# [2020] 12 S.C.R. 1

- **Citation:** [2020] 12 S.C.R. 1
- **Court:** Supreme Court of India
- **Decided:** 2020-09-16
- **Case number:** Civil Appeal No. 3185 of 2020
- **Bench:** S. Abdul Nazeer, Indu Malhotra, Aniruddha Bose
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/2020-12-s-c-r-1-34523
- **Pages:** 101

## Headnote

Arbitration and Conciliation Act, 1996 - ss.47 and 49 -
Foreign award - Limitation for filing enforcement/execution petition
for enforcement of a foreign award - Held: Period of limitation for
filing a petition for enforcement of a foreign award u/ss.47 and 49,
would be governed by Art.137 of the Limitation Act, which prescribes
a period of three years from when the right to apply accrues -
Limitation Act, 1963 - Art. 137.
Arbitration and Conciliation Act, 1996 - ss. 44, 46, 47 and
48 - Scheme of the Act for enforcement of New York Convention
awards - Held: Part II Chapter 1 of the Act, pertains to enforcement
of New York Convention awards - The enforcement Court cannot
set aside a foreign award, even if the conditions u/s.48 are made
out - Power to set aside a foreign award vests only with the court at
the seat of arbitration, since supervisory or primary jurisdiction is
exercised by the curial courts at the seat of arbitration -The
enforcement court is not to correct the errors in the award u/s.48,
or undertake a review on the merits of the award, but is conferred
with the limited power to "refuse" enforcement, if the grounds are
made out - If the Court is satisfied that the application u/s.48 is
without merit, and the foreign award is found to be enforceable,
then u/s.49, the award shall be deemed to be a decree of "that Court"
- Limited purpose of the legal fiction is enforcement of the foreign
award - New York Convention on the Recognition and Enforcement
of Foreign Awards, 1958 - Arts. IV & V.
Arbitration - Foreign award - Limitation for enforcement /
execution of a foreign award - Lex fori - Held: The issue of
limitation for enforcement of foreign awards being procedural in
nature, is subject to the lex fori i.e. the law of the forum (State)
where the foreign award is sought to be enforced.
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Arbitration - Arbitral award - Foreign award - Limitation
period for filing the enforcement / execution petition for enforcement
of a foreign award in India - Held: Would be governed by Indian
law - The Indian Arbitration Act, 1996 does not specify any period
of limitation for filing an application for enforcement / execution of
a foreign award - s.43 however provides that the Limitation Act,
1963 shall apply to arbitrations, as it applies to proceedings in
court - Arbitration and Conciliation Act, 1996 - s.43 - Limitation
Act, 1963.
Arbitration and Conciliation Act, 1996 - s.36 - Award in
arbitral proceeding - Domestic award - Statutory fiction created
u/s.36 for limited purpose of enforcement of a 'domestic award' as
a decree of the court - Held: By deeming fiction, a domestic award
is deemed to be a decree of the court, even though it is as such not
a decree passed by a civil court - The deeming fiction is restricted
to treat the award as a decree of the court for the purposes of
execution, even though it is, as a matter of fact, only an award in
an arbitral proceeding.
Arbitration - Foreign award - Held: Foreign awards are not
decrees of an Indian civil court - By a legal fiction, s.49 provides
that a foreign award, after it is granted recognition and enforcement
u/s.48, would be deemed to be a decree of "that Court" for the
limited purpose of enforcement - The phrase "that Court" refers to
the Court which has adjudicated upon the petition filed u/ss.47
and 49 for enforcement of the foreign award - Art.136 of the
Limitation Act would not be applicable for the enforcement /
execution of a foreign award, since it is not a decree of a civil court
in India - Limitation Act, 1963 - Art. 136 - Arbitration and
Conciliation Act, 1996 - ss.47, 48 and 49 - Legal Fiction.
Arbitration and Conciliation Act, 1996 - Foreign award -
Applicable law at the enforcement stage - Held: Enforcement court
does not sit in appeal over the findings of the seat court -
Enforcement of the award is a subsequent and distinct proceeding
from the setting aside proceedings at the seat - The enforcement
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[2020] 12 S.C.R. 1
1
GOVERNMENT OF INDIA
v.
