V/O Tractoroexport vs Tarapore and Co. and Another

M. Anantanarayanan, C.J.—Civil Suit No. 118 of 1967 is a suit instituted by Messrs. Tarapore & Co., (Plaintiff) against Messrs. V/o

Tractoro-export first Defendant, relating to a contract between the parties for supply of items of machinery by the first Defendant to the Plaintiff for

a very large sum. In this pending suit, the first Defendant-firm filed an application (2604 of 1967) u/s 3 of the Foreign Awards (Recognition and

Enforcement) Act, XLV of 1961, for an order that all the proceedings in Civil Suit No. 118 of 1967 should be stayed, on the ground that in terms

of the contract, dated 2nd February 1965, the parties had expressly agreed that all disputes arising out of the contract should be settled only by

arbitration by the Foreign Trade Arbitration Commission at the U.S.S.R. Chamber of Commerce at Moscow. The Plaintiff resisted this

application, and RAMAMURTI J,, in an elaborate judgment covering about 147 typed pages, had held that the application is not maintainable,

and that the suit should proceed. At the outset itself, we may make it clear that, if we agree with the view taken by the learned Judge concerning

the interpretation of Section 3 of Act XLV of 1961, there may be no need to proceed into, certain other controverter issues, upon which also, the

learned Judge was inclined in favour of the Plaintiff-firm. Mr. V.P. Raman for the Plaintiff-firm (here Respondent) desires to make it clear to us that

those grounds upon which also the judgment of the learned judge could be defended, are, by no means, relinquished by him. For instance,"" the

learned Judge, has held on the argument that the arbitral clause itself in the contract ceased to be effective as between the parties, as a result of the

agreement, dated the 14th August 1966 (exhibit P.32) that.

it will be wholly unrealistic, and totally divorced from compelling context of the situation, to hold that the moment an amicable settlement, as

provided in exhibit P-32, proved futile, the entire contract, exhibit P-4 revived....

The learned judge further appears to think that, the very fact that there is dispute between the parties about this aspect, coupled with the vital

circumstance that this aspect cannot be decided by the arbitrators, is sufficient to hold that the matter cannot be referred to arbitration. How can

the arbitrators decide this question which would either confer or deprive them of the jurisdiction?

On the further. aspect that, admittedly, Section 3 itself contains an exception that the mandatory obligation to stay is not incumbent on the Court, if

the Court is satisfied that the agreement is null and void, inoperative or incapable of being performed...the learned Judge at least appears to be of

the view that the alleged nullity of the contract, on the basis of mutual mistake, is a matter that the Court has to assess further, by recording

evidence, and that the Court alone could do so, in other words, that is also a ground on which the proceedings cannot be stayed u/s 3.

We are delimiting ourselves, in this judgment to the question whether the arguments of Mr. Kuma-ramangalam appearing for the Appellant-firm

(M/S V/0 Tractoroexport) can be accepted, that Section 3 constrains the Court to stay the proceedings. If we are in agreement with the learned

Judge (Ramamurti J.) on the interpretation of Section 3, no further question really arises for our determination, within the ambit of the present

proceedings. We may here add that, in this event, the suit will obviously, have to proceed to trial, and we learn that very important amendment

petitions are pending, which will include, if allowed, within the ambit of the suit, not merely the relief of a permanent junction originally sought, but

also a claim by the Plaintiff-firm for damages for breach of warranty of the contract. At the moment, we are not at all concerned with these further

developments.

Before proceeding to the crux of the matter, a word may be necessary about the maintainability of these appeals. Though the learned Judge has

given a very elaborate judgment, discussing several points of law and several of the precedents cited at the Bar, the fact remains that this is an

order dismissing, Application No. 2604 of 1967, but not otherwise disposing of Civil Suit No. 118 of 1967, which is pending. The argument could

be raised that such an order is not appealable, under clause 15 of the Letters Patent. But this point has to be decided in favour of the Appellant-

firm, and, indeed, it was not seriously in dispute before us. The issue has been determined in the catena of cases, stemming from the decision of Sir

Arnold White C.J. in Tuljaram Row v. Alagappa Chettiar (1910) ILR Mad. 1 (F.B.) and through a, catena of cases of this Court up to the recent

Full Bench decision in Palaniappa v. Krishnamurthy ILR (1967) Mad. 227 (F.B.). The test with reference to Clause 15, is not merely whether the

actual order determines, the rights of parties in any final sense, or puts an end to the lis but whether a conceivable order in the proceeding, could

have done so. It is obvious that Application No. 2604 of 1967 had been allowed by the learned Judge (Ramamurti J.) on the merits that would

have put an end to the suit u/s 3 of Act XLV of 1961, and made a final determination of rights, in respect of the process of litigation. There can be

no doubt, therefore, that the judgment is within the ambit of Clause 15 of the Letters Patent.

