http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 13  

CASE NO.: Appeal (civil) 3594  of  2001

PETITIONER: M/S. FUERST DAY LAWSON LTD.

       Vs.

RESPONDENT: JINDAL EXPORTS LTD.

DATE OF JUDGMENT:       04/05/2001

BENCH: D.P. Mohapatra & Shivaraj V. Patil

JUDGMENT:

Shivaraj V. Patil J.

Leave granted. L...I...T.......T.......T.......T.......T.......T.......T..J

   An  agreement was entered into between the appellant and the respondent on 1.8.1994 under which the respondent was to supply  certain  goods  to the appellant during  the  period January, 1995 to June, 1996.  Certain disputes cropped up in the course of the execution of the agreement.  The agreement provided  for  arbitration.   The appellant  filed  a  claim petition   before   the    International   General   Produce Association  (IGPA) a body nominated by the appellant as the Arbitrators.    The   Arbitrators,   after   entering   into reference,  received evidence and thereafter passed an Award on  13.8.1996  allowing  the claims of the  appellant.   The appeal  filed by the respondent against the Award before the IGPA  Appellate Board was dismissed on 14.11.1998.   Further the  appeal filed by the respondent before the Queens Bench Division  of  the High Court of Justice at London  was  also dismissed  on  29.1.1999.  The appellant filed an  execution application  in  August 1998 before the High Court of  Delhi for  enforcement of said foreign Award dated 13.8.1996.   An order of attachment was issued by the High Court against the respondent.   The  respondent  filed  an  application  under Section 151 CPC (E.A.  347 of 1998) seeking dismissal of the execution  petition.  The respondent also filed O.M.P.   No. 203  of  1998  under  Section  48  of  the  Arbitration  and Conciliation  Act,  1996  (for short the ‘Act).   The  High Court  varied  its  order  of  attachment  and  ordered  the respondent to lodge security.  A learned Single Judge of the High  Court held that the execution application filed by the appellant  for enforcement of foreign Award dated  13.8.1996 was  not  maintainable  under  the Act  as  the  arbitration proceedings were commenced prior to the coming into force of the  Act and dismissed the execution petition,  consequently released  the  security  of  1.74 crores  furnished  by  the respondent.   The appellant filed Special Leave Petition No. 7674  of 1999 before this Court challenging the order passed by  the  learned Single Judge.  This Court disposed  of  the Special  Leave  Petition  observing that the  order  of  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 13  

learned  Single Judge was appealable under Section  50(1)(b) of  the Act.  In this view, the appellant filed FAO (OS) No. 284  of  1999 before Division Bench of the High Court.   The Division  Bench  of the High Court by the impugned  judgment and  order  dismissed  the appeal saying that there  was  no fallacy in the reasoning of the learned Single Judge.  Under these  circumstances, the appellant is before this Court  in this appeal assailing the impugned judgment and order.

   Mr.  Ashwani Kumar, learned Senior Counsel appearing for the  appellant,  contended that the learned Single Judge  as well  as  the  Division Bench of the High  Court  manifestly erred in holding that since the arbitration proceedings were commenced  prior to 25.1.1996, i.e., before the commencement of  Act,  the  foreign Award dated 13.8.1996  could  not  be enforced  under Act in terms of Section 85 read with Section 21  of the Act;  this Court has ruled in Thyssen  Stahlunion GMBH  vs.  Steel Authority of India Ltd.  [1999(9) SCC  334] that a foreign award passed after the commencement of Act is to  be  enforced/executed  under the said  Act  alone  being stamped  as  decree;   in  this  ruling  the  reasoning  and conclusions  of Gujarat High Court in Western Ship  Breaking Corporation  vs.   Clarehaven  Ltd U.K.  [1988 (1)  Raj  367 (404)]  were  affirmed;  at no stage before the High  Court, either  before  the  learned  Single  Judge  or  before  the Division  Bench,  the  respondent  questioned  the  date  of commencement  of the Act on 25.1.1996;  in fact the Division Bench  proceeded  on  the  admitted position  that  new  Act commenced from 25.1.1996 and, therefore, it cannot be raised for the first time in these proceedings;  even otherwise the question is no longer ‘res integra having been conclusively decided  by  this Court in Shettys Constructions Co.   Pvt. Ltd.  vs.  Konkan Railway Constructions & Another [ 1998 (5) SCC  599],  Thyssen Stahlenion GMBH vs.  Steel Authority  of India  Ltd.   (supra)  and NALCO vs.  Metalimpex  [2000  (3) A.L.R.   422];  it is firmly established by these  judgments that  the  new  Act  came  into  force  on  25.1.1996;   the principal  contention  advanced on behalf of the  respondent that  these judgments are ‘per incuriam on the ground  that they  hold 25.1.1996 as the date of commencement of the  Act ignoring the specific provision and the Gazette notification according  to  which the Act came into force  on  22.8.1996; this Court was using the word ‘Act interchangeable with the first ordinance which came into force on 25.1.1996;  article 367  of  the  Constitution  and Section 30  of  the  General Clauses Act equate an Act with the ordinance and vice versa. Section  86(2) of the new Act itself says that all  actions and  orders under the ordinance as deemed to have been under the  Act.  Reference is invited to T.V.Venkata Reddy & Ors. vs.   State of Andhra Pradesh [1985 (3) SCC 198].  Thus  the learned  Senior  Counsel  submitted   that  the  contentions advanced by the respondent are untenable and unavailable and they  cannot be permitted to re-open settled legal issues in relation  to enforcement of a foreign award which has become final.