1. VEDANTA LIMITED (FORMERLY CAIRN INDIA LTD.)
2. RAVVA OIL (SINGAPORE) PTE. LTD.
3. VIDEOCON INDUSTRIES LIMITED
(Civil Appeal No. 3185 of 2020)
SEPTEMBER 16, 2020
[S. ABDUL NAZEER, INDU MALHOTRA AND
ANIRUDDHA BOSE, JJ.]
Arbitration and Conciliation Act, 1996 - ss.47 and 49 -
Foreign award - Limitation for filing enforcement/execution petition
for enforcement of a foreign award - Held: Period of limitation for
filing a petition for enforcement of a foreign award u/ss.47 and 49,
would be governed by Art.137 of the Limitation Act, which prescribes
a period of three years from when the right to apply accrues -
Limitation Act, 1963 - Art. 137.
Arbitration and Conciliation Act, 1996 - ss. 44, 46, 47 and
48 - Scheme of the Act for enforcement of New York Convention
awards - Held: Part II Chapter 1 of the Act, pertains to enforcement
of New York Convention awards - The enforcement Court cannot
set aside a foreign award, even if the conditions u/s.48 are made
out - Power to set aside a foreign award vests only with the court at
the seat of arbitration, since supervisory or primary jurisdiction is
exercised by the curial courts at the seat of arbitration -The
enforcement court is not to correct the errors in the award u/s.48,
or undertake a review on the merits of the award, but is conferred
with the limited power to "refuse" enforcement, if the grounds are
made out - If the Court is satisfied that the application u/s.48 is
without merit, and the foreign award is found to be enforceable,
then u/s.49, the award shall be deemed to be a decree of "that Court"
- Limited purpose of the legal fiction is enforcement of the foreign
award - New York Convention on the Recognition and Enforcement
of Foreign Awards, 1958 - Arts. IV & V.
Arbitration - Foreign award - Limitation for enforcement /
execution of a foreign award - Lex fori - Held: The issue of
limitation for enforcement of foreign awards being procedural in
nature, is subject to the lex fori i.e. the law of the forum (State)
where the foreign award is sought to be enforced.
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[2020] 12 S.C.R.
Arbitration - Arbitral award - Foreign award - Limitation
period for filing the enforcement / execution petition for enforcement
of a foreign award in India - Held: Would be governed by Indian
law - The Indian Arbitration Act, 1996 does not specify any period
of limitation for filing an application for enforcement / execution of
a foreign award - s.43 however provides that the Limitation Act,
1963 shall apply to arbitrations, as it applies to proceedings in
court - Arbitration and Conciliation Act, 1996 - s.43 - Limitation
Act, 1963.
Arbitration and Conciliation Act, 1996 - s.36 - Award in
arbitral proceeding - Domestic award - Statutory fiction created
u/s.36 for limited purpose of enforcement of a 'domestic award' as
a decree of the court - Held: By deeming fiction, a domestic award
is deemed to be a decree of the court, even though it is as such not
a decree passed by a civil court - The deeming fiction is restricted
to treat the award as a decree of the court for the purposes of
execution, even though it is, as a matter of fact, only an award in
an arbitral proceeding.
Arbitration - Foreign award - Held: Foreign awards are not
decrees of an Indian civil court - By a legal fiction, s.49 provides
that a foreign award, after it is granted recognition and enforcement
u/s.48, would be deemed to be a decree of "that Court" for the
limited purpose of enforcement - The phrase "that Court" refers to
the Court which has adjudicated upon the petition filed u/ss.47
and 49 for enforcement of the foreign award - Art.136 of the
Limitation Act would not be applicable for the enforcement /
execution of a foreign award, since it is not a decree of a civil court
in India - Limitation Act, 1963 - Art. 136 - Arbitration and
Conciliation Act, 1996 - ss.47, 48 and 49 - Legal Fiction.
