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Issues: (i) whether the foreign arbitral award, once held enforceable, could be executed by the executing court despite objections based on FEMA, RBI approval, valuation, and alleged distinction between enforceability and executability; (ii) whether the executing court could grant consequential reliefs including transfer of shares, appointment of nominee directors, injunctions, partial execution against remaining respondents, and set-off of costs.
Issue (i): Whether the foreign arbitral award, once held enforceable, could be executed by the executing court despite objections based on FEMA, RBI approval, valuation, and alleged distinction between enforceability and executability?
Analysis: A foreign award that has been found enforceable under the Arbitration and Conciliation Act, 1996 is to be treated as a decree and may be executed in the same proceeding. The distinction sought to be drawn between enforceability and executability was rejected. The executing court cannot reopen objections that were already rejected in enforcement proceedings, especially where the Supreme Court has held that FEMA violations, if any, do not render the award void and that post-facto RBI permission may be available. The objections on valuation and pricing guidelines were also held to be matters already concluded and incapable of being re-agitated in execution.
Conclusion: The objections to executability were rejected, and the award was held executable.
Issue (ii): Whether the executing court could grant consequential reliefs including transfer of shares, appointment of nominee directors, injunctions, partial execution against remaining respondents, and set-off of costs?
Analysis: The residual power under the Code of Civil Procedure, 1908 permits the court to adopt execution machinery necessary to give effect to the relief granted by the award. The reliefs directing transfer of shares and steps necessary for implementation were treated as severable and capable of partial execution against the remaining respondents after deletion of some parties. The court also held that the directions for appointment of nominee directors and interim injunctions were consequential to the award and within execution powers. The request to rely on RBI correspondence to postpone execution was rejected, and the set-off of arbitral costs against the transfer price was allowed.
Conclusion: The consequential reliefs were granted, including transfer of shares, appointment of nominee directors, injunctions, partial execution, and set-off.
Final Conclusion: The execution application succeeded in substance, with the award enforced and the connected interim and ancillary reliefs granted to facilitate implementation of the award.
Ratio Decidendi: Once a foreign arbitral award is held enforceable and deemed a decree, the executing court must give effect to it in execution and cannot reopen merits-based objections already rejected in enforcement proceedings, unless the decree is a nullity on the face of the record; consequential and severable reliefs necessary to implement the award may also be granted in execution.
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