2016 (10) TMI 1388 - HC - Indian Laws

Seeking enforcement of foreign award - whether the award, which is based on the application of Singaporean law of limitation, would be unenforceable in India on the ground that it is violative of the public policy in India? - Whether the Arbitrator had stepped outside his jurisdiction by considering the claims made by the petitioner for teleport and occasional services, as they were, purportedly, not part of the main agreement? - HELD THAT - Once it is accepted that the law of limitation would be the Singaporean law, as has also been ruled by the learned Arbitrator, the next tertiary issue which would arise for consideration would be Would such a conclusion, lead to violation of the public policy in India. The Court, in Shri Lal Mahal's case 2013 (7) TMI 643 - SUPREME COURT , ultimately, upheld the dicta laid down in its earlier judgment in Renusagar Power Company V. General Electric Company 1993 (10) TMI 232 - SUPREME COURT , which adumbrated that public policy in the context of foreign award has to be viewed in a narrower sense, and that, in order to attract the bar of public policy qua enforcement of a foreign award, it must invoke something more than just a mere violation of the law of India. In the instant case, the objections articulated clearly do not fall foul of the head, the fundamental policy of India Frankly, given the scope of Section 45, this argument was not available before the learned Arbitrator. However, since, in any event, such a submission was made, the learned Arbitrator, evidently, dealt with the same and held that as the Singaporean law of limitation applied, the agreement, which was otherwise lawful and binding, was neither null and void, nor inoperative or incapable of being performed, within the meaning of Section 45 of the 1996 Act. Thus, no fault can be found with the reasoning of the learned Arbitrator, and therefore, this submission, being misconceived, is also rejected - petition allowed.

Summary

Issues Involved:

1. Enforceability of the foreign award under the Arbitration and Conciliation Act, 1996.
2. Jurisdiction of the Arbitrator.
3. Applicability of the law of limitation.
4. Public policy of India.

Issue-wise Detailed Analysis:

1. Enforceability of the Foreign Award:
This petition was filed under Sections 47 and 49 of the Arbitration and Conciliation Act, 1996, to enforce a foreign award dated 21.09.2015 as a deemed decree. The petitioner, the original claimant, sought enforcement of the award which directed the respondent to pay various sums for unpaid fees, legal costs, and interest.

2. Jurisdiction of the Arbitrator:
The respondent objected to the award, claiming the Arbitrator acted beyond his jurisdiction by adjudicating disputes outside the scope of the agreement. The respondent also contended that claims related to teleport and occasional services were not part of the main agreement. However, the court noted that the jurisdictional challenge was raised belatedly, only during closing submissions, and not in the initial defense statement. The Arbitrator had found that variations to the agreement included teleport and occasional services, which were discussed in meetings between the parties.

3. Applicability of the Law of Limitation:
The respondent argued that the claims were beyond the limitation period prescribed under Indian law, asserting that the commencement of arbitration in 2012 was belated. The court, however, noted that the parties had agreed that the governing law would be Singaporean law and that the seat of arbitration would be Singapore. The Arbitrator applied Singaporean law, which provides a six-year limitation period for contract claims. The court upheld this application, stating that limitation is part of procedural law and thus governed by the law of the seat of arbitration.

4. Public Policy of India:
The respondent contended that the award was unenforceable as it violated Indian public policy, particularly the Indian Limitation Act. The court rejected this argument, emphasizing that the public policy of India, in the context of enforcing foreign awards, must be construed narrowly. The court cited the Supreme Court's decision in Shri Lal Mahal Limited v. Progetto Grano Spa, which held that enforcement of a foreign award could only be refused if it was contrary to the fundamental policy of Indian law, the interests of India, or justice and morality. The court found that the application of Singaporean law did not violate these principles.

Conclusion:
The court concluded that the objections raised by the respondent were untenable. It held that the Arbitrator had not exceeded his jurisdiction and that the application of Singaporean law of limitation was appropriate. The award did not violate the public policy of India. Consequently, the petition to enforce the foreign award was allowed, and the parties were directed to bear their own costs.