1 / 21

2024:CGHC:43451

AFR

HIGH COURT OF CHHATTISGARH AT BILASPUR

ARBAP No. 10 of 2023

1 Bulk Trading S.A. Having Its Office at Piazza Molino Nuovo 17 Lugano CH-

6900, Switzerland, Through Its Authorized Representative, Mr. Alberto Ravano

S/o. Pietro, Aged About 73 Years, Having Office At Piazza Nolino Nuovo 17,

6900 Lugano, Switzerland

---- Petitioners

versus

Mahendra Sponge And Power Ltd. Having Its Registered Office At A Block, 2nd

Floor, Maruti Business Park, Near Dhuppar Pump, G.E. Road, Raipur,

Chhattisgarh. -492001

---- Respondents

ARBAP No. 9 of 2023

1 - Bulk Trading S.A. Having Its Office At Piazza Molino Nuovo 17 Lugano C H -

6900, Switzerland, Through Its Authorized Representative, Mr. Alberto Ravano

S/o Pietro, Aged About 73 Years, Having Office At Piazza Nolino Nuovo 17, 6900

Lugano, Switzerland.

----Petitioner

Versus

2 / 21

1 - Mahendra Sponge And Power Ltd. Having Its Registered Office At A Block,

2nd Floor, Maruti Business Park, Near Dhuppar Pump, G. E. Road, Raipur,

Chhattisgarh- 492001.

---- Respondent

For Applicant :Ms. Feresthe D. Sethna, Advocate with Harshmander

Rastogi, Mr. Amieya Pant and Mr. Mohit Tiwari,

Advocates

For Respondent :Mr. Aashish Anand Barnad, Advocate with Mr. Ashish

Mittal and Mr. Mehal Jethani, Advocates

SB.: Hon'ble Mr. Justice Deepak Kumar Tiwari

Order On Board

07/11/2024

1.These two Arbitral Applications have been filed under Sections 47,

48 and 49, Chapter 1, Part-II of the Arbitration and Conciliation Act,

1996 read with Order XXI and Section 151 of the CPC for

enforcement of the English Arbitral Award dated 11.8.2021 and

Cost Award dated 27.3.2023.

2.Indisputably, on 6.3.2020, a contract for sale of 50,000 MT +/- 10%

of Coal (Contract) was entered into by and between the parties via

exchange of e-mails, which incorporated the Standard Coal Trading

Agreement Version 8, General Terms and Conditions (ScoTA).

Further, the respondent/judgment debtor was obliged to open a

letter of credit (LC) 10 days before the commencement of the

delivery period i.e. by no later than 31.3.2020. The

respondent/judgment-debtor failed to open the LC by the said

3 / 21

date. Such a failure amounted to an event of default entitling the

award-holder/applicant to terminate the contract. Subsequently,

a dispute was referred and an arbitral award and cost award were

passed in favour of the applicant. The respondent/decree-holder

challenged the aforesaid awards by way of an appeal under the

English Arbitration Award, 1996 and both the awards have attained

finality. The merits award and cost award are published in the

United Kingdom and as such, governed by the Notification dated

25.10.1976 issued by the Ministry of Commerce in exercise of

powers conferred under clause (b) of Section 2 of the Foreign

Awards (Recognition and Enforcement Act, 1961), and the same has

been published in the Gazette of India on 13.11.1976. Since the

property of the respondent/judgment-debtor is located in the

territory of the State of Chhattisgarh, both these applications have

been filed to recognize the said foreign award(s).

3.Mr. Aashish Anand Barnad, learned counsel for the respondent

would submit that enforcement of the said foreign award may be

refused in view of Section 48 of the Arbitration and Conciliation

Act, 1996 (in short “the Act, 1996”) as the said award would be

contrary to the public policy of India. Learned counsel would also

submit that due to outbreak of Covid-19 Pandemic, various

Notifications/Circulars have been issued under Section 10(2)(l) of

the the Disaster Management Act, 2005 (in short “the Act, 2005”),

regarding measures to be taken by the Ministries/Departments of

Government of India to mitigate the extraordinary situation of the

Covid-19 Pandemic. Learned counsel for the respondent would

4 / 21

refer to the letter issued by the Home Secretary and the order

issued by the National Disaster Management Authority, both dated

24.3.2020, in which, guidelines in this regard have been issued. In

Sl. No.4 of the said guidelines, it is directed that commercial and

private establishments should be closed down, however there was

an exception (at Sl.no.4 b.) to Banks, Insurance offices and ATMs.