Arbitration and Conciliation Act, 1996 - Foreign award -
Applicable law at the enforcement stage - Held: Enforcement court
does not sit in appeal over the findings of the seat court -
Enforcement of the award is a subsequent and distinct proceeding
from the setting aside proceedings at the seat - The enforcement
court would independently determine the issue of recognition and
enforceability of the foreign award in India, in accordance with the
provisions of Chapter 1 Part II of the Indian Arbitration Act, 1996
- On facts, the Malaysian Courts being the seat courts were justified
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in applying the Malaysian Act to the public policy challenge raised
by the Government of India - However, merely because the
Malaysian Courts upheld the award in question, it would not be an
impediment for the Indian courts to examine whether the award
was opposed to the public policy of India u/s.48 of the Indian
Arbitration Act, 1996 - The enforcement court would examine the
challenge to the award in accordance with the grounds available
u/s.48 of the Act, without being constrained by the findings of the
Malaysian Courts - If the award is found to be violative of the
public policy of India, it would not be enforced by the Indian courts
- The enforcement court would however not second-guess or review
the correctness of the judgment of the Seat Courts, while deciding
the challenge to the award.
Arbitration and Conciliation Act, 1996 - s.48 - Enforcement
of foreign awards - Public policy defence for refusing enforcement
u/s.48 of the Act - s.48 was amended by Act 3 of 2016 - Effect of,
whether retrospective or prospective - Held: By this amendment,
the public policy ground was given a narrow and specific
construction by statute, by the insertion of two Explanations - The
amendments made to s.48 by the 2016 Amendment Act are substantive
amendments which were incorporated to make the definition of
"public policy" narrow by statute - The two Explanations in s.48
begin with the words "For the avoidance of any doubt." - However,
since the amendments introduced specific criteria for the first time,
it must be considered to be prospective, irrespective of the usage of
the phrase "for the removal of doubts."
Arbitration - Foreign Award - Enforcement of - Limits of
judicial intervention on grounds of public policy of the enforcement
State - Plea that the award in question may not be enforced, since it
is contrary to the basic notions of justice - Held: On facts, not
tenable, for two reasons - Firstly, the Appellants did not make out a
case of violation of procedural due process in the conduct of the
arbitral proceedings - Requirement of procedural fairness
constitutes a fundamental basis for the integrity of the arbitral
process - Fair and equal treatment of the parties is a non-derogable
and mandatory provision, on which the entire edifice of the alternate
dispute resolution mechanism is based - In the present case, no
such violation was alleged - Secondly, the Appellants did not make
GOVERNMENT OF INDIA v. VEDANTA LIMITED (FORMERLY
CAIRN INDIA LTD.) ETC.
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out as to how the award was in conflict with the basic notions of
justice, or in violation of the substantive public policy of India.
Legal fiction - Object of - Held: Legal fictions are created
only for some definite purpose - A legal fiction is to be limited to
the purpose for which it was created, and it would not be legitimate
to travel beyond the scope of that purpose, and read into the
provision, any other purpose how so attractive it may be.
Dismissing the appeal, the Court
HELD: Limitation for filing an enforcement/execution
petition of a foreign award under Section 47 of the Arbitration
and Conciliation Act, 1996
1.1. The issue of limitation for enforcement of foreign
awards being procedural in nature, is subject to the lex fori i.e.
