Important Point
Foreign Awards Act is a complete code in itself providing for all the possible contingencies in relation to foreign awards.

Headnote:(i) Foreign Awards (Regulation and Enforcement) Act, 1961—Sections 6 and 7—Appellants and respondents brothers — Appointed elder brother as arbitrator — To divide their business and properties both in USA and India—Arbitration agreement entered into at New York—Arbitration proceedings held and award given — Respondents applied to Bombay High Court under provisions of Foreign Awards Act for enforcing award — High Court after contest ordered filing of award—Judgment pronounced according to award as required under Section 6 of Foreign Awards Act—Appeal—Award—Foreign award—Not outside scope of Foreign Awards Act—Nobody’s case that authority of arbitrator revoked at any time—No condition exist under Section 7(1) of the Act not to enforce award on alleged ground of fraud—No merit in plea of appellant that schedule to award substituted—No force in submission that once award attained finality in Supreme Court of New York proceedings to enforce foreign award would not be maintainable—Argument that foreign award merged in Judgment of Supreme Court of State of New York rejected—Mere fact that documents of conveyance/exchange/lease to be executed subsequently in pursuance of agreement for transfer is of no relevance or consequence at all—Documents of conveyance can be executed only if and after requisite no objection under provisions of Chapter XX-C of Income-Tax Act issued—No ground to interfere in impugned Judgment of High Court. (Paras 19, 24, 30 and 32)
       (ii) Registration Act, 1908—Sections 17(2)(v), 17(1)(b) and (c)—Foreign award—Whether require registration — Foreign Judgment does not require registration as process of suit having been decreed on that basis will have to be gone through—When decree passed by Court it does not require registration in view of Section 17(2)(vi) of Registration Act—Even decree passed by Foreign Court execution of which sought under Section 44A CPC does not require registration—Foreign award under provisions of Foreign Awards Act does not require registration under the Registration Act.
       Held : A foreign judgment does not require registration as the process of suit having been decreed on that basis will have to be gone through. When a decree is passed by the Court, it does not require registration in view of clause (vi) of sub-section 2 of Section 17 of the Registration Act. A decree or order of a court affecting the rights mentioned in Section 17(1)(b) and (c) would not require registration. It would , however, require registration where the decree or order on the basis of compromise affects the immovable property other than that which is the subject matter of the suit or proceeding. Even a decree passed by the foreign court execution of which is sought under Section 44A of the Code of Civil Procedure would not require registration. That being the position, we are of the view that foreign award under the provisions of the Foreign Awards Act does not require registration under the Registration Act. (Para 41)

JUDGMENT

D.P. Wadhwa, J.—The Appellants (Harendra H. Mehta & Ors.) are challenging the judgment dated February 24, 1995 of the Bombay High Court enforcing the ‘foreign award’ dated October 31, 1990 on a petition filed by the Respondents (Mukesh H. Mehta & Ors.). It was, however, directed that the enforcement of the same or execution of the decree shall be subject to the respondents’ obtaining the necessary permission under Foreign Exchange Regulations Act, 1973 (‘FERA’, for short) as regards the enforcement part in India is concerned. The matter came to this Court on a certificate granted by the High Court under Article 134A read with Article 134(1)(c) of the Constitution. The impugned judgment had been rendered by a single Judge. There was some controversy if a single Judge could grant such a certificate. However, considered the importance of the issue involved, this Court admitted the appeal. The controversy, therefore, does not survive in the present appeal.

2. For convenience, we refer to the appellants as “Harendra” and respondents as `Mukesh’. Both Harendra and Mukesh are brothers. Harendra is elder to Mukesh. They appointed their elder brother Lalit Mehta as arbitrator to divide their businesses and properties both in the United States of America (USA) and India. Lalit Mohan gave his award in New York. Some proceedings arising out of the arbitration agreement and the award were held there in the courts. Arbitration agreement was entered into at New York where arbitration proceedings held and award given. Mukesh applied to the Bombay High Court here under the provisions of the Foreign Awards (Regulation and Enforcement) Act, 1961 (for short, the `Foreign Awards Act’) for enforcing the award. High Court after contest ordered the award to be filed and pronounced judgment according to the award as required under Section 6 of the Foreign Awards Act. Harendra finds himself aggrieved by the judgment. That is how the matter before us.

3. We may now consider the controversy between the brothers in detail. Harendra and Mukesh were having vast businesses in the USA and India. They also acquired properties in both the countries. Disputes having arisen, they decided to divide and distribute their jointly held assets. Both have equal share in all the properties and businesses. On October 25, 1989, they entered into an agreement to refer their disputes to their elder brother Lalit Mohan. Their submission to the arbitrator is in the following terms :

“Lalit Mehta,

48 Arbor Lane,

Roslyn Hts.,

N.Y. 11577.

Dear Lalitbhai,

We, Harendra Mehta and Mukesh Mehta hereby appoint you as our sole arbitrator for the following difference of opinions.

They are related to :

1. All our business in USA & India

2. Social relationship.

Your award in the matter shall be binding on both of us and our legal heirs.

In areas where you need any assistance of any lawyers and or technical or outside persons you are fully authorised to take such assistance.

On our part we agree to offer our fullest co-operation in giving you all the documents, papers and any information you call for from time to time.

We shall ensure full participation in the meetings and clarify whatever explanations and clarification you may seek.

We shall be prepared to sign any papers in advance that you ask for before the beginning of the arbitration proceedings which will remain solely in your custody.

If you require the signatures of our wives and any of our representatives we shall give you the same as may be called for by you.

Yours sincerely.

Sd/-

Harendra Mehta

Sd/-

Mukesh Mehta

Sd/-

Witness”

4. Thereafter a formal agreement dated November 17, 1989 to refer the disputes to Arbitrator Lalit Mohan was entered into by the parties. It

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1999 Supreme(SC) 653

Important PointForeign Awards Act is a complete code in itself providing for all the possible contingencies in relation to foreign awards.

Cases Referred (10)

Important Point
Foreign Awards Act is a complete code in itself providing for all the possible contingencies in relation to foreign awards.