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PETITIONER: BADAT AND CO.

       Vs.

RESPONDENT: EAST INDIA TRADING CO.

DATE OF JUDGMENT: 10/05/1963

BENCH: SUBBARAO, K. BENCH: SUBBARAO, K. DAYAL, RAGHUBAR MUDHOLKAR, J.R.

CITATION:  1964 AIR  538            1964 SCR  (4)  19  CITATOR INFO :  R          1970 SC 522  (6)  D          1977 SC2002  (6)  RF         1978 SC 389  (51)

ACT: Foreign Award and Judgment-Suit filed in Bombay High  Court- jurisdiction  of Court to entertain the suit based  on  such documents.

HEADNOTE: The  respondent company, which was incorporated in New  York and  carried  on business in spices, brought a suit  in  the original side of the Bombay High Court against the appellant for  recovery of a sum of Rs. 92,884-4-10 on the basis of  a judgment  of  the  Supreme Court of the State  of  New  York affirming  two awards obtained by it and also on the  awards in the alternative. 20 The respondent was a partnership firm carrying on import and export business in Bombay.  By two letters exchanged between them, the appellant and the respondent agreed to do business in  turmeric  fingers  on the terms and  conditions  of  the American  Spice  Trade  Association, one  of  which  was  an arbitration clause which ran as follows :-               "All  questions  and  controversies  and   all               claims  arising under this contract  shall  be               submitted to and settled by Arbitration  under               the  Rules of the American Spice  Trade  Asso-               ciation  printed on the reverse side  thereof.               This contract is made as of in New York." The appellant failed to supply turmeric in terms of the  two contracts   it  entered  into  with  the  respondent.    The respondent  put the matter into arbitration in pursuance  of the  arbitration clause.  The appellant took no part in  it. The  arbitrators  gave  the  two awards  in  favour  of  the respondent  for  damages.  The appellant did  not  pay.  The respondent  then  took appropriate proceedings and  got  the awards confirmed by the judgment of the Supreme Court of the State  of  New York.  The single judge of  the  Bombay  High Court  who tried the suit held that it was not  maintainable either  on  the  foreign  judgment  or  on  the  awards  and

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(dismissed the suit.  The Division Bench on appeal held that the  suit was maintainable on the awards, though not on  the judgment,  as  part  of the cause of action  had  arisen  in Bombay and the relevant facts had been proved by the  Public documents produced by the respondent and the admissions made by the appellant and decreed the suit. Held,  (per  Dayal and Mudholkar JJ.) The  decision  of  the Single  judge  of  the  High Court that  the  suit  was  not maintainable on the foreign judgment must be affirmed but on other grounds. Apart  from the provisions of the Arbitration  Protocol  and Conventions Act, 1937, foreign awards and foreign  judgments based  upon  award  arc enforceable in  India  on  the  same grounds  and  in the same circumstances in  which  they  are enforceable  in England under the Common Law on  grounds  of justice,  equity and good conscience.  On the original  side of  the  Bombay  High  Court  English  Common  Law  is  also applicable under cl. 19 of the Letters Patent read with  cl. XLI of the Charter of that Court. If the award is followed by a judgment which is rendered  in a  proceeding in which the person against whom  judgment  is sought can take objections as to the validity of the  award, the judgement will be enforceable in England.  Even then the plaintiff will have the right to sue on the original  course of action.  Secondly, even a foreign award will be  enforced only if it satisfies mutate’s mutandis the tests  applicable to  the enforcement of foreign judgments on the ground  that it   creates  a  contractual  obligation  arising   out   of submission  to  arbitration.  But there is a  difference  of opinion  in this connection on two matters, (1)  whether  an award which 21. is  followed  by a judgment can be enforced as an  award  or whether the judgment alone can be enforced, and (2)  whether an award which is not enforceable in the country in which it was made without an enforcement order or a judgement, can be enforced or in such a case the only remedy is to sue on  the original cause of action.  Thirdly, both a foreign  judgment and  a  foreign  award may be  sued  upon  provided  certain conditions are fulfilled one of which is that it has  become final. Although,  therefore,  the  respondent  could  sue  on   the original cause of action in the Bombay High Court that cause of  action must be distinguished from the one  furnished  by the  ’judgment of the New York Supreme Court which  must  be held to have arisen in New York and not in Bombay and was  a cause  of  action  independent of the one  afforded  by  the contracts  and  the Bombay High Court  would,  consequently, have no jurisdiction to try the suit based on that judgment. East India Trading Co. v. Carmel Exporters & Importers Ltd., (1952)  2 Q. B. 439, Schibsby v. Westenholz., (1870) 6 Q.  B 155 and Re Davidson’s Settlement Trust, (1873) L. R. 15  Eq. 383, referred to. In  a  suit based on a foreign award the  plaintiff  has  to prove,.  (1) that the contract between the parties  provided for arbitration by a tribunal in a foreign country, (2) that the award is in accordance with the agreement, (3) that  the award is valid according to the law of that country (4) that it  was  final according to that law and, (5)  that  it  was subsisting award at the date of the suit. The  essential difference between a foreign judgement and  2 foreign  award is that while the former is a command of  the foreign,  sovereign  and  the  coming  of  nations   accords international recognition to it if it fulfill certain  basic requirements, the latter is founded on the contract  between

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the parties and is not given the status of a judgment in the country  in  which  it is made ’and cannot  claim  the  same international status as the act of a foreign sovereign. Even  though  an award may not have obtained the  status  of judgment in the country in which it is made, if it possesses the essential attribute of a judgment, that is finality,  it can be sued upon in in other country. Union  Nationaledes  Cooperatives Agricoles de  Careales  v. Robert Catterall & Co. Ltd.’ (1959) 2 Q. B. 44, referred to. But  the finality that r. 15, cl. (E) of the American  Spice Trade Association gives to the awards in question is no more than  a matter of contract between the parties and  must  be subject to the law of the State. A  reference to the laws of the State of New York  makes  it abundantly clear that the relevant provisions of the laws of the 22 State  under which alone the awards could become  final  had not  been  complied  with and  they  could  not,  therefore, provide a cause of action for the suit. For an award to furnish a fresh cause of action, it must  be final.  If the law of the country in which it was made gives finality  to the judgment based on an award and not  to  the award itself, the award cannot furnish a cause of action  in India.   Although the High Court of Bombay has  jurisdiction to  enforce  a  final award made in  a  foreign  country  in pursuance  of  a submission made within the  limits  of  its original  jurisdiction,  the awards in  question  not  being final the suit must fail. Per Subba Rao J.-The doctrine of non-merger of the  original cause of action with the foreign judgment pronounced upon it is a well established doctrine. Popat v. Damodar, (1934) 36 B.L.R. 844, Oppenbeim and Co. v. Mohmed  Haneef,  (1922)  I.L.R. 45 Mad. 496  and  Nil  Ratan Mukhopahya v. Cooch Behar Loan Office, Ltd.  I.L.R. (1941) 1 Cal. 171, referred to. If the contract does not merge in the judgment, by a  parity of reasoning an award on which a foreign judgment is  passed cannot also merge in the judgment. There is no distinction between a foreign award which  would require an enforcement order to be enforceable in law and an award which cannot be enforced except by a judgment.  An en- forcement order as well as a judgment on an award serves the same  purpose  and  they are two  different  procedures  for enforcing, an award. Meerifield  Ziegler  & Co. v. Liverpool  Cotton  Association Ltd., (1911) 105 L.T.R. 97, referred to. A  suit would, therefore, lie on a foreign  award  completed according to the law of that country and before a decree can be passed on it three things must be proved, (1) arbitration agreement,  (2)  that  the  arbitration  was  conducted   in accordance  with the agreement, and (3) that the  award  was valid according to the law of the country when it was made. Norske Atlas Insurance Co. Ltd. v. London General  Insurance Company Limited. (1927) 43 T.L.R. 541, referred to. It was not correct to say that the High Court had gone wrong in  holding  that the three necessary  conditions  had  been proved   by  the  admission  of  the  appellants  in   their pleadings. Rules  3,  4 and 5 of the Order VIII of the  Code  of  Civil -Procedure  form an integrated code dealing with the  manner in ,which the allegations of fact made in a plaint has to be traversed  :and the legal consequences that follow from  its non-compliance. 23

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The  written  statement  must deal  specifically  with  each allegation  of fact made in the plaint and if the  defendant denies  any such fact, such denial must not be  evasive,  he must answer the point of substance and if he fails to do  so the said fact must be take to be admitted. The discretion under the proviso to r. 5 has to be  exercise by  the court as justice demands and particularly  according to   the  nature  of  the  parties,  standard  of   drafting prevailing in the locality and the practice of the court. There can be no doubt that pleadings on the original side of the  Bombay High Court have to be strictly construed in  the light of the said provisions unless the court thinks fit  to exercise it discretion under the proviso. Tildesley  v.  Harper, (1878) L.R. 7 Ch.  D. 403  and  Laxmi narayan  v. Chimniram Girdharilal, (1917) I.L.R. 41  Bom.-89 referred to. The said three conditions were also proved by the  exhibited record  of the proceedings of the Supreme Court of New  York containing the certificate of the Consul General of India in New  York and certified copies of the order and judgment  of the Supreme Court. While  under s. 78(6) of the Indian Evidence Act,  proof  of the  character of the document according to the law  of  the foreign  country, is condition precedent to  its  admission, such admission is not a condition precedent for drawing  the requisite  presumption  under  s.  86  of  the  Act.    That presumption  can be drawn before the document  is  admitted. The  judgment of the Supreme Court of New  York,  therefore, which  satisfied  the first two conditions laid down  by  s. 78(6), could be legitimately admitted into evidence. The  contracts  between the parties  having  been  concluded within the local limits of the original jurisdiction of  the Bombay  High Court, a part of the cause of action must  have arisen  there.  and that court had jurisdiction to  try  the suit on the awards.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 39 of 1961. Appeal from the judgment and decree dated September, 1958 of the Bombay High Court in Appeal No. 13 of 1958. C.K.   Daphtary,  Solicitor-General of India,  S.N.  Andley, Rameshwar  Nath,  P.L. Vohra and I. B. Dadachanji,  for  the appellant. M.   C.  Setalvad,  Atul  Setalvad,  V.I.  Merchant  and  G. Gopalkrishnan, for the respondent. 24 May 10, 1963.-Subba Rao J., delivered a dissenting  Opinion. The  judgment of Dayal and Mudholkar JJ., was  delivered  by Mudholkar J. SUBBA  RAO  J.-I  regret  my inability  to  agree  with  the judgment  prepared by my learned brother Mudholkar  J.  This appeal  by certificate raises the question of  ’Jurisdiction of the Bombay High Court to entertain a suit on an award  in respect  whereof a judgment was made in a foreign court  and other incidental questions. The facts that have given rise to the present appeal may  be briefly  stated.  I shall only narrate such facts which  are relevant  to  the question raised, for in  the  pleadings  a wider field was covered, but it has gradually been  narrowed down  when the proceedings reached the present  stage.   The appellants  are  Badat & Co., a firm  formerly  carrying  on business  at  Bombay.  The respondents, East  India  Trading Co.,  are a private limited company incorporated  under  the