We might immediately proceed to a discussion of the only relevent issue, namely, the true interpretation of Section 3 of Act XLV of 1961, and

the impact of this provision on the pending suit.

Section 3 of Act XLV of 1961 is in the following, terms:

Notwithstanding anything contained in the Arbitration Act, 1940, or in the CPC 1908, if any party to a submission made in pursuance of an

agreement to which the Convention set forth in the Schedule applies, or any person claiming through or under him commences any legal

proceedings in any Court against any other party to the submission or any person claiming through or under him in respect of any matter agreed to

be referred, any party to such legal proceedings may, at any time after appearance and before filing a written statement or taking any other steps in

the proceedings, apply to the Court to stay the proceedings and the Court, unless satisfied that the agreement is null and void inoperative or

incapable of being performed or that there is not in fact any dispute between the parties with regard to the matter agreed to be referred, shall make

an order staying the proceedings.

It will at once be noticed that Section 3 refers to the convention set forth in the schedule, which was on the recognition and enforcement of foreign

arbitral awards and which itself, is an international protocal to which this country was signatory effectuated at New York on 10th June 1958; a

successor to earlier Conventions of the same lineage, Article II of this convention, which has three clauses is relevent, and runs as follows:

Each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any difference

which have arisen or which may arise between them in respect of defined legal relationship, whether contractual or not, concerning a subject-

matter capable of settlement by arbitration.

The term ""agreement in writing"" shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an

exchange of letters or telegrams.

The Court of a Contracting State, when seized if an action in a matter in respect of which the parties have made an agreement within the

meaning of this article, shall, at the request of one of the parties refer the parties to arbitration, unless it finds that the said agreement is null and

void, inoperative or incapable of being performed.

We are now in a position to formulate the central propositions of Mr. Kumaramangalam for the Appellant firm. Mr. Kumaramangalam has made

available to us several authoritative treaties on international law, including Lord Mc Nair on the Law of Treaties (1961 edition), the British Year

Book of International Law (1932 edition), International Law and the Practitioner by Sir Francis Vallet, and Oppenheim on International Law,

volume I eighth edition. These authorities emphasise what was elucidated by Lord Diplock in Salomon v. Comrs. of Customs 1966 3 All E.R. 871

that the high contracting powers in respect of a protocol or treaty of this description, will be under an obligation to bring their municipal law in

conformity with the rights recognized by the ""international Convention. Apparently, there are certain countries, such as the U.S.S.R. as evidenced

by the authoritative statement of the law produced before us by Mr. Kumaramangalam, which acknowledge the treaties or protocols themselves,

as ipso facto a part of the corpus of municipal law. There are other countries, which do not do this, but which rely upon municipal law to be

enacted by their Legislatures, in order to effectuate the rights recognized by the protocol; India and the United Kingdom are in this category. There

is an interesting passage in Mc Nair on the Law of Treaties Mc Nair Law of Treaties chapter IV, pages 79-80 1961 edition, quoting Chief Justice

Marshall (Foster and Neilson) to the effect that, in the United States.

Our Constitution declares a treaty to be the law of the land. It is, consequently, to be regarded in Courts of justice as equivalent to an act of the

legislature whenever it operates of itself, without the aid of any legislative provision. But when the terms of the stipulation import a contract...the

legislature must execute the contract before it can become a rule for the Court.

Not merely is there this doctrine in international law, but there is also a general doctrine that the State does not legislate, infringement of an

obligation binding on it under international law, or in violation of international law. See Maxwell on The Interpretation of Statutes eleventh edition,

pages 142 and 143. Also see Lord Mc Nair on the Law of Treaties, 1961 edition pages 22 and 23 and 100 and 101. From this Mr.

