TaxTMI 
TaxTMI 
2022 (6) TMI 1170
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....Petitioner in Arb.O.P.(Comm. Div.)No.410 of 2021 is NCC Infrastructure Holdings Limited (NCCIHL). In this petition, NCCIHL seeks a declaration that the Foreign Award be deemed to be a decree of this Court and for a direction to the Respondent to deposit a sum of INR 14,62,45,615/- towards amounts directed to be paid by TAQA India Power Ventures Private Limited (TAQA/the Respondent) to NCCIHL towards counter claim (g) along with interest at 18% per annum from the date of Foreign Award until December 31, 2020 and for further interest on the aggregate amount from January 1, 2021 until the date of payment. The Petitioner in Arb.O.P.No.412 of 2021 is NCC Limited(NCC). In Arb.O.P. No.412 of 2021, NCC seeks a declaration that the Foreign Award be deemed to be a decree of this Court and for a direction to TAQA/ the Respondent to pay a sum of INR 8,500,000/- being the costs awarded to NCC in the arbitral proceedings as per the Foreign Award. Since both these petitions arise out of the Foreign Award and seek the recognition and enforcement thereof, they are considered and decided by this Common Order. 2. A Securities Purchase Agreement (the SPA) was entered into by and between NCCIHL, IL & ....
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....e Respondent herein and the Company were the joint claimants and NCCIHL and NCC were the respondents. The claimants made several claims. For the purposes of these petitions, it is not necessary to set out the claims in detail. However, it is relevant to mention that the claimants sought a declaration that the respondents are in breach of their obligations under specific clauses of the SPA. In addition, the claimants sought a direction for payment of the cost overrun amounts to the Company or, in the alternative, an indemnification of TAQA/the Respondent herein for the cost overrun amount. The claimants also sought indemnification of TAQA/the Respondent herein for losses incurred on account of the claim arising out of the Bulk Power Transmission Agreement (the BPTA claim). 5. NCCIHL made counter claims. These counter claims, inter alia, pertained to the wrongful invocation of the security bond; and return of the bank guarantee to NCCIHL or, in the alternative, to pay NCCIHL the amount incurred as commission charges for Security Bond No.1. NCCIHL also counter a sum of INR 90,000,000 towards the balance sale consideration which was withheld by TAQA. The Arbitral Tribunal framed sever....
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....nitiation of Corporate Insolvency Resolution Proceedings (CIRP) against TAQA/the Respondent herein under the Insolvency and Bankruptcy Code, 2016 (the IBC). By order dated August 06, 2021, the NCLT concluded that there is a dispute between the parties and that the petitioner therein did not qualify as an operational creditor of TAQA/the Respondent herein. On that basis, the petition before the NCLT was dismissed. It also appears that parts of the Foreign Award were challenged before the Hon'ble Singapore High Court by both NCCIHL and the claimants. These petitions to set aside portions of the Foreign Award were rejected. The order of rejection was assailed in appeals before the Court of Appeal of the Republic of Singapore in Civil Appeal No.34 of 2019 and Civil Appeal No.35 of 2019. The said appeals were disposed of by judgment dated 29.10.2020 by remitting the issue related to the cut-off date to the Arbitral Tribunal. However, the admitted position is that the parts of the Foreign Award, which are sought to be recognized and enforced through these proceedings, were not the subject matter of challenge before the courts in Singapore. 8. Oral submissions were made on behalf of ....
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....d v. Sivakama Sundari and others (2011) 6 CTC 11. (iv) R.S.Jiwani and others v. Ircon International Ltd (2010(1) Arb LR 451(Bom). After relying upon the above judgments, Mr.Murari concluded his arguments by stating that the Foreign Award is liable to be recognized and enforced because it is not vitiated by any of the circumstances set out in Section 48 of the Arbitration Act. In particular, he contended that it cannot be said that the Foreign Award is in conflict with the public policy of India. 11. Mr.Satish Parasaran, learned senior counsel for the Respondent, made submissions in response and to the contrary. The first contention of Mr.Satish Parasaran was that the NCLT concluded that there was a dispute between the parties and that NCCIHL did not qualify as an operational creditor of TAQA and that there is no operational debt due from TAQA to NCCIHL. The second contention was that the proceedings before the Hon'ble Delhi High Court were not disclosed before this Court or before the NCLT. The third contention was that the Company was intentionally not joined as a party in view of the fact that the Foreign Award directed the payment of a much larger sum to the Company. The....
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....lanta Limited) and, in particular, paragraphs 29 to 31 thereof. 15. In light of the rival contentions, the first question that arises for consideration is whether this Court has jurisdiction over the matter. The Explanation to Section 47 of the Arbitration Act is as under: ''Explanation: In this section and in the sections following in this Chapter, ''Court'' means the High Court having original jurisdiction to decide the questions forming the subject-matter of the arbitral award if the same had been the subject matter of a suit on its original civil jurisdiction and in other cases, in the High Court having jurisdiction to hear appeals from decrees of courts subordinate to such High Court.'' Thus, the test is whether this Court would have had original civil jurisdiction in respect of the questions forming the subject matter of the Foreign Award if those questions were the subject matter of a suit or whether this Court would have civil appellate jurisdiction over decrees of courts subordinate to it as regards questions forming the subject matter of the Foreign Award. It should be noticed that the expression used is "questions forming the subject....