   Shri  K.K.   Venugopal, learned Senior Counsel  for  the respondent  urged that the date from which the Act came into force  is  an issue of fact and not an issue of  law;   this Court  in  the cases relied on behalf of the  appellant  has wrongly  mentioned  the  date of commencement  as  25.1.1996 instead  of 22.8.1996;  the error will have to be  corrected as  the  decision  would  be ‘per  incuriam.   Punjab  Land Development  & Reclamation Corporation Ltd.  Chandigarh  vs. Presiding  Officer, Labour Court, Chandigarh and Ors.  [1990

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 13  

(3)  SCC 682] and State of U.P.  & Another vs.  Synthetics & Chemicals  Ltd.   & Another [1991 (4)SCC 139] are  cited  in support  of  the  submissions;  the  decisions  in  Shettys Construction  Co.  Pvt.  Ltd.  vs.  Konkan Railway  (supra), Thyssen Stahlunion vs.  Steel Authority of India (supra) and NALCO  vs.   Metalimpex  (Supra)   will  have  far  reaching consequences.   The  Gazette of India produced  before  this Court  shows that the statement of some publications of  the Act  to  the  effect it shall be deemed to have  come  into force  on  25.1.1996 is a total error.  On the other  hand, Section  1(3) as shown in the Gazette is to the effect  that it shall come into force on such date as the Central Govt., may  by notification in the official Gazette, appoint;  the Government  of  India  by  Notification GSR  375  (E)  dated 22.8.1996  has notified 22.8.1996 as the date of coming into force  of  the  Act;  in Thyssen (supra) it is held  that  a foreign  award  given after the commencement of the new  Act can  be  enforced  only under the new Act;  in  the  present case,  the Award was passed on 13.8.1996 i.e.  9 days  prior to  coming into force of the Act.  In the instant case, both events  are  before 22.8.1996.  As such the  Foreign  Awards (Recognition  & Enforcement) Act, 1961 (for short the  ‘1961 Act)  will  apply in which case enforcement could  only  be through   a  suit;   the   execution  petition  was  rightly rejected.   Article 367(2) of the Constitution or Section 30 of  the  General  Clauses Act have nothing to  do  with  the question  as to the date on which the Act comes into  force; they  could not alter this date to 25.1.1996 from 22.8.1996; the  entire enforcement proceedings would be governed by the 1961  Act;  hence the execution petition could not have been directed  to be converted into an application under  Section 46 or 47 of the Act for various reasons.

   In  the light of the rival contentions and  submissions, the  principal legal issue that arises for consideration  is as to the very date of the commencement of the Act.

   In substance and effect, similar contentions were raised in   Thyssen   (supra)  in   regard  to   construction   and interpretation  of Section 85(2)(a) as to the enforceability of  foreign award passed after coming into force of the Act, although  the arbitration proceedings had commenced prior to the  commencement  of the Act.  This Court having heard  the learned  counsel  for  the  parties  elaborately  and  after referring  to  number of decisions of this court as well  as English Courts, arrived at the conclusions as stated in para 22  of the judgment.  Conclusion relevant for the  immediate purpose, is in para 22(7) which reads :-

   7.  A foreign award given after the commencement of the new Act can be enforced only under the new Act.  There is no vested  right  to have the foreign award enforced under  the Foreign   Awards  Act  (Foreign   Awards  (Recognition   and Enforcement) Act, 1961).

