LexRENUSAGAR POWER CO. LTD. ETC. versus GENERAL ELECTRIC CO. ETC.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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A
RENUSAGAR POWER CO. LTD. ETC.
~
v.
GENERAL ELECTRIC CO. ETC.
OCTOBER 17, 1993
B
[M.N. VENKATACHALIAH C.J., S.C. AGARAWAL
AND DR. AS. ANAND, JJ.]
Foreign Awards (Recognition and Enforceme!Jt} Act, 1961 Ss.5, 7
'Scope of Enquiry in proceedings for enforcement of ward-Held, limited to
c grounds mentioned in S. 7; does not pennit impeachm-ent of award on merits.
Foreign Awards (Recognition and Enforcement) Act, 1961 s.7 (1) (b)
(ii)-Enforcement of award objected to as being contrary to public policy of
India as well as State of New York-Held, the words 'public' refer to the public
D
policy of India and not of the State of New York whose law governs t~e
contract.
Foreign Awards (Recognition and Enforcement) Act, 1961 S.7 (1) (b)
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(ii)-Enforcement of award objected to as violating the Foreign public policy
of India-Held, violation of FERA would be contrary to public policy but on
E facts the present award would not involve any such violation.
Foreign Exchange Regulation Act,-Ss.9(1), 47(3)-Government ap-
proving foreign contract but not approving rescheduling of payments there-
under-Whether payments made would violate FERA-Held, no; government
not precluded from granting pennission under S.47(3) for enforcement of
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F
award. -
Foreign Awards (Recognition and Enforcement) Act, 1961 S.7(1) (b)
(ii)-Interest Act, 1978 S.3(3) (c)-Foreign award providing for compound
interest-En/ orcement of award objected to as being contrary to public
G policy-Held, awarding of compound interest not against public policy of
India.
' {·
Foreign Awards (Recognition and Enforcement) Act, 1961 S.7 (1) (b)
(ii }-Non-deduction from the final amount awarded of tax payable by foreign
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party to its government on regular and delinquent interest-Held, does not
H amount to unjust enrichment.
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RENU SAGAR POWER LTD. v. ELECTRIC CO.
23
·Foreign Awards (Recognition and Enforcement) Act, 1961 S.7(1) (a)
A
(ii)--Bar to enforcement of foreign award on the ground that patty unable to
present its case before arbitral ttibwiaf-Patty staying away from heating on
the ground that ttibunal had become functus officio-Ttibunal proceeding
with heating after ovenuling the objection-Held, Ttibunal not required to give
patty further notice of hearing.
Foreign Award (Recognition and Enforcement) Act, 1961
S.4( 1)-Relevant date for conversion of amount awarded in foreign cu"ency
to Indian cu"ency-Held, a matter of procedure; conversion should be on the
basis of exchange rate prevailing on date of decree made in terms of the
B
award.
C
.
Pursuant to negotiations and approval by the Government of India
on January 2, 1964? Renusagar Power Co. Ltd. ('Renusagar') and General
Electric Company, U.S.A. ('General Electric') entered into a contract on
August 24, 1964 under which General Electric was to supply Renusagar D
equipment and power services for setting up a thermal power plant at
Renukoot in Uttar P.radesh. All items of equipment were to be delivered at
New York not later than fifteen months from the contract effective date
i.e.December 31, 1964. Ten per cent of the total contract price of U.S.$
13,195,000 was to be paid in cash or by Letter of Credit. The balance ninety
per cent together with interest at 6-1/2 % per annum from the 16th to 30th E
month of the contract effective data totalling US $ 12,176,058.75 was to be
· paid in sixteen equal six- monthly instalments commencing from the expiry
of 30 months from the contract effective date i.e from June 30, 1967, the
last instalment payable on the expiry of the 120th month thereafter i.e. on
December 31, 1974. Renusagar was to execute unconditional negotiable F
promissory notes in respect of the instalments each note being uncon-
ditionaly guaranteed by United Commercial Bank.
In the event of General Electric receiving exemption from Govern-
ment of India from payment of income tax on interest payments by
Renusagar, the interest rate on such of those promissory notes exempted G
would be reduced to 6%. If no exemption was granted, Renusagar would
furnish General Electric receipts on all withheld amounts paid to Govern-
ment of India. The rights and obligations of the parties were to be governed
by the laws of the State of New York, U.S.A. Unresolvable disputes arising
out of the contract were to be settled in accordance with the Arbitration H
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SUPREME COURT REPORTS (1993] SUPP. 3 S.C.R.
A
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