India / 07 October 1993 / India, Supreme Court / Renusagar Power Co Ltd v. General Electric Company and anor.
| Country | India |
| Court | India, Supreme Court |
| Date | 07 October 1993 |
| Parties | Renusagar Power Co Ltd v. General Electric Company and anor. |
| Applicable NYC Provisions | V | V(2) | V(2)(b) |
| Source |
(1994) 2 Arb LR 405: AIR 1994 SC 860, 885, 888: 1994 Supp (1) SCC 644 | http://www.judis.nic.in (website of the decisions of the Supreme Court as well as several High Courts) |
| Languages | English |
| Summary | Renusagar Power Co Ltd (“Renusagar”) entered into a contract General Electric Company (“General Electric”), which provided for arbitration under the auspices of the International Chamber of Commerce (“ICC”) in Paris. A dispute arose and General Electric referred the matter to arbitration. Renusagar argued that the dispute did not fall within the scope of the arbitration agreement but the Supreme Court of India ruled against it. An award was rendered in favour of General Electric which it sought to enforce before the High Court of Bombay. The High Court enforced the award and Renusagar appealed to the Supreme Court, arguing that (i) the arbitral tribunal had failed to inform it of the potential effects of certain of the Tribunal's decisions, thereby rendering it unable to present its case in violation of Section 7(1)(a)(ii) of the Foreign Awards (Recognition and Enforcement) Act 1961 (the “1961 Act”) (mirroring Article V(1)(b) NYC); and, (ii) the terms of the award were grossly unfair, so enforcement would be contrary to public policy, in violation of Section 7(b)(ii) of the 1961 Act (mirroring Article V(2)(b) NYC). The Supreme Court dismissed Renusagar’s appeal and affirmed the lower court's decision. The Court rejected Renusagar’s contention that it had been unable to present its case in violation of Section 7(1)(a)(ii) of the 1961 Act because Renusagar voluntarily refused to appear before the arbitral tribunal. Therefore, it could not complain of the alleged effects this had on presentation of its case at this stage in the proceedings. The Court also rejected Renusagar’s public policy argument. First, it held that the term “public policy” in Section 7(1)(b)(ii) of the 1961 Act referred to the public policy of India and not the public policy of New York. It based this conclusion on Article V(2)(b) NYC, which it found to clearly refer to the public policy of the country enforcing the award. Second, it held that the award was not contrary to the public policy of India. The Court determined that under Section 7(1)(b)(ii) of the 1961 Act, the enforcement an award violates the public policy of India if enforcement would be contrary to (i) a fundamental policy of Indian law; (ii) the interests of India; or, (iii) justice or morality. The Court found that no aspect of the award or interest was excessive or unjust, and therefore enforcing the award would not be contrary to India's public policy. |
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