In the said application filed under Section 9 of the Act, an order dated 13.3.2000 was passed without notice to the respondents in that petition. That order reads as under :- Heard learned Counsel for the petitioners. Issue notice to the respondents returnable after 4 weeks i.e. on 10.4.2000. Ad-interim relief in terms of prayer Clause (a) till 10th April,2000. This order was continued from time to time till the Arbitration petition No. 49 of 2000 was decided. The ICC Tribunal took the view that the interim order passed by this Court in application No. 98 of 2000 was not binding on the Arbitral Tribunal and therefore, they decided to proceed further. The petitioner submitted his written submission on interest and cost on 14.3.2001. The respondent however, notified the Tribunal that the respondent does not intend to make any submission on the issue of interest and cost. Mr. Desai the respondent's nominee on the Arbitral Tribunal indicated that he is unable to continue on the Arbitral Tribunal due to the interim order passed by this Court. The I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act does not lay down any period for filing a petition under that provision. The petitioner rely on the the judgment of the Supreme Court in the case Uttam Namdeo Mahale v. Vithal Deo and Ors. to contend that in a special Law when no period of limitation is prescribed the application of general law i.e. the Limitation Act stands excluded. The petitioner also rely on the judgment of the Supreme Court in the Case of Patel Naranbhai Marghabhai and Ors. v. Deceased Dhulabhai Galbabhai and Ors. contending that whether the Special Act provides for specific period of limitation in respect of appeals and makes only certain provisions of Limitation Act applicable to such appeals to that extent only the provisions of Limitation Act stands extended and applicability of other provisions by necessary implications stands excluded. The petitioner also rely on a judgment of the learned Single Judge in the case ONGC v. Jagson Intl. Ltd. reported at to contend that there is no period of limitation provided for filing an appeal under Section 47 of the Act. On the other hand, according to the respondent, an application under Section 47 of the Act is to be made to a Court, relying on the judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision is Section 34 of the Arbitration Act. It provides for application to a Court challenging the domestic award and it lays down a specific period of limitation for challenging the Award. Section 37 provides for an appeal against certain orders to a Court and Section 37 does not lay down any period of limitation for filing an appeal under that provision. Section 47 of the Arbitration Act provides for making an application to a Court for enforcement of a foreign Award but the provisions itself does not lay down any period for making the application. Section 50 provides for appeal against the orders passed under Section 45 and Section 48 to a Court but it does not lay down any period of limitation. Now so far as appeals provided to a Court are concerned, even assuming that the Limitation Act applies to those appeals then also because in the Schedule of the Limitation Act for the appeals to be filed under Section 37 and Section 50 of the Arbitration Act there is no period provided and as there is no residuary article in relation to appeals like Article 137 in relation to application, if in the Arbitration Act no period of limitation is provided for making an appeal, the period cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the Special statute, has been considered by the Supreme Court in its judgment in the case Nityananda M. Joshi and Ors. v. Life Insurance Corporation of India and Ors. . The Supreme Court in that case was considering whether the period of limitation prescribed by Article 137 of the Limitation Act is applicable to applications made under Section 33-C(2) of the Industrial Disputes Act. The observations made by the Supreme Court in paragraph 3 of that judgment are relevant. They read as under:- 3. In our view Article 137 only contemplates applications to Courts. In the Third Division of the Schedule to the Limitation Act, 1963 all the other applications mentioned in the various articles are applications filed in a court. Further Section 4 of the Limitation Act, 1963, provides for the contingency when the prescribed period for any application expires on a holiday and the only contingency contemplated is when the court is closed. Again under Section 5 it is only a court which is enabled to admit an application after the prescribed period has expired if the court is satisfied that the applicant had sufficient cause for not preferring the application. It seems to us that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the Supreme Court but failed and the order became final. An application was made by the respondent before the Supreme Court for execution of that order after lapse of a period of 12 years. The High Court relying on the judgment of the Bombay High Court in Babaji Khanduji v. Kushaba Ramaji 1906(8) Bombay Law Reporter 218, ruled that there is no period of limitation prescribed and therefore, because the execution of the order has been taken up after 12 years the execution is not barred by the Law of Limitation. The Supreme Court by its judgment in the case Uttam Namdeo Mahale v. Vithal Deo and Ors. has confirmed the order passed by the High Court. The observations that the Supreme