Foreign award enforcement turns on written arbitration agreements, narrow public policy review, and limited interference with interest awards.

A written arbitration agreement for New York Convention enforcement may be established from signed contracts and contemporaneous correspondence, including conduct referable to those contracts. Prior judicial determination of the agreement's existence barred re-agitation of that issue in enforcement proceedings. Public policy under foreign award enforcement was applied narrowly, limited to fundamental policy of Indian law, the interests of India, and justice or morality; a plausible arbitral view on RBI import restrictions and force majeure was not open to merits review. Interest awards were not interfered with absent exceptional circumstances, and exchange-rate fluctuation alone was insufficient.

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Issues: (i) whether there was an agreement in writing containing an arbitration clause so as to attract enforcement under the New York Convention and the Foreign Awards (Recognition and Enforcement) Act, 1961; (ii) whether the prior decision in proceedings under section 33 of the Arbitration Act, 1940 barred the appellant from disputing the arbitration agreement; (iii) whether the foreign award was unenforceable on the ground of public policy because of RBI import restrictions and the force majeure clause; and (iv) whether the award of interest called for interference.

Issue (i): whether there was an agreement in writing containing an arbitration clause so as to attract enforcement under the New York Convention and the Foreign Awards (Recognition and Enforcement) Act, 1961.

Analysis: Article II of the Schedule requires an agreement in writing, which includes an arbitral clause in a contract signed by the parties, a separate arbitration agreement signed by the parties, or either contained in an exchange of letters or telegrams. The correspondence, the opening of letters of credit referable to the two contracts, and the appellant's own telex invoking force majeure on the basis of those contracts established that the transactions were being carried on with reference to the written contracts containing the arbitration clause. On that basis, the arbitration clause was treated as forming part of a written agreement for purposes of the Convention.

Conclusion: the arbitration agreement was held to be in writing and enforceable against the appellant.

Issue (ii): whether the prior decision in proceedings under section 33 of the Arbitration Act, 1940 barred the appellant from disputing the arbitration agreement.

Analysis: The existence, validity, or effect of an arbitration agreement can be determined by a court before the arbitration, during its pendency, or after the award is made. Since the High Court had already determined the existence of the arbitration agreement in the earlier proceeding, the appellant could not reopen the same controversy in the enforcement proceedings. The earlier determination also reinforced the conclusion reached on the merits.

Conclusion: the appellant was precluded from challenging the existence of the arbitration agreement again.

Issue (iii): whether the foreign award was unenforceable on the ground of public policy because of RBI import restrictions and the force majeure clause.

Analysis: The expression public policy in enforcement of foreign awards was applied in a narrow sense, limited to fundamental policy of Indian law, the interests of India, or justice or morality. The arbitrators had taken a plausible view that the RBI directives did not impose a complete prohibition and that the force majeure clause operated to affect performance in the manner found by them. Such a view was not shown to be impossible or contrary to the narrow public policy exception, and the award could not be reappraised on merits.

Conclusion: the award was not shown to be contrary to public policy and was upheld.

Issue (iv): whether the award of interest called for interference.

Analysis: The award of interest, including interest for the relevant pre-reference and post-reference periods, was not shown to involve any exceptional circumstance warranting interference. The fact of exchange-rate fluctuation was not treated as a ground to modify the award.

Conclusion: the award of interest was left undisturbed.

Final Conclusion: the foreign award was confirmed as enforceable and the challenge to it failed on all grounds.

Ratio Decidendi: For enforcement of a foreign award, a written arbitration agreement may be established from the contractual documents and contemporaneous correspondence, and the court's review is confined to the narrow statutory grounds, including only a limited public policy exception.

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