Judgment:
S.M. Jhunjhunuwala, J.
1. By this petition, the petitioners seek to have the Judgment pronounced and Decree passed in terms of the Award under the provisions of section 6 of the Foreign Awards (Recognition & Enforcement) Act, 1961 (for short, 'the Act).
2. Briefly stated, the facts leading to controversy, are as under :
(a) While the petitioners were a part and parcel and/or division of one Messrs. Sovfract, which was wholly owned by the erstwhile Government of Union of Soviet Socialist Republic (U.S.S.R.), engaged the 1st respondents as their agents for the purpose of petitioners' business of transport and/or carriage of the goods from Indian Port to the other ports all over the world and vice versa. The appointment and/or engagement of the agency of the 1st respondents was done by and under several agreements executed in writing. The 1st respondents while acting as shipping agents of the petitioners in India collected freight from the shippers and/or hirers and/or consignors who utilised and/or hired the vessels and ships owned by the petitioners for carriage of goods from the Indian Port to other ports in the world. As per the terms of the agreement arrived between the petitioners and the 1st respondents, the 1st respondents used to send accounts and remit the balance freight to the petitioners after meeting all the expenses. Such balance freight used to be sent in terms of Rupee and Rouble agreement which existed between Union of India and the U.S.S.R;
(b) Subsequently the State of Ukraine severed from U.S.S.R. and became a Sovereign State Republic. As a matter of fact, U.S.S.R. became non-existent. Consequently all the rights, title and interest in respect of then existed business transacted between the petitioners and the 1st respondent devolved upon the Government of Ukraine. The 1st respondents accepted the petitioners as a separate and legal entity and also as a wholly owned Company of the Ukrainian Government;
(c) On 18th May, 1992, a fresh agreement was entered into by and between the petitioners and the 1st respondents wherein the business transactions between the petitioners and the 1st respondents were agreed to be continued on the fresh terms and conditions mentioned therein. Even under the Agreement dated 18th May, 1992, obligations of the 1st respondents to remit the balance Rupee freight in accordance with the law to the petitioners continued. According to the petitioners, the 1st respondents, in gross breach of the terms and conditions of the said Agreement, failed and neglected to remit the balance Rupee freight to the extent of Rs. 6,41,66,410/- to the petitioners. Since after dissolution of U.S.S.R Government the agreement of Rupee freight stood abrogated, the balance amount of Rupee freight in the hands of the 1st respondents became non-convertible currency. The petitioners, in the circumstances, decided to import coffee from India from one Messrs. Akshay Exports of Calcutta utilising the said amount of Rupee freight then lying with the 1st respondents. The petitioners instructed the 1st respondents to make payment of the said amount to the said Messrs. Akshay Exports to enable the petitioners to import coffee from India. The requisite permission from the Ministry of Commerce, Union of India, was also obtained. However, according to the petitioners, the 1st respondents failed and neglected to take any steps for handing over the said amount to the said Messrs. Akshay Exports;
(d) On or about 13th August, 1995, the petitioners got published a public notice in English newspaper 'Indian Express', Bombay Edition, inviting the claims from all persons/organisations throughout the Union of India pertaining to non-movement of cargo, delayed delivery of cargo, etc., as also for any demand whatsoever in nature in respect of the goods shipped through the 1st respondents. The claims were required to be lodged with the time specified in the said public notice for appropriate redressal. It is the case of the petitioners that no claim of any nature whatsoever was received by the petitioners from any of the parties in respect of the goods shipped through the 1st respondents;
(e) The 1st respondents had not then disputed their liability for payment of the said sum of Rs. 6,41,66,410/- to the petitioners. By a telex dated 8th September, 1994, the 1st respondents informed the petitioners that they had written to the Reserve Bank of India for permission for remittances thereof and were awaiting the decision of the Reserve Bank of India in that connection. Even in the telex dated 6th January, 1995, the 1st respondents did admit that the total non-convertible balance freight in rupees with the 1st respondents was to the extent of Rs. 6,41,66,410/- and not to the extent of Rs. 6,48,71,482/- as informed by the petitioners. By their telex dated 18th February 1995 addressed to the said Messrs. Akshay Exports, the 1st respondents did inform the said Messrs. Akshay Exports that the 1st respondents had already approached the Reserve Bank of India, Exchange Control Department, for permission to pay non-convertible Rs. 6,10,00,000/- to them and that they would again approach the Reserve Bank of India for payment of full amount of Rs. 6,41,66,410,60 to the said Messrs. Akshay Exports. Despite the said admission of liability on the part of the 1st respondents, the 1st respondents did not remit the said amount either to the petitioners or to the said Messrs. Akshay Exports;
(f) Clause 7.1 in the Agreement dated 18th May, 1992 entered into by and between the petitioners and the 1st respondents, reads as under:
'7. 1 All disputes between owners and Agents which may arise in connection with the fulfillment of their Agreement are to be settled amicably, but if impossible then to be referred to Arbitration of Country where the owners are registered.' Since as per Clause 7. 1 all disputes between the petitioners and the 1st respondents arising in connection with the fulfillment of the Agreement were required to be settled amicably but if impossible to settle amicably, then to be referred to arbitration of the Country where the petitioners were registered, the petitioners after making their efforts to get the disputes between the petitioners and the 1st respondents pertaining to the said balance freight amount settled amicably and being not successful in having them resolved amicably, referred the same to arbitration pursuant to the arbitration agreement incorporated in the form of the said Clause 7.1 in the said Agreement dated 18th May, 1992.