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laws  of  the  State of New York in  the  United  States  of America  and having their registered office in the State  of New  York.  The respondents instituted Suit No. 71  of  1954 against  the appellants in the High Court of  judicature  at Bombay, in its Ordinary Original Civil Jurisdiction, for the recovery of a sum of Rs. 92,884/4/10 with interest  thereon. It  was  alleged in the plain that  by  correspondence,  the details  whereof  were given in the plaint,  the  appellants agreed  to do business with the respondents on the terms  of the American Spice Trade Association contract.   Thereafter, by  subsequent correspondence the parties entered  into  two different  contracts  where under the appellants  agreed  to sell  to  the respondents different  quantities  of  Allepey Turmeric  Fingers  on agreed terms. Though  the  respondents forwarded   to  the  appellants  in  respect  of  the   said transactions two contracts in duplicate on the standard form issued  by the said Trade Association with a request to  the appellants  to send them after having duly signed,  the  ap- pellants failed to do so.  Under the terms and conditions of the  said  Trade Association Contract,  all  claims  arising under  the contract should be submitted to, and settled  by, arbitration under the rules of the said Association. it  was stated that pursuant to a relevant rule of the 25 said  Association, the dispute was referred  to  arbitration and  two  awards were made in due course i.e., on  July  12, 1949.    Following   the  procedure   prescribed   for   the enforcement  of  such awards in New  York,  the  respondents initiated  proceedings in the Supreme Court of the State  of New  York to have the said awards confirmed and  a  judgment entered thereon in the said Court.  In due course, the  said Court  pronounced judgment confirming the said  awards.   On those  allegations  a suit was filed in the  High  Court  of Bombay  for recovery of the amounts payable under  the  said two  awards by the appellants to the respondents.  The  suit was  tried,  in the first instance, by Mody J.  The  learned judge,  inter  alia,  held  that the  suit  on  the  foreign judgment  would not lie in the Bombay High Court,  as  there was no obligation under the said judgment for the appellants to pay any amount to the respondents at any place within the jurisdiction  of  the Bombay High Court.  Adverting  to  the claim  based on the agreement resulting in the  awards,  the learned  Judge  observed  that there was no  proof  of  such agreement and that there were no admissions in the  written- statement  in  regard  to  the  facts  sustaining  such   an agreement.   On those findings he held that the  respondents had  failed  to  prove  that  the  Bombay  High  Court   had jurisdiction  to  try the suit.  As the suit  was  heard  on merits also, he considered other issues and held that  there was neither proof nor admissions in the written-statement in regard  to  the  alleged  contracts.   He  found  that   the arbitrators  and  the umpire had jurisdiction  to  make  the awards, but the said awards merged in the judgment and  that the suit was not maintainable on the said two awards.  It is not  necessary  to give the other findings  of  the  learned judge,  as nothing turns on them in the present appeal.   In the result. the suit was dismissed with costs.  On appeal, a division Bench of the said High Court, consisting of  Chagla C.J.  and  S. T. Desai J., disagreed with Mody  J.,  on  the material  questions  decided by him and allowed  the  appeal with costs.  The learned judges held that the awards did not merge  in  the  judgment, that the suit on  the  awards  was maintainable and that the Bombay High Court had jurisdiction to entertain the suit as part of the cause of 3-2 S. C. India/64

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26 action arose within its limits.  The learned Judges  further held  that  all the facts necessary to sustain  the  respon- dents’  suit on the awards had been proved either by  public documents produced in the case or by the admissions made  by the  appellants  in  the  written-statement.   The   present appeal,  as  aforesaid, has been  preferred  by  certificate against the judgment of the division Bench. The learned Solicitor General, appearing for the appellants, raised  before  us  the following points :  (1)  The  awards merged  in  the judgment made by the Supreme  Court  of  the State  of New York and, therefore, no suit would lie on  the awards.  (2) Even if the suit could be filed on the  awards, it  was  not  proved that any part of the  cause  of  action accrued  within the jurisdiction of the Bombay  High  Court. To  state  it differently, the respondents have  not  proved that the agreements resulting were entered into or concluded within  of the Bombay High Court.  And (3) failed  to  prove the three necessary enforcement of the awards namely, (i) an arbitration agreement, (ii) that the conducted in accordance with  the  agreement, and (iii) that the  awards  were  made pursuant to the provisions of the agreement and,  therefore, valid according to the lex fori of the place where the arbi- tration was carried out and where the awards were made.  Mr.   Setalvad  appearing for the  respondents,  sought  to sustain the findings of the Division Bench of the High Court given  in  favour of the respondents on the  said  questions raised by the appellants.  The  first  question is whether the awards  merged  in  the judgment  of the Supreme Court of the State of New York  for all   purposes;   if  so,  the  awards  would   lose   their individuality  or  separate  existence and  no  suit  could, therefore, be filed to enforce them.  In Halsbury’s Laws  of England, Vol. 7, 3rd Edn., at p. 141, the relevant principle is stated under the heading "Foreign judgments" thus:               "  Since  the foreign judgment  constitutes  a               simple contract debt only, there is no  merger               of  the  original cause of action, and  it  is               therefore open to the plain- 27 tiff  to  sue  either  on the foreign  judgment  or  on  the original  cause of action on which it is based,  unless  the foreign judgment has been satisfied." The  same idea is expressed in Dicey’s "Conflict  of  Laws", 7th edn., at p. 1059:               "For  historical  and  procedural  reasons,  a               foreign  judgment is treated in England  as  a               contractual  debt,  and  the  fact  that,   in               certain  instances,  it  can  be  enforced  by               registration does not appear to alter the tra-               ditional view." Though  the learned author in the course of  his  commentary criticizes  this view, the passage represents  the  accepted view  on  the  subject.  An interesting  discussion  of  the evolution  of the rule of non-merger of the cause of  action in  the  foreign  judgment is found  in  Piggott’s  "Foreign judgment",  Part  I  at p. 17.  The  various  steps  in  its evolution  may  be  stated thus : (1) Action  brought  on  a foreign  judgment  was  an action  brought  to  recover  the judgment debt :...... necessarily then, the judgment must be evidence  of the debt. (2) It was not made clear which  debt it  evidenced,  whether  it was the  judgment  debt  or  the original debt. (3) As it was an action on a debt, an  action on  the  judgment debt soon came to be  confused  with,  and perhaps looked upon as, an action on the original debt.  (4)

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Having  come  to that stage, the courts  declared  that  the original  debt  or  cause of action had not  merged  in  the foreign  judgment pronounced upon it.  Whatever may  be  the origin, the doctrine of non-merger of the original cause  of action  with  the foreign judgment has now been  well  esta- blished in spite of the fact that some text-book writers are not  able to discover a logical basis for the doctrine.   In "Smith’s Leading Cases", the learned author says: "Foreign judgments certainly do not occasion a merger of the original ground of action." In  Cheshire’s  Private  International Law,  5th  Edn.,  the learned author says in Ch.  XVII under the heading  "Foreign Judgments", thus, at p. 598 :               "It  is a rule of domestic English law that  a               plaintiff who has obtained judgment in England               against a defendant is barred from suing again               on the original cause of action.  The original               cause of action is mer- 28               ged in the judgment-transit in rem  judicatum-               and  it  would be vaxatious.  to  subject  the               defendant to another action for the purpose of               obtaining the same result.  It has been  held,               however, in a series of authorities, that this               is  not so in the case of  foreign  judgments.               Such  a  judgment  does not, in  the  view  of               English   law,  occasion  a  -merger  of   the               original  cause of action, and  therefore  the               plaintiff has his option, either to resort  to               the  original ground of action or to  sue  oil               the  judgment recovered, provided  of  course,               that the judgment has not been satisfied." The learned author gives the following different reason  for this distinction between a foreign and a domestic  judgment, at p. 599 :               "The  most  plausible justification  for  non-               merger, perhaps, is that a plaintiff suing  in               England  on a foreign judgment, as  contrasted               with  one  who sues on  an  English,  judgment               possesses  no higher remedy than he  possessed               before  the  foreign action.   The  effect  of               judgment  in English proceedings is that  "the               cause  of  action is changed  into  matter  of               record, which is of a’ higher nature, and  the               inferior remedy is merged in the higher" ; but               the view which English law takes of a  foreign               judgment  is that it creates merely  a  simple               contract   debt  between  the  parties.    The               doctrine of non-merger has. however, been  too               often  repeated  by  judges  to  justify   any               prospect of its abandonment." This  doctrine  has  been accepted and  followed  by  Indian Courts:  see Popat v. Damodar(’), Oppenheim and  Company  v. Mahomed HanEef(2) and Nil Ratan Mukhopadhyaya v. Cooch Behar Loan Office, Ltd.(’). If  the contract does not merge in a judgment, by parity  of reasoning,  the  award on which a foreign judgment  is  made cannot also merge in the judgment.  While conceding the said legal  position,  the  learned  counsel  for  the  appellant contends  that the award to furnish a valid cause of  action shall be one which is legally enforceable in the country  in which it is made.  An award made in (1)  (1934)  36 B.L.R. 844, 853. (2)  (1922) I.L.R. 45 Mad. 496.  (3)  I.L.R. (1941) 1 Cal. 171, 175.

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29 New  York, the argument proceeds, by its own force does  not create  rights or impose liabilities thereunder  and  there- fore,  such an inchoate document cannot afford a  cause  ,of action.   This contention has not been raised for the  first time, but has been noticed in "Russel On Arbitration",  16th Edn. and answered it p. 282.  The learned author places  the following two propositions in juxtaposition : (1) "An  award made  by foreign arbitrators, which requires an  enforcement order  to render it enforceable by the local law, is  not  a judgment  of  a foreign tribunal which can  be  enforced  by action  in  English  courts". (2) "But  an  award  which  is complete  and could be enforced in the country where it  was made  is  enforceable in England at Common Law  quite  apart from any rights given by Part 11 of the Act." In  Halsbury’s Laws  of  England, Vol. 11 3rd edn., the following  note  is given at p. 52 : "A   foreign  arbitration  award  which  is   complete   and enforceable  in the country in which        it was  made  is enforceable in England at Common Law." The  learned  Solicitor-General  seeks  to  (]raw  a  subtle distinction  between  an award made by  foreign  arbitrators which require an enforcement order to render it  enforceable by  the local law and an award which could not  be  enforced except  by  obtaining  a judgment on  its  basis.   On  this distinction  an  argument is advanced, namely, that  in  the case  of  the former the award has been  vitalized  by,  the enforcement order, while in the case of the latter the award qua  the Judgment has not become enforceable, but it is  the judgment  that  becomes  enforceable.  In  support  of  this contention   reliance   is  placed   upon   the   following, observations  found in Dicey’s Conflict of Laws, 17th  edn., at p. 1059 :               "If the foreign award is followed by  judicial               proceedings in the foreign country  resultants               in  a judgment of the foreign court  which  it               not  merely  a formal order  giving  leave  to               enforce the award, enforcement proceedings  in               England   must  be  brought  on  the   foreign               judgment (or possibly on the original cause of               action), but probably not on the award." These               observations  are not supported by any  direct               decision,  they  represent only  the  author’s               doubts on the 30 question.   On  principle  1 cannot see  why  a  distinction should be made between the two categories of cases.  An  en- forcement order as well as a judgment on an award serves the same purpose : they are two different procedures  prescribed for enforcing an award.  In the case of an enforcement order a party applies to a court for leave to enforce the award  ; and on the granting of such leave, the award can be enforced as  if  it  were a decree of a court.   In  the  alternative procedure.  an  action either ill the shape of a suit  or  a petition  will have to be filed on an award and  a  judgment obtained  thereon.  In that event, the award, vis-a-vis  the country  in  which it is made, merges in  the  judgment  and thereafter  the judgment only becomes enforceable.  But,  as explained earlier, there is no merger in the context of  its enforcement in another country.  In both the cases the award in  the country of its origin is complete  and  enforceable. If  an award gets vitality by a mere enforcement  order,  it gets  a higher sanctity by the court of its origin making  a judgment  on  it.  Both of them afford a  guarantee  of  its vitality  and  enforceability in the country of  its  origin

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and, therefore, a different country can safely act upon  it. In  both the cases the award is complete in the  country  of its  origin and if the doctrine of merger cannot be  invoked in  the case of foreign judgment, as I have held it  cannot, there is no principle on which the distinction sought to  be made  can be sustained.  To sanction the distinction in  the context  of  a  foreign judgment is to prefer  the  form  to substance  and  to accept a lesser guarantee  and  reject  a higher one.  The decision in Merrifield, Ziegleis-, and Co., v.  Liverpool  Cotton -Association Limited(1) does  not  lay down  any  different  proposition.   There,  the   plaintiff brought  an  action  in  England  against  Liverpool  Cotton Association  for  restraining  the  said  Association   from expelling  them  from membership of  the  Association.   The Association  filed a counter claim demanding a large  amount from  the plaintiffs payable by them under an award made  in Germany.  The claim was based on the award and in effect  it was  a  claim  to  enforce the  award.   By  German  Law  an enforcement order (1) (1911) 105 L.T.R. 97, 106. 31 was necessary before an award can be enforced.  But no  such order was made there.  The High Court rejected the     counter claim.  In doing so, it made the following   observations :               "The  sole point, therefore,  remains  whether               the  award is a decision which the court  here               ought to recognise as a foreign judgment.   In               my opinion it is not, although as between  the               parties  it  is conclusive  upon  all  matters               thereby adjudicated upon, and is therefore  in               a different category to the "remate"  judgment               dealt with by the House of Lords in Nouvin  v.               Freeman(1) ; it has no further force or effect               unless and until the court determines that  it               is   an  adjudication  made   in   proceedings               regularly   conducted  upon   matters   really               submitted to the jurisdiction of the tribunal.               It  is  not  even as  though  the  award  were                             enforceable   unless   the  court   st ays   its               operation  ; the contrary is really the  case,               and for all practical purposes it is stillborn               until  vitality  is  infused into  it  by  the               court.   It  is  then,  for  the  first  time,               endowed  with one, at least, of the  essential               characteristics  of  a judgment-the  right  to               enforce obedience to it." This  passage  in  clear  terms  brings  out  the  principle underlying  the  proposition that an award cannot  afford  a cause  of action till it is complete in the country  of  its origin.   The  reason of the rule is that unless  and  until tile appropriate court determines its regularity, it is  in- choate  and it becomes enforceable only when an  enforcement order or judgment puts its seal of approval on it.  For  the application  of  this principle the distinction  between  an enforcement  order  and  a  judgment on  the  award  is  not material.   In either case, the Court approves it.   Indeed, the  Judicial  Committee  in  Oppenheim  &  Co.  v.  Mahomed Hanef(2) sanctioned the maintainability of a suit to enforce an award which ended in a judgment.  There, in respect of  a mercantile dispute that arose between merchants carrying  on business  in London and a merchant at Madras, an  award  was obtained in England.  The merchants in England filed a  suit on (1) (1889) 15 App.  Cas. 1.

