Holding

A foreign award given after the commencement of the Arbitration and Conciliation Act, 1996 is enforceable under that Act irrespective of when the arbitration commenced, and the Act is deemed to have been effective from 25 January 1996, rendering separate enforcement proceedings unnecessary.

Summary

Mis. Fuerst Day Lawson Ltd. entered into a supply contract with Jindal Exports Ltd. which gave rise to a dispute arbitrated before the International General Produce Association, resulting in a foreign award dated 13 August 1996. The award was sought to be enforced in Delhi High Court, but the court dismissed the execution petition on the ground that the arbitration proceedings began before the Arbitration and Conciliation Act, 1996 came into force. The Supreme Court held that a foreign award made after the Act’s commencement is enforceable under the Act even if the arbitration commenced earlier, and that the Act is deemed to have been in force from 25 January 1996 as a continuation of the 1996 Ordinance. The Court also rejected the argument that the Thyssen judgment was per incuriam and clarified that separate proceedings for enforcement are unnecessary. Consequently, the High Court’s order was set aside and the appeal allowed.

Issues considered

The appropriate date of commencement of the Arbitration and Conciliation Act, 1996 – whether 25 January 1996 (as continuation of the Ordinance) or 22 August 1996 (as per Gazette notification).
Whether a foreign award passed after the Act’s commencement can be enforced under the Act even when the arbitration proceedings started before the Act came into force.
Whether the Thyssen Stahlunion GMBH v. Steel Authority of India Ltd. judgment is per incuriam in the present context.
Whether separate proceedings are required under Sections 46‑49 of the Act for enforcement of a foreign award.

Legislation cited

Arbitration Act, 1940
Arbitration and Conciliation Act, 1996s. 1(3), s. 21, s. 46, s. 47, s. 48, s. 49, s. 85(2)(a), s. 86(2)
Arbitration (Protocol and Convention) Act, 1937
Constitution of Indias. Article 123, s. Article 213, s. Article 367(2)
Foreign Awards (Recognition and Enforcement) Act, 1961s. 7, s. 8
General Clauses Act, 1897s. 30

Subjects

ArbitrationForeign award enforcementArbitration and Conciliation Act 1996Commencement datePer incuriamSection 85(2)(a)Section 46-49Statutory interpretation

Judgment

MIS. FUERST DAY LAWSON LTD. A
v.
JINDAL EXPORTS LTD.

MAY 4, 2001

[S.P. MOHAPATRA AND SHIVARAJ V. PATIL, JJ.] B

Arbitration and Conciliation Act, 1996

Section 85(2)(a)-Arbitration-Foreign Award-Enforcement of-Act
came into force on 25.1.1996-Proceedings commenced prior to the C
enforcement of Act-Award passed after the commencement of Act-Effect
of-Held, Award would be governed under the Act.

Section 1(3)-Date of commencement of Act-Determination of-
1.>romulgation of Ordinance-Effect of-Arbitration and Conciliation
Ordinance came into force on 25.1.1996-Act was notified on 22.8.1996- D
Held, an Ordinance shall '1ave the same force and effect as an Act-Act being
continuation of the Ordinance it shall be deemed to have come into force
from 25.1.1996-Constitution ofIndia, 1950-Articles 367(2), 123 and 213--
General Clauses Act, 1897-Sec. 30.
E
Sections 46 and 49-Foreign award-Enforcement of-Initiation of
separate proceedings.....:...Necessity of-Held, the Act was promulgated with the
object of providing speedy and alternative solution to disputes-Thus, it is
~ -l not necessary for a party holding foreign award to file separate proceedings
for its enforcement.
F
Interpretation of statutes

Purposive reading-Applicability of

Precedent
G
Judgment "Per incuriam "-Applicability-Arbitration and Conciliation
Ordinance came into force on 25.1.1996-Act notified on 22.8.1996-ln
,---'. Thyssen case, Supreme Court held that Act came into force on 25.1.1996-
Held, unless there is glaring case of obstrusive commission principle of
Judgment "per incuriam is not applicable-Thyssen s Judgment has not
479 H
480 SUPREME COURT REPORTS [2001] 3 S.C.R.

A failed t(l notice either a statutory provision in substance and effect or a
binding precedent-Thus, Thyssen s case held not "per incuriam ".

Appellant and respondent entered into an agreement for supply of certain
goods. During the course of the agreement certain dispute arose between the
parties which was referred to arbitration before the International General
B · Produce Association. Arbitrators passed an Award on 13.8.1996 allowing
the claims of the appellant Respondent's appeals before the Appellate Board
and Queen's Bench of the High Court of Justice at London were dismissed.
Thereafter, appellant filed an execution application before the High Court of
Delhi for enforcement of the said foreign Award. J'he High Court issued an
C order of attachment against the respondent. Aggrieved, respondent filed an
application for dismissal of the execution petition under Section 151 of the
Code of Civil Procedure, 1908, and also a petition under Section 48 of the
Arbitration and Conciliation Act, 1996. Single Judge of High Court dismissed
the execution petition of appellant holding that the execution application filed
for eDrorccment of foreign Award dated 13.8.i996 was not maintainable under
D Act as the arbitration proceedings had commenced prior to the coming into
force of the Act Appellant's appeal before Division Bench of High Court was
also dismissed. Hence the present appeal.

On behalf of the appellant, it was contended that Single Judge as well
E as the Division Bench of the High Court erred in holding that since the
arbitration proceedings were commenced prior to the commencement of the
Act, the foreign Award dated 13.8.1996 could not be enforced under the Act
in terms of Section 85 read with Section 21 of the Act in view of the judgment
of this Court in Thyssen case; that at no stage before the High Court either
.L - .
before the Single Judge or before the Division Bench respondent questioned
F the date of commencement of Act and in fact Division Bench proceeded on
the admitted position that the new Act commenced from 25.11.1996 and,
therefore, it cannot be raised for the first time in the instant proceedings.

