JUDGMENT The Court : This is an application made by the second defendant, in this suit, for a declaration that an English judgment and decree dated 10.12.96 operates as a res judicata in this suit, and that this suit be dismissed. 2. The judgment and decree was passed by the Hon'ble Mr. Justice Tuckey in the Commercial Court, Queen's Bench Division. 3. Mr. Chakrabarti supports these prayers on the basis of section 11 of the Code of Civil Procedure. He submits that even if this suit is not dismissed, or a declaration as prayed for is not granted, the suit should be permanently stayed. 4. The short material facts are these. Sometime in the middle of 1995, the second defendant and the plaintiff negotiated for sale and purchase of certain specialty articles. The sale was to be of 1,000 metric tonnes, 5% more or less at the seller's option, at a price of 1220 US dollars per metric tonne. 5. A fax message was signed and sent on the 10th of August, 1995 from the second defendant, which the plaintiff signed on the 22nd of that month and thereafter returned it. I shall hereafter call this the first document. The first defendant is the agent of the second of India. 6. On the 22nd of August, 1995 the plaintiff sent another communication containing various terms. This is a fact of very great importance. At the end of this document dated 22nd of August, 1995, which I shall call the second document, the plaintiff 'wrote' that a duplicate copy of the second document is to be returned by the second defendant signed as a token of acceptance. 7. The second defendant received the second document in due time and there is no dispute about it. But it was not signed and returned. 8. Thereafter the sale, if sale there was, fell through although the second defendant nominated a ship and, according to its case, had the goods (of Turkish or Bulgarian origin) stored at Barcelona for shipment to India. The plaintiff did not open the Letter of Credit. 9. The goods in question has a rapidly fluctuating international market. In November, 1995 a notice to complete the sale was sent to the plaintiff and that not been complied with the second defendant treated it as a repudiatory breach of the contract. 10. The plaintiff did not open the Letter of Credit. 9. The goods in question has a rapidly fluctuating international market. In November, 1995 a notice to complete the sale was sent to the plaintiff and that not been complied with the second defendant treated it as a repudiatory breach of the contract. 10. The second defendant filed a suit for damages in England. It claimed the loss of profits arising out of the fallen market storing charges at Bareclona and costs. 11. The plaintiff never submitted to the English jurisdiction. Mr. Flaux, Q.C. appeared for the second defendant in the suit which was heard in the absence of the plaintiff who was the defendant in England. A reasoned and comprehensive judgment has been delivered. A decree for nearly 500,000 US dollars has been passed as well as for costs. 12. The plaintiff filed its suit here claiming three reliefs. First it claimed that the true contract between the parties is contained in the second document and not the first; second that there is an arbitration clause in the second document and it be declared as valid; thirdly that an injunction do issue against the second defendant from prosecuting its English suit. 13. The plaintiff succeeded in obtaining an interlocutory injunction retraining further prosecution of the English suit. But that order was aside in appeal. In a reasoned judgment our Division Bench has opined that the injunction against prosecution of the English suit should not continue; that the continuance of such an injunction would render the English suit liable to be dismissed for non-prosecution; and further that the controversy as to the identity of the contract is to be resolved either in this country or in the foreign country. The Division Bench was in favour of allowing the foreign court to do justice in their jurisdiction. 14. After the removal of the restraint order the ex parte decree was obtained in England. 15. Mr. Chakrabarti submits that the substantial matter in controversy between the two parties is the same in England and in India. If anything the English suit is much more comprehensive. The Indian suit has already failed with regard to the relief regarding restraint with respect to the prosecution of the English suit. The relief for declaration of the validity of an arbitration clause can hardly form the subject matter of a suit. If anything the English suit is much more comprehensive. The Indian suit has already failed with regard to the relief regarding restraint with respect to the prosecution of the English suit. The relief for declaration of the validity of an arbitration clause can hardly form the subject matter of a suit. The mere declaration, even if obtained, that the second document contains the valid contract would be an empty declaration. The English suit on the other hand squarely claimed damages for breach of contract and it did not stop at merely claiming a declaration that the first document contains the binding contract. That matter is over and the English court has pronounced its judgment. Therefore, the Indian suit should not any longer be tried. 