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(2)  (1922) I.L.R. 45 Mad. 496. 32 the award on the King’s Bench Division of the High Court  in England  for the amounts payable thereunder and obtained  an ex-parte   judgment   against  the   merchant   at   Madras. Thereafter, they brought a suit against the Madras  merchant in the High Court of judicature at Madras    claiming    the sum due under the said judgment, or in the alternative,  for the  amount  due under the award.  Coutts  Trotter  J.,  who heard the case in the first instance, held that the suit was not  maintainable on the judgment that was an ex-parte  one, and  gave a decree on the award.  But on appeal, a  Division Bench.  of  that Court took a different  view.   On  further appeal, the Privy Council restored the decree made by Coutts Trotter  J.  : but they concluded their  judgment  with  the following caution : "In order to prevent misconception, it appears desirable  to add that it was not pleaded or contended at any stage of the proceedings  that  the  award  had  merged  in  the  English judgment,  and accordingly their Lordships do not deal  with that point." This  decision  is certainly an authority for  the  position that  on  the assumption that an award does not merge  in  a foreign  judgment, it affords a cause of action  in  another country.   I  have  already indicated earlier  on  the  same reasoning  applicable  to the doctrine of  non-merger  of  a contract  in a foreign judgment that an award also will  not merge.   For  the reasons given by me, I hold  that  a  suit would   lie  on  the  basis  of  an  award  in   a   foreign country,provided it is completed in the manner prescribed by the  law of that country. I  shall  now take the third question,  for  the  discussion thereon  would also solve the problem raised by  the  second question.  The learned Solicitor-General contends that there is  no  proof of the facts to satisfy  the  aforesaid  three conditions  and  the Division Bench of the High  Court  went wrong in holding to the contrary on the basis of the alleged admissions  found in the pleadings.  Mr.  Setalvad,  learned counsel  for  the  respondents, on  the  other  hand,  while conceding  that the said three conditions must be  satisfied before  a  foreign award can be enforced,  argues  that  the relevant  facts were proved not only by the admissions  made by the appellants in the written-statement, ex- 33 pressed or implied, but also by the production of the certi- fied copy of the judgment of the foreign court. In  Norake-  Atlas  Insurance Co.  Ltd.  v.  London  General Insurance  Company Limited(1), in award made in  Norway  was sought to be enforced in England.  Action was brought not on the  contract but on the award.  MacKinnon J., laid down  in that case that three things had to be proved for obtaining a decree thereon, namely, (1) the submission ; (2) the conduct of  the arbitration in accordance with the submission ;  and (3)  the fact that the award was valid according to the  law of  the  country where it was made.  So too,  in  Halsbury’s Laws  of England, 3rd edn., Vol. 11, in para 116, at p.  53, the  said conditions of enforcement are given  with  further elaboration.  I need not pursue this matter, as there is  no dispute on this aspect of the question. Have  the  conditions been proved in the  present  case?   I shall first take the arguments based on the pleadings.   Be- fore  doing so, it would be convenient to read the  relevant provisions of the Code of Civil Procedure on the subject, as the arguments turn upon the application of those  provisions to the pleadings.

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Order  VII of the Code of Civil Procedure prescribes,  among others,  that  the plaintiff shall give in  the  plaint  the facts  constituting the cause of action and when  it  arose, and  the  facts  showing the court  has  jurisdiction.   The object  is  to enable the defendant to  ascertain  from  the plaint  the  necessary facts so that be may  admit  or  deny them.   Order  VIII provides for the filing  of  a  written- statement,  the particulars to be contained therein and  the manner  of doing so ; rules 3, 4 and 5 thereof are  relevant to the present enquiry and they read :               Order VIII Rule 3. It shall not be  sufficient               for  a defendant in his written  statement  to               deny  generally  the grounds  alleged  by  the               plaintiff,   but  the  defendant   must   deal               specifically  with each allegation of fact  of               which  he  does not admit  the  truth,  except               damages.  r.  4 Where a  defendant  denies  an               allegation of fact in the plaint, he must  not               do  so  evasively,  but answer  the  point  of               substance.  Thus if it is alleged that he               (1) (1927) 43 T.T.R. 541.               34               received a certain sum of money, it shall  not               be  sufficient to deny that he  received  that               particular  amount, but he must deny  that  he               received that sum or any part thereof, or else               set  out  how  much he received.   And  if  an               allegation is made with diverse circumstances,               it  shall not be sufficient to deny  it  along               with those circumstances.               Rule  5.  Every  allegation  of  fact  in  the               plaint,  if  not denied  specifically,  or  by               necessary  implication,  or stated to  be  not               admitted  in  the pleading of  the  defendant,               shall  be  taken  to  be  admitted  except  as               against a person under disability.               Provided that the Court may in its  discretion               require  any  fact so admitted  to  be  proved               otherwise than by such admission. These  three rules form an integrated code dealing with  the manner in which allegations of fact in the plaint should  be traversed  and the legal consequences flowing from its  non- compliance.   The written-statement must  deal  specifically with  each  allegation  of fact in the  plaint  and  when  a defendant denies any such fact, he must not do so evasively, but answer the point of substance.  If his denial of a  fact is not specific but evasive, the said fact shall be taken to be  admitted.  In such an event, the admission itself  being proof, no other proof is necessary.  The first paragraph  of r.  5  is a re-production of O.XIX, r. 13,  of  the  English rules  made  under  the Judicature Acts.   But  in  mofussil Courts  in India, where pleadings were not precisely  drawn, it  was  found  in  practice  that  if  they  were  strictly construed  in terms of the said provisions, grave  injustice would  be  done  to  parties with  genuine  claims.   To  do ’Justice  between  those  parties,  for  which  Courts   are intended,  the  rigor  of  r. 5 has  been  modified  by  the introduction of the proviso thereto.  Under that proviso the Court  may, in its discretion, require any fact so  admitted to  be  proved  otherwise than by such  admission.   In  the matter  of  mofussil pleadings, Courts,  presumably  relying upon  the  said  proviso,  tolerated  more  laxity  in   the pleadings  in the interest of justice.  But on the  Original Side  of the Bombay High Court, we are told,  the  pleadings are drafted by trained lawyers bestowing serious thought and

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with  precision.  In construing such pleadings  the  proviso can be invoked only in exceptional 35 circumstances to prevent obvious injustice to a party or  to relieve  him  from  the results of  an  accidental  slip  or omission, but not to help a party who designedly made  vague denials  and  thereafter sought to rely upon them  for  non- suitng the plaintiff.  The discretion under the proviso must be  exercised by a Court having regard to the Justice  of  a cause  with  particular  reference  to  the  nature  of  the parties,  the standard of drafting obtaining in a  locality, and  the traditions and conventions of a Court wherein  such pleadings  are  filed.   In this  context  the  decision  in Tildestey v. Harper(1) will be useful.  There. in an  action against  a  lessee to set aside the lease  granted  under  a power  the statement of claim stated that the donee  of  the power had received from the lessee a certain sum as a bribe, and  stated  the  circumstances; the  statement  of  defence denied   that   sum  had  been  given,   and   denied   each circumstance,  but  contained no general denial of  a  bribe having   been   given.    The  Court   held,   under   rules corresponding  to the aforesaid rules of the Code  of  Civil Procedure, that the giving of the bribe was not sufficiently denied  and therefore it must be deemed to have been  admit- ted.  Fry J. posed the question thus : What is the point  of substance in the allegations in the statement of claim ? and answered it as follows :               "The point of substance is undoubtedly that  a               bribe was given by Anderson to Tildesley,  and               that    point   of   substance   is    nowhere               met............ no fair and substantial answer               is, in my opinion, given to the allegation  of               substance, namely that there was a bribe.   In               my  opinion  it is of the  highest  importance               that  this rule of pleading should be  adhered               to strictly, and that the Court should require               the  Defendant, when putting in his  statement               of  defence, and the Plaintiff, when  replying               to the allegations of the Defendant, to  state               the point of substance, and not to give formal               denials  of the allegations contained  in  the               previous   pleadings   without   stating   the               circumstances.   As far as I am  concerned,  I               mean to give the fullest effect to that  rule.               I  am convinced that it is one of the  highest               benefit to suitors in the Court." (1) (1878) L.R. 7- Ch.  D. 403. 36 It is true that in England the concerned rule is  inflexible and  that there is no proviso to it as is found in the  Code of Civil Procedure.  But there is no reason why in Bombay on the  original side of the High Court the same  precision  in pleadings  shall not be insisted upon except in  exceptional circumstances.  The Bombay High Court, in Laxminarayanan  v. Chimniram Girdhai Lal(1), construed the said provisions  and applied  them to the pleadings in a suit filed in the  court of  the  joint Subordinate Judge of Ahmednagar.   There  the plaintiffs  sued  to recover a sum of money  on  an  account stated.  For the purpose of saving limitation they relied in their plaint upon a letter sent by the defendant-firm.   The defendants  in  their  written  statement  stated  that  the plaintiffs’s suit was not in time and that "the suit is  not saved by the letter put in from the bar of limitation".  The question was raised whether in that state of pleadings,  the letter  could be taken as admitted between the parties  and,

