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Dan Xie / Transnational Due Process and Article V(1)(b) of the New York Convention - 01/06/2024
Author(s) Dan Xie Subject(s) B. Books on the 1958 New York Convention Applicable NYC Provisions V(1)(b) ISBN 978-94-035-2437-5 Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6917&opac_view=6
Author(s) Fernando Zuñiga ; Beltran Flores Source Kluwer Arbitration Blog Subject(s) B. Articles on the recognition and enforcement of arbitral awards in specific countries and regions (including book chapters) Jurisdictions Chile Applicable NYC Provisions V | V(1)(b) | V(2)(b) Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6886&opac_view=6
Author(s) Emilio Bettoni Source in Deference in International Commercial Arbitration: The Shared System of Control in International Commercial Arbitration, Wolters Kluwer, pp. 265-300 Subject(s) A. Articles on the 1958 New York Convention Applicable NYC Provisions V(1) | VII(1) | IX(1) | V(1)(a) | V(1)(b) | V(1)(c) | V(1)(d) | V(1)(e) | VII | IX Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6871&opac_view=6
Author(s) Alfred Lewis Source in Arbitration International, 2023, Volume 39, Issue 1, pp. 39-62 Subject(s) A. Articles on the 1958 New York Convention Jurisdictions Russia Applicable NYC Provisions V(2)(a) | III | V | V(1) | V(2) | V(1)(b) | I(3) | I(1) | XIV Worldcat Number Worldcat : 9963158196 
Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6857&opac_view=6
Author(s) Alex Dong Source in Journal of International Arbitration, Kluwer Law International 2022, Volume 39 Issue 3) pp. 491-517 Subject(s) B. Articles on the recognition and enforcement of arbitral awards in specific countries and regions (including book chapters) Jurisdictions China Applicable NYC Provisions II | III | V | V(1)(a) | V(1)(b) | V(1)(c) | V(1)(d) | V(2)(b) | II(1) | II(2) Worldcat Number Worldcat : 9531412601 Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6744&opac_view=6
China / 25 February 2022 / China, 山东省青岛市中级人民法院 (Shandong, Qingdao Intermediate People’s Court) / ECOM Agroindustrial Corp. Ltd. Switzerland v. 青岛锦华东国际贸易有限公司 / (2021)鲁02协外认3号
Country China Court China, 山东省青岛市中级人民法院 (Shandong, Qingdao Intermediate People’s Court) Date 25 February 2022 Parties ECOM Agroindustrial Corp. Ltd. Switzerland v. 青岛锦华东国际贸易有限公司 Case number (2021)鲁02协外认3号 Applicable NYC Provisions IV | V | V(1)(a) | V(1)(b) Source https://wenshu.court.gov.cn/ (China Judgements Online)
Languages Chinese Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6802&opac_view=6 Attachment (1)
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Author(s) Dalma Kovács Source in Dispute Resolution Journal, Kluwer Law International, AAA-ICDR 2022, Volume 76 Issue 1 pp. 115-136 Subject(s) B. Articles on the recognition and enforcement of arbitral awards in specific countries and regions (including book chapters) Jurisdictions Hungary Applicable NYC Provisions IV | V | V(1) | V(1)(a) | V(1)(b) | V(1)(c) | V(1)(d) | V(1)(e) | V(2) | V(2)(a) | V(2)(b) Worldcat Number Worldcat : 9530313212 Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6755&opac_view=6
Country United States Court United States, U.S. Court of Appeals, District of Columbia Circuit Date 15 January 2021 Parties LLC SPC Stileks v. The Republic of Moldova Case number 19-7142 Applicable NYC Provisions I | V | V(1) | V(1)(b) | V(1)(c) | VI Source online: PACER
Languages English see also : Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6584&opac_view=6 Attachment (1)
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Country China Court China, 浙江省湖州市中级人民法院 (Zhejiang, Huzhou Intermediate People’s Court) Date 24 December 2020 Parties 奥克塔福系统有限公司 (Octaform Systems Inc.) v. 华浚塑料建材有限公司 Case number (2019)浙05协外认1号 Applicable NYC Provisions IV | V | V(1) | V(1)(b) | V(1)(c) | V(1)(d) | V(2) | V(2)(b) Source https://wenshu.court.gov.cn/ (China Judgements Online)
Languages Chinese Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6810&opac_view=6 Attachment (1)
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Country United States Court United States, U.S. Court of Appeals, Second Circuit Date 25 November 2020 Parties Rodrigo R. Pagaduan v. Carnival Corporation, et al. Case number 19-3400-cv Applicable NYC Provisions V | V(1) | V(1)(b) | V(2) | V(2)(b) Source online: PACER
