LexHARENDRA H. MEHTA AND ORS. versus MUKESH H. MEHTA AND ORS.
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A HARENDRA H. MEHTA AND ORS. v. MUKESH H. MEHTA AND ORS. MAY 13, 1999 B (D.P. WADHWA AND SANTOSH HEGDE, JJ.] Foreign Awards (Regulation and Enforcement) Act. 1961-Section 2(b), 7-Enforcement of foreign award-Conditions for-Parties, brothers having business both in India and in United States of America-Disputes of C commercial nature-Arbitration proceedings held in United States of America-Whether it could be held as an award under the Foreign Awards Act-Held, Yes. The appellant's and respondents, two brothers families appointed their D elder brother as an arbitrator to divide their vast businesses and properties both in the United States of America and India. The arbitrator gave his award in New York incorporating the settlement between the parties. Respondents applied to the Bombay High Court under the provisions of the Foreign Awards (Regulation and Enforcement) Act 1961, for enforcing the award. Single Judge of the High Court pronounced1judgment according to the award E as required u/s 6 of the Foreign Awards Act. This appeal had been filed challenging the judgment of the Bombay High Court enforcing the foreign award. The appellants submitted that the High Court could not order the award to be filed and give judgment in terms thereof as it was not an arbitral award as there was no dispute on the basis of which the arbitrator could give F his award; that it was not an award under the Foreign Awards Act as the award was merely effecting a family settlement and dispute did not arise out of any international· trade;· that a fraud had been committed in getting the award and certain schedule which formed the part of the agreement to refer the dispute to arbitration, had been fraudulently substituted and that chapter XX-C of the Income Tax Act 1961 had been violated and the enforcement of G the award in violation of the law of this country would be against the public policy. Dismissing the appeal, this Court HELD : 1.1. In the instant case all the ingredients of a foreign award H were there. Parties were having business both in India and in the United 562 _J -.. - .• H.H. MEHTA v. M.H. MEHTA 563 States of Amrica as a joint venture and they also acquired properties. A Differences that arose between the parties were out of legal relationships and certainly of commercial nature under the laws of this country. Agreement to refer the disputes to Arbitration, in writing, was made in the United States where arbitration proceedings were held and award given. United States is a country to which clause (b) of section 2 of the Foreign Awards Act applies. B In the present case, the parties were related to each other but that could not take the award outside the ambit of the Foreign Awards Act. (574-G-H; 575-A) 1.2. The parties entered into the settlement during tendency of the arbitration proceedings. Appellant himself approached the courts in the C United States never complaining that it was not an award. It cannot be held that the agre~ment stood revoked when the parties during the course of arbitration proceedings entered into a settlement among themselves and yet wanted the arbitrator to give his award in terms thereof. It is nobody's case that authority of the arbitrator was revoked at any time. [576-C-EJ 1.3. A competent court in the State of New York rejected appellants' D case that any fraud had been committed. Therefore, sub-section (2) of Section 7 of the Foreign Act would not be applicable. No conditions now exist under sub-section (1) of Section 7 of the Foreign Award Act not to enforce the award on the alleged ground of fraud. (576-H; 577-AJ 1.4. Foreign Awards Act is a complete Code in itself providing for all E the possible contingencies in relation to foreign awards. Once it is held that an award is a foreign award, the provisions of the Foreign Award Act would apply and where the conditions for enforcement of such an award exist as mentioned in Section 1 of this Act, the Court shall order the award to be filed and shall proceed to pronounce judgment granting ward and upon the judgment F so pronounced, decree shall follow. It is not material for the Foreign Award Act that in any other country than India, a judgment has already been passed by a court of competent jurisdiction in terms of the award. A party may have other remedy for filing a suit passed on a foreign judgment but that will oust jurisdiction of the Court to enforce a foreign award u
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