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therefore, unnecessary to be proved.  Batchelor, Ag.  C. T., after noticing the said provisions, observed               "It  appears to us that on a fair  reading  of               paragraph  6, its meaning is that  though  the               letter  put in by the plaintiff is not  denied               the defendants contend that for one reason  or               another  its  effect is not to save  the  suit               from the bar of limitation.  We think,  there-               fore, that...... the letter, Exhibit 33,  must               be  accepted as admitted between the  parties,               and therefore, unnecessary to be proved." The written statement before the High Court in that case was one filed in a court in the mofussil ; yet, the Bombay  High Court implied the rule and held that the letter need not  be proved  aliunde -is it must be deemed to have been  admitted in  spite of the vague denial in the written  statement.  1. therefore,  hold that the pleadings on the original side  of the  Bombay  High Court should also be  strictly  construed, having  regard to the provisions of rr. 3, 4 and 5 of  Order VIII  of  the  Code of Civil  Procedure,  unless  there  are circumstances  wherein  a Court thinks fit to  exercise  its discretion under the proviso to r. 5 of O.VII. The first condition for the enforceability of an award (1) [1917] I.L.R. 41 Bom. 89, 93. 37 is the proof of submission to arbitration.  A claim based on an  award is in effect a claim to enforce the award  on  the footing  that  the  submission implied a  contract  to  give effect  to  the  award.  In the plaint the  details  of  the preliminary  contract  between  the  parties  containing  an arbitration  clause  has  been  specifically  and  precisely stated in paras 2 and 3. As much of the argument turns  upon the said allegations, it may conveniently be read here.               "2. By their letter- dated 7th September  1948               the  plaintiffs  intimated to  the  defendants               that  they were prepared to do  business  with               them on the terms of the American Spices Trade               Association contract, net landed weights, less               1-1/2 per cent. discount, letter of credit  to               be  opened for 95 per cent. of the  amount  of               the transaction and the balance to be  settled               immediately  after the goods were weighed  and               delivered  and if there was any difference  in               the  plaintiffs’  favour the same  was  to  be               remitted   to  them  by  the   defendants   by               telegraph.    By  their  letter   dated   13th               September,  1948 the defendants agreed to  the               said  terms.  Thereafter by their cable  dated               3rd March, 1949 the defendants offered to sell               to the plaintiffs 30 tons of Alleppey Turmeric               Fingers at 221 cents per lb.  C. & F. New York               less 2 per cent March/April shipment.  On  the               same   day  the  plaintiffs  cabled   to   the               defendants their acceptance of the said offer.               By  their  cable  dated 7th  March,  1949  the               defendants  offered to sell to the  plaintiffs               further  30 tons of Alleppey Turmeric  Fingers               at  22 cents per lb.  C. & F. New York less  2               per  cent March/April shipment.  On  the  same               day  the plaintiffs cabled to  the  defendants               their acceptance of the said offer.  By  their               letter  dated  8th March 1949  the  defendants               confirmed the said contract arrived at between               the  parties  on 3rd March,  1949.   By  their               letter  dated 9th March, 1949  the  plaintiffs

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             confirmed both the said contracts and  further               intimated  to  the defendants  that  they  had               opened  the necessary letters of credit.   The               plaintiffs  forwarded  to  the  defendants  in               respect of the said transactions two contracts               in  duplicate on the standard form  issued  by               the said American Spice Trade Association with               a  request to the defendants to return to  the               plaintiffs a copy of each of them 38               after  signing  the  same.   The   defendants,               however,  failed and neglected to do so.   The               plaintiffs  crave leave to refer to  and  rely               upon the cables and letters above referred  to               and  standard form of contract issued  by  the               said  American Spice Trade  Association,  when               produced."               "3.  The plaintiff say that the standard  form               of contract issued by the said American  Spice               Trade  Association is known in the  spice  and               herb  market  as  "The  American  Spice  Trade               Association  Contract" and contains terms  and               conditions on which the defendants had  agreed               to   do   business  with  the   plaintiff   as               aforesaid.  The plaintiff further say that the               said  standard form of contract is  in  common               use  with  firms dealing in spices  and  herbs               both  in  the New York market  and  elsewhere.               The plaintiff further say that the  defendants               have  been  dealing in spices and  herbs  with               American  firms in the United States and  also               on the United States market and had previously               entered  into  several  American  Spice  Trade               Association  Contracts  and  were  well  aware               ofand  knew what the terms and  conditions  of               the  said  American  Spice  Trade  Association               Contract  were.  One of the said terms was  as               follows :-               "All  questions  and  controversies  and   all               claims  arising -under this contract shall  be               submitted to and settled -by Arbitration under               the   Rules  of  the  American   Spice   Trade               Association   printed  on  the  reverse   side               hereof.   This contract is made as of  in  New               York." Then  the plaint proceeds to give how the dispute should  be referred  to  arbitration  and how  arbitrators  and  umpire should  be appointed by the parties.  From the said  allega- tions  in  the plaint it is clear that the  plaintiffs  have precisely  -and  definitely  given the  particulars  of  the correspondence that passed between the parties on the  basis of which they claimed the preliminary contract containing an agreement  to  submit their dispute to arbitration  and  the subsequent  contracts  in  respect of  the  goods  made  and concluded between the parties.   The  defendants, adverting to the said  allegations  dealt with them in paragraphs 7 and 8 of their written state-               39               ment.  The said paragraphs read :               "7.  With  reference  to paragraph  2  of  the               plaint  the defendants deny that they  at  any               time  entered  into  any  contract  with   the               plaintiff as alleged in the said paragraph  or               otherwise.   The defendants deny that they  at               any time signed or were bound to sign a  stan-

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             dard  form of contract issued by the  American               Spice Trade Association."               8.    With  reference  to paragraph 3  of  the               plaint,  the defendants deny that they at  any               time  agreed to do any business or enter  into               any  contract with the plaintiffs  as  alleged               therein or otherwise.  The defendants say that               they  did not at any time sign nor  were  they               bound  to sign the said American  Spice  Trade               Association  Contract  and that they  are  not               therefore bound by or concerned with the terms               and/or  conditions of the said contract.   The               defendants  deny  the rest of  the  statements               contained in the said paragraph." It  will  be seen from the said paragraphs that  though  the defendants  denied  that  at any time they  entered  into  a contract  with  the plaintiffs as alleged in the  plaint  or otherwise,   they   have  not  denied   that   the   letters particularized  in  the plaint passed between  the  parties. Learned  SolicitorGeneral  relied upon  the  expression  "as alleged" in paragraphs 7 and 8 of the written statement  and contended  that the said words implied necessarily that  the defendants  denied  the passing of the  correspondence.   No such  necessary  implication can arise from the use  of  the said  expression.   That expression is consistent  with  the admission  bv the defendants of the passing of  the  letters mentioned in paragraphs 2 and 3 of the plaint, coupled  with a  denial  that such correspondence does  not  constitute  a binding  contract between them.  Indeed, rr. 3 and 4  of  0. VIII  are  aimed  at such  general  allegations  in  written statements.   Rule  3 demands that each allegation  of  fact made  -in  the plaint must specifically be denied and  r.  4 emphasizes  that  such  a denial shall be of  the  point  of substance  and shall not be vague.  Here, in the plaint  the contents  of the letters dated September 7, 1948,  September 13,  1948, March 8, 1949 and March 9, 1949 are given and  it is specifically stated that they passed between the parties. Nowhere  in  the  written statement there  is  a  denial  as regards the               40 passing  of  the letters or the contents of  those  letters. The  general and vague allegations in the written  statement cannot  possibly  be construed, expressly  or  by  necessary implication, as a denial of the specific allegations in  the plaint in regard to the said correspondence.  On this aspect of the case, to some extent, there is unanimity between Mody J.,  and  the learned Judges of the Division  Bench  of  the Bombay  High  Court.   Adverting to para 7  of  the  written statement, Mody, J., says               "In  my  opinion, paragraph 7 of  the  written               statement   does  not  at  all,  directly   or               indirectly,  specifically or  by  implication,               deal with any of the said three statements  of               facts.  A denial of a contract is not a denial               of the receipt or of the contents of the  said               letter dated 7th September 1948 or the writing               of the letter dated 13th September 1948.   The               defendants  can  conceivably  admit  the  said               three  statements of fact but still deny  that               any contract resulted thereby.  Therefore  the               said three statements of facts must be  deemed               to have been admitted." Dealing  with para 8 of the written statement,  the  learned judge says that these two statements of facts have not  been pleaded to in the written statement and must, therefore,  be

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deemed  to have been admitted.  But having gone so far,  the learned  Judge  rules  against their  admissibility  on  the ground  that  there are no allegations that  the  defendants wrote  the letters attributed to them and that there  is  no description of the contents of the letters.  This, if I  may say so, is rather hypercritical.  The allegations in para  2 of the plaint in express terms say that the letters emanated from the defendants and also give their gist.  The  Division Bench  of the High Court in the context of the said  denials said:               "Therefore,   there  is  no  denial  of   this               correspondence.   Indeed there could  not  be,               because before the Written Statement was filed               inspection was given by the plaintiffs of this               correspondence  and  again  the  conscientious               draftsman  of the written statement could  not               possibly have controverted the statement  that               these  letters  passed  between  the  parties.               Therefore,  in our opinion, these two  letters               of the 7th September, 1948 and 13th September,               1948 are admissible in evidence.               41               and we will formally admit them in evidence."               Then they proceeded to state :               "Now, we read this denial to mean not a denial               of the exchange of letters and telegrams,  not               a  denial of the correctness of the copies  of               the  documents  of which the  Defendants  have               taken inspection, but a submission in law that               no contract emerges from the exchange of these               letters and telegrams. For  the reasons already given by me, I entirely agree  with the view expressed by the Division Bench on the  interpreta- tion  of the pleadings and hold that the said  letters  have been rightly admitted in evidence.  If the said letters  can go  in as evidence, the first condition, namely, the  factum of submission has been proved in this case. As   regards  the  question  whether  the  arbitration   was conducted  in accordance with the submission, the  pleadings again afford the answer.  In paras 3, 4 and 5 of the  plaint it  is  specifically stated that the parties agreed  to  the arbitration  clause  and  to the  procedure  prescribed  for carrying  out  the arbitration.  It is stated  therein  that pursuant  to  r. 5 and clauses B, C and E of r.  15  of  the Rules   of  the  said  American  Spice  Trade   Association, arbitrators and umpire were appointed, that the  arbitrators and  the  umpire  subscribed to their oaths  of  office  and proceeded  to hear the matter on 27th June, 1949,  and  12th July, 1949, that the defendants, though duly notified of the hearings, did not attend the same, that on 12th July,  1949, the   said  arbitrators  and  umpire  duly   made,   signed, acknowledged  and  published their awards and  thereby  they unanimously held that the defendants had committed a  breach of  the said two contracts and awarded that  the  defendants should pay to the plaintiffs specific amounts in respect  of the said contracts as and by way of damages.  Paragraph 7 of the  plaint  describes how the defendants did not  meet  the demand, how proceedings were taken before the Supreme  Court of the State of New York, how notice of the said proceedings was  duly  served on the defendants and how the  said  Court pronounced   its  judgment  confirming  the   said   awards. Paragraphs  9, 10, 11 and 12 of the written  statement  deal with  the  said  allegations.  In the  said  paragraphs  the defendants  do  not deny the factum of  the  appointment  of arbitrators and the procedure followed by 4-2 S C India/64

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42 them  in  making the awards.  They are content to  say  that they  are not bound by or concerned with the appointment  of the  arbitrators  by the plaintiffs as  alleged  therein  or other-wise, that they are not bound by or concerned with any of the statements contained in para 7 of the plaint and that the awards passed by the arbitrators and the umpire are  not binding on them.  As regards the allegations in para 7  they only say that the arbitrators acted without jurisdiction and that  the judgment of the Supreme Court of the State of  New York  made thereon is not binding on them.  It will be  seen from  the said denials that neither the appointment  of  the arbitrators  nor the steps taken by them are denied.  If  so it must be held, on the same reasoning which I have  adopted in the context of the allegations pertaining to  submission, that in the absence of specific denials it must be held that it  is  admitted  that  the  awards  were  made  in   strict compliance with the terms of submission. Now coming to the third condition, namely, the proof of  the fact  that the awards are valid according to the law of  the country where they were made, the same equivocal attitude is adopted  by the defendants in their written  statement.   In para  8  of  the  plaint there  is  the  following  specific allegation in that regard :               "........  the  said arbitration  having  been               duly held and the said awards having been duly               made,   signed,  acknowledged  and   published               according  to the said rules and the  laws  of               the State of New York, and the defendants  not               having taken steps to have the said awards  or               either  of  them set aside  or  modified.,  as               provided in the said rules and by the laws  of               the  State  of New York, the said  awards  are               binding  on the defendants and the  defendants               are now precluded and estopped               from disputing the same." Here there is a definite averment that the awards were  made according  to  the laws of the State of New  York.   In  the written  statement of the defendants, though they  generally deny  that  the  awards are binding on  them,  there  is  no specific  denial that the awards are not in accordance  with the laws of the State of New York.  Applying the same  rules of  construction  which I invoked in the case of  the  other averments in the plaint, I must also hold that the 43 defendants  must be held to have admitted the fact that  the awards were made in accordance with the laws of the State of New York. There  is one important circumstance which must be borne  in mind  in construing the terms of the written statement.   It is  not disputed that the plaintiffs have  filed  affidavits disclosing  the  copies of the documents  mentioned  in  the plaint.  The defendants’ Advocate bad inspection of the said documents before he filed his written statement.  It is  not disputed that the defendants received a copy of the petition filed by the plaintiffs in the Supreme Court of the State of New  York, along with a copy of the awards and the order  of the Court to show cause.  With the knowledge of the contents of the copies of the letters and the contents of the awards, the Advocate for the defendants rightly and properly was not in  a position to deny the factual aspect of the passing  of the letters and the making of the awards and the delivery of the  judgment by the Supreme Court of the State of New  York confirming  the  said  awards.   That  is  why  the  written statement  contained vague and general denials  only  speci-