Court has made in paragraph 4 of the Judgment, in my opinion, are to be read in the context in which they are made. They have been made in relation to the provisions of Section 21 of the Mamlatdar's Court Actwhich does not contemplate a party making any application for execution of order made in his favour. The provision casts duty on the Mamlatdar to execute the order. The observations of the Supreme Court in paragraph 4 of the Judgment in Uttam Namdeo Mahale case have also to be read in the contex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be executed. In the absence of any specific limitation provided thereunder, necessary implication is that the general law of limitation provided in the Limitation Act (Act 2 of 1963) stands excluded. The Division Bench, therefore, has rightly held that no limitation has been prescribed and it can be executed at any time, especially when the law of limitation for the purpose of this appeal is not there. Where there is statutory rule operating in the field, the implied power of exercise of the right within reasonable limitation does not arise. The cited decisions deal with that area and bear no relevance to the facts. The observations of the Supreme Court that in the absence of any specific limitation provided under the Mamlatdars' Courts Act the provisions of the Limitation Act stands excluded, have to be read in the light of the judgment of the Division Bench referred to above which was followed by the learned Single Judge whose order has been confirmed by the Supreme Court in its judgment in Uttam Namdeo Mahale case. So far as the judgment of the learned Single Judge in the case Oil and Natural Gas Corporation Ltd. v. Jagson Intl. Ltd. is concerned, in that cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act are applicable to an application filed under Section 47 of the Arbitration Act for enforcement of a Foreign Award, the question arises what is the period of Limitation laid down by the Limitation Act for making such an application Perusal of the provisions of Section 2(j) of the Limitation Act shows that the period of limitation means period of limitation prescribed for any suit, appeal or application by the Schedule. Therefore, to find out what is the period of limitation provided for making an application under Section 47 of the Act one has to refer to the Schedule of the Limitation Act. Perusal of that Schedule shows that so far as applications are concerned, the period of limitation is laid down by the third division. Perusal of Part-I of the third division of the Schedule of the Limitation Act shows that though there is period of Limitation laid down for making application under the Arbitration Act,1940, there is no period of limitation laid down for making an application either under Section 47 of the Arbitration Act 1996 or for making any application under any other provisions of the Arbitration Act 1996. Part II of the Third Division of the Schedule is a residuary provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterchangeably with execution The Petitioner also relies on a judgment of the single Judge of the Gujarat High Court in the case of Western Shipbreaking Corporation v. Clare Haven Ltd., reported in 1997(3) Volume 38 Gujarat Law Reporter, 1984. The Petitioner referred to the meaning given to the term enforcement in various dictionaries and submitted that when Section 47 of the Act speaks of enforcement, what it really contemplated is execution under Order 21 of the CPC. It is submitted that a foreign award and a decree of a Indian Civil Court is executable under the same provisions and if satisfaction about enforcibility of the Court can be achieved in the same proceedings, why there should be any discrimination and why a separate procedure should be adopted in relation to the foreign award. It is submitted that in its judgment in the case of Furest Day Lawson Ltd., the Supreme Court was considering the judgment of the Delhi High Court, wherein the Delhi High Court had held that until the court records its satisfaction about enforcibility of the foreign award, there is no decree which can be executed, no execution lies for enforcement of foreign award, until the court first reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of Article 136 would not be consistent with the Article 3 of New York Convention, which provides that a contracting State will not impose a substantially more onerous condition for enforcement of a foreign award, than that is imposed on the recognition or enforcement of domestic arbitral Awards. If the period of limitation for enforcement of foreign award is restricted to 3 years the same would make it more onerous than the period of 12 years provided for enforcing a domestic award. In reply, on behalf of the Respondent it is submitted that a foreign award becomes binding under Section 46 of the Act when it becomes enforceable. It is submitted that Section 47 of the Act contemplates an application for enforcement and provides for the parties seeking to enforce the award to perform certain acts. Section 48 provides for enforcement being refused by the court either at the request of the parties against whom it is invoked on the grounds set out in Sub-section 1 and 2 and if the court finds that the subject matter is not capable of being settled by arbitration under the law of India or the enforcement of the award would be contrary to the public policy of India. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o contend that the learned single Judge of this Court has already considered the judgment of the Supreme Court in the case of Thyseen as also Fuerst Day Lawson and held that the Supreme Court has not bypassed the provisions of Order 21 of the C.P.C. and has also held that it is only after the courts hold that the award is enforceable under Section 49, that it can be executed under Order 21. It is submitted that this Court has interpreted two judgments to mean that though one application can be made for recognition and execution, the question of execution arises only after the Award is recognised as a valid and enforceable Award. The Respondent relies on the rules framed by this Court under the Arbitration Act and submits that the rules contemplates separate applications, one under Section 47, which can be filed under Rule 803 (C)(c) and other for execution under Rule 803(H),(I) and (J). It is submitted that Article 136 of the Limitation Act must be read as a whole. The third column postulates that the 12 years period only commences when (a) the decree or order becomes enforceable, or (b) where the decree or any subsequent order directs any payment of money or delivery of any proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s by way of defence, set off or otherwise in any legal proceedings in India and any references in this Chapter to enforcing a foreign award shall be construed as including references to relying on an award. Reading of Section 46 of the Act quoted above shows that a foreign award is not considered to be binding in India on the parties to that award immediately after that award is made. But the award is considered to be binding on the parties only when it is found to be enforceable under Chapter-1 Part-II of the Act. Once it becomes binding, it can be relied on by the parties by way of defence, set off or otherwise in any legal proceedings in India. The provisions make it clear that a foreign award which is yet to be found to be enforceable by the competent court cannot be relied on for any purpose in India. It is also not considered to be binding on the parties to the award in India, till the competent court finds it to be enforceable. Finding of the court that the foreign award is enforceable is necessary not only for the purpose of executing that award as a decree, but it is necessary also for relying on that award for any purpose in India. Thus, the term enforcement of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be enforced; or (d) the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or (e) the award has not yet become binding award on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made. 2. Enforcement of an arbitral award may also Enforcement of an arbitral award may also Enforcement of an arbitral award may also be refused if the Court finds that- (a) the subject-matter of the difference subject-matter of the difference subject-matter of the difference is is not capable of settlement by arbitration under the law of India; or (b) the enforcement of the award would be contrary to the public policy of India. Perusal of the above quoted provisions shows that under Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill be useful to refer to Article 136 of the Limitation Act. It reads as under:- Article-136 Description of application- For the execution of any decree (other than a decree granting a mandatory injunction) or other of any civil court. Period of limitation- Twelve years. Time from which period begins to run- (When) the decree or other becomes enforceable or where the decree or any subsequent order directs any payment of money or the delivery of any property to be made at a certain date or at recurring periods, when default in making the payment or delivery in respect of which execution is sought, takes place; Provided that an application for the enforcement or execution of a decree granting a perpetual injunction shall not be subject to any period of limitation. Perusal of the above quoted Article 136 makes it clear that in order to attract the application of this Article, the decree or order of which the execution is sought must be a decree or order of any civil court. It is contended on behalf of the Petitioner relying on the judgment of the Supreme Court in the case of Fuerst Day Lawson v. Jindal Exports , and Thyseen Stahlunion v. Steel Authority of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings have commenced before the commencement of the Act. The Supreme Court then considered the question as to what is the difference between the provisions of the Act and the two repealed Acts relating to enforcement of the foreign Awards, and the Supreme Court has observed thus:- As a matter of fact if we examine the provisions of the Foreign Awards Act and the new Act there is not much difference for the enforcement of the foreign award. Under the Foreign Awards Act when the court is satisfied that the foreign award is enforceable under that Act the Court shall order the award to be filed and shall proceed to pronounce the judgment accordingly and upon the judgment so pronounced a decree shall follow. Sections 7 and 8 of the Foreign Awards Act respectively prescribe the conditions for enforcement of a foreign award and the evidence to be produced by the party applying for its enforcement. The definition of foreign award is the same in both the enactments. Section 48 and 47 of the new Act correspond to Sections 7 and 8 respectively of the Foreign Awards Act. While Section 49 of