Languages English Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6577&opac_view=6 Attachment (1)
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Country United States Court United States, U.S. District Court, Eastern District of Arkansas Date 14 September 2020 Parties Tetronics (International) Limited v. BlueOak Arkansas, LLC Case number 4:20CV00530 SWW Applicable NYC Provisions III | V | V(1) | V(1)(b) | VI Source online: PACER
Languages English see also : Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6563&opac_view=6 Attachment (1)
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Country China Court China, 广东省广州市中级人民法院 (Guangdong, Guangzhou Intermediate People’s Court) Date 06 August 2020 Parties 布兰特伍德工业有限公司 [Brentwood Industries, Inc. (U.S.A)] v. 广东阀安龙机械成套设备工程有限公司 Case number (2015)穗中法民四初字第62号 Applicable NYC Provisions V | V(1) | V(1)(b) | V(1)(c) Source http://wenshu.court.gov.cn (China Judgements Online)
Languages Chinese Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6559&opac_view=6 Attachment (1)
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Country United States Court United States, U.S. District Court, Southern District of New York Date 30 July 2020 Parties PB Life and Annuity Co. Ltd. v. Universal Life Insurance Company Case number 20-cv-2284 (LJL) Applicable NYC Provisions V | V(1) | V(1)(b) | V(1)(e) | V(2) | V(2)(a) | V(2)(b) Source online: PACER
Languages English see also : Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6349&opac_view=6 Attachment (1)
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Country China Court China, 江苏省苏州市中级人民法院 (Jiangsu, Suzhou Intermediate People’s Court) Date 20 July 2020 Parties 嘉能可有限公司 v. 昆山立益纺织有限公司s Case number (2019)苏05协外认2号 Applicable NYC Provisions I | I(1) | III | V | V(1) | V(1)(a) | V(1)(b) Source https://wenshu.court.gov.cn/ (China Judgements Online)
Languages Chinese Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6813&opac_view=6 Attachment (1)
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Country Netherlands Court Netherlands, Gerechtshof Amsterdam (Court of Appeal of Amsterdam) Date 14 July 2020 Parties 200.224.067/01 Case number 200.224.067/01 Applicable NYC Provisions III | IV | V | V(1) | V(1)(a) | V(1)(b) | V(1)(c) | V(1)(d) | V(2) Source https://www.rechtspraak.nl (official website of the Netherlands judiciary system)
Languages Dutch see also : Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6343&opac_view=6 Attachment (1)
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Country United Kingdom Court England and Wales, High Court Date 10 July 2020 Parties Shell Energy Europe Limited v. Meta Energia SpA Case number CL-2020-000271 Applicable NYC Provisions V | V(1) | V(1)(b) | V(1)(e) | VI Source [2020] EWHC 1799 (Comm) | online: BAILII
Languages English Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6243&opac_view=6 Attachment (1)
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Country Lithuania Court Lithuania, Lietuvos Apeliacinis Teismas (Court of Appeal of Lithuania) Date 03 July 2020 Parties Dreymoor Fertilizers Overseas PTE LTD v. AVAGRO and AVAGRO LLC Case number e2T-34-943/2020 Applicable NYC Provisions II | II(1) | II(2) | V | V(1) | V(1)(a) | V(1)(b) | V(1)(c) | V(2) | V(2)(a) | V(2)(b) Source https://www.apeliacinis.lt (website of the Court of Appeal of Lithuania)
Languages Lithuanian Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6369&opac_view=6 Attachment (1)
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Country China Court China, 浙江省嘉兴市中级人民法院 (Zhejiang, Jiaxing Intermediate People’s Court) Date 01 July 2020 Parties 上海佳船机械设备进出口有限公司 v. 美克斯海洋工程设备股份有限公司 Case number (2019)浙04协外认1号 Applicable NYC Provisions V | V(1) | V(1)(b) | V(1)(d) | V(2) | V(2)(b) Source http://wenshu.court.gov.cn (China Judgements Online)
Languages Chinese Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6558&opac_view=6 Attachment (1)
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Country China Court China, 浙江省嘉兴市中级人民法院 (Zhejiang, Jiaxing Intermediate People’s Court) Date 01 July 2020 Parties 上海佳船机械设备进出口有限公司 v. 美克斯海洋工程设备股份有限公司 Case number (2019)浙04协外认2号 Applicable NYC Provisions V | V(1) | V(1)(b) | V(1)(d) | V(2) | V(2)(b) Source http://wenshu.court.gov.cn (China Judgements Online)