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....this Court. This contention is not disputed by TAQA. Therefore, there is no doubt that this Court qualifies as a High Court with jurisdiction in terms of the Explanation to Section 47 of the Arbitration Act in an action for recognition and enforcement against TAQA. 17. The question whether these proceedings are liable to be rejected on account of the NCLT order should be considered next. The NCLT is empowered to admit an action for corporate insolvency resolution at the instance of a financial creditor or operational creditor, as defined in the IBC, or the company concerned. As regards these proceedings, the grounds in Section 48 of the Arbitration Act have been held to be exhaustive in cases such as Vijay Karia v. Prysmian Cavi Sistema Srl (2020) 11 SCC 1. Indeed, the Supreme Court held that the court concerned has the discretion to reject the resistance to enforcement if made on grounds which only affect party interest even if one of the grounds under Section 48 are made out. Therefore, the objection on this ground is rejected. 18. Nonetheless, the Company and TAQA/the Respondent herein have jointly instituted proceedings before the Delhi High Court seeking recognition and enfo....
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....t enforcement means execution of the award. However, as a pre-condition for the enforcement of a foreign award, it becomes necessary to approach a jurisdictional court for purposes of seeking a declaration that the award be recognised and held to be enforceable as a deemed decree of such court. In view of the judgment of the Hon'ble Supreme Court in Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333, a composite petition is maintainable to fulfil dual purposes: (i) recognise and declare a foreign award as enforceable, in the first stage; and (ii) enforce/execute in the second stage. The Arbitration Act, however, only deals with the above mentioned first stage and recourse is necessary, in the Indian context, to Sections 36 to 74 of the Code of Civil Procedure, 1908, read with Order XXI thereof in the second stage. 20. The questions of non-joinder of the Company and whether such proceedings may be instituted in more than one high court in India remain to be answered. As regards non-joinder, the Foreign Award did not grant any relief to NCCIHL against the Company. Therefore, there is no question of any enforcement action against the Company by NCCIHL. As a corollary....
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....y other place where its assets are situated. On the contrary, a petition by NCCIHL to recognise and enforce the portion of the Foreign Award in its favour would only lie before the jurisdictional high court qua TAQA and its assets. Although Atlanta Limited was relied upon by TAQA to contend that only one high court would have jurisdiction, the said judgment was in the context of a challenge under Section 34 of the Arbitration Act. Therefore, such proceedings were subject to Section 42, which is in Part I of the Arbitration Act. By contrast, the present petitions under Part II are not governed or controlled by Section 42. If it is concluded that a petition may be filed in more than one high court in India, the consequence thereof would be that the award would be deemed to be a decree of each high court which recognizes and declares that the award is enforceable. No doubt, this leaves the door open to the possibility, albeit unlikely, of a part of the award being held to be enforceable and not the other, if the high courts concerned take decisions which are not entirely in consonance. In any event, such possibility cannot per se lead to the conclusion that a petition should not be fi....
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....doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption. (3) If an application for the setting aside or suspension of 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.'' 23. On examining the text of Sub-section 1 of Section 48, it is clear that the grounds set out therein are exhaustive, except to the extent specified in Sub-section 2 thereof. In the case at hand, TAQA/the Respondent did not contend that the Foreign Award should not be enforced on any of the grounds set out under Clauses (a) to (e) of Sub-section 1 of Section 48. For instance, it is not TAQA's case that the portion of the Foreign Award in NCCIHL's favour has not yet become binding. Therefore, it becomes necessary to turn to Sub-section 2. Clause (a) of Sub-section 2 is also clearly inapplicable and the Respondent did not contend that Clause (a) may....
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....inct matter. The expression "public policy" cannot be put into a straight jacket. As interpreted in Renusagar and subsequently in Shri Lal Mahal, the said expression is required to receive a narrow construction in the context of a foreign award. Nevertheless, it should receive a construction which is in consonance with the most basic notions of morality and justice. As discussed earlier, by the Foreign Award, NCCIHL, which is the Petitioner in Arb.O.P.No.410 of 2021, was directed to pay INR 904,480,000 and a further sum of INR 287,018,685 to the Company. Such amounts were also directed to be paid along with interest thereon. Although the Company and the Respondent herein were joint claimants before the Arbitral Tribunal, the above claims were awarded only in favour of the Company. The cost claim of the claimants, i.e. TAQA and the Company, of INR 18,500,000 was also directed to be paid by NCCIHL in the aggregate to both the claimants. The petition for recognition and enforcement before the Delhi High Court has also been filed jointly by the Company and the Respondent herein against NCCIHL. In addition, the Company has filed an affidavit before this Court confirming that the amounts....