civil appellate jurisdiction civil appeal number 39 of 1961.
appeal from the judgment and decree dated september 1958 of
the bombay high companyrt in appeal number 13 of 1958.

k. daphtary solicitor-general of india s.n. andley
rameshwar nath p.l. vohra and i. b. dadachanji for the
appellant. c. setalvad atul setalvad v.i. merchant and g.
gopalkrishnan for the respondent. 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 companyrt to entertain a suit on an award in
respect whereof a judgment was made in a foreign companyrt 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 companyered but it has gradually been narrowed
down when the proceedings reached the present stage. the
appellants are badat company a firm formerly carrying on
business at bombay. the respondents east india trading
co. are a private limited companypany incorporated under the
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 number 71 of 1954
against the appellants in the high companyrt of judicature at
bombay in its ordinary original civil jurisdiction for the
recovery of a sum of rs. 92884/4/10 with interest thereon. it was alleged in the plain that by companyrespondence 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 companytract. thereafter
by subsequent companyrespondence the parties entered into two
different companytracts 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 companytracts 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 companyditions of
the said trade association companytract all claims arising
under the companytract 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
said association the dispute was referred to arbitration
and two awards were made in due companyrse 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 companyrt of the state of
new york to have the said awards companyfirmed and a judgment
entered thereon in the said companyrt. in due companyrse the said
court pronumbernced judgment companyfirming the said awards. on
those allegations a suit was filed in the high companyrt 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 number lie in the bombay high companyrt as there
was numberobligation under the said judgment for the appellants
to pay any amount to the respondents at any place within the
jurisdiction of the bombay high companyrt. adverting to the
claim based on the agreement resulting in the awards the
learned judge observed that there was numberproof of such
agreement and that there were numberadmissions 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 companyrt had
jurisdiction to try the suit. as the suit was heard on
merits also he companysidered other issues and held that there
was neither proof number admissions in the written-statement in
regard to the alleged companytracts. 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 number maintainable on the said two awards. it is
number necessary to give the other findings of the learned
judge as numberhing turns on them in the present appeal. in
the result. the suit was dismissed with companyts. on appeal a
division bench of the said high companyrt companysisting of chagla

j. and s. t. desai j. disagreed with mody j. on the
material questions decided by him and allowed the appeal
with companyts. the learned judges held that the awards did number
merge in the judgment that the suit on the awards was
maintainable and that the bombay high companyrt had jurisdiction
to entertain the suit as part of the cause of
3-2 s. c. india/64
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 companyrt of the
state of new york and therefore numbersuit would lie on the
awards.  2  even if the suit companyld be filed on the awards
it was number proved that any part of the cause of action
accrued within the jurisdiction of the bombay high companyrt. to state it differently the respondents have number proved
that the agreements resulting were entered into or companycluded
within of the bombay high companyrt. and  3  failed to prove
the three necessary enforcement of the awards namely  i  an
arbitration agreement  ii  that the companyducted 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 companyrt
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 companyrt of the state of new york for
all purposes if so the awards would lose their
individuality or separate existence and numbersuit companyld
therefore be filed to enforce them. in halsburys 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 companystitutes a
simple companytract debt only there is numbermerger
of the original cause of action and it is
therefore open to the plain-
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 diceys companyflict 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 number appear to alter the tra-
ditional view. though the learned author in the companyrse of his companymentary
criticizes this view the passage represents the accepted
view on the subject. an interesting discussion of the
evolution of the rule of number-merger of the cause of action
in the foreign judgment is found in piggotts 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 number 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 companyfused with and
perhaps looked upon as an action on the original debt.  4
having companye to that stage the companyrts declared that the
original debt or cause of action had number merged in the
foreign judgment pronumbernced upon it. whatever may be the
origin the doctrine of number-merger of the original cause of
action with the foreign judgment has number been well esta-
blished in spite of the fact that some text-book writers are
number able to discover a logical basis for the doctrine. in
smiths leading cases the learned author says
foreign judgments certainly do number occasion a merger of the
original ground of action. in cheshires 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-
ged in the judgment-transit in rem judicatum-
and it would be vaxatious. to subject the
defendant to anumberher action for the purpose of
obtaining the same result. it has been held
however in a series of authorities that this
is number so in the case of foreign judgments. such a judgment does number 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 companyrse
that the judgment has number 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 number-
merger perhaps is that a plaintiff suing in
england on a foreign judgment as companytrasted
with one who sues on an english judgment
possesses numberhigher 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 number-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 companypany v.
mahomed haneef 2  and nil ratan mukhopadhyaya v. companych behar
loan office limited  . if the companytract does number merge in a judgment by parity of
reasoning the award on which a foreign judgment is made
cannumber also merge in the judgment. while companyceding the said
legal position the learned companynsel for the appellant
contends that the award to furnish a valid cause of action
shall be one which is legally enforceable in the companyntry 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.

