Court interprets "submission" in Foreign Awards Act, affirms jurisdiction, dismisses appeals.

The court concluded that "submission" in Section 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961 refers to an actual submission of disputes to an arbitrator. Indian courts have jurisdiction to grant an injunction to restrain arbitration in Moscow to avoid parallel proceedings. The issue of the arbitration agreement's operability requires further examination. The appeals were dismissed without costs.

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Issues Involved:
1. Interpretation of "submission made in pursuance of an agreement" under Section 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961.
2. Jurisdiction of Indian courts to grant an injunction against arbitration proceedings in Moscow.
3. Whether the arbitration agreement between the parties was rendered inoperative or null and void.

Detailed Analysis:

Issue 1: Interpretation of "submission made in pursuance of an agreement" under Section 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961

The primary question was whether the term "submission made in pursuance of an agreement" means an actual or completed reference to arbitration or merely the existence of an arbitration agreement. The appellant argued that any arbitration agreement within a commercial contract should compel the court to stay the suit if the conditions in Section 3 are satisfied. Conversely, the respondent contended that "submission" should be understood as an actual submission of disputes to an arbitral tribunal.

The court examined the legislative history and international protocols, including the Geneva Protocol of 1923 and the New York Convention of 1958. It noted that the term "submission" had historically included both an agreement to refer disputes to arbitration and an actual submission of disputes to an arbitrator. However, the court concluded that in the context of Section 3, "submission" should be interpreted as an actual submission of a particular dispute to an arbitrator. This interpretation was deemed necessary to avoid rendering the words "made in pursuance of an agreement" meaningless.

The court also considered the principle that domestic legislation should be interpreted in a manner consistent with international obligations, provided the language of the statute permits such an interpretation. However, it found that the language of Section 3 was clear and unambiguous, and thus, the court was bound by the legislative intent expressed in the statute.

Issue 2: Jurisdiction of Indian courts to grant an injunction against arbitration proceedings in Moscow

The second issue was whether Indian courts had the jurisdiction to grant an injunction restraining the Russian firm from proceeding with arbitration in Moscow. The court noted that the presence of the party sought to be injuncted within the jurisdiction is a prerequisite for granting such an injunction. The court also referenced Section 35 of the Arbitration Act, 1940, which implies that arbitration proceedings cannot continue simultaneously with a suit on the same subject matter.

The court held that since the suit in India could not be stayed under Section 3 of the Act due to the lack of an actual submission to arbitration, it was proper to grant an injunction to prevent the Russian firm from proceeding with the arbitration in Moscow. This was to avoid parallel proceedings and ensure that the disputes were resolved in a single forum.

Issue 3: Whether the arbitration agreement between the parties was rendered inoperative or null and void

The respondent argued that the arbitration agreement was rendered inoperative due to a subsequent agreement between the parties. The court found that this issue required further examination and could not be conclusively decided at this stage. The court noted that if the arbitration agreement was found to be null and void, inoperative, or incapable of being performed, the mandatory obligation to stay the suit under Section 3 would not apply.

Conclusion

The court concluded that the term "submission" in Section 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961, refers to an actual submission of disputes to an arbitrator. It also held that Indian courts have the jurisdiction to grant an injunction to restrain arbitration proceedings in Moscow to avoid parallel litigation. However, the issue of whether the arbitration agreement was rendered inoperative required further examination. The appeals were dismissed, and there was no order as to costs.

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