the law of the forum (State) where the foreign award is sought to
be enforced. Article III of the New York Convention on the
Recognition and Enforcement of Foreign Awards, 1958 states
that recognition and enforcement of arbitral awards should be
done in accordance with the rules of procedure of the State where
the award was to be enforced. The time limit may be specifically
provided in the national legislation for recognition or enforcement
of Convention awards, or it may be a general rule applicable to
court proceedings. The limitation period for filing the enforcement
/ execution petition for enforcement of a foreign award in India,
would be governed by Indian law. The Indian Arbitration Act,
1996 does not specify any period of limitation for filing an
application for enforcement / execution of a foreign award. Section
43 however provides that the Limitation Act, 1963 shall apply to
arbitrations, as it applies to proceedings in court. The Limitation
Act, 1963 does not contain any specific provision for enforcement
of a foreign award. Articles 136 and 137 fall in the Third Division
of the Schedule to the Limitation Act. Article 136 provides that
the period of limitation for the execution of any decree or order
of a "civil court" is twelve years from the date when the decree
or order becomes enforceable. Article 137 is the residuary
provision in the Limitation Act which provides that the period of
limitation for any application where no period of limitation is
provided in the Act, would be three years from "when the right
to apply accrues". [Part A, Para VII (ii), (iii), (iv), (v) and (vi)]
[51-B-C; 52-A-G]
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1.2. Section 36 of the Arbitration and Conciliation Act, 1996
creates a statutory fiction for the limited purpose of enforcement
of a 'domestic award' as a decree of the court, even though it is
otherwise an award in an arbitral proceeding. By this deeming
fiction, a domestic award is deemed to be a decree of the court,
even though it is as such not a decree passed by a civil court.
The arbitral tribunal cannot be considered to be a 'court', and
the arbitral proceedings are not civil proceedings. The deeming
fiction is restricted to treat the award as a decree of the court for
the purposes of execution, even though it is, as a matter of fact,
only an award in an arbitral proceeding. [Part A, Para VII (vii)]
[53-D-F]
1.3. The Limitation Act was framed keeping in view the
suits, appeals and applications to be filed in Indian courts.
Wherever the need was felt to deal with an application/petition
filed outside India, the Limitation Act specifically provided a time
period for that situation. The legislature has omitted reference
to "foreign decrees" under Article 136 of the Limitation Act.
The intention of the legislature was to confine Article 136 to the
decrees of a civil court in India. The application for execution of
a foreign decree would be an application not covered under any
other Article of the Limitation Act, and would be covered by
Article 137 of the Limitation Act. Foreign awards are not decrees
of an Indian civil court. By a legal fiction, Section 49 provides
that a foreign award, after it is granted recognition and
enforcement under Section 48, would be deemed to be a decree
of "that Court" for the limited purpose of enforcement. The
phrase "that Court" refers to the Court which has adjudicated
upon the petition filed under Sections 47 and 49 for enforcement
of the foreign award. Article 136 of the Limitation Act would not
be applicable for the enforcement / execution of a foreign award,
since it is not a decree of a civil court in India. The enforcement
of a foreign award as a deemed decree of the concerned High
Court [as per the amended Explanation to Section 47 by Act 3 of
2016 confers exclusive jurisdiction on the High Court for
execution of foreign awards] would be covered by the residuary
provision i.e. Article 137 of the Limitation Act. [Part A, Para VII
(ix), (x) and (xi)][55-E-H; 56-A-C; 60-C-E]
GOVERNMENT OF INDIA v. VEDANTA LIMITED (FORMERLY
CAIRN INDIA LTD.) ETC.
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1.4. The period of limitation for filing a petition for
enforcement of a foreign award under Sections 47 and 49, would
be governed by Article 137 of the Limitation Act, 1963 which
prescribes a period of three years from when the right to apply
accrues. The application under Sections 47 and 49 for enforcement
of the foreign award, is a substantive petition filed under the
Arbitration Act, 1996. It is a well-settled position that the
Arbitration Act is a self-contained code. The application under
Section 47 is not an application filed under any of the provisions
of Order XXI of the CPC, 1908. The application is filed before
the appropriate High Court for enforcement, which would take
recourse to the provisions of Order XXI of the CPC only for the
purposes of execution of the foreign award as a deemed decree.
The bar contained in Section 5, which excludes an application
filed under any of the provisions of Order XXI of the CPC, would
not be applicable to a substantive petition filed under the
Arbitration Act, 1996. Consequently, a party may file an application
under Section 5 for condonation of delay, if required in the facts
and circumstances of the case. [Part A, Para VII (xiv) and (xv)][57F-H; 58-A-C]
Scheme of the 1996 Act for enforcement of New York
Convention awards
2.1. Part II Chapter 1 of the Arbitration and Conciliation
Act, 1996 pertains to the enforcement of New York Convention
awards. Under the 1996 Act, there is no requirement for the
foreign award to be filed before the seat court, and obtain a decree
thereon, after which it becomes enforceable as a foreign decree.