16. Mr. Mitter submitted that section 11 is inapplicable to foreign judgments. He said that the section applies only when an Indian court has made a pronouncement and that pronouncement affects another Indian suit. 17. He submitted that the section occurs in Part I of the Code where the jurisdiction of Indian courts is dealt with. He submits that in this Part the word "Court" has been used again and again in a sense which must mean an Indian court. Therefore, in section 11 also it should mean an Indian court. 18. With respect I do not agree with Mr. Mitter. Section 13 refers to foreign judgments and in section 13(a) the word "Court" is clearly used to indicate a foreign court. 19. In the Code the word "Court" is not defined. Therefore, there is no bar to a construction which includes a foreign court within the terms of section 11. 20. Section 13 lays down cases where foreign judgments are not conclusive in India. In case the foreign judgment is not affected by any of the infirmities mentioned in section 13, it becomes as conclusive as to a decided matter as is an Indian decree or judgment. In that event the foreign judgment and decree can as much found a plea of res judicata as can an Indian pronouncement. This section is a part of the codified private International Law of India. 21. Mr. Mitter next submitted that an application will not lie under section 11 of the Code. Indeed in my limited experience I have not seen such an interlocutory application based on section 11. Applications for stay under section 10 are most common. This section is a part of the codified private International Law of India. 21. Mr. Mitter next submitted that an application will not lie under section 11 of the Code. Indeed in my limited experience I have not seen such an interlocutory application based on section 11. Applications for stay under section 10 are most common. But this is the first time that I come across an application under section 11. 22. However, I see no reason why an application under section 11 should not lie. The section prohibits a court from trying a suit or issue under certain circumstances. Therefore, it is not improper that the applicability of the section is decided before the trial itself commences. A determination prior to commencement of trial can only be made by way of an interlocutory application and that is exactly what is before me. 23. Mr. Mitter was also at pains to submit that the matter in the Indian suit and in the English suit are substantially different. I do not see eye to eye to Mr. Mitter in this regard either. 24. To my mind the matters are nearly if not wholly identical, or as Mr. Chakrabarti rightly submitted, the English suit is more comprehensive. 25. It was then submitted by Mr. Mitter that instead of making an application of the present nature, the second defendant should forthwith take out an application for execution under section 44A of the Code. That section permits execution of decrees obtained in reciprocating territories. England is a reciprocating territory. It was said that if the second defendant is confident of its English decree it should not make an interim application of the present nature, but go straight to the executing court. 26. In my opinion, the possibility of making of an application under or in accordance with section 44A, is not inconsistent with the making of an application under section 11 also. It would be possible to make both applications together or one after the other. Thus the mere possibility of applying under the execution section later on cannot bar application made under section II. 27. I asked Mr. Chakrabarti about the course of either allowing this application to stand to trial with the suit or to allow his client to apply directly in accordance with section 44A without deciding the real controversy in this application. Thus the mere possibility of applying under the execution section later on cannot bar application made under section II. 27. I asked Mr. Chakrabarti about the course of either allowing this application to stand to trial with the suit or to allow his client to apply directly in accordance with section 44A without deciding the real controversy in this application. But a decision on the real controversy was invited and therefore that has to be given. The real controversy is whether the English decree is a conclusive foreign judgment within the meaning of section 13 of the Code. 28. Sub-section (a) of that section states that a foreign judgment shall not be conclusive where it has not been pronounced by a Court of competent jurisdiction. 29. Mr. Mitter submitted that the English Court pronouncing the decree did not have jurisdiction to pronounce it. 30. The plaintiff, which is the defendant in England, is out and out an Indian Company. It has never submitted to the jurisdiction of the English Court. 31. The English Court assumed jurisdiction on the basis of the first document. If the first document is the contract, then it incorporates the Phibro General Terms and Conditions. 32. Under those terms – (i) each party expressly submits to the jurisdiction of the High Court of London without recourse to arbitration and (ii) the contract shall be governed by English Law. 33. Under the Rules of the Supreme Court (which expression is used in England compendiously to describe the Court of Appeal and the High Court), leave can be obtained under Order 11, Rule 1 for service of writ out of jurisdiction. 