| Content Provider | Supreme Court of India |
|---|---|
| e-ISSN | 30484839 |
| Language | English |
| Access Restriction | NDLI |
| Subject Keyword | ss.47 and 49 Limitation for filing enforcement/execution petition Arbitration and Conciliation Act 1996 Foreign award |
| Content Type | Text |
| Resource Type | Law Judgement |
| Jurisdiction | India |
| Act(s) Referred | Limitation Act, 1963 (36 of 1963) Arbitration and Conciliation Act, 1996 (26 of 1996) |
| Case(s) Referred | Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 Referred Case 7 Referred Case 8 Referred Case 9 Referred Case 10 Referred Case 11 Referred Case 12 Referred Case 13 Referred Case 14 Referred Case 15 Referred Case 16 Referred Case 17 Referred Case 18 Referred Case 19 |
| Case Type | Appeal |
| Court | Supreme Court of India |
| Disposal Nature | Appeal Dismissed |
| Headnote | Arbitration and Conciliation Act, 1996 – ss.47 and 49 –Foreign award – Limitation for filing enforcement/execution petitionfor enforcement of a foreign award – Held: Period of limitation forfiling a petition for enforcement of a foreign award u/ss.47 and 49,would be governed by Art.137 of the Limitation Act, which prescribesa period of three years from when the right to apply accrues –Limitation Act, 1963 – Art. 137.Arbitration and Conciliation Act, 1996 – ss. 44, 46, 47 and48 – Scheme of the Act for enforcement of New York Conventionawards – Held: Part II Chapter 1 of the Act, pertains to enforcementof New York Convention awards – The enforcement Court cannotset aside a foreign award, even if the conditions u/s.48 are madeout – Power to set aside a foreign award vests only with the court atthe seat of arbitration, since supervisory or primary jurisdiction isexercised by the curial courts at the seat of arbitration –Theenforcement court is not to correct the errors in the award u/s.48,or undertake a review on the merits of the award, but is conferredwith the limited power to “refuse” enforcement, if the grounds aremade out – If the Court is satisfied that the application u/s.48 iswithout merit, and the foreign award is found to be enforceable,then u/s.49, the award shall be deemed to be a decree of “that Court”– Limited purpose of the legal fiction is enforcement of the foreignaward – New York Convention on the Recognition and Enforcementof Foreign Awards, 1958 – Arts. IV & V.Arbitration – Foreign award – Limitation for enforcement /execution of a foreign award – Lex fori – Held: The issue oflimitation for enforcement of foreign awards being procedural innature, is subject to the lex fori i.e. the law of the forum (State)where the foreign award is sought to be enforced.Arbitration – Arbitral award – Foreign award – Limitationperiod for filing the enforcement / execution petition for enforcementof a foreign award in India – Held: Would be governed by Indianlaw – The Indian Arbitration Act, 1996 does not specify any periodof limitation for filing an application for enforcement / execution ofa foreign award – s.43 however provides that the Limitation Act,1963 shall apply to arbitrations, as it applies to proceedings incourt – Arbitration and Conciliation Act, 1996 – s.43 – LimitationAct, 1963.Arbitration and Conciliation Act, 1996 – s.36 – Award inarbitral proceeding – Domestic award – Statutory fiction createdu/s.36 for limited purpose of enforcement of a ‘domestic award’ asa decree of the court – Held: By deeming fiction, a domestic awardis deemed to be a decree of the court, even though it is as such nota decree passed by a civil court – The deeming fiction is restrictedto treat the award as a decree of the court for the purposes ofexecution, even though it is, as a matter of fact, only an award inan arbitral proceeding.Arbitration – Foreign award – Held: Foreign awards are notdecrees of an Indian civil court – By a legal fiction, s.49 providesthat a foreign award, after it is granted recognition and enforcementu/s.48, would be deemed to be a decree of “that Court” for thelimited purpose of enforcement – The phrase “that Court” refers tothe Court which has adjudicated upon the petition filed u/ss.47and 49 for enforcement of the foreign award – Art.136 of theLimitation Act would not be applicable for the enforcement /execution of a foreign award, since it is not a decree of a civil courtin India – Limitation Act, 1963 – Art. 136 – Arbitration andConciliation Act, 1996 – ss.47, 48 and 49 – Legal Fiction.Arbitration and Conciliation Act, 1996 – Foreign award –Applicable law at the enforcement stage – Held: Enforcement courtdoes not sit in appeal over the findings of the seat court –Enforcement of the award is a subsequent and distinct proceedingfrom the setting aside proceedings at the seat – The enforcementcourt would independently determine the issue of recognition andenforceability of the foreign award in India, in accordance with theprovisions of Chapter 1 Part II of the Indian Arbitration Act, 1996– On facts, the Malaysian Courts being the seat courts were justifiedin applying the Malaysian Act to the public policy challenge raisedby the Government of India – However, merely because theMalaysian Courts upheld the award in question, it would not be animpediment for the Indian courts to examine whether the awardwas opposed to the public policy of India u/s.48 of the IndianArbitration Act, 1996 – The enforcement court would examine thechallenge to the award in accordance with the grounds availableu/s.48 of the Act, without being constrained by the findings of theMalaysian Courts – If the award is found to be violative of thepublic policy of India, it would not be enforced by the Indian courts– The enforcement court would however not second-guess or reviewthe correctness of the judgment of the Seat Courts, while decidingthe challenge to the award. AArbitration and Conciliation Act, 1996 – s.48 – Enforcementof foreign awards – Public policy defence for refusing enforcementu/s.48 of the Act – s.48 was amended by Act 3 of 2016 – Effect of,whether retrospective or prospective – Held: By this amendment,the public policy ground was given a narrow and specificconstruction by statute, by the insertion of two Explanations – Theamendments made to s.48 by the 2016 Amendment Act are substantiveamendments which were incorporated to make the definition of“public policy” narrow by statute – The two Explanations in s.48begin with the words “For the avoidance of any doubt.” – However,since the amendments introduced specific criteria for the first time,it must be considered to be prospective, irrespective of the usage ofthe phrase “for the removal of doubts.”Arbitration – Foreign Award – Enforcement of – Limits ofjudicial intervention on grounds of public policy of the enforcementState – Plea that the award in question may not be enforced, since itis contrary to the basic notions of justice – Held: On facts, nottenable, for two reasons – Firstly, the Appellants did not make out acase of violation of procedural due process in the conduct of thearbitral proceedings – Requirement of procedural fairnessconstitutes a fundamental basis for the integrity of the arbitralprocess – Fair and equal treatment of the parties is a non-derogableand mandatory provision, on which the entire edifice of the alternatedispute resolution mechanism is based – In the present case, nosuch violation was alleged – Secondly, the Appellants did not makeout as to how the award was in conflict with the basic notions ofjustice, or in violation of the substantive public policy of India.Legal fiction – Object of – Held: Legal fictions are createdonly for some definite purpose – A legal fiction is to be limited tothe purpose for which it was created, and it would not be legitimateto travel beyond the scope of that purpose, and read into theprovision, any other purpose how so attractive it may be. |
| Judge | Hon'ble Ms. Justice Indu Malhotra |
| Neutral Citation | 2020 INSC 548 |
| Petitioner | Government Of India |
| Respondent | 1.vedanta Limited (formerly Cairn India Ltd.) 2. Ravva Oil (singapore) Pte. Ltd. 3. Videocon Industries Limited |
| SCR | [2020] 12 S.C.R. 1 |
| Judgement Date | 2020-09-16 |
| Case Number | 3185 |
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