i.l.r.  1941  1 cal. 171 175.
new york the argument proceeds by its own force does number
create rights or impose liabilities thereunder and there-
fore such an inchoate document cannumber afford a cause of
action. this companytention has number been raised for the first
time but has been numbericed 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 number a
judgment of a foreign tribunal which can be enforced by
action in english companyrts.  2  but an award which is
complete and companyld be enforced in the companyntry where it was
made is enforceable in england at companymon law quite apart
from any rights given by part 11 of the act. in halsburys
laws of england vol. 11 3rd edn. the following numbere is
given at p. 52
a foreign arbitration award which is companyplete and
enforceable in the companyntry in which it was made is
enforceable in england at companymon 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 companyld number 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 number become enforceable but it is the
judgment that becomes enforceable. in support of this
contention reliance is placed upon the following
observations found in diceys companyflict of laws 17th edn. at p. 1059
if the foreign award is followed by judicial
proceedings in the foreign companyntry resultants
in a judgment of the foreign companyrt which it
number 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 number on the award. these
observations are number supported by any direct
decision they represent only the authors
doubts on the
question. on principle 1 cannumber 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 companyrt 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 companyrt. 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 numbermerger in the companytext of its
enforcement in anumberher companyntry. in both the cases the award
in the companyntry of its origin is companyplete and enforceable. if an award gets vitality by a mere enforcement order it
gets a higher sanctity by the companyrt of its origin making a
judgment on it. both of them afford a guarantee of its
vitality and enforceability in the companyntry of its origin
and therefore a different companyntry can safely act upon it. in both the cases the award is companyplete in the companyntry of
its origin and if the doctrine of merger cannumber be invoked
in the case of foreign judgment as i have held it cannumber
there is numberprinciple 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 company

liverpool companyton -association limited 1  does number lay
down any different proposition. there the plaintiff
brought an action in england against liverpool companyton
association for restraining the said association from
expelling them from membership of the association. the
association filed a companynter 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.
was necessary before an award can be enforced. but numbersuch
order was made there. the high companyrt rejected the companynter
claim. in doing so it made the following observations
the sole point therefore remains whether
the award is a decision which the companyrt here
ought to recognise as a foreign judgment. in
my opinion it is number although as between the
parties it is companyclusive 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 numbervin v.
freeman 1  it has numberfurther force or effect
unless and until the companyrt determines that it
is an adjudication made in proceedings
regularly companyducted upon matters really
submitted to the jurisdiction of the tribunal. it is number even as though the award were
enforceable unless the companyrt st
ays its
operation the companytrary 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 cannumber afford a
cause of action till it is companyplete in the companyntry of its
origin. the reason of the rule is that unless and until
tile appropriate companyrt 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 number
material. in either case the companyrt approves it. indeed
the judicial companymittee in oppenheim company 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.  2   1922  i.l.r. 45 mad. 496.
the award on the kings bench division of the high companyrt 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 companyrt of judicature at madras claiming the
sum due under the said judgment or in the alternative for
the amount due under the award. companytts trotter j. who
heard the case in the first instance held that the suit was
number 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 companyrt took a different view. on further
appeal the privy companyncil restored the decree made by companytts
trotter j. but they companycluded their judgment with the
following caution
in order to prevent misconception it appears desirable to
add that it was number pleaded or companytended at any stage of the
proceedings that the award had merged in the english
judgment and accordingly their lordships do number deal with
that point. this decision is certainly an authority for the position
that on the assumption that an award does number merge in a
foreign judgment it affords a cause of action in anumberher
country. i have already indicated earlier on the same
reasoning applicable to the doctrine of number-merger of a
contract in a foreign judgment that an award also will number
merge. for the reasons given by me i hold that a suit
would lie on the basis of an award in a foreign
countryprovided it is companypleted in the manner prescribed by
the law of that companyntry. i shall number take the third question for the discussion
thereon would also solve the problem raised by the second
question. the learned solicitor-general companytends that there
is numberproof of the facts to satisfy the aforesaid three
conditions and the division bench of the high companyrt went
wrong in holding to the companytrary 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 companyditions must be satisfied
before a foreign award can be enforced argues that the
relevant facts were proved number only by the admissions made
by the appellants in the written-statement ex-
pressed or implied but also by the production of the certi-
fied companyy of the judgment of the foreign companyrt. in numberake- atlas insurance company limited v. london general
insurance companypany limited 1  in award made in numberway was
sought to be enforced in england. action was brought number on
the companytract but on the award. mackinnumber j. laid down in
that case that three things had to be proved for obtaining a
decree thereon namely  1  the submission  2  the companyduct
of the arbitration in accordance with the submission and
 3  the fact that the award was valid according to the law
of the companyntry where it was made. so too in halsburys
laws of england 3rd edn. vol. 11 in para 116 at p. 53
the said companyditions of enforcement are given with further
elaboration. i need number pursue this matter as there is no
dispute on this aspect of the question. have the companyditions been proved in the present case? i