the new Act states that where the Court is satisfied that the foreign award is enforceable un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was a procedure for filing and making an award a rule of court i.e. a decree. Since the object of the Act is to provide speedy and alternative solution to the dispute, the same procedure cannot be insisted upon under the new Act when it is advisedly eliminated. Thus, in our view, a party holding a foreign award can apply for enforcement of it but the Court before taking further effective steps for the execution of the award has to proceed in accordance with Sections 47 to 49. In one proceeding there may be different stages. In the first stage the court may have to decide about the enforceability of the award having regard to the requirement of the said provisions. Once the court decides that the foreign award is enforceable, it can proceed to take further effective steps for execution of the same. The submission that the execution petition could not be permitted to convert as an application under Section 47 is technical and is of no consequence in the view we have taken. In the case before the Supreme Court an application for execution of the foreign award was made and that application for execution was held not to be maintainable by the High Court beca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apable of being enforced then there would be no question of execution. In my opinion, the observations of the Supreme Court in its judgment in the case Thyssen Stahlunion GMBH which is quoted by the Supreme Court in its judgment in Furest Day Lawson Ltd. that under the Act the Foreign Award is stamped as a decree is made only to indicate that now under the Act, as was necessary under the repealed Foreign Awards Act, the Court is not required to pronounce judgment in terms of the Award so that judgment operates as a decree. Now under the Act on the Court being satisfied that the Award is enforceable the Award itself operates as a decree. But it is clear from the provisions of Section 49 of the Act which are quoted above, the Award operates as a decree only on the Court recording its satisfaction that it is enforceable and it is only at that point of time that the Award becomes a decree of that Court which has recorded its satisfaction that it is enforceable. As observed above Article 136 of the Schedule of the Limitation Act becomes applicable for execution of any decree or order of any Civil Court. Till the Court records satisfaction contemplated by Section 49 of the Arbitration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Global Limited . The learned Single Judge has observed thus: The learned Counsel however, on behalf of the respondent sought to place reliance on the judgment of the Apex Court in Thyussen Stahlunion GMBH V. Steel Authority of India Ltd. to point out that in so far as Foreign Awards (Recognition and enforcement) Act is concerned, decree follows but under the new Act, the foreign Award is already stamped as the decree. This according to learned Counsel would be the distinguishing factor to hold that the Court while considering enforcement of Foreign Award is considering the decree itself. In my opinion, the judgment in Thyssen GMBH (supra) cannot be so read considering the express language of Section 49 of the Act of 1996. The Foreign Award continues to remain an award in the country. It is deemed to be a decree only when the Court to which the application is made for enforcement of the foreign award is satisfied that the Foreign Award is enforceable. To my mind therefore, objection under Section 22 of the SIC(SP) Act,1985 must be rejected. The same learned Single Judge has considered the judgment of the Supreme Court in the Case Fuerst Day Lawson Ltd. v. Jindal E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with application for enforcement a party seeking enforcement may also apply for execution in the form prescribed so that once the Court proceeds to hold that the Award is enforceable, it can thereafter proceed to execute the decree without further procedural requirements. In the instant case, as the petitioners have not applied for execution, it is open to them to move for execution of the award. 10. To conclude, therefore, in my therefore, opinion if a person in whose favour the Foreign Award is made desires to make an application for execution of that Award when the Court is yet to record its satisfaction that the Award is enforceable, the period of limitation for making such an application would be governed by Article 137 of the Schedule of the Limitation Act. According to Article 137 the period of limitation is three years from the date when the right to apply accrues. In the present case, right to apply for execution/enforcement of the foreign award would accrue to the petitioner when the final award was made on 22.10.2001. The final award was received by the petitioner on 6.11.2001. On receiving the Award the petitioner became entitled to seek enforcement of that Awa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itation Act applies the period of limitation for making an application for execution is 12 years and therefore, this petition was not filed earlier. It is submitted that in any case it cannot be said that the petitioner has not filed his petition for enforcement of the Award with malafide intention because the petitioner is holding the Award and therefore, obviously the petitioner is interested in its enforcement. Therefore, unless the petitioner was under a bonafide belief that it cannot make an application for enforcement of the Award it would not have withheld making an application for enforcement. On behalf of the respondent it is submitted that though the petitioner claims that it was under the belief that as the petition filed by the respondent was pending and then appeal was pending therefore, he could not make an application. The petitioner has given explanation which is incapable of acceptance about change of the lawyer by the petitioner and that on receiving fresh advice from that lawyer application was filed. It is submitted in the affidavit filed in support of the notice of motion a statement is made that the petitioner changed the Lawyer on or about 25-1-2005. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal within that period, it would be a clear case of sufficient cause which could be said to have prevented them from filing the appeal within the time prescribed by the Portuguese Code. Where two views are equally possible on this complex question and where a party being guided by one of such views adopts a course consistent with that view it would equally be a case of just impediment within the meaning of Article145 of the Portuguese Code, which could be said to have prevented the party from filing the appeal within limitation prescribed by the Portuguese Code. IN the application made for condonation of delay the appellants have categorically stated that they bonafide believed, presumably on legal advice, that Article 116 of the Limitation Act,1963 was applicable and they had acted bonafide in filing the appeal in the Judicial Commissioner's Court within a period of 90 days as per that provision. In the circumstances, we grant the application for condonation of delay and direct that the appeal (being Civil First Appeal No. 6 of 1968) be taken on file and be disposed of by the Judicial Commissioner's Court on merits in accordance with law. The appeal before us is accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n given by the applicant for delay in making the application cannot be termed as malafide or if the act of the applicant of not making the application within the period of limitation provided by the law cannot be termed as dilatory tactics, then in view of the law that has been laid down by the Supreme Court, the delay deserves to be condoned. In the present case, as observed above, it can not be said that the explanation that has been given by the applicant for not approaching the court earlier (the applicant being under a bonafide impression that till the appeal filed by the Respondent is pending in this Court, the applicant cannot file the application, that there is no period of limitation provided for making the application under Section 47 that the application for enforcement being an execution application the period of limitation is 12 years) cannot be termed as mala fide. No interest of the applicant can be said to be served, who is having award in his favour, by delaying making an application for conversion of that award into a decree. For all these reasons, therefore, in my opinion, the delay in filing the present petition deserves to be condoned. Notice of motion No. 826 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r authority to make an order against the arbitral tribunal. In support of this proposition, the Petitioner relies on the judgment of the Supreme Court in the case of Bhatia International v. Bulk Trading S.A. and Anr. . It is further submitted that the order dated 13-3-2000 is a nullity also for the reason that it has been passed against an absent foreigner i.e. the arbitrators who had not submitted to the jurisdiction of this Court. It is submitted that such an order is abinitio-void in international law and is not required to be obeyed. It is further submitted that under Section 9 no order could have been made injuncting the foreign arbitral tribunal from proceeding with the arbitral proceedings. If at all the injunction could have been granted against a party to the arbitration, it is submitted that there is no public policy of India which requires absent foreigners to obey void orders of injunction made by the courts in India. Making of the final award during the operation of the order dated 13-3-2000 does not render the award a nullity as contended. Relying on the judgment of the Supreme Court in the case of Kiran Singh and Ors. v. Chaman Paswan and Ors. , a judgment of the Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence; (d) interim injunction or the appointment of a receiver. (e) such other interim measure of protection as may appear to the Court to be just and convenient. and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it. Perusal of the above quoted Section 9 shows that it does not vest power in the court to issue any interim directions or orders to the arbitral tribunal. I have also not been pointed out any other provision in the Arbitration Act, which can be said to confer jurisdiction on the court to issue interim directions, of the nature which has been issued by this Court on 13-3-2000 against arbitral Tribunal. 