He would further submit that apart from the said exception, there

was a further stipulation at Sl. No.13, whereby, a direction has been

given that the organisations/employers must ensure necessary

precautions against Covid-19 virus as well as social distance

measures as advised by the Health Department from time to time.

He further referred to Sl. No.17 of the said guidelines, wherein, it

has been mentioned that any person violating these containment

measures will be liable to be proceeded against as per the

provisions of Sections 51 to 60 of the Act, 2005, besides legal

action under Section 188 of the IPC. He would further submit that

in such extraordinary situation, movement of the

respondent/judgment-debtor got restricted during that period and

moreover, obtaining a LC from the Bank was not so necessary like

obtaining essential goods. He would further draw attention to Sl.

No.15 of the said guidelines, whereby, all enforcing authorities had

been given relaxation only to the extent of essential goods.

Therefore, the respondent/judgment-debtor did not obtain the

letter of credit in such extraordinary situation, however, the

learned Arbitrators have not considered the said submission put

forth, in its proper perspective and rejected the said objection and

5 / 21

passed the awards in favour of the applicant. Learned counsel for

the respondent highlighted the objections raised in para 50 of the

said award(s), wherein, the learned Arbitrators have observed that

‘the only event that was to take place in India was the opening of

the LC required by the Sale Contract before 1 April. We are not

satisfied, on the evidence we have seen - or, more particularly, not

seen – that the pandemic rendered such an event impossible.

Further, were there to have been such a FM event, we would have

considered it excepted by the definition of FM set out in the Sale

Contract, as set out in paragraph 47 above – being an “obligation to

make any payment under the agreement” under paragraph a.’

4.Learned counsel for the respondent would place reliance on the

judgment rendered in the matter of National Agricultural

Cooperative Marketing Federation of India Vs. Alimenta S.A.,

(2020) 19 SCC 260 (para 69)., wherein, it was observed that NAFED

was unable to supply as it did not have any permission in the season

1980-81 to effect the supply, it required the permission of the

Government. The matter is such which pertains to the fundamental

policy of India and parties were aware of it, and contracted that in

such an exigency as provided in Clause 14, the Agreement shall be

cancelled for the supply which could not be made. There was no

permission to export commodity of the previous year in the next

season and then the Government declined permission to NAFED to

supply. It was held therein that it would be against the

fundamental public policy of India to enforce such an award.

5.Learned counsel for the respondent also relied upon the judgment

6 / 21

rendered in the matter of Associate Builders Vs. Delhi

Development Authority, (2015) 3 SCC 49 and referred to para 27

of it, which reads as under :

Fundamental Policy of Indian Law

27. Coming to each of the heads contained in Saw Pipes

(2003) 5 SCC 705, AIR 2003 SC 2629 judgment, we will first

deal with the head “fundamental policy of Indian law”. It

has already been seen from Renusagar 1994 Supp (1) SCC

644 judgment that violation of the Foreign Exchange Act

and disregarding orders of superior courts in India would be

regarded as being contrary to the fundamental policy of

Indian law. To this it could be added that the binding effect

of the judgment of a superior court being disregarded

would be equally violative of the fundamental policy of

Indian law.

6.Lastly, learned counsel for the respondent would submit that due

to outbreak of Covid-19 Pandemic in March 2020, even the

Supreme Court had taken cognizance and extended the limitation

in SLW (C) No.3/2020. He submits that due to such epidemic; the

respondent could not obtain the LC during the subject period as it

was complying with the directions/guidelines issued by the

Government under the Act 2005 in the territory of India. However,

this aspect has not been taken into consideration by the learned

Arbitrators. Hence, both the impugned awards are not

sustainable, therefore, he prays to refuse enforcement of the said

7 / 21

awards.

