V/O TRACTOROEXPORT, MOSCOW versus M/S. TARAPORE & COMPANY & ANR.

Citation: [1970] 3 S.C.R. 53 · Decided: 28-10-1969 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Dismissed

Cited by 7 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

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53 
V /0 TRACTOROEXPORT, MOSCOW 
v. 
M/S. TARAPORE & COMPANY & ANR. 
October 28, 1969 
(J. C. SHAH, V . .RAMASWAMI AND A. N. GROVER, JJ.] 
Foreign Awards (Recognition and Enforce1nent) Act XLV of 1961, 
s. 3-"Subnzission niade in pursuance of an agree1nent'', nJeaning of-
Act paSsed to 
implenient 
international 
convention-Interpretation 
of 
statutes-Where language is clear Act 111ust be constrned according 
to 
their n1ea11ing even if against object of 
convention-Injunction-Juris· 
diction of Indian Courts to grant injunction restraining a party in Moscow 
fronz proce.cding with arbitratio1z in Mosco'rr-Arbitration Act, 1940, s. 35, 
applicability of. 
By article 2 of the New York Convention on the Recognition and 
Enforcement of Foreign Arbitral Awards, 1958, to which India was a 
party, each contracting State. agreed to recognise an agreement in writing 
under which the parties there.to undertook to submit to arbitration 
any 
dispute between them and the Court of a contracting State \\-·hen seized 
of an action in a matter in respect of which parties have made an agree-
ment "shall at the request of one of the Parties 
refer the parties 
to 
arbitration". 
To implement this Conve.ntion 
Parliament 
enacted 
the 
Foreign Awards 
(Recognition and Enforcement) Act XLV of 
1961. 
Section 3 of the Act provides, inter alia, that "if any party to a submission 
made in pursuance of an agreement" commence,s any legal procccdin_gs 
in any Court any other party to the submission may at any time after 
appearance and before filing a \vritten statement or taking any other step 
in the proceedings apply to the Court to stay the proceedings and 
the 
Court, unless satisfied that the agreement is null and void, inoperative 
or incapable of being performed, shaH make an order staying the pro-
ceeding.5. 
In respect of a contract entered into by the respondent. an 
Indian 
Finn, with ·the appellant, a.Russian firm, the respondent instituted a suit 
in the Madras High Court alleging breach of contract. Thereafter tho 
Russian finn instituted proceedings in tenns of the arbitral clause in the 
contract before the Foreign Trade Arbitration Commission of the U.S.S.R. 
Chamber of C.Ommerce, Moscow. The RUMian firm also ent•cd ap-
pearance. under protest, before the Madras High Court and on the same 
date filed an application under section 3 of the Act for stay of the suit. 
The Indian firm filed an application for an interim injunction restraining 
the Russian finn from taking any further part in the arbitration proceedings 
at Moscow. The High Court dismissed the application filed by the Russian 
firm for stay of the suit and granted the interim injunction sought by 
the Indian firm. In appeal to this Court, the Indian firm 
contended 
that s. 3 of ,the Act could be invoked by the Russian firm only if it had 
implemented the arbitration agreement by actually submitting the dispute 
for arbitration• prior to the, institution o[ the suit. 
On the questions (i) 
whether the words "a submission made in pursuance of an agreement" in 
section 3 of the Act meaOt an actual or completed reference made pur-
suant to an arbitration agreement or they meant an arbitration agreement 
that has come into existence as a result of commercial contract and (ii) 
whether the courts in India could 
grant an injunction 
restraining 
a 
party in Moscow from proceeding with the conduct of arbitration before 
a tribunal there, 
54 
SUPREME COURT REPORTS 
(1970] 3 S.C.R. 
HELD: (Per Shah and Grover, JJ.) 
The 'Nord 
"submission" in section 3 means 
an actual submission 
made in pursuance of an arbitration agreement or arbitral clause to which 
the Convention setforth in the 
Schedule to the Act 
applies. If sub-
mission means •iagreement to refer" or an arbitral clause in a commercial 
contract it makes the entire. set of words unintelligible and 
completely 
ambiguous. It is difficult to comprehend in that case, why the legislature 
shou1d have used the words which follow the term "submission", namely 
"made in pursuance of an agree.ment". 
_If by "agreement" is meant a 
commercial contract the words "made in pursuance of" convey no sense. 
~rhe difficulties disappear if the word submi5sion is given the meaning of 
an actual submission 
o·f 
a particular dispute to the authority of an 
arbitrator. 
There is no 
rule of 
interpretation 
by which 
rank ambi-
guity can be first introduced by giving certain expressions a particular 
mean

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