JUDGMENT Badar Durrez Ahmed, J.
1. The present petition has been filed, inter alia for enforcement of the foreign award dated 10.11.2003 passed by the sole Arbitrator Mr Samuel A. Houbold Asq. at London, U.K. in ICC case No. 11881/MS. It is also prayed that the order dated 31.5.2005 passed by Ms Shailender Kaur, Additional District Judge, Delhi in Ex. No. 19/2004 be set aside and that the proceedings pending before the Court of the District Judge, Tiruchirapalli, Tamilnadu be stayed.
2. At the outset it must be made clear that the prayers with regard to setting aside the said order of 31.5.2005 and staying of the proceedings before the District Court at Tiruchirapalli cannot be allowed. The former, because this is not an appeal from the said order dated 31.5.005 and, the latter, because the District Court at Tiruchirapalli does not fall within the jurisdiction of this High Court. Thus this petition is to be considered purely from the standpoint of whether the foreign award can be enforced by this Court.
3. Under the foreign award dated 10.11.2003 the Judgment Debtor/Respondent is liable to pay to the petitioner/decree holder (1) U.S. $ 36,584.74 plus 4% interest with effect from 1.11.1999 till date of payment; and (2) £14,484.70 plus U.S. $ 21,000 plus 4% interest on both the sums from 10.11.2003 (date of award) till date of full payment.
4. The respondent has raised three preliminary objections to the maintainability of the present petition. Firstly, the respondent contends that the present petition is not maintainable inasmuch as a similar petition being Ex. No. 19/2004 is pending before the Court of the learned Additional District Judge, Delhi. Secondly, this Court does not have the jurisdiction to entertain the present petition inasmuch as the award amount is less than Rs. 20,00,000/. Thirdly, the respondent/judgment debtor has already filed objections to the said Award in the District Court at Tiruchirapalli. Therefore, in view of Section 42 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'said Act'), this Court would not have jurisdiction to entertain the present petition.
5. The petitioner/decree holder has responded to each of these contentions. It is the case of the petitioner/decree holder that there is no bar to the filing of a second Execution Application. It was also submitted on behalf of the petitioner/decree holder that the award amount was more than Rs. 20,00,000/- and, therefore, this Court has pecuniary jurisdiction to entertain the present petition. Lastly, it was contended on behalf of the petitioner/decree holder that Section 42 of the said Act falls in Part I thereof, whereas foreign awards are governed by Part II. Therefore, Section 42 would have no applicability insofar as the present case is concerned, it being a case involving a foreign award.
6. Before I embark upon a discussion of the relative merits and de-merits of the aforesaid submissions made by counsel for the parties, it would be pertinent to note a few dates. As stated above, the award, in question, was made on 10.11.2003 in U.K. On 16.7.2004, the decree holder/petitioner filed an application for enforcement of the foreign award in this Court (Delhi High Court). The same was returned by the Registry of this Court to the petitioner on account of the fact that the value of the award was less than Rs. 20,00,000/-. Thereafter, the petitioner filed the execution petition in the District Court. The said Execution Petition was numbered as Ex. No. 19/2004 and is pending before the Court of Ms Shailender Kaur, Additional District Judge, Delhi. On 19.11.2004, the respondent/judgment debtor moved an application under Section 42 of the said Act in the said petition (Ex. No. 19/2004) on the ground that the respondent/judgment debtor had already filed an application for setting aside the award, in question, in the District Court at Tiruchirapalli, Dalmiya Puram, Tamil Nadu. In the said application, it was also contended that the court of the ADJ did not have pecuniary jurisdiction to try the matter as the subject matter was in excess of Rs. 20,00,000/-. On 31.5.2005, the learned Additional District Judge, inter alia, passed the following order:-
Decree Holder has filed an execution for an amount of Rs. 19,99,643/-. Thus the same is within the pecuniary jurisdiction of this Court. Section 42 of the Arbitration and Conciliation Act, 1996 provides:
Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other court.
However, this Court has no power to transfer the execution proceedings before another court in which objections are pending adjudication as the other court falls in the territory of State of Tamil Nadu. Since the objections are stated to have been filed prior to filing of the execution thus as per provisions of the Arbitration Act the objections filed against the award are to be first disposed of. Therefore the present execution is adjourned sine-die till the objections filed by the judgment debtor are decided. It can be revived on the application moved by either of the parties to the execution.
In view of the above observations, the application is disposed of.
