Kerala High Court
M/S Concilium Marine Group A B vs Sharath Thazhathe Veedu on 31 March, 2026
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E.P.(ICA)No.1 of 2024
1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE S.MANU
TUESDAY, THE 31ST DAY OF MARCH 2026 / 10TH CHAITHRA, 1948
EP(ICA) NO. 1 OF 2024
ARBITRATION AWARD DTD.30.01.2023 IN SCC ARBITRATION
V2020/199 OF THE ARBITRAL TRIBUNAL, SWEDEN
PETITIONERS/RESPONDENTS:
1 M/S CONCILIUM MARINE GROUP A B
PO BOX 502813105 NAKA, STOCKHOLM, SWEDEN
REPRESENTED BY ITS POWER OF ATTORNEY HOLDER ADITI
DINENDRA KAMATH, AGED 37 YEARS, D/O DINENDRA
ANANT KAMATH, RESIDING AT J, 6/5, JAL MANGAL
DEEP, BANGUR NAGAR GAREGAON WEST, MUMBAI, PIN -
400090.
2 CONCEJO AB
PO BOX 502813105 NAKA, STOCKHOLM, SWEDEN
REPRESENTED BY ITS POWER OF ATTORNEY HOLDER ADITI
DINENDRA KAMATH, AGED 37 YEARS, D/O DINENDRA
ANANT KAMATH, RESIDING AT J, 6/5, JAL MANGAL
DEEP, BANGUR NAGAR GAREGAON WEST, MUMBAI,
PIN - 400090.
BY ADVS.
SRI.MILLU DANDAPANI
SRI.ANIL XAVIER (SR.)
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RESPONDENT/CLAIMANT:
SHARATH THAZHATHE VEEDU
S/O MUTHUKRISHNA VARIER VARANATTU HOUSE
PERUMBAVOOR, ERNAKULAM, KERALA, PIN - 683542.
BY ADVS.
SHRI.SAIBY JOSE KIDANGOOR
SHRI.BENNY ANTONY PAREL
SMT.PRAMITHA AUGUSTINE
SMT.NAZRIN BANU
SMT.IRINE MATHEW
SMT.ADRISYA S.
SMT.AFSANA KHAN
SHRI.SREERAJ S. RAJARAM
SMT.SNEHA J.
SMT.SANDRA ANIL
THIS EXECUTION PETITION (ICA) HAVING BEEN FINALLY HEARD ON
10.03.2026, THE COURT ON 31.03.2026 DELIVERED THE
FOLLOWING:
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[CR]
S.MANU, J.
--------------------------------------------------
E.P.(ICA)No.1 of 2024
-------------------------------------------------
Dated this the 31st day of March, 2026
JUDGMENT
Enforceability of an award for payment of costs rendered
by an Arbitral Tribunal in Sweden is the issue arising for
consideration in this case.
2. Petitioners are the respondents in Annexure 1 award.
The respondent instituted arbitral proceedings against them
before an Arbitral Tribunal in Sweden, consisting of three
members. The Tribunal concluded that no arbitration agreement
had come into existence and rejected the claims of the
respondent. Nevertheless, the Tribunal directed that the
respondent shall bear 100% of the costs of the arbitration. In
this E.P.(ICA) the petitioners are seeking to execute the award,
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contending that the respondent is liable to pay
Rs.10,51,23,485/- along with interests and costs under the
award.
3. The respondent entered appearance. He contends
that the E.P. is not maintainable and even if it is assumed that
the same is maintainable, the award is unenforceable.
Arguments advanced on behalf of the Respondent,
objecting enforcement
4. The learned Counsel for the respondent Sri.Saiby Jose
Kidangoor, raised serious objections regarding maintainability of
this execution petition. The learned Counsel made extensive
reference to the provisions of the Arbitration and Conciliation
Act, 1996. He made specific reference to various provisions in
Part-II Chapter I. The learned Counsel referred to Section 47 of
the Act and contended that the party applying for enforcement
of a foreign award shall, at the time of application, produce
before the Court the original award or a duly authenticated copy
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thereof, in the manner required by law of the country in which it
was made. As provided under Section 47(1)(b), the original
agreement for arbitration or a duly certified copy thereof shall
also be necessarily produced before the Court. The learned
Counsel pointed out that the language of Section 47(1) makes it
clear that, the production of the original award or duly
authenticated copy thereof as well as original agreement or a
duly certified copy thereof are mandatory and they shall be
produced at the time of filing of the application. He submitted
that, if the application is filed without producing the key
documents stipulated under Section 47(1)(a) and (b) at the time
of filing of the application, the application shall be treated as not
supported by evidence contemplated under Section 47 of the
Act.
5. As an extension of the said contention, the learned
Counsel submitted that production of the original arbitration
agreement or a duly certified copy has been made mandatory
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under Section 47 of the Act with a specific purpose. The learned
Counsel made reference to the provisions of the First Schedule
in this regard. He contended that, in the instant case, the finding
of the Arbitral Tribunal is that there was no valid agreement
between the parties for arbitration. He further pointed out that
the said contention was raised by the petitioner herein in it’s
defense before the Arbitral Tribunal. The said contention was
analyzed by the Arbitral Tribunal in detail. The learned Counsel
referred to Paragraph Nos.71 to 90 of Annexure 1 award. He
made specific reference to the decision of the Tribunal reflected
in paragraph No.90. The learned Counsel submitted that, the
Arbitral Tribunal entered into a categorical finding that there was
no valid agreement. He reiterated that the said finding was
actually invited by the petitioner. According to the learned
Counsel, the petitioners cannot be permitted to contend that
there was a valid arbitration agreement, differing with the
finding of the Arbitral Tribunal in the award sought to be
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executed. He submitted that the award has become final as it
was not challenged under the Swedish law. Since the award has
attained finality, the finding of the Tribunal regarding existence
of a valid agreement has also undeniably become final. That
being so, the learned Counsel submitted that the petitioner
cannot be permitted to contend that there was a valid arbitration
agreement. The learned Counsel further contended that, if there
was no valid agreement then the petitioner cannot satisfy this
Court regarding the existence of essential conditions mentioned
under Section 47 of the Act. If the application for execution is
not supported by evidence as contemplated under Section 47 of
the Act, then the application cannot be treated as maintainable
by this Court. The learned Counsel made reference to Section 44
of the Act. He pointed out that, ‘foreign award’ has been defined
as an arbitral award on differences between persons arising out
of legal relationship, whether contractual or not, considered as
commercial under the law in force in India.
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6. The learned Counsel pointed out that as provided
under Section 44(a), the foreign award shall be one passed in
pursuance of an agreement in writing for arbitration to which the
Convention set forth in First Schedule applies. He submitted that
in order to invoke the provisions of Part II, Chapter I of the Act,
the award sought to be executed shall satisfy the definition of
the foreign award under Section 44 of the Act. The learned
Counsel hence submitted that unless there is an agreement in
writing for arbitration, as clearly stipulated under Section 44(a),
an arbitral award cannot be treated as a foreign award as
defined under Section 44. He therefore submitted that such an
award, that would not satisfy the requirements mentioned in
Section 44 of the Act, cannot be sought to be enforced under
Part II of Chapter I of the Act. The learned Counsel pointed out
that the finding of the Arbitral Tribunal regarding non-existence
of a valid arbitration agreement would stand in the way of the
petitioner. The learned Counsel submitted that in view of the
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requirements under Section 44 and 47 of the Act, this execution
petition is not legally maintainable.
7. Further, the learned Counsel submitted that, the
contention of the respondent in this case would fall under
Section 48 (1) (a). If the agreement was not valid under the law
to which the parties had subjected it, the same can be raised as
a valid ground under Section 48 of the Act against enforcement
of the foreign award. Learned Counsel submitted that, in the
case at hand, the arbitration proceedings were conducted in
Sweden and Swedish law was applicable. Tribunal concluded the
proceedings by passing Annexure 1 award, holding that there
was no valid agreement. Therefore, the learned Counsel
submitted that as provided under Section 48(1)(a), the
agreement was not valid under the law to which the parties had
subjected it and therefore, the foreign award cannot be enforced
in India.
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8. The learned Counsel also submitted that the primary
inquiry to be conducted by a court in India enforcing a foreign
award is as to whether the foreign award falls within the
parameters laid down in Part II Chapter I of the Act. He
submitted that the award may be enforceable under Swedish
law. However, the award, to be enforced in India, should satisfy
the specific conditions mentioned in the provisions under Part II
Chapter I of the Act. Therefore, he submitted that the award
though has become final and may be enforceable under Swedish
law, does not satisfy the basic requirements for enforcement
under the provisions of Part II Chapter I of the Arbitration and
Conciliation Act, 1996.
9. The learned Counsel made reference to Article II (1)
of the first schedule of Arbitration and Conciliation Act, 1996.
The said provision is extracted herein: –
“1. Each Contracting State shall recognise an
agreement in writing under which the parties
undertake to submit to arbitration all or any
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11differences which have arisen or which may arise
between them in respect of defined legal
relationship, whether contractual or not,
concerning a subject-matter capable of
settlement by arbitration.”
10. He also made reference to Article IV (1):-
“1. To obtain the recognition and enforcement
mentioned in the preceding article, the party
applying for recognition and enforcement shall, at
the time of the application, supply:–
(a)the duly authenticated original award or
a duly certified copy thereof;
(b) the original agreement referred to in
article II or a duly certified copy thereof.”
11. He also made reference to Article V(1) which reads as
under:-
“1. Recognition and enforcement of the award
may be refused, at the request of the party
against whom it is invoked, only if that party
furnishes to the competent authority where the
recognition and enforcement is sought, proof that
— (a) the parties to the agreement referred to in
article II were, under the law applicable to them,
under some incapacity, or the said agreement is
not valid under the law to which the parties have
subjected it or, failing any indication thereon,
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12under the law of the country where the award
was made; or
(b) the party against whom the award is
invoked was not given proper notice of the
appointment of the arbitrator or of the arbitration
proceedings or was otherwise unable to present
his case; or
(c) the award deals with a difference not
contemplated by or not falling within the terms of
the submission to arbitration, or it contains
decisions on matters beyond the scope of the
submission to arbitration; provided that, if the
decisions on matters submitted to arbitration can
be separated from those not so submitted, that
part of the award which contains decisions on
matters submitted to arbitration may be
recognised and enforced; or
(d) the composition of the arbitral authority or
the arbitral procedure was not in accordance with
the agreement of the parties, or, failing such
agreement, was not in accordance with the law of
the country where the arbitration took place; or
(e) the award has not yet become binding on the
parties, or has been set aside or suspended by a
competent authority of the country in which, or
under the law of which, that award was made.”
12. The learned Counsel pointed out that Article II
specifically deals with an agreement in writing. An agreement in
writing shall include an arbitral clause in a contract or an
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arbitration agreement signed by the parties, or contained in an
exchange of letters or telegrams. He submitted that requirement
of production of original agreement referred to in Article II, or a
duly certified copy thereof, is specified in Article IV(1)(b). The
learned Counsel further submitted that, in view of Section 44 of
the Act read in conjunction with the First Schedule, it clearly
appears that the existence of a valid agreement and production
of the same are two essential conditions for maintaining an
application for execution of the foreign award under Indian law,
and the instant application fails to satisfy those essential
requirements.
13. The learned counsel further contended that the
petitioners did not purposely produce before this Court
statement of defence filed before the Arbitral Tribunal. The
respondent has produced the same as Annexure-R1(a).
Referring to paragraphs 296 to 299 of the statement of defence,
the learned counsel submitted that the petitioners pleaded
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before the Arbitral Tribunal that they would not be able to seek
enforcement in India in case a cost award is passed in their
favour. Further, they categorically stated in paragraph 297 that
as there is no arbitration agreement between the parties, let
alone a signed agreement, they cannot successfully seek
enforcement under the New York Convention. They also stated,
with reference to the various provisions of the convention, that
the principles apply under Indian and UAE National Laws and the
party applying for enforcement must supply the arbitration
agreement to obtain enforcement. They specifically pleaded that
consequently, it is highly unlikely that they can obtain
enforcement of a cost award in their favour both under National
and International Law. He therefore submitted that the
petitioners were well aware even during the pendency of the
arbitral proceedings that they will not be in a position to seek
enforcement of an award in India for want of an agreement in
writing. He hence argued that the petitioners are actually taking
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this Court for a ride in the Execution Petition. He submitted that
the principles of estoppel will undoubtedly apply in the situation
and the petitioners are precluded from taking a position contrary
to their pleadings before the Arbitral Tribunal. The learned
counsel also contended that the non-production of the defence
statement before this Court is a material suppression. He
contended that the petitioners shrewdly omitted to produce the
same as the pleadings therein would cut at the root of their case
in the Execution Petition.