On behalf of the respondent it was contended that the date from which
G the Act came into force was an issue of fact and not an issue of law and this
Court in the cases relied _upon on behalf of the appellant had wrongly
mentioned the date of enforcement of the Act as 25.1.1996 instead of 22.8.1996
and thus the error will have to be corrected as the decision would be 'per
incuriam'; that in Thyssen case it was held that a foreign award given after
the commencement of the new Act can be enforced only under the new Act;
H in the instant case, the Award was passed on 13.8.1996 i.e. 9 days prior to
FUERST DAY LAWSON LTD. v. JINDAL EXPORTS LTD. 481

coming into force of the Act and as such the Foreign Awards (Recognition A
, and Enforcement) Act, 1961 would apply in which case enforcement would
be only through a suit and the execution petition was thus rightly rejected.

Allowing the appeal, the Court

HELD : 1. A foreign award given after the commencement of the B
Arbitration and Conciliation Act, 1996 even in cases where the arbitration
proceedings were commenced prior to the enforcement of the Act can be
...... -'-, enforced under the Act. [487-H; 488-A]

Thyssen Stahlunion GMBH v. Steel Authority of India Ltd., [1999] 9
sec 334, reiterated. c
Western Ship Breaking Corporation v. Clarehaven Ltd. UK, (C.A. No.
4928 of 1997) decided by Gujarat High Court, approved.

2.1. An Ordinance operates in the field it occupies, with same effect
and force as an 'Act'. Article 367(2) of the Constitution states that any D
reftrence in the Constitution to Acts or laws of, or made by Parliament, or
to Acts or laws of or made by the Legislature of a State shall be construed
as including a reference to an Ordinance made by the President or to an
Ordinance made by a Governor as the case may be. This Article read with
Section 30 of the General Clauses Act clearly indicate that when a reference
is made to an Act, it shall be construed as including a reference to an E
Ordinance. Under Articles 123 and 213, subject to the limitation stated
therein, an Ordinance promulgated shall have the same force and effect as
an Act of Parliament or an Act of a Legislature of a State. [490-C-D]

2.2. Though the plain and literal reading of Section 1(3) of the Act and
the Gazette Notification, suggests that the Act came into force on 22.8.1996, F
but the purposive reading would show that the Act came into force in
continuation of the Ordinance which was brought into force on 25.1.1996.
This makes the position clear that although the Act came into force on
22.8.1996, for all practical and legal purposes it shall be deemed to have
been effective from 25.1.1996 particularly when the provisions of the G
ordinance and the Act are similar and there is nothing in the Act to the
contrary so as to make the Ordinance ineffective as to either its coming into
force on 25.1.1996 or its continuation upto 22.8.1996.[495-F-G-H; 496-A]

A.K Roy v. Union of India and Ors., [1982] 1 SCC 271; R.K Garg v.
Union ofIndia and Ors., AIR (1981) SC 2138 and T. Venkata Reddy and Ors. H
482 SUPREME COURT REPORTS [2001] 3 S.C.R.

A v. State of Andhra Pradesh, (1985) 3 SCC 198, followed.
She ttys Constructions Co. Pvt. Ltd. v. Konkan Railway Constructions
and Anr:, (1998) 5 SCC 599 and NALCO v. Metalimpex, (2000) 3 A.L.R. 422,
relied on.

B Western Ship Breaking Corporation v. Clarehaven Ltd. UK., (C.A. No.
4928 of 1997) decided by Gujarat High Court, approved.

3. It cannot be said that the Thyssen judgment is per incuriam A prior
decision of this Court on identical facts and law binds the Court on the same
points of law in a latter case. This is not an exceptional case by inadvertence
C or oversight of any judgment or statutory provisions running counter to the
reason and result reached. Unless it is a glaring case of obtrusive commission,
it is not desirable to depend on the principle of judgment 'per incuriam'. It •......
is also not shown that some part of the decision based on a reasoning which
was demonstrably wrong, hence the principle of 'per incuriam' cannot be
D applied. It cannot also be said that while deciding Thyssen, the promulgation
of the first ordinance, which was effective from 25.1.1996, or subsequent
ordinances were not kept in mind. The Thyssen, judgment has not failed to
notice either a statutory provision in substance and effect or a binding
precedent running counter to the reasoning and the result reached.
(493-C-D; 494-A]
E
Thyssen Stahlunion GMBH v. Steel Authority of India Ltd., [1999) 9
SCC 334; She ttys Constructions Co. Pvt. Ltd. v. Konkan Railway
Construction and Anr:, (1998) 5 SCC 599 and NALCO v. Metalimpex, (2000)
3 A.L.R. 422, held not per incuriam.
F
Mamleshwar Prasad and Anr: v. Kanhaiya Lal (Dead) through L.Rs.,
(1975) 2 SCC 232 and A.R. Antulay v. R.S. Nayak and Anr:, (1998) 2 SCC
602, relied on.

Punjab Land Development and Reclamation Corporation Ltd.
G Chandigarh v. Presiding Officer, Labour Court, Chandigarh and Ors., [1990)
3 SCC 682 and State of UP and Anr. v. Synthetics and Chemicals Ltd. and
Anr., [1991) 4 SCC 139, referred to.