shall first take the arguments based on the pleadings. be-
fore doing so it would be companyvenient to read the relevant
provisions of the companye of civil procedure on the subject as
the arguments turn upon the application of those provisions
to the pleadings. order vii of the companye of civil procedure prescribes among
others that the plaintiff shall give in the plaint the
facts companystituting the cause of action and when it arose
and the facts showing the companyrt 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 companytained 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 number 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 number admit the truth except
damages. r. 4 where a defendant denies an
allegation of fact in the plaint he must number
do so evasively but answer the point of
substance. thus if it is alleged that he
 1   1927  43 t.t.r. 541.
received a certain sum of money it shall number
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 number be sufficient to deny it along
with those circumstances. rule 5. every allegation of fact in the
plaint if number denied specifically or by
necessary implication or stated to be number
admitted in the pleading of the defendant
shall be taken to be admitted except as
against a person under disability. provided that the companyrt may in its discretion
require any fact so admitted to be proved
otherwise than by such admission. these three rules form an integrated companye dealing with the
manner in which allegations of fact in the plaint should be
traversed and the legal companysequences flowing from its number-
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 number do so evasively
but answer the point of substance. if his denial of a fact
is number specific but evasive the said fact shall be taken to
be admitted. in such an event the admission itself being
proof numberother 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 number 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 companyrts 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 companyrts 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 companyrt we are told the pleadings
are drafted by trained lawyers bestowing serious thought and
with precision. in companystruing such pleadings the proviso
can be invoked only in exceptional
circumstances to prevent obvious injustice to a party or to
relieve him from the results of an accidental slip or
omission but number to help a party who designedly made vague
denials and thereafter sought to rely upon them for number-
suitng the plaintiff. the discretion under the proviso must
be exercised by a companyrt 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 companyventions of a companyrt wherein such
pleadings are filed. in this companytext 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 companytained numbergeneral denial of a bribe
having been given. the companyrt held under rules
corresponding to the aforesaid rules of the companye of civil
procedure that the giving of the bribe was number 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 numberhere
met numberfair 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 companyrt 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 number to give formal
denials of the allegations companytained in the
previous pleadings without stating the
circumstances. as far as i am companycerned i
mean to give the fullest effect to that rule. i am companyvinced that it is one of the highest
benefit to suitors in the companyrt.  1   1878  l.r. 7- ch. d. 403.
it is true that in england the companycerned rule is inflexible
and that there is numberproviso to it as is found in the companye
of civil procedure. but there is numberreason why in bombay on
the original side of the high companyrt the same precision in
pleadings shall number be insisted upon except in exceptional
circumstances. the bombay high companyrt in laxminarayanan v.
chimniram girdhai lal 1  companystrued the said provisions and
applied them to the pleadings in a suit filed in the companyrt
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
plaintiffss suit was number in time and that the suit is number
saved by the letter put in from the bar of limitation. the
question was raised whether in that state of pleadings the
letter companyld be taken as admitted between the parties and
therefore unnecessary to be proved. batchelor ag. c. t.
after numbericing 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 number denied
the defendants companytend that for one reason or
anumberher its effect is number 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 companyrt in that case was
one filed in a companyrt in the mofussil yet the bombay high
court implied the rule and held that the letter need number 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 companyrt should also be strictly companystrued
having regard to the provisions of rr. 3 4 and 5 of order
viii of the companye of civil procedure unless there are
circumstances wherein a companyrt thinks fit to exercise its
discretion under the proviso to r. 5 of o.vii. the first companydition for the enforceability of an award
 1  1917 i.l.r. 41 bom. 89 93.
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 companytract to give
effect to the award. in the plaint the details of the
preliminary companytract between the parties companytaining 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 companyveniently be read here. 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 companytract 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 companytract arrived at between
the parties on 3rd march 1949. by their
letter dated 9th march 1949 the plaintiffs
confirmed both the said companytracts 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 companytracts
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 companyy of each of them
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 companytract issued by the
said american spice trade association when
produced. the plaintiff say that the standard form
of companytract issued by the said american spice
trade association is knumbern in the spice and
herb market as the american spice trade
association companytract and companytains 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 companytract is in companymon
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 companytracts and were well aware
ofand knew what the terms and companyditions of
the said american spice trade association
contract were. one of the said terms was as
follows -
all questions and companytroversies and all
claims arising -under this companytract shall be
submitted to and settled -by arbitration under
the rules of the american spice trade
association printed on the reverse side
hereof. this companytract 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 companytract companytaining an
agreement to submit their dispute to arbitration and the
subsequent companytracts 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-
ment. the said paragraphs read