7.Replying the aforesaid submissions, Ms. Feresthe D. Sethna,

learned counsel for the applicant/award-holder would submit that

in the subject Notification itself there is an exception to the Banks

and the said ground has been taken by the respondent/judgment

debtor before the learned Arbitrators. From para 46 onwards of

the award(s), the learned Arbitrators have dealt with the said

aspect and they have categorically observed in para 49 that Banks

and Shipping are excepted industries and they were not subjected

to the lock-down rules. If there was some kind of force majeure or

frustration event due to Covid-19 pandemic, evidence to the

contrary would have to be adduced by the buyer and they have not

done so. Learned counsel for the applicant would further submit

that even during Covid-19 pandemic period, passes and permits

were issued by the competent authorities for certain exigencies.

However, no effort has been made by the respondent/judgment

debtor in this regard. Therefore, the learned Arbitrators have

rightly disregarded such objection at para 50 by observing that in

such situation, it was not impossible for the respondent to obtain

LC and accepted the submission of the applicant that it was also

not necessary for the respondent or its employee to visit the Bank

in person to open a letter of credit as appearance of a person was

not compulsory for opening a LC. Lastly, learned counsel for the

applicant would submit that both the awards have attained

finality.

8.Learned counsel for the applicant further submits that in a catena

8 / 21

of judgments, it has been held by the Supreme Court that there is a

narrow scope of enquiry before the Court in which the award is

sought to be enforced and the same is limited to the grounds

mentioned in Section 48 of the Act, 1996. She would place reliance

on the matter of Shri Lal Mahal Limited Vs. Progetto Grano Spa

reported in (2014) 2 SCC 433 and refer to para 45, wherein , it has

been categorically observed that Section 48 of the Act, 1996 does

not give an opportunity to have a “second look” at the foreign

award in the award enforcement stage. Para 45 of the said

judgment is reproduced below :

45. Moreover, Section 48 of the 1996 Act does not give 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.

9.Learned counsel for the applicant would further place reliance on

the matter of Ssangyong Engineering and Construction Company

Limited Vs. National Highways Authority of India (NHAI), (2019)

15 SCC 131, wherein, the aspect with regard to challenge of

foreign award was categorically dealt with in para 44 to 48 and para

9 / 21

69, which read thus :

44. In Renusagar (supra), this Court dealt with a challenge to a

foreign award under Section 7 of the Foreign Awards (Recognition

and Enforcement) Act, 1961 [“Foreign Awards Act”]. The Foreign

Awards Act has since been repealed by the 1996 Act. However,

considering that Section 7 of the Foreign Awards Act contained

grounds which were borrowed from Article V of the Convention

on the Recognition and Enforcement of Foreign Arbitral Awards,

1958 [“New York Convention”], which is almost in the same terms

as Sections 34 and 48 of the 1996 Act, the said judgment is of

great importance in understanding the parameters of judicial

review when it comes to either foreign awards or international

commercial arbitrations being held in India, the grounds for

challenge/refusal of enforcement under Sections 34 and 48,

respectively, being the same.

45.After referring to the New York Convention, this Court

delineated the scope of enquiry of grounds under Sections 34/48

(equivalent to the grounds under Section 7 of the Foreign Awards

Act, which was considered by the Court), and held:

“34. Under the Geneva Convention of 1927, in order

to obtain recognition or enforcement of a foreign arbitral

award, the requirements of clauses (a) to (e) of Article I had

to be fulfilled and in Article II, it was prescribed that even if

the conditions laid down in Article I were fulfilled

recognition and enforcement of the award would be

refused if the Court was satisfied in respect of matters

mentioned in clauses (a), (b) and (c). The principles which

apply to recognition and enforcement of foreign awards

are in substance, similar to those adopted by the English

courts at common law. (See: Dicey & Morris, The Conflict of

Laws, 11 Edn., Vol. I, p. 578). It was, however, felt that the

Geneva Convention suffered from certain defects which

hampered the speedy settlement of disputes through

arbitration. The New York Convention seeks to remedy the

said defects by providing for a much more simple and

10 / 21

effective method of obtaining recognition and

enforcement of foreign awards. Under the New York

Convention the party against whom the award is sought to

be enforced can object to recognition and enforcement of

the foreign award on grounds set out in sub-clauses (a) to

(e) of clause (1) of Article V and the court can, on its own

motion, refuse recognition and enforcement of a foreign

award for two additional reasons set out in sub-clauses (a)

and (b) of clause (2) of Article V. None of the grounds set

out in sub-clauses (a) to (e) of clause (1) and sub-clauses (a)

and (b) of clause (2) of Article V postulates a challenge to

the award on merits.