This was referred to as the "double exequatur" which was a
requirement under the Geneva Convention, 1927 and was done
away with by the New York Convention, which superseded it.
There is a paradigm shift under the 1996 Act. Under the 1996
Act, a party may apply for recognition and enforcement of a foreign
award, after it is passed by the arbitral tribunal. The applicant is
not required to obtain leave from the court of the seat in which,
or under the laws of which, the award was made. [Part B, Para
(ii)(a)][60-F-H; 61-A-C]
2.2. Section 48 replicates Article V of the New York
Convention, and sets out the limited conditions on which the
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enforcement of a foreign award may be refused. Sub-sections (1)
and (2) of Sections 48 contain seven grounds for refusal to enforce
a foreign award. Sub-section (1) contains five grounds which may
be raised by the losing party for refusal of enforcement of the
foreign award, while sub-section (2) contains two grounds which
the court may ex officio invoke to refuse enforcement of the award,
i.e. non-arbitrability of the subject-matter of the dispute under
the laws of India; and second, the award is in conflict with the
public policy of India. [Part B, Para (ii)(h)][66-A-C]
2.3. The enforcement Court cannot set aside a foreign award,
even if the conditions under Section 48 are made out. The power
to set aside a foreign award vests only with the court at the seat
of arbitration, since the supervisory or primary jurisdiction is
exercised by the curial courts at the seat of arbitration. The
enforcement court may "refuse" enforcement of a foreign award,
if the conditions contained in Section 48 are made out. This would
be evident from the language of the Section itself, which provides
that enforcement of a foreign award may be "refused" only if the
applicant furnishes proof of any of the conditions contained in
Section 48 of the Act. [Part B, Para (ii)(i)][66-D-F]
2.4. The opening words of Section 48 use permissive, rather
than mandatory language, that enforcement "may be" refused.The
use of the words "may be" indicate that even if the party against
whom the award is passed, proves the existence of one or more
grounds for refusal of enforcement, the court would retain a
residual discretion to overrule the objections, if it finds that overall
justice has been done between the parties, and may direct the
enforcement of the award. This is generally done where the ground
for refusal concerns a minor violation of the procedural rules
applicable to the arbitration, or if the ground for refusal was not
raised in the arbitration. A court may also take the view that the
violation is not such as to prevent enforcement of the award in
international relations. [Part B, Para (ii)(j)][66-G; 67-A-C]
2.5.The grounds for refusing enforcement of foreign awards
contained in Section 48 are exhaustive, which is evident from
GOVERNMENT OF INDIA v. VEDANTA LIMITED (FORMERLY
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the language of the Section, which provides that enforcement
may be refused "only if"the applicant furnishes proof of any of
the conditions contained in that provision. The enforcement court
is not to correct the errors in the award under Section 48, or
undertake a review on the merits of the award, but is conferred
with the limited power to "refuse" enforcement, if the grounds
are made out.If the Court is satisfied that the application under
Section 48 is without merit, and the foreign award is found to be
enforceable, then under Section 49, the award shall be deemed
to be a decree of "that Court". The limited purpose of the legal
fiction is for the purpose of the enforcement of the foreign award.
The concerned High Court would then enforce the award by taking
recourse to the provisions of Order XXI of the CPC. [Part B,
Para (ii)(k), (l) and (m)][67-D; 68-A-D]
Whether the Malaysian Courts were justified in applying
the Malaysian law of public policy while deciding the challenge to
the foreign award?