   It  is  clear  from conclusion extracted  above  that  a foreign award given after the commencement of the Act can be enforced  only under the new Act.  In brief, the facts  that gave rise to three appeals decided in the said case are:  In the  case of Thyssen (C.A.  No.  6036 of 1998), contract for the  sale  and purchase contained an arbitration  agreement. The arbitration proceedings commenced on 14.9.1995 under the Arbitration  Act, 1940 (for short the ‘old Act).  Award was given  on 24.9.1997 by the time the Act had come into  force

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 13  

on 25.1.1996;  Thyssen filed petition in Delhi High Court on 13.10.1997  under Sections 14 & 17 of the old Act for making the  award rule of the Court;  subsequently Thyssen filed an application  in  the High Court for execution of  the  award under  the  Act contending that the arbitration  proceedings had  been  terminated  with  the  making  of  the  award  on 24.9.1997  and,  therefore,  the   Act  was  applicable  for enforcement   of  the  Award.   The   question  as  to   the maintainability  of the execution petition was raised to the effect  whether  the award would be governed by the Act  for its  enforcement  or whether the provisions of the  old  Act would apply.  A learned Single Judge of the Delhi High Court held that the proceedings should be governed by the old Act. Hence, the appeal was filed in this Court.

   In  the  case of Western Shipbreaking Corporation  (C.A. No.  4928 of 1997), arbitration proceedings were held in the United  Kingdom  prior to the enforcement of the  Act;   the award  was  made in London on 25.2.1996;  the question  that arose  for consideration was whether the award was  governed by  the provisions of the Act for its enforcement or by  the Foreign  Awards  Act, 1961, the learned Single Judge of  the Gujarat  High  Court held that the Act would be  applicable. Aggrieved  by  the same, the above appeal was filed in  this Court.

   In  the case of Rani Constructions (P) Ltd.  (C.A.   No. 61  of 1999), disputes were referred to the sole  arbitrator on  4.12.1993.   The Arbitrator gave his award on  23.2.1996 after  the  Act had come into force.  The Division Bench  of Himachal  Pradesh  High  Court held that Clause  25  of  the Agreement  does not admit of interpretation that this  case is governed by the Act of 1996.

   In para 13 of the judgment, it is noticed that arguments had  been  addressed in considerable detail for and  against the  application of the new Act or the old Act in the  three appeals mentioned above.  We consider it useful to reproduce hereinbelow paras 39 to 42 of the said judgment:

   39.The  Foreign Awards Act gives the party the right to enforce  the foreign award under that Act.  But before  that right  could  be exercised the Foreign Awards Act  had  been repealed.   It cannot, therefore, be said that any right had accrued to the party for him to claim to enforce the foreign award under the Foreign Awards Act.  After the repeal of the Foreign Awards Act a foreign award can now be enforced under the new Act on the basis of the provisions contained in Part II  of  the  new  Act depending whether it  is  a  New  York Convention  award  or  a  Geneva Convention  award.   It  is irrespective  of  the  fact when  the  arbitral  proceedings commenced  in  a foreign jurisdiction.  Since no  right  has accrued  Section  6  of the General Clauses  Act  would  not apply.

   40.   In the very nature of the provision of the Foreign Awards  Act  it is not possible to agree to  the  submission that  Section  85(2)(a) of the new Act would keep  that  Act alive  for  the  purpose of enforcement of a  foreign  award given  after the date of commencement of the new Act  though arbitral  proceedings in a foreign land had commenced  prior to that.  It is correct that Section 85(2)(a) uses the words the  said  enactments  which would include all  the  three Acts,  i.e.,  the  old,  the  Foreign  Awards  Act  and  the Arbitration  (Protocol  and  Convention)   Act,  1937.   The

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 13  

Foreign  Awards Act and even the 1937 Act contain provisions only  for  the enforcement of the foreign award and not  for the   arbitral   proceedings.    Arbitral  proceedings   and enforcement  of  the  award are two separate stages  in  the whole  process of arbitration.  When the Foreign Awards  Act does  not contain any provision for arbitral proceedings  it is  difficult to agree to the argument that in spite of that the  applicability  of  the Foreign Awards Act is  saved  by virtue  of  Section  85(2)(a).  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 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.   Sections 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  under this chapter (Chapter I Part II, relating to  New York Convention awards) the award is deemed to be  a decree  of  that  court.  The  only  difference,  therefore, appears  to  be  that while under the Foreign Awards  Act  a decree  follows,  under  the new Act the  foreign  award  is already  stamped  as the decree.  Thus if provisions of  the Foreign  Awards Act and the new Act relating to  enforcement of the foreign award are juxtaposed there would appear to be hardly any difference.