35. Albert Jan van den Berg in his treatise The New

York Arbitration Convention of 1958 : Towards a Uniform

Judicial Interpretation, has expressed the view:

“It is a generally accepted interpretation of the

Convention that the court before which the enforcement of

the foreign award is sought may not review the merits of the

award. The main reason is that the exhaustive list of grounds

for refusal of enforcement enumerated in Article V does not

include a mistake in fact or law by the arbitrator.

Furthermore, under the Convention the task of the

enforcement judge is a limited one. The control exercised

by him is limited to verifying whether an objection of a

respondent on the basis of the grounds for refusal of

Article V(1) is justified and whether the enforcement of the

award would violate the public policy of the law of his

country. This limitation must be seen in the light of the

principle of international commercial arbitration that a

national court should not interfere with the substance of

the arbitration.” (p. 269)

36. Similarly Alan Redfern and Martin Hunter have said:

“The New York Convention does not permit any review

on the merits of an award to which the Convention

applies and, in this respect, therefore, differs from the

provisions of some systems of national law governing

the challenge of an award, where an appeal to the

11 / 21

courts on points of law may be permitted.” (Redfern &

Hunter, Law and Practice of International Commercial

Arbitration, 2 Edn., p. 461.)

37. In our opinion, therefore, in proceedings for

enforcement of a foreign award under the Foreign Awards

Act, 1961, the scope of enquiry before the court in which

award is sought to be enforced is limited to grounds

mentioned in Section 7 of the Act and does not enable a

party to the said proceedings to impeach the award on

merits.

xxx xxx xxx

65. 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 1837 which requires that the

enforcement of the foreign award must not be contrary to

the public policy or the law of India. Since the expression

“public policy” covers the field not covered by the words

“and the law of India” which follow the said expression,

contravention of law alone will not attract the bar of public

policy and something more than contravention of law is

required.

66. Article V(2)(b) of the New York Convention of

1958 and Section 7(1)(b)(ii) of the Foreign Awards Act do

not postulate refusal of recognition and enforcement of a

foreign award on the ground that it is contrary to the law

of the country of enforcement and the ground of challenge

is confined to the recognition and enforcement being

contrary to the public policy of the country in which the

award is set to be enforced. There is nothing to indicate

12 / 21

that the expression “public policy” in Article V(2) (b) of the

New York Convention and Section 7(1)(b)(ii) of the Foreign

Awards Act is not used in the same sense in which it was

used in Article I(c) of the Geneva Convention of 1927 and

Section 7(1) of the Protocol and Convention Act of 1937.

This would mean that “public policy” in Section 7(1)(b)(ii)

has been used in a narrower sense and in order to attract

the bar of public policy the enforcement of the award must

invoke something more than the violation of the law of

India. Since the Foreign Awards Act is concerned with

recognition and enforcement of foreign awards which are

governed by the principles of private international law, the

expression “public policy” in Section 7(1)(b)(ii) of the

Foreign Awards Act must necessarily be construed in the

sense the doctrine of public policy is applied in the field of

private international law. Applying the said criteria, it must

be held that the enforcement of a foreign award would be

refused on the ground that it is contrary to public policy if

such enforcement would be contrary to (i) fundamental

policy of Indian law; or (ii) the interests of India; or (iii)

justice or morality.”

(emphasis supplied)

46. This judgment was cited with approval in Redfern and Hunter

on International Arbitration by Nigel Blackaby, Constantine

Partasides, Alan Redfern, and Martin Hunter (Oxford University

Press, Fifth Ed., 2009) [“Redfern and Hunter”] as follows:

“11.56. First, the New York Convention does not permit any

review on the merits of an award to which the Convention

applies. [This statement, which was made in an earlier

edition of this book, has since been cited with approval by

the Supreme Court of India in Renusagar Power Co. Ltd. v.