4. It is not necessary for a party holding a foreign Award to file separate >--,
'proceedings for enforcement of the award. The object of the Act is to minimize
H supervisory role of court and to give speedy justice. The stage of approaching
FUERST DAY LAWSON LTD. v. JINDAL EXPORTS LTD. [PATIL, J.) 483

court for making award a rule of court as required in Arbitration Act, 1940 A
is dispensed with in the present Act. If separate proceedings are to be taken,
one for deciding the enforceability of a foreign award and the other thereafter
for execution, it would only contribute to protracting the litigation and adding
to the sufferings of a litigant in terms of money, time and energy. Thus, if
the Court is satisfied that a foreign award is enforceable, the award shall
be deemed to be a decree of that Court and that Court has to proceed further B
to execute the foreign award. [496-G-H; 497-A-B; E]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3594 of
2001.

From the Judgment and Order dated 27.9.99 of the Delhi High Court in C
F.A.O. (0.S.) No. 284 of 1999.
... Ashwani Kumar, Rajiv Nanda, Ms. Sangeeta Bharti, Ms. Ruchi Narula
and Ms. Ramni Taneja for the Appellant.

K.K. Venugopal, Mukesh Jain, J.S. Arora, Sanjeev Khanna, Ms. Asha D
Jain Madan and Sushil K. Pathak for the Respondent.
-....- The Judgment of the Court was delivered by
•. SHIVARAJ V. PATIL, J. Leave granted.
E
An agreement was entered into between the appellant and the respondent
on 1.8.1994 under which the respondent was to supply certain goods to the
appellant during the period January, 1995 to June, 1996. Certain disputes
cropped up in the course of the execution of the agreement. The agreement
provided for arbitration. The appellant filed a claim petition before the
International General Produce Association (IGPA) a body nominated by the F
appellant as the Arbitrators. The Arbitrators, after entering into reference,
received evidence and thereafter passed an Award on 13.8.1996 allowing the
claims of the appellant. The appeal filed by the respondent against the Award
before the IGPA Appellate Board was dismissed on 14.11.1998. Further the
appeal filed by the respondent before the Queen's Bench Division of the High
Court of Justice at London w~ also dismissed on 29.1.1999. The appellant
G
filed an execution application in August 1998 before the High Court of Delhi
for enforcement of said foreign Award dated 13 .8.1996. An order of attachment
~ was issued by the High Court against the respondent. The respondent filed
an application under Section 151 CPC (E.A. 347of1998) seeking dismissal of
the execution petition. H
484 SUPREME COURT REPORTS [2001] 3 S.C.R.

A The respondent also filed 0.M.P. No. 203 of 1998 under Section 48 of
the Arbitration and Conciliation Act, 1996 (for short the 'Act'). The High
Court varied its order of attachment and ordered the respondent to lodge
security. A learned Single Judge of the High Court held that the execution
application filed by the appellant for enforcement of foreign Award dated
B 13. 8.1996 was not maintainable under the Act as the arbitration proceedings
were commenced prior to the coming into force of the Act and dismissed the
execution petition, consequently released the security of 1.74 crores furnished
by the respondent. The appellant filed Special Leave Petition No. 7674of1999
before this Court challenging the order passed by the learned Single Judge.
This Court disposed of the Special Leave Petition observing that the order
•C of the learned Single Judge was appealable under Section 50(l)(b) of the Act.
In this view, the appellant filed FAO (OS) No. 284 of 1999 before Division
Bench of the High Court. The Division Bench of the High Court by the ......
impugned judgment and order dismissed the appeal saying that there was no
fallacy in the reasoning of the learned Single Judge. Under these circumstances,
the appellant is before this Court in this appeal assailing the impugned
D judgment and order.

Mr. Ashwani Kumar, learned Senior Counsel appearing for the appellant,
contended that the learned Single Judge as well as the Division Bench of the
High Court manifestly erred in holding that since the arbitration proceedings
E were commenced prior to 25.1.1996, i.e., before the commencement of Act, the
foreign Award dated 13.8.1996 could not be enforced under Act in terms of
Section 85 read with Section 21 of the Act; this Court has ruled in Thyssen
Stahlunion GMBHv. Steel Authority of India Ltd., [1999] 9 SCC 334 that a
foreign award passed after the commencement of Act is to be enforced/
executed under the said Act alone being stamped as decree; in this ruling the
F reasoning and conclusions of Gujarat High Court in Western Ship Breaking
Corporation v. Clarehaven Ltd U.K., (1988) 1 Raj 367 (404) were affirmed; at
no stage before the High Court, either before the learned Single Judge or
before the Division Bench, the respondent questioned the date of
commencement of the Act on 25.1.1996; in fact the Division Bench proceeded
G on the admitted position that new Act commenced from 25.1.1996 and, therefore,
it cannot be raised for the first time in these proc'eedings; even otherwise the
question is no longer 'res integra' having been conclusively decided by this
s
Court in Shelly Constructions Co. Pvt. Ltd. v. Konkan Railway Constructions
& Another, [1998] 5 SCC 599, Thyssen Stahlenion GMBHv. Steel Authority
of India Ltd., (supra) and NALCO v. Metalimpex, (2000) 3 A.L.R. 422; it is
H firmly established by these judgments that the new Act came into force on
FUERST DAY LAWSON LTD. v. JINDAL EXPORTS LTD. [PATIL, J.] 485
25.1.1996; the principal contention advanced on behalf of the respondent that A
these judgments are 'per incuriam' on the ground that they hold 25.1.1996 as
the date of commencement of the Act ignoring the specific provision and the
Gazette notification according to which the Act came into force on 22.8.1996;
this Court was using the word 'Act' interchangeable with the first ordinance
which came into force on 25 .1.1996; article 367 of the Constitution and Section B
30 of the General Clauses Act equate an Act with the ordinance and vice
versa. Section 86(2) of the new Act itself says that "all actions and orders
under the ordinance as deemed to have been under the Act". Reference is
invited to T VVenkata Reddy & Ors. v. State ofAndhra Pradesh, [1985] 3 SCC
198. Thus the learned Senior Counsel submitted that the contentions advanced
by the respondent are untenable and unavailable and they cannot be permitted C
to re-open settled legal issues in relation to enforcement of a foreign award
which has become final.