34. When such a leave is granted and upheld, the English Court assumes jurisdiction over a foreign defendant. Such leave can be obtained under several conditions. Here sub-rule 1(d) was invoked. Under that sub-rule leave can be had to serve upon a foreign defendant if the suit is for recovery of damages and the contract is governed by English Law, or the contract contains a term to the effect that the High Court shall have jurisdiction to hear an action on the contract. 35. Such leave to serve outside was obtained even before the judgment was delivered by Tuckey, J. but his Lordship re-examined the matter of jurisdiction and heard the submissions of the learned Q.C. in this regard. 36. 35. Such leave to serve outside was obtained even before the judgment was delivered by Tuckey, J. but his Lordship re-examined the matter of jurisdiction and heard the submissions of the learned Q.C. in this regard. 36. As soon as this conclusion is reached, that the first document is the contract, service outside jurisdiction under Order 11, Rule 1 become eminently maintainable. His Lordship did maintain such grant of leave and then proceeded to decide the suit on the basis of affidavit evidence. Such affidavit evidence is used in England in ex parte suits. We do almost the same thing in appropriate, circumstances under Order 8, Rule 5 of the Code by accepting the statements in the plaint. 37. Mr. Mitter submits that if the second document is the contract, or at least is also part of the contract, then the two important terms regarding governance by English Law and submission to English jurisdiction would both be seriously affected. 38. This is because the second document contains exactly opposite terms. That second document provides for arbitration and declares Indian Law as. the ruling Law of the contract. If the second document is non est, in the eye of law, then the assumption of jurisdiction by the English Court is an unchallengeable matter. If the second document and the first are to be read together then and in that event the very root of assumption of jurisdiction by the English High Court is seriously threatened. 39. I quite agree with Mr. Chakrabarti that it is possible to incorporate general terms and conditions of a standard variety by mere reference. In many cases such a reference has the same effect as the setting out of the terms themselves in the signed and written contract itself. 40. In the case of Abu Road, 81 CWN 1101 certain standing terms were extracted on the reverse of all quotations and contracts. In the case of Alimenta S.A., AIR 1987 SC 643 certain terms and conditions described as FOFSA- 20 were incorporated by use of the phrase, that the other terms and conditions would be as per FOFSA- 20 Contract Terms. Those terms contained an arbitration clause. The arbitration clause was effectively incorporated. 41. There is no difficulty, therefore, about incorporation of the Phibro General Terms by mere reference, so far as the legality of it is concerned. Those terms contained an arbitration clause. The arbitration clause was effectively incorporated. 41. There is no difficulty, therefore, about incorporation of the Phibro General Terms by mere reference, so far as the legality of it is concerned. But the Phibro General Terms were not sent with the fax message. The plaintiff in India pleads its ignorance of such terms. The full terms are now annexed to the affidavit-in-reply. Mr. Chakrabarti submits that if the plaintiff did not know the terms it should not have signed the contract. Having put its signature it is bound by the terms and the second defendant is entitled to assume so and' proceed on that basis. There is a lot of substance in Mr. Chakrabarti's submission. 42. Mr. Mitter next submitted that a foreign judgment must, if it is to be binding, be pronounced by a foreign court which is competent not only according to the municipal laws of the foreign country but also according to the rules of private International law of the country where the Court is asked to accept the binding nature of the foreign judgment. 43. If the foreign judgment has violated certain principles of private international law applied by the Court where the binding nature of the foreign judgment is sought to be established, here our Indian court, it might refuse the enforcement of the foreign judgment and also deny it a binding or conclusive value. If, for example, a foreign judgment pronounces a decree in a suit which is really a suit for land situated in India the decree will be invalid by reason of the rules of Indian private international law. The Indian courts will not enforce such a judgment. If, again, a defendant is domiciled in a foreign land, has not agreed by contract or otherwise to submit to the jurisdiction of the court pronouncing the judgment, then also a rule of Indian private international law forbids the pronouncement of a judgment for damages and the assumption of jurisdiction over the foreigner. 44. Gurdayal's case is an authority for the second of these instances (21 Indian Appeals 171). The case was and is good law and is noticed even in the current edition of Dicey & Morris. The private international law in India and England is the same in this regard. 