11A. The Supreme Court in its judgment in the case of Bhatia International v. Bulk Trading S.A. and Anr. , in paragraph 29 has categorically held that under Section 9 of the Arbitration Act, a direction to the arbitral tribunal cannot be made. Paragraph 29 reads as under:- 29. We see no substance in the submission that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lord Selborne said: In a personal action to which none of these causes of jurisdiction apply, a decree pronounced in absentem by a foreign court, to the jurisdiction of which the defendant has not in any way submitted himself, is by international law an absolute nullity. He is under no obligation of any kind to obey it; and it must be regarded as a mere nullity by the courts of every nation except (when authorised by special local legislation) in the country of the forum by which it was pronounced. There may however be submission to the jurisdiction of an Indian court by litigating in India. The question then is what would amount to submission to jurisdiction. Thus, apart from Section 9 not conferring jurisdiction on this Court to make an order against the arbitral tribunal, in view of the fact that the arbitral tribunal was constituted by the ICC International Court in London and two of the three members of the arbitral tribunal were foreigners, who were not in India, this Court had no jurisdiction to make the order dated 13-3-2000 and therefore for this reason also the order dated 13-3-2000 is a nullity. 12. In fairness of the Respondent, it is to be sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Perusal of paragraph 28 of the judgment of the Supreme Court in Tayabbhai's case shows that the Supreme Court has noted the distinction between the case where an interim order is made to which Section 9A applies and a case where Section 9A does not apply. The Supreme Court has held that in a case where Section 9A does not apply, once the court holds that it has no jurisdiction entertain the suit, the order ceases to exist and the order comes to an end on the court holding that it has no jurisdiction to entertain the suit. The Supreme Court in this case has not considered the question as to whether in a case where Section 9A does not apply and an interim order is made and the court ultimately finds that it had no jurisdiction to make the order, the order would cease to apply from the date of the Court holding that it had no jurisdiction to make the order or the order will cease to exist from the date on which it was made. Though that question has not been considered by the Supreme Court in its judgment in Tayabbhai's case, it has been considered by the Supreme Court in other cases. The Supreme Court in its judgment in the case of Harshad Chimanlal Modi v. DLF Universal Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 32. In Bahrein Petroleum Co., this Court also held that neither consent nor waiver nor acquiescence can confer jurisdiction upon a court, otherwise incompetent to try the suit. It is well settled and needs no authority that where a court takes upon itself to exercise a jurisdiction it does not possess, its decision amounts to nothing. A decree passed by a court having no jurisdiction is non est and its invalidity can be set up whenever it is sought to be enforced as a foundation for a right, even at the stage of execution or in collateral proceedings. A decree passed by a court without jurisdiction is a coram non judice. 33. In Kiran Singh v. Chaman Paswan this Court declared; (SCR p.121) It is a fundamental principle well established that a decree passed by a court without jurisdiction is a nullity, and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction...strikes at the very authority of the court to pass any decree, and such a defect cannot be cured even by consent of parties. It can be taken as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Once the Court declares the order to be nullity, the declaration relates back to the date on which that order was made and it will be deemed that the order never existed in law. Thus, as I find that the order dated 13-3-2000 was a nullity in the eye of law, I have to proceed as if that order never existed, and as that order had no existence in law, there is no question of the final award made ignoring that order either being a nullity or being contrary to the public policy of India. Therefore, I do not find any substance in the challenge raised to the enforcibility of the award on the basis of the interim order dated 13-3-2000 passed by this Court. 13. The next challenge to the award on merits is that enforcement of the award will be contrary to the prevalent Foreign Exchange Laws. It is submitted that the Respondent had invoked the arbitration clause under ECAAP. In the same arbitration proceedings the Petitioner filed a counter claim, which has been awarded by the arbitral tribunal in favour of the Petitioner. So far as ECAAP is concerned, it has not been approved by the Reserve Bank of India. It is submitted that making of payment under a contract which has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia dated August 1, 1969 refusing to approve rescheduling of payments the bar of Section 9 will operate and no order for enforcement of the award can be made. The High Court in this regard has placed reliance on the provisions of Section 47(3) of FERA which provides as follows:- Neither the provisions of this Act nor any term (whether expressed or implied) contained in any contract that anything for which the permission of the Central Government or the Reserve Bank is required by the said provisions shall not be done without that permission, shall prevent legal proceedings being brought in India to recover any sum which, apart from the said provisions and any such term would be due, whether as debt, damages or