From the aforesaid narration of facts, it becomes clear that the respondent had taken the objection with regard to the applicability of Section 42 in Ex. No. 19/2004 pending before the learned Additional District Judge. But, contrary to what has been contended herein, on pecuniary jurisdiction, the argument advanced was that the subject matter was in excess of Rs. 20,00,000/- and, therefore, the learned Additional District Judge did not have the pecuniary jurisdiction to entertain Execution No. 19/2004. However, it can be easily seen from the extract of the order of the learned Additional District Judge that the question of pecuniary jurisdiction raised by the respondent/judgment debtor before that Court was repelled inasmuch as in paragraph 3 of the order, it is recorded that the decree holder has filed an execution for an amount of Rs. 19,99,643/- and thus the same is within the pecuniary jurisdiction of that Court. It is also clear that the learned Additional District Judge was impressed by the arguments advanced by the respondent/judgment debtor that the provisions of Section 42 of the said Act would apply and it is on this ground that the Ex. No. 19/2004 was adjourned sine-die till the objections filed by the respondent/judgment debtor in the District Court at Tiruchirapalli were disposed of. The learned Additional District Judge, however, give liberty to the parties to revive the application (Ex. No. 19/2004).
Applicability of Section 42 of the Arbitration and Conciliation Act, 1996 to a foreign Award.
Section 42 of the said Act reads as under:-
Jurisdiction.- Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a court, that court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that court and in no other court.
A plain reading of the provision makes it clear that it has reference to an application under 'this part'. Section 42 falls in Part I of the said Act. Therefore, the expression 'any application under this Part' appearing in Section 42 has reference to an application filed under Part I of the said Act. In other words, by virtue of Section 42, it is made clear that once an application has been filed under Part I of the said Act in a particular Court, that Court alone would have jurisdiction over the arbitral proceedings and all subsequent applications arising out of the arbitration agreement and the arbitral proceedings would have to be made in that Court and in no other Court. The application which has supposedly been filed by the defendant/judgment debtor in the District Court at Tiruchirapalli has been filed under Section 34 of the said Act for setting aside the foreign award. The question that arises is whether a foreign award can at all be challenged under Section 34 of the said Act. It is clear that part II is different from part Part I of the Act. Part I relates to arbitration in general and to domestic awards. Part II pertains to 'enforcement of certain foreign awards'. Chapter I thereof pertains to the New York Convention Awards and Chapter II pertains to the Geneva Convention Awards. In this case we are concerned with Chapter I of Part II of the said Act. Clearly, Section 42 falls in Part I and so does Section 34. But in the case of a foreign award as defined in Section 44 of the said Act, there is no provision for moving an application for setting aside a foreign award. On the contrary, Section 48 provides for conditions for enforcement of foreign award. The scheme, therefore, appears to be that while a domestic award made under Part I (see Section 2(7) of the said Act) may be set aside pursuant to an application under Section 34, there is no provision for such an application in respect of a foreign award falling under Part II of the said Act. A party objecting to the enforceability of a foreign award may do so only when an application for enforcing the same is moved by the other party. At that stage, the enforcement of the foreign award may be refused by the Court at the request of the party against whom it is invoked on the conditions set out in Section 48 of the said Act. It may be seen that some of the grounds available such as the enforcement of the award being contrary to the public policy of India are also available under Section 34 of the said Act insofar as the domestic award is concerned. In fact, Section 42(2)(a) and 42(b) are somewhat similar to the provisions of Section 34(2)(b)(i) and 34(ii) of the said Act. To make it clear, the said provisions are set out hereinbelow:-
48(2) Enforcement of an arbitral award may also be refused if the Court finds that -
(a) the subject-matter of the difference is not capable of settlement by arbitration under the law of India; or
(b) the enforcement of the award would be contrary to the public policy of India.
Explanation- Without prejudice to the generality of clause (b) in this section, it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption."
"34. Application for setting aside arbitral award. -
(1) x x x x (2) An arbitral award may be set aside by the court only if -
(a) x x x x
(b) the court finds that -
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or (ii) the arbitral award is in conflict with the public policy of India.