14. The learned Counsel submitted that the petitioners
who disputed the validity of the agreement and got a favourable
finding in that regard from the Arbitral Tribunal cannot be
permitted to contend that the arbitral award is enforceable and
it should be presumed that there was yet another agreement,
limited in nature, to proceed with the arbitration in order to
decide on the procedural issues.
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15. The learned counsel disputed the contention of the
learned Senior Counsel for the petitioners that the production of
the agreement along with the Execution Petition is not
mandatory to proceed with the enforcement of the award. The
learned counsel contended that even the judgment cited by the
learned counsel in this regard will not come to the aid of the
petitioners. He sought to draw a distinction between the
requirement of producing the agreement under Section 47 of the
Act and recognition of the award under the New York
Convention. He also submitted that the judgment of the Hon’ble
Supreme Court in PEC Limited v. Austbulk Shipping SDN
BHD [(2019) 11 SCC 620] relied on by the learned Senior
Counsel was rendered in a case where there was no dispute
regarding existence of the agreement. The only issue decided
was as to whether the production of the agreement at the time
of filing is mandatory. He submitted that the Hon’ble Supreme
Court has not held that the production of the agreement is not
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necessary for the enforcement of the award. He hence
contended that the award cannot be enforced under part II of
the Act unless the agreement is produced, even though the
requirement can be excused at the time of the filing of the
Execution Petition.
16. The learned counsel also submitted that the
enforcement of the award may be refused also for the grounds
under S.48(2) also. The dispute was not arbitrable under Indian
law if there is no agreement. Further, award passed without an
agreement would be contrary to the public policy of India. He
submitted that in view of the provisions of Section 7(2) of the
Act, an agreement in writing is essential to resort to arbitration.
Therefore, it is a fundamental requirement of the policy of
Indian law that there shall be an agreement in writing. In the
instant case the Arbitral Tribunal having found that there is no
valid agreement under the Swedish law, enforcing an award
arising from the same arbitral proceeding by a court in India will
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be in conflict with the public policy of India. The learned counsel
made some further submission to distinguish the judgments
cited by the learned Senior Counsel for the petitioners. He
contended that the principles laid down therein actually support
the case of the respondent.
Arguments advanced on behalf of the petitioners
17. Sri.Anil Xavier, the learned Senior Counsel for the
petitioners refuted the submissions of the learned counsel for
the respondent. He asserted that none of the contentions of the
respondent would constitute valid objections under Section 48 of
the Arbitration and Conciliation Act and hence the award is
enforceable. The learned Senior Counsel further submitted that
the endeavor of the Court shall be to give effect to the award
and hence it should be enforced unless any of the inhibiting
features under S.48 is established.
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18. Regarding the contention of the respondent that the
original copy of the arbitration agreement has not been
produced, the learned Senior Counsel submitted that the
production of the same at the time of filing is not mandatory.
The agreement was subsequently produced as Annexure-A2. The
Stockholm Chamber of Commerce forwarded all associated
documents including the arbitration agreement to the petitioners
when the respondent initiated arbitral proceedings. A true copy
of the agreement forwarded by the Chamber of Commerce has
been produced as Annexure-A2. The learned Senior Counsel
submitted that production of copy of the agreement is not
mandatory at the stage of filing of the execution proceedings as
held by the Hon’ble Supreme Court in PEC Limited v. Austbulk
Shipping SDN BHD [(2019) 11 SCC 620].
19. With respect to the contention regarding lack of a
valid arbitration agreement, the learned Senior Counsel
submitted that when the Chamber of Commerce forwarded the
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matter to the petitioners, they objected on the ground that the
agreement was invalid as it was not signed by the parties.
Under the Swedish law even an unsigned arbitration agreement
can be considered as valid, but the Arbitral Tribunal must
adjudicate on it. In the agreement involved in the case on hand
there is a specification that the agreement will become valid only
when signed by the parties. However, the petitioners also
appointed an Arbitrator and sought bifurcation to decide the
validity of the arbitration agreement as a preliminary issue. The
respondent opposed the request contending that unsigned
agreements are also valid under the Swedish law and the issue
can be decided only on the basis of the evidence. The request
for bifurcation was rejected by the Tribunal and it entered into a
full-fledged arbitration. The learned Senior Counsel submitted
that though the arbitration clause forms part of a larger
unsigned agreement, subsequently, the petitioners entered into
a limited arbitration agreement by giving the Tribunal authority
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to decide on procedural issues under Swedish law without which
Swedish law would not apply. The said limited arrangement itself
constituted a valid arbitration agreement. According to the
learned Senior Counsel, there are two arbitration agreements,
one for substantive disputes and another limited to procedural
issues. Petitioners authorised only procedural adjudication.
20. The learned Senior Counsel further submitted that the
Tribunal found that even for deciding procedural issues
examination of evidence was essential. In arbitration
proceedings, where a party is compelled to participate despite
contending that no arbitration agreement exists, it is permissible
to award costs to such a party, notwithstanding the Tribunal’s
finding that there was no arbitral agreement. Therefore, the
Tribunal was correct in granting costs to the petitioners.
According to the learned Senior Counsel, the respondent
resisted the application filed by the petitioners before the
Tribunal to pass an order for security for costs, by stating that a
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cost award is also enforceable in India and that he owns
sufficient assets in India to satisfy such an award. The
respondent is therefore estopped from taking a contrary stand in
the execution proceedings. The learned Senior Counsel therefore
submitted that none of the objections raised by the respondent
is valid and hence the award may be declared as enforceable.
21. Further elaborating on the nature of the award the
learned Senior Counsel submitted that the Tribunal proceeded to
decide on costs of arbitration as per the Swedish Law. He
referred to Section 37 of the Swedish Arbitration Act which reads
as under:-
“Section 37 – The parties shall be jointly and
severally liable to pay reasonable compensation to the
arbitrators for work and expenses. However, if the
arbitrators have stated in the award that they lack
jurisdiction to determine the dispute, the party that did
not request arbitration shall be liable to make payment
only insofar as required due to special circumstances.
In a final award, the arbitrators may order the parties
to pay compensation to them, together with interest
from the date occurring one month following the date of
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23the announcement of the award. The compensation
shall be stated separately for each arbitrator.”
22. He also made reference to Section 42 of the Swedish
Arbitration Act which provides power to Arbitral Tribunal to order
compensation of costs. Section 42 of the Swedish Arbitration
Act reads as under:-
“Section 42- Unless otherwise agreed by the
parties, the arbitrators may, upon the request of a
party, order the opposing party to pay
compensation for the party’s costs and determine
the manner in which the compensation to the
arbitrators shall be finally allocated between the
parties. The arbitrators’ order may also include
interest, if a party has so requested.”
23. He therefore submitted that the Arbitral Tribunal
passed the impugned award granting costs to the petitioners in
accordance with the Swedish Arbitration Act. He also submitted
that in International Arbitration, Arbitral Tribunals routinely
award costs when they lack jurisdiction on merits of a dispute,
which are called as ‘negative costs awards’. He further
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submitted that the Arbitral Tribunal gets the authority to pass
such awards mainly from three sources;i) specific agreements
between the parties to arbitrate costs ii) the competence-
competence principle or iii) the national arbitration laws.
24. The learned Senior Counsel, in response to the
contention of the learned counsel for the respondent regarding
the pleadings in the statement of defence filed before the
Arbitral Tribunal, submitted that there was no admission as
alleged. Contents of paragraphs 296 to 299 of the statement of
defence reflect the apprehension of the petitioners and it cannot
be construed as admissions. He referred to Annexure A6,
decision on the application for security for cost. He pointed out
that in paragraph 4 of the decision, the apprehension of the
petitioners was taken note of by the Tribunal. In paragraph 14,
the Tribunal noted the submission of the respondent that he has
access to adequate resources to satisfy any adverse costs
award. In paragraphs 22 and 23, the Tribunal considered as to
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whether the respondent lacks funds and ability to satisfy an
adverse cost award. The Tribunal accepted the contention of the
respondent in this regard and rejected the request to direct
furnishing of security. The learned Senior Counsel submitted that
the respondent had thus submitted before the Arbitral Tribunal
that in case of a cost award being passed, the enforcement of
the same will not be defeated for want of funds.
25. The learned Senior Counsel submitted that the
principle of estoppel would not apply against the petitioners as
contended by the learned counsel for the respondent. He
submitted that the essential element of obtaining any gain by
adopting a contention is absent in the instant case and hence
the doctrine of estoppel has no application to the facts of this
case. Regarding the contention of the learned counsel for the
respondent that the petitioners did not raise any challenge
against the arbitral award, the learned Senior Counsel submitted
that the award is in favour of the petitioners as the claims
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against them raised by the respondent were not allowed and on
the other hand cost was imposed on the respondent.
Precedents cited by both sides
26. Having narrated the contentions raised by both sides,
I shall now refer to the judgments cited.
27. Learned Senior Counsel for the petitioners relied on
the following judgments in support of their arguments;
i) PEC Limited v. Austbulk Shipping SDN
BHD [(2019) 11 SCC 620].
ii) B.L. Sreedhar and Others v. K.M.
Munireddy(Dead) and others (2003) 2
SCC 355.
iii) Shri Lal Mahal Ltd. v. Progetto Grano Spa
[(2014) 2SCC 433].
iv) Government of India v. Vedanta Limited
(Formerly Cairn India Ltd.) & Others
[(2020) 10 SCC 1]
v) Commonwealth Development Corp (UK)
v. Montague [[2000] QCA 252]
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vi) Ravfox Limited v. Bexmoor Limited [2025
EWHC 1313 (Ch)]
28. In PEC Limited v. Austbulk Shipping SDN BHD
[(2019) 11 SCC 620], the Hon’ble Supreme Court held as under;
“11. The points that arise for our consideration in
this case are:
11.1. Whether an application for enforcement under
Section 47 of the Act is liable to be dismissed if it is
not accompanied by the arbitration agreement?
11.2. Whether there is a valid arbitration agreement
between the parties and what is the effect of a party
not signing the charterparty?
12. The Foreign Awards (Recognition and
Enforcement) Act, 1961 was repealed by the Act.
Part II of the Act deals with enforcement of foreign
awards. An arbitral award made in pursuance of an
agreement in writing for arbitration, to which the
Convention on the Recognition & Enforcement of
Foreign Arbitration Awards, 1958 (hereinafter
referred to as “the New York Convention”) set forth
in the First Schedule of the Act applies is defined to
be a “foreign award”. Section 47 of the Act
postulates that the party applying for the
enforcement of a foreign award “shall” produce
before the Court at the time of application the
following:
“47. (a) the original award or a copy thereof,
duly authenticated in the manner required by
the law of the country in which it was made;
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(b) the original agreement for arbitration or
a duly certified copy thereof; and
(c) such evidence as may be necessary to
prove that the award is a foreign award.”
……………………………………………………………………………………..
14. Admittedly, an authenticated copy of the
arbitration agreement was not placed on record by
the respondent at the time of filing of the application
for enforcement. It is clear from the record that the
appellant placed the arbitration agreement along with
its reply and thereafter the respondent also filed the
original arbitration agreement in the Court. The
submission made by the appellant is that production
of the arbitration agreement at the time of filing of
the application is mandatory, the non-compliance of
which ought to have resulted in the dismissal of the
application. The appellant sought support for this
submission from the word “shall” appearing in Section
47. We do not agree with the submission made by the
learned counsel for the appellant. We are of the
opinion that the word “shall” appearing in Section 47
of the Act relating to the production of the evidence
as specified in the provision at the time of application
has to be read as “may”.
……………………………………………………………………………………..
19. The Object and Purpose of the New York
Convention is to facilitate the recognition of the
arbitration agreement within its purview and the
enforcement of the foreign arbitral awards. This
Object and Purpose must, in the first place, be seen
in the light of enhancing the effectiveness of the legal
regime governing international commercial arbitration
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[Dardana Ltd. v. Yukos Oil Co., 2002 EWCA Civ 543 :
(2002) 1 ALL ER (Comm) 819].”