3.1. The enforcement court does not sit in appeal over the
findings of the seat court. The enforcement of the award is a
subsequent and distinct proceeding from the setting aside
proceedings at the seat. The enforcement court would
independently determine the issue of recognition and
enforceability of the foreign award in India, in accordance with
the provisions of Chapter 1 Part II of the Indian Arbitration Act,
1996. [Part C, Discussion and Findings, Para (i)][77-D-E]
3.2. The courts having jurisdiction to annul or suspend a
New York Convention award are the courts of the State where
the award was made, or is determined to have been made i.e. at
the seat of arbitration. The seat of the arbitration is a legal concept
i.e. the juridical home of the arbitration. The legal "seat" must
not be confused with a geographically convenient venue chosen
to conduct some of the hearings in the arbitration. The courts at
the seat of arbitration are referred to as the courts which exercise
"supervisory" or "primary" jurisdiction over the award. The "laws
under which the award was made" used in Article V (1)(e) of the
New York Convention, is mirrored in Section 48(1)(e) of the Indian
Arbitration Act, which refers to the country of the seat of the
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arbitration, and not the State whose laws govern the substantive
contract. [Part C, Discussion and Findings, Para (ii)][77-E-G]
3.3. The courts before which the foreign award is brought
for recognition and enforcement would exercise "secondary" or
"enforcement" jurisdiction over the award, to determine the
recognition and enforceability of the award in that jurisdiction.
[Part C, Discussion and Findings, Para (iii)][79-B]
3.4. The governing law determines the substantive rights
and obligations of the parties in the underlying commercial
contract. The parties normally make a choice of the governing
law of the substantive contract; in the absence of a choice of the
governing law, it would be determined by the tribunal in
accordance with the conflict of law rules, which are considered to
be applicable. The law governing the arbitration agreement must
be determined separately from the law applicable to the
substantive contract. The arbitration agreement constitutes a
separate and autonomous agreement, which would determine the
validity and extent of the arbitration agreement; limits of party
autonomy, the jurisdiction of the tribunal, etc. The curial law of
the arbitration is determined by the seat of arbitration. In an
international commercial arbitration, it is necessary that the
conduct of the arbitral proceedings are connected with the law of
the seat of arbitration, which would regulate the various aspects
of the arbitral proceedings. The parties have the autonomy to
determine the choice of law, which would govern the arbitral
procedure, which is referred to as the lex arbitri, and is expressed
in the choice of the seat of arbitration. The curial law governs the
procedure of the arbitration, the commencement of the arbitration,
appointment of arbitrator/s in exercise of the default power by
the court, grant of provisional measures, collection of evidence,
hearings, and challenge to the award. The courts at the seat of
arbitration exercise supervisory or "primary" jurisdiction over
the arbitral proceedings, except if the parties have made an
express and effective choice of a different lex arbitri, in which
event, the role of the courts at the seat will be limited to those
matters which are specified to be internationally mandatory and
GOVERNMENT OF INDIA v. VEDANTA LIMITED (FORMERLY
CAIRN INDIA LTD.) ETC.
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of a non-derogable nature. The lex fori governs the proceedings
for recognition and enforcement of the award in other jurisdictions.
Article III of the New York Convention provides that the national
courts apply their respective lex fori regarding limitation periods
applicable for recognition and enforcement proceedings; the date
from which the limitation period would commence, whether there
is power to extend the period of limitation. The lex fori determines
the court which is competent and has the jurisdiction to decide
the issue of recognition and enforcement of the foreign award,
and the legal remedies available to the parties for enforcement
of the foreign award. [Part C, Discussion and Findings, Para
(iv)][79-D-G; 80-A-F]
3.5. The Malaysian Courts being the seat courts were
justified in applying the Malaysian Act to the public policy
challenge raised by the Government of India. The enforcement
court would, however, examine the challenge to the award in
accordance with the grounds available under Section 48 of the
Act, without being constrained by the findings of the Malaysian
Courts. Merely because the Malaysian Courts have upheld the
award, it would not be an impediment for the Indian courts to
examine whether the award was opposed to the public policy of
India under Section 48 of the Indian Arbitration Act, 1996. If the
award is found to be violative of the public policy of India, it would
not be enforced by the Indian courts. The enforcement court would
however not second-guess or review the correctness of the
judgment of the Seat Courts, while deciding the challenge to the
award. [Part C, Discussion and Findings, Para (v)][80-F-G; 81-AB]
Whether amendments made to Section 48 of the Arbitration
and Conciliation Act, 1996, by Act 3 of 2016 have retrospective
application?