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fically raising disputes on legal questions, and  designedly giving  equivocal  answers to factual aspects.  It  is  said that  no  inference of tacit acceptance on the part  of  the defendants   or  their  counsel  can  be  drawn,   for   the defendants’  Advocate,  after inspection of  the  documents, asked the plaintiffs’ Advocate to produce the originals, but the  plaintiffs  failed and neglected to do  so.   But  this circumstance  does  not detract from the  knowledge  of  the defendants  and their Advocate of the existence of the  said documents  and their contents before the  written  statement was   drafted.   This  circumstance  gives  a   satisfactory explanation  for  the vagueness of the  allegations  in  the written  statement of the defendants.  They were  designedly made  vague  as  the Advocate  presumably  could  not  bring himself  to  go the whole length of denying the  facts.   I, therefore,  hold, on a fair and reasonable  construction  of the  pleadings and written statement that the  existence  of the  three  conditions for enforcing the  awards  have  been admitted  by  the defendants in their  pleadings  and  that, therefore, they need not be independently proved. I would go further and hold that the said three con- 44 ditions are also proved by Ex.  X-9, The said exhibit is the record  of proceeding of the Supreme Court of the  State  of New York relating to the arbitration between the  plaintiffs and  the respondents.  That record contains the  certificate issued  by the Counsul General,and other papers relating  to the proceedings including the order and judgment of the said Supreme Court.  The Certificate reads thus :               "THIS IS TO CERTIFY (a) that the annexed  pro-               ceedings have been duly had in accordance with               the laws of the State of New York.               (b)   that  the annexed proceedings  are  duly               certified  by  the officer  having  the  legal               custody  of the originals thereof at the  time               such  annexed proceedings were issued  by  the               Supreme Court of New York.               (c)   that  the several persons named  in  the               annexed proceedings as holding the  respective               offices  stated therein in respect of each  of               them  did in fact bold such respective  office               at the time the same took place.               The  Consulate-General  of  India  assumes  no               responsibility   for  the  contents  of   this               document. Dated: New York, N.Y. June 18th, 1957. Sd./- M. Gopalcharan CONSUL-GENERAL Seal of CONSULATE GENERAL OF INDIA, New York, N.Y. The  order  and judgment of the Supreme Court  of  New  York dated  March  21,  1950, give in detail the  filing  of  the application by the -respondents for an order confirming  the two awards ; the consideration given to the said application by the Court ; the Court’s  satisfaction, after perusing the awards  and the connected papers, that the said  proceedings were  in  all respects regular; and the terms of  the  order made on the said application.  The decretal  portion of  the order  confirms  the  awards.  The  judgment  is  signed  by Archibald R. Watgon, Clerk, and certified both by the  clerk and  the Clerk of the Supreme court of New York County.   If the judgment  goes into evidence, the, three conditions  are

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satisfied, namely, that there was 45 a submission, that the arbitrators gave the awards in  terms of  the  submission and that a judgment was  made  on  those awards on the ground that the awards were made in accordance with law. But  it is argued by the learned Solicitor-General that  the said  judgment has not been proved in the manner  prescribed by  the Indian Evidence Act.  The relevant sections  of  the Evidence Act may now be read :               Section  74  :  The  following  documents  are               public documents :-               (1)   documents  forming the acts, or  records               of acts-               (iii)of public officers, legislative, judicial               and  executive of any part of India or of  the               Commonwealth or of a foreign country.               Section 78: The following public documents may               be proved as follows               (6)   Public documents of any other class in a               foreign country,               By the original, or by a copy certified by the               legal keeper, thereof with a certificate under               the  seal of a notary public, or of an  Indian               Consul  or diplomatic agent, that the copy  is               duly certified by the officer having the legal               custody of the original, and upon proof of the               character of the document according to the law               of the foreign country."               Section  86 : The Court may presume  that  any               document purporting to be a certified copy  of               any judicial record of any country not forming               part of India or of Her Majesty’s Dominions is               genuine and accurate, if the document purports               to  be  certified  in  any  manner  Which   is               certified by any representative of the Central               Government  in or for such country to  be  the               manner commonly in use in that country for the               certification    of   copies    of    judicial               records..............." It is not disputed that the copy of  the Judgment is  certi- fied by the legal keeper of the original within the  meaning of  s. 78(6) of the Evidence Act; nor is it  contended  that there  is no certificate under the seal of an Indian  Consul certifying that the copy is certified by the officer having 46 the legal custody of the original.  But what is contended is that  under  s. 78(6) of the Evidence Act  three  conditions must be complied with before the judgment can be admitted in evidence and the third condition, namely, proof of character of the document according to the law of the foreign country, is  not forthcoming in this case.  A perusal of s. 78(6)  of the  Evidence  Act makes it clear that apart  from  the  two certificates-one  by  the  legal  keeper  of  the   original documents  and the other by the Consul-General  there  shall also be proof of the character of the document according  to the  law  of  the foreign country  before  the  document  is admitted.  It is a condition precedent.  The short question, therefore,  is  whether there is such proof  in  this  case. Proof  can be by direct or circumstantial  evidence.   Proof can  also be given by placing before the Court facts  giving rise  to presumptions, rebuttable or irrebuttable.   Section 86  of the Evidence Act lays down that a Court  may  presume the  genuineness and accuracy of any document purporting  to be  a certified copy of any judicial record of  any  foreign

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country, if such a copy is duly certified in the manner  and according   to  the  rules  in  use  in  the   country   for certification  of copies of judicial records.  To give  rise to this presumption it is not necessary that the judgment of the  foreign  country should have already been  admitted  in evidence.   While  s. 78(6) of the Evidence  Act  lays  down three conditions for admitting the judgment in evidence, the admission  of  the  judicial  record  is  not  a   condition precedent for drawing the requisite presumption under s.  86 of  the Evidence Act.  That presumption may be drawn  before the  said  record is admitted.  The document may  be  looked into  for the purpose of ascertaining whether there  is  the requisite  certificate,  viz., a certificate issued  by  any representative  of the Central Government in  the  concerned country  to the effect that the said document was  certified in  the  manner  commonly in use in  that  country  for  the certification   of  copies  of  judicial  record.   If   the distinction  between  the certificate and  the  judgment  is borne in mind, the fallacy of the argument becomes apparent. The requisite certificate makes the document admissible  and not   viace  versa.   If  there  was  such   a   certificate forthcoming-in  this  case there is such  a  certificate-the document may be presumed to be genuine and accurate.  If  it is presumed 47 to  be genuine and accurate, it shows its  character,  viz., that  it is a genuine judgment made by the Supreme Court  of New York.  This is a fit case for raising the said  presump- tion  and  with the aid of this presumption the  third  con- dition  is also complied with i.e., it is a judgment of  the Supreme  Court of the State of New York made  in  accordance with law.  As the three conditions laid down in S. 78(6)  of the   Evidence   Act  are  fulfilled,   the   document   can legitimately be admitted in evidence, and if it is admitted, the  document,  by  its  own  force,  establishes  that  the aforesaid  three  conditions for the enforceability  of  the awards have been fulfilled. Now  I come to the second contention.  This deals  with  the jurisdiction  of the Bombay High Court on its original  side to entertain the suit.  Clause 12 of the Letters Patent  for Bombay enables a party to file a suit with the leave of  the Court,  if  the cause of action arises in  part  within  the local  limits of the ordinary original Jurisdiction  of  the said High Court.  The cause of action in the plaint is given as follows :               "........ the terms of business were  accepted               by  the defendants in Bombay and the  proposal               or  acceptance  of the said contracts  by  the               defendants   took   place  in   Bombay.    The               defendants’  refusal to pay the said sum  also               took place in Bombay." On  those allegations the leave of the High Court of  Bombay was  obtained and the suit was filed in the said  Court.   I have  already pointed out that in the case of a claim  based on an award, it is in effect a claim to enforce the award on the  footing that the submission implied a contract to  give effect  to  the  award.   I have  also  held  that  all  the necessary  documents relating to the preliminary as well  as subsequent contracts are admitted in the written  statement. The said documents clearly establish that the parties agreed that their disputes under the contracts should be  submitted to arbitration in the manner prescribed by the rules of  the American  Spices  Trade Association.  Those  contracts  were concluded   within  thne  local  limits  of   the   original jurisdiction  of the Bombay High Court.  It follows  that  a

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part  of the cause of action accrued within the said  limits and  that as the leave of the High Court was  obtained,  the said High Court had jurisdiction to entertain the 48 claim.  No other point is argued before us. In  the result, I agree with the conclusions arrived  at  by the High Court.  The appeal is dismissed with costs. MUDHOLKAR  J.-This is an appeal by a certificate granted  by the  High Court of Bombay from its judgment dated  September 12, 1958 reversing that of Mody J., who, by his judgment had dismissed  a suit instituted by the East India Trading  Co., respondents  before us, against the defendants Badat &  Co., on  the  original side of the High Court for a  sum  of  Rs. 92,884-4-10  with  interest  and costs on  the  basis  of  a judgment  of the Supreme Court of New York affirming  awards given by a domestic tribunal or alternatively on the  awards themselves. The  plaintiff-company was incorporated in the State of  New York  and  among  other things, engages  in  the  import  of spices.   The defendant-company, was a partnership firm  and at  the  relevant  time was carrying on  import  and  export business  in  Bombay.  According to the plaintiffs,  by  two letters dated September 7, 1948, and September 13, 1948, the first  written  by  the plaintiffs and  the  second  by  the defendants, the parties agreed to do business upon the terms of  the American Spice Trade Association.  One of the  terms agreed  between the parties was that the plaintiffs  at  the time  of placing an order for the supply of spices with  the defendants were to open a letter of credit to the extent  of 95  per  cent of the value of the commodity  ordered  to  be supplied and the balance to be settled immediately after the goods  were  weighed and delivered.  By  their  cable  dated March 3, 1949, the defendants offered to sell to the  plain- tiffs  30  tons of Alleppey Turmeric Fingers  at  a  certain rate,  to  be  shipped  in  March/April.   This  offer   was immediately accepted by the plaintiffs.  A somewhat  similar offer was again made by the defendants to the plaintiffs  on March  7,  1949,  which  offer  also  was  accepted  by  the plaintiffs.   The plaintiffs claim to have forwarded to  the defendants in respect of the said transactions two contracts in  duplicate on the standard forms issued by  the  American Spice Trade Association with a request to the defendants  to return to them a duly signed 49 from  in  respect  of each of  the  transactions  and  their grievance  is that the defendants failed to comply with  the request. The plaintiffs further aver that though they opened letters  of  credit, the defendants committed  a  breach  in respect of both the contracts by failing to supply turmeric. The plaintiffs have alleged in para 3 of the plaint that the defendants  were well aware of and knew what the  terms  and conditions  of  the American Spice Trade  Association  were. One of the terms of the Association which they have set  out is as follows:               "All  questions  and  controversies  and   all               claims  arising under this contract  shall  be               submitted to and settled by Arbitration  under               the   Rules  of  the  American   Spice   Trade               Association   printed  on  the  reverse   side               thereof.   This contract is made as of in  New               York." In  pursuance of this term, the plaintiffs who had  declared the  defendants in default appointed one Edward B. Polak  as their  Arbitrator  and  on May 24,  1949,  called  upon  the defendants  to appoint an arbitrator on their behalf.   They

