AI Drafter 
TaxTMI 
TaxTMI 
2017 (2) TMI 1278
X X X X Extracts X X X X
X X X X Extracts X X X X
....ioner is stated to have held negotiations during 2007 for the manufacture and supply of parabolic mirrors for use in the construction of thermo solar power plant located at Khasra No. 08 Village Nokh, Tehsil Pokran, District Jaisalmer, India, with an initial plan for an agreement between M/s. Abhijeet Project Limited (hereinafter called APL), M/s. Corporate Ispat Alloys Limited (hereinafter called CIAL), the respondent herein (hereinafter called Shriram), M/s. Ener-T (hereinafter called ET) and the petitioner. 3. Pursuant to discussions, an agreement was entered into on 30.11.2011 and executed in counterparts as of 30.11.2011, 19.12.2011 and 02.1.2012 and the petitioner agreed to manufacture and sell and the Shriram agreed to purchase parabolic mirrors for a consideration of EUR 8,399,244.67 for the use in the construction of thermo solar power plant in India. The agreement contains an arbitration clause in Clause 17.13, which provides that all disputes shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce (hereinafter called the ICC). In paragraph 4(e) to (j) of the petition, the breach committed by the Shriram has been set out and und....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e ICC; and (iv) simple interest @ 3.5% p.a. on the amounts outstanding under the award from the date of the award until payment." 7. The petitioner's case is that the Shriram is bound by the foreign award dated 12.2.2015, as it has become final and the petitioner is entitled to enforce the award in India and that the award has not been set aside or suspended by any competent court of the country, in which, the said foreign award was made and the enforcement is not contrary to any public policy in India. Therefore, in terms of Section 47 of the Act, the present petition has been filed. 8. The Shriram - the respondent, in their counter statement, would contend that the Arbitral Tribunal allowed the claims made by the petitioner overlooking the settled legal proposition and erroneously considering the scope of the agreement and rendered a wholly untenable, illegal, irregular, erroneous and unreasoned award, which is not only against the ICC Rules and English Law, but also against the public policy of India, equity, good conscience and natural justice under the provisions of the Act and that the Shriram was deprived of an opportunity to even cross examine the witness....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fence raised by the respondent to resist the enforcement of the award. 13. Mr. Hiroo Advani, learned counsel appearing on behalf of Mr. S.R. Raghunathan, learned counsel on record for the petitioner, after setting out the factual matrix, which have been briefly stated in the preceding paragraphs, submitted that foreign awards are not required to be stamped in India and that Section 3 of the Indian Stamp Act speaks about execution and a foreign award, having been not executed in India, but only sought to be enforced in India, stamping is not required. 14. In support of the said contention, reliance has been placed on the decision of the Delhi High Court in the case of Naval Gent Maritime Limited Vs. Shivnath Rai Hanarain (I) Ltd. [reported in MANU/DE/2364/2009] and the decision of the Bombay High Court in the case of Vitol S.A. Vs. Bhatia International Limited [reported in MANU/MH/1615/2014]. 15. After referring to Section 48 of the Act, it is submitted that all the contentions raised by the petitioner are factual and these aspects cannot be gone into in a petition under Section 47 of the Act and no public policy issue has been raised except for vague averments. To support ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the principles of natural justice. Perversity or irrationality of decisions is to be tested on the touchstone of Wednesbury principles of reasonableness. 19. Therefore, it is submitted that the respondent is entitled to oppose the relief sought for raising all these contentions as pointed out by the Hon'ble Supreme Court and the grounds of challenge are not restricted. 20. With regard to the aspect regarding the stamping of the foreign award by placing reliance on the decision in the case of SMS Tea Estates (P) Ltd. Vs. Chandmari Tea Company (P) Ltd. [reported in 2011 (14) SCC 66], it is submitted that having regard to Section 35 of the Indian Stamp Act, unless the stamp duty and penalty due in respect of an instrument is paid, the court cannot act upon the instrument, which means that it cannot act upon the arbitration agreement also, which is part of the instrument. 21. On the issue relating to stamping and registration of the award, reliance was also placed on the decision in the case of M. Anasuya Devi Vs. M. Manik Reddy [reported in 2003 (8) SCC 565] to support the proposition that the issue relating to non stamping can be raised only when the party seeks enforce....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd rendered findings. In fact, the learned counsel referred to certain paragraphs of the arbitral award to substantiate his contentions and submitted that there is no violation of the principles of natural justice and that the respondent had full opportunity to oppose the Second Memorial, which, in fact, they have done. Therefore, it was submitted that the above original petition may be allowed and Shriram may be directed to disclose the assets to enable the petitioner to execute the award. 27. Heard the learned counsel for the parties and perused the materials placed on record. 