(g) The Acting Director of Department of Merchant, Marine and River Transport of the Ministry of Transport of Ukraine, issued on order dated 11th August, 1995 directing the petitioners and the 1st respondents to get the disputes settled by way of arbitration and appointed the 2nd respondent as the sole Arbitrator in disputes between the petitioners and the 1st respondents. The said arbitration was directed to take place on 3rd October, 1995.
(h) The 2nd respondent accepted the appointment to act as the Arbitrator. On 28th September, 1995, the 2nd respondent addressed a letter to the 1st respondents and to the Advocates for the petitioners, inter alia, conveying her consent to act as the sole Arbitrator in the disputes between the petitioners and the 1st respondents and directed the petitioners to file their Statement of Claim before the 2nd respondent by 11th September, 1995 with a copy thereof to the 1st respondents. The 1st respondents were directed to file their Objections/Reply by 25th September, 1995 with a copy thereof to the Advocates for the petitioners. By the said letter, the 2nd respondent gave notice to the petitioners and the 1st respondents that the 2nd respondent would hold meeting of the parties before her in her capacity as the sole Arbitrator on 3rd October, 1995 at 10 a.m. in the office of the 2nd respondent in Odessa and directed both the parties to remain present to proceed with the reference.
(i) In pursuance of the directions given by the 2nd respondent, the petitioners filed their Statement of Claim before the 2nd respondent on 11th September, 1995 and furnished a copy thereof to the 1st respondents claiming the sum of Rs. 6,41,66,410/- together with interest at the rate of 24% per annum and costs of the arbitration from the 1st respondents. By their letter dated 12th September, 1995 addressed to the 2nd respondent, the 1st respondents challenged the authority of the 2nd respondent to arbitrate in the matter.
(j) By their letter dated 15th September, 1995 addressed to the Advocates for the 1st respondents, the petitioners denied the allegations and/or contentions of the 1st respondents contained in the said letter dated 12th September, 1995;
(k) By their Advocates letter dated 20th September, 1995 addressed to the Advocates for the petitioners, the 1st respondents again made allegations as regards the appointment of the 2nd respondent as an Arbitrator which were denied by the petitioners by their Advocates letter dated 21st September 1995. On the date fixed for hearing of the arbitration reference viz., 3rd October, 1995, the 1st respondents did not appear before the 2nd respondent though advance notice of the date, time and place for holding the said meeting was duly served upon the 1st respondents. No Statement in Reply to the Statement of Claim of the petitioners was filed by the 1st respondents before the 2nd respondent;
(l) The 2nd respondent proceeded with the hearing of the reference on 3rd October, 1995 and after taking into consideration the documents, evidence and pleadings on record, made and published her Award on 3rd October, 1995, which is sought to be enforced by the petitioners by the present petition.