[Emphasis added]
29. In B.L.Sreedhar and Others v. K.M.Munireddy
(Dead) and others [(2003) 2 SCC 355] the Hon’ble Supreme
Court held thus;
“30. If a man either by words or by conduct has
intimated that he consents to an act which has been
done and that he will not offer any opposition to it,
although it could not have been lawfully done
without his consent, and he thereby induces others
to do that which they otherwise might have
abstained from, he cannot question the legality of
the act he had sanctioned to the prejudice of those
who have so given faith to his words or to the fair
inference to be drawn from his conduct.”
30. In Shri Lal Mahal Ltd. v. Progetto Grano Spa
[(2014) 2 SCC 433], the three Judge bench of the Hon’ble
Supreme Court made the following observations;
“19. Having regard to clause (b) of sub-section (2)
of Section 48 of the 1996 Act, we shall immediately
examine what is the scope of enquiry before the
court in which foreign award, as defined in Section
44, is sought to be enforced. This has become
necessary as on behalf of the appellant it was
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30vehemently contended that in light of the two
decisions of this Court in Saw Pipes [ONGC Ltd. v.
Saw Pipes Ltd., (2003) 5 SCC 705] and Phulchand
Exports [Phulchand Exports Ltd. v. O.O.O. Patriot,
(2011) 10 SCC 300 : (2012) 1 SCC (Civ) 131], the
Court can refuse to enforce a foreign award if it is
contrary to the contract between the parties and/or
is patently illegal. It was argued by Mr Rohinton F.
Nariman, learned Senior Counsel for the appellant,
that the expression “public policy of India” in
Section 48(2)(b) is an expression of wider import
than the expression “public policy” in Section 7(1)
(b)(ii) of the Foreign Awards (Recognition and
Enforcement) Act, 1961. The expansive construction
given by this Court to the term “public policy of
India” in Saw Pipes [ONGC Ltd. v. Saw Pipes Ltd.,
(2003) 5 SCC 705] must also apply to the use of
the same term “public policy of India” in Section
48(2)(b).
…………………………………………………………..
27. In our view, what has been stated by this Court
in Renusagar [Renusagar Power Co. Ltd. v. General
Electric Co., 1994 Supp (1) SCC 644] with reference
to Section 7(1)(b)(ii) of the Foreign Awards Act
must apply equally to the ambit and scope of
Section 48(2)(b) of the 1996 Act. In Renusagar
[Renusagar Power Co. Ltd. v. General Electric Co.,
1994 Supp (1) SCC 644] it has been expressly
exposited that the expression “public policy” in
Section 7(1)(b)(ii) of the Foreign Awards Act refers
to the public policy of India. The expression “public
policy” used in Section 7(1)(b)(ii) was held to mean
“public policy of India”. A distinction in the rule of
public policy between a matter governed by the
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31
domestic law and a matter involving conflict of laws
has been noticed in Renusagar. For all this there is
no reason why Renusagar should not apply as
regards the scope of inquiry under Section 48(2)(b).
Following Renusagar, we think that for the purposes
of Section 48(2)(b), the expression “public policy of
India” must be given a narrow meaning and the
enforcement of foreign award would be refused on
the ground that it is contrary to the public policy of
India if it is covered by one of the three categories
enumerated in Renusagar. Although the same
expression “public policy of India” is used both in
Section 34(2)(b)(ii) and Section 48(2)(b) and the
concept of “public policy in India” is same in nature
in both the sections but, in our view, its application
differs in degree insofar as these two sections are
concerned. The application of “public policy of India”
doctrine for the purposes of Section 48(2)(b) is
more limited than the application of the same
expression in respect of the domestic arbitral
award.”
[Emphasis added]
31. In Government of India v. Vedanta Limited
(Formerly Cairn India Ltd.) & Others [(2020) 10 SCC 1] the
Hon’ble Supreme Court referred to the law laid down in Shrilal
Mahal Ltd. (Supra). The Hon’ble Court surveyed a number of
Indian and foreign judgments and held that the expression
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32
public policy in Section 48 of the Act is to be understood in a
narrow sense and the Court enforcing the award cannot review
the award on merits. It was clarified that the review on merits is
a matter within the domain of the Courts at the seat of
arbitration.
32. In Commonwealth Development Corp (UK) v.
Montague [[2000] QCA 252], the Court of Appeal of Queens
Land held that the Arbitral Tribunal’s decision with respect to
costs could be enforced in Queens Land in the same manner as a
judgment of a Queens Land Court.
33. In Ravfox Limited v. Bexmoor Limited [2025
EWHC 1313 (Ch)], the High Court of Justice of England and
Wales considered the jurisdiction of the arbitrator to award
costs. It is relevant to refer to the following paragraph of the
judgment:-
“22. I was not referred to the Queensland case or
the journal article. As I have indicated, I do not consider
that the Crest Nicholson case is authority for such a
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33general proposition as is stated by Chitty. However,
section 30 is highly material, in my view, because it
confers jurisdiction on the tribunal to rule on its own
jurisdiction. Section 31 confirms that it may do so by an
award on jurisdiction. The proceedings on the
jurisdictional challenge are therefore valid proceedings.
There is thus no logical reason why a costs award in
respect of those proceedings should be incapable of
being made. The argument mentioned in footnote 699 in
para 35-152 of Chitty, based on section 30, seems to
me to have merit. Further, section 61 confers on the
tribunal an express power to “make an award allocating
the costs of the arbitration as between the parties”. It
might be said that, where there is no jurisdiction, there
is no “arbitration”, so that section 61 does not apply. I
do not consider it necessary to reach that conclusion.
“Arbitration” is not itself a defined word in the 1996 Act,
but section 59 defines “the costs of the arbitration” and
does so in terms that are, in my view, wide enough to
cover the costs of the parties in respect of a
jurisdictional challenge.”
34. The Court referred to a consultation paper of Law
Commission wherein the Law Commission opined as under:-
“23. The Law Commission Consultation Paper 257.
Review of the Arbitration Act 1996, considered this
issue in the following paragraphs, reaching (albeit
tentatively) the same conclusion as I have reached:
………………………………………………………………………
8.69 We think the latter proposition is
unattractive. If the arbitral tribunal rules that it
does have jurisdiction, the successful party
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34would ordinarily recover its costs of meeting
the challenge. If the arbitral tribunal rules that
it does not have jurisdiction, the successful
party would get nothing. Instead, the party
who wrongly initiated arbitral proceedings
would otherwise walk away free of
consequences, in circumstances where it has
triggered the costs of bringing arbitration
proceedings in the first place and progressing
them to the point of an award. That imbalance
seems unfair.
…………………………………………………………………….”
35. The Court further examined the issue as to whether a
cost award can be considered as an award under the Arbitration
Act, 1996. It was held as under:-
“29. The second task, however, is to identify the
“award” out of which the question of law arises. The
claim form identifies only the Main Award. However, the
case was presented to me on the basis that the Costs
Award was the relevant award. But is the Costs Award
an award for the purposes of the 1996 Act? This is a
major issue between the parties. Russell on Arbitration
(24th edition) states at para 6-002 (footnotes omitted):
“There is no statutory definition of an award in
English arbitration law despite the important
consequences which flow from an award being
made in principle an award is a final
determination of a particular issue or claim in
the arbitration. It may be contrasted with
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35orders and directions of the tribunal which
address the procedural mechanisms to be
adopted in the reference. Such procedural
orders and directions are not necessarily final
in that the tribunal may choose to vary or
rescind them altogether. Thus, questions
concerning the jurisdiction of the tribunal or
the choice of the applicable substantive law are
suitable for determination by the issue of an
award, whereas rulings on the nature and
timing of procedural steps to be taken in the
arbitration or the extent of disclosure of
documents are procedural in nature and are
determined by the issue of an order or
direction and not by an award. The distinction
is important because an award can be the
subject of a challenge or an appeal to the
court, whereas a procedural order or direction
in itself cannot be so challenged. A preliminary
decision, for example of the engineer or
adjudicator under a construction contract,
which is itself subject to review by an
arbitration tribunal, is not an award.”
The second sentence of that paragraph reflects section
47 of the 1996 Act.
30. The informality of what I have called the Costs
Award is not itself determinative. Section 52 of the
1996 Act makes provision for the form of an award.
However, the consequence of a failure to comply with
the requirements as to the form of an award is simply
that it may give rise to a ground of challenge to the
award under section 68. Such challenges will be rare,
because a failure to comply with the requirements as to
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36
form will only amount to a serious irregularity for the
purposes of section 68 if it “has caused or will cause
substantial injustice to the applicant”: section 68(2).
See Russell on Arbitration, para 6-046.”
36. Learned counsel for the respondents on the other
hand relied on the following judgments to buttress his
contentions:-
i) Agritrade International Pte. Ltd v.
National Agricultural Co-operative Marketing Federation of India Ltd. [2012 SCC OnLine Del 896]. ii) Cinergy Corporation Pte Ltd. v. National Agricultural Co-Operative Marketing Federation of India Ltd.[2012 SCC OnLine Del 4956]. iii) Kalmart Systems (M) SDN BHD v. National Agricultural Co-Operative Marketing Federation of India Ltd.[2015 SCC OnLine Del 7811].
iv) Virgoz Oils & Fats Pte. Ltd. v. National
Agricultural Co-Operative Marketing
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37Federation of India Ltd. [2018 SCC
OnLine Del 12780].
v) Pari Agro Exports v. Soufflet
Alimentaire and Another [2019 SCC
OnLine P&H 1351].
vi) Pasl Wind Solutions Private Limited
Vs. GE Power Conversion India
Private Limited. [(2021) 7 SCC 1].
vii) Jaldhi Overseas Pte Ltd. v. Steer
Overseas Pvt. Ltd. [2023 SCC OnLine Cal
1628].
viii) Gemini Bay Transcription Pvt. Ltd. v.
Integrated Sales Service Ltd. and
others [(2022) 1 SCC 753].
ix) Smita Conductors Ltd. v. Euro Alloys
Ltd. [(2001) 7 SCC 728].
x) National Thermal Power Corporation v.
The Singer Company and Ors. [(1992) 3
SCC 551]
xi) Olam International Ltd. v. Manickavel
Edible Oils Pvt. Ltd. and
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38
Olam International Ltd. v. YENTOP
Manickam Edible Oils Pvt. Ltd. [(2025)
SCC OnLine Mad 11018]
37. In Agritrade International Pte. Ltd (Supra) Delhi
High Court made the following observations;
“16. The first issue concerns the non-compliance with
Section 47(1)(b) of the Act which requires a party
applying for enforcement of a foreign award to
mandatorily produce before the Court “at the time of
the application”, “the original agreement for
arbitration or a duly certified copy thereof.” In
Austbulk Shipping SDN BHD v. P.E.C. Ltd., (2005) 2
Arb LR 6 (Del) it was observed that an application for
enforcement not accompanied by the arbitration
agreement may be returned to the applicant for filing
a fresh application and further that the failure to file
the agreement was not one of the grounds set out
under Section 48 of the Act for rejection of the
prayer for enforcement. However, in the present case
even that stage has been crossed. Even while issuing
notice on 30th March 2009 it was noticed that
Agritrade had not filed a copy of the arbitration
agreement. Agritrade was given an opportunity to file
additional documents. None of the documents filed
by Agritrade include an ‘arbitration agreement’
between it and NAFED within the meaning of Section
7 of the Act. What is sought to be relied upon is a
combination of documents beginning with the
document dated 11th May 2004, which was neither
addressed to nor signed by NAFED, and
correspondence between Global Commodities and
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39Agritrade to plead that there was an ‘implied’
agreement between the parties. For reasons to be
discussed, the fact remains that there was in fact no
arbitration agreement within the meaning of Section
7 of the Act. Consequently, the inescapable
conclusion is that Section 47(1)(b) of the Act had not
been complied with.
17. It is not that there are no consequences for the
failure of a party to file a copy of the arbitration
agreement. Section 48(2)(a) of the Act states that
enforcement of an award may be refused if the Court
finds that “the subject matter of the difference is not
capable of settlement by arbitration under the law of
India.” The question to be asked is whether in terms
of the law of India, the dispute between Agritrade
and NAFED, in the absence of an arbitration
agreement, was capable of settlement by arbitration?
The obvious answer has to be in the negative. A
reading of Sections 7 and 16(1) of the Act show that
the existence of an arbitration agreement is what
confers jurisdiction on the arbitral tribunal. At the
threshold where a party is able to demonstrate to the
satisfaction of the arbitral tribunal under Section
16(1) of the Act that an arbitration agreement does
not exist or where it does it is not valid, that brings
the arbitration proceedings to a close. Such dispute
is therefore “not capable of settlement by arbitration”
under Indian law in terms of Section 48(2)(a) of the
Act. This is therefore one ground on which the
enforcement of the foreign Award in question can be
refused in the instant case.”
