India / 31 August 2001 / India, Supreme Court / Smita Conductors Ltd. v. Euro Alloys Ltd. / Civil Appeal No. 12930 of 1996
| Country | India |
| Court | India, Supreme Court |
| Date | 31 August 2001 |
| Parties | Smita Conductors Ltd. v. Euro Alloys Ltd. |
| Case number | Civil Appeal No. 12930 of 1996 |
| Applicable NYC Provisions | II | II(1) | II(2) |
| Source |
http://www.judis.nic.in (website of the decisions of the Supreme Court as well as several High Courts) |
| Languages | English |
| Summary | In August 1990, Euro Alloys proposed a contract for the sale of aluminum rods to Smita Conductors. Despite several requests and reminders, Smita neither signed nor returned the contract, which contained an arbitration clause. Smita did, however, open several irrevocable letters of credit, and shipments were made in performance of the contract. A subsequent dispute led to a July 1992 arbitral award in favour of Euro Alloys. Euro Alloys then obtained an order from the Bombay High Court for enforcement of the award, with interest, under the 1961 Foreign Awards (Recognition & Enforcement Act) ("1961 Act"), which implemented the NYC. Smita appealed, arguing that (1) enforcement violated Section 2(a) of the 1961 act and Article II(1)-(2) of the NYC because the agreement containing the arbitration clause was not signed by both parties, and none of the parties' other written exchanges contained an agreement to arbitrate, and (2) it would be contrary to the public policy of India to enforce the award, in violation of Section 7(1)(b)(ii) of the 1961 Act (which directly incorporates Article V(2)(b) NYC). The Supreme Court dismissed the appeal and affirmed the decision of the High Court. It held that Smita’s conduct, particularly the acts of opening the letters of credit in reliance on the contract and invoking the contract’s force majeure clause, demonstrated its acknowledgement and acceptance of the terms of the written contract. Therefore, it would be illogical to let Smita escape its obligations under the contract simply because it failed to sign. The Court also found that because the arbitrator’s conclusions were plausible, enforcing the award would not be contrary to the public policy of India. |
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Attachment (1)
 Original Language Adobe Acrobat PDF |