3. Section 7 of the Act lays down conditions for enforcement of foreign awards. It reads as under :
'7. Conditions for enforcement of foreign awards -
(1) A foreign award may not be enforced under this Act -
(a) If the party against whom it is sought to enforce the award proves to the Court dealing with the case that -
(i) the parties to the agreement were under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it, or failing any indication thereon, under the law of the country where the award was made; or
(ii) the party was not given proper notice of the appointment of the arbitration proceedings or was otherwise unable to present his case; or
(iii) the award deals with questions not referred or contains decisions on matters beyond the scope of the agreement;
Provided that if the decisions on matters submitted to arbitration can be separated from those not submitted, that part of the award which contains decisions on matters submitted to arbitration may be enforced;
(iv) 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
(v) the award has not yet become binding 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; or (b) if the Court dealing with the case is satisfied that-
(i) the subject matter of the difference is not capable of settlement by arbitration under the law of India; or
(ii) the enforcement of the award will be contrary to public policy;
(2) If the Court before which a foreign award is sought to be relied upon is satisfied that an application for the setting aside or suspension of the award has been made to a competent authority referred to in sub-clause (v) of clause (a) of sub-section (1), the Court may, if it deems proper, adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the away, order the other party to furnish suitable security'.
As per section 7, the burden is on the party against whom the award is sought to be enforced to prove to the Court dealing with the case that :
(i) the parties to the agreement were under the law applicable to them, under some incapacity or the said agreement is not valid under the law to which the parties have subjected it or failing any indication thereon, under the law of the country where the award was made;
(ii) that the party was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; or
(iii) the award deals with questions not referred or contains decisions on matters beyond the scope of the agreement;
(iv) 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;
(v) the award has not yet become binding 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.
A foreign award may not be enforced under the Act if the Court dealing with the case is satisfied that-
(i) the subject matter of the difference is not capable of settlement by arbitration under the law of India; or
(ii) the enforcement of the award will be contrary to public policy.
4. Mr. Dwarkadas learned Counsel for the 1st respondents, has submitted that the Award is not a valid Award as defined by section 2 of the Act and as such, the petition for the enforcement of such an Award is not maintainable. Mr. Dwarkadas has further submitted that section 2(b) of the Act stipulates that for an award to be for an Award, it must be made in a territory notified by the Central Government as a territory to which the Convention set forth in the Schedule to the Act applies and since the State of Ukraine was not a notified territory by the Central Government, the Award made in Ukraine cannot be enforced in India under the provisions of the Act.
5. A foreign award is defined under the Act to mean an award made on or after 11th October 1960 on difference arising between persons out of legal relationships, whether contractual or not, which are considered to be commercial under the law in force in India. To qualify as the foreign award under the Act, the award should have been made in pursuance of an agreement in writing for arbitration to be governed by the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, and not to be governed by the law of India. Furthermore, such an Award should have been made outside India in the territory of a foreign State notified by the Government of India as having made reciprocal provisions for enforcement of the Convention. An award is 'foreign' not merely because it is made in the territory of a foreign State but because it is made in such a territory on an arbitration agreement not governed by law of India. Admittedly, the Award has been made in the territory of a foreign State. It is made in pursuance of an arbitration agreement in writing governed by the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 and not by the law of India. The question which arises for consideration is whether the Award has been made in the territory of a foreign State notified by the Government of India as having made a reciprocal provision for enforcement of the Convention.
6. Section 2 of the Act which defines a 'foreign award' uses the terminology of 'territory' and not 'country' in sub-clause (b) thereof. It is not in dispute that the Government of India had notified the entire territory of erstwhile USSR as territory for the purpose of section 2 of the Act. In exercise of the powers conferred by section 2 of the Act notification dated 7th September, 1992 was issued by the Government of India whereby it was declared that being satisfied with reciprocal provisions having been made, USSR is a territory to which Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 set forth in the Schedule to the Act would apply. It is not in dispute that in the year 1972 when the said notification was published in the Gazette, Ukraine was an integral part and parcel of USSR. On the dissolution of USSR, Ukraine became a separate sovereign State but the territories to which the said notification dated 7th February, 1972 applied had remained the same. In the circumstances, Mr. Lala, learned Counsel for the petitioners, has rightly submitted that the entire territory of sovereign State of Ukraine being part and parcel of the territories to which the said notification dated 7th February 1992 applied was still covered by the said notification when Award was made. Reliance has been placed by Mr. Lala on Article 34 of Vienna Convention on Succession of States in respect of treaties which reads as under :
'Article 34: Succession of States in cases of separation of parts of a State :
1. When a part or parts of the territory of a State separate to form one or more States whether or not the predecessor State continues to exist;
(a) any treaty in force at the date of the succession of States in respect of the entire territory of the predecessor State continues in force in respect of each successor State so formed;
(b) any treaty in force at the date of the succession of States in respect only of that part of the territory of the predecessor State which has become a successor State continues in force in respect of that successor State alone.