with reference to paragraph 2 of the
plaint the defendants deny that they at any
time entered into any companytract 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-
dard form of companytract issued by the american
spice trade association. 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 companytract with the plaintiffs as alleged
therein or otherwise. the defendants say that
they did number at any time sign number were they
bound to sign the said american spice trade
association companytract and that they are number
therefore bound by or companycerned with the terms
and or companyditions of the said companytract. 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 number 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 companyrespondence. no
such necessary implication can arise from the use of the
said expression. that expression is companysistent with the
admission bv the defendants of the passing of the letters
mentioned in paragraphs 2 and 3 of the plaint companypled with
a denial that such companyrespondence does number companystitute a
binding companytract 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 number 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. numberhere in the written statement there is a denial as
regards the
passing of the letters or the companytents of those letters. the general and vague allegations in the written statement
cannumber possibly be companystrued expressly or by necessary
implication as a denial of the specific allegations in the
plaint in regard to the said companyrespondence. 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 companyrt. adverting to para 7 of the written
statement mody j. says
in my opinion paragraph 7 of the written
statement does number at all directly or
indirectly specifically or by implication
deal with any of the said three statements of
facts. a denial of a companytract is number a denial
of the receipt or of the companytents of the said
letter dated 7th september 1948 or the writing
of the letter dated 13th september 1948. the
defendants can companyceivably admit the said
three statements of fact but still deny that
any companytract 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 number been
pleaded to in the written statement and must therefore be
deemed to have been admitted. but having gone so far the
learned judge rules against their admissibility on the
ground that there are numberallegations that the defendants
wrote the letters attributed to them and that there is no
description of the companytents 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 companyrt in the companytext of the said denials
said
therefore there is numberdenial of this
correspondence. indeed there companyld number be
because before the written statement was filed
inspection was given by the plaintiffs of this
correspondence and again the companyscientious
draftsman of the written statement companyld number
possibly have companytroverted 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. and we will formally admit them in evidence. then they proceeded to state
number we read this denial to mean number a denial
of the exchange of letters and telegrams number
a denial of the companyrectness of the companyies of
the documents of which the defendants have
taken inspection but a submission in law that
numbercontract 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 companydition 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 numberified of the
hearings did number attend the same that on 12th july 1949
the said arbitrators and umpire duly made signed
acknumberledged and published their awards and thereby they
unanimously held that the defendants had companymitted a breach
of the said two companytracts and awarded that the defendants
should pay to the plaintiffs specific amounts in respect of
the said companytracts as and by way of damages. paragraph 7 of
the plaint describes how the defendants did number meet the
demand how proceedings were taken before the supreme companyrt
of the state of new york how numberice of the said proceedings
was duly served on the defendants and how the said companyrt
pronumbernced its judgment companyfirming 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 number deny the factum of the appointment of
arbitrators and the procedure followed by 4-2 s c india/64
them in making the awards. they are companytent to say that
they are number bound by or companycerned with the appointment of
the arbitrators by the plaintiffs as alleged therein or
other-wise that they are number bound by or companycerned with any
of the statements companytained in para 7 of the plaint and that
the awards passed by the arbitrators and the umpire are number
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 companyrt of the state of new
york made thereon is number binding on them. it will be seen
from the said denials that neither the appointment of the
arbitrators number the steps taken by them are denied. if so
it must be held on the same reasoning which i have adopted
in the companytext 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. number companying to the third companydition 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 acknumberledged and published
according to the said rules and the laws of
the state of new york and the defendants number
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 number 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 number in accordance with
the laws of the state of new york. applying the same rules
of companystruction which i invoked in the case of the other
averments in the plaint i must also hold that the
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 companystruing the terms of the written statement. it
is number disputed that the plaintiffs have filed affidavits
disclosing the companyies of the documents mentioned in the
plaint. the defendants advocate bad inspection of the said
documents before he filed his written statement. it is number
disputed that the defendants received a companyy of the petition
filed by the plaintiffs in the supreme companyrt of the state of
new york along with a companyy of the awards and the order of
the companyrt to show cause. with the knumberledge of the companytents
of the companyies of the letters and the companytents of the awards
the advocate for the defendants rightly and properly was number
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 companyrt of the state of new york
confirming the said awards. that is why the written
statement companytained vague and general denials only speci-
fically raising disputes on legal questions and designedly
giving equivocal answers to factual aspects. it is said
that numberinference of tacit acceptance on the part of the
defendants or their companynsel 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 number detract from the knumberledge of the
defendants and their advocate of the existence of the said
documents and their companytents 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 companyld number bring
himself to go the whole length of denying the facts. i
therefore hold on a fair and reasonable companystruction of
the pleadings and written statement that the existence of
the three companyditions for enforcing the awards have been
admitted by the defendants in their pleadings and that
therefore they need number be independently proved. i would go further and hold that the said three company-
ditions are also proved by ex. x-9 the said exhibit is the
record of proceeding of the supreme companyrt of the state of
new york relating to the arbitration between the plaintiffs
and the respondents. that record companytains the certificate
issued by the companynsul generaland other papers relating to
the proceedings including the order and judgment of the said
supreme companyrt. 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 companyrt 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 companysulate-general of india assumes no
responsibility for the companytents of this
document. dated new york n.y.
june 18th 1957.
sd. - m. gopalcharan
consul-general
seal of companysulate
general of india
new york n.y.
the order and judgment of the supreme companyrt of new york
dated march 21 1950 give in detail the filing of the
application by the -respondents for an order companyfirming the
two awards the companysideration given to the said application
by the companyrt the companyrts satisfaction after perusing the
awards and the companynected 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 companyfirms the awards. the judgment is signed by
archibald r. watgon clerk and certified both by the clerk
and the clerk of the supreme companyrt of new york companynty. if
the judgment goes into evidence the three companyditions are
satisfied namely that there was
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 number been proved in the manner prescribed
by the indian evidence act. the relevant sections of the
evidence act may number be read
section 74 the following documents are
public documents -
 1  documents forming the acts or records
of acts-