Shri K.K. Venugopal, learned Senior Counsel for the respondent urged
that the date from which the Act came into force is an issue of fact and not
an issue of law; this Court in the cases relied on behalf of the appellant has D
wrongly mentioned the date of commencement as 25.1.1996 instead of 22.8.1996;
the error will have to be corrected as the decision would be 'per incuriam'.
Punjab Land Development & Reclamation Corporation Ltd. Chandigarh v.
Presiding Officer, Labour Court, Chandigarh and Ors., [1990] 3 SCC 682 and
State of U.P & Another v. Synthetics & Chemicals Ltd. & Another, [1991) E
4 SCC 139 are cited in support of the submissions; the decisions in Shetty s
Construction Co. Pvt. Ltd. v. Konkan Railway, (supra), Thyssen Stahlunion
v. Steel Authority of India (supra) and NALCO v. Meta/impex, (Supra) will

- --- have far reaching consequences. The Gazette of India produced before this
Court shows that the statement of some publications of the Act to the effect
"it shall be deemed to have come into force on 25.1.1996" is a total error. On F
the other hand, Section 1(3) as shown in the Gazette is to the effect that "it
shall come into force on such date as the Central Govt., may by notification
in the official Gazette, appoint"; the Government of India by Notification GSR
375 (E) dated 22.8.1996 has notified 22.8.1996 as the date of coming into force
of the Act; in Thyssen (supra) it is held that a foreign award given after the G
commencement of the new Act can be enforced only under the new Act; in
the present case, the Award was passed on 13.8.1996 i.e. 9 days prior to
coming into force of the Act. In the instant case, both events are before
22.8.1996. As such the Foreign Awards (Recognition & Enforcecient) Act,
1961 (for short the '1961 Act') will apply in which case enforcement could
only be through a suit; the execution petition was rightly rejected. Article H
486 SUPREME COURT REPORTS [2001] 3 S.C.R.

A 367(2) of the Constitution or Section 30 of the General Clauses Act have
nothing to do with the question as to the date on which the Act comes into
force; they could not alter this date to 25. l.1996 from 22.8.1996; the entire
enforcement proceedings would be governed by the 1961 Act; hence the
execution petition could not have been directed to be converted into an
B application under Section 46 or 47 of the.Act for various reasons.

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

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

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

It is clear from conclusion extracted above that a foreign award given after
the commencement of the Act can be enforced only under the new Act. In
brief, the facts that gave rise to three appeals decided in the said case are:
F In the case of Thyssen (C.A. No. 6036 of 1998), contract for the sale and
purchase contained an arbitration agreement. The arbitration proceedings
commenced on 14.9.1995 under ·the Arbitration Act, 1940 (for short the 'old
Act'). Award was given on 24.9.1997 by the time the Act had come into force
on 25.1.1996; Thyssen filed petition in Delhi High Court on 13.10.1997 under
G Sections 14 & 17 of the old Act for making the award rule of the Court;
subsequently Thyssen filed an application in the High Court for execution of
the award under the Act contending that the arbitration proceedings had
been terminated with the making of the award on 24.9.1997 and, therefore, the
Act was applicable for enforcement of the Award. The question as to the
maintainability of the execution petition was raised to the effect whether the
H award would be governed by the Act for its enforcement or whether the
FUERST DAY LAWSON LTD. v. JINDAL EXPORTS LTD. [PATIL, J.] 487

provisions of the old Act would apply. A learned Single Judge of the Delhi A
High Court ~eld that the. proceedings should be governed by the old Act.
Hence, the appeal was filed in this Court.

In the case of Western Shipbreaking Corporation (C.A. No. 4928 of
1997), arbitration proceedings were held in the United Kingdom prior to the
enforcement of the Act; the award was made in London on 25.2.1996; the 8
question that arose for consideration was whether the award was governed
by the provisions of the Act for its enforcement or by the Foreign Awards
Act, 1961, the learned Single Judge of the Gujarat High Court held that the
Act would be applicable. Aggrieved by the same, the above appeal was filed
in this Court.
c
... In the case of Rani Constructions (P) Ltd. (C.A. No. 61 of 1999),
disputes were referred to the sole arbitrator on 4.12.1993. The Arbitrator gave
his award on 23.2.1996 after the Act had come into force. The Division Bench
ofHimachal Pradesh High Court held that Clause 25 of the Agreement "does
not admit of interpretation that this case is governed by the Act of 1996". D

In para 13 of the judgment, it is noticed that arguments had been
addressed in considerable detail for and against the application of the new
Act or the old Act in the three appeals mentioned above. We consider it
useful to reproduce hereinbelow paras 39 to 42 of the said judgment:
E
"39.The Foreign Awards Act gives the party the right to enforce the
foreign award under that Act. But before that right could be exercised
the Foreign Awards Act had been repealed. It cannot, therefore, be
said that any right had accrued to the party for him to claim to·enforce
-- .... the foreign award under the Foreign Awards Act. After the repeal of F
the Foreign Awards Act a foreign award can now be enforced under
the new Act on the basis of the provisions contained in Part II of the
new Act depending whether it is a New York Convention award or
a Geneva Convention award. It is irrespective of the fact when the
arbitral proceedings commenced in a foreign jurisdiction. Since no
right has accrued Section 6 of the General Clauses Act would not G
apply.

40. In the very nature of the provision of the Foreign Awards Act it
is not possible to agree to the submission that Section 85(2)(a) of the
new Act would keep that Act alive for the purpose of enforcement of
a foreign award given after the date of commencement of the new Act H
488 SUPREME COURT REPORTS [2001) 3 S.C.R.