4. This issue is required to be determined in accordance
with the conditions laid down in Section 48 of the Arbitration and
Conciliation Act, 1996. Section 48 was amended by Act 3 of 2016.
By this amendment, the public policy ground was given a narrow
and specific construction by statute, by the insertion of two
Explanations. The amendments made to Section 48 by the 2016
Amendment Act are substantive amendments, which have been
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incorporated to make the definition of "public policy" narrow by
statute. The two Explanations in Section 48 begin with the words
"For the avoidance of any doubt." It cannot, however, be presumed
to be clarificatory and retrospective, since the substituted
Explanation 1 has introduced new sub-clauses, which have
brought about a material and substantive change in the section.
A new Explanation 2 has been inserted which states that the test
as to whether there is a contravention with the fundamental policy
of Indian law, shall not entail a review on the merits of the dispute.
Since the amendments have introduced specific criteria for the
first time, it must be considered to be prospective, irrespective
of the usage of the phrase "for the removal of doubts." [Part D,
Para (i), (vii), (ix)][81-F; 88-D; 89-C-G]
Whether the foreign award is in conflict with the Public
Policy of India?
5.1. The International Council for Commercial Arbitration
(ICCA) Guide to the Interpretation of the 1958 New York
Convention : A Handbook for Judges (2011), states that while
considering the grounds for refusal of a foreign award, the Court
must be guided by the following principles (i) no review on merits;
(ii) narrow interpretation of the grounds for refusal; and (iii) limited
discretionary power. The merits of the arbitral award are not open
to review by the enforcement court, which lies within the domain
of the seat courts. Accordingly, errors of judgment, are not a
sufficient ground for refusing enforcement of a foreign award.
[Part D, Para (xviii)][95-H; 96-A-B]
5.2. The Appellants have contended that the award may
not be enforced, since it is contrary to the basic notions of justice.
This submission cannot be accepted for the following reasons.
Firstly, the Appellants have not made out a case of violation of
procedural due process in the conduct of the arbitral proceedings.
The requirement of procedural fairness constitutes a fundamental
basis for the integrity of the arbitral process. Fair and equal
treatment of the parties is a non-derogable and mandatory
provision, on which the entire edifice of the alternate dispute
resolution mechanism is based. In the present case, there is no
such violation alleged. Secondly, the Appellants have not made
out as to how the award is in conflict with the basic notions of
GOVERNMENT OF INDIA v. VEDANTA LIMITED (FORMERLY
CAIRN INDIA LTD.) ETC.
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[2020] 12 S.C.R.
justice, or in violation of the substantive public policy of India.
[Part D, Para (xix) ][96-D-F]
Bengal Immunity v. State of Bihar & Ors., [1955] 2 SCR
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Umesh Goyal v. Himachal Pradesh Co-op Group
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6 SCR 703; Sundaram Finance Ltd. v. Abdul Saman
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Singh Patheja v. ICDS Ltd. (2006) 13 SCC 322 : [2006]
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Nadu, (2017) 3 SCC 274 : [2018] 5 SCR 829; Bank of
Baroda v. Kotak Mahindra Bank, (2020) SCC OnLine
324; Fuerst Day Lawson Limited v. Jindal Exports
Limited (2001) 6 SCC 356 : [2001] 3 SCR 479;
Sumitomo Corporation v. CDC Financial Services
(Mauritius) Limited (2008) 4 SCC 91 : [2008]
3 SCR 309; Sedco Forex International Drill v.
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717 : [2005] 5 Suppl. SCR 302 and Ssangyong
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BCCI v. Kochi Cricket (P) Ltd. (2018) 6 SCC
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SCR 456; LMJ International Limited v. Sleepwell
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4 SCR 617; Shakti Bhog Food Industries Ltd. v. the
Central Bank of India, (2020) SCC OnLine SC 482;
Shri Lal Mahal Ltd v. Progretto Grano Spa, (2014) 2
 SCC 433 : [2013] 13 SCR 599; Bharat Aluminium Co.