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also  informed the defendants that if they failed to do  so, they,  the  plaintiffs,  would request  the  Association  to appoint  an  arbitrator  on  the  defendants’  behalf.   The defendants  not  having appointed any  arbitrator  on  their behalf, the Association at the plaintiffs’ request appointed one  Michael  F.  Corio  to act  as  an  arbitrator  on  the defendants’ behalf.  This person informed the defendants  of his appointment as Arbitrator and requested them to  furnish him  with  all  documents and  information  which  might  be necessary or useful in the matter of arbitration and further informed  them  that in the absence of  such  documents  and information  the Arbitrators will have to proceed  with  the arbitration   upon  the  documents  and   information   made available  by the plaintiffs.  The defendants did not  reply to this communication.  The Arbitrators before entering upon arbitration,  selected  one James F. Knight  as  Umpire  and Chairman  as  required  by the  rules  of  the  Association. Thereafter  the  Arbitrators  and the  Umpire  entered  upon arbitration and gave two awards, in the sum of $9,538.64  in respect of the first contract and in the sum of $9,209.36 in respect of the second 50 contract by way of damages.  The plaintiffs thereupon drew a bill  of  exchange on the defendants at Bombay  for  $18,748 being   the  aggregate  sum  awarded  by  the  two   awards. According to them, though it was presented to the defendants several times in Bombay they "failed and neglected to accept or to pay the same." Then, according to the plaintiffs, they adopted  proceedings in  the Supreme Court of the State of New York to  have  the said awards confirmed and judgment entered thereon.  Notices of  the  proceedings were said to have been  served  on  the defendants  and  judgment  confirming the  said  awards  and ordering   the  defendants  to  pay  $19,554.17,   including interest  and costs, was pronounced on April 13, 1950.   The plaintiffs eventually instituted the suit out of which  this appeal  arises  in the High Court of Bombay on  January  14, 1954. According  to  the plaintiffs, the defendants have,  by  the terms  of the contract voluntarily submitted  themselves  to the  jurisdiction of the Supreme Court of New York and  have agreed  to  the  said  Court,  which  was  a  Court   having jurisdiction in that behalf, confirming the said awards  and entering judgment thereon.  Further, according to them,  the parties had expressly agreed that judgment might be  entered on any award that might be made in respect of any  question, controversy  or claim between the parties arising  under  or out of the said contracts in accordance with the practice of an  Court  having  jurisdiction.   Alternatively  they  have contended that if the Court held that the judgment was not a judgment of a foreign Court on which action would lie in the High  Court the defendants having by the terms of  the  said contracts expressly agreed to have any dispute arising under the  contracts settled by arbitration in New York under  the rules  of  the Spice Trade Association and  the  arbitration upon which the awards arc founded having been duly made  and published  according to the rules and laws of the  State  of New York and further having become final are binding on  the defendants, the defendants are bound to carry out the  terms of  the  said awards and to pay to the plaintiffs  the  sums awarded under them.  Thus the suit is substantially based on a foreign judgment and in the alternative on the two  awards given by a domestic 51 tribunal functioning in New York.

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The defendants raised a number of pleas in defence.  In  the first  place they said that they did not reside  within  the limits  of  the original jurisdiction of the High  Court  or carry  on  business  therein  and  the  High  Court  had  no jurisdiction to entertain the suit.  They further  contended that  no part of the cause of action had arisen  in  Bombay. It  may be mentioned that the plaintiffs had sought for  and obtained  ex  parte leave of the court under cl. 12  of  the Letters  Patent and the defendants submitted that the  leave should  be  revoked.  The next important contention  of  the defendants  was  that the Supreme Court of New York  had  no jurisdiction to pass the judgment and the order sought to be enforced.   Further, according to them, the Arbitrators  and the Umpire who gave the alleged awards on which the judgment of the Supreme Court was founded had no jurisdiction to make those awards.  They raised a number of other pleas also  and elaborate  judgments have been delivered by Mody J. as  well as by the appeal court consisting of Chagla C.J., and S.  T. Desai J., dealing with those contentions.  Upon the view  we take on the question of the enforceability of the awards  in question  in  the  manner  sought in this  case  it  is  not necessary to advert to those pleadings. It  was not disputed before us that the defendants  had,  at the  date  of suit, ceased to reside or  carry  on  business within the limits of the original civil jurisdiction of  the High Court of Bombay.  The appeal court, while holding  that the  judgment  of the Supreme Court of New  York  cannot  be enforced  against  the defendants in a suit brought  on  the original  side  of  the High Court took the  view  that  the awards  upon  which the judgment is based  can  be  enforced because  they give rise to a cause of action and a  part  of that  cause of action had arisen in Bombay.  The reason  why the  judgment of the Supreme Court of New York could not  be the  foundation of the suit is, in the words of the  learned Chief Justice, as follows :               "The  foreign judgment was passed in New  York               and the defendants did not reside and carry on               business  within jurisdiction at the  relevant               date.   The only way that  jurisdiction  could               possibly   have  been  attracted  was  by   an               averment that there was an obligation 52               under   the  judgment  on  the  part  of   the               defendants to pay the amount in Bombay or that               the  defendants had undertaken the  obligation               to  pay the judgment amount in Bombay.   There               is  no such averment in the Plaint and in  the               absence of any such averment if the Plaint had               been  based only on the foreign judgment  then               we  might have agreed with the  learned  Judge               and held that the Court had no jurisdiction." No doubt, the learned Chief Justice has further said that it was unnecessary to decide the matter finally because in  his view  the plaintiffs were entitled to the relief claimed  on the  basis  of  the  awards.  We  may  point  out  that  Mr. Setalvad, who appeared before us for the plaintiffs, did not challenge the finding of the appeal court on this point  and did not seek to argue that the judgment of the Supreme Court could furnish a cause of action to the plaintiffs in respect of the present suit. We entertain no doubt as to the correctness of the view that the  plaintiffs are not entitled to enforce the judgment  of the   Supreme  Court  against  the  defendants  by  a   suit instituted  on  the  original side of  the  High  Court  and therefore,  we  should ordinarily have let the  matter  rest

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there.   Our  reasons  for agreeing with  the  High  Court’s conclusion  on  the  point  are,  however,  different   and, therefore, it is necessary for us to state them.  Before  we do  so,  it  would  be desirable  to  examine  the  position regarding  the  enforcement of foreign  awards  and  foreign judgments based upon awards.  Under the Arbitration Protocol and  Convention Act, 1937 (VI of 1937),  certain  commercial awards made in foreign countries are enforceable in India as if they were made on reference to arbitration in India.  The provisions  of  this Act, however, apply only  to  countries which  are  parties to the Protocol set forth in  the  First Schedule to the Act or to awards between persons of whom one is subject to the jurisdiction of some one of such powers as the  Central Government being satisfied that the  reciprocal provisions  have been made, may, by notification declare  to be  parties  to  the  Convention,  setforth  in  the  Second Schedule  to  the  Act.   It is  common  ground  that  these provisions  are  not applicable to the awards  in  question. Apart from the provisions 53 of  the aforesaid statute, foreign awards and foreign  judg- ments based upon awards are enforceable in India on the same grounds  and  in the same circumstances in  which  they  are enforceable  in England under the common law on  grounds  of justice,  equity  and good conscience.  We may add  that  in cases  arising  on the original side of the  High  Court  of Bombay, English common law is applicable "has nearly as  the circumstances  of  the place and the inhabitants  admit"  by virtue of cl. 19 of the Letters Patent read with cl.  XLI of the Charter of the Bombay High Court.               The common law on the subject is  crystallised               thus as rule 198 in Dicey’s Conflict of  Laws,               7th edn. at p. 1.056.               "Rule  198(1)  : A foreign  arbitration  award               which  has  been  rendered  enforceable  by  a               judgment in the country where it was given may               be   enforced  by  an  action  as  a   foreign               judgment.               (2)   A  foreign arbitration award  which  has               not been rendered enforceable by a judgment in               the country where it was given may be enforced               by an action at the discretion of the court if               the award is,-               (a)   in  accordance  with the  terms  of  the               submission agreement; and               (b)   valid according to the law governing the               arbitration proceedings; and               (c)   (semble)  final  according  to  the  law               governing the submission agreement."               The  position  as  summarised  in  Russel   On               Arbitration,  16th edn. is set out thus at  p.               282 :               "An  award made by foreign arbitrators,  which               requires  an  enforcement order to  render  it               enforceable  by  the  local  law,  is  not   a               judgment  of a foreign tribunal which  can  be               enforced by action in English courts.               But  an award which is complete and  could  be               enforced  in the country where it was made  is               enforceable  in England at common  law,  quite               apart from any rights given by Part II of  the               Act.  (Arbitration  Act, 1950-14  Geo.  6,  c.               27)."               Dealing  with actions upon foreign  awards  at               common  law,  it is stated further at  p.  283

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             thus :               "To  succeed in such an action  the  plaintiff               must               54               prove :-               (1)   That there was an arbitration agreement               (2)   That  the arbitration was  conducted  in               accordance with that agreement ; and               (3)   That the award was made pursuant to  the               provisions  of  the  agreement  and  is  valid               according  to the lex fori of the place  where               the arbitration was carried out and where  the               ward was made.               If the award is validly made in consequence of               a valid arbitration agreement, a sum found due               by the award and unpaid may be sued for in  an               action upon the agreement." Thus  commercial  arbitration  awards,  though  based  on  a contract  to arbitrate are not contracts and  although  they are  decisions they are not judgments.  Even though that  is so,  it has been held in several cases in England that  even where  an  award  has not been reduced to a  judgment  in  a foreign  country it can be enforced in England provided,  of course,  the  award answers mutatis mutandis the  tests  for determining the enforceability of foreign judgments.   Thus, the  foreign  arbitration tribunal must have  acted  upon  a valid submission within the limits of jurisdiction conferred by  the submission, and the award must be valid  and  final. (see  Dicey’s Private International Law, p. 1057).  Then  it is stated there:               "Others  believe that enforcement  in  England               must  depend upon the nature of the  award  in               the country where it was given.  Thus, if  the               award  must  be, and has been,  reduced  to  a               judgment  abroad,  the judgment  and  not  the               award  must  be enforced in England.   If  the               award  gives  rise  to  a  claim  in  contract               abroad,  it must be enforced as a contract  in               England.   However, as will be shown, this  is               not the view generally adopted by the  courts,               for  the  award is treated as  a  contract  in               England,  no  matter whether  foreign  law  so               regards  it or not.  Still others assert  that               the  enforcement  of an award  in  England  is               based not on the award, but on the contractual               agreement   to  submit  to   arbitration   all               differences   arising  out  of  the   original               contract, on the ground that the submission to               arbitration itself implies a contractual               55               agreement  to  abide  by  the  award,  thereby               extinguishing the original cause of action."               After   stating  this,  the   learned   author               proceeds to say               "It is submitted that no one short formula  is               satisfactory  and  that the enforcement  of  a               foreign award involves a complex of  questions               which must be treated separately."               He  has then dealt with various  decisions  in               England  and  also  the  opinions  of  certain               writers.  The conclusions stated in so far  as               they are relevant to this case are --               1.    In   all  enforcement   proceedings   in               England  the  plaintiff must first  obtain  an               enforceable  title  in England i.e.,  he  must