Languages Chinese Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6557&opac_view=6 Attachment (1)
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Country China Court China, 广州海事法院 (Guangzhou Maritime Court) Date 17 June 2020 Parties 安富尔自由贸易区公司 (Emphor FZCO) v. 广东粤新海洋工程装备股份有限公司 Case number (2020)粤72协外认1号 Applicable NYC Provisions IV | V | V(1) | V(1)(b) | V(1)(c) | V(2) Source http://wenshu.court.gov.cn (China Judgements Online)
Languages Chinese Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6556&opac_view=6 Attachment (1)
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Country United States Court United States, U.S. Court of Appeals, Fourth Circuit Date 08 June 2020 Parties Denver Global Products, Inc. v. Roger Leon, Jeanne Hendrix, Keith Piercy et al. Case number 18-1853 Applicable NYC Provisions V | V(1) | V(1)(a) | V(1)(b) | V(2) | V(2)(b) Source online: PACER
Languages English affirms : Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6329&opac_view=6 Attachment (1)
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Country India Court India, Supreme Court Date 02 June 2020 Parties M/S. Centrotrade Minerals and Metals Inc. v. Hindustan Copper Ltd. Case number Civil Appeal No. 2562 of 2006 and No. 2564 of 2006 Applicable NYC Provisions V | V(1) | V(1)(b) Source https://www.sci.gov.in (website of the Supreme Court of India)
Languages English Summary Summary prepared by Ishita Mishra (Advocate, Supreme Court of India | Chambers of Mr. Gourab Banerji)
This case was the final instalment in the Centrotrade series (which had seen two previous rounds of litigations at the Supreme Court), and finally enforced in 2020, a foreign arbitral award that had been passed in 2001. This dispute between the parties had arisen with respect to the quantity of dry weight copper concentrate that had to be supplied by Hindustan Copper Ltd (the “Respondent”) to Centrotrade, the Appellant, pursuant to a contract for sale. Centrotrade is a U.S. Corporation which had entered into the above-mentioned contract for sale of 15,500 DMT of copper concentrate which was to be delivered by the Respondent at the Kandla Port in the State of Gujarat. Clause 14 of this contract for sale contained a two-tier arbitration clause, which provided for at the first stage, an arbitration in India and then at the second stage, offered the parties an option to ‘appeal’ against the award of the Indian arbitrator by conducting a second arbitration in London under ICC Rules.
In 1996, Centrotrade had invoked the arbitration clause against the Respondent. On 15 June 1999, a nil award had been passed by the Indian arbitrator (“First Award”). After the passing of this award, Centrotrade then utilised the provisions of clause 14 to initiate a second arbitration under ICC Rules in London. In these proceedings, an award was passed by Sir Jeremy Cooke QC on 29 September 2001 in favour of Centrotrade (“Second Award”). Centrotrade now sought to enforce this award in India and filed an application for enforcement of this award before the Calcutta High Court. The case was called before a single judge at the Calcutta High Court who enforced this award. However, the Respondent appealed this decision of the Single Judge, and on appeal, the Division Bench of the Calcutta High Court refused to enforce the Second Award. They observed that the Second Award was not a foreign award as both the arbitral awards (the First and the Second Awards) had been delivered by arbitrators who exercised concurrent jurisdiction and hence, the First Award and the Second Award were mutually destructive. The court held that neither award could be enforced under Section 48 of the Arbitration and Conciliation Act, 1996 (“Indian Arbitration Act”). Centrotrade, then appealed this judgment of the Division Bench of the Calcutta High Court before the Supreme Court of India. A two-judge bench of the Supreme Court of India then further referred this appeal to a larger bench as two separate judgments had been delivered by a two-judge bench in Centrotrade Minerals & Metals Inc v HCL (2006) 11 SCC 245.