Kumaramangalam argues, as the next step, that, to the extent practicable, municipal law must be interpreted by Courts in conformity with the

international obligation which the law may seek to effectuate. But the difficulty here is that the principle itself is restricted in its scope; obviously the

Courts cannot interpret municipal law, against the purport and tenor of the enactment, merely because another interpretation would be contrary to

the comity of nations, or to International Conventions. This was very clearly laid down in Ellerman''s cote, namely, Ellerman Lines Limited v.

Murray and Whitestar Line v. Comerford (1931) A.C. 125. As Chakravartti C.J., stated in W. Wood and Son Ltd. Vs. Bengal Corporation, a

leading decision on this very problem of interpretation, the Courts are not concerned with the

ethics of the diplomatic or legislative behaviour of the parties, nor are we at liberty to speculate as to what may or may not have been the reason

for a particular State proceeding in a particular manner. For us, as a Court of law, the sole guide must be the words of the Statute, in which the

Legislature of the country has proposed its intention.

But the point stressed by Mr. Kumaramangalam is, in the words of Lord Diplock in Salomon v. Comrs. of Customs (1966) 3 All E.R. 871, 875

that, while it is true that

if the terms of the legislation are clear and unambigious, they must be given effect to whether or not they carry out Her Majesty''s treaty obligations,

this is not at all the case if the terms of the legislation are not clear, or are reasonably capable of more than one meaning.

If that is the context,

the treaty itself becomes relevant, for there is a prima facie presumption that Parliament does not intend to act in breach of international law,

including therein specific treaty obligations.

Applying this to the immediate issue, the argument is that article II of the Convention, that we have earlier set forth, makes it clear that, under the

Convention, the Court of a contracting State must, when seized of such an action refer the parties to arbitration. Section 8 must be read as in

consonance with this obligation, and any interpretation of that section, which would restrict the obligation, or introduce a refinement not warranted

by the Convention itself, could be justified, only if the plain words necessitate such a reading. Here, the argument of learned Counsel is that the

words

if any party to a submission made in pursuance of an agreement to which the Convention'' set forth in the Schedule applies,

really mean that the submission is the arbitral clause itself, and the agreement is the commercial agreement, which includes or embodies that clause.

In other words, there is no temporal sequence in this expression, and it is not necessary that either party should make a separate submission to

arbitration in the usual sense, before the suit in the municipal Court could be stayed. If there is an arbitral clause, whether this is followed by a

reference to arbitration by the concerned party or not, the very existence of this clause in the commercial agreement would render stay of the suit

mandatory u/s 3. The point is, can this reading of the section be justified, on any of the principles of the interpretation of statues, or on giving effect

to the plain purport and tenor of the words used? Alternatively, can it be stated that these words present an obscurity, an ambiguity that cannot be

resolved, which will justify the Court in invoking the doctiune that municipal law will not be in conflict with an international obligation, and thereby

giving these words the interpretation that Mr. Kumaramangalam seeks.

On this aspect, a reference to legislative history becomes essential. The reason is that both the words or expressions submission and agreement

to arbitration have had a special significance attached to them, because of the peculiar evolution of statute law. The learned Judge (Ramamurti J.)

refers to this aspect in terms of a wider meaning, or a more restricted meaning, but that is really confusing. It is preferable to formulate the

distinction, as that between the statutory or special meaning, and the meaning that such expression have acquired in terms of common usage. We

may commence with the English Act of 1889 (52 and 53 Vict: C.49). Submission was defined in Section 27 of this Act as:

Submission means a written agreement to submit present or future differences to arbitration whether an arbitrator is named therein or not.

This is in contrast to the meaning of submission in such works as the Oxford Dictionary or the Law Lexicon of Ramanatha Iyer, which would imply

a reference to the decision or judgment of a third party, including a reference to arbitration. In the Arbitration Clauses (Protocol) Act of 1924, we

have the words submission made in pursuance of an agreement first used, and submission appears to be employed in the statutory sense. In the

Indian Arbitration Act of 1889, Section 4(6) defines submission in exactly the same terms as Section 27 of the English Act of 1889. In the Indian

Arbitration Act VI of 1937, we have the expression if any party to a submission made in pursuance of an agreement. In the English Arbitration Act

of 1934 (24 and 25 Geo. 5 C. 14) agreement is defined in Section 21(2) as

a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not.