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             either apply for leave to enforce the award or               must bring an action on the award.               2.    In an enforcement proceeding in  England               the action on the award must take the form  of               a claim in contract.  This rule is based  upon               the  assumption that the agreement to  perform               the  award  is implied in the  submission  and               that  the submission is the contract on  which               the action is based.               3.    In  order to be enforceable in  England,               the foreign award need not first be pronounced               enforceable in the country of its origin. (see               Union  National des Cooperatives Agricoles  de               Cereales  v.  Robert Catterall &  Co.  Ltd.(1)               though  there  the award  was  being  enforced               under   the  Arbitration  Act,   1950).    If,               however,  the  foreign award  is  followed  by               judicial  proceedings in the  foreign  country               resulting  in a judgment of the foreign  court               which  is  not merely a  formal  order  giving               leave   to  enforce  the  award,   enforcement               proceedings in England must be brought on  the               foreign  judgment or possibly on the  original               cause of action but probably not on the award.               If the foreign judgment has the character of a               formal order giving leave to enforce the award               it  is doubtful whether the foreign  award  or               the  foreign  order  is  to  be  enforced   in               England.   If the distinction between  foreign               judgments on the award and foreign               (1959) 2 Q.B. 44.               56               formal enforcement orders can be maintained in               practice,  then,  it  is  believed  that   the               foreign award and not the foreign order,  will               be  enforced  in England, if  the  enforcement               order is purely formal.               4.    For  the purpose of enforcing a  foreign               award   plaintiff   must   prove   only    (1)               submission, (2) compliance with the submission               in  the conduct of an arbitration and (3)  the               validity of the award according to the law  of               the  country where it was made.  This is  also               laid down in Norske Atlas Insurance Co.  Ltd.,               v. London General Insurance Co., Ltd.,(1)  and               according to the learned author this  decision               correctly indicates the conditions which  must               be  fulfilled  if  a foreign award  is  to  be               enforced in England. We  may,  however,  mention that  relying  upon  Merrifield, Ziegler & Co., v. Liverpool Cotton Association Ltd.,(2)  the learned  Solicitor-General  contended that an  award  should also be one which is enforceable in the country in which  it was  rendered without the aid of an enforcement order  or  a judgment.   There, a German award was sought to be  executed in England.  Eve J., who decided the case, found that  under the German law the award had the effect of a final  judgment pronounced by a court of law.  But it could not be  enforced by  execution  unless an enforcement order was made  by  the Court  and further no enforcement order will be made if  any grounds exist for setting the award aside.  In the course of his judgment the learned judge observed : "It is not even as though the award were enforceable  unless the  court stays its operation ; the contrary is really  the case,  and for all practical purposes it is stillborn  until

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vitality  is infused into it by the court.  It is then,  for the first time, endowed with one, at least, of the essential characteristics of a judgment-the right to enforce obedience to it." Dicey has pointed out that this is the only case where such a  view has been taken and that it was not even referred  to in the Norske’s case(1).  Nor was it referred to (1) (1927) 43 T.L.R. 541. (2) (1911)  105 L.T.R. 97. in  the  Union  National case(1).  There,  a  Danish  award, though  not  enforceable in Denmark in the  absence  of  an’ enforcement  order  was held by the court of  Appeal  to  be enforceable under the Arbitration Act of 1950 on the  ground that it had become final and that under the Danish law  only formal  objections  could be taken to such an award  in  the proceedings for obtaining an enforcement order. It will thus be seen that there is a conflict of opinion  on a  number  of points concerning the enforcement  of  foreign awards  or judgments, based upon foreign  awards.   However, certain propositions appear to be clear.  One is that  where the award is followed by a judgment in a proceeding which is not  merely  formal but which permits  of  objections  being taken to the validity of the award by the party against whom judgment  is  sought, the judgment will  be  enforceable  in England.   Even  in that case, however, the  plaintiff  will have the right to sue on the original cause of action.   The second  principle  is  that even a  foreign  award  will  be enforced  in England provided it satisfies mutatis  mutandis the   tests  applicable  for  the  enforcement  of   foreign judgments  on  the  ground that  it  creates  a  contractual obligation arising out of submission to arbitration.  On two matters connected with this there is difference of  opinion. One is whether an award which is followed by a judgment  can be  enforced as an award in England or whether the  judgment alone can be enforced.  The other is whether an award  which it  not  enforceable  in the country in which  it  was  made without obtaining an enforcement order or a judgment can  be enforced  in  England  or whether in such a  case  the  only remedy is to sue on the original cause of action.  The third principle is that a foreign judgment or a foreign award  may be  sued  upon  in England as giving good  cause  of  action provided  certain conditions arc fulfilled one of  which  is that it has become final. Bearing in mind these principles let us consider whether the judgment of the Supreme Court could be enforced against  the defendants by instituting a suit on (1) (1959) 2 Q. B. 44. 5-2 S. C. India/64 58 the original side of the High Court.  The appeal court  has, as already stated taken the view that the original cause  of action having arisen wholly or in part within the limits  of the  original Jurisdiction of the High Court, the  suit  was maintainable.   If  the  plaintiffs  were  suing  upon   the original   cause  of  action,  there  would  have  been   no difficulty and the High Court could have granted leave under cl.  12 to the plaintiffs to institute the suit.  But  here, we  are concerned not with the original cause of action  but with  the  judgment of the New York Supreme  Court  and  the award.   The  judgment  furnishes an  independent  cause  of action.   The question would be whether the cause of  action furnished  by  it arose within the limits  of  the  original jurisdiction  of the High Court.  The judgment was  rendered in New York and, therefore, the cause of action furnished by it arose at that place and not anywhere else.  This cause of

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action is really independent of the cause of action afforded by  the contract and, therefore, if advantage was sought  to be  taken  of it, the suit would not lie  at  Bombay.   This point does not appear to have come up for a direct  decision in any case. We may, however, refer to the decision in East India Trading Co., v. Carmel Exporters & Importers Ltd.(1) There,  an action was brought in England to enforce a foreign  judgment awarding damages for breach of contract and the question for consideration  was  the  relevant date  for  converting  the amount  of  damages into sterling.   After  considering  the relevant  decisions on the point Sellers J., held  that  the relevant  date  would be the date of the  foreign  judgment. The  ground given by him was that the plaintiff’s  cause  of action  was  the foreign judgment and it  is  that  judgment which  creates the debt which was enforceable by  action  in England.   The  principle underlying this case  should  also apply to the present one because in both cases the cause  of action  is founded on foreign judgments, though in the  case before  us it is founded alternatively, upon foreign  awards also.   The only difference is that while in. our  case  the question  is where it arose, in the case cited the  question was as to (1)  (1952) 2 Q.B. 439. 59 when it arose.               The  reason why a foreign judgment  should  be               deemed to create a new obligation has not been               stated in this case.  But it is to be found in               the  judgment of Blackburn J. in  Schibsby  v.               Westenholz(1) where at p. 159 he has stated :               "The true principle on which the judgments  of               foreign  tribunals are enforced in England  is               that stated by Parke B. in Russel v. Smyth(1),               and  again  repeated  by him  in  Williams  v.               Jones(1)  that  the  judgment of  a  court  of               competent  jurisdiction  over  the   defendant               imposes a duty or obligation on the  defendant               to  pay the sum for which judgment  is  given,               which the courts in this country are bound  to               enforce..........               As  James  L. J., has said  in  Re  Davidson’s               Settlement  Trusts(4) "It would be  impossible               to  carry  on  the business of  the  world  if               courts refused to act upon what has been  done               by other courts of competent jurisdiction."               Schmitthoff  in The English Conflict of  Laws,               3rd edn. has stated at p. 459 :               "The  English courts recognise that a  foreign               judgment  gives rise to private rights  which,               on  principle,  should be protected  by  them.               Consequently,    when   referring    to    the               recognition  of  a foreign judgment,  what  is               actually meant is the recognition of the  pri-               vate right that is created by the judgment and               not the enforcement of a foreign judicial  act               of State.  In the words of Professor  Read(5)-               ’The true basis upon which the  Anglo-Dominion               authorities........ place the recognition of a               foreign  judgment is that it proves  the  fact               that  a vested right has been created  through               the  judicial process by the law of a  foreign               law district............ The view that the re-               cognition of a foreign judgment in the English               juris-

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             (1) (1870) 6 Q.B. 155.           (2) (1842)  9               M & W 810.               (3)(1845) 13 M & W 628. (4 ) (1873) L.R./E.  &               383, 386,               (5)  "Recognition and enforcement  of  foreign               judgments  (1938)" by Prof.  Read.  Quoted  by               Schmitthoff in "The English Conflic; of  Laws"                             459 60               diction  is based on the assumption  that  the               foreign,   judgment   creates  a   new   legal               Obligation  is firmly established by  numerous               decisions." No  divergent views have been expressed upon this  question. No   doubt,  the  English  doctrine  of  merger   has   been consistently  held  in  England not to apply  to  a  foreign judgment with the result that despite the fact that a plain- tiff  has obtained a foreign judgment he may never the  less sue  in an English court upon the original cause  of  action instead  upon the judgment.  When he sues upon the  original cause   of  action,  no  doubt,  the  court   within   whose ’Jurisdiction the cause of action arose would be entitled to entertain the suit.  But, if -on the other hand, he  chooses to  sue upon the judgment, he cannot found jurisdiction  for the  institution  of the suit on the basis of  the  original cause  of action because once he chooses to rest himself  on the  judgment  obtained  by  him in  a  foreign  court,  the original  cause of action will have no relevance  whatsoever even though it may not have merged in that judgment. Since   the  judgment  with  which  we  are  concerned   was pronounced in New York the cause of action for a suit  based thereon  must be said to have arisen at that  place.   Since that is so, it follows that the cause of action in so far as it rests on the judgment, did not arise within the limits of the  original jurisdiction of the High Court of  Bombay  and the suit based upon that judgment must be held to be  beyond the jurisdiction of the Court. The  alternative  claim  of the plaintiffs is  for  the  en- forcement of the awards themselves and it is this which  the Appeal  Court has held to be one which can validly form  the basis  of the present suit.  The  learned  Solicitor-General contended  that  the awards having merged  in  the  judgment cannot afford a basis to the present suit.  It is true  that it  is  pointed out in Dicey’s Conflict of  Laws  that  some writers  have expressed the view that where a foreign  award must  be, and has been, reduced to a judgment  the  judgment and  not the award must be enforced in England.  But it  has also  been pointed out that this is not the  view  generally adopted  by  the courts in the United States of  America  as would  appear  from the following  passage  from  Lorenzen’s "Cases on Conflict of Laws" 4th edn. 61 P. 1090 : "As a judgment of a foreign country is held not to merge the original  cause  of action, it would follow that  an  action might  be brought upon the award, notwithstanding  the  fact that it has been converted into a judgment abroad." This  question  was  left open by the Privy  Council  in  L. Oppenheim  &  Co., v. Mahomed Haneef(1) as it had  not  been raised  in  that case.  The recognition given to  a  foreign judgment  by  the  English Courts is, as  pointed  ’out  -by Schmitthoff  at p. 459 of the English Conflict of Laws,  not based upon the doctrine of merger.  For, this doctrine  does not  apply  to judgments of courts which are not  courts  of record in the English sense.  It may be that founded as  the

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American  legal system is on the common law of  England  the New  York  Supreme Court would be a court of record  in  the English  sense and, therefore, the doctrine of merger  could be said to apply to a judgment recorded by it.  However,  as no contention was raised before us that the Supreme Court of New  York was a court of record, we would leave  the  matter there. Just  as a foreign judgment affords a fresh cause of  action upon which a suit can be brought in an English court, so  is the  case with regard to a foreign award.  Thus,  in  Bremer Oeltransport  GMBH v. Drewey(2) it was held that  a  foreign award  furnishes  a  new  cause  of  action  based  on   the agreements  between the parties to perform the award.   This view  has been accepted in Halsbury’s Laws of  England  Vol. II,  p.  45.   In  that  case  it  was  contended  for   the respondents  that in so far as the submission is a  contract whereby  the parties to it impliedly undertake to  abide  by and carry out the award of the arbitrators, the  enforcement of  the  award would be the enforcement of a  contract  made within  jurisdiction (the contract having been entered  into in  London  while the award thereunder made  at  Hamburg  in Germany).   On  the  other hand it  was  contended  for  the appellant  that  the award having been made in  Hamburg  the action for its enforcement in England would not be an action for   the  enforcement  of  a  contract  made  in   England. Rejecting this contention Slesser (1) I.L.R. 45 Mad. 496.    (2) [1933] 1 K.B. 753. 62 L.J.,  after  considering  the authorities  on  the  subject observed at p 760 :               "So  far  it would appear clear  that  in  the               opinion  both of common law and equity  judges               the  award  is to be regarded  as  merely  the               working   out  of  a  term  of  the   original               agreement  of  submission..........  and  then               referred  to  the  following  observations  of               James  L.J., in Llanelly Ry. and Dock Co.,  v.               London and North Western Ry.  Co.,(1):               "It  would be difficult to say that  the  real               question   between   the  parties   could   be               determined by the arbitrator under that clause               ;  because,  if the plaintiffs  are  right  in               their  contention, they have  determined  that               part  of the agreement as well  as  everything               else:"               Now,  when  a plaintiff sues  upon  a  foreign               award what he in fact does is to ask the court               to  pass  a  judgment in his  favour  for  the               amount stated in the award only after  proving               five facts :               (1)   that  there was a contract  between  the               parties  where  under  disputes  between  them               could be referred to arbitration to a tribunal               in a foreign country,;               (2)   that the award is in accordance with the               terms of the agreements;               (3)   that the award is valid according to the               law    governing    arbitration    proceedings               obtaining  in the country where the award  was               made ;               (4)   that  it was final according to the  law               of. that country; and               (5)   that  it was a subsisting award  at  the               date of suit. A.   view  has been expressed in some English cases that  an

