LexSHRI LAL MAHAL LTD. versus PROGETIO GRANO SPA
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(2013] 13 S.C.R. 599 f. SHRI LAL MAHAL LTD. v PROGETIO GRANO SPA (Civil Appeal No. 5085 of 2013) JULY 3, 2013 B [R.M. LODHA, MADAN B. LOKUR AND KURIAN JOSEPH, JJ.] • Arbitration and Conciliation Act, 1996 - s.48(2)(b) - Foreign award - Enforcement of - Challenge to - Award c passed by the Board of Appeal of the Grain and Feed Trade Association, London in respect of a transaction relating to 20,000 MT(+/- 5%) of Durum wheat, Indian Origin in favour of respondent-buyers - Appellant-sellers challenged the award passed by Board of Appeal in the High Court of Justice D' at London which found no ground or justification for setting aside the award - Whether foreign award in question enforceable u/s.48 - Held: If a ground supported by the decisions of the foreign country concerned was not good enough for setting aside the award by the court competent to E do so, a fortiori, such ground can hardly be a good ground for refusing enforcement of the award - Moreover, s. 48 of the Act does not give an opportunity to have a 'second look' at the foreign award in the award - enforcement stage - Scope of inquiry uls. 48 does not permit review of the foreign award F on merits - Procedural defects in the course of foreign arbitration do not lead necessarily to excuse an award from enforcement on the ground of public policy - Even if it be assumed that the Board of Appeal made some errors, such " errors would not bar the enforceability of the appeal awards G• passed by the Board of Appeal - While considering the enforceability of foreign awards, the court does not exercise appellate jurisdiction over the foreign award nor does it enquire as to whether, while rendering foreign award, some 599 H 600 SUPREME COURT REPORTS [2013] 13 S.C.R. -·A error has been committed- Under s.48(2)(b), enforcement of - a foreign award can be refused only if such enforcement is found to be contrary to (1) fundamental policy of Indian law; or (2) the interests of India; or (3) justice or morality- On facts, objections raised by appellant not falling in any of these B categories and, therefore, the foreign awards cannot be held to be contrary to public policy of India as contemplated u/ s.48(2)(/;>) - Awards in question can be enforced. Appeal award nos. 3782 and 3783 both dated 21.09.1998 were passed by the Board of Appeal of the C Grain and Feed Trade Association, London in respect of a transaction relating to 20,000 MT (+/- 5%) of Durum wheat, Indian Origin in favour of respondent-buyers. After both the foreign awards attained finality, the respondent- b uyers instituted suit in the Delhi High Court for D enforcement of the same. The appellant-sellers raised diverse objections to enforcement of the said two foreign ·awards. The High Court overruled the objections raised by the sellers and held that the said foreign awards were enforceable under Part II of the Arbitration and E Conciliation Act, 1996. The appellant contended before this Court that the awards by the Board of Appeal cannot be enforced on the touchstone that they are contrary to public policy of India, F as both the Arbitral Tribunal, GAFTA and the Board of Appeal went beyond the terms of the contract between the sellers and the buyers. It was contended that despite the contract being FOB contract between the parties which specifically sets out that the certificate of quality obtained at the load port from the buyers' nominated G certifying agency, i.e., S.G.S. would be final and the certifying agency in fact issued such a certificate, the Arbitral Tribunal, GAFTA as well as the Board of Appeal relied upon evidence procured unilaterally by the buyers l H from other certifying agencies beyond the terms of the SHRI LAL MAHAL LTD. v. PROGETTO GRANO SPA 601 contract which was based on quality specifications of a A forward contract which the buyers had signed with OAIC Algiers. The appellant contended that the Board of Appeal dealt with the questions not referred to it and which were never in dispute and, therefore, award cannot be enforced because it is contrary to Section 48(1 )(c) of B the 1996 Act as well. The appellant contended that in light of the two decisions of this Court in Saw Pipes and Phulchand Exports, the Court can refuse to enforce a foreign award C if it is contrary to the contract between the parties and/ or is patently illegal. It was argued on behalf of the appellant, that the expression
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