2. Paragraph 1 does not apply if :
(a) the States concerned otherwise agree; or
(b) it appears from the treaty or is otherwise established that the application of the treaty in respect of the successor State would be incompatible with the object and purpose of the treaty or would radically change the conditions for its operation'.
Reliance has also been placed on the letter dated 26th October, 1960 of the United Nations recording that on 10th October, 1960 the Instrument of Ratification by the Government of Ukraine Soviet Socialist Republic on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 was deposited with the Secretary General in accordance with Article VIII. These documents go to show that the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 continued to be in force in respect of Sovereign State of Ukraine though Mr. Dwarkadas has submitted that the said letter dated 26th October, 1960 may merely assists the petitioners to establish that the Sovereign State of Ukraine had acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 but since no subsequent notification in this regard has been issued by the Government of India, Sovereign State of Ukraine cannot be considered to be a successor State of the USSR. In my view, since the expression used in sub-clause, (2) (d) of section 2 of the Act is 'territory' and not 'Country', the requirements of section 2 of the Act to make the Award as a foreign award have been complied with.
7. Mr. Dwarkadas further submitted that the Award contains decision on matters beyond the scope of the Agreement. In the submission of the learned Counsel, the dispute between the petitioners and the 1st respondents pertained to the freight collected under 1983 Agreement which amount was utilised by the 1st respondents pursuant to various Protocols/Agreements entered into between the petitioners and the 1st respondents and as of date, it is the petitioners who are indebted to 1st respondents. The contentions raised on behalf of the 1st respondents pertain to the merits of the claim of the petitioners against the 1st respondents which have been adjudicated by the Arbitrator in the said arbitration proceedings. Similar contention was raised by the 1st respondents in the letter addressed to the 2nd respondent which has been considered by the 2nd respondent. As held by the Supreme Court in the case of Renusagar Power Co. Ltd. v. General Electric Company reported in : AIR1994SC860 , in the proceedings for enforcement of a foreign award under the Act, the scope of enquiry before the Court in which the award is sought to be enforced is limited to the grounds mentioned in section 7 of the Act and does not enable a party to the proceedings to impeach the award on merits. Moreover, it is an admitted position that the said Agreement dated 18th May, 1992 was executed by the parties after the State of Ukraine had severed its relationship with U.S.S.R. and had declared itself as an independent Sovereign State. The Agreement of 26th March, 1983 was abrogated and declared to be null and void under the Agreement of 18th May, 1992 which is still subsisting. All liabilities subsisting, existing and/or remaining under the Agreement of 26th March, 1983 were taken over and were agreed to be governed under the Agreement of 18th May, 1992. This is specifically provided in express terms in the First Addendum to the Agreement dated 18th May, 1992. This dispute between the petitioners and the 1st respondents arose in the year 1994 when the 1st respondents refused to pay the amount which the 1st respondents admitted as lying with it on behalf of the petitioners. In the facts of the case, the arbitration agreement contained in Clause 7.1 of the Agreement dated 18th May, 1992 was operative in the year 1994 when the dispute arose between the parties and was applicable thereto. The dispute was covered by the arbitration agreement between the parties, and in the facts of the case, it is not possible to hold that the 2nd respondent decided the issue beyond the scope of the agreement. It may also be stated that the language used in the arbitration agreement as contained in Clause 7.1 incorporated in the said Agreement dated 18th May, 1992 is not wide amplitude in as much as it records that all disputes between the petitioners and the 1st respondents arising in connection with the fulfillment of the agreement were to be referred to arbitration of the country where the petitioners are registered. Though Mr. Dwarkadas has submitted that the agreement of 1983 was declared to be null and void without the rights and liabilities therein being taken over and/or continued under the Agreement of 18th May, 1992, I find no merit in the submission in view of the express provision made for taking over of all subsisting and existing liabilities under the Agreement of 26th March, 1983 as per the said First Addendum to Agreement dated 18th May, 1992. The reliance placed by the learned Counsel on the judgments of the Supreme Court in the case of Union of India v. Kishorilal Gupta reported in A.I.R. 1959 S.C. 1632 and the case of Indian Drugs & Pharmaceuticals Ltd. v. Indo-Swiss Syndicate Jem reported in : AIR1996SC543 is of no avail to the learned Counsel since in the facts of the case, the principles laid down in those cases have no applicability.