   41.   Again a bare reading of the Foreign Awards Act and the  Arbitration  (Protocol and Convention) Act, 1937  would show  that  these  two enactments are  concerned  only  with recognition and enforcement of the foreign awards and do not contain  provisions for the conduct of arbitral  proceedings which  would,  of necessity, have taken place in  a  foreign country.   The provisions of Section 85(2)(a) insofar  these apply  to  the  foreign Awards Act and the 1937  Act,  would appear  to  be quite superfluous.  A literal  interpretation would  render section 85(2)(a) unworkable.  Section 85(2)(a) provides  for a dividing line dependent on commencement  of arbitral  proceedings,  which expression would  necessarily refer  to Section 21 of the new Act.  This Court has  relied on  this Section as to when arbitral proceedings commence in the  case  of  Shettys  Constructions Co.   (P)  Ltd.   vs. Konkan  Rly.  Construction.  Section 2(2) read with  Section 2(7) and Section 21 falling in Part I of the new Act make it clear  that  these provisions would apply when the place  of arbitration is in India, i.e., only in domestic proceedings. There  is no corresponding provision anywhere in the new Act with reference to foreign arbitral proceedings to hold as to what  is  to be treated as date of commencement  in  those foreign  proceedings.   We would, therefore, hold that on  a proper  construction  of Section 85(2)(a) the  provision  of this sub-section must be confined to the old Act only.  Once having  held  so  it  could be said that Section  6  of  the General  Clauses  Act would come into play and  the  foreign award  would be enforced under the Foreign Awards Act.   But then  it  is quite apparent that a different intention  does appear  that  there is no right that could be said  to  have been  acquired by a party when arbitral proceedings are held

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 13  

in  a place resulting in a foreign award to have that  award enforced under the Foreign Awards Act.

   42.   We,  therefore,  hold  that  the  award  given  on 24.9.1997  in the case of Thyssen Stahlunion GMPH v.   Steel Authority  of  India Ltd.  (Civil appeal No.  6036 of  1998) when   the  arbitral  proceedings   commenced   before   the Arbitration  and  Conciliation Act, 1996 came into force  on 25.1.1996,  would  be enforced under the provisions  of  the Arbitration  Act,  1940.   We  also   hold  that  clause  25 containing  the  arbitration agreement in the case  of  Rani Constructions (P) Ltd.  vs.  H.P.  SEB (Civil Appeal No.  61 of  1999) does admit of the interpretation that the case  is governed   by   the  provisions  of  the   Arbitration   and Conciliation  Act,  1996.  We further hold that the  foreign award  given in the case of Western Shipbreaking Corporation v.  Clareheaven Ltd.  (Civil appeal No.  4928 of 1997) would be  governed  by  the  provisions  of  the  Arbitration  and Conciliation  Act,  1996.  Thus, we affirm the decisions  of the  Delhi High Court in Execution Petition No.  47 of  1998 and  of the Gujarat High Court in Civil Revision Application No.   99 of 1997, and set aside that of the Himachal Pradesh High Court in Civil Suit No.  52 of 1996.

   It may be stated here again that this Court affirmed the judgment  of  Gujarat  High  Court in the  case  of  Western Shipbreaking  Corporation (supra) and held that the  foreign award  given  after  the commencement of the  Act  would  be governed  by  the Act although arbitration  proceedings  had commenced  in that case prior to the enforcement of Act.  In view  of  the  law  laid  down  by  this  Court  as  to  the enforcement  of foreign award passed after the  commencement of  the Act even in cases where the arbitration  proceedings were  commenced  prior  to  enforcement  of  the  Act  after consideration  of  various aspects, in particular,  question relating  to the construction and interpretation of  section 85(2)(a)  of  the  Act,  we do not  think  it  necessary  to consider  the  same  contentions  again   when  we  are   in respectful  agreement with the law laid down in the  Thyssen judgment.