General Electric Co. .. . The court added that in its opinion

‘the scope of enquiry before the court in which the award is

sought to be enforced is limited [to the grounds mentioned

in the Act] and does not enable a party to the said

proceedings to impeach the Award on merits']. Nor does

the Model Law.”

13 / 21

47. The same theme is echoed in standard textbooks on

international arbitration. Thus, in International Commercial

Arbitration by Gary B. Born (Wolters Kluwer, Second Ed., 2014)

[“Gary Born”], the learned author deals with this aspect of the

matter as follows:

“[12] No Judicial Review of Merits of Foreign or Non-

Domestic Awards in Recognition Actions

It is an almost sacrosanct principle of international

arbitration that courts will not review the substance of

arbitrators' decisions contained in foreign or nondomestic arbitral

awards in recognition proceedings. Virtually every authority

acknowledges this rule and virtually nobody suggests that this

principle should be abandoned. When national courts do review

the merits of awards, they labour to categorize their action as an

application of public policy, excess of authority, or some other

Article V exception, rather than purporting to justify a review of

the merits.

[a] No Judicial Review of Awards Under New York and

Inter-American Conventions

Neither the New York Convention nor the Inter-American

Convention contains any exception permitting non-enforcement of

an award simply because the arbitrators got their decision on the

substance of the parties' dispute wrong, or even badly wrong. This is

reasonably clear from the language of the Convention, which

makes no reference to the possibility of a review of the merits in

Article V's exhaustive list of the exclusive grounds for denying

recognition of foreign and nondomestic awards. There is also no

hint in the New York Convention's drafting history of any

authority to reconsider the merits of an arbitral award in

recognition proceedings.

Likewise, the prohibition against review of the merits of the

arbitrator's decision is one of the most fundamental pillars of

national court authority interpreting the Convention. This

prohibition has repeatedly and uniformly been affirmed by

national courts, in both common law and civil law jurisdictions.

Simply put: “the court may not refuse to enforce an arbitral award

solely on the ground that the arbitrator may have made a mistake

14 / 21

of law or fact” [Karaha Bodas Co. LLC v. Perusahaan Pertambangan

Minyak Dan Gas Bumi Negara, 364 F.3d 274, 287-88 (5 Cir. 2004)].

Thus, in the words of the Luxembourg Supreme Court [Judgment

of 24 November 1993, XXI Y.B. Comm. Arb. 617, 623 (Luxembourg

Cour Supérieure de Justice) (1996)]:

“The New York Convention does not provide for any

control on the manner in which the arbitrators decide on the

merits, with as the only reservation, the respect of

international public policy. Even if blatant, a mistake of fact

or law, if made by the arbitral tribunal, is not a ground for

refusal of enforcement of the tribunal's award.”

Or, as a Brazilian recognition decision under the Convention

held [Judgment of 19 August 2009, Atecs Mannesmann GmbH v.

Rodrimar S/A Transportes Equipamentos Industriais e Armazes

Gerais, XXXV Y.B. Comm. Arb. 330, 331 (Brazilian Tribunal de

Justiça) (2010)]:

“These questions pertain to the merits of the arbitral award

that, according to precedents from the Federal Supreme Court

and of this Superior Court of Justice, cannot be reviewed by this

Court since recognition and enforcement of a foreign award is

limited to an analysis of the formal requirements of the award.”

Commentators have uniformly adopted the same view of

the Convention [See, for e.g., K.-H. Böckstiegel, S. Kröll & P.

Nacimiento, Arbitration in Germany 452 (2007)].” (at pp. 3707-

3710)

(emphasis supplied)

48. Likewise, the UNCITRAL Secretariat Guide on the Convention

on the Recognition and Enforcement of Foreign Arbitral Awards

(New York, 1958) (2016 Ed.) [“UNCITRAL Guide on the New York

Convention”] also states:

“9. The grounds for refusal under article V do not

include an erroneous decision in law or in fact by the arbitral

tribunal. A court seized with an application for recognition

and enforcement under the Convention may not review the

merits of the arbitral tribunal's decision. This principle is

15 / 21

unanimously confirmed in the case law and commentary on

the New York Convention.”

