TaxTMI 
TaxTMI 
2018 (9) TMI 847
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.... delivered in London on 12.02.2015 by Mr. Christopher Style QC in the following terms: "363. After consideration of all the factual and legal submissions which have been presented to me and for the reasons set out in full above, I award, declare and adjudge as follows: (1) I declare that I have no jurisdiction over the Second and Third Respondents. (2) I declare that Rioglass is not obliged to issue a Performance Bank Guarantee as provided for in clause 6 of the Agreement, as amended by Amendment No.1. (3) I declare that Rioglass is entitled to sell as scrap the mirrors that it holds in storage in relation to Delivery Four. (4) I declare that Shriram acted in breach of the Agreement in the respects set out above. (5) I order Shriram to pay Rioglass EUR4,366,598.70, consisting of damages amounting to EUR4,151,570.52 and interest amounting to EUR215,028.18." 3.2. Objections dated 21.07.2015 under Section 34 of the Arbitration and Conciliation Act, 1996 were filed by the Appellant which were dismissed on 27.09.2016, stating that a petition under Section 34 would not be maintainable as against a foreign award, citing this Court's....
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....ced. He further relied upon the 194th Law Commission Report, which had suggested changes insofar as stamp duty is concerned in Part II of the 1996 Act. 5. Learned counsel appearing on behalf of the Respondent, on the other hand, relied strongly upon the judgment of the Delhi High Court as well as the Madhya Pradesh High Court referred to hereinabove. According to the learned counsel, the expression "award" which occurs in Schedule I of the Indian Stamp Act, 1899 applies only to a domestic award and not a foreign award. He relied on the fact that the Indian Stamp Act was enacted in 1899, in which "award" has never been enlarged so as to include foreign awards after the Arbitration (Protocol and Convention) Act, 1937 and/or the Foreign Awards (Recognition and Enforcement) Act, 1961 were enacted. Also, according to the learned counsel, the only requirement for the enforcement of a foreign award is laid down in Section 47 of the Act, which does not require the award to be stamped. A without prejudice argument was also made that under Section 48(2)(b), even if a foreign award were required to be stamped, but is not stamped, enforcement of such award would not be contrary to the funda....
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....erwise, of any ship or vessel, or any part, interest, share or property of or in any ship or vessel, registered under the Merchant Shipping Act, 1894, or under Act 19 of 1938, or the Indian Registration of Ships Act, 1841 (10 of 1841) as amended by subsequent Acts. (3) any instrument executed, by, or, on behalf of, or, in favour of, the Developer, or Unit or in connection with the carrying out of purposes of the Special Economic Zone. Explanation.-For the purposes of this clause, the expressions "Developer", "Special Economic Zone" and "Unit" shall have meanings respectively assigned to them in clause (g), (za) and (zc) of section 2 of the Special Economic Zones Act, 2005." Under Sections 33 and 35, instruments that are not duly stamped in accordance with the provisions of the Act are inadmissible in evidence, and any such instrument which is not duly stamped is liable to be impounded as provided in Section 33 of the Act. Item No.12 of Schedule I of the Indian Stamp Act, 1899 reads as follows: Description of Instrument Proper Stamp-duty "12. AWARD, that is to say, any decision in writing by an arbitrator or umpire, not being an award di....
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....ct applicable in any other local area as if it were a Presidencytown." Section 4 of the said Act states as follows: "4. Definitions.-In this Act, unless there is anything repugnant in the subject or context,- (a) "the Court" means, in the Presidency-towns, the High Court, and, elsewhere, the Court of the District Judge; and (b) "submission" means a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not." Section 11 then states: "11. Award to be signed and filed.-(1) When the arbitrators or umpire have made their award, they shall sign it, and shall give notice to the parties of the making and signing thereof, and of the amount of the fees and charges payable to the arbitrators or umpire in respect of the arbitration and award. (2) The arbitrators or umpire shall at the request of any party to the submission or any person claiming under him, and upon payment of the fees and charges due in respect of the arbitration and award, and of the costs and charges of filing the award, cause the award, or a signed copy of it, to be filed in the Court; and notice of the filing shall ....
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....the matters referred to arbitration for re-consideration in manner aforesaid, and no application has been made to set aside the award, or the Court has refused such application, the Court shall, after the time for making such application has expired, proceed to pronounce judgment according to the award. (2) Upon the judgment so pronounced a decree shall follow, and no appeal shall lie from such decree except insofar as the decree is in excess of, or not in accordance with, the award." Under Sections 20 and 21, arbitration without the intervention of a Court is referred to, and awards delivered in such cases are to be incorporated in a judgment by a Court, after which a decree is to follow, which decree then becomes enforceable. 12. Next in line, chronologically speaking, is the Arbitration (Protocol and Convention) Act, 1937, in which, certain foreign awards governed by the Geneva Convention of 1923 were to be recognized and enforced in signatory countries, India being one. In this Act, "foreign award" is defined as follows: "2. Interpretation.-In this Act "foreign award" means an award on differences relating to matters considered as commercial under the la....