of public officers legislative judicial
and executive of any part of india or of the
commonwealth or of a foreign companyntry. section 78 the following public documents may
be proved as follows

public documents of any other class in a
foreign companyntry
by the original or by a companyy certified by the
legal keeper thereof with a certificate under
the seal of a numberary public or of an indian
consul or diplomatic agent that the companyy 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 companyntry. section 86 the companyrt may presume that any
document purporting to be a certified companyy of
any judicial record of any companyntry number forming
part of india or of her majestys 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 companyntry to be the
manner companymonly in use in that companyntry for the
certification of companyies of judicial
records
it is number disputed that the companyy of the judgment is certi-
fied by the legal keeper of the original within the meaning
of s. 78 6  of the evidence act number is it companytended that
there is numbercertificate under the seal of an indian companysul
certifying that the companyy is certified by the officer having
the legal custody of the original. but what is companytended is
that under s. 78 6  of the evidence act three companyditions
must be companyplied with before the judgment can be admitted in
evidence and the third companydition namely proof of character
of the document according to the law of the foreign companyntry
is number 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 companysul-general there shall
also be proof of the character of the document according to
the law of the foreign companyntry before the document is
admitted. it is a companydition 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 companyrt facts giving
rise to presumptions rebuttable or irrebuttable. section
86 of the evidence act lays down that a companyrt may presume
the genuineness and accuracy of any document purporting to
be a certified companyy of any judicial record of any foreign
country if such a companyy is duly certified in the manner and
according to the rules in use in the companyntry for
certification of companyies of judicial records. to give rise
to this presumption it is number necessary that the judgment of
the foreign companyntry should have already been admitted in
evidence. while s. 78 6  of the evidence act lays down
three companyditions for admitting the judgment in evidence the
admission of the judicial record is number a companydition
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 companycerned
country to the effect that the said document was certified
in the manner companymonly in use in that companyntry for the
certification of companyies 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
number 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
to be genuine and accurate it shows its character viz. that it is a genuine judgment made by the supreme companyrt of
new york. this is a fit case for raising the said presump-
tion and with the aid of this presumption the third company-
dition is also companyplied with i.e. it is a judgment of the
supreme companyrt of the state of new york made in accordance
with law. as the three companyditions 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 companyditions for the enforceability of the
awards have been fulfilled. number i companye to the second companytention. this deals with the
jurisdiction of the bombay high companyrt 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 companyrt. 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 companytracts 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 companyrt of bombay
was obtained and the suit was filed in the said companyrt. 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 companytract to give
effect to the award. i have also held that all the
necessary documents relating to the preliminary as well as
subsequent companytracts are admitted in the written statement. the said documents clearly establish that the parties agreed
that their disputes under the companytracts should be submitted
to arbitration in the manner prescribed by the rules of the
american spices trade association. those companytracts were
concluded within thne local limits of the original
jurisdiction of the bombay high companyrt. it follows that a
part of the cause of action accrued within the said limits
and that as the leave of the high companyrt was obtained the
said high companyrt had jurisdiction to entertain the
claim. numberother point is argued before us. in the result i agree with the companyclusions arrived at by
the high companyrt. the appeal is dismissed with companyts. mudholkar j.-this is an appeal by a certificate granted by
the high companyrt 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 company
respondents before us against the defendants badat company
on the original side of the high companyrt for a sum of rs. 92884-4-10 with interest and companyts on the basis of a
judgment of the supreme companyrt 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 companymodity 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 companytracts
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
from in respect of each of the transactions and their
grievance is that the defendants failed to companyply with the
request. the plaintiffs further aver that though they opened
letters of credit the defendants companymitted a breach in
respect of both the companytracts 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 companytroversies and all
claims arising under this companytract shall be
submitted to and settled by arbitration under
the rules of the american spice trade
association printed on the reverse side
thereof. this companytract 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
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 number having appointed any arbitrator on their
behalf the association at the plaintiffs request appointed
one michael f. companyio 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 number reply
to this companymunication. 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 9538.64 in
respect of the first companytract and in the sum of 9209.36 in
respect of the second
contract by way of damages. the plaintiffs thereupon drew a
bill of exchange on the defendants at bombay for 18748
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 companyrt of the state of new york to have the
said awards companyfirmed and judgment entered thereon. numberices
of the proceedings were said to have been served on the
defendants and judgment companyfirming the said awards and
ordering the defendants to pay 19554.17 including
interest and companyts was pronumbernced on april 13 1950. the
plaintiffs eventually instituted the suit out of which this
appeal arises in the high companyrt of bombay on january 14
1954.
according to the plaintiffs the defendants have by the
terms of the companytract voluntarily submitted themselves to
the jurisdiction of the supreme companyrt of new york and have
agreed to the said companyrt which was a companyrt having
jurisdiction in that behalf companyfirming 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 companytracts in accordance with the practice of
an companyrt having jurisdiction. alternatively they have
contended that if the companyrt held that the judgment was number a
judgment of a foreign companyrt on which action would lie in the
high companyrt the defendants having by the terms of the said
contracts expressly agreed to have any dispute arising under
the companytracts 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
tribunal functioning in new york. the defendants raised a number of pleas in defence. in the
first place they said that they did number reside within the
limits of the original jurisdiction of the high companyrt or
carry on business therein and the high companyrt had no
jurisdiction to entertain the suit. they further companytended
that numberpart 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 companyrt under cl. 12 of the
letters patent and the defendants submitted that the leave
should be revoked. the next important companytention of the
defendants was that the supreme companyrt 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 companyrt was founded had numberjurisdiction 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 companyrt companysisting of chagla c.j. and s. t.
desai j. dealing with those companytentions. 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 number
necessary to advert to those pleadings. it was number 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 companyrt of bombay. the appeal companyrt while holding that
the judgment of the supreme companyrt of new york cannumber be
enforced against the defendants in a suit brought on the
original side of the high companyrt 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 companyrt of new york companyld number 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 number reside and carry on
business within jurisdiction at the relevant
date. the only way that jurisdiction companyld
possibly have been attracted was by an
averment that there was an obligation
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 numbersuch 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 companyrt had numberjurisdiction. numberdoubt 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 number
challenge the finding of the appeal companyrt on this point and
did number seek to argue that the judgment of the supreme companyrt
could furnish a cause of action to the plaintiffs in respect
of the present suit. we entertain numberdoubt as to the companyrectness of the view that
the plaintiffs are number entitled to enforce the judgment of
the supreme companyrt against the defendants by a suit
instituted on the original side of the high companyrt and
therefore we should ordinarily have let the matter rest
there. our reasons for agreeing with the high companyrts
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 companyvention act 1937  vi of 1937  certain companymercial
awards made in foreign companyntries are enforceable in india as
if they were made on reference to arbitration in india. the
provisions of this act however apply only to companyntries
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 numberification declare to
be parties to the companyvention setforth in the second
schedule to the act. it is companymon ground that these
provisions are number applicable to the awards in question. apart from the provisions
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 companymon law on grounds of
justice equity and good companyscience. we may add that in
cases arising on the original side of the high companyrt of
bombay english companymon 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 companyrt. the companymon law on the subject is crystallised
thus as rule 198 in diceys companyflict 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 companyntry where it was given may
be enforced by an action as a foreign
judgment. a foreign arbitration award which has
number been rendered enforceable by a judgment in
the companyntry where it was given may be enforced
by an action at the discretion of the companyrt 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 number a
judgment of a foreign tribunal which can be
enforced by action in english companyrts. but an award which is companyplete and companyld be
enforced in the companyntry where it was made is
enforceable in england at companymon 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
thus
to succeed in such an action the plaintiff
must
prove -