It will thus be seen that this definition of arbitration agreement approximates to the earlier definition of submission and one view of the statute law in

both countries, is that the terms have become almost synonyms. In the Indian Arbitration Act X of 1940, Section 2(a) defines arbitration

agreement in the very same terms as in the English Arbitration Act. In the English Arbitration Act of 1950 Section 4(2) imposes on the Court a

duty to stay the proceedings if a party relies on

a submission to an arbitration made in pursuance of an agreement to which the Protocol applies.

In this Act, Section 32 defines arbitration agreement, in the same terms as that in the English Act of 1934, and in the Indian Act of 1940. Mr.

Kumaramangalam presses the argument, basing his argument largely on two sources (i) the dicta of Scarman J., in Owners of Cargo on Board the

Merak v. The Merak (1965) 2 W.L.R. 250, and (ii) Dicey on Conflict of Laws, eigth edition, pages 1073 to 1076, the passage largely following

Scarman J., that the words in Section 3

a submission made in pursuance of an agreement to which the Convention applies,

imply the very arbitral clause in the agreement, and not any separate submission to arbitration by a party. He claims that this is strengthened by the

statutory significance of the word submission as revealed by the legislative history that we have just reviewed, in distinction to the general or lexicon

sense of that word. Counsel would concede as stressed by Lord PORTER in Theophile v. Solicitor-General (1950) 1 All. E.R. 405 that a

Legislature does not intend to act against the comity of nations, but that the doctrine can be prayed in aid, only where the statute is not plain and

unambiguous. But he states that there is an obscurity in Section 3, as stressed by SCARMAN J., and that, notwithstanding the Indian cases to the

contrary, which we shall presently notice, and the fact that the Legislature of this country enacted Act XLV of 1961 after these cases had been

decided, and presumably, with knowledge of judicial interpretation of this expression embodied in this part of the statute, we must now construe

these words as making stay mandatory, by virtue of the existence of the arbitral clause itself, and though there is no separate submission to

arbitration.

Since this view admittedly depends, to a considerable extent, on the reasoning of SCARMAN J., in the Merak Case (1965) 2 W.L.R. 250,

260, 269 it becomes immediately essential to set forth that reasoning verbatim, and at some length. Before doing that, it is interesting to note that

the first case in England in which the point formed the subject of analysis was not the Merak Case (1965) 2 W.L.R. 250, 260, 269 but the case

before Clauson J., in Radio Publicity (Universal), Ltd. v. Compagnie Luxembourgeoise de Radiodifusion (1936) 2 All E.R. 721 As Scarman J.,

stressed, Clauson J., did not decide the point, but spoke with a Delphic discretion to the effect that that he did not propose to decide the point one

way or the other. The reasoning of Scarman J., and his perspective of approach to the entire question, deserve to be noticed at some length, and

we are hence appending the relevant passage here.

In my opinon, the Sub-section must b e read together with the protocol as it stands translated into the English of the First Schedule to the Act.

Article I of the translated protocol provides for the recognition of the validity of an agreement whether relating to existing or future differences

whereby the parties to a contract agree to submit to arbitration differences arising in connection with that contract, and expressly reserves to

contracting states the right to limit the obligation of recognition to contract which are considered commerical. Article 4 provides that the tribunals of

the contracting states, on being seized of a dispute regarding a contract which includes an arbitration agreement whether referring to present or

future differences, shall refer the dispute to arbitration. Thus the protocol is concerned with two agreements one a contract, commercial in

character or giving rise to a difference relating to matters that are either commercial or otherwise capable of settlement by arbitration, between

parties subject to the jurisdiction of different contracting states; the other, an arbitration agreement whereby the parties to such a contract agree to

submit their differences to arbitration. It is clear from the protocol that the arbitration agreement may itself be included in and simultaneous with the

commercial or business contract between the parties. In my opinion, Section 4(2) of the Act is intended to make the same distinction between the

parties business contract and their arbitration agreement, and no other distinction. It uses the term ""submission to arbitration"" to identify the

protocol''s agreement to submit their differences to arbitration and the term ""agreement to which the protocol applies"" to identify the commercial or

business contract between the parties. Section 4(2), in my opinion, applies to agreements to submit to arbitration made in pursuance of a contract

to which, because of its character and the character of its parties, the protocol applies. The words ""in pursuance of"" merely establish the link that

there must be between the agreement to submit present or future differences to arbitration and the agreement of a commercial business character

between parties of a certain class to which the protocol applies. They have in this context no temporal significance.

