2017 (7) TMI 1454 - HC - Indian Laws

Enforcement of a foreign award - Sections 47 to 49 of the Arbitration and Conciliation Act, 1996 - Order XXXVI Rule 9 of Madras High Court Original Side Rules read with Clause 15 of Letters Patent. HELD THAT - The inescapable and indisputable conclusion is that a foreign award cannot become opposed to public policy in India merely because a larger/longer period of limitation has been applied to test the claim in a money suit. More so, when the contracting parties have unambiguously covenanted that the proper law for the contract would be Singaporean Law. There are no hesitation whatsoever in holding that a Foreign Award, merely because limitation aspect has been decided on the basis of foreign law, where the period of limitation is more, does not per se become opposed to public policy rendering it unenforceable in India. Jurisdiction of the Arbitral Tribunal qua Teleport Services and Occasional services - HELD THAT - 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 - challenge to jurisdiction of Arbitral Tribunal also fails as flawed. There are no hesitation in coming to a conclusion that the order of the learned Single Judge is correct and does not call for any interference - appeal dismissed.

Issues Involved:
1. Jurisdiction of the arbitral tribunal concerning teleport services or occasional services.
2. Limitation period for enforcement of the foreign award.
3. Applicability and interpretation of public policy in India.
4. Proper law for the arbitration agreement and the contract.
5. Maintainability of the intra-court appeal.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Arbitral Tribunal:
The appellant, Raj TV, contended that the arbitral tribunal lacked jurisdiction over teleport services and occasional services, arguing that the original contract only covered transponder services. The tribunal’s jurisdictional challenge was raised belatedly, only during closing submissions. The tribunal, referencing Article 16(2) of the Model Law, barred this late jurisdictional challenge, noting that the respondent had not raised this issue earlier and had not provided any justification for the delay. The court upheld the tribunal's decision, affirming that the jurisdictional challenge was unjustified and should be rejected.

2. Limitation Period:
Raj TV argued that the claim was barred by limitation under Indian law (three years), while the tribunal applied Singaporean law (six years). The court noted that the arbitration agreement specified Singapore as the seat of arbitration, thus making Singaporean law the curial law. The court held that limitation is procedural and governed by the curial law. Therefore, the tribunal correctly applied the Singaporean limitation period. The court further ruled that applying a longer limitation period under foreign law does not per se render an award opposed to public policy in India.

3. Public Policy in India:
Raj TV contended that the award was opposed to public policy in India due to the application of the Singaporean limitation period. The court referred to the Supreme Court’s elucidation of public policy in Renusagar Power Co. Ltd. v. General Electric Co. and Shri Lal Mahal Limited v. Progetto Grano Spa, which stated that public policy in the context of foreign awards is more limited than in domestic cases. The court applied the triple test from the Bombay High Court’s decision in Louis Dreyfus Commodities Suisse S.A. v. Sakuma Exports Limited, determining that enforcement would be contrary to public policy only if it violated the fundamental policy of Indian law, the interests of India, or justice or morality. The court concluded that applying a longer limitation period did not violate these principles.

4. Proper Law for the Arbitration Agreement and the Contract:
The court clarified that the proper law for the arbitration agreement (curial law) is determined by the seat of arbitration, which was Singapore. Both the arbitration agreement and the contract were governed by Singaporean law, as explicitly stated in the contract. The court held that there was no need to debate whether limitation is procedural or substantive since both were governed by Singaporean law.

5. Maintainability of the Intra-Court Appeal:
Thaicom raised a preliminary objection regarding the maintainability of the intra-court appeal, arguing that Section 50 of the Arbitration and Conciliation Act, 1996, only allows appeals against orders refusing to enforce a foreign award. The court acknowledged that Section 50 does not explicitly bar intra-court appeals under Clause 15 of the Letters Patent. The court distinguished between Sections 37 and 50 of the Act, noting the absence of a negative import in Section 50. Consequently, the court held that the intra-court appeal was maintainable.

Conclusion:
The court upheld the learned Single Judge’s order, affirming the enforcement of the foreign award. The appeal was dismissed, and the parties were directed to bear their respective costs. The court concluded that the award was enforceable, and the objections raised by Raj TV regarding jurisdiction and limitation were unfounded.

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