[Emphasis added]
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38. In Cinergy Corporation Pte Ltd. (Supra), the Delhi
High Court made the following observations;
“17. In addition to reiterating the above contentions,
Mr. T.K. Ganju, learned Senior counsel appearing for
NAFED, referred to Section 47(1)(b) read with
Section 48(1)(a), Section 48(2)(a) and Section 7 of
the Act. He submitted that in terms of the definition
of “arbitration agreement” under Section 7 of the
Act, even if there was no arbitration agreement in
writing as such signed by the parties, such
agreement had to be contained in a document signed
by the parties or in an exchange of letters, telegraph,
telex or other means of communication between
them. He pointed out that in the instant case at no
time did Cinergy get in touch with the officers of
NAFED. There was no correspondence between
NAFED and Cinergy which would prove the existence
of an arbitration agreement between the parties.
……………………………………………………………………………………..
32. In conclusion, the Court is satisfied that there
was no valid arbitration agreement between the
parties within the meaning of Section 7 read with
Section 47(1)(b) of the Act. Consequently, the First
Tier Award, the Appellate Award and the Final
Foreign Arbitration Award cannot be enforced in
terms of Section 47(1) read with Sections 48(1)(a)
and 48(2)(a) of the Act.”
[Emphasis added]
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39. In Kalmart Systems (M) SDN BHD(Supra), the
following observations were made by the Delhi High Court:
“1. The petitioner, by virtue of the instant petition
seeks to enforce an award dated 14.04.2010, under
the provisions of Section 48 of the Arbitration and
Conciliation Act, 1996 (in short the Act). The ancillary
provisions to which reference has been made is,
Section 47 of the Act and Section 11 read with Order
21, Rule 10 of the Code of Civil Procedure, 1908 (in
short the Code).
1.1 The petitioner avers that the aforementioned
award is a foreign award passed qua the respondent
herein and, therefore, the award being a decree
should be enforced in the terms set out therein. The
petitioner thus, claims to be a decree holder, seeking
recovery of moneys awarded to it.
1.2 On the other hand, the central issue raised by the
respondent in defence of the captioned petition, is
that, the purported agreement based on which the
arbitration proceedings were triggered is, not an
agreement to which it is a signatory, and hence, no
legal obligations can arise from the said agreement
including the obligation to arbitrate. In sum, the
respondent’s stand is that, there is no arbitration
agreement in existence.
……………………………………………………………………………………..
10.6 The two judgments cited by the petitioner, i.e.,
Smita Conductors Ltd. and Shakti Bhog Foods Ltd.,
are clearly distinguishable on facts. One cannot
quibble with the fact that as per, Para 2, Article II of
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42the New York Convention the agreement in writing
would include exchange of letters and/or telegrams.
The point for consideration, in this particular case is :
as to whether the respondent had conveyed its
acceptance to the offer of the petitioner contained in
the sales contract dated 05.06.2008. Having come to
the conclusion that in the facts of this case, there
was no acceptance of the offer made by the
petitioner, in my opinion, no concluded contract came
into existence and, therefore, by logical corollary, one
could safely say that there was no binding arbitration
agreement subsisting between the parties.
11. In view of the foregoing discussion, I am not
inclined to grant the reliefs prayed for in the petition.
The petition is accordingly dismissed. Parties shall,
however, be left to bear their own costs.”
40. In Virgoz Oils & Fats Pte. Ltd. (Supra), the Delhi
High Court recorded the following observations:
“9. Seeking enforcement of the aforementioned
award, the Appellant filed Execution Petition No.
149/2015 in this Court. One of the central questions
addressed by the learned Single Judge was whether
there was an arbitration agreement between the
parties. It was held that from the plain language of
Section 44(a) of the Act, for recognition of a foreign
Award, it should have been rendered in respect of
differences between parties pursuant to an
agreement in writing for arbitration to which the
Convention on the Recognition and Enforcement of
Foreign Arbitral Awards (known as the ‘New York
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43Convention’ and mentioned in the First Schedule to
the Act) applies.
10. The learned Single Judge also referred to Article-
II of the New York Convention which states thus:
“2. The term “agreement in writing” shall
include an arbitral clause in a contract or an
arbitration agreement, signed by the parties or
contained in an exchange of letters or
telegrams.”
11. The learned Single Judge then held that factually
in the present case, it was seen that the Broker had
signed the contracts in his own capacity and not for
and on behalf of NAFED. Further, there was no
correspondence between the Appellant and NAFED
which could establish a meeting of minds. In effect,
there was no agreement on the part of NAFED to
refer any dispute to arbitration. By the letter dated
29th July, 2008 NAFED had merely requested the
Broker to take up the matter of deferment of
shipment with the seller i.e. the Appellant. However,
this was not inconsistent with NAFED’s contention
that the bargain between the parties had not been
finalized.the parties had not been finalized.
12. The learned Single Judge held that an arbitration
agreement must be in writing; it must unequivocally
indicate the intention of the parties to resolve their
disputes by arbitration; it must be “signed by the
parties or must be contained in exchange of letters or
telegrams”. Notwithstanding that Part-I of the Act did
not apply to Foreign Awards, Section 7 of the Act
could be referred to for interpreting the expression
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‘agreement in writing’. Although the definition under
Section 7(4) of the Act was wider than Article – II of
the New York Convention, even by that yardstick in
the present case, it was not possible for the Court to
conclude that there was a valid arbitration agreement
between the parties. After referring to the case law,
the learned Single Judge upheld the objections of
NAFED that with there being no concluded contract
between the parties, a foreign award could not be
enforced.”
41. In Pari Agro Exports (Supra), the Punjab and
Haryana High Court proceeded to set out the following
observations:
“39. By referring to CR No. 2471 of 2016 titled
National Aluminum Co. Ltd. v. Subhash Infra
engineers Pvt. Ltd., decided on 22.10.2016 and
Indowind Energy Ltd. v. Wescare (I) Ltd., (2010) 5
SCC 306, learned Senior Counsel for the petitioner
submitted that the term agreement in writing, as
applicable to part II, has been defined in First
Schedule of Article II of The Arbitration and
Conciliation Act, 1996 (for short ‘the Act’). The
definition is much narrower than Section 7 of the Act.
Reference can be made to Virgoz Oils and Fats Pte
Ltd. v. National Agricultural Co-operative Marketing
Federation of India Ltd., 2017 (3) R.A.J. 627 (Delhi
High Court). It is conceded position that incograin
model contract which as per respondent No. 1
contained arbitration clause was never signed by the
petitioner, nor the same was served upon the
petitioner by way of exchange of letter/telegrams or
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45other means of E-mails. It cannot be treated to be
concluded arbitration agreement inter se the parties
by any legally conceivable manner. The award
rendered by the Tribunal in such a scenario would be
a nullity.
40. In the absence of any valid contract for
arbitration, enforcement under Section 49 of the Act
can be refused. Incograin contract No. 12 was never
easily available. The English copy of incograin
contract has been placed on record for the first time
as Ex.I with the reply to the objections filed by the
petitioner. The aforesaid contract itself provides for its
availability on www.incograin.com. The aforesaid
website is in French language. It is accessible only to
members of Paris Grain Trade Association. The
confirmation of contract under the aforesaid incograin
model contract provides that the contract form in
force on the date of signature of the contract. It has
been provided that the written text must contain all
agreed conditions. Concededly, the contract was
never signed, nor the agreed terms inter se the
parties made part of the contract. Therefore, no valid
arbitration agreement ever existed between the
parties.
…………………………………………………………………
75. In the instant case, incograin model contract had
an arbitration clause, but the same was neither
signed by the petitioner, nor the same was ever
served upon the petitioner by way of any exchange of
letter or telegram or exchange of E-mails. In the
absence of any concluded arbitration agreement inter
se the parties, the award passed on such alleged
concluded agreement is a nullity in the eyes of law
and Tribunal had no jurisdiction to arbitrate upon
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46such an issue. The availability of incograin contract
being a model contract on the website i.e.
www.incograin.com would give rise to many
questions to be answered by respondent No. 1. The
aforesaid website is in French language. The website
is accessible only by the member of Paris Grain Trade
Association. The copy of screenshot of the website
was placed before this Court which clearly reflected
non-access by any private persons to the aforesaid
website. In the heading of confirmation of contract in
incograin model contract, it was mentioned that the
contract form in force on the date of signature of the
contract. The written text must contain all agreed
conditions. Since the contract was never signed by
the petitioner nor any terms agreed inter se the
parties, therefore, there was no valid arbitration
agreement between the parties on the strength of
incograin contract No. 12 which was vaguely recited
in general conditions in the draft E-mail dated
03.12.2012.”
42. In Pasl Wind Solutions Private Limited (supra),
the Hon’ble Apex Court expounded the following principles:
“85. It will thus be seen that where the law of India
prohibits a certain act, the conflict of law rules as set
down in Dicey’s authoritative treatise will take care of
this situation in most cases as the arbitrators would
then apply these rules on the ground of international
comity between nations in cases which arise between
two Indian nationals in an award made outside India,
which would fall within the definition of “foreign
award” under Section 44 of the 1996 Act.”
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43. In Jaldhi Overseas Pte Ltd. (Supra), the Calcutta
High Court held thus;
“21. The following principles can be derived from the
judgments cited and discussed above:-
…………………………………………………………………..
b) In circumstances wherein an arbitration agreement
is evidently found lacking or there is no concluded
contract, the enforcement of an award must be
refused and shall fall prey to:–
(i) Section 48(2)(a) – for the subject matter not being
capable of settlement by arbitration under the law of
India (as per the judgments in Agrigade International
Pte. Ltd. [supra], Cinergy Corporation PTE Ltd.
[supra] and Marina World Shipping Corporation Ltd.
[supra]),
(ii) Section 48(2)(b) of the Act – the enforcement of
the award would be in conflict with the public policy
of India as unilateral imposition of a contract upon an
unwilling and unrelated party would be against the
‘most basic notions of justice’ and would shock the
conscience of any court, as per the judgment in
Ssangyong Engg. & Constriction Co. Ltd. (supra).
…………………………………………………………………
27. Keeping in mind the law with regards to Section
48 of the Act wherein my discretion is very limited, I
do not find there was no concluded contract or no
arbitration agreement which could have made (i) the
matter being incapable of settlement by arbitration in
India or (ii) shocked the conscience of the court in
light of forceful imposition of a contract not entered
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48
into by the respondent. Therefore, the respondent’s
challenge to the enforcement of the award must fail.
28. In view of the above, the objections raised by the
respondent with regard to enforceability of the award
are rejected and it is ordered that the award is
enforceable and executable as a decree of this court.
The respondent is directed to disclose its affidavit of
assets within eight weeks from date. The petitioner
shall be at liberty to seek further directions for
execution of the award, in accordance with law.”
44. In Gemini Bay Transcription Pvt. Ltd.(Supra) the
Hon’ble Supreme Court observed that Section 47 of the
Arbitration and conciliation Act, 1996 is based on Article IV of the
New York Convention. The Hon’ble Supreme Court also
explained the necessary ingredients for an award being a foreign
award under Section 44 of the Act.
45. In Smita Conductors Ltd.(Supra) the Hon’ble
Supreme Court held as under:-
“3………………………………………………………………………..
In the case under consideration, however, the
arbitration agreement was contained and explicitly
mentioned in the sales contract itself. The reference
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49had as sold object the procedural regulation of the
arbitration and, therefore, validly completed the
arbitral clause mentioned above as it ascertained the
existence and the specific contents of that regulation.
But the Supreme Court, however, held that the
arbitral clause was null and void because it was
signed only by the seller who invoked the clause.
Shri.Venugopal referred to another decision of the
Italian Court in Corte DI Cassazione in Begro B.V. vs.