I see no reason for having to construe ""submission to arbitration"" as an actual submission of an existing dispute to a particular arbitrator. The Act of

1950 does not say that I must. It makes nonsense of the protocol so to do. The Act of 1924, which first introduced the sub-section, was an Act to

give effect to the protocol and there is respectable, though now antiquated authority, namely r the repealed Section 27 of the Act of 1889, for

giving a wider meaning to ""submission"" if the context so requires. The term ""submission to arbitration"" is not now denned by statute, and must, in

my opinion, be given a meaning appropriate to its context. While, no doubt, it is often convenient to use the term to distinguish an actual reference

of a particular dispute to arbitration from an ""arbitration agreement"" it would be wrong so to do in construing this particular sub-section.

As we earlier noticed, the views of Scarman J. have been approbated in the latest edition of Dicey on Conflict of Laws, pages 1073 to 1075.

But this passage, largely, is founded upon the fact that the dicta of Scarman J., were not even questioned in the Court of Appeal in the Merak

Case (1965) 2 W.L.R.. Per contra, eminent authorities would appear to have doubted whether the plain words of Section 3 did not compel the

interpretation that a separate submission to arbitration in pursuance of the arbitral clause in the agreement, is what the words imply, and not merely

the arbitral clause itself. In Russell on Arbitration, 17th edition (pages 78, 79, 397, 378, 389 and 398) an eminent authority upon whom the

learned Judge (RAMAMURTI J.) has considerably relied, the plain intendment of the words of the statute has been accepted, as involving a

distinct reference in an unambiguous manner.

Pursuant to implies a submission separate from and founded upon an earlier arbitration agreement....Thus Parliament may have enacted not the true

text of the Protocol, but a very limited interpretation....

Russel is not the only authority for such a view. In the Harward Law Review there is an article by a learned author on Treatise on Commercial

Arbitration--A Test of International Private Law Legislation and it has been noticed that the English Act of 1924 does not merely carry out the

Protocol, but substitutes a

submission made in pursuance of an agreement to which the said Protocol applies.

The view here taken is that--

under the Act, there must be an arbitration agreement (sic) submission.

If, however, the rm submission was to be taken in the statutory sense, as merely an agreement to arbitrate this will lead, as Mr. Raman has rightly

stressed, to the absurdity of an arbitral clause made in pursuance of an arbitral clause. This glaring difficulty was noticed by Chakravartti C.J., in

W. Wood and Son Ltd. Vs. Bengal Corporation, The learned Chief Justice said at page 16:

Tin words which I read a little while ago from Section 3 would therefore, read as ""any party to an agreement made in pursuance of an agreement

to which the Protocol set forth in the First Schedule"" applied. An agreement made in pursuance of an agreement is not in itself an impossible notion,

because there may be an agreement to enter into a further agreement, whether it be valid or not, but agreements to which the Protocol set forth in

the First Schedule of the Act applies, are not agreements to enter into agreements, for arbitration, bait the very arbitration agreements themselves.

It is sufficient for us here, while on the Indian cases, to note that they have uniformly interpreted this relevant language of statute to imply that there

must be a separate submission to arbitration, in pursuance of the arbitral clause, before the power of stay could be invoked. These decisions are:

W. Wood and Sons Ltd. Vs. Bengal Corporation and Another, , Bajrang Electric Steel Co. Private Ltd. Vs. Commissioners for the Port of

Calcutta and Others, , W. Wood and Son Ltd. Vs. Bengal Corporation, and Kamani Engineering Corporation Ltd. and Others Vs. Societe De

Traction Et D''Electricite Societe Anonyme and Others, . In the last decision, K.K. Desai J., goes so far as to hold that the submission cannot be

unilateral both parties must join in making it. Mr. Raman, also relies on the following indisputable propositions of law. Firstly, the Courts should be

disinclined to prefer a construction that will oust their own jurisdiction, and words apparently to this effect, found in any statute, must be given a

strict and rigid interpretation. Secretary of State for India v. Mask & Co. ILR (1940) Mad. 599 (P.C.) approbated in these further decisions,

Shiromani Gurdwara Parbandhak Committee and Others Vs. Raja Shiv Rattan Dev Singh and Others, , Akbar Khan Alam Khan and Another Vs.