A though arbitral proceedings in a foreign land had commenced prior to
that. It is correct that Section 85(2)(a) uses the words "the said
_>..,--:.'
enactments" which would include all the three Acts, i.e., the old, the
Foreign Awards Act and the Arbitration (Protocol and Convention)
Act, 1937._ The Foreign Awards Act and even the 1937 Act contain
provisions only for the enforcement of the foreign award and not for
B the arbitral proceedings. Arbitral proceedings and enforcement of the
award are two separate stages in the whole process of arbitration.
When the Foreign Awards Act does not contain any provision for
arbitral proceedings it is difficult to agree to the argument that in spite
~
of that the applicability of the Foreign Awards Act is saved by virtue
c of Section 85(2)(a). As a matter of fact if we examine the provisions
of the Foreign Awards Act and the new Act there is not much
difference for the enforcement of the foreign award. Under the Foreign
Awards Act when the court is satisfied that the foreign award is
enforceable under that Act the court shall order the award to be filed
and shall proceed to pronounce judgment accordingly and upon the
D judgment so pronounced a decree shall follow. Sections 7 and 8 of
the Foreign Awards Act respectively prescribe the conditions for
enforcement of a foreign award and the evidence to be produced by y~·

the party applying for its enforcement. The definition of foreign
award is the same in both the enactments. Sections 48 and 47 of the
E new Act correspond to Sections 7 and 8 respectively of the Foreign
Awards Act. While Section 49 of the new Act states that where the
court is satisfied that the foreign award is enforc~able under this
chapter (Chapter I Part II, relating to New York Convention awards)
the award is deemed to be a decree of that court. The only difference,
~--
therefore, appears to be that while under the Foreign Awards Act a
F decree follows, under the new Act the foreign award is already
stamped as the decree. Thus if provisions of the Foreign Awards Act
and the new Act relating to enforcement of the foreign award are
juxtaposed there would appear to be hardly any difference.

41. Again a bare reading of the Foreign Awards Act and the Arbitration
G
(Protocol and Convention) Act, 1937 would show that these two
enactments are concerned only with recognition and enforcement of
the foreign awards and do not contain provisions for the conduct of
arbitral proceedings which would, of necessity, have taken place in a ~

foreign country. The provisions of Section 85(2)(a) insofar these apply
H to the foreign Awards Act and the 1937 Act, would appear to be quite
FUERST DAY LAWSON LTD. v. JINDAL EXPORTS LTD. [PATIL, J.] 489

superfluous. A literal interpretation would render section 85(2)(a) A
unworkable. Section 85(2)(a) provides for a dividing line dependent on
"commencement of arbitral proceedings", which expression would
necessarily refer to Section 21 of the new Act. This Court has relied
on this Section as to when arbitral proceedings commence in the case
of She tty~ Constructions Co. (P) Ltd. v. Konkan Rly. Construction. B
Section 2(2) read with Section 2(7) and Section 21 falling in Part I of
the new Act make it clear that these provisions would apply when the
place of arbitration is in India, i.e., only in domestic proceedings.
There is no corresponding provision anywhere in the new Act with
reference to foreign arbitral proceedings to hold as to what is to be
treated as "date of commencement" in those foreign proceedings. We C
would, therefore, hold that on a proper construction of Section 85(2)(a)
the provision of this sub-section must be con.fined to the old Act
only. Once having held so it could be said that Section 6 of the
General Clauses Act would come into play and the foreign award
would be enforced under the Foreign Awards Act. But then it is quite
apparent that a different intention does appear that there is no right D
that could be said to have been acquired by a party when arbitral
proceedings are held in a place resulting in a foreign award to have
that award enforced under the Foreign Awards Act.
42. We, therefore, hold that the award given on 24.9.1997 in the case
of Thyssen Stahlunion GMPH v. Steel Authority of India Ltd., (Civil E
Appeal No. 6036of1998) when the arbitral proceedings commenced
before the Arbitration and Conciliation Act, 1996 came into force on
25. l .1996, would be enforced under the provisions of the Arbitration
Act, 1940. We also hold that clause 25 containing the arbitration
agreement in the case of Rani Constructions (P) Ltd. v. H.P. SEB F
(Civil Appeal No. 61of1999) does admit of the interpretation that the
case is governed by the provisions of the Arbitration and Conciliation
Act, 1996. We further hold that the foreign award given in the case
of Western Shipbreaking Corporation v. Clareheaven Ltd. (Civil
Appeal No. 4928 of 1997) would be governed by the provisions of
the Arbitration and Conciliation Act, 1996. Thus, we affirm the G
decisions of the Delhi High Court in Execution Petition No. 47of1998
and of the Gujarat High Court in Civil Revision Application No. 99 of
1997, and set aside that of the Himachal Pradesh High Court in Civil
Suit No. 52of1996."
It may be stated here again that this Court affirmed the judgment of H
...
r-

490 SUPREME COURT REPORTS [2001) 3 S.C.R.

A Gujarat High Court in the case of Western Shipbreaking Corporation (supra)
and held that the foreign award given after the commencement of the Act
would be governed by the Act although arbitration proceedings had
commenced in that case prior to the enforcement of Act. In view of the law
laid down by this Court as to the enforcement of foreign award passed after
the commencement of the Act even in cases where the arbitration proceedings
B were commenced prior to enforcement of the Act after consideration of various
aspects, in particular, question relating to the construction and interpretation
of section 85(2)(a) of the Act, we do not think it necessary to consider the
same contentions again when we are in respectful agreement with the law laid
down in the Thyssen judgment.
c It may be noticed that the provisions of the Ordinance as well as the
Act are same. Article 367 (2) of the Constitution states that any reference in
the Constitution to Acts or laws of, or made by Parliament, or to Acts or laws ...--·
of or made by the Legislature of a State shall be construed as including a
reference to an Ordinance made by the President or to an Ordinance made by
D a Governor as the case may be. This Article read with Clause 30 of the General
Clauses Act clearly indicate that when a reference is made to an Act, it shall
be construed including a reference to an Ordinance. Under Articles 123 and
213, subject to the limitation, stated therein, an Ordinance promulgated shall
have the same force and effect as an Act of Parliament or an Act of a
Legislature of a State.
·E
A Constitution Bench of this Court in A.K. Roy v. Union of India &
Ors., [1982] 1 SCC 271 has in clear terms stated that "an ordinance issued by
the President or the Governor is as much law as an Act passed by the
Parliament and is, fortunately and unquestionably, subject to the same
p inhibitions. In those inhibitions lies the safety of the people"