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award  must also be enforceable in the country in  which  is was  made before a suit call be brought, in England  on  its basis.  But upon the view we are taking it is not  necessary to  decide  this point.  Now, when a suit is  brought  by  a plaintiff  on the basis of an award it is not necessary  for him to prove that the amount claimed was actually payable to him  in  respect  of  the dispute nor  is  it  open  to  the defendants  to  challenge the validity of such an  award  on grounds like those which are available in India under s.  30 of  the  Arbitration Act.  A very limited challenge  to  the claim based (1) (1873) L.R. 8 Ch. 942, 948. 63 on  the award is permissible to the defendants and  that  is one of the reasons why it is important to ascertain  whether the  award has in fact attained finality in the  country  in which it was made.  We will assume that the plaintiffs  have satisfactorily  established  the  first three  of  the  five conditions  which we have set out above.  The question  then is  whether  the fourth and the fifth conditions  have  been satisfied. As  to  when  an award can be regarded  as  final  has  been considered  recently  in the Union Nationale  case(1).   The facts  of that case are succinctly summarised in  the  head- note  and  we can do no better than reproduce  its  relevant portion:               "By  an  agreement in French  made  in  Paris,               dated  August 31, 1956, the appellants  agreed               to sell to the respondents a quantity of wheat               seed.  The agreement contained an  arbitration               clause, the English translation of which  was:               ’All  differences arising out of  the  present               contract  will  be judged by  the  Arbitration               Chamber   of  Copenhagen  which  will   settle               without appeal with the powers of an  amicable               arbitrator.’ Differences having arisen between               the parties they were referred pursuant to the               arbitration  clause to the Copenhagen  Chamber               of  Arbitration.  Under the  rules  regulating               the  procedure  of  the  arbitration  chamber,               awards are made by a committee of the chamber.               Regulation  14  of the rules provides  that  :               ,awards made by the Committee shall be  final.               An  award can only be appealed against to  the               appeal court attached to the committee....  If               the  presidency decides that the appeal  can’t               be  made  the award made by the judgement  and               arbitration  committee shall be final.  By  an               order  of  October  6,  1958,  the   committee               awarded   to  the  respondents  the   sum   of               $183,000.  The presidency of  the  arbitration               committee  on  November 25, 1958  refused  the               appellants’  application for leave  to  appeal               and notified them that the award of October 6,               1958  was final.  The award could not  be  en-               forced in Denmark without an order of a Danish               court.   The  respondents,  by  summons  under               section  36  and 26 of  the  Arbitration  Act,               1950, which applies to arbitration awards made               in Denmark, applied for leave to en-               (1)   (1959) 2 Q.B. 44.,               64               force that award.  The appellant claimed  that               the  award  was a foreign award  and  had  not               become  final. in the country in which it  was

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             made." The  contention raised on behalf of the appellants was  that the  award had not become final in the country in  which  it was  made  because it was not enforceable in  that  country. The  Court of Appeal referred to regulation 14  which  gives finality  to an award made in accordance with the rules  re- gulating  the procedure of the arbitration chamber  and  ac- cepted the opinion of a qualified Danish lawyer that accord- ing to the Danish law the award had become final, though  it could  not  be  enforced  in  Denmark  without  obtaining  a judgment  from  a  Danish Court -and that  during  the  pro- ceedings before such court it would be open to the defendant to complain that the award suffered from formal defects  but nothing  else.  Thus, in this case the Court of  Appeal  has drawn a distinction between ’finality’ and enforceability of an  award and held that where under the laws of the  country in  which  an award has been made, it is no longer  open  to challenge  it  on merits it must be regarded as  final  even though  in  the  form  in which it  stands  it  may  not  be enforceable  there.  Rule 15, cl. (E) of the American  Spice Trade  Association whereunder the awards in the  plaintiff’s favour were made runs thus               "The  award of such arbitrators and umpire  or               sole arbitrator shall be final and binding  on               both parties unless within three business days               after  receipt of the award, an appeal with  a               fee  $75 be lodged with the Secretary  of  the               Association by either disputant.   Settlements               under  an arbitration award or awards  of  the               Arbitration Committee shall be made within  10               days  from the date of such award, and if  not               so settled, judgment may be entered therein               in accordance with. the practice of any  Court               having jurisdiction." One  point of distinction between the Danish rule  and  rule 15E  of the American Rules is that the latter  requires  the obtaining  of a judgment for enforcing it in case the  claim arising  out  of the award is not settled.   No  doubt,  the American  rule also says that the award shall  become  final and  binding  on the parties but whether it takes  away  the jurisdiction  of the courts to go behind its  finality  will have to be ascertained by reference to the laws of New York 65 State.   For, that rule is no more than a term of  the  con- tract between the parties and must be subject to the laws of the State. It  would  be  desirable at this stage  to  compare  foreign judgment with foreign awards and bear in mind the difference between   them.    No  doubt,  both  of  them   create   new obligations.  The judgment of a foreign sovereign is a  com- mand  of  that sovereign which has to be obeyed  within  the territorial limits of that sovereign’s jurisdiction.  On the principles   of   comity   it   is,   therefore,    accorded international recognition provided it fulfills certain basic requirements.  A foreign award, on the other hand, which  is founded  on a contract of the parties and is not  given  the status  of  a judgment in the country in which it  is  made, cannot  claim the same international status as the act of  a foreign  sovereign.   As pointed out by Schmitthoff  on  the English Conflict of laws, at p. 489 :               "It  follows  that unless  the  plaintiff  can               satisfy  the English court that the  award  is               treated,  in  the country where it  was  made,               like a judgment of the court he should sue  on               the original cause of action, but even in that

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             case  he  should plead the  award  because  it               might in appropriate cases, be regarded by the               English  courts  as  conclusive  between   the               parties." These observations would perhaps now stand slightly modified by  the  view  taken by the Court of  Appeal  in  the  Union Nationale case(1) in the sense that even an award which  has not  obtained  the status of a judgment in  the  country  in which  it  was  rendered but which  possesses  an  essential attribute of a judgment, that is, finality, it could be sued upon in another country. Bearing  in mind these principles we must consider what  are the requirements of the laws of New York State for giving an award  finality.   In  Appendix  I  to  Sturges’  Cases   on Arbitration  Law, the New York Arbitration Law, Art.  84  of the New York Civil Practice Act, as in force on September 1, 1952,  has  been  set out.  Section 1461  which  deals  with confirmation of an award runs thus:               "Motion  to confirm award: At any time  within               one   year  after  the  award  is   made,   as               prescribed in the               (1)   (1959) 2 Q.B. 44.               66               last  section,  any party to  the  controversy               which  was arbitrated may apply to  the  court               having  jurisdiction, as provided  in  section               fourteen  hundred  fifty-nine  for  an   order               confirming the award; and thereupon the  court               must  grant such an order unless the award  is               vacated, modified or corrected, as  prescribed               in  the next two sections or unless the  award               is  unenforceable  under  the  provisions   of               section  fourteen hundred fifty-eight.  Notice               of the motion must be served upon the  adverse               party  or his attorney,, as prescribed by  law               -for  service  of notice of a motion  upon  an               attorney  in an action in the same court.   In               the  Supreme  Court, the motion must  be  made               within  the  judicial district  embracing  the               country where the judgment is to be entered."                 Then  follows  s. 1462 which  deals  with  a               motion to vacate award; s. 1462-a which  deals               with  a motion to modify or correct an  award;               s. 1463 which deals with ’notice of motion and               stay’;  s.  1464 which deals  with  ’entry  of               judgment  on award and costs’; s.  1465  which               deals with the judgment roll and s. 1466 which               deals  with  effect  of  a  judgment  and  its               enforcement.  It is clear from s. 1462 that in               the  motion to vacate an award a party to  the               arbitration  can  challenge the award  on  the               following five grounds :               "1.   Whether  the  award  was   procured   by               corruption, fraud or other undue means.               2.    Where  there was evident  partiality  or               corruption  in  the arbitrators or  either  of               them.               3.    Where   arbitrators   were   guilty   of               misconduct in refusing to postpone the hearing               upon sufficient cause shown, or in refusing to               hear  evidence pertinent and material  to  the               controversy;  or of any other misbehaviour  by               which  the  rights  of  any  party  have  been               prejudiced.               4.    Where  the  arbitrators  exceeded  their

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             powers, or so imperfectly executed them,  that               a  mutual, final and definite award  upon  the               subject-matter submitted was not made.               5.    If  there  was no  valid  submission  or               contract,  and the objection has  been  raised               under  the  conditions set  forth  in  section               fourteen hundred fifty-eight." It will thus be seen that despite the finality spoken of by 67 Rule  15E, this section enables the defendants to apply  for vacating  the award on certain grounds and thus imperil  the finality accorded to the award by his contract.  It is  only after  the objections under s. 1462 are disposed of  that  a judgment  putting an end to all controversy, can be  entered under s. 1464 which reads thus:               "Entry  of judgment on award and  costs:  Upon               the granting of an order confirming, modifying               or  correcting  an  award,  judgment  may   be               entered  in  conformity therewith, as  upon  a               referee’s  report in an action, except  as  is               otherwise  prescribed in this article.   Costs               of  the  application and  of  the  proceedings               subsequent thereto; not exceeding  twenty-five               dollars  and disbursements, may be awarded  by               the court in its discretion.  If awarded,  the               amount   thereof  must  be  included  in   the               judgment."               After  the judgment is pronounced  a  judgment               roll is prepared and the judgment docketed  as               if  it was rendered in an action.  The  effect               of the judgment as enunciated in s. 1466 is as               follows:               "Effect of judgment and enforcement: The judg-               ment so entered has the same force and effect,               in all respects as and is’ subject to all  the               provisions  of law relating to, a judgment  in               an  action ; and it may be enforced as  if  it               had been rendered in an action in the court in               which it is entered." From all these provisions it would be abundantly clear  that the award has no finality till the entire procedure is  gone through  and that the award as such can never  be  enforced. What is enforceable is the judgment.  There is no  provision in  the  law  providing  for  taking  proceedings  for   the confirmation  of  an award in which all  objections  to  the award  could be made except s. 1461.  The proceedings  taken thereunder must, however, culminate in a judgment.  In  this respect the procedure under the law of the New York State is quite  different  from  that under the  Arbitration  law  of Denmark.  Apparently, that is why the plaintiffs, after  ob- taining the awards, went up to the Supreme Court of New York for  obtaining a judgment confirming the awards.  No  doubt, as a result of the judgment the decision of the  arbitrators became  unchallengable  in the New York State  and  for  all practical purposes in India as well but in the pro- 68 cess the award made by them has given way to the judgment of the  Supreme Court of New York.  It is this  judgment  which can now furnish a cause of action to the plaintiffs and  not the awards. No doubt, an award can furnish a fresh cause of action.  But the award must be final.  If the law of the country in which it  was made gives finality to judgment based upon an  award and not to the award itself, the award can furnish no  cause of  action for a suit in India.  In these  circumstances  we

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hold  that though the High Court of Bombay has  jurisdiction to  enforce  a  final award made in  a  foreign  country  in pursuance  of  a submission made within the  limits  of  its original  jurisdiction,  the awards in  question  being  not final, cannot furnish a valid cause of action for the  suit. Upon this view we allow the appeal and dismiss the suit with costs  throughout  The normal rule as to  costs  must  apply because  the  choice  of forum made by  the  plaintiffs  was deliberate  and with the knowledge that they were  taking  a risk  in not seeking out the defendants at the  place  where they reside or carry on business. By  Court-Following the opinion of the majority, the  appeal is allowed with costs. Appeal allowed. 69