AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2017 (7) TMI 1454
X X X X Extracts X X X X
X X X X Extracts X X X X
....iding transponder services. 3(b) Raj Television Network Limited is a public limited company incorporated under the laws of India (hereinafter referred to as 'Raj TV' for the sake of brevity). Raj TV is engaged in the business of operating and broadcasting television channels, providing news, entertainment and other programmes to its viewers. 3(c) Thaicom and Raj TV entered into a Transponder Service Agreement dated 10.09.2003. Under this Transponder Service Agreement, Raj TV was permitted to use what is technically described as 'C-Band Regional Beam Transponder on Thaicom 3' for delivery of its television transmissions for a period of four years and nine months from 1.10.2003 to 30.06.2008. This Transponder Service Agreement dated 10.09.2003 is hereinafter referred to as the 'said contract' for the sake of brevity, convenience and clarity. The service which is subject matter of the 'said contract' is hereinafter referred to as 'transponder services' for the sake of brevity. 3(d) Under the said contract, it was agreed that Raj TV would pay Thaicom a service fee of 35,834 US Dollars per month for the transponder services. Further, unde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ment by Raj TV resulted in a second meeting on 2.8.2006, wherein Thaicom agreed to waive outstanding Teleport Service fees and granted Raj TV further fee adjustments to facilitate timely payment of all outstanding payments. It is stated that it was also further agreed in this second meeting that the fee for Teleport Service would be reduced to 15,800 US $ per month. However, we are informed that Raj TV continued to be in default. 3(i) When things stood as above, some time in July 2007, there were large scale changes in Indian regulations qua broadcasting services owing to which local broadcasters were required to broadcast only via Indian satellite. Therefore, in compliance with the Indian regulations, Raj TV shifted from Thaicom to an Indian satellite called INSAT-2E. Therefore, the said contract between Thaicom and Raj TV was terminated by mutual consent on 4.8.2007. 3(j) On 23.10.2012, Thaicom issued a legal notice to Raj TV demanding amounts allegedly due and owing to Thaicom under the said contract. It is for all practical purposes is the arbitration trigger notice, because clauses 19 and 23 of the said contract provide for dispute resolution by arbitration. 3(k) Whil....
X X X X Extracts X X X X
X X X X Extracts X X X X
....thy, learned counsel appearing for Thaicom (respondent before us) that this intra-court appeal is not maintainable. 4(c) It is the specific contention of the learned counsel for Thaicom that the order of the learned Single Judge is one allowing a petition for enforcement of a foreign award and is, therefore, not covered by Section 50 of the A and C Act, which enumerates/adumbrates appealable orders under Part II of the A and C Act. In other words, he would contend that an appeal under Section 50 of the A and C Act would lie only when the learned Judge has passed an order refusing to enforce the foreign award under Section 48 of the A and C Act. 4(d) It is necessary to extract usefully Section 50 of the A and C Act, which reads as follows: "50. Appealable orders.-(1) An appeal shall lie from the order refusing to -- (a) refer the parties to arbitration under section 45; (b) enforce a foreign award under section 48, to the Court authorised by law to hear appeals from such order. (2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Sup....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....S. Sathappan (2004) 11 SCC 672]) was held to be a self-contained code. Now, if the Arbitration Act, 1940 was held to be a self-contained code, on matters pertaining to arbitration, the Arbitration and Conciliation Act, 1996, which consolidates, amends and designs the law relating to arbitration to bring it, as much as possible, in harmony with the UNCITRAL Model must be held only to be more so. Once it is held that the Arbitration Act is a self-contained code and exhaustive, then it must also be held, using the lucid expression of Tulzapurkar, J., that it carries with it "a negative import that only such acts as are mentioned in the Act are permissible to be done and acts or things not mentioned therein are not permissible to be done". In other words, a letters patent appeal would be excluded by the application of one of the general principles that where the special Act sets out a self-contained code the applicability of the general law procedure would be impliedly excluded. 90. We, thus, arrive at the conclusion regarding the exclusion of a letters patent appeal in two different ways; one, so to say, on a micro basis by examining the scheme devised by Sections 49 and 50 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... under 15 of Letters Patent is not certainly maintainable. Accordingly, Point No. 4 is answered." 4(i) Besides the clear distinction between Sections 37 and 50 of the A and C Act owing to absence of negative import within parenthesis, we are also of the considered view that the ratio in Videocon Power Limited's case does not help the respondent in the instant case, because Videocon Power Limited's case is clearly distinguishable on facts. That was a case where there was an issue about whether a particular award was domestic award or foreign award. As a sequitur, a further question was whether such an award can be questioned under Section 34 of Part I of the A and C Act. This court on examination of facts and circumstances of the case, came to the conclusion that the award in question in that case is a foreign award and therefore, the same cannot be questioned under Section 34 of the A and C Act. It was ultimately held in that case that it was open to the company in whose favour the award was passed to approach this court for enforcement of such foreign award. We, therefore, proceed to examine the matter on merits. 