VIJAY KARIA & ORS. versus PRYSMIAN CAVI E SISTEMI SRL & ORS.

Citation: [2020] 4 S.C.R. 336 · Decided: 13-02-2020 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Dismissed

Cited by 2 judgment(s) · cites 3 · see the full citation network in Lexace

Judgment (excerpt)

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SUPREME COURT REPORTS
[2020] 4 S.C.R.
VIJAY KARIA & ORS.
v.
PRYSMIAN CAVI E SISTEMI SRL & ORS.
(Civil Appeal No. 1544 of 2020)
FEBRUARY 13, 2020
[R. F. NARIMAN, ANIRUDDHA BOSE AND
V. RAMASUBRAMANIAN, JJ.]
Arbitration and Conciliation Act, 1996: s.48(1)(b) –
Enforcement of foreign awards – Violation of provisions of FEMA
– Whether amounts to breach of Public Policy of India – If a
particular act violates any provision of FEMA or the Rules framed
thereunder, permission of the Reserve Bank of India may be obtained
post-facto if such violation can be condoned – Neither the award,
nor the agreement being enforced by the award, can, therefore, be
held to be of no effect in law – This being the case, a rectifiable
breach under FEMA can never be held to be a violation of the
fundamental policy of Indian law – Further, even if the Reserve
Bank of India were to take action under FEMA, the non-enforcement
of a foreign award on the ground of violation of a FEMA Regulation
or Rule would not arise as the award does not become void on that
count – The fundamental policy of Indian law, must amount to a
breach of some legal principle or legislation which is so basic to
Indian law that it is not susceptible of being compromised –
“Fundamental Policy” refers to the core values of India’s public
policy as a nation, which may find expression not only in statutes
but also time-honoured, hallowed principles which are followed by
the Courts – Judged from this point of view, resistance to the
enforcement of a foreign award cannot be made on this ground.
Arbitration and Conciliation Act, 1996: s.48(1)(b) –
Enforcement of foreign awards – Refusal at the request of party if
that party furnishes to the court that he was unable to present his
case – Expression “was otherwise unable to present his case” –
Interpretation of – Held: Expression “was otherwise unable to
present his case” occurring in s.48(1)(b) cannot be given an
expansive meaning and would have to be read in the context and
colour of the words preceding the said phrase – This expression
[2020] 4 S.C.R. 336
336
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would be a facet of natural justice, which would be breached only
if a fair hearing was not given by the arbitrator to the parties –
Read along with the first part of s.48(1)(b), this expression would
apply at the hearing stage and not after the award is delivered –
Such breach should be clearly made out on the facts of a given
case, and that awards must always be read supportively with an
inclination to uphold rather than destroy, given the minimal
interference possible with foreign awards under s.48 of the Act –
Mere failure to consider a material issue would not fall within the
rubric of s.48(1)(b) – However, if a foreign award fails to determine
a material issue which goes to the root of the matter or fails to
decide a claim or counter- claim in its entirety, the award shocking
the conscience of the Court may be set aside on the ground of
violation of the public policy of India, in that it would then offend a
most basic notion of justice in this country – Poor reasoning, by
which a material issue or claim is rejected, can never fall in this
class of cases – The foreign award must be read as a whole, fairly,
and without nit-picking – In the instant case, when award is read as
a whole, it has addressed the basic issues raised by the parties and
has, in substance, decided the claims and counter-claims of the
parties, its enforcement must follow.
Arbitration and Conciliation Act, 1996: s.48 – Recognition
and enforcement of foreign awards – Scope of interference under
Art.136 – The legislative policy so far as recognition and
enforcement of foreign awards is that an appeal is provided against
a judgment refusing to recognise and enforce a foreign award but
not the other way around (i.e. an order recognising and enforcing
an award) – This is because the policy of the legislature is that
there ought to be only one bite at the cherry in a case where
objections are made to the foreign award on the extremely narrow
grounds contained in s.48 of the Act and which have been rejected
– This is in consonance with the fact that India is a signatory to the
Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, 1958 (“New York Convention”) and intends - through this
legislation - to ensure that a person who belongs to a Convention
country, and who, in most cases, has gone through a challenge
procedure to the said award in the country

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