AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2003 (3) TMI 538
X X X X Extracts X X X X
X X X X Extracts X X X X
....wards has to be reasoned. In the instant case, though the arbitrator has given reasons, yet at the same time, it is set out that the reasons do not form part of the award and the reasons should not be used. It is therefore, contended that this would be violation of public policy considering both the fundamental policy of law and violation of principal of natural justice and fair play by which the court is precluded from examining the reasons. 2. At the hearing of the petition, the learned counsel for the parties have relied on judgments which will be adverted to, to the extent they are necessary in the course of the Judgment. In the first instance, it will be necessary to consider the judgment of the Apex Court in Bhatia International's case (supra) to find out whether it supports the contention as canvassed before this court by the learned counsel for the respondent. At the stage of admission there was another petition also before this court wherein a foreign award had been challenged under section 34 of the Arbitration & Conciliation Act, 1996 relying on the judgment in Bhatia International's case (supra). It was in that context and as it was contended that the judgment in Bhati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....luded. That would mean application of Part II, once that be so, Part I would not apply. Under Part I a decree can be executed only if the challenge under section 34 fails if made. Under section 48, the foreign awards become enforceable and is to be executed as a decree. (c)On the consideration of the law set out in Paragraph 28 insofar as application of section 9 is concerned, it holds that section 9 would not apply insofar as foreign awards are concerned after the award is made. From the Judgment in Bhatia's case, therefore, these are three major propositions which can be culled out. Once that be the case, the first contention advanced on behalf of the Respondent opposing enforcement of the foreign award must be rejected. 3. We then come to the second contention of no reasons or when after giving reasons the order of the arbitral tribunal that the reasons should not be looked into amounts to violation of public policy of India and consequently award shall not be enforced. To examine this contention, it will be first necessary to consider clauses in the agreement itself. Clause 23 may now be reproduced as that is the essential clause in which there is provision provided whether ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....greement between the parties which contemplates that if any of the parties do not give notice to the Tribunal, then Tribunal is not bound to give reasons. Even if, therefore, section 31 is considered, the award would be within requirement of law. Giving of reasons, therefore, cannot be said to be a fundamental policy of Indian law in so far as arbitral proceedings are concerned, as by statute the requirement to give reasons is not mandatory insofar as domestic award is concerned. The Statute itself dispenses with the requirement to give reasons if parties agree that reasons need not be given. We may now consider whether an award which contains reasons which are not to be relied upon by a court considering enforcement of a foreign award can be said to be in conflict with public policy of India. What is public policy under the foreign awards (Recognition and requirements) Act, 1961, is set out in the judgment of the Apex Court in Renusagar Power Co. Ltd. v. General Electric Co. AIR 1994 SC 860. The Apex Court observed that public policy under section 7(1)(2) of the Foreign Awards Act must necessarily be construed in the sense of the doctrine of public policy as applied in the field ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and that mere fact that Arbitral Tribunal may briefly in terms of the contract is required to give reasons which parties cannot rely upon because a clause in the contract so prohibits or the arbitral procedure, it cannot be said to be violation of fundamental policy of Indian law. At the highest if the award was challenged in the country where the award was made, it will be open to the Court of that country to examine reasons if so required, Fundamental policy of Indian Law however is that foreign awards passed in convention countries, whether New York or Geneva would be recognized and enforced if they are not contrary to fundamental policy of Indian law; interest of India and justice or morality. The Courts in India while enforcing an award will also not examine illegalities, if any, as such illegalities, procedural or substantive could have been considered in the challenge to the award in the country where it was made. It was argued that the contract does not provide as what would be the law to be applied by the Tribunal. Firstly, it was for the Arbitrator to decide what was the law. The Respondent however, at least it is not pointed out had contended before the Tribunal that the....