45. 44. Gurdayal's case is an authority for the second of these instances (21 Indian Appeals 171). The case was and is good law and is noticed even in the current edition of Dicey & Morris. The private international law in India and England is the same in this regard. 45. The case of Viswanathan ( AIR 1963 SC 1 ) also contains dicta at several places to the effect that, to be binding, a foreign judgment has to be recognizable in accordance with private international law. Dicta are found to the same effect; in the case of Sankaral Govindan reported at AIR 1974 SC 1764 . 46. I do not see, however, any manner in which the decree passed by the English Court can be said to be invalid, in the international sense, provided its conclusion regarding incorporation of the Phibro terms is unimpeachable. If the terms are incorporated, then the parties have consciously submitted to the English jurisdiction, and have also accepted English law as the governing law. In those circumstances, assumption of jurisdiction by the English Court is perfectly in accordance with the private international law of India (and England too, though that is not so relevant). 47. However, even if the English court has opined that according to the English municipal law the English court has jurisdiction to hear and pronounce upon the suit, the matter has to be examined again by an Indian court if the question of conclusiveness of the foreign judgment arises in India. 48. Under section 13(a) of the Code it is the Indian court which must enter a finding that the foreign judgment has not been pronounced by a court of incompetent jurisdiction. Therefore, a plaintiff proceeding against an Indian party in a foreign land, has to satisfy twice regarding the jurisdiction of the foreign court; once in the foreign land, when obtaining the foreign decree, and once again in India, when enforcing the foreign decree, on the basis of its conclusive nature, in that it is in accordance with the Indian private international law. True it is, that under section 14 of the Code, a presumption of the foreign Court's competence and jurisdiction arises. But the presumption can be displaced, as is attempted to be done here. Such displacement might take place in one or two ways at least. 49. True it is, that under section 14 of the Code, a presumption of the foreign Court's competence and jurisdiction arises. But the presumption can be displaced, as is attempted to be done here. Such displacement might take place in one or two ways at least. 49. First, it might be shown in India, before the Indian Court, that the foreign court lacked jurisdiction even on the basis of the municipal law of that foreign land. Secondly, it might be shown that the foreign Court, although competent to exercise jurisdiction on the footing of the foreign municipal law, yet according to Indian private international law. such exercise of jurisdiction by the foreign Court is not recognized as conferring upon the foreign decree a conclusive value in India. Such bar to conclusiveness by reason of the prohibition contained in Indian private international law might arise in various ways. Section 13 lists some cases of prohibition. Two prohibitions regarding decrees on foreign lands and damages against a foreigner are mentioned above. Another instance of the prohibition might arise if natural justice is not obeyed; see the case of improper service by affixation in the Trinidad and Tobago case, noticed at paragraph 41 of the case of Sankarlal Govindan mentioned above. 50. If the plaintiff to satisfy in the foreign court as to its jurisdiction, it will not pass the foreign decree. If thereafter the plaintiff fails to satisfy (subject to section 14) at the second stage in India, having obtained the foreign decree, that the foreign court's decree is good as to jurisdiction both as regards the municipal law of the foreign land (including perhaps, although the question does not arise here, the private international law of that foreign land which is part of the municipal law there) and as regards the principles of Indian private international law, if the plaintiff fails in either of the two cases, the plaintiff cannot use the foreign decree in India as a conclusive pronouncement. 51. Mr. Mitter relied on the Nevada Divorce case reported at AIR 1975 SC 105 . He placed amongst others paragraph 25 of the judgment. The following passage is found there:- "...... A foreign divorce may be collaterally attacked for lack of jurisdiction, even though jurisdictional facts are recited in the judgment. Such recitals are not conclusive and may be contradicted by satisfactory proof. Domicil is a jurisdictional fact. He placed amongst others paragraph 25 of the judgment. The following passage is found there:- "...... A foreign divorce may be collaterally attacked for lack of jurisdiction, even though jurisdictional facts are recited in the judgment. Such recitals are not conclusive and may be contradicted by satisfactory proof. Domicil is a jurisdictional fact. Therefore, a foreign divorce decree may be attacked, and its invalidity shown, by proof that the plaintiff did not have, or that neither party had, a domicil or bona fide residence in the State ......” 