28. This is petition under Section 47 of the Act seeking enforcement of the foreign award. The said provision lays down procedural requirements that need to be complied with by a party in order to enforce the award. The Hon'ble Supreme Court in the case of S.M.D. Kiran Pasha Vs. Government of Andhra Pradesh [1990 (1) SCC 328] observed that enforcement means to impose or to compel an obedience of law. Section 48 of the Act deals with conditions for enforcement of a foreign award. The Hon'ble Supreme Court in the decision in Shri Lal Mahal, considered the scope of enquiry before the Court, in wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt would be contrary to (i) fundamental policy of Indian law; or (ii) the interests of India; or (iii) justice or morality." 30. In Saw Pipes Ltd., the scope of the court's jurisdiction under Section 34 of the Act was under consideration. The Hon'ble Supreme Court considered the meaning that can be assigned to the phrase 'public policy of India' occurring in Section 34(2)(b)(ii) of the Act being alive to the subtle distinction in the concept of "enforcement of the award" and "jurisdiction of the court in setting aside the award" and the decision in Renusagar Power Co. Ltd. and held in Saw Pipes Ltd., as follows: "The term 'public policy of India' in Section 34 was required to be interpreted in the context of the jurisdiction of the court where the validity of the award is challenged before it becomes final and executable in contradistinction to the enforcement of an award after it becomes final. Having that distinction in view, with regard to Section 34, this Court said that the expression 'public policy of India' was required to be given a wider meaning. Accordingly, for the purposes of Section 34, this Court added a new category - patent ille....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nciples laid down in Saw Pipes Ltd., would govern the scope of such proceedings. Therefore, it was held in paragraph 29 as follows: "We accordingly hold that enforcement of foreign award would be refused under Section 48(2)(b) only if such enforcement would be contrary to (1) fundamental policy of Indian Law; or (2) the interests of India; or (3) justice or morality. The wider meaning given to the expression 'public policy of India' occurring in Section 34(2)(b)(ii) in Saw Pipes Ltd. is not applicable where objection is raised to the enforcement of the foreign award under Section 48(2)(b)." 34. In terms of the above decision, the enforcement of the foreign award could be refused under Section 48(2)(b) only if it is contrary to the (a) fundamental policy of Indian Law (b) interests of India and (c) justice or morality. It was further held that Section 48 of the Act does not give opportunity to have a second look at the foreign award in the award enforcement stage, that the scope of enquiry does not permit review of the foreign award on merits and that the court does not exercise appellate jurisdiction over the foreign award nor does it enquire as to whether, while rend....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reliance was placed on the decision of the Hon'ble Supreme Court in the cases of M. Anasuya Devi and SMS Tea Estates (P) Ltd. 37. Firstly, M. Anasuya Devi arose of a proceeding under Section 34 of the Act and this decision has been relied on to support the proposition that the issue pertaining to stamping can be raised only when the award is sought to be enforced. However, in the considered view of this Court, the decision in the case of M. Anasuya Devi cannot be made applicable to the facts of the present case, as the Court was not considering a petition seeking implementation of a foreign award, which was sought to be resisted by the respondent raising various contentions including the aspect regarding stamp duty. 38. In SMS Tea Estates (P) Ltd., two questions arose out of a proceeding under Section 11 of the Act for appointment of an arbitrator. The Hon'ble Chief Justice of the Gauhati High Court dismissed the application holding that the lease deed was compulsorily registrable under Section 17 of the Registration Act and under Section 106 of the Transfer of Property Act and having not been registered, no term in the lease deed could be relied for the purpose and t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Court in the case of Harendra H. Mehta Vs. Mukesh H. Mehta [reported in 1999 (5) SCC 108], held that foreign award would not require registration and can be enforced as a decree. The relevant portions read as follows: "In view of the above judgment, the foreign award would not require registration and can be enforced as a decree. In any case, the issue of stamp duty cannot stand in the way of deciding whether the award is enforceable or not. Supreme Court in M. Anasuya Devi and Anr. Vs. M. Manik Reddy and Ors. MANU/SC/0837/2003 :2003 (8) SCC 565 had observed that at the time of deciding objections under Section 34 of the Arbitration and Conciliation Act, 1996, the Court cannot set aside the award for want of stamping and registration. I consider that the Court while deciding enforceability of foreign award under Sections 47 and 48 cannot hold the award non enforceable on the ground of award being not registered or unstamped. It is settled law that a foreign award can be enforced or executed in the same proceedings as was held by the Supreme Court in Fuerst Day Lawson Ltd. Vs. Jindal Exports Ltd. MANU/SC/0329/2001 :2001 (6) SCC 356. The present award was passed in England an....