This appeal was then heard by a three-judge bench. This bench now focused on two main issues, (i) whether a two-tier arbitration clause was permissible under Indian law, and (ii) if yes, whether the Second Award would be recognised as a ‘foreign award’ enforceable under Section 48 of the Indian Arbitration Act. The first issue was answered in the affirmative by the Supreme Court in Centrotrade Minerals & Metals Inc v HCL (2017) 2 SCC 228. The second issue was referred to another bench of the Supreme Court on account of time constraints facing the 2017 bench.
The second issue related to the enforcement of the Second Award. The Court in ruling on the recognition and enforcement of the Second Award after noting that no challenge had been filed at the seat court against the Second Award, looked at (i) whether the arbitrator should have determined the question of jurisdiction as a preliminary question?, and (ii) whether the Respondent was unable to present its case and in particular at the meaning of the word ‘otherwise’ when interpreting ‘otherwise unable to present his case’ under Section 48(1)(b)? The Respondent argued that the arbitrator the ought to have determined the question of jurisdiction before going into the substantive issues. The Court observed that no such argument had been raised by the Respondent in the past proceedings and then went on to observe on fact that there was no evidence produced which unequivocally showed that the arbitrator sought to take up the plea as to jurisdiction as a preliminary objection. The Respondent then argued that the Second Award must be refused enforcement under Section 48(1)(b) as the Respondent had not been given the full opportunity to present its case by the arbitrator. In evaluating this submission of the Respondent, the court while inferring this provision, referred to the NYC and attributed a narrower meaning to the word “otherwise” as used in Section 48(1)(b) (“…the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings or was otherwise unable to present his case”). The court did so, relying on its judgment in Vijay Karia v Prysmian Cavi 2020 SCC OnLine SC 177 which emphasised on the pro-enforcement bias that runs through the NYC and Part II of the Indian Arbitration Act. The court also noted that an arbitrator’s ‘misconduct’ (as defined under the older (Indian) Arbitration Act, 1940) was a broader ground for setting aside an award, than a party being unable to present its case before the arbitrator as provided for under Section 48(1)(b).
The court then went on to examine what would constitute a party being ‘unable to present its case’. The court took note of judgments from the United Kingdom (Minmetals Germany GmbH v. Ferco Steel Ltd. (1999) C.L.C. 647, Eastern European Engineering v. Vijay Consulting (2019) 1 LLR 1 (QBD), Cuckurova Holding A.S. v. Sonera Holding B.V. (2014) UKPC 15), United States (Jorf Lasfar Energy Co. v. AMCI Export Corp. 2008 WL 1228930, Consorcio Rive v. Briggs of Cancun 134 F. Supp 2d 789, the US District Court, E.D. Louisiana, Four Seasons Hotels v. Consorcio Barr S.A. 613 Supp 2d 1362 (S.D. Fla. 2009)), Hong Kong (Nanjing Cereals v. Luckmate Commodities XXI Y.B. Com. Arb. 542 (1996)) and Italy (De Maio Giuseppe v. Interskins Y.B. Comm. Arb. XXVII (2002) 492) which interpreted this phrase in the context of their domestic arbitration legislations and under Article V(1)(b) NYC and then analysed the facts of the present case. The court noted that the Sir Cooke had provided the Respondent with several opportunities to advance documents and legal submissions in its support. The court noted that, the Respondent had chosen to not participate in the arbitral proceedings in relation to the Second Award until August 2001 and in spite of this, had been granted several time extensions (as requested) and that even submissions made by the Respondent beyond agreed timelines had been taken into account by Sir Cooke before passing his award. The court held that there was no mistake in the conduct of the arbitral proceedings as undertaken by Sir Cooke. Additionally, the court also observed that an enforcing court under Section 48 did not have the power to remand matters back to an ICC arbitrator for him / her to pass a fresh award. Consequently, the Supreme Court enforced the Second Award and allowed Centrotrade’s appeal.