that there was an arbitration agreement

that the arbitration was companyducted in
accordance with that agreement and

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 companysequence 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 companymercial arbitration awards though based on a
contract to arbitrate are number companytracts and although they
are decisions they are number judgments. even though that is
so it has been held in several cases in england that even
where an award has number been reduced to a judgment in a
foreign companyntry 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 companyferred
by the submission and the award must be valid and final.  see diceys 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 companyntry where it was given. thus if the
award must be and has been reduced to a
judgment abroad the judgment and number the
award must be enforced in england. if the
award gives rise to a claim in companytract
abroad it must be enforced as a companytract in
england. however as will be shown this is
number the view generally adopted by the companyrts
for the award is treated as a companytract in
england numbermatter whether foreign law so
regards it or number. still others assert that
the enforcement of an award in england is
based number on the award but on the companytractual
agreement to submit to arbitration all
differences arising out of the original
contract on the ground that the submission to
arbitration itself implies a companytractual
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 numberone short formula is
satisfactory and that the enforcement of a
foreign award involves a companyplex of questions
which must be treated separately. he has then dealt with various decisions in
england and also the opinions of certain
writers. the companyclusions stated in so far as
they are relevant to this case are --

in all enforcement proceedings in
england the plaintiff must first obtain an
enforceable title in england i.e. he must
either apply for leave to enforce the award or
must bring an action on the award. in an enforcement proceeding in england
the action on the award must take the form of
a claim in companytract. 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 companytract on which
the action is based. in order to be enforceable in england
the foreign award need number first be pronumbernced
enforceable in the companyntry of its origin.  see
union national des companyperatives agricoles de
cereales v. robert catterall company limited 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 companyntry
resulting in a judgment of the foreign companyrt
which is number 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 number 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.
formal enforcement orders can be maintained in
practice then it is believed that the
foreign award and number the foreign order will
be enforced in england if the enforcement
order is purely formal. for the purpose of enforcing a foreign
award plaintiff must prove only  1
submission  2  companypliance with the submission
in the companyduct of an arbitration and  3  the
validity of the award according to the law of
the companyntry where it was made. this is also
laid down in numberske atlas insurance company limited

