TMI Blog2017 (2) TMI 1278X X X X Extracts X X X X X X X X Extracts X X X X ..... cisions, some of which have been referred to above. The contention stating that there was no opportunity to cross examine and other related matters are all touching upon the merits of the award and in this petition under Section 47 of the Act, seeking enforcement of the award, all that is required to be seen is as to whether the award is (a) contrary to the fundamental policy of India. The respondent has not been able to substantiate such a plea while resisting the petition under Section 47 of the Act; (b) contrary to the interests of India. No arguments were advanced on this aspect; (c) contrary to justice or morality. The plea of violation of the principles of natural justice, the lack of opportunity, etc., are sought to be read into this aspect by stating that the fundamental policy of India as well as the public policy of India having not been defined, one of the pre-requisites is to have a judicial approach. When such judicial approach is lacking in a quasi judicial decision, the same can be interfered with. This Court would, once again, point out that the present proceeding is not a proceeding to set aside the award under Section 34 of the Act. The respondent cannot see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner submitted a request for arbitration dated 14.5.2013 to the ICC claiming 5,682,2014.21 representing the price of delivery and four other related claims. 4. Though the petitioner, in their request for arbitration dated 14.5.2013 and in its First Memorial, claimed that the APL, the CIAL and the Shriram were jointly and severally liable, in its Second Memorial, they stated that the Shriram is solely liable for the amounts claimed as hereunder: (i) 1,928,729.06 towards the outstanding payment for delivery four; (ii) 1,455,800.00 towards storage fees owing in relation to delays to delivery one, two, three and four as calculated upto April 4, 2014, which amount continues to accrue at 12,000 per week in relation to delivery four, which remains in storage; (iii) 235,950.00 towards the full value of racks for the initial upfront delivery of 1,330 mirrors and deliveries one, two and three, which have never been returned; (iv) 108,033.00 towards damages for the additional time the racks were occupied in Spain which amount continues to accrue at 3,328.00 per month in relation to delivery four which remains in storage; and (v) 97,053.00 towards l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the impugned foreign award is unstamped and unregistered and requires to be stamped compulsorily under the provisions of the Indian Stamp Act and hence, its recognition and enforcement would be contrary to the fundamental law and the public policy of India and that the Arbitral Tribunal proceeded to alter the terms of the reference during the course of arbitration i.e. to say that the petitioner proceeded to seek reference to arbitration against the APL and the CIAL as well with claims made jointly against all the respondents therein holding them jointly and severally liable. However, in the Second Memorial, which was taken note of by the Tribunal, the claim was restricted to the Shriram alone. Thus, the Tribunal allowed the petitioner to erode and alter the very basis of the reference to arbitration to the disadvantage of the respondent. There has been violation of the principles of natural justice, as the Shriram was not given an opportunity to present its case on several issues. 10. In the counter affidavit, it has been further stated that the award is further vitiated by non-joinder of necessary parties namely, the APL and the CIAL especially when the petitioner, in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Shri Lal Mahal Ltd., and the decision of the Bombay High Court in the case of Louis Dreyfus Commodities Suisse S.A. Vs. Sakuma Exports Limited [reported in MANU/MH/2613/2015]. 16. Mr. Vishnu Mohan, learned counsel appearing for the respondent/Shriram submitted that various important grounds for opposing the enforcement of the award have been raised in defence and pointed out that as held by the Hon'ble Supreme Court in Shri Lal Mahal Ltd., under Section 48(2)(b) of the Act, the enforcement of a foreign award can be refused only if such enforcement is found to be contrary to (i) fundamental policy of Indian Law; or (ii) interest of India; or (iii) justice or morality. 17. The Hon'ble Supreme Court in a subsequent decision in the case of ONGC Vs. Western Geco International Ltd. [reported in 2014 (9) SCC 263] pointed out that the public policy of India fell for interpretation before this Court in the case of ONGC Ltd. Vs. Saw Pipes Ltd. [reported in 2003 (5) SCC 705] and after a comprehensive review of the case law on the subject, it has been held as follows: In addition to narrower meaning given to the term 'public policy' in Renusagar Po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough executed outside India, it has to be stamped when it comes into India and enforcement is sought for. The award, as mentioned in Entry 12 of Schedule 1 of the Indian Stamp Act, will include the foreign award and in this regard a reference was made to the decision in the case of SMS Tea Estates (P) Ltd. 22. While distinguishing the decision of the Delhi High Court in the case of Naval Gent Maritime Ltd., it has been pointed out that it deals with only the registration of the foreign award, but not pertaining to stamping. 23. The learned counsel for the respondent next proceeded to deal with the factual aspects and made elaborate submissions on the issue that when the petitioner submitted themselves for arbitration, in the First Memorial, the respondent has been made jointly and severally liable along with others namely APL and CIAL. But, in the Second Memorial, the respondent alone has been made solely liable and an award has been passed against the respondent alone, which is illegal. 