8. Mr. Dwarkadas then submitted that the arbitral procedure was not in accordance with the agreement between the parties. In the submission of the learned Counsel, since disputes arose under 1983 Agreement, the procedure for arbitration as provided therein ought to have been followed. Since the 2nd respondent was appointed as an Arbitrator by an order passed by the Ministry of Transport of Ukraine, which is not a party to the 1992 Agreement, Mr. Dwarkadas submitted that the 2nd respondent was appointed as an Arbitrator by a person who was not even a party to the Agreement and as such, the entire arbitration proceedings were vitiated. As aforesaid, all liabilities existing under the 1983 Agreement on 18th May 1992 when the fresh agreement between the petitioners and the 1st respondents was entered into were taken over in view of the express provisions made in the said First Addendum to the Agreement dated 18th May, 1992. The arbitration agreement as contained in Clause 7.1 did apply to the disputes in respect whereof the liability was taken over by the 1st respondent under the Agreement of 18th May, 1992. The reference to arbitration was required to be made in accordance with the law where the petitioners were registered in the State of Ukraine and, therefore, the Law of Arbitration as applicable to the State of Ukraine applied to the proceedings which required the appointment of the arbitrator to be made in the manner in which the 2nd respondent was appointed as the Arbitrator. Accordingly, I find no substance in the submission made on behalf of the 1st respondent that the arbitral procedure followed was not in accordance with the agreement between the parties.
9. Mr. Dwarkadas also submitted that no proper notice of the arbitration proceedings was given to the 1st respondents and the 1st respondents were even otherwise unable to present their case before the Arbitrator and as such, in view of Section 7(1)(a)(ii) of the Act, the Award cannot be enforced against the 1st respondents. Admittedly, by her letter dated 28th August, 1995, the 2nd respondent had served notice upon the petitioners and the 1st respondents about the hearing of the reference fixed on 3rd October, 1995. Both the parties were directed to remain present before the 2nd respondent on the appointed day, date, time and place. The 2nd respondent did convey to the parties that the hearing of the reference would be proceeded with on 3rd October, 1995. It cannot be said that the notice dated 28th August, 1995 was not sufficient when the hearing of the reference was kept on 3rd October, 1995. By their Advocates' letter dated 12th September, 1995, the 1st respondents had challenged the authority of the 2nd respondent to arbitrate. No statement in reply to the Statement of Claim was filed by the 1st respondents. No application for adjournment of the hearing fixed on 3rd October, 1995 was made by the 1st respondents. By the Government order appointing the 2nd respondent as the Arbitrator, the date fixed for hearing was 3rd October, 1995. There is no merit in the submission that the 2nd respondent ought to have fixed another date of hearing after 3rd October 1995 and ought to have given notice thereof to the parties. In the facts of the case, it was not necessary for the 2nd respondent to write in the notice dated 28th August 1995 that in the event of the 1st respondents remaining absent, the 2nd respondent would proceed ex-parte. Though Mr. Dwarkadas has put reliance on the passage in Russell on Arbitration, (20th Edn. at page 263) which states that in general the arbitrator is not justified in proceeding ex-parte without giving the party absenting himself due notice and that the notice should express the arbitrator's intention clearly otherwise the award may be set aside, in the facts of the case, the said letter dated 28th August, 1995 served by the Arbitrator did indicate to the parties that the hearing of the reference would be proceeded with on 3rd October, 1995 and if despite the notice to the parties, which was sufficient notice, the 1st respondents had chosen to remain absent, no fault can be found with the Arbitrator in proceeding ex-parte against the 1st respondents. In the case of Harcourt v. Ramsbottom, reported in 1820(1) J & W 505, which has also been referred by Russell on arbitration, (20th Edn. at page 263), it has been held that when a party has ineffectually attempted to revoke the submission, and refused to attend a meeting on the ground that the arbitrator has no authority, the arbitrator may proceed ex-parte at once. As aforesaid, in the instant case, the 1st respondents had denied the authority of the Arbitrator to arbitrate in the matter and as such no useful purpose would have been served even if the hearing fixed on 3rd October 1995 would have been adjourned by the Arbitrator and the fresh hearing would have been fixed by the Arbitrator. In view proper notice of hearing of the reference before the Arbitrator was given by the 2nd respondent to the petitioners and the 1st respondents and it is not the case where the 1st respondents can be said to be otherwise unable to present their case before the 2nd respondent. There is no violation of principles of natural justice by the Arbitrator.