   It  may be noticed that the provisions of the  Ordinance as  well  as  the  Act are same.  Article  367  (2)  of  the Constitution  states that any reference in the  Constitution to  Acts  or laws of, or made by Parliament, or to  Acts  or laws  of  or  made by the Legislature of a  State  shall  be construed  as including a reference to an Ordinance made  by the  President or to an Ordinance made by a Governor as  the case  may  be.   This  Article read with Clause  30  of  the General  Clauses Act clearly indicate that when a  reference is  made  to  an  Act, it shall  be  construed  including  a reference  to  an  Ordinance.  Under Articles 123  and  213, subject  to  the  limitation, stated therein,  an  Ordinance promulgated  shall have the same force and effect as an  Act of Parliament or an Act of a Legislature of a State.

   A  Constitution  Bench  of this Court in A.K.   Roy  vs. Union of India & Ors.  (1982 (1) SCC 271) has in clear terms stated  that  an ordinance issued by the President  or  the Governor  is as much law as an Act passed by the  Parliament and  is, fortunately and unquestionably, subject to the same inhibitions.   In  those inhibitions lies the safety of  the people

       Para 18 of the said judgment reads thus:

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 13  

   In  one  sense,  these contentions of Shri  Garg  stand answered  by what we have already said about the true nature and character of the ordinance-making power.  The contention that  the word ‘law in Article 21 must be construed to mean a  law  made by the legislature only and cannot  include  an ordinance,  contradicts  directly the express provisions  of Article  123(2) and 367(2) of the Constitution.  Besides, if an ordinance is not law within the meaning of Article 21, it will   stand  released  from   the  wholesome  and  salutary restraint  imposed  upon  the legislative power  by  Article 13(2) of the Constitution.

   In  another Constitution Bench Judgment of this Court in R.K.   Garg vs.  Union of India & Ors.  (AIR 1981 SC  2138), in para 5 has observed thus:-

   ......................................   It may also be noted that Clause (2) of Article 123 provides in terms clear and  explicit  that  an  Ordinance  promulgated  under  that Article  shall  have the same force and effect as an Act  of Parliament.  That there is no qualitative difference between an  ordinance  issued by the President and an Act passed  by Parliament  is also emphasized by Clause (2) of Article  367 which  provides  that any reference in the  Constitution  to Acts  or  laws  made  by Parliament shall  be  construed  as including   a  reference  to  an   Ordinance  made  by   the President.................

   A  Constitution  Bench of this Court again in  T.Venkata Reddy  and Others vs.  State of Andhra Pradesh (1985 (3) SCC 198) while reiterating the position in para 14 observed:

   14.   The  above  view  has been  approved  by  another Constitution  Bench of this Court in A.K.  Roy vs.  Union of India.  Both these decisions have firmly established that an ordinance is a ‘law and should be approached on that basis. The  language of clause (2) of Article 123 and of clause (2) of Article 213 of the Constitution leaves no room for doubt. An  Ordinance promulgated under either of these two Articles has  the same force and effect as an Act of Parliament or an Act of the State Legislature, as the case may be.

   Thus  an  Ordinance operates in the field  it  occupies, with  same  effect  and force as an ‘Act as stated  in  the aforementioned Articles of the Constitution.

   A  foreign  Award passed on 13.8.1996 could be  enforced with  the  same  vigour under the Ordinance as it  could  be under  the Act.  May be that is a reason why this point  was not  raised  by the respondent before the High  Court.   The learned  senior  counsel for the appellant reminded us  that now  attempt  is made by the respondent to overcome  Thyssen judgment.   It is not understandable as to how any prejudice is  caused to the respondent.  Thus, the contention advanced in  this  regard  by  the learned  senior  counsel  for  the respondent does not help the respondent in any way.

   The  other  argument with emphasis was that the  Thyssen judgment  is  ‘per incuriam as it was  pronounced  ignoring Section  1(3)  and the notification bringing Act into  force from  22.8.1996.  It is useful to refer to certain decisions of  this Court before taking a decision whether the  Thyssen judgment  is  ‘per  incuriam  or  not as  to  the  date  of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 13  

commencement of the Act in the given situation.

   In  Mamleshwar  Prasad  and Another  vs.   Kanhaiya  Lal (Dead)  through L.Rs.  (1975 (2) SCC 232) reflecting on  the principle  of  judgment per incuriam, in paras 7 &  8,  this Court has stated thus:-

   7.   Certainty  of the law, consistency of rulings  and comity  of courts  all flowering from the same principle converge  to  the conclusion that a decision  once  rendered must  later  bind like cases.  We do not intend  to  detract from  the  rule  that, in exceptional  instances,  where  by obvious inadvertence or oversight a judgment fails to notice a  plain statutory provision or obligatory authority running counter to the reasoning and result reached, it may not have the  sway  of  binding precedents.  It should be  a  glaring case,  an  obtrusive omission.  No such  situation  presents itself  here  and  we  do not embark  on  the  principle  of judgment per incuriam.