The Union of India (UOI) and Others, , Magiti Sasamal Vs. Pandab Bissoi, , Firm and Illuri Subbayya Chetty and Sons Vs. The State of Andhra

Pradesh, , Addanki Tiruvenkata Thata Desika Charyulu (Since deceased) and after him his legal representatives Vs. State of Andhra Pradesh and

Another, and The Provincial Government of Madras Vs. J.S. Basappa, . Secondly, the Legislature retained the same language in re-enacting the

same section, after the decision of Chakravartti C.J., and the other cases that we have referred to. This sustains the view that the Legislature

probably approved and accepted the construction of the Courts {Maxwell on The Interpretation of Statutes, 1962 edition, page 303 and cases

cited therein).

In addition to these considerations, Ramamurti J., has relied, in repelling the reasoning of Scarman J., in the Merak case (1965) 2 W.L.R. 250

on two features of the section itself. Firstly, there is a non-obstante clause with which Section 3 begins, and the learned, Judge points out that if the

word submission is to be here taken, not in its general sense, but in its statutory sense, the non-obstante clause would be redundant and

meaningless. It is because the word submission is used, in this particular section, in its ordinary sense of a reference to the judgment of a third

party, or arbitrator, that the non-obstante clause has meaning. Again, the word agreement occurs in two contexts of Section 3, and the theory of

Scarman J., necessarily implies that it means different things in these two contexts. The earlier reference would be to the commercial agreement,

and the later reference in the same section, would be to the arbitral clause. Mr. Raman has cited and relied on passages from Maxwell for the view

that the same word must be given the same meaning in a section of law as far as practicable (Maxwell 1962 edition): pages 311-12.

In our view, there are certain very clear, emphatic and compelling reasons why the interpretation of Scarman J., in the Merak case (1965) 2

W.L.R. 250 cannot be followed by us, and, on the contrary, we should accept the dicta of Chakravartti C.J., in W. Wood and Son Ltd. Vs.

Bengal Corporation, as embodying the true interpretations. The passage from the judgment of Scarman J., we have earlier set forth confirms this in

the sense of revealing a prepossession as the root of the interpretation. The learned Judge was obsessed by the idea that Parliament could never

have enacted the statute, without totally enshrining therein, the international obligation of the Protocol. The learned Judge practically revealed his

mind in the significant sentence:

I see no reason for having to construe submission to arbitration as an actual submission of an existing dispute to a particular arbitrator. It makes

nonsense of the Protocol so to do.

We think that this is a particular fallacy of this process of reasoning. The alleged obscurity, which was also referred to in the Harvard Law

Review article, in the words of Mr. Sutton, as so obscure as to be almost unintelligible arises only because of the pre-possession or obsession.

Clearly, it is not admissible to envisage an obscurity or ambiguity that does not exist, because of a theory that the Legislature could never have

intended to enact a statute that does not totally embody an international obligation. This is, to employ the old metaphor, to put the cart before the

horse. Naturally when the task of interpretation is approached in this perspective, the obscurity arises, and has to be resolved seemingly by

invoking the doctrine of the comity of nations elaborated by Diplock J.

All this is wholly unnecessary, and even unjustified. We are unable to concede that there is any presumption that the Legislature of this country

enacted the Foreign Awards (Recognition and Enforcement) Act, XLV of 1961, under an imminent stress to embody the entire protocol, as it

stood. On the contrary, there might have been very excellant reasons, which induced the Legislature to enshrine the obligation, no doubt, but with

certain refinements. The treatises on international laws that we have been referred to, do not express any doctrine of the time-limit within which

municipal law must be enacted to effectuate a treaty or protocol obligation ; apparently, there is no such time-limit. It can very well be envisaged

that the obligation may be expressed in terms of municipal law, in stages or with certain precautionary safeguards. The Courts of the country must

interpret the municipal law as it is, in plain purport and tenor, and not seek to discover why, precisely, the international obligation was not instantly

embodied in statute, or whether such a policy would be justified according to the comity of nations. That is not the task of the Courts at all. If the

words are approached with this perspective, we are unable to see any difficulty whatever. The words submission made in pursuance of an

agreement can have only one meaning, unless, semantically speaking, the words made in pursuance of are to be destroyed altogether, or rendered

nugatory. There is no justification whatever for the Court to do this. The Court must take the language as it is, and interpret it, in its plain

unambiguous purport. That necessarily implies that there must be a submission to arbitration, apart from the arbitral clause in the agreement, and

we can think of very many sound reasons why the Legislature should have thought this essential or desirable, before the jurisdiction of the municipal