reverses : Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6374&opac_view=6 Attachment (1)
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Country China Court China, 天津市第一中级人民法院 (Tianjin No. 1 Intermediate People’s Court) Date 18 May 2020 Parties FSOJ国际有限责任公司 (FSOJ International LLC) v. 天津北方电影集团有限公司 Case number (2018) 津01协外认3号 Applicable NYC Provisions II | III | V | V(1) | V(1)(a) | V(1)(b) | V(1)(d) Source http://wenshu.court.gov.cn (China Judgements Online)
Languages Chinese Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6554&opac_view=6 Attachment (1)
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Country China Court China, 天津市第一中级人民法院 (Tianjin No. 1 Intermediate People’s Court) Date 18 May 2020 Parties IM全球有限责任公司 (IM Global LLC) v. 天津北方电影集团有限公司 Case number (2018)津01协外认2号 Applicable NYC Provisions II | III | V | V(1) | V(1)(a) | V(1)(b) | V(1)(d) Source http://wenshu.court.gov.cn (China Judgements Online)
Languages Chinese Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6555&opac_view=6 Attachment (1)
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Country China Court China, 广东省东莞市中级人民法院 (Guangdong, Dongguan Intermediate People’s Court) Date 30 April 2020 Parties 科兹集团分销有限公司 (Limited Liability Company, Kurgroup Distribution) v. 广东省东莞畜产进出口有限公司 Case number (2019)粤19协外认1号 Applicable NYC Provisions I | II | IV | V | V(1) | V(1)(b) | V(1)(c) Source http://wenshu.court.gov.cn (China Judgements Online)
Languages Chinese Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6553&opac_view=6 Attachment (1)
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Country United States Court United States, U.S. District Court, Southern District of Florida Date 09 April 2020 Parties Productos Roche S.A. v. Iutum Services Corp. and Gerardo Jose Guarino Case number 20-20059-Civ-Scola Applicable NYC Provisions V | V(1) | V(1)(a) | V(1)(b) Source online: PACER
Languages English affirmed by : Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6316&opac_view=6 Attachment (1)
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Country United States Court United States, U.S. Court of Appeals, Fifth Circuit Date 06 April 2020 Parties OJSC Ukrnafta v. Carpatsky Petroleum Corporation Case number 19-20011 Applicable NYC Provisions II | IV | V | V(1) | V(1)(a) | V(1)(b) | V(1)(c) | V(1)(d) | V(1)(e) | V(2)(b) Source online: PACER
Languages English affirms : Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6314&opac_view=6 Attachment (1)
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Country China Court China, 山东省烟台市中级人民法院 (Shandong, Yantai Intermediate People’s Court) Date 16 March 2020 Parties 皇家食品进口公司 (Royal Food Import Corp) v. 烟台洛克西进出口有限公司 Case number (2017)鲁06民初382号 Applicable NYC Provisions IV | IV(1) | IV(1)(a) | IV(1)(b) | V | V(1) | V(1)(b) | V(1)(c) Source http://wenshu.court.gov.cn (China Judgements Online)
Languages Chinese Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=6550&opac_view=6 Attachment (1)
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Country India Court India, Supreme Court Date 13 February 2020 Parties Vijay Karia & Ors. v. Prysmian Cavi e Sistemi S.r.l. & Ors. Case number Civil Appeals No. 1544 of 2020 and No. 1545 of 2020 Applicable NYC Provisions I | II | III | IV | V | V(1) | V(1)(a) | V(1)(b) | V(1)(e) | V(2) | V(2)(b) | VII | VII(1) Source https://www.sci.gov.in (website of the Supreme Court of India)
Languages English Summary Summary prepared by Ishita Mishra (Advocate, Supreme Court of India | Chambers of Mr. Gourab Banerji)
A sole arbitrator had passed four arbitral awards (Awards) in a London Court of International Arbitration (LCIA) arbitration. The context of the dispute was a joint venture dispute between the Appellants and the Respondents. The Respondents had initiated arbitration proceedings against the Appellants for materially breaching various provisions of the joint venture agreement (JVA) and in particular, for loss of effective control over ‘Ravin’, the joint venture company. In response to these allegations, the Appellants filed a set of counter claims which alleged that the Respondents had violated their non-compete obligations by acquiring a competing business in India through their indirect acquisition of ACPL (which was Ravin’s competitor), breached confidentiality and interfered in the management of Ravin among others. The parties agreed that on account of the alleged material breaches, the party successful in this arbitration would be entitled to buy out the other at a 10% premium / discount under the JVA.