Ditta Voccia & Ditta Autonio Lamberti ((1978) 3
Yearbook Commercial Arbitration, 278). The court
interpreted Art. II, paras 1 and 2 of the Convention,
as requiring a specific agreement to submit to
arbitration signed by the parties or contained in an
exchange of letters or telegrams. According to the
court, such a specific agreement could not be found
in an arbitration clause printed on the contract-form
and signed by the parties and, therefore, held the
arbitration clause to be without effect. Shri Venugopal
next referred to the decision of Corte Di Cassazione in
Societa Atlas General Timbers v. Agenzia Concordia
[(1978) 3 Yearbook Commercial Arbitration, 267]. It
was held therein that the validity of the arbitral
clause in question had to be judged under the New
York Convention. According to Art. II, para 2 of the
Convention, the arbitration clause in writing means
‘an arbitral clause in a contract or an arbitration
agreement, signed by the parties or contained in an
exchange of letters or telegrams. This provision,
therefore, requires clearly the signature as a
minimum element for the effectiveness of the
contract containing the arbitral clause. The Court
concluded that not the arbitration clause itself, but
the contract in which it is contained must be signed
by both parties under Art. II, para 2 of the
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50Convention. The court examined whether the
requirement was met in the present case and found
that the signature of the agent of the carrier was not
sufficient since his power of attorney was not in
writing and that the signature of the other party was
also lacking and his endorsement does not replace
the signature, since the former concerns only a
transfer of title, whilst the latter is necessary for the
formation of the contract.
………………………………………………………………………………
6. What needs to be understood in this context is that
the agreement to submit to arbitration must be in
writing. What is an agreement in writing is explained
by para 2 of “Article II. If we break down para 2 into
elementary parts, it consists of four aspects. It
includes an arbitral clause (1) in a contract containing
an arbitration clause signed by the parties, (2) an
arbitration agreement signed by the parties, (3) an
arbitral clause in a contract contained in exchange of
letters or telegrams, and (4) an arbitral agreement
contained in exchange of letters or telegrams. If an
arbitration clause falls in any one of these four
categories, it must be treated as an agreement in
writing. ……………………………………………………………..”
46. In National Thermal Power Corporation (Supra)
the Hon’ble Supreme Court held as follows:-
“37. A ‘foreign award, as defined under the Foreign
Awards Act, 1961 means an award made on or after
October 11, 1960 on differences arising between
persons out of legal relationships, whether
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51contractual or not, which are considered to be
commercial under the law in force in India. To qualify
as a foreign award under the Act, the award should
have been made in pursuance of an agreement, in
writing for arbitration to be governed by the New
York Convention on the Recognition and Enforcement
of Foreign Arbitral Awards, 1958, and not to be
governed by the law of India. Furthermore such an
award should have been made outside India in the
territory of a foreign State notified by the
Government of India as having made reciprocal
provisions for enforcement of the Convention. These
are the conditions which must be satisfied to qualify
an award as a ‘foreign award’ (Section 2 read with
Section 9).
……………………………………………………………………………….
41. A foreign award will not be enforced in India if it
is proved by the party against whom it is sought to
be enforced that the parties to the agreement were,
under the law applicable to them, under some
incapacity, or, the agreement was not valid under
the law to which the parties have subjected it, or, in
the absence of any indication thereon, under the law
of the place of arbitration; or there was no due
compliance with the rules of fair hearing; or “the
award exceeded the scope of the submission to
arbitration; or the composition of the arbitral
authority or its procedure was not in accordance
with the agreement of the parties, or, failing such
agreement, was not in accordance with the law of
the place of arbitration; or ‘the award has not yet
become binding on the parties, or has been set
aside or suspended by a competent authority of the
country in which, or under the law of which, that
award was made’. The award will not be enforced by
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52a court in India if it is satisfied that the subject
matter of the award is not capable of settlement by
arbitration under Indian law or the enforcement of
the award is contrary to the public policy.”
47. In Olam International Ltd.(Supra) a learned Single
Judge of the Madras High Court considered two cases for
enforcement of two foreign arbitral awards. The respondent
contended that there existed no valid, legal and enforceable
arbitration agreement. The said contention was accepted by the
learned Single Judge. The learned Single Judge finally held as
under:-
“44. A foreign award, which upholds the existence of
an agreement based on surmises is, obviously,
opposed to public policy and is not enforceable.
45. The jurisdictional pre-condition for reference to
arbitration is the concluded contract between the
parties and their intention to refer the dispute to
arbitration. In the absence of such jurisdictional
requirement, a foreign award passed by the Arbitral
Tribunal would run contrary to the Public Policy of
India.
46. In the light of the above findings rendered by this
Court, it is not necessary for this Court to go into the
other issue raised on the side of the respective
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53respondent to the effect that they were intentionally
kept in lull by means of the letter received from the
PORAM dated 01.10.2020 informing that the
arbitration proceedings were kept on hold till
30.11.2020 and that the Arbitral Tribunal was to be
constituted whereas simultaneously the petitioner
invoked the jurisdiction of the FOSFA and managed to
get an ex parte order against the respective
respondent.
47. The discussion on this issue becomes academic
since this Court has already held that there were no
concluded contracts between the parties and as a
result, the jurisdictional pre-condition for reference to
arbitration was missing and that therefore, the foreign
awards become unenforceable under Section 48 of the
Act.”
Pertinent provisions of the Arbitration and Conciliation Act,
1996
48. As the learned Senior Counsel for the petitioner and
the learned counsel for the respondent have advanced
arguments pertaining to the real import of the provisions of
Chapter I it is necessary to refer to the relevant provisions. Part
II of the Arbitration and Conciliation Act, 1996 provides for
enforcement of certain foreign awards. Chapter I deals with New
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54
York Convention Awards. In the instant case the award sought to
be executed is a New York Convention Award. Section 44 defines
foreign award. The said provision is extracted hereunder:-
“44. Definition.- In this Chapter, unless the context
otherwise requires, “foreign award” means an
arbitral award on differences between persons
arising out of legal relationships, whether contractual
or not, considered as commercial under the law in
force in India, made on or after the 11th day of
October, 1960–
(a) in pursuance of an agreement in writing for
arbitration to which the Convention set forth in the
First Schedule applies, and
(b) in one of such territories as the Central
Government, being satisfied that reciprocal
provisions have been made may, by notification in
the Official Gazette, declare to be territories to which
the said Convention applies.”
49. Section 47 deals with ‘evidence’. For the purpose of
the present case reference to Section 47(1) is essential. The
said provision is as under:-
“47. Evidence.–(1) The party applying for the
enforcement of a foreign award shall, at the time of the
application, produce before the court–
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(a) the original award or a copy thereof, duly
authenticated in the manner required by the law of the
country in which it was made;
(b) the original agreement for arbitration or a duly
certified copy thereof; and
(c) such evidence as may be necessary to prove that
the award is a foreign award. ”
50. Section 48 lays down the conditions for enforcement
of foreign awards. Section 48(1) delineates five situations
wherein enforcement of a foreign award may be refused at the
request of the parties against whom it is invoked. Section 48(1)
reads as under:-
“48. Conditions for enforcement of foreign
awards.–(1) Enforcement of a foreign award may be
refused, at the request of the party against whom it is
invoked, only if that party furnishes to the court proof
that–
(a) the parties to the agreement referred to in section
44 were, under the law applicable to them, under some
incapacity, or the said agreement is not valid under the
law to which the parties have subjected it or, failing any
indication thereon, under the law of the country where
the award was made; or
(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; or
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(c) the award deals with a difference not
contemplated by or not falling within the terms of the
submission to arbitration, or it contains decisions on
matters beyond the scope of the submission to
arbitration:
Provided that, if the decisions on matters submitted to
arbitration can be separated from those not so
submitted, that part of the award which contains
decisions on matters submitted to arbitration may be
enforced; or
(d) the composition of the arbitral authority or the
arbitral procedure was not in accordance with the
agreement of the parties, or, failing such agreement,
was not in accordance with the law of the country where
the arbitration took place; or
(e) the award has not yet become binding on the
parties, or has been set aside or suspended by a
competent authority of the country in which, or under
the law of which, that award was made”.
51. Under Section 48(2), two more situations under
which enforcement may be refused are provided which are as
follows:-
“48. Conditions for enforcement of foreign
awards.–
……………………………………………………………………
(2) Enforcement of an arbitral award may also be
refused if the Court finds that–
(a) the subject-matter of the difference is not capable
of settlement by arbitration under the law of India; or
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57
(b) the enforcement of the award would be contrary
to the public policy of India.”
52. In Gemini Bay Transcription Pvt. Ltd. v.
Integrated Sales Service Ltd. and Ors. [(2022) 1 SCC 753]
the Hon’ble Supreme Court pointed out that there are six
ingredients to an award being a foreign award under Section 44.
The relevant paragraph of the judgment is extracted
hereunder:-
“30. A reading of Section 44 of the Arbitration and
Conciliation Act, 1996 would show that there are six
ingredients to an award being a foreign award under
the said section. First, it must be an arbitral award on
differences between persons arising out of legal
relationships. Second, these differences may be in
contract or outside of contract, for example, in tort.
Third, the legal relationship so spoken of ought to be
considered “commercial” under the law in India. Fourth,
the award must be made on or after the 11th day of
October, 1960. Fifth, the award must be a New York
Convention award — in short it must be in pursuance of
an agreement in writing to which the New York
Convention applies and be in one of such territories.
And sixth, it must be made in one of such territories
which the Central Government by notification declares
to be territories to which the New York Convention
applies.”
[Emphasis added]
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53. The Hon’ble Supreme Court further held in the same
judgment regarding Section 47 as under:-
“35. We now come to Section 47. As the marginal note
indicates, this section provides that the prerequisites for
the enforcement of a foreign award are : (1) the original
award or a copy thereof duly authenticated in the
manner required by the law of the country in which it is
made; (2) the original agreement for arbitration or a
duly certified copy thereof, and; (3) such evidence as
may be necessary to prove that the award is a foreign
award.
36. Section 47 is based on Article IV of the New York
Convention which is contained in Schedule I to the
Arbitration Act, 1996. Article IV reads as follows:
“Article IV
1. To obtain the recognition and enforcement
mentioned in the preceding article, the party applying
for recognition and enforcement shall, at the time of
the application, supply:
(a) The duly authenticated original award or a duly
certified copy thereof;
(b) The original agreement referred to in Article II or a
duly certified copy thereof.
2. If the said award or agreement is not made in an
official language of the country in which the award is
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59relied upon, the party applying for recognition and
enforcement of the award shall produce a translation
of these documents into such language. The
translation shall be certified by an official or sworn
translator or by a diplomatic or consular agent.”
54. Still further it was held regarding Section 48 as
under:-
“39. We now come to Section 48 which deals with
enforcement of a foreign award being refused. It is
important to notice that when enforcement of a
foreign award is resisted, the party who resists it
must prove to the Court that its case falls within any
of the sub-clauses of sub-section (1) or sub-section
(2) of Section 48. Since some arguments were made
as to the expression “proof” contained in Section
48(1), it is necessary to deal with the same. In
Emkay Global Financial Services Ltd. v. Girdhar
Sondhi [(2018) 9 SCC 49 : (2018) 4 SCC (Civ) 274],
a question arose under the pari materia provision
contained in Section 34 of the Arbitration Act, 1996
as to what the expression “proof” means therein.
After referring to a number of High Court judgments,
and to an amendment that has now been made to
Section 34, in which the expression “furnishes proof
that” is now substituted by “establishes on the basis
of the record of the Arbitral Tribunal that”, this
judgment held that the expression “proof” cannot
possibly mean the taking of oral evidence as it will
otherwise defeat the object of speedy disposal of
Section 34 petitions. This was so stated as follows :
(SCC p. 63, para 21)
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60“21. It will thus be seen that speedy resolution
of arbitral disputes has been the reason for
enacting the 1996 Act, and continues to be the
reason for adding amendments to the said Act to
strengthen the aforesaid object. Quite obviously,
if issues are to be framed and oral evidence
taken in a summary proceeding under Section
34, this object will be defeated. It is also on the
cards that if Bill No. 100 of 2018 is passed, then
evidence at the stage of a Section 34 application
will be dispensed with altogether. Given the
current state of the law, we are of the view that
the two early Delhi High Court judgments
[Sandeep Kumar v. Ashok Hans, 2004 SCC
OnLine Del 106 : (2004) 3 Arb LR 306], [Sial
Bioenergie v. SBEC Systems, 2004 SCC OnLine
Del 863 : AIR 2005 Del 95], cited by us
hereinabove, correctly reflect the position in law
as to furnishing proof under Section 34(2)(a). So
does the Calcutta High Court judgment [WEB
Techniques & Net Solutions (P) Ltd. v. Gati Ltd.,
2012 SCC OnLine Cal 4271]. We may hasten to
add that if the procedure followed by the Punjab
and Haryana High Court judgment [Punjab SIDC
Ltd. v. Sunil K. Kansal, 2012 SCC OnLine P&H
19641] is to be adhered to, the time-limit of one
year would only be observed in most cases in
the breach. We therefore overrule the said
decision. We are constrained to observe that
Fiza Developers [Fiza Developers & Inter-Trade
(P) Ltd. v. AMCI (India) (P) Ltd., (2009) 17 SCC
796 : (2011) 2 SCC (Civ) 637] was a step in the
right direction as its ultimate ratio is that issues
need not be struck at the stage of hearing a
Section 34 application, which is a summary
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61procedure. However, this judgment must now be
read in the light of the amendment made in
Sections 34(5) and 34(6). So read, we clarify
the legal position by stating that an application
for setting aside an arbitral award will not
ordinarily require anything beyond the record
that was before the arbitrator. However, if there
are matters not contained in such record, and
are relevant to the determination of issues
arising under Section 34(2)(a), they may be
brought to the notice of the Court by way of
affidavits filed by both parties. Cross-
examination of persons swearing to the
affidavits should not be allowed unless
absolutely necessary, as the truth will emerge on
a reading of the affidavits filed by both parties.