Para 18 of the said judgment reads thus:

"In one sense, these contentions of Shri Garg stand answered by
what we have already said about the true nature and character of the
ordinance-making power. The contention that the word 'law' in Article
G 21 must be construed to mean a law made by the legislature only and
cannot include an ordinance, contradicts directly the express provisions
of Article 123(2) and 367(2) of the Constitution. Besides, if an ordinance
is not law within the meaning of Article 21, it will stand released from
the wholesome and salutary restraint imposed upon the legislative
H power by Article 13(2) of the Constitution."
FUERST DAY LAWSON LTD. v. JINDAL EXPORTS LTD. [PATIL, J.] 491
In another Constitution Bench Judgment of this Court in R.K. Garg v. A
Union of India & Ors., AIR (1981) SC 2138, in para 5 has observed thus:-

" ...................................... It may also be noted that Clause (2) of Article
123 provides in terms clear and explicit that an Ordinance promulgated
under that Article shall have the same force and effect as an Act of
Parliament. That there is no qualitative difference between an ordinance B
issued by the President and an Act passed by Parliament is also
emphasized by Clause (2) of Article 367 which provides that any
reference in the Constitution to Acts or laws made by Parliament shall
be construed as including a reference to an Ordinance made by the
President. ................"
c
A Constitution Bench of this Court again in T. Venkata Reddy and
Others v. State of Andhra Pradesh [1985] 3 SCC 198 while reiterating the
position in para 14 observed:

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

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

The other argument with emphasis was that the Thyssen judgment is
'per incuriam' as it was pronounced ignoring Section 1(3) and the notification H

i
492 SUPREME COURT REPORTS [2001] 3 S.C.R.

A bringing Act into force from 22.8.1996. It is useful to refer to certain decisions
of this Court before taking a decision whether the Thyssen judgment is 'per
incuriam' or not as to the date of commencement of the Act in the given
situation.

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

"7. Certainty of the law, consistency of rulings and comity of courts
- all flowering from_ the same principle-converge to the conclusion that
a decision once rende:red must later bind like cases. We do not intend
c to detract from the rule that, in exceptional instances, where by obvious
inadvertence or oversight a judgment fails to notice a plain statutory
provision or obligatory authority running counter to the reasoning
and result reached, it may not have the sway of binding precedents.
It should be a glaring case, an obtrusive omission. No such situation
D presents itself here and we do not embark on the principle of judgment
per incuriam.
8. Finally it remains to be noticed that a prior decision of this Court
on identical facts and law binds the Court on the same points in a later
case. Here we have a decision admittedly rendered on facts and law,
E indistinguishably identical, and that ruling must bind."

. This Court in A.R. Antu lay v. R.S. Nayak & Another, [1988] 2 SCC 602,
in para 42 has quoted the observations of Lord Goddard in Moore v. Hewwit,
(1947) 2 All.ER 270 and Pennyv. Nicholas, (1950) 2 All.ER 89 to the following
effect:-
F
"Per incuriam a~e those decisions given in ignorance or forgetfulness
of some inconsistent statutory provision or of some authority binding
on the court concerned, so that in such cases some part of the
decision or some step in the reasoning on which it is based, is found,
on that account to be demonstrably wrong .................. "
G
This Court in State of V.P & Another v. Synthetics & Chemicals Ltd.
& Another, [1991) 4 SCC 139 in para 40 has observed thus :-

"40. 'Incuria' literally means 'carelessness'. In practice per incuriam
appears to mean per ignoratium. English courts have developed this
H principle in relaxation of the rule of stare decisis. The 'quotable in law'
FUERST DAY LAWSON LTD. v. JINDAL EXPORTS LTD. [PATIL, J.] 493

A
.-
I is avoided and ignored ifit is rendered, 'in ignoratium ofa statute or
other binding authority'. (Young v. Bristol aeroplane Co. Ltd).

The two judgments (1) Punjab Land Development and Reclamation
Corporation Ltd., Chandigarh v. President Officer, Labour Court, Chandigarh
and Others, [1990) 3 SCC 682 and (2) State of UP and Another v. Synthetics B
and Chemicals Ltd. and Anoiher, [1991) 4 SCC 139 were cited in support of
the argument. Attention was drawn to paras 40, 41and43 in the first judgment
and paras 39 and 40 in the second judgment. In these two judgments no view
contrary to the views expressed in the aforesaid judgments touching the
principle of judgment per incuriam is taken. C
A prior decision of this court on identical facts and law binds the Court
on the same points of law in a latter case. This is not an exceptional case by
inadvertence or oversight of any judgment or statutory provisions running
counter to the reason an4 result reached. Unless it is a glaring case of
obtrusive omission, it is not desirable to depend on the principle of judgment D
'per incuriam'. It is also not shown that some part of the decision based on
a reasoning which was demonstrably wrong, hence the principle of per incuriam
cannot be applied. It cal'mot also be said that while deciding Thyssen, the
promulgation of the first Ordinance, which was effective froth 25.1.1996, or
subsequent Ordinances were not kept in mind more so when the judgment of E
Gujarat High Court in Western Shipbreaking Corporation (supra) did clearly
state in para 8 of the said judgment thus:-

"8. We now come to the arbitration and Conciliation Ordinance, 1996
which was promulgated on 16.1.1996 and brought into force with
effect from 25.1.1996. The second Ordinance, 1996 was also promulgated F
on 26.3.1991 as a supplement to main Ordinance giving retrospective
effect from 25.1.1996. The Ordinance received assent of the President
on 16.8.1996 giving the retrospective effect from 25.1.1996. Thus the
Ordinance has now become an Act. All the provisions of the Ordinance
as well as Act are same. Therefore, the use of word "The Ordinance"
shall also mean the Act and vice versa." G
It appears in the portion extracted above there is a mistake as to the date of
promulgation of the second Ordinance as 26.3.1991. But the correct date is
26.3.1996.