It may be further noted that Chapter 7 of Part I bears the heading 'recourse against arbitral award.' There is no such chapter in Part II. It is also intresting to note that Chapter 7 of Part I relates to finality and enforcement of arbitral awards and Part II in its entirety relates to 'enforcement of certain foreign awards'. Section 36 falling in Chapter VIII of part I deals with enforcement and prescribes that where the time for making the application to set aside the arbitral award under Section 34 has expired, or such application having been made, it has been refused, the award shall be enforceable under the Code of Civil Procedure, 1908 in the same manner as if it were a decree of the court. It, therefore, becomes clear that prior to enforcement of an arbitral award under Part I, it has to be seen as to whether any application under Section 34 has been made or not. If it has not been so made during the period prescribed then the award becomes enforceable as a decree of the Court. If an application has been made and it has been rejected then, also, the award becomes enforceable as if it were a decree of the Court.
7. Insofar as a foreign award is concerned, Section 49 deals with the enforcement of such awards. It provides that where the court is satisfied that the foreign award is enforceable under this Chapter, the award shall be deemed to be a decree of that court. It is relevant to note that while in Section 36, which deals with enforcement of award falling under Part I of the said Act, there is a reference to an application under Section 34, there is no such reference to any application under Section 34 in Section 49 which falls in Part II and pertains to enforcement of a foreign award. It, therefore, becomes clear that an application under Section 34 is not at all contemplated insofar as foreign awards falling under Part II are concerned. A similar view was taken by a learned Single Judge of the Bombay High Court in the case of Jindal Drugs Limited v. Noy Vallesina Engineering SpA and other: 2002 (2) Arb. LR 323 (Bombay). That Court observed as under:
"It appears from the reading of the Act that insofar as the challenge and enforceability is concerned, there are different schemes for a domestic Award and a foreign Award. The Act provides for a direct challenge to a domestic Award (Section 34). A domestic Award is enforceable as a decree passed by a Civil Court, after the period provided for challenging the same is over, and in case it is challenged, after the challenge fails (Section 36). Whereas, insofar as a foreign Award is concerned, it is not enforceable in India unless the Court finds that it is enforceable. For that purpose, the party which seeks its enforcement has to make an application to the Court and has to satisfy the Court about its enforceability (Section 49). It is only after the party satisfies the Court that a foreign Award becomes enforceable as a decree passed by a Civil Court (Section 49). The Act, provides different remedies to persons, against whom domestic Award is made and person against whom foreign Award is made. A person against whom a domestic Award is made, has to immediately approach the Court for challenging the same by making an application under Section 34 of the Act otherwise the person in whose favor the Award has been made can execute the same as a decree. On the other hand, a person against whom a foreign Award has been made, is not required to challenge the same, because it cannot be executed against him in India unless the Court finds that it is enforceable. He can wait till the person in whose favor the foreign Award has been made, makes an application before the Court (Section 47).
It is, therefore, quite clear that an application under Section 34 is not at all contemplated insofar as a foreign award is concerned. That being the case the filing of a Section 34 application by the respondent at Tirichirapalli would be of no consequence. And, for this reason also, the respondent cannot set up the bar of Section 42 as an impediment to this petition.
Does this Court has the pecuniary jurisdiction?
It was argued by the petitioner/decree holder that this Court had pecuniary jurisdiction inasmuch as the award amount was in excess of Rs. 20,00,000/-. What is interesting to note is that this very petitioner/decree holder did not object to the Execution Petition when the matter was before the learned Additional District Judge on the ground that that Court did not have pecuniary jurisdiction. On the contrary, the petitioner argued that the Additional District Judge had the jurisdiction as the award amount was less than Rs. 20,00,000/-. In fact, in paragraph 8 of the reply by the petitioner to the Respondent's Section 42 application before the Additional District Judge, the petitioner averred as under:
That para 8 of the application is wrong and denied. It is wrong and denied that even otherwise this Hon'ble Court does not have the jurisdiction to entertain the present Execution Petition since admittedly the value of the subject matter is in excess of Rs. 20,00,000/- (Rupees twenty lacs only) and as such th4e pecuniary jurisdiction lies only with the Hon'ble High Court.
On the contrary, it was contended by the respondent that the pecuniary jurisdiction was with the High Court and not with the District Court. But, interestingly, the learned ADJ in her order dated 31.5.2005 had settled this issue by saying that the decree holder has filed an execution for an amount of Rs. 19,99,643/- and as such the same is within the pecuniary jurisdiction of this Court. Moreover, no appeal has been preferred against this finding by the petitioner and, therefore, it cannot be said at this stage, that the learned ADJ did not have the pecuniary jurisdiction and that this Court had pecuniary jurisdiction. It is also relevant to note that when the Execution Petition was filed before this Court the petitioner itself had stated that the Arbitration Award amount was for Rs. 16,85,093/- It is precisely for this reason that the execution petition was returned by this Court as the jurisdiction value was less than Rs. 20,00,000/- It is, thereafter that the petition was filed before the District Court. Insofar as this petition is concerned, in my opinion, it is not well founded because on the petitioner's own statement the award amount is less than Rs. 20,00,000/-. Therefore, this Court would not have pecuniary jurisdiction to entertain the present petition.