We, therefore, set aside the judgment [Girdhar
Sondhi v. Emkay Global Financial Services Ltd.,
2017 SCC OnLine Del 12758] of the Delhi High
Court and reinstate that of the learned
Additional District Judge dated 22-9-2016. The
appeal is accordingly allowed with no order as to
costs.”
40.Given that foreign awards in Convention countries
need to be enforced as speedily as possible, the same
logic would apply to Section 48, as a result of which
the expression “proof” in Section 48 would only mean
“established on the basis of the record of the Arbitral
Tribunal” and such other matters as are relevant to
the grounds contained in Section 48.
41.It is important to remember that the New York
Convention, which our Act has adopted, has a pro-
enforcement bias, and unless a party is able to show
that its case comes clearly within Sections 48(1) or
48(2), the foreign award must be enforced. Also, the
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grounds contained in Sections 48(1)( a) to (e) are not
to be construed expansively but narrowly. Thus, in
Ssangyong Engg. & Construction Co.
Ltd.v.NHAI[(2019) 15 SCC 131 : (2020) 2 SCC (Civ)
213] [“Ssangyong”], it was held : (SCC pp. 172-74,
para 45)
“45. After referring to the New York Convention,
this Court delineated the scope of enquiry of
grounds under Sections 34/48 (equivalent to the
grounds under Section 7 of the Foreign Awards
Act, which was considered by the Court), and
held : (Renusagar case [Renusagar Power Co.
Ltd.v.General Electric Co., 1994 Supp (1) SCC
644] , SCC pp. 671-72 & 681-82, paras 34-37 &
65-66)
’34. Under the Geneva Convention of
1927, in order to obtain recognition or
enforcement of a foreign arbitral award,
the requirements of clauses (a) to (e) of
Article I had to be fulfilled and in Article
II, it was prescribed that even if the
conditions laid down in Article I were
fulfilled recognition and enforcement of
the award would be refused if the court
was satisfied in respect of matters
mentioned in clauses (a), (b) and (c).
The principles which apply to recognition
and enforcement of foreign awards are in
substance, similar to those adopted by
the English courts at common law. (See
Dicey & Morris, The Conflict of Laws, 11th
Edn., Vol. I, p. 578.) It was, however, felt
that the Geneva Convention suffered
from certain defects which hampered the
speedy settlement of disputes through
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arbitration. The New York Convention
seeks to remedy the said defects by
providing for a much more simple and
effective method of obtaining recognition
and enforcement of foreign awards.
Under the New York Convention the party
against whom the award is sought to be
enforced can object to recognition and
enforcement of the foreign award on
grounds set out in sub-clauses (a) to (e)
of clause (1) of Article V and the court
can, on its own motion, refuse
recognition and enforcement of a foreign
award for two additional reasons set out
in sub-clauses (a) and (b) of clause (2) of
Article V.None of the grounds set out in
sub-clauses (a) to (e) of clause (1) and
sub-clauses (a) and (b) of clause (2) of
Article V postulates a challenge to the
award on merits.
35. Albert Jan van den Berg in his
treatise The New York Arbitration
Convention of 1958 : Towards a Uniform
Judicial Interpretation, has expressed the
view:
“It is a generally accepted interpretation
of the Convention that the court before
which the enforcement of the foreign
award is sought may not review the
merits of the award. The main reason is
that the exhaustive list of grounds for
refusal of enforcement enumerated in
Article V does not include a mistake in
fact or law by the arbitrator.
Furthermore, under the Convention the
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64task of the enforcement Judge is a
limited one. The control exercised by him
is limited to verifying whether an
objection of a respondent on the basis of
the grounds for refusal of Article V(1) is
justified and whether the enforcement of
the award would violate the public policy
of the law of his country. This limitation
must be seen in the light of the principle
of international commercial arbitration
that a national court should not interfere
with the substance of the arbitration.” (p.
269)
36. Similarly, Alan Redfern and Martin
Hunter have said:
“The New York Convention does not
permit any review on the merits of an
award to which the Convention applies
and, in this respect, therefore, differs
from the provisions of some systems of
national law governing the challenge of
an award, where an appeal to the courts
on points of law may be permitted.”
(Redfern & Hunter,Law and Practice of
International Commercial Arbitration, 2nd
Edn., p. 461.)
37. In our opinion, therefore, in
proceedings for enforcement of a foreign
award under the Foreign Awards Act,
1961, the scope of enquiry before the
court in which award is sought to be
enforced is limited to grounds mentioned
in Section 7 of the Act and does not
enable a party to the said proceedings to
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impeach the award on merits.
* * *
65.This would imply that the defence of
public policy which is permissible under
Section 7(1)(b)(ii) should be construed
narrowly. In this context, it would also be
of relevance to mention that under Article
I(e) of the Geneva Convention Act of
1927, it is permissible to raise objection
to the enforcement of arbitral award on
the ground that the recognition or
enforcement of the award is contrary to
the public policy or to the principles of the
law of the country in which it is sought to
be relied upon. To the same effect is the
provision in Section 7(1) of the Protocol &
Convention Act of 1837 which requires
that the enforcement of the foreign award
must not be contrary to the public policy
or the law of India. Since the expression
“public policy” covers the field not covered
by the words “and the law of India” which
follow the said expression, contravention
of law alone will not attract the bar of
public policy and something more than
contravention of law is required.
66. Article V(2)(b) of the New York
Convention of 1958 and Section 7(1)(b)
(ii) of the Foreign Awards Act do not
postulate refusal of recognition and
enforcement of a foreign award on the
ground that it is contrary to the law of the
country of enforcement and the ground of
challenge is confined to the recognition
and enforcement being contrary to the
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public policy of the country in which the
award is set to be enforced. There is
nothing to indicate that the expression
“public policy” in Article V(2)(b) of the
New York Convention and Section 7(1)(b)
(ii) of the Foreign Awards Act is not used
in the same sense in which it was used in
Article I(c) of the Geneva Convention of
1927 and Section 7(1) of the Protocol and
Convention Act of 1937. This would mean
that “public policy” in Section 7(1)(b)(ii)
has been used in a narrower sense and in
order to attract the bar of public policy the
enforcement of the award must invoke
something more than the violation of the
law of India. Since the Foreign Awards Act
is concerned with recognition and
enforcement of foreign awards which are
governed by the principles of private
international law, the expression “public
policy” in Section 7(1)(b)(ii) of the Foreign
Awards Act must necessarily be construed
in the sense the doctrine of public policy is
applied in the field of private international
law. Applying the said criteria it must be
held that the enforcement of a foreign
award would be refused on the ground
that it is contrary to public policy if such
enforcement would be contrary to (i)
fundamental policy of Indian law; or (ii)
the interests of India; or (iii) justice or
morality.’
[Emphasis in original]
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55. In Pasl Wind Solutions (P) Ltd. v. GE Power
Conversion (India) (P) Ltd. [(2021) 7 SCC 1] the Hon’ble
Supreme Court held that Part I and Part II of the Arbitration and
Conciliation Act are mutually exclusive. It was held as under:-
“Part I and Part II of the Arbitration Act are
mutually exclusive
34. The Arbitration Act is in four parts. Part I deals
with arbitrations where the seat is in India and has no
application to a foreign-seated arbitration. It is,
therefore, a complete code in dealing with appointment
of arbitrators, commencement of arbitration, making of
an award and challenges to the aforesaid award as well
as execution of such awards. On the other hand, Part II
is not concerned with the arbitral proceedings at all. It
is concerned only with the enforcement of a foreign
award, as defined, in India. Section 45 alone deals with
referring the parties to arbitration in the circumstances
mentioned therein. Barring this exception, in any case,
Part II does not apply to arbitral proceedings once
commenced in a country outside India.”
[Emphasis supplied]
56. Regarding the ingredients of Section 44 of the Act it
was held as under in the said judgment:-
“45. Under Section 44 of the Arbitration Act, a foreign
award is defined as meaning an arbitral award on
differences between persons arising out of legal
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68relationships considered as commercial under the law
in force in India, in pursuance of an agreement in
writing for arbitration to which the New York
Convention applies, and in one of such territories as
the Central Government, by notification, declares to be
territories to which the said Convention applies. Thus,
what is necessary for an award to be designated as a
foreign award under Section 44 are four ingredients:
(i) the dispute must be considered to be a commercial
dispute under the law in force in India,
(ii) it must be made in pursuance of an agreement in
writing for arbitration,
(iii) it must be disputes that arise between “persons”
(without regard to their nationality, residence, or
domicile), and the arbitration must be conducted in a
country which is a signatory to the New York
Convention. Ingredient (i) is undoubtedly satisfied on
the facts of this case. Ingredient (ii) is satisfied given
Clause 6 of the settlement agreement. Ingredients (iii)
and (iv) are also satisfied on the facts of this case as
the disputes are between two persons i.e. two Indian
companies, and the arbitration is conducted at the seat
designated by the parties i.e. Zurich, being in
Switzerland, a signatory to the New York Convention.”
Analysis
57. While analysing the facts of the instant case, it must
be acknowledged that this case is unique with a rare factual
backdrop. The respondent herein initiated the arbitral
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proceedings. Reliefs sought are discernible from paragraphs 68
and 69 of Annexure-1 award. The relevant paragraphs are
extracted hereunder: –
“VI. CLAIMS FOR RELIEF
68. The Claimant’s requests, as finally articulated, are
set out at page 80 of the Reply, at which the Claimant
requests that the Tribunal declare and order the
following:
“a. DECLARE that the Respondents have breached
the CME Shareholders Agreement by inter alia
illegally appropriating the value of Mr Sharath’s
shareholding in various companies including CME
Holding and its subsidiaries and associated
companies;
b. ORDER the Respondents to pay the Claimant
compensation for damage in an amount of USD 25.2
million, including interest pendente lite at USD
Treasury Rate +4% per annum (calculated as on 28
February 2022) compounded quarterly;
c. ORDER the Respondents to pay interest on all
amounts awarded, at a commercially reasonable rate
or such other rate determined by applicable law,
from the date of award until full payment of the
award;
d. ORDER the Respondents to pay the costs incurred
by Mr Sharath in relation to these proceedings,
including all professional fees, attorneys’ fees and
disbursements and the costs of the arbitration”
69. The Respondent’s requests, as finally articulated,
are set out at paragraphs 362-365 of the Rejoinder, at
which the Respondents seek the following relief from
the Tribunal:
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70“362. Respondents respectfully request the Tribunal
to dismiss Mr Sharath’s claims against Respondents
on the grounds of the Tribunal’s lack of jurisdiction
over the dispute (Section 2 of the Swedish Arbitration
Act).
363. Respondents respectfully request the Tribunal to
dismiss Mr Sharath’s claim for declaratory relief as
the prerequisites for declaratory judgments under
Swedish law are not met (Chapter 13, Section 2 of
the Code of Judicial Procedure).
364. Should the Tribunal not dismiss the claims,
Respondents respectfully request the Tribunal to
reject Mr Sharath’s claims against Respondents.
365. In any event, Respondents respectfully request
the Tribunal to,
(i) order that Mr Sharath as between the parties
shall bear the costs for arbitration including the fee
to the SC and interest calculated in accordance with
Section 6 of the Interest Act (1975:635), from the
date of the award until full payment of the award;
and
(ii) order Mr Sharath to compensate
Respondents for their costs and expenses
incurred in the arbitration including
interestncalculated in accordance with Section 6
of the Interest Act (1975:635) from the date of
the award until full payment of the award.”