   8.   Finally  it  remains  to be noticed  that  a  prior decision  of this Court on identical facts and law binds the Court  on  the same points in a later case.  Here we have  a decision   admittedly   rendered   on    facts   and    law, indistinguishably identical, and that ruling must bind.

   This  Court  in A.R.Antulay vs.  R.S.  Nayak  &  Another (1988  (2) SCC 602), in para 42 has quoted the  observations of  Lord Goddard in Moore vs.  Hewwit [(1947) 2 All.ER  270] and  Penny  vs.   Nicholas  [(1950)  2  All.ER  89]  to  the following effect:-

   Per  incuriam are those decisions given in ignorance or forgetfulness of some inconsistent statutory provision or of some  authority  binding on the court concerned, so that  in such  cases  some part of the decision or some step  in  the reasoning on which it is based, is found, on that account to be demonstrably wrong..................

   This Court in State of U.P.  & Another vs.  Synthetics & Chemicals  Ltd.  & Another (1991 (4) SCC 139) in para 40 has observed thus :-

   40.   ‘Incuria  literally  means  ‘carelessness.   In practice  per  incuriam  appears  to  mean  per  ignoratium. English  courts have developed this principle in  relaxation of  the  rule  of stare decisis.  The ‘quotable in  law  is avoided  and ignored if it is rendered, ‘in ignoratium of  a statute  or  other binding authority.  (Young  v.   Bristol aeroplane co.  Ltd).  ...............

   The  two  judgments  (1)  Punjab  Land  Development  and Reclamation  Corporation  Ltd.,  Chandigarh  vs.   President Officer,  Labour Court, Chandigarh and Others (1990 (3)  SCC 682)  and (2) State of U.P.  and Another vs.  Synthetics and Chemicals Ltd.  and Another (1991 (4) SCC 139) were cited in support  of the argument.  Attention was drawn to paras  40, 41  and 43 in the first judgment and paras 39 and 40 in  the second judgment.  In these two judgments no view contrary to the  views expressed in the aforesaid judgments touching the principle of judgment per incuriam is taken.

   A  prior  decision of this court on identical facts  and law  binds  the Court on the same points of law in a  latter case.   This  is not an exceptional case by inadvertence  or

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 13  

oversight  of  any judgment or statutory provisions  running counter  to  the reason and result reached.  Unless it is  a glaring  case of obtrusive omission, it is not desirable  to depend  on the principle of judgment ‘per incuriam.  It  is also  not  shown that some part of the decision based  on  a reasoning  which was demonstrably wrong, hence the principle of  per incuriam cannot be applied.  It cannot also be  said that  while deciding Thyssen, the promulgation of the  first Ordinance, which was effective from 25.1.1996, or subsequent Ordinances  were not kept in mind more so when the  judgment of  Gujarat  High Court in Western Shipbreaking  Corporation (supra)  did  clearly state in para 8 of the  said  judgment thus:-

   8.   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 versa.

   It  appears  in the portion extracted above there  is  a mistake  as  to  the  date of  promulgation  of  the  second Ordinance as 26.3.1991.  But the correct date is 26.3.1996.

   It is noticed in the above paragraph that all provisions of  the  Ordinance as well as the Act are same;   therefore, use  of the word ‘the Ordinance shall also mean the Act and vice-versa.   The said judgment of the Gujarat High Court is affirmed by this Court in Thyssen.  The Thyssen judgment has not  failed  to  notice  either  a  statutory  provision  in substance  and effect or a binding precedent running counter to the reasoning and the result reached.

   Having  regard  to the facts of the case on hand and  in the   light   of  the  position  of  law   stated   in   the aforementioned  decisions,  we are unable to agree that  the Thyssen  judgment is per incuriam.  Same is the position  in respect  of Shettys Construction (supra) & NALCO (supra) on this  aspect  of ‘per incuriam.  As already noticed  above, the  facts  of Western Shipbreaking Corporation (supra)  and the  case  we  are  dealing  with  are  similar  as  to  the commencement  of  arbitration  proceedings  and  passing  of foreign award.