52. In similar fashion Mr. Mitter would show before me that the clauses of submission to English Courts and acceptance of English law were not agreed upon. If those were not agreed upon the English Court would lose Jurisdiction both from the (English) national sense and from the (Indian) private international sense. It would lose jurisdiction even by reason of English law because Order 11, sub-rule (1) would be inapplicable to the contract. The English Court would also 'lose' jurisdiction in the private international sense, according to Indian private international law, because it would be passing a decree for damages against a foreigner who has not submitted or agreed to submit to the English Court and therefore, which, according to Lord Selborme's judgment in the case of Gurdayal, cited above, be an absolute nullity. 53. We have to examine, therefore, the question of jurisdiction afresh. If the first document is the contract and the second document is a legal irrelevancy, the English Court was a Court of competent jurisdiction from both points of view. Otherwise, the consequence might well be the opposite, again from both points of view. 54. In pronouncing the Judgment Tuckey, J. noted that Mr. Mladenov of the second defendant had no recollection of seeing or having his attention drawn to the second document. Then his Lordship accepted the submission of Mr. Flaux that the second document was a post contract attempt to vary the terms by which the plaintiff in India was already bound. His Lordship concluded that the second defendant did no accept the terms set out in the second document and so those terms are not to the point and do not apply to this contract. 55. With the greatest of respect I am in complete disagreement. His Lordship concluded that the second defendant did no accept the terms set out in the second document and so those terms are not to the point and do not apply to this contract. 55. With the greatest of respect I am in complete disagreement. The signature on the first document was put on the same day and the second document was brought contemporaneously into existence and transmitted. That Mr. Mladenov did not pay any attention to the second document was no fault of the plaintiff. Placing 100% importance on the signature put on the first document and 0% importance on the second document transmitted for signature by the second decendant was an error. 56. It was an error on substance and also an error of jurisdiction because it failed to pay any regard to a material document, which was the second document. The issue of jurisdiction was decided upon by rejection of this second document which in my respectful opinion was both material and important. In my opinion, the first document and the second document should be read together. Although the signature on the first document was on a sheet different from the sheets of the second document, yet the contemporaneous nature of the two club them together. A contract is not brought about by the attention or inattention of only one party. A contract is that upon which two minds, at least, have been ad idem. It appears to me to be clear and beyond dispute that the contract between the parties was that which could be gathered from the first and the second document read together and if there were conflict between the two documents, those conflicting terms would destroy one another. 57. In the instant case, the terms of submission, contained in the first document, and that of submission of arbitration contained in the second document destroy each other. The provision of governance of English Law mentioned in the first document and the provision of governance by Indian Law mentioned in the second document also destroy each other. The parties, however, had agreed upon something; they had fixed upon the price; they had fixed upon the quantity and the mode of payment by letter of credit; the goods were sufficiently well described, they were ad idem on these. The parties, however, had agreed upon something; they had fixed upon the price; they had fixed upon the quantity and the mode of payment by letter of credit; the goods were sufficiently well described, they were ad idem on these. But they were not ad idem either on the question of submission to the jurisdiction of the English Courts or on the question of governance of the contract by English Law. 58. On the basis of this conclusion the invariable consequence is that the English Judgment and decree must be pronounced as not conclusive and not binding and as offending section 13(a) of the Code of Civil Procedure. However, that declaration is not asked for by any party here and I do not grant that declaration here. But a section 11 application cannot succeed when the founding foreign Judgment is itself not conclusive or binding. 59. Accordingly, this application must and is hereby dismissed. All interim orders passed in this application will stand vacated with immediate effect. 60. There will be no order as to costs. 61. Stay of operation of this order is prayed for by Mr. Gupta but it is refused. 62. Parties and all others concerned are to act on a signed xerox copy of this dictated order on the usual undertakings. Application dismissed.