4(j) For the purpose of further discussion, it is esse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd Raj TV. It is also not in dispute that the venue for arbitration is a neutral venue, namely, Singapore. In other words, it is not in dispute that the seat of arbitration is Singapore. Therefore, there can be no two views or dispute about the fact that the 'proper law' for the 'arbitration agreement' is Singaporean law. In other words, the Curial Law is Singaporean Law. 4(r) While proper law for the arbitration agreement is indisputably Singaporean law, proper law for the contract is put an issue. While Thaicom would contend that proper law for the contract is also Singaporean Law, Raj TV would contend that proper law for the contract is not Singaporean Law. 4(s) While Thaicom would contend that the limitation is procedural law and therefore, Curial Law would apply, Raj TV would contend that it is not just procedural law, but substantive law too and therefore, cannot be governed by Curial Law alone. 4(t) While both contracting parties, namely, Thaicom and Raj TV, agreed without any dispute that there is an arbitration agreement between them for Transponder Services, there is disagreement between the contracting parties about the existence of an arbitratio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... may usefully be extracted below: "39. Procedural issues shall be governed by the law of the seat of arbitration, i.e. Singapore law, and limitation is a procedural matter. Hence, Indian limitation law does not apply. 40. Article 6(1) of the Singaporean Limitation Act provides that action founded on contract "shall not be brought after the expiration of 6 years from the date on which the cause of action accrued". The earliest due date of payment for the invoices was 23 July 2007. The Notice of Arbitration was served on the Respondent on 23 October 2012 and pursuant to Article 3(2) of the UNCITRAL Rules, "arbitral proceedings shall be deemed to commence on the date on which the notice of arbitration is received by the Respondent". Hence, any claim within six years before 23 October 2012, i.e. 24 October 2006 is not time-barred. 41. Save for the Occasional Service fees, which the Claimant is no longer pursuing, all the claims made are within the limitation period and thus, not time-barred. 42. The Tribunal agrees with the submissions of the Counsel for the Claimant that, neither the nationality of a party, nor the actual or possible forum of enforc....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... claims arising out of the said contract, shall be Singaporean Law. Therefore, as contracting parties have not chosen to spell out that Curial Law shall be the law of land other than the seat of arbitration, we have no hesitation in holding that both proper law for arbitration agreement (Curial Law) as well as proper law for the contract is Singaporean Law in the instant case. Therefore, it follows as a natural and inevitable corollary that it is not necessary to even enter into the arena of debate as to whether limitation is merely procedural law or substantive law. On a demurer, even if it is conceded that limitation is not merely procedural law, but substantive law too, as both are governed by Singaporean Law, the limitation that shall be applicable is Singaporean Law. 4(ab) This takes us to the next question as to whether limitation being determined on the basis of Singaporean Law where law of limitation of money claim is six years unlike three years in India would per se render the award opposed to public policy and therefore unenforceable. 4(ac) Public policy in India has been well articulated and explained by the Hon'ble Supreme Court, commencing from Renusagar Pow....
X X X X Extracts X X X X
X X X X Extracts X X X X
....se days" (p. 440) 49. In later decisions this Court has, however, leaned towards the broad view. [See : Murlidhar Agarwal v. State of U.P. [(1974) 2 SCC 472, 482 : (1975) 1 SCR 575, 584]; Central Inland Water Transport Corpn. v. Brojo Nath Ganguly [(1986) 3 SCC 156, 217 : 1986 SCC (L & S) 429 : (1986) 1 ATC 103 : (1986) 2 SCR 278, 372] at p. 373; Rattan Chand Hira Chand v. Askar Nawaz Jung [(1991) 3 SCC 67, 76-77].] 50. In the field of private international law, courts refuse to apply a rule of foreign law or recognise a foreign judgment or a foreign arbitral award if it is found that the same is contrary to the public policy of the country in which it is sought to be invoked or enforced. The English courts follow the following principles: "Exceptionally, the English court will not enforce or recognise a right conferred or a duty imposed by a foreign law where, on the facts of the particular case, enforcement or, as the case may be, recognition, would be contrary to a fundamental policy of English law. The court has, therefore, refused in certain cases to apply foreign law where to do so would in the particular circumstances be contrary to the interests o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... International Law, 12th Edn., p. 129.)" 