TaxTMI 
TaxTMI 
2026 (5) TMI 194
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....ion O.P.(COM. DIV) No. 88/2022 and O.A. No.76/2022 and A.No. 67/2022 respectively, by which the petition filed by the petitioners herein under Sections 47 and 49 of the Arbitration and Conciliation Act, 1996 respectively (for short, 'the Act 1996') to declare the foreign arbitral award being enforceable in India with other ancillary prayers came to be disposed of holding that the Foreign Award, in favour of the petitioners, is enforceable in India subject to obtaining RBI approval, if required under the law. 2. We should first take notice of the order dated 17.04.2023 passed by a coordinate Bench. The same reads thus: "Issue notice to the respondents, returnable in the month of July 2023. Notice will also be issued to the Reserve Bank of India to ascertain, if at all any approval/permission from them is required, and if yes, at what stage will it be required. Copy of the paper-book with this order will be served on the nominated counsel for the Reserved Bank of India, who would obtain instruction and file response. We clarify that the execution proceedings may continue. It will be open to the petitioners to file an application as an allegation has been....
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....suade us to take the view that the agreement between the parties itself could be termed as illegal as the parties were in pari delicto. In such circumstances, according to Mr. Shakdher, once this Court holds that the agreement itself is illegal, the Foreign Award cannot be enforced under the provisions of the Act 1996. 7. On the other hand, Mr. Balbir Singh, the learned Senior Counsel, fervently urged the Court to look into the Affidavit-in- Reply, filed by the RBI, particularly the stance of the RBI. According to Mr. Balbir Singh, the RBI has made itself very clear that the payment of compensatory damages, as awarded by the Arbitral Tribunal, being in the nature of current account transaction, the same is enabled under Section 5 of the Foreign Exchange Management Act, 1999 (for short, 'FEMA') read with Foreign Exchange Management (Current Account Transaction) Rules, 2000 by residents (respondents) to non-resident (petitioner Nos.1-2 respectively), and per se, would not require any approval or permission from the RBI under the FEMA. The RBI, in its Affidavit-in-Reply, has stated thus: "5. It is stated that, in exercise of the powers conferred by clause (b) of sub-sectio....
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....dia, the implications from a foreign exchange perspective change significantly. These and other material aspects may be taken into consideration by the RBI upon receipt of an appropriate application. To that extent, in this context, I disagree with the conclusion in NTT Docomo." (emphasis added) 7. Accordingly, under the Impugned Order, the Hon'ble High Court of Madras has held, inter alia, that: "Consequently, subject to the requirement of obtaining RBI approval before initiating further proceedings for enforcement, the Foreign Award is recognized and held to be enforceable as a decree of this Court. As a corollary, subject to and in accordance with terms and conditions, if any imposed by the RBI in its approval, the respondents are required to pay the amounts claimed by the petitioners in paragraph 36(b) of the petition...." (emphasis added) 8. It is observed from the writ petition that the aforementioned foreign arbitral award dated 07.01.2021 has been granted in the international commercial arbitration held in Singapore International Arbitration Centre in accordance with the Singapore International Arbitration Centre Rules, 2016. The aforementione....
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....ice: Price of shares issued to persons resident outside India under this Schedule, shall not be less than - (b) the fair valuation of shares done by a SEBI registered Category-I Merchant Banker or a Chartered Accountant as per the discounted free cash flow method, where the shares of the company is not listed on any recognised stock exchange in India ..." "10. B Transfer by way of sale not covered by Regulation 9 by a person resident outside India (1) A person resident outside India, may transfer share or convertible debenture of an Indian company, without the prior permission of the Reserve Bank, by way of sale, to a person resident in India subject to the adherence to pricing guidelines, documentation and reporting requirements for such transfers as may be specified by Reserve Bank from time to time.] 12. It is submitted that, an Indian entity can issue equity instruments to a person resident outside India only at a price more than or equal to the fair value of shares as determined in accordance with the pricing guidelines of Reserve Bank. 13. It is therefore submitted that, based on the perusal of the documents produced along....