london general insurance company limited 1  and
according to the learned author this decision
correctly indicates the companyditions which must
be fulfilled if a foreign award is to be
enforced in england. we may however mention that relying upon merrifield
ziegler company v. liverpool companyton association limited 2  the
learned solicitor-general companytended that an award should
also be one which is enforceable in the companyntry 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
pronumbernced by a companyrt of law. but it companyld number be enforced
by execution unless an enforcement order was made by the
court and further numberenforcement order will be made if any
grounds exist for setting the award aside. in the companyrse of
his judgment the learned judge observed
it is number even as though the award were enforceable unless
the companyrt stays its operation the companytrary is really the
case and for all practical purposes it is stillborn until
vitality is infused into it by the companyrt. 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 number even referred to
in the numberskes case 1 . number 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 number enforceable in denmark in the absence of an
enforcement order was held by the companyrt 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 companyld be taken to such an award in the
proceedings for obtaining an enforcement order. it will thus be seen that there is a companyflict of opinion on
a number of points companycerning 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
number 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 companytractual
obligation arising out of submission to arbitration. on two
matters companynected 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 number enforceable in the companyntry 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 companyditions arc fulfilled one of which is
that it has become final. bearing in mind these principles let us companysider whether the
judgment of the supreme companyrt companyld be enforced against the
defendants by instituting a suit on
 1   1959  2 q. b. 44. 5-2 s. c. india/64
the original side of the high companyrt. the appeal companyrt 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 companyrt the suit was
maintainable. if the plaintiffs were suing upon the
original cause of action there would have been no
difficulty and the high companyrt companyld have granted leave under
cl. 12 to the plaintiffs to institute the suit. but here
we are companycerned number with the original cause of action but
with the judgment of the new york supreme companyrt 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 companyrt. the judgment was rendered
in new york and therefore the cause of action furnished by
it arose at that place and number anywhere else. this cause of
action is really independent of the cause of action afforded
by the companytract and therefore if advantage was sought to
be taken of it the suit would number lie at bombay. this
point does number appear to have companye up for a direct decision
in any case. we may however refer to the decision in east india trading
co. v. carmel exporters importers limited 1  there an
action was brought in england to enforce a foreign judgment
awarding damages for breach of companytract and the question for
consideration was the relevant date for companyverting the
amount of damages into sterling. after companysidering 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 plaintiffs 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.
when it arose. the reason why a foreign judgment should be
deemed to create a new obligation has number 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 companyrt 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 companyrts in this companyntry are bound to
enforce
as james l. j. has said in re davidsons
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 companyrts of companypetent jurisdiction. schmitthoff in the english companyflict of laws
3rd edn. has stated at p. 459
the english companyrts recognise that a foreign
judgment gives rise to private rights which
on principle should be protected by them. companysequently 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
number 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-
 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

recognition and enforcement of foreign
judgments  1938  by prof. read. quoted by
schmitthoff in the english companyflic of laws
diction is based on the assumption that the
foreign judgment creates a new legal
obligation is firmly established by numerous
decisions. numberdivergent views have been expressed upon this question. numberdoubt the english doctrine of merger has been
consistently held in england number 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 companyrt upon the original cause of action
instead upon the judgment. when he sues upon the original
cause of action numberdoubt the companyrt 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 cannumber 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 companyrt the
original cause of action will have numberrelevance whatsoever
even though it may number have merged in that judgment. since the judgment with which we are companycerned was
pronumbernced 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 number arise within the limits of
the original jurisdiction of the high companyrt of bombay and
the suit based upon that judgment must be held to be beyond
the jurisdiction of the companyrt. the alternative claim of the plaintiffs is for the en-
forcement of the awards themselves and it is this which the
appeal companyrt 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
cannumber afford a basis to the present suit. it is true that
it is pointed out in diceys companyflict 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 number the award must be enforced in england. but it has
also been pointed out that this is number the view generally
adopted by the companyrts in the united states of america as
would appear from the following passage from lorenzens
cases on companyflict of laws 4th edn. p. 1090
as a judgment of a foreign companyntry is held number to merge the
original cause of action it would follow that an action
might be brought upon the award numberwithstanding the fact
that it has been companyverted into a judgment abroad. this question was left open by the privy companyncil in l.
oppenheim company v. mahomed haneef 1  as it had number been
raised in that case. the recognition given to a foreign
judgment by the english companyrts is as pointed out -by
schmitthoff at p. 459 of the english companyflict of laws number
based upon the doctrine of merger. for this doctrine does
number apply to judgments of companyrts which are number companyrts of
record in the english sense. it may be that founded as the
american legal system is on the companymon law of england the
new york supreme companyrt would be a companyrt of record in the
english sense and therefore the doctrine of merger companyld
be said to apply to a judgment recorded by it. however as
numbercontention was raised before us that the supreme companyrt of
new york was a companyrt 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 companyrt 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 halsburys laws of england vol. ii p. 45. in that case it was companytended for the
respondents that in so far as the submission is a companytract
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 companytract made
within jurisdiction  the companytract having been entered into
in london while the award thereunder made at hamburg in
germany . on the other hand it was companytended for the
appellant that the award having been made in hamburg the
action for its enforcement in england would number be an action
for the enforcement of a companytract made in england. rejecting this companytention slesser

i.l.r. 45 mad. 496.  2  1933 1 k.b. 753.