24. In this regard, the learned counsel for the respondent referred to various paragraphs and the findings rendered by the Arbitral Tribunal. It has been further submitted that there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h were considered by the Hon'ble Supreme Court, are in the cases of (i) Renusagar Power Co. Ltd. Vs. General Electric Co. [reported in 1994 Supp. (1) SCC 644]; (ii) Saw Pipes Ltd.; and (iii) Phulchand Exports Ltd. Vs. O.O.O. Patriot [reported in 2011 (10) SCC 300]. 29. In Renusagar Power Co. Ltd., one of the questions framed for determination is 'what is meant by public policy in Section 7(1)(b)(ii) of the Foreign Awards Act'. While explaining the expression 'public policy', it was held as follows: This would imply that the defence of public policy which is permissible under Section 7(1)(b)(ii) should be construed narrowly. In this context, it would also be of relevance to mention that under Article I(e) of the Geneva Convention Act of 1927, it is permissible to raise objection to the enforcement of arbitral award on the ground that the recognition or enforcement of the award is contrary to the public policy or to the principles of the law of the country in which it is sought to be relied upon. To the same effect is the provision in Section 7(1) of the Protocol Convention Act of 1937 which requires that the enforcement of the foreign award must not be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... patent illegality, the Court clarified that illegality must go to the root of the matter and if the illegality is of trivial nature it cannot be held that the award is against public policy. Award could also be set aside if it was so unfair and unreasonable that it shocks the conscience of the court. 31. Thus, after referring to the above decisions, it was pointed out that while accepting the narrower meaning given to the expression 'public policy' in Renusagar Power Co. Ltd. in the matter of enforcement of foreign awards, there was a departure from the said meaning for the purposes of jurisdiction of the court in setting aside the award under Section 34. It was further pointed out that what has been stated by the Court in Renusagar Power Co. Ltd. with regard to the Foreign Awards Act, must apply equally to the ambit and scope of Section 48(2)(b). Thus, following the decision in Renusagar Power Co. Ltd., it was held that for the purposes of Section 48(2)(b), the expression 'public policy of India' must be given a narrower meaning and the enforcement of a foreign award would be refused on the ground that it is contrary to public policy of India, if it is covered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Moreover, Section 48 of the 1996 Act does not given an opportunity to have a 'second look' at the foreign award in the award enforcement stage. The scope of inquiry under Section 48 does not permit review of the foreign award on merits. Procedural defects (like taking into consideration inadmissible evidence or ignoring/rejecting the evidence which may be of binding nature) in the course of foreign arbitration do not lead necessarily to excuse an award from enforcement on the ground of public policy. While considering the enforceability of foreign awards, the Court does not exercise appellate jurisdiction over the foreign award nor does it enquire as to whether, while rendering foreign award, some error has been committed. Under Section 48(2)(b), the enforcement of a foreign award can be refused only if such enforcement is found to be contrary to : (1) fundamental policy of Indian Law; or (2) the interests of India; or (3) justice or morality. The objections raised by the appellant do not fall in any of these categories and, therefore, the foreign awards cannot be held to be contrary to public policy of India as contemplated under Section 48(2)(b). 35. Once we steer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correctness of the same, the Hon'ble Supreme Court framed the question as to whether the arbitration agreement in an unregistered instrument, which is not duly stamped, is valid and enforceable. After taking into consideration Sections 33 and 35 of the Indian Stamp Act, it was pointed out that unless the stamp duty and penalty due in respect of the instrument is paid, the Court cannot act upon the instrument. 39. Firstly, it has to be pointed out that the said decision does not deal with enforcement of foreign award and no objection appears to have been raised by the respondent when the arbitration claim was laid before the Arbitral Tribunal. Therefore, to state that the agreement itself is not enforceable, that too at this stage of the matter, cannot be permitted, as it would be beyond the scope of Section 48 of the Act. 40. In fact, the Hon'ble Supreme Court in the decision in the case of Fuerst Day Lawson Ltd. Vs. Jindal Exports Ltd. [reported in 2001 (6) SCC 356], while considering the position with regard to four Enactments namely 1940 Act, 1937 Act, the Foreign Awards Act and the 1996 Act, it was held that the object of the Act is to minimise the supervisory rol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The judgment debtor did not assail the award under Section 48 raising grounds as given in Section 48 of the Act or produce any evidence in respect of any of the grounds available to the judgment debtor to resist the execution of the award. The issues argued by the judgment debtor were on the basis of intrinsic material available on record. I find no force in any of the issues raised by the judgment debtor. The present award is held executable. The bank guarantee issued by the judgment debtor in favour of the petitioner/decree holder and being renewed from time to time under the directions of the Court is allowed to be encashed by the decree holder. After getting the bank guarantee encashed, if any further amount remains to be paid by the judgment debtor, decree holder would be at liberty to take steps for further execution. 42. In the light of the above decisions, the contentions raised by the respondent that the foreign award is unenforceable on account of non stamping, stands rejected. 43. This leaves us with only one question, which largely revolves around the merits of the case and incidentally seeks to touch upon the various issues to demonstrate that there has been a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