It is noticed in the above paragraph that all provisions of the Ordinance H
494 SUPREME COURT REPORTS [2001] 3 S.C.R.

A as well as the Act are same; therefore, use of the word 'the Ordinance' shall
also mean the Act and vice-versa. The said judgment of the Gujarat High
,,t
Court is affirmed by this Court in Thyssen. The Thyssen judgment has not ~

failed to notice either a statutory provision in substance and effect or a
~-
binding precedent running counter to the reasoning and the result reached.
r
B Having regard to the facts of the case on hand and in the light of the
position of law stated in the aforementioned decisions, we are unable to agree
that the Thyssen judgment is per incuriam. Same is the position in respect
of She tty's Construction (supra) & NALCO (supra) on this aspect of 'per \
..k_,,
incuriam'. As already noticed above, the facts of Western Shipbreaking
c Corporation (supra) and the case we are dealing with are similar as to the
commencement of arbitration proceedings and passing of foreign award. "'
\jc

The Arbitration and Conciliation Ordinance, 1996 was originally
promulgated by the President on 16.1.1996 and was made effective from
25.1.1996. The Second Ordinance came in its place on 26.3.1996 which was
D again replaced by the Third Ordinance on 26 .6.1996. These Ordinances were
issued, necessitated by the circumstances for continuing the operation of the
new Law. The new Act No. 26 of 1996 received the President's assent on
16.8.1996 and was published in the Gazette of India (Extra) Part II Section I y--
dated 19.8.1996:
E
· We have already expressed above that the Ordinance had the same
force and effect as the Act. This Court in Thyssen, Shetty's Construction and
NALCO appears to have taken the date of commencement of the Act as
25 .1.1996 in the background of ordinances and their continuance with same
force effective from 25.1.1996. May be the Court was using the word 'Act' __.,._ -
F interchangeable with the first Ordinance which came into force on 25.1.1996
which ultimately culminated into Act. As already noticed above, the judgment
of Gujarat High Court in Western Shipbreaking Corporation (supra) was in
appeal before this court in Thyssen and in para 8 of the said judgment, there
is specific mention that the use of the. word 'the Ordinance' shall mean the
Act and vice-versa. Even in the Thyssen judgment itself in para i6, reference
G
is made to MS. Shivananda v. Karnataka SRTC, [1980] 1 SCC 149. In paras
12 and l3 of the said judgment, discussion is there as to the effect of
expiration of a temporary Act and effect of repealing the Ordinance as to the
rights and liabilities. As brought to our notice that some of the private .~·

publications mentioned that the Act came into force on 25 .1.1996, this might
H have also contributed in mentioning the date of commencement of the Act
FUERST DAY LAWSON LTD. v. JINDAL EXPORTS LTD. [PATIL, J.] 495

as 25.1.1996. Be that as it may, in the light of the successive Ordinances and A
the provisions of the Ordinances and the Act being same and the new Law
continued with the same effect and force from 25.1.1996. There is no alteration
or change in the legal position and effect in relation to enforcement of foreign
award including the one made between the period 25.1.1996 till 22.8.1996, the
date on which the Act came into force in terms of Section 1(3) read with the
Gazette Notification inasmuch as the first Ordinance was operative with the B
same force and effect from 25.1.1996. In the present case with which are
concerned in this appeal, a foreign Award was passed on 13.8.1996 and as
such in terms of the conclusion arrived at in Thyssen, the said Award is to
be enforced only under the Act. Even in the impugned judgment, it is stated
that "it is an admitted position that the said Act has commenced from 26.1.1996." C
This point that the date of the commencement of the Act is 22.8.1996 and not
25.1.1996 was neither raised nor contested. It may be added that the High
Court of Delhi did not have the benefit of Thyssen judgment as it was
delivered subsequently on 7.10.1999 whereas the impugned judgment was
passed on 27.9.1999. Section 1(3) of the Act reads thus:-
D
"(l) Short title, extent and commencement:
----y
(1) ··························

(2) ··························
(3) It shall come into force on such date as the Central government, E
may by notification in the Official Gazette, appoint."
The Gazette Notification GSR 375 (E) dated 22.8.1996 reads:
"In exercise of the powers conferred by sub-section (3) of Section 1
of the Arbitration and Conciliation Act, 1996 (26of1996), the Central F
Government hereby appoints the 22nd day of August, 1996, as the
date on which the said Act shall come into force."

From the plain and literal reading of the said provision and the Gazette
Notification, it is clear that the Act came into force on 22.8.1996. But the
purposive reading would show that the Act came into force in continuation G
of the first Ordinance which was brought into force on 25 .1.1996. This makes
· the position clear that although the Act came into force on 22.8.1996, for all
practical and legal purposes it shall be deemed to have been effective from
25.1.1996 particularly when the provisions of the Ordinance and the Act are
similar and there is nothing in the Act to the contrary so as to make the
Ordinance ineffective as to either its coming into force on 25.1.1996 or its H
496 SUPREME COURT REPORTS (2001] 3 S.C.R.