69. We therefore hold, following the aforesaid authorities, that in

the guise of misinterpretation of the contract, and consequent

“errors of jurisdiction”, it is not possible to state that the arbitral

award would be beyond the scope of submission to arbitration if

otherwise the aforesaid misinterpretation (which would include

going beyond the terms of the contract), could be said to have

been fairly comprehended as “disputes” within the arbitration

agreement, or which were referred to the decision of the

arbitrators as understood by the authorities above. If an arbitrator

is alleged to have wandered outside the contract and dealt with

matters not allotted to him, this would be a jurisdictional error

which could be corrected on the ground of “patent illegality”,

which, as we have seen, would not apply to international

commercial arbitrations that are decided under Part II of the 1996

Act. To bring in by the backdoor grounds relatable to Section 28(3)

of the 1996 Act to be matters beyond the scope of submission to

arbitration under Section 34(2)(a)(iv) would not be permissible as

this ground must be construed narrowly and so construed, must

refer only to matters which are beyond the arbitration agreement

or beyond the reference to the arbitral tribunal.”

10.Learned counsel for the applicant would further submit that if the

Court is satisfied that the foreign award is enforceable, the

award(s) shall be deemed to be a decree of that Court and the

Court has to proceed further to execute the foreign award as the

decree of that Court. Lastly, she would submit that the objections

raised by the respondent/judgment debtor are not sustainable.

Hence, learned counsel for the applicant prays to allow both the

applications and recognize the awards for enforcement.

11.Heard learned counsel for the parties and also perused the

16 / 21

documents annexed with the petitions.

12.Section 48 of the Act, 1996 set out the grounds on which the

foreign award is refused. The said Section is reproduced below :

48. Conditions for enforcement of foreign awards. (1)

Enforcement of a foreign award may be refused, at the

request of the party against whom it is invoked, only if that

party furnishes to the court proof that-

(a) the parties to the agreement referred to in section 44

were, under the law applicable to them, under some

incapacity, or the said agreement is not valid under the law

to which the parties have subjected it or, failing any

indication thereon, under the law of the country where the

award was made; or

(b) the party against whom the award is invoked was not

given proper notice of the appointment of the arbitrator or

of the arbitral proceedings or was otherwise unable to

present his case; or

(c) the award deals with a difference not contemplated by or

not falling within the terms of the submission to arbitration,

or it contains decisions on matters beyond the scope of the

submission to arbitration:

Provided that, if the decisions on matters submitted

to arbitration can be separated from those not so submitted,

that part of the award which contains decisions on matters

submitted to arbitration may be enforced; or

(d) the composition of the arbitral authority or the arbitral

procedure was not in accordance with the agreement of the

17 / 21

parties, or, failing such agreement, was not in accordance

with the law of the country where the arbitration took place;

or

(e) the award has not yet become binding on the parties, or

has been set aside or suspended by a competent authority of

the country in which, or under the law of which, that award

was made.

(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 1. For the avoidance of any doubt, it is clarified

that an award is in conflict with the public policy of India,

only if,-

(i) the making of the award was induced or affected by fraud

or corruption or was in violation of section 75 or section 81;

or

(ii) it is in contravention with the fundamental policy of

Indian law; or

(iii) it is in conflict with the most basic notions of morality or

justice.

Explanation 2 - For the avoidance of doubt, the test as to

whether there is a contravention with the fundamental

policy of Indian law shall not entail a review on the merits of

the dispute.]

(3) If an application for the setting aside or suspension of

18 / 21

the award has been made to a competent authority referred

to in clause (e) of sub-section (1) the Court may, if it

considers it proper, adjourn the decision on the

enforcement of the award and may also, on the application

of the party claiming enforcement of the award, order the

other party to give suitable security.

13.Learned counsel for the respondent/judgment-debtor has taken

only a specific plea that the said awards are not enforceable on the

ground that the same are contrary to the public policy of India. The

situation of the Covid-19 Pandemic has been referred in the subject

Notification which has been issued under the Act, 2005. The

expression “Public Policy of India” as contained in the Foreign

Awards (Recognition and Enforcement) Act, 1961 (the Foreign

Awards Act) was interpretated in Renusagar Power Co. Ltd. Vs.