Whether the present petition is maintainable when an identical Execution Petition is pending before the Additional District Judge, Delhi?
Insofar as this question is concerned, the learned counsel for the petitioner has relied upon a decision of a learned Single Judge of this Court in the case of Cholamandalam Investment & Finance Co. Ltrd. v. CEC Ltd. & Anr: 1996 II AD (Delhi) 517. In that case, an objection has been raised that the simultaneous execution of the decree at Chandigarh and Delhi would be an abuse of the process of Court and therefore, the execution application at Delhi deserved to be dismissed or adjourned sine die unless and until the decree holder withdrew the execution application pending at Chandigarh. It was also contended, with reference to Section 41 of the Code of Civil Procedure, 1908, that so long as a certificate of non-satisfaction has not been issued and sent by one transferee court to the original executing court, a fresh application for execution seeking its transfer to another court would not lie. Repelling these objections, the Court held that no provision of Civil Procedure Code had been brought to its notice which would expressly prohibit simultaneous execution of a decree before two Courts. With reference to Section 39 of the CPC it was observed that the said provision is permissive in nature inasmuch as it provided for execution of a decree either by the Court which passed it or by the Court to which it is sent for execution. The Court held that the law does not prevent simultaneous execution of a decree in more courts than one, although the Court transferring the decree may in its discretion refuse such transfers as it would enable the decree holder to maintain concurrent executions before more courts than one. Ultimately, it concluded that simultaneous transfer of a decree for execution to two courts and 'simultaneous execution proceedings are neither illegal nor without jurisdiction.' Reference was also made to the Supreme Court Judgment in Prem Lata Agarwal v. Lakshman Prasad Gupta and Others: , wherein the Supreme Court held as under:
"Simultaneous execution proceeding in more places than one is possible but the power is used sparingly ion exceptional cases by imposing proper terms so that hardship does not occur to judgment debtors by allowing several attachments to be proceeded with at the same time.'
8. On the strength of these decisions, the counsel for the petitioner submitted that there is no bar to the filing of the present Execution Petition during the pendency of the earlier Execution Petition before the Court of the Additional District Judge. It was also contended, on the strength of a decision of this Court in the case of Motorola Inc. v. Modi Wellvest: , that a foreign award can be executed against a judgment debtor wherever he has assets. In that case it was held that the position of law was well settled as per the judgment of the Supreme Court in Brace Transport Corporation of Monrovia, Bermuda v. Orient Middle East Lines Ltd., Saudi Arabia: (1995) Supp 2 SCC 280 that a party seeking an enforcement of a foreign award would be able to go forum shopping and locate the assets of the losing party for execution of the award. It was held that the enforcement of a foreign award can be done wherever the assets of the losing party are located. Insofar as this decision [(Motorola (supra)] is concerned, there is no difficulty whatsoever. The same is not applicable at all although, the principles enunciated therein cannot be taken exception to. The present Execution Petition has not been resisted on the ground that the respondent does not have any assets in Delhi. It is being resisted on the ground that there cannot be two Execution Applications within the same territorial jurisdiction of two courts falling in two tiers of hierarchy. It is on this ground that the decision in the case of Cholamandalam (supra) is also been clearly distinguishable. There, it was held that more than one Execution Petition was permissible where properties fell in different areas. That decision would have no applicability to the facts of the present case inasmuch as the territory over which the District Court has jurisdiction is also the territory over which this Court has jurisdiction. Therefore, it is not a case where assets and properties of a judgment debtor were located in different areas over which different courts had territorial jurisdiction. Clearly, the two decisions relied upon by the learned counsel for the petitioner would not be applicable to the facts of the present case. There is no difficulty in my coming to the conclusion that a second execution application filed in this Court when the first application is pending before the District Court falling within the territorial jurisdiction of this Court would not lie.
9. Thus, although I have found the objections raised by the respondent in respect of the Section 42 argument to be untenable, this petition has to be dismissed because of my view that this Court does not have pecuniary jurisdiction to entertain this petition and, secondly, that the present petition being a second Execution Application would not be maintainable. The Execution Petition is, accordingly, dismissed. No order as to costs.