Court came to an end. In our view, therefore, the words are plain and unambiguous, and any other meaning would be quite unjustified, and involve

a violence to construction and even involve an obliteration of some of the words."" With great respect to the dicta of Scarman J., in the Merak case

(1965) 2 W.L.R. 250 we are of the view that the interpretation of the learned Judge (Ramamurti J.) is justified, and that, on the state of the facts of

the record, the learned Judge had every right to decline to stay the case, since the suit had admittedly been filed before any party made any

submission to arbitration. That really disposes of the appeals.

There are certain other authorities, referred to during the extensive arguments, that we may briefly note, before leaving the case. Mr. Raman for

Messrs. Tarapore & Co., relied also on the judgment of Karminski J., in Societe Anonyme Hersent v. United Towing Co., Ltd., (The Tradesman)

(1961) 3 All E.R. 661, on Theophile v. Solicitor-General (1950) 1 All. E.R. 405, already referred to, and some passages in Russell on Arbitration

(17th edition). It is not necessary to cite them at any length here. With regard to the presumption that a Legislature, in re-enacting a section of law,

must be presumed to have been aware of intervening judicial interpretation and to have approbated it, Mr. Kumaramangalam has relied heavily on

the dicta of Lord Denning M.R., in R. v. Bow Road Dom. Proceedings Court (1968) 2 All E.R. 89, 91, 93 the decision related to the fact that R.

v. Blane (1843) All E.R. 397 (Rep.), had not been overruled, but the Master of the Rolls nevertheless stressed that, though it had stood for over

hundred, years, if it was a quite erroneous precedent, the fact that Parliament had re-enacted the provisions of the statute, did not authorize the

erroneous interpretation. See also Royal Derby Porcelain Co. v. Russel (1949) 1 All E.R. 749. But we are unable to see why we should proceed

to this extent, when it appears to us that the Legislature probably never intended to give effect to the protocol in the absolute sense without any

refinement or modification.

In result, therefore, the appeals have to be dismissed, and are accordingly dismissed with costs in Original Side Appeal No. 25 of 1968. It is

not necessary for us to decide here the other points discussed by the learned Judge (Ramamurti J.), with regard to the extent to which the original

contract was superseded by the subsequent agreement, or the conceivable void nature of the contract as vitiated by mutual mistake. In any event

the suit has to proceed further in trial.

Natesan J.

I agree with the judgment of my Lord the Chief Justice just now rendered as to the scope and content of Section 3 of Central Act XLV of

1961.

The question has been examined in great detail by our learned brother Ramamurti J., in the first instance. The connected appeal against the

order of the learned Judge interdicting the Defendant from prosecuting the arbitration proceedings in Moscow has necessarily to fall. The

arbitration proceedings commenced by the Defendant in Moscow and the suit here cannot properly be proceeded with concurrently, as they are

mutually exclusive. If the arbitral clause is a bar to the institution of the present suit, the suit here cannot be proceeded with. But we have repelled

the contention. The Plaintiff''s right to prosecute the suit having been upheld, the Defendant cannot have the same matter arbitrated upon in

Moscow. As pointed out by our learned brother Ramamurti J., this is not a case of choice of forums, but it is a case where one forum should

exclude the other. In such circumstances, the Court may properly in the exercise of discretion restrain the Defendant from pursuing what in its view

are futile proceedings that would only harass the Plaintiff.

No special arguments were addressed before us in the appeal against the order of the learned Judge allowing amendment of the plaint. The

amendment allowed does not change the cause of action. By the amendment certain details are furnished and they are in effect, an elaboration of

the case set forth in the beginning whatever its merits may be. The Plaintiff seeks to make it clear by the amendment that the loss or damage that it

would sustain would exceed the amount payable to the Defendant under the letters of credit. In a way the facte have been disclosed in the

memorandum exhibit P-36 (a). The order in question is a discretionary one and the learned Judge has, in due conformity with the principles that

should govern the exercise of discretion, allowed the amendment. We see no reason to interfere in the matter.

In the result, the appeals fail and they have to be dismissed.