General Electric Co, 1994 Supp. (1) SCC 644 (Renusagar). The

said expression received a narrow construction in the said

judgment in the context of a foreign award. After the enactment

of the Arbitration Act and consequent repeal of the Foreign

Awards Act, the appropriate construction of the expression “public

policy of India” as contained in the Arbitration Act was decided in

Shri Lal Mahal Limited (supra). In the said judgment, the Honb’le

Supreme Court concluded that it is the narrow construction of

public policy which should apply to the interpretation of Section

48 of the Arbitration Act. While the Hon’ble Supreme Court refused

to declare a foreign award to be enforceable in Alimenta S.A

19 / 21

(supra), the said judgment was rendered in the context of the

Government of India refusing permission to NAFED to export the

relevant commodity. On such basis, it was concluded that the

enforcement of the foreign award would contravene the

fundamental policy of India and the basic notions of justice. In

other words, unless a foreign award is contrary to the fundamental

policy of Indian law or the most basic notions of morality or justice

it should be recognized and enforced.

14.The question whether the recognition and enforcement of a part

of the Foreign Award is contrary to public policy, in the peculiar

facts and circumstances of the case, is a separate and distinct

matter. The expression “public policy” cannot be put into a straight

jacket. As interpretated in Renusagar and subsequently in Shri Lal

Mahal (supra), the said expression is required to receive a narrow

construction in the context of a foreign award.

15.Reverting back to the facts and circumstances of the case, it is

quite vivid that in the situation of Covid-19 pandemic in March

2020, though the Supreme Court has extended the limitation for

cognizance in the litigation matters but in the said Notification

itself, there is an exception to the Banks and other organisations

and the said objection has been raised before the learned

Arbitrators. The learned Arbitrators have carefully dealt with the

said issue extensively and observed that the banks and shipping are

the excepted industries and they are not subject to the lock-down

rules.

16.Even if the submission of learned counsel for the

20 / 21

respondent/judgment debtor is accepted, for the sake of

convenience, there is no complete bar even in such contingencies.

During the relevant period, the person concerned could have

approached the Bank after obtaining permission/permit of the

competent authorities. The Banking Sector continued to provide

essential services to meet out the requirements of every citizen in

such extra ordinary situations so as to avoid any financial hardship.

The learned Arbitrators have assigned cogent reasons for

discarding the said objection. Hence, the awards on such score

would not be contrary to or in the teeth of public policy of India

and the said objection raised by learned counsel for the

respondent/judgment debtor is not sustainable.

17.In view of the aforesaid discussion, the Applicant is entitled to an

order declaring that the Foreign Award(s) is recognized and is,

consequently, enforceable as a decree of this Court. If the

payment has not been made, it is open for the Applicant to enforce

the Foreign Award(s) by taking recourse to measures in accordance

with the applicable provisions of the Code of Civil Procedure, 1908.

18.Consequently, both the Arbitration Applications are allowed on the

above terms without any order as to costs.

Sd/-

(Deepak Kumar Tiwari)

Judge

Shyna

21 / 21

ARBAP No. 10 of 2023 & ARBAP No. 9 of 2023

HEAD NOTE

Foreign Award Enforcement – Even during Covid-19 pandemic, the

Banking Sector continued to provide essential services and in the

Notification, said Sector is under exception, so the award(s) could not be

said to be contrary to public policy of India. Foreign Award(s) is

recognised and enforceable as a decree of the Court.

fons'kh vokMZ dk izorZu & dksfoM 19 egkekjh ds nkSjku Hkh cSafdax {ks= us

fujUrj vko';d lsok,W iznku dh gS rFkk vf/klwpuk eas mDr {ks= NwV ds

varxZr gS] rkfd vokMZ dks Hkkjr ds yksd uhfr ds izfrdwy u le>k tkosA

fons'kh vokMZ U;k;ky; ds fMØh ds leku ekU;rk izkIr vkSj izoruhZ; gSA