58. The petitioners resisted the claims mainly contending
that there was no valid arbitration agreement. This contention
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was accepted by the Arbitral Tribunal. The following paragraphs
of Annexure-1 award are to be noted: –
“87. For the foregoing reasons, the Tribunal concludes
that the Shareholders Agreement was not entered into
by conduct, and that therefore there is no valid or
effective arbitration agreement between the Claimant
and the First Respondent.
…………………………………………………………….
89. All of the foregoing agreements provide for ad hoc
arbitration, with the SCC designated as the appointing
authority. None of these agreements provide for
arbitration to be administered by the SCC pursuant to
the SCC Rules, which is what is provided for at Clause
6.4 of the Shareholders Agreement. It follows that the
Claimant has not been able to show that there is any
established usage between the Parties for arbitration
pursuant to the SCC Rules. The Claimant’s argument
that it was the Respondents who proposed the
arbitration agreement in the Shareholders Agreement
which calls for SCC arbitration does not assist the
Claimant’s position, as it appears that this is the first
time that such a dispute resolution provision was
proposed for use in an agreement between the
Claimant and any of member of the Concejo Group.
90. Even if the Tribunal were to accept that the
purported usage relied on by the Claimant conferred
jurisdiction on the Tribunal – an issue which the
Tribunal does not rule on – the Claimant has failed to
establish that any such usage did in fact exist. As a
consequence, no arbitration agreement has come into
existence by virtue of the purported usage.
………………………………………………………………
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95. As the Tribunal has already determined that there
is no arbitration agreement in the first place, and that
the First Respondent is not therefore bound by it, the
Second Respondent cannot be bound by the arbitration
agreement on the basis of the theory of piercing the
corporate veil.”
59. The Arbitral Tribunal held against the respondent on
the pertinent aspect as noted above and then dealt with the
issue of cost. It was observed in paragraph 114 as under:-
“114. It is unequivocal that the Respondents have been
victorious in these proceedings, as they have
succeeded on their jurisdictional objections and the
Claimant’s claims for relief have been dismissed. On
the basis of the foregoing principles, the Respondents
are entitled to recover their reasonable costs. Despite
its finding on jurisdiction, the Tribunal has authority to
make orders as to costs pursuant to Article 37 of the
Arbitration Act.”
60. Finally, in the dispositive section of the award it was
found and directed as under:-
“128. Based on the Final Award above, the Tribunal
hereby finds, orders and directs:
A. The Tribunal lacks jurisdiction over the Claimant’s
claims, which are accordingly dismissed;
B. The Claimant is directed to pay the Respondents
SEK 11,405,267 for their legal and other costs;
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73C. The Claimant is directed to pay the Respondents
EUR 175,677.25, GBP 215.62 and SEK 289.50 for
the Respondents’ payment towards the costs of
arbitration;
D. The Claimant is directed to pay interest on the
Respondents’ costs at paragraphs B. and C. above,
such interest to be calculated pursuant to Section 6
of the Swedish Interest Act as of the date of this
award until the date of payment;
E. The Claimant is ordered to bear its own legal and
other costs;
F. All other claims and requests for relief are
dismissed.”
61. Thus, the Arbitral Tribunal entered into a firm finding
that there was no arbitration agreement and hence the Tribunal
lacked jurisdiction over the respondent’s claims. Since the
petitioners emerged victorious, the respondent was directed to
pay cost to them. Hence, Annexure-1 is virtually a cost only
award. Peculiarity of this award is the fact that the same has
been rendered with a finding that the Tribunal had no
jurisdiction to entertain the claims as there was no valid
arbitration agreement.
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62. At this juncture it must be noted that the thrust of
the entire arguments advanced on behalf of the respondent is
regarding the conclusive findings of the Arbitral Tribunal that
there was no valid arbitration agreement between the parties. It
is also to be noted that the respondent did not challenge the
arbitral award. In other words, as of now the award can be
treated as concluded between the parties without any further
challenge.
63. In view of the arguments raised by both sides
pertaining to enforceability of the award, the primary task of the
court at this juncture is to examine whether the award is
enforceable under Part II of the Arbitration and Conciliation Act,
1996. The Hon’ble Supreme Court has highlighted the
importance of recognizing and enforcing valid foreign awards in
the judgment in Gemini Bay Transcription Pvt. Ltd. (Supra).
64. The approach of the court shall normally be in favour
of enforcement of foreign awards. Nevertheless, it goes without
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saying that the statutory provisions of Part II of the Arbitration
and Conciliation Act, 1996 shall be certainly followed. The
Hon’ble Supreme Court has clarified that the provisions of Part I
of the Act and those of Part II are mutually exclusive.
Therefore, the scope and ambit of the provisions of Part II are
distinct from those dealing with domestic arbitration.
65. It is also well settled that the power of the court
under Part II is restricted in nature. It has no authority to set
aside a foreign award or to interfere with the findings of the
Arbitral Tribunal in any manner. Review of the foreign awards on
merits is not within the purview of the enforcement proceedings
under Part II of the Arbitration and Conciliation Act, 1996. Scope
of the enquiry is confined to the enforceability of the award
under the Indian law.
66. Conjoint reading of Sections 44 to 49 of the Act would
show that the court has to initially satisfy that the award sought
to be enforced is a ‘foreign award’ as defined under Section 44
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of the Act. Unless the award satisfies the ingredients of the
definition, obviously the jurisdiction under Part II cannot be
invoked. Further, the court should satisfy that the party seeking
enforcement of the award has produced evidence as
contemplated under Section 47. If the party resisting
enforcement furnishes proof to the court with respect to any of
the factors mentioned in sub-sections (1) and (2) of Section 48,
enforcement may be refused.
67. Having said that courts must lean in favour of
enforcing awards rather than refusing to do so on technical
grounds, it cannot be overlooked that enforcement of a foreign
award under Part II can be resorted to only if the requirements
of the provisions of that Part are fulfilled. Therefore, it is
incumbent on the court to forensically analyse, when
enforcement of a foreign award is sought, as to whether the
requirements of Part II of the Arbitration and Conciliation Act,
1996 are satisfied before proceeding to enforce the award as a
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decree of the court. The said analysis is indispensable when an
award stated to be passed under another legal regime is sought
to be executed under the Indian law as the conditions under the
provisions of Part II are carefully and consciously fused into the
Arbitration and Conciliation Act by the legislature with the
obvious objective of preventing abuse of the process of Indian
law. Notwithstanding the transnational commitments of
reciprocity, the legislature has not contemplated that every
foreign award shall be impulsively acknowledged and enforced
by the Indian courts. Hence it is crucial that the award should
pass the muster of Part II.
68. In this regard it is pertinent to refer to Article V of the
New York convention extracted hereunder:-
“ARTICLE V
1. Recognition and enforcement of the award may
be refused, at the request of the party against
whom it is invoked, only if that party furnishes to
the competent authority where the recognition and
enforcement is sought, proof that-
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(a) the parties to the agreement referred to in
article II were, under the law applicable to them,
under some incapacity, or the said agreement is
not valid under the law to which the parties have
subjected it or, failing any indication thereon, under
the law of the country where the award was made;
or
(b) the party against whom the award is
invoked was not given proper notice of the
appointment of the arbitrator or of the arbitration
proceedings or was otherwise unable to present his
case, or
(c) the award deals with a difference not
contemplated by or not falling within the terms of
the submission to arbitration, or it contains
decisions on matters beyond the scope of the
submission to arbitration; provided that, if the
decisions on matters submitted to arbitration can
be separated from those not so submitted, that
part of the award which contains decisions on
matters submitted to arbitration may be recognised
and enforced; or
(d) the composition of the arbitral authority or
the arbitral procedure was not in accordance with
the agreement of the parties, or, failing such
agreement, was not in accordance with the law of
the country where the arbitration took place; or
(e) the award has not yet become binding on
the parties, or has been set aside or suspended by
a competent authority of the country in which, or
under the law of which, that award was made.
2. Recognition and enforcement of an arbitral
award may also be refused if the competent
authority in the country where recognition and
enforcement is sought finds that-
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(a) the subject-matter of the difference is not
capable of settlement by arbitration under the law
of that country; or
(b) the recognition or enforcement of the award
would be contrary to the public policy of that
country.”
A reading of Article V would reveal that the same also envisages
retention of discretion by the signatory states in the matter of
enforcing foreign awards. Hence the signatory states definitely
have the freedom to enact laws providing for enforcement,
however with thresholds, traversing of which would be essential
to secure endorsement by the domestic courts of the State
concerned. Needless to say, such riders cannot be irrationally
stringent in that way frustrating the objects of the Convention.
Provisions of Chapter I under Part II of the Arbitration and
Conciliation Act, 1996 are framed ostensibly in tune with Article
V.
69. Keeping the above principles in mind, I shall analyse
the objections raised by the learned counsel for the respondent
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in seriatim. The learned counsel had raised a preliminary
contention that the execution petition was filed without
producing any evidence as contemplated under Section 47 of the
Act. He argued so for the reason that no copy of the original
agreement was produced along with the execution petition. He
further contended that Annexure-1 was not an original of the
award or a duly authenticated copy thereof.
70. Scope and intent of the expression “evidence” under
Section 47 of the Act cannot be understood like that of the
standards of the Evidence Act. The apparent purpose of insisting
that the original of the award, or a copy thereof duly
authenticated in the manner required by the law of the country
in which it was made, as well as the original arbitration
agreement or a duly certified copy thereof, shall be produced, is
to convince the court that what is sought to be enforced is a
genuine foreign award pursuant to a valid arbitration agreement.
Beyond the said requirement, no further necessity can be read
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into the provisions of Section 47 of the Act. If there is dispute
regarding the genuineness of the award or agreement, of course
the court may require to insist for convincing evidence. Hence
the standards of “evidence” may vary according to the facts and
circumstances of each case. The avowed purpose of the Act is to
ensure speedy resolution of the disputes. As a sequel, in the
case of enforcement of foreign awards, making the process
cumbersome would be against the goals of the law relating to
arbitration. Review of the foreign award on merits is not within
the province of the court called upon to enforce the award. Court
is exercising only a constricted jurisdiction under Part II of the
Act. Therefore, if the expression ‘evidence’ in Section 47 is
reckoned as an expression signifying evidence of a high
standard as required in criminal trials or in pure civil
proceedings, it will be against the prime objectives of the
arbitration law. The expression “evidence” ought to be
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understood in the particular context of the provisions under Part
II as well as the general scheme of the Act.
71. In the case at hand, the authenticated copy of the
agreement was not produced along with the execution petition,
but was produced later. As held by the Hon’ble Supreme Court in
PEC Limited (Supra), it is not a reason to hold that the execution
petition was defective and not liable to be entertained. Moreover,
the said agreement was actually relied on by the respondent
before the Arbitral Tribunal. Likewise, before hearing concluded,
a certified copy of the award was also produced. The learned
Senior Counsel for the petitioners clarified that the copies
produced at the time of filing were those forwarded to the
petitioners by e-mail from the arbitral institution, and that the
said method is the normal mode of serving copies of pleadings
and documents, as well as orders and the final award. This was
not disputed by the learned counsel for the respondents. That
being so I am of the view that the requirements of Section 47 of
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the Act have been satisfactorily complied in this case. The
materials produced are sufficient for the court to be satisfied
that there was an arbitral proceeding between the parties and
that the award produced is its outcome, since there is no dispute
regarding the legitimacy of the documents. Hence, I hold that
the objection raised by the respondent with reference to Section
47 of the Act is not sustainable.
72. Be that as it may, the next contention pertaining to
Section 48(1)(a) that no valid arbitration agreement existed
between the parties as found by the Tribunal and the same is a
sufficient reason to refuse enforcement deserves to be
considered independently. At the risk of repetition, it must be
noted that the unequivocal finding of the Arbitral Tribunal was
that there was no valid arbitration agreement. The said
conclusion of the Tribunal is binding on both sides. The award
has become final as no challenge was raised against it. The
principles of resjudicata and fairness would demand that the
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parties shall not contend that there was a valid agreement after
having accepted the findings of the Tribunal to the contrary. The
contention raised by the learned Senior Counsel for the
petitioners that there was an agreement between the parties to
the extent they agreed for adjudication by the Tribunal needs to
be examined in this background. It is not impossible that such
an agreement may also evolve. Nonetheless, even if the said
contention is acknowledged for the sake of arguments, the
crucial question is as to whether the same would be sufficient to
satisfy the requirement of Section 48(1)(a).
73. It is relevant to note that in Section 48(1)(a) the
opening words employed are, “the parties to the agreement
referred to in Section 44“. Therefore, the expression ‘agreement’
in Section 48(1)(a) shall be understood as stated in Section 44.