Through the first partial final award, the tribunal had interpreted certain provisions of the JVA and concluded that the Appellants had not succeeded in their primary submission that the conclusion of contracts of sales in India by the Respondent through a company other than Ravin was contrary to the JVA. In the second award, the tribunal dismissed the Appellant’s counter claims and observed that the Appellants had committed several breaches of the JVA. Counter claims of interference in management and mismanagement, breach of confidentiality and violation of non-compete obligations under the JVA were dismissed. The tribunal observed that the Appellant was always aware of Prysmian SA’s acquisition of the Draka group which would result in its acquisition of its subsidiary ACPL and yet had never objected to the same.
Prior to the passing of the third partial award, the Appellants challenged the appointment of the arbitrator on the ground of alleged lack of impartiality or independence. This challenge was dismissed by the LCIA Court as it had been made out of time as per the LCIA Rules. Through the final award, the shares to be transferred by the Appellants to the Respondents were valued. No challenge was made by the Appellants to this award under the (English) Arbitration Act, 1996 in the seat court (Courts of London, United Kingdom). An appeal was only filed by Shri Vijay Karia when an enforcement petition was filed under Section 48 of the Indian Arbitration and Conciliation Act, 1996 (1996 Act) at the Bombay High Court. Through his judgment, Justice A.K Menon held these 4 arbitral awards to be enforceable. The Bombay High Court enforced the arbitral awards as it found that none of the allegations raised by the Appellants met the conditions under Section 48 for a successful challenge such as that of an invalid arbitration agreement, violation of principles of natural justice, award going beyond the scope of arbitration, non-arbitrable subject matter and violation of the fundamental policy of India among others. The Appellants, unhappy with the Bombay High Court’s determination, impugned this judgment before the Supreme Court of India.
The Supreme Court when deciding on this appeal, first examined the scope of Section 48 of the 1996 Act. By citing precedent from the US Court of Appeals, Second Circuit in Parsons & Whittemore Overseas Co. v. Societe Generale De L’Industrie Du Papier 508 F.2d 969 (1974) and US District Court, District of Colombia in Compagnie des Bauxites de Guinee v. Hammermills Inc. (1992) WL 122712, US Court of Appeals for the 5th Circuit in Karaha Codas Co., L.L.C v. Perusahaan Pertambagan Minyak 364 F.3d 274 (2004) among others observed that there was prevalence of a “pro-enforcement bias” under the NYC which was adopted by India within its legislature through Section 48 of the 1996 Act.
The Supreme Court further elaborated on the narrow review powers available to a ‘court’ under Section 48 of the 1996 Act. The Court approvingly cited provisions from its judgments in Renusagar Power Plant Co Ltd v. General Electric (1994 Supp (1) SCC 644) and Ssangyong Engineering & Construction Limited v. NHAI (2019 SCC OnLine SC 677) which observed that a foreign award being enforced under the NYC may not be examined by a review court on the basis of merits. The Court also referred to its judgment in Shri Lal Mahal v. Progetto Grando SPA (2014 2 SCC 433) and reiterated that Section 48(2)(b) of the 1996 Act contemplated a narrower review under the ground of “fundamental policy of Indian law”. The Court signaled towards the same being a part of the legislative intent by noting that Section 48 had been amended in 2015 to delete the ground of “contrary to the interest of India.”