4(ad) With regard to when Courts refuse to enforce a foreign acquired right on the ground that such enforcement would affront public policy, we again refer to Renusagar Power Co. Ltd.'s case, which is widely construed to be some kind of a magnum opus on this and extract the following paragraphs: "54. The cases in which the English courts refuse to enforce a foreign acquired right on the ground that its enforcement would affront some moral principle the maintenance of which admits of no possible compromise, have been classified as under: "(i) Where the fundamental conceptions of English justice are disregarded; (ii) Where the English conceptions of morality are infringed; (iii) Where a transaction prejudices the interests of the United Kingdom or its good relations with foreign powers; (iv) Where a foreign law or status offends the English conceptions of human liberty and freedom of action;" (See : Cheshire and North, Private International Law, 12th Edn., pp. 131-133.) 55. As observed by Lord Simon of Glaisdale "an English Court will exercise such a jurisdiction with extrem....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion of the US Court of Appeals in Parsons & Whittemore Overseas Co. Inc. v. Societe Generale De L'Industrie Du Papier (Rakta) and Bank of America [508 F 2d 969 (1974)] wherein it has been observed: "The general pro-enforcement bias informing the Convention and explaining its supersession of the Geneva Convention points toward a narrow reading of the public policy defense. An expansive construction of this defense would vitiate the Convention's basic effort to remove pre-existing obstacles to enforcement. ... We conclude, therefore, that the convention's public policy defense should be construed narrowly. Enforcement of foreign arbitral awards may be denied on this basis only where enforcement would violate the forum State's most basic notions of morality and justice." (pp. 973-974) 59. While dealing with arbitration agreements in international business transactions, the U.S. Supreme Court, has disapproved a parochial refusal by the courts of one country to enforce an international arbitration agreement as well as the "parochial concept that all disputes must be resolved under our laws and in our courts". It has been observed: "We cannot ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pplication of the same expression in respect of domestic awards governed by Part I of the A and C Act. Relevant paragraphs of Lal Mahal's case are paragraph Nos. 23 and 27, which read as follows: "23. Of the many questions framed for determination in Renusagar [Renusagar Power Co. Ltd. v. General Electric Co., 1994 Supp (1) SCC 644], the two questions under consideration were: (i) "Does Section 7(1)(b)(ii) of the Foreign Awards Act preclude enforcement of the award of the Arbitral Tribunal, GAFTA for the reason that the said award is contrary to the public policy of the State of New York?", and (ii) "what is meant by public policy in Section 7(1)(b)(ii) of the Foreign Awards Act?". This Court held that the words "public policy" used in Section 7(1)(b)(ii) of the Foreign Awards Act meant public policy of India. The argument that the recognition and enforcement of the award of the Arbitral Tribunal, GAFTA can be questioned on the ground that it is contrary to the public policy of the State of New York was negated. A clear and fine distinction was drawn by this Court while applying the rule of public policy between a matter governed by domestic ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e domestic arbitral award." 4(af) Though not cited at the Bar, we have also taken note of a judgment of the Bombay High Court reported in 2015 (6) Arb.L.R. 172 (Bom) being M/s. Louis Dreyfus Commodities Suisse S.A. Vs. Sakuma Exports Limited. In the said judgment, the Bombay High Court, after referring to the judgments of the Hon'ble Supreme Court of India in O.N.G.C. Ltd. Vs. Saw Pipes Ltd. [(2003) 5 SCC 705], Renusagar Power Co. Ltd. Vs. General Electric Co. [(1994) Supp (1) SCC 644] and also Shri Lal Mahal Limited Vs. Progetto Grano SPA [(2014) 2 SCC 433] regarding 'public policy' and 'public policy of India', culled out the principles and laid down a triple test. By this triple test, it was held that enforcement of a foreign award can be refused qua public policy in India only if such enforcement would be contrary to (i) fundamental policy of Indian law or (ii) the interest of India or (iii) justice or morality. 4(ag) Relevant paragraph in the Bombay High Court judgment with regard to triple test (culled out from the principles laid down by the Hon'ble Supreme Court of India in O.N.G.C. Ltd.'s case (supra), Renusagar Power Co. Ltd. (supra) and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n India. 4(ak) This takes us to the next aspect of the matter, which is challenge to the jurisdiction of the Arbitral Tribunal qua Teleport Services and Occasional services. The learned Single Judge has rightly observed that this objection had not been raised by Raj TV till such time closing submissions were propounded before the Arbitral Tribunal. This is clear from the defence statement filed before the Arbitral Tribunal, as extracted by the Tribunal, wherein and whereby it becomes clear that the only objection which the respondent had raised is vis-a-viz. jurisdiction and that was pivoted on the applicability of law of limitation i.e., whether Indian Law of limitation or Singaporean Law of limitation would apply in the given circumstances. With regard to Teleport Services and Occasional Services, it was simply stated by Raj TV, particularly in paragraph 5 of the defence statement that all payments have been made and therefore, nothing more was due and outstanding. There was, absolutely, no due whatsoever was the plea. 4(al) This is evident from paragraphs 36 and 37 of the Award of Arbitral Tribunal, which read as follows: "36. The Tribunal agrees with the Claimant....