Under Section 44(a), the agreement for arbitration shall
essentially be in writing. Therefore, it is imperative that the
agreement for arbitration shall be ‘in writing’ to satisfy the
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requirements of the provisions of Part II of the Act, especially of
Section 48(1)(a). To put it plainly, unless there is an agreement
for arbitration in writing there cannot be a ‘foreign award’ as
defined under Section 44 of the Act. Likewise, to satisfy the
requirement of Section 48(1)(a), such an agreement shall not be
invalid under the law to which the parties have subjected it.
Hence, the requirements are two-fold; 1) the agreement for
arbitration shall be in writing and 2) the same shall not be
invalid under the curial law.
74. It was the case of the petitioners before the Arbitral
Tribunal that there was no agreement for arbitration, binding on
the parties. They effectively established the same before the
Tribunal. The Tribunal refused reliefs to the respondent holding
that it had no jurisdiction in the absence of valid arbitration
agreement. Hence, it is no longer open to the petitioners to rely
on the agreement produced in this execution petition. Similarly,
the contention of the learned Senior Counsel for the petitioners
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that from the conduct of the parties, an agreement for
arbitration can be inferred also cannot save the case for the
petitioners as the unequivocal requirement under the Indian law
is ‘agreement for arbitration in writing’. An agreement,
admittedly not in black and white, but sought to be inferred
from the conduct of the parties, cannot fulfil the requirements of
the provisions of Part II of the Arbitration and Conciliation Act,
1996. Though an agreement contained in an exchange of letters
or telegrams can also satisfy the requirement in this regard, no
such agreement exists even for the purpose of a limited
adjudication by the Arbitral Tribunal.
75. It is germane to note that, under the various Articles
of the Convention incorporated under the First Schedule to the
Act, the existence of an agreement in writing by which the
parties undertake to submit to arbitration is essential. It is also
necessary that the subject matter shall be capable of settlement
by arbitration. Further, the agreement shall be in writing. Under
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Article II(2), the term “agreement in writing” includes an arbitral
clause in a contract or an arbitration agreement signed by the
parties or contained in an exchange of letters or telegrams.
Therefore, in the case on hand, the requirements of the
Convention on the Recognition and Enforcement of Foreign
Arbitral Awards, as incorporated in the First Schedule of the Act,
are also not satisfied.
76. I find substantial merit in the contention of the
learned counsel for the respondent that the petitioners were well
aware that the award would not be enforceable in India. In their
statement of defence before the Arbitral Tribunal, it was plainly
stated that they would not be in a position to seek enforcement
under the New York Convention as there is no arbitration
agreement between the parties. Relevant submissions of the
petitioners in this regard are found in paragraphs 296-299 of the
defence statement produced by the respondent as Annexure-
R1(a). It is apposite to extract the same hereunder: –
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New York Convention – meaning that the countries must
recognize arbitral awards as binding and enforce them
in accordance with the convention – the Respondents
would not be able to seek enforcement under the
convention in the case of a costs award in their favour.
The reason being that, under to the New York
Convention, the arbitration agreement must be supplied
to obtain enforcement, (Article IV), and the agreement
must be in writing and signed by the two parties
(Article II).
297. As there is no arbitration agreement between the
parties, let alone a signed agreement, Respondents
cannot successfully seek enforcement under the New
York Convention.
298. The same principles apply under Indian and UAE
national law. According to the Indian Arbitration and
Conciliation Act, 1996, the party applying for
enforcement must supply the arbitration agreement to
obtain enforcement (Article 47.1.b), and an arbitration
agreement shall be in writing and signed by the two
parties (7.3 and 7.4a). Likewise, under Federal Law No.
(6) of 2018 on Arbitration in the UAE, the party
applying for enforcement must supply the arbitration
agreement to obtain enforcement (55.1.b), and the
agreement shall be in writing and signed by the two
parties (7.1 and 7.2.a).
299. Consequently, it is highly unlikely that the
Respondents can obtain enforcement of a costs award
in their favour, both under national and international
law. Respondents thus stand a great financial risk
regardless of the outcome of the arbitration initiated by
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Mr.Sharath. This alone constitute exceptional
circumstances under Article 38 of the SCC Rules.”
77. The learned Senior Counsel for the petitioners
attempted to defend the above-mentioned contention by stating
that the pleadings extracted above reflected the apprehensions
of the petitioners and the same are not liable to be considered
as admissions. In the nature of the pleadings extracted above,
the said contention of the learned Senior Counsel cannot be
accepted. The pleadings in paragraphs 296-299 of Annexure-
R1(a) are unambiguous and would show that the petitioners
were well aware during the pendency of the arbitral proceedings
that for enforcement of a foreign award under the Indian
Arbitration and Conciliation Act, 1996 the party applying for
enforcement must supply the arbitration agreement and it shall
be necessarily in writing and signed by the parties. They
candidly submitted so before the Tribunal and sought reliefs on
the said premises. It must be said that the contentions raised in
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this Execution Petition, in entirety, are inconsistent with the
pleadings extracted above.
78. The learned Senior Counsel pointed out that, while
resisting the plea before the Tribunal to insist on furnishing
security, the respondent contended that he had sufficient assets
in India to satisfy any award passed against him. He raised no
objection regarding the enforceability of the award, even if it
were a cost award, before the Tribunal. The learned Senior
Counsel hence argued that the respondent’s contentions
regarding enforceability are liable to be rejected for this sole
reason. True that the pleadings of the parties before the Tribunal
produced before this Court do not reveal that the respondent
had contended that the award would not be enforceable in India
and on the other hand, he maintained that he has sufficient
assets to satisfy if an award is passed against him. But from the
point of view of the court, what requires to be examined first is
as to whether the award is enforceable under Part II of the Act.
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The said analysis cannot be compromised even if the party
resisting enforcement had taken a stand at variance with that
adopted before this Court. In that analysis, within the contours
of the provisions of Part II, this Court has concluded that the
award does not satisfy the requirements under Part II. Hence
this contention is also of no help to the petitioners.
79. Relying on S.42 of the Swedish Arbitration Act and the
judgments reported in Commonwealth Development Corp (UK)
v. Montague [[2000] QCA 252] and Ravfox Limited v. Bexmoor
Limited [2025 EWHC 1313 (Ch)], the learned Senior Counsel
submitted that it was well within the authority of the Tribunal to
pass a cost award and hence there is no illegality or impropriety
and a cost award is also enforceable like any other award.
Appraisal of S.42 of the Swedish Arbitration Act would show that
the Arbitral Tribunals under the Swedish law are competent to
grant costs and to pass cost awards. Learned Senior Counsel is
right in contending that cost only awards are recognized in
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international commercial arbitrations. Nevertheless, the concern
of the enforcing court under the Indian law, as already stated, is
as to whether the award is enforceable under Part II of the
Arbitration and Conciliation Act,1996. For the reasons stated in
the foregoing paragraphs, though a cost award may also be
enforceable under the Indian law, the award in the instant
cannot be enforced as it does not satisfy the requirements of
Part II of the Arbitration and Conciliation Act,1996
80. A valid arbitration agreement is a baseline for a lawful
arbitral proceeding in India. Agreement-less arbitration is
inconceivable in Indian law. S.48(2)(a) stipulates that
enforcement of an arbitral award can be refused if the court
finds that the subject matter of difference is not capable of
settlement by arbitration under the law of India. As the
Arbitration and Conciliation Act, 1996 does not envisage a lawful
arbitration without an agreement as articulated under S.7, for
want of a binding agreement, the differences between the
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petitioners and the respondent in this case were not capable of
settlement by arbitration under the Indian law. Consequently,
the award is hit by S.48(2)(a). For the same reason, in my view
it attracts the disqualification under S.48(2)(b) too even though
the expression “public policy of India” is understood in a
restricted sense.
Conclusions
81. As noted supra, the Hon’ble Supreme Court has
clarified the ingredients of the definition of “foreign award” in
the judgment in Pasl Wind Solutions (P) Ltd.(Supra). An
essential characteristic of a foreign award, as per Section 44(a),
is that it must be passed in pursuance of an agreement in
writing for arbitration to which the Convention set forth in the
First Schedule applies. The first part of Section 44(a) states
about ‘an agreement in writing,’ for arbitration. In the case on
hand, as already observed, the Arbitral Tribunal entered into an
absolute conclusion that there was no valid arbitration
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agreement binding the parties. Hence, the award cannot be
treated as a foreign award as defined under Section 44 of the
Act and therefore the enforcement of the same under Part II of
the Act is impermissible. The parties had subjected the
agreement and arbitral proceedings to Swedish law. Under the
said law, the Tribunal concluded that there was no valid
agreement. Therefore, the same is a valid ground to resist
enforcement under Section 48(1)(a). The award sought to be
executed itself can be considered as a sufficient proof available
to the respondent in this regard.
82. Since it is essential under Indian law to have a valid
arbitration agreement as the foundational prerequisite for
arbitral proceedings, the enforcement of the award in the case
on hand, in the absence of a valid arbitration agreement,
deserves to be refused in view of the provisions of Section 48(2)
(a) as well as Section 48(2)(b). The subject matter of difference
is not capable of settlement by arbitration under the law of India
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and an award passed without a valid arbitration agreement is
against the public policy of India, even within a restricted sense
of the said expression.
In the result, I hold that the award sought to be executed is
not enforceable under Part II of the Arbitration and Conciliation
Act, 1996. Consequently, the E.P.(ICA) is dismissed.
Sd/-
S.MANU
JUDGE
skj
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APPENDIX OF EP(ICA) NO. 1 OF 2024
PETITIONER ANNEXURES
Annexure 1 TRUE COPY OF THE ARBITRAL AWARD DATED
30.01.2023 IN SCC ARBITRATION V2020/199
OF THE HON’BLE ARBITRAL TRIBUNAL,
SWEDEN
Annexure 2 POWER OF ATTORNEY OF THE 1ST PETITIONER
IN FAVOUR OF THE DEPONENT DATED
26.08.2024 AND CERTIFIED ON 05.09.2024
Annexure 2(a) POWER OF ATTORNEY OF THE 2ND PETITIONER
IN FAVOUR OF THE DEPONENT DATED
26.08.2024 AND CERTIFIED ON 05.09.2024
Annexure 3 JUDGMENT OF THE HON’BLE HIGH COURT OF
KERALA IN OP(ICA) 1 OF 2023 DATED
13.06.2024
RESPONDENT ANNEXURES
Annexure R1 True copy of the Judgement in Appeal
(ICA) No.1 of 2024 dated 4.11.2024 of
this Honorable High Court of Kerala
PETITIONER ANNEXURES
Annexure A2 . The certified copy of the complete
set of documents submitted by the
claimant for initiating the arbitration
proceedings dated nil
Annexure A3 THE COPY OF THE DECISION OF BIFURCATION
22.04.2021
Annexure A4 THE COPY OF THE CLAIMANT’S REPLY TO THE
RESPONDENTS’ REQUEST FOR SECURITY FOR
COSTS DATED 3.11.2021
Annexure A5 . THE COPY OF THE CLAIMANT’S COMMENTS
TO RESPONDENTS’ ADDITIONAL SUBMISSION
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ON SECURITY FOR COSTS DATED 25.01.2022
Annexure A6 THE COPY OF THE DECISION ON
RESPONDENTS’ APPLICATION FOR SECURITY
FOR COSTS
Annexure A7 . THE COPY OF THE RESPONDENTS’
STATEMENT OF REJOINDER DATED 2.05.2022
RESPONDENT ANNEXURES
Annexure R1(a) TRUE COPY OF THE
RESPONDENT/PETITIONER’S STATEMENT OF
DEFENCE
PETITIONER ANNEXURES
Annexure A8 The certified copy of the final award
passed by the Arbitral Tribunal dated
30.01.2023
Annexure A9 In order to certify that a letter is
issued from the Arbitral Tribunal dated
19.02.2026
Annexure A10 The certified copy of the
electronically certified judgment
issued by the Court of Appeal, Dubai
Courts, Government of Dubai, in Appeal
No. 3 of 2025, Civil Appeal against an
Order on Petition dated 15.04.2025
Annexure A11 The certified copy of the decision
dated 28.07.2023 issued by the Dubai
Court of First Instance, Eleventh
Execution Circuit, Government of Dubai,
in Case No. 104/2023 (Order on Petition
for Writ of Execution) granting the
executory formula for enforcement of a
foreign arbitral award issued by the
Stockholm Chamber of Commerce in
Arbitration Case No. 199 of 2020