10. It has been next submitted on behalf of the 1st respondents that the enforcement of the Award if permitted will be contrary to the public policy of India and as such, the Award can not be enforced against the 1st respondents. Mr. Dwarkadas further submitted that the 2nd respondent was an interested party in the petitioners in as much as the 2nd respondent had signed the First Addendum to the Agreement dated 18th May, 1992. In the submission of the learned Counsel, the 2nd respondent was a biased person against the 1st respondents and as such ought not to have acted as an Arbitrator in the matter. I find no merit in any of these submissions made on behalf of the 1st respondents. The 2nd respondent has on oath stated that she has not signed the First Addendum to the Agreement dated 18th May, 1992. At the time when the 2nd respondent was appointed as an Arbitrator under the Government Order, the 2nd respondent was neither an employee of the petitioners nor attached to the petitioners in any other capacity. A Xerox copy of Addendum No. 1 produced before me showing the alleged signature of the 2nd respondent is not a correct copy. The other copy of the Addendum No. 1 which was also produced before me did not bear the signature of the 2nd respondent. Moreover, besides bare allegation of the 1st respondents that the 2nd respondent was signatory to the Addendum No. 1, the 1st respondents have not produced any evidence to prove the same. There is nothing to show that the 2nd respondent was biased against the 1st respondents. There was no impediment in 2nd respondent acting as an arbitrator in the matter. At the material times, the 2nd respondent was not interested in the petitioners. Though, Mr. Dwarkadas has submitted that awarding of interest at 24% per annum by the 2nd respondent was against public policy of India, in my view, there is no merit in the submission. Awarding of interest at 24% per annum in India in the present circumstances cannot be considered to be against the public policy in India.
11. The Arbitrator has awarded costs quantified at U.S. $ 25,000/- Which in the submission of Mr. Dwarkadas shows that the Arbitrator was biased against the 1st respondents. There is no merit in this submission also and it is to be stated just to be rejected.
12. Mr. Dwarkadas lastly referred to Rule 801 of the Rules of this Court as applicable on its Original Side and submitted that no relief can be ranted to the petitioners since no affidavit as contemplated by the Rule to show that the Award has become final has been filed. As per Rule 801, the party seeking to enforce a foreign award is to produce with the petition, inter alia , an affidavit or affidavits showing that the award has become final in the country in which it was made. Sub-Clause (iv) of Rule 801 (c) requires an affidavit to show that the award has become final in the country in which it was made. This part of the Rule seems to be merely a repetition of the earlier Rules which were framed by this Court under the Arbitration Protocol & Convention Act, 1937 without noticing the difference in the language used under the Act. As held by the Division Bench of this Court in the case of Renusagar Power Co. Ltd. v. General Electric Company, reported in : (1990)92BOMLR70 , the Rule cannot go beyond the Act under which it was been framed. When the Act only requires that the Award should be binding as between the parties, the Rule cannot prescribe something more viz. that the Award should also have become final. The word 'final' which is used in Rule 801 (c), therefore, has been read down by the Division Bench of this Court so as to bring it in harmony with the Act under which it is made. As held by the Division Bench, the term 'final' therefore must be construed in this context in the limited sense of 'binding' and nothing more. There is an affidavit filed to show that the Award has become binding in the country in which it was made. Moreover, the said Rule has now been amended by this Court and the word 'final' is substituted by the word 'binding'
13. In the result, the petition is made absolute in terms of prayer (a) with costs.
Mr. Shyam Mehta, learned Counsel for the 1st respondents, applies for stay of the execution of the decree. Since decree passed is a money decree, the provisions of Order 41 Rule 5 of the Code of Civil Procedure, 1908 apply and since the 1st respondents are not willing to deposit in this Court the decretal amount, the application for stay is rejected.