The Supreme Court then considered the issue of whether a court could still enforce a foreign award even if some grounds under Section 48 of the 1996 Act were made out. This argument relied on the usage of the word “may” in Section 48 of the 1996 Act instead of ‘shall.’ The Court first discussed the legislative intent behind use of the word “may” in Article V NYC by endorsing the view that Articles V(1) and V(2) use permissive and not mandatory language. The Court then noted that the grounds under Section 48 could be classified into three groups i.e. “…grounds which affect the jurisdiction of the arbitration proceedings, grounds which affect the party interest alone; and grounds which go to the public policy of India…” and held that courts could not have any discretion if grounds affecting the public policy of India were made, but if grounds affecting party interest alone were made out, then the enforcing court will have the residual discretion when it came to enforcement of such awards. Consequently, the Supreme Court held that the word “may” in Section 48 of the 1996 Act could be interpreted as ‘shall’ depending on the context.
The Supreme Court also reviewed the Appellants’ challenge to the awards on the basis of violation of the principles of natural justice under Section 48(1)(b) of the 1996 Act. The Appellants’ had alleged that the principle of audi alteram partem was not followed as the Appellants had been unable to present their case on account of wilful failure on part of the Respondents to produce documents and the tribunal having not drawn a negative inference from the same. While deciding on this aspect, the Court referred to its judgment in Sohan Lal Gupta v. Asha Devi Gupta (2003 7 SCC 492) and the Delhi High Court’s judgment in Glencore International AG v. Dalmia Cement (Bharat) Limited (2017 SCC Online Del 8932). In Glencore International (supra), the Delhi High Court had observed that Section 48(1)(b) of the 1996 Act was pari materia to Article V(1)(b) NYC and hence a clear case of falling foul of the minimal standards of due process / natural justice needed to be established under Section 48(1)(b) of the 1996 Act to warrant a refusal of enforcement. The Supreme Court held that the phrase “was otherwise unable to present his case” should be interpreted narrowly and would be breached only if a fair hearing was not given by the tribunal to the parties. Poor reasoning by a tribunal would not meet the threshold under Section 48(1)(b) of the 1996 Act. The Court held that a failure of a tribunal in examining a material issue would not be sufficient for a challenge under Section 48(1)(b) of the 1996 Act unless such a failure went to the root of the matter and shocked the conscience of a court. The Court reiterated that a pro-enforcement undercurrent must feature in a review even under Section 48(1)(b) of the 1996 Act and that if an award addresses basic issues raised by the parties and in substance, decides on the claims and counter claims, then “enforcement must follow”.
The final issue before the Supreme Court was whether these awards violated India’s foreign exchange laws, and in particular, the Foreign Exchange Management Act, 1999 (FEMA). The award directed a sale of shares at a discount to a foreign party (the Respondents). The Supreme Court held that the award did not violate India’s public policy. The Court traced the history of India’s foreign exchange laws from ‘policing to management’ and approved the Delhi High Court’s judgment in Cruz City 1 Mauritius Holdings v. Unitech Limited (2017 239 DLT 649; in this case, the Delhi High Court had held that an application to resist enforcement of a foreign award on the basis of public policy grounds will only succeed if the objections are of such a nature that they offend the core values of India’s national policy “which it cannot be expected to compromise”, and that a mere inconsistency with a regulation like the FEMA, did not automatically meet this test). The Court noted that Section 47 of the Foreign Exchange Regulation Act, 1973 (FERA) which held transactions that violated the FERA as void did not find place within the FEMA and held that a rectifiable breach under the FEMA could not amount to a violation of the fundamental policy of Indian law.
After noting the legislative and judicial history of Section 48 of the 1996 Act, the Supreme Court observed that the pleas taken by the Appellants forayed into a review of the awards on the basis of merits, and that the same is not permitted under Section 48 of the 1996 Act read with the NYC. The Supreme Court noted that the Appellants in the present case appeared to be indulging in “…speculative litigation with the fond hope that by flinging mud on a foreign arbitral award, some of the mud so flung would stick.”. The Supreme Court after perusing the court records, rejected all of the grounds raised, dismissed the appeal of Shri Vijay Karia and imposed costs on the Appellants of Rs. 5,000,000 (Indian Rupees Five Million) for attempting to argue this matter as a first appeal despite being aware of the limited scope of review available under Section 48 of the 1996 Act.
affirms : Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=5809&opac_view=6 Attachment (1)
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