This is a summary of a court ruling on the recognition and ...

Enforcement of Foreign Arbitral Awards: Balancing Act between Finality and Public Policy.

Case Laws     FEMA

November 19, 2024

This is a summary of a court ruling on the recognition and enforcement of foreign arbitral awards under the Arbitration and Conciliation Act, 1996. The key points are: The court upheld the maintainability of a common petition seeking both recognition and execution of foreign awards, following the Supreme Court's decision in Vedanta Limited. However, the petition was dismissed as barred by limitation under Article 137 of the Limitation Act, 1963. The court emphasized the pro-enforcement bias u/s 48 and held that non-parties cannot object to enforcement unless falling under specific grounds. It found violation of public policy and principles of natural justice, as the arbitral tribunal derived findings contrary to uncontroverted witness testimony without affording a fair hearing. The court rejected the petitioner's challenge to the de-merger scheme, as the orders attained finality after inordinate delay. It also held impleading non-signatory parties at the execution stage unwarranted without substantiating fraud allegations. Objections regarding the validity of invoking arbitration and the tribunal's composition were not considered, as the court found the awards unenforceable due to violation of public policy, lack of RBI approval for the transaction, and the foreign party's entitlement to substantial damages without supplying goods under the agreement.

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