   The  Arbitration  and Conciliation Ordinance,  1996  was originally promulgated by the President on 16.1.1996 and was made effective from 25.1.1996.  The Second Ordinance came in its place on 26.3.1996 which was again replaced by the Third Ordinance  on  26.6.1996.   These  Ordinances  were  issued, necessitated  by  the  circumstances   for  continuing   the operation  of  the  new Law.  The new Act No.   26  of  1996 received  the  Presidents  assent  on  16.8.1996  and   was published  in the Gazette of India (Extra) Part II Section I dated 19.8.1996.

   We  have already expressed above that the Ordinance  had the  same  force  and  effect as the  Act.   This  Court  in Thyssen,  Shettys  Construction and NALCO appears  to  have taken  the  date of commencement of the Act as 25.1.1996  in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 13  

the background of ordinances and their continuance with same force  effective from 25.1.1996.  May be the Court was using the  word  ‘Act  interchangeable with the  first  Ordinance which   came  into  force  on  25.1.1996  which   ultimately culminated into Act.  As already noticed above, the judgment of  Gujarat  High Court in Western Shipbreaking  Corporation (supra)  was  in appeal before this court in Thyssen and  in para  8 of the said judgment, there is specific mention that the  use of the word ‘the Ordinance shall mean the Act  and vice-versa.  Even in the Thyssen judgment itself in para 16, reference  is  made to M.S.  Shivananda vs.  Karnataka  SRTC (1980  1 SCC 149).  In paras 12 and 13 of the said judgment, discussion  is  there  as to the effect of expiration  of  a temporary  Act  and effect of repealing the Ordinance as  to the  rights and liabilities.  As brought to our notice  that some of the private publications mentioned that the Act came into force on 25.1.1996, this might have also contributed in mentioning the date of commencement of the Act as 25.1.1996. Be that as it may, in the light of the successive Ordinances and  the provisions of the Ordinances and the Act being same and  the  new Law continued with the same effect  and  force from  25.1.1996.   There is no alteration or change  in  the legal  position  and  effect in relation to  enforcement  of foreign  award  including  the one made between  the  period 25.1.1996  till  22.8.1996, the date on which the  Act  came into  force  in terms of Section 1(3) read with the  Gazette Notification  inasmuch as the first Ordinance was  operative with  the  same  force and effect from  25.1.1996.   In  the present  case  with  which are concerned in this  appeal,  a foreign  Award was passed on 13.8.1996 and as such in  terms of  the conclusion arrived at in Thyssen, the said Award  is to  be  enforced only under the Act.  Even in  the  impugned judgment, it is stated that it is an admitted position that the  said Act has commenced from 26.1.1996. This point that the date of the commencement of the Act is 22.8.1996 and not 25.1.1996 was neither raised nor contested.  It may be added that  the  High Court of Delhi did not have the  benefit  of Thyssen  judgment  as  it   was  delivered  subsequently  on 7.10.1999  whereas  the  impugned  judgment  was  passed  on 27.9.1999.  Section 1(3) of the Act reads thus:-

(1)    Short title, extent and commencement:

(1) ..........................

(2) ..........................

   (3) It shall come into force on such date as the Central government,  may  by notification in the  Official  Gazette, appoint.

The Gazette Notification GSR 375 (E) dated 22.8.1996 reads:

   In exercise of the powers conferred by sub- section (3) of  Section 1 of the Arbitration and Conciliation Act,  1996 (26  of  1996), the Central Government hereby  appoints  the 22nd  day of August, 1996, as the date on which the said Act shall come into force.

   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.  But the purposive reading  would show  that  the Act came into force in continuation  of  the first  Ordinance which was brought into force on  25.1.1996. This  makes  the position clear that although the  Act  came

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 13  

into  force  on  22.8.1996,  for  all  practical  and  legal purposes  it  shall  be deemed to have been  effective  from 25.1.1996  particularly when the provisions of the Ordinance and  the Act are similar and there is nothing in the Act  to the  contrary so as to make the Ordinance ineffective as  to either   its  coming  into  force   on  25.1.1996   or   its continuation  upto 22.8.1996.  Thus we conclude that 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  Ordinance  is  deemed  to  have  been effective  from 25.1.1996 when the first Ordinance came into force.