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....e made first in British India, and later in the territory of India except the State of Jammu and Kashmir. 14. In 1961, after the New York Convention of 1958, the Foreign Awards (Recognition and Enforcement) Act, 1961, came into force to recognize and enforce New York Convention Awards. Here again, such awards were referred to as "foreign awards" in Section 2 thereof which defines foreign awards as follows: "2. Definition.-In this Act, unless the context otherwise requires, "foreign award" means an award on differences between persons arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India, made on or after the 11th day of October, 1960- (a) in pursuance of an agreement in writing for arbitration to which the Convention set forth in the Schedule applies; and (b) in one of such territories as the Central Government being satisfied that reciprocal provisions have been made, may, by notification in the official Gazette, declare to be territories to which the said Convention applies." 15. As is well-known, the present Arbitration and Conciliation Act, 1996 then came into force and ....
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.... declare to be territories to which the said Convention applies, and for the purposes of this Chapter an award shall not be deemed to be final if any proceedings for the purpose of contesting the validity of the award are pending in the country in which it was made." The other important sections which have a bearing on the controversy before us are as follows: "46. When foreign award binding.-Any foreign award which would be enforceable under this Chapter shall be treated as binding for all purposes on the persons as between whom it was made, and may accordingly be relied on by any of those persons by way of defence, set-off or otherwise in any legal proceedings in India and any references in this Chapter to enforcing a foreign award shall be construed as including references to relying on an award. 47. Evidence.-(1) The party applying for the enforcement of a foreign award shall, at the time of the application, produce before the Court- (a) the original award or a copy thereof, duly authenticated in the manner required by the law of the country in which it was made; (b) the original agreement for arbitration or a duly certified copy ....
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....., (1962) 3 SCR 146, that an Act must be construed as on date, despite the fact that the definition contained in an old Act may not literally fit the bill. We are afraid that this judgment is wholly distinguishable in that, in the aforesaid case, the definition of "telegraph line" in the Indian Telegraph Act, 1885, was construed as being wide enough to include electric lines used for the purpose of wireless telegraph. This Court held that in a modern progressive society, it would be unreasonable to confine the intention of the legislature to the meaning attributable to a word used at the time the law was made, and, unless a contrary intention appeared, an interpretation should be given to the words used in the statute to take in new facts and situations, if such words are capable of comprehending them. As stated hereinabove, this judgment is wholly distinguishable in that, given the factual scenario of 1899, and the fact that foreign awards existed even then, in princely states as well as foreign countries, no new fact situation has arisen subsequently in order to apply the ratio of the said judgment. Further, we must not forget that the Indian Stamp Act, 1899 is a fiscal statute w....
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.... in Section 48 are attracted, the award becomes enforceable as a decree. The stage of enforceability, therefore, has arisen in these cases, and it cannot be said that the ratio of M. Anasuya (supra) would apply so that stamp duty would become payable only at some subsequent stage. This judgment is equally incorrect in stating that Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2001) 6 SCC 356, would apply. One sentence in Fuerst Day Lawson (supra) reads, "[T]he only difference as found is that while under the Foreign Awards Act a decree follows, under the new Act the foreign award is already stamped as the decree." This sentence does not lead to the conclusion, following the judgment in Thyssen Stahlunion GMBH v. Steel Authority of India Ltd., (1999) 9 SCC 334, that under the 1996 Act, a foreign award is considered to be stamped already. All that this sentence means is that the foreign award is to be regarded as a decree. The expression "stamped" means "regarded". This judgment also does not carry us much further. 20. On the other hand, the Madhya Pradesh High Court judgment (supra) hits nearer home. This judgment, in paragraph 12 thereof, states why foreign awards do not have ....
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.... other judgment heavily relied upon by Shri Viswanathan, namely the Gujarat High Court judgment (supra), merely refers to Article III of the New York Convention to state that so far as procedural aspects relatable to foreign awards are concerned, we must go by the Code of Civil Procedure, and going by the Code of Civil Procedure, the Court at Bhavnagar would have no jurisdiction to enforce the foreign award in the facts of that case. Since Article III of the New York Convention is strongly relied upon by Shri Viswanathan, we need to set it out. It states: "Article III Each Contracting State shall recognise arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon under the conditions laid down in the following articles. There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards." 23. There is no doubt whatsoever that if stamp duties are leviable in India on foreign awards, the imposition shoul....