A continuation upto 22.8.1996. Thus we conclude that the Act was brought into
force with effect from 22.8.1996 vide Notification No. G.S.R. 375 (E) dated
22.8.1996 published in the G~zette of India and that the Act being a
continuation of the Ordinance is deemed to have been effective from 25.1.1996
when the first Ordinance came into force.

B Alternatively it was contended that a party holding a foreign award has
to file a separate application and produce evidence as contemplated under
Section 47 and also satisfy the conditions· 1aid down under Section 48 and
it is only after the Court decides about the enforceabilify of the award, it
should be deemed to be a decree under Section 49 as available for execution.
C In other words, the party must separately apply before filing an application
for execution of a foreign award. The Arbitration and Conciliation Ordinance,
1996 was promulgated with the object to consolidate and amend the law
relating to domestic arbitration, international commercial arbitration and
enforcement of foreign arbitral award and to define law relating to conciliation
and for matters connected therewith or incidental thereto. In para 4 of the
D Statement of Objects and Reasons contained in the Act, the main objects of
the Bill are stated. To the extent relevant for the immediate purpose, they are:

E (ii) .................. .
(iii)

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

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

Prior to the enforcement of the Act, the Law of Arbitration in this
country was substantially contained in three enactments namely (1) The
G Arbitration Act, 1940, (2) The Arbitration (Protocol and Convention) Act,
1.937 and (3) The Foreign Awards (Recognition and Enforcement) Act, 1961.
A party holding a foreign award was required to take recourse to these
enactments. Preamble of the Act makes it abundantly clear that it aims at to
consolidate and amend Indian laws relating to domestic arbitration, international ,::>---"
commercial arbitration and enforcement of foreign arbitral awards. The object
H of the Act is to minimize supervisory role of court and to give speedy justice.
FUERST DAY LAWSON LTD. v. JINDAL EXPORTS LTD. [PATIL, J.] 497
-~ · In this view, the stage of approaching court for making award a rule of court A
. . . . . . .h as required in Arbitration Act, 1940 is dispensed with in the present Act. If
the argument of the respondent is accepted, one of the objects of the Act
will be frustrated and defeated. Under the old Act, after making award and
prior to execution, there was a procedure for filing and making an award a rule
of court i.e. a decree. Since the object of the act is to provide speedy and
alternative solution of the dispute, the same procedure cannot be insisted B
under the new Act when it is advisedly eliminated. If separate proceedings
are to be taken, one for decidin,g the enforceability of a foreign award and the
. A. other thereafter for execution, it would only contribute to protracting the
litigation and adding to the sufferings of a litigant in terms of money, time and
energy. Avoiding such difficulties is one of the objects of the Act as can be c
gathered from the scheme of the Act and particularly looking to the provisions
~ contained in Sections 46 to 49 in relation to enforcement of foreign award. In
para 40 of the Thyssen judgment already extracted above., it is stated that as
a matter of fact, there is not much difference between the provisions of the
1961 Act and the Act in the matter of enforcement of foreign award. The only
difference as found is that while under the Foreign Award Act a decree D
follows, under the new Act the foreign award is already stamped as the
--, decree. Thus, in our view, a party holding foreign award can apply for
enforcement of it but the court before taking further effective steps for the.
execution of the award has to proceed in accordance with Sections 47 to 49_:,
In one proceeding there may be different stages. In the first stage the Court E
may have to decide about the enforceability of the award having regard to
the requirement of the said provisions. Once the court decides that foreign
award is enforceable/ it can proceed to take further effective steps for execution
~
~
of the same. There arises no question of making foreign award as a rule of
court/decree again. If the object and purpose can be served in the same
proceedings, in our view, there is no need to take two separate proceedings' F
resulting in multiplicity of litigation. It is also clear from objectives contained
in para 4 of the Statement of Objects and Reasons, Sections 47 to 49 and
Scheme of the Act that every final arbitral award is to be enfor~ed as if it were
a decree of the court. The submission that the execution petition could not
be permitted to convert as an application under Section 47 is technical and G
is of no consequence in the view we have taken. In our opinion, for enforcement
of foreign award there is no need to take separate proceedings, one for
--i_ deciding the enforceability of the award to make rule of the court or decree
and the other to take up execution thereafter. In one proceeding, as already
stated above, the court enforcing a foreign award can deal with the entire
matter. Even otherwise, this procedure does not prejudice a party in the light H
498 SUPREME COURT REPORTS (2001) 3 S.C.R.

A of what is stated in para 40 of the Thyssen judgment. ..
Part II of the Act relates to enforcement of certain foreign awards.
Chapter I of this Part deals with New York Convention Awards. Section 46
of the Act speaks as to when a foreign award is binding. Section 4 7 states
as to what evidence the party applying for the enforcement of a foreign award
B should produce before the court. Section 48 states as to the conditions for
enforcement of foreign awards. As per Section 49, ifthe Court is satisfied that
a foreign award is enforceable under this Chapter, the award shall be deemed
to be a decree of that court and that court has to proceed further to execute
the foreign award as a decree of that court. If the argument advanced on
C behalf of the respondent is accepted, the very purpose of the Act in regard
to speedy and effective execution ~f foreign award will be defeated. Thus
none of the contentions urged on behalf of the respondent merit acceptance
so as to uphold the impugned judgment and order. We have no hesitation or
impediment in concluding that the impugned judgment and order cannot be
sustained.
D
In the light of the discussion made and the reasons stated hereinabove,
the impugned judgment and order are set aside. The case is remitted to a
learned Single Judge of the High Court for proceeding with enforcement of
the award in the light of the observations made above. The appeal is allowed
in terms indicated above. No costs.
E
S.VK. Appeal allowed.