   Alternatively  it  was contended that a party holding  a foreign award has to file a separate application and produce evidence  as contemplated under Section 47 and also  satisfy the  conditions  laid down under Section 48 and it  is  only after  the  Court  decides about the enforceability  of  the award,  it should be deemed to be a decree under Section  49 as  available for execution.  In other words, the party must separately  apply before filing an application for execution of  a  foreign  award.   The  Arbitration  and  Conciliation Ordinance,   1996  was  promulgated   with  the  object   to consolidate   and  amend  the   law  relating  to   domestic arbitration,   interntional  commercial    arbitration   and enforcement  of  foreign  arbitral award and to  define  law relating to conciliation and for matters connected therewith or  incidental  thereto.   In  para 4 of  the  Statement  of Objects  and Reasons contained in the Act, the main  objects of  the  Bill  are stated.  To the extent relevant  for  the immediate  purpose,  they are:  i) to  comprehensive  cover international  commercial  arbitration and  conciliation  as also domestic arbitration and conciliation;

   ii) ...................     iii) ...................

   iv)  to  minimize the supervisory role of courts in  the arbitral process;

   v)   ....................

   vi)  to  provide  that  every final  arbitral  award  is enforced  in  the same manner as if it were a decree of  the court;  ....................

   Prior  to  the  enforcement  of  the  Act,  the  Law  of Arbitration  in this country was substantially contained  in three  enactments namely (1) The Arbitration Act, 1940,  (2) The  Arbitration (Protocol and Convention) Act, 1937 and (3) The  Foreign Awards (Recognition and Enforcement) Act, 1961. A  party  holding  a  foreign award  was  required  to  take recourse  to these enactments.  Preamble of the Act makes it abundantly  clear  that it aims at to consolidate and  amend Indian  laws relating to domestic arbitration, international commercial  arbitration and enforcement of foreign  arbitral awards.   The  object of the Act is to minimize  supervisory role of court and to give speedy justice.  In this view, the stage  of approaching court for making award a rule of court as  required  in Arbitration Act, 1940 is dispensed with  in the  present  Act.   If the argument of  the  respondent  is accepted,  one of the objects of the Act will be  frustrated and  defeated.   Under the old Act, after making  award  and prior  to  execution, there was a procedure for  filing  and

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 13  

making  an award a rule of court i.e.  a decree.  Since  the object  of  the  act is to provide  speedy  and  alternative solution  of  the  dispute,  the same  procedure  cannot  be insisted  under the new Act when it is advisedly eliminated. If  separate  proceedings are to be taken, one for  deciding the  enforceability  of  a  foreign   award  and  the  other thereafter  for  execution,  it  would  only  contribute  to protracting the litigation and adding to the sufferings of a litigant  in terms of money, time and energy.  Avoiding such difficulties  is  one  of the objects of the Act as  can  be gathered from the scheme of the Act and particularly looking to the provisions contained in Sections 46 to 49 in relation to  enforcement of foreign award.  In para 40 of the Thyssen judgment  already  extracted above, it is stated that  as  a matter  of  fact, there is not much difference  between  the provisions  of  the  1961 Act and the Act in the  matter  of enforcement  of foreign award.  The only difference as found is  that while under the Foreign Award Act a decree follows, under  the  new Act the foreign award is already stamped  as the  decree.   Thus,  in our view, a party  holding  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 foreign award  is  enforceable,  it  can  proceed  to  take  further effective  steps for execution of the same.  There arises no question  of making foreign award as a rule of  court/decree again.   If the object and purpose can be served in the same proceedings,  in  our  view, there is no need  to  take  two separate   proceedings   resulting    in   multiplicity   of litigation.   It is also clear from objectives contained  in para  4 of the Statement of Objects and Reasons, Sections 47 to  49 and Scheme of the Act that every final arbitral award is  to be enforced as if it were a decree of the court.  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  our opinion, for enforcement of  foreign  award there  is  no  need to take separate  proceedings,  one  for deciding the enforceability of the award to make rule of the court  or  decree  and  the   other  to  take  up  execution thereafter.  In one proceeding, as already stated above, the court  enforcing  a foreign award can deal with  the  entire matter.  Even otherwise, this procedure does not prejudice a party  in  the  light of what is stated in para  40  of  the Thyssen judgment.

   Part  II  of the Act relates to enforcement  of  certain foreign  awards.  Chapter 1 of this Part deals with New York Convention  Awards.  Section 46 of the Act speaks as to when a  foreign  award is binding.  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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 13  

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.

   In  the  light  of the discussion made and  the  reasons stated  hereinabove, the impugned judgment and order are set aside.   The  case is remitted to a learned Single Judge  of the  High Court for proceeding with enforcement of the award in  the light of the observations made above.  The appeal is allowed in terms indicated above.  No costs.