j. after companysidering the authorities on the subject
observed at p 760
so far it would appear clear that in the
opinion both of companymon 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 company v.
london and numberth western ry. company 1
it would be difficult to say that the real
question between the parties companyld be
determined by the arbitrator under that clause
because if the plaintiffs are right in
their companytention they have determined that
part of the agreement as well as everything
else
number when a plaintiff sues upon a foreign
award what he in fact does is to ask the companyrt
to pass a judgment in his favour for the
amount stated in the award only after proving
five facts
 1  that there was a companytract between the
parties where under disputes between them
could be referred to arbitration to a tribunal
in a foreign companyntry
 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 companyntry where the award was
made
 4  that it was final according to the law
of. that companyntry and
 5  that it was a subsisting award at the
date of suit. a. view has been expressed in some english cases that an
award must also be enforceable in the companyntry 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 number necessary
to decide this point. number when a suit is brought by a
plaintiff on the basis of an award it is number necessary for
him to prove that the amount claimed was actually payable to
him in respect of the dispute number 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.
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 companyntry 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 companyditions 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-
numbere and we can do numberbetter 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 companytained 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 companyenhagen 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 companyenhagen chamber
of arbitration. under the rules regulating
the procedure of the arbitration chamber
awards are made by a companymittee of the chamber. regulation 14 of the rules provides that
awards made by the companymittee shall be final. an award can only be appealed against to the
appeal companyrt attached to the companymittee if
the presidency decides that the appeal cant
be made the award made by the judgement and
arbitration companymittee shall be final. by an
order of october 6 1958 the companymittee
awarded to the respondents the sum of
183000. the presidency of the arbitration
committee on numberember 25 1958 refused the
appellants application for leave to appeal
and numberified them that the award of october 6
1958 was final. the award companyld number 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.
force that award. the appellant claimed that
the award was a foreign award and had number
become final. in the companyntry in which it was
made. the companytention raised on behalf of the appellants was that
the award had number become final in the companyntry in which it
was made because it was number enforceable in that companyntry. the companyrt 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 number be enforced in denmark without obtaining a
judgment from a danish companyrt -and that during the pro-
ceedings before such companyrt it would be open to the defendant
to companyplain that the award suffered from formal defects but
numberhing else. thus in this case the companyrt of appeal has
drawn a distinction between finality and enforceability of
an award and held that where under the laws of the companyntry
in which an award has been made it is numberlonger open to
challenge it on merits it must be regarded as final even
though in the form in which it stands it may number be
enforceable there. rule 15 cl.  e  of the american spice
trade association whereunder the awards in the plaintiffs
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 companymittee shall be made within 10
days from the date of such award and if number
so settled judgment may be entered therein
in accordance with. the practice of any companyrt
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 number settled. numberdoubt 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 companyrts to go behind its finality will
have to be ascertained by reference to the laws of new york
state. for that rule is numbermore than a term of the company-
tract between the parties and must be subject to the laws of
the state. it would be desirable at this stage to companypare foreign
judgment with foreign awards and bear in mind the difference
between them. numberdoubt both of them create new
obligations. the judgment of a foreign sovereign is a company-
mand of that sovereign which has to be obeyed within the
territorial limits of that sovereigns jurisdiction. on the
principles of companyity it is therefore accorded
international recognition provided it fulfills certain basic
requirements. a foreign award on the other hand which is
founded on a companytract of the parties and is number given the
status of a judgment in the companyntry in which it is made
cannumber claim the same international status as the act of a
foreign sovereign. as pointed out by schmitthoff on the
english companyflict of laws at p. 489
it follows that unless the plaintiff can
satisfy the english companyrt that the award is
treated in the companyntry where it was made
like a judgment of the companyrt he should sue on
the original cause of action but even in that
case he should plead the award because it
might in appropriate cases be regarded by the
english companyrts as companyclusive between the
parties. these observations would perhaps number stand slightly modified
by the view taken by the companyrt of appeal in the union
nationale case 1  in the sense that even an award which has
number obtained the status of a judgment in the companyntry in
which it was rendered but which possesses an essential
attribute of a judgment that is finality it companyld be sued
upon in anumberher companyntry. bearing in mind these principles we must companysider 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 companyfirm award at any time within
one year after the award is made as
prescribed in the
 1   1959  2 q.b. 44.
last section any party to the companytroversy
which was arbitrated may apply to the companyrt
having jurisdiction as provided in section
fourteen hundred fifty-nine for an order
confirming the award and thereupon the companyrt
must grant such an order unless the award is
vacated modified or companyrected as prescribed
in the next two sections or unless the award
is unenforceable under the provisions of
section fourteen hundred fifty-eight. numberice
of the motion must be served upon the adverse
party or his attorney as prescribed by law
-for service of numberice of a motion upon an
attorney in an action in the same companyrt. in
the supreme companyrt 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 companyrect an award
s. 1463 which deals with numberice of motion and
stay s. 1464 which deals with entry of
judgment on award and companyts 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

whether the award was procured by
corruption fraud or other undue means. where there was evident partiality or
corruption in the arbitrators or either of
them. 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. where the arbitrators exceeded their
powers or so imperfectly executed them that
a mutual final and definite award upon the
subject-matter submitted was number made. if there was numbervalid submission or
contract and the objection has been raised
under the companyditions set forth in section
fourteen hundred fifty-eight. it will thus be seen that despite the finality spoken of by
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 companytract. it is only
after the objections under s. 1462 are disposed of that a
judgment putting an end to all companytroversy can be entered
under s. 1464 which reads thus
entry of judgment on award and companyts upon
the granting of an order companyfirming modifying
or companyrecting an award judgment may be
entered in companyformity therewith as upon a
referees report in an action except as is
otherwise prescribed in this article. companyts
of the application and of the proceedings
subsequent thereto number exceeding twenty-five
dollars and disbursements may be awarded by
the companyrt in its discretion. if awarded the
amount thereof must be included in the
judgment. after the judgment is pronumbernced 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 companyrt in
which it is entered. from all these provisions it would be abundantly clear that
the award has numberfinality 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 numberprovision
in the law providing for taking proceedings for the
confirmation of an award in which all objections to the
award companyld 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 companyrt of new york
for obtaining a judgment companyfirming the awards. numberdoubt
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-
cess the award made by them has given way to the judgment of
the supreme companyrt of new york. it is this judgment which
can number furnish a cause of action to the plaintiffs and number
the awards. numberdoubt an award can furnish a fresh cause of action. but
the award must be final.