otherwise, but-(a) the said provisions shall apply to sums required to be paid by any judgment or order of any Court as they apply in relation to other sums; (b) no steps shall be taken for the purpose of enforcing any judgment or order for the payment of any sum to which the said provisions apply except as respects so much thereof as the Central Government or the Reserve Bank, as the case may be, may permit to be paid; and (c) for the purpose of considering whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agraphs of the judgment of the Supreme Court that an award cannot be set aside because at the time of entering into the contract, permission of the Reserve Bank of India was not obtained. If such a permission is necessary, it can be obtained by the party concerned before he receives actual payment. The contention, therefore, has no force and is, therefore, rejected. I have not been pointed out any law which prevents the arbitral tribunal from making an award for payment of money to a foreigner pursuant to a contract, which has not been approved by the R.B.I. In the absence of any such provision, no fault can be found with the award on this count. 14. It is next submitted on behalf of the Respondent that the terms of reference which were duly signed by the arbitrators and the parties state that the jurisdiction of the tribunal results only from Article 12.4.2 of the ECAAP. The Respondent had invoked the arbitration clause in the ECAAP. The arbitration clause under the ECAAP was rightly invoked by the Respondent because the Respondent wanted to enforce the obligations under the ECAAP against the Petitioner. The counter claims, however, submitted by the Petitioner pursuant to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sult of novating or substituting ECAAP. It is submitted that ECA is dated 28th April, 1995, though ECAAP was dated 30-1-1995, was brought in effect on 15th December, 1995. Thus, ECAAP is a later agreement than ECA, and therefore, it cannot be said that the payment obligations under ECAP were novated by entering into the ECA. It is further submitted that the question whether ECA substituted ECAAP in relation to payment obligations is a pure question of fact. It was not raised admittedly before the arbitral tribunal and therefore it cannot be permitted to be raised for the first time in this petition. Now, if in the light of these rival submissions the record of the case is perused, it becomes clear that under Section 48(c) one of the grounds on which a foreign award can be challenged is that the award deals with the differences not contemplated by or not filing within the terms of the submissions to the arbitration. So far as the submissions to the arbitration are concerned, perusal of the terms of reference before the arbitral tribunal shows that counter claims made by the Petitioner were part of the terms of reference. Therefore, they were within the terms of submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CAAP and not ECA. An inquiry into that aspect would be an inquiry into fact, in my opinion, such an inquiry cannot be undertaken for the first time by this Court in a petition filed under Section 47. I also find some substance in the submission made on behalf of the Petitioner that in order that the obligations under ECAAP can be said to be substituted by ECA, ECAAP should be an agreement which is entered into prior in point of time. But ECAAP though entered into earlier was brought into force on 15th December, 1995 and the ECA was entered into on 28th April, 1995. Therefore, from this point of view, ECAAP will be a later agreement and therefore, without further inquiry it cannot be said that the payment obligations under the ECAAP were substituted by ECA. For these reasons, therefore, I do not find any substance in the contentions urged on behalf of the Respondent that the enforcement of the award should be refused for this reason. 15. The last ground on which the award is challenged is that the arbitral tribunal has awarded an amount of Swiss Fr.1,453,316 to the Petitioner as loss suffered by Enco with interest. This award is outside the scope of submissions to arbitrati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the indemnity may enforce his right as soon as his liability to the third party has arisen and he may obtain relief before he has actually suffered loss. Lastly, it is submitted on behalf of the Petitioner that if this Court holds that the arbitral tribunal was not justified in awarding the amount to make good the loss suffered by Enco, that part of the award is severable and therefore, the court may refuse to enforce the award to that extent only. The Respondent has basically challenged the award so far as this aspect of the matter is concerned on the ground that the award is contrary to the public policy of India. According to the Petitioner, though Enco was not a party to the arbitration proceeding, the loss suffered by it was recoverable by it from the Petitioner. Under the ECAAP, the Respondent was under an obligation to indemnify the Petitioner for any loss suffered by the Petitioner. It is an admitted position that there is no material on record to show that Enco, in fact, suffered any loss, that Enco has initiated any proceedings for recovering any amount of loss from the Petitioner. The Enco was also not a party to the arbitration. So far as the obligation of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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