v. Kaiser Aluminium Technical Services Inc. (2012) 9
SCC 648; Cairn India Limited v. Union of India (2020)
SCC Online SC 324; The Kerala State E l e c t r i c i t y
Board, Trivandrum v. T.P. Kunhaliumma (1976) 4 SCC
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A
B
C
D
E
F
G
H
13
and Anr. v. OCI Corporation and Anr., (2018) 14 SCC
715 : [2018] 1 SCR 915; ONGC v. Saw Pipes (2003) 5
SCC 705 : [2003] 3 SCR 691; BALCO v. Kaiser
Aluminium (2012) 9 SCC 552 : [2012] 12 SCR 327;
Shri Lal Mahal Ltd. v. Progetto Grano SPA (2014) 2
SCC 433 : [2013] 13 SCR 599; Renusagar Power Co.
v. General Electric Co. (1994) 1 Suppl. SCC 644
: [1993] 3 Suppl. SCR 22; ONGC v. Western Geco
(2014) 9 SCC 263; Renusagar Power Co. Ltd. v.
General Electric Company & Anr., 1994 AIR 860 :
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v. Sleepwell Industries (2019) 5 SCC 302 : [2019] 4
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Sistemi SRL & Ors., (2020) SCC OnLine 177 - referred
to.
Noy Vallesina Engineering Spa v. Jindal Drugs Limited
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'SODNOC' v. Bharat Refineries Limited (2008) 1 Arb
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XXV Ybk Comm Arbn 641; Maritime Enterprises Ltd
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693; Minister of Public Works of the Government of the
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1 WLR 818 CA; Northern Sales Company Ltd. v. Comp
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GOVERNMENT OF INDIA v. VEDANTA LIMITED (FORMERLY
CAIRN INDIA LTD.) ETC.
A
B
C
D
E
F
G
H
14
SUPREME COURT REPORTS
[2020] 12 S.C.R.
Ltd. v. Lu Qin (Hong Kong) Company Ltd. and Ors.,
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Parsons & Whittemore Overseas Co. Inc. v. Societe
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Petrotesting Colombia S.A. & Southeast Investment
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pp.664-674 (Hong Kong No.6); British Virgin Islands,
A
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F
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15
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pp.408-432 (British Virgin Islands No.1) Albert Jan
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of Arbitration, 4th Edition, Vol. 2, Pg. 1163-1164,
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Case Law Reference
[2018] 2 SCR 829
referred to
Part A, Para V(a)(iii)
[1993] 3 Suppl. SCR 22
referred to
Part A, Para V(b)
[2014] 6 SCR 456
referred to
Part A, Para V(b)(vii)
[2001] 3 SCR 479
relied on
Part A, Para VI(a)(vi)
[2019] 4 SCR 617
referred to
Part A, Para VI(a)(vi)
[2013] 13 SCR 599
referred to
Part A, Para VI(a)(vii)
(2012) 9 SCC 648
referred to
Part A, Para VI(a)(ix)
[2016] 6 SCR 703
relied on
Part A, Para VII(vii)
[2018] 10 SCR 451
relied on
Part A, Para VII(vii)
[2006] 8 Suppl. SCR 178 relied on
Part A, Para VII(vii)
GOVERNMENT OF INDIA v. VEDANTA LIMITED (FORMERLY
CAIRN INDIA LTD.) ETC.
A
B
C
D
E
F
G
H
16
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[2020] 12 S.C.R.
[1955] 2 SCR 603
followed
Part A, Para VII(viii)
[2018] 5 SCR 829
relied on
Part A, Para VII(viii)
[1977] 1 SCR 996
referred to
Part A, Para VII(xi)
[2011] 11 SCR 1
referred to
Part A, Para VII(xv)
[2018] 1 SCR 915
referred to
Part A, Para VII(xv)
[2008] 3 SCR 309
relied on
Part A, Para VII(xv)
[2013] 2 SCR 389
referred to
Part B, Para (ii)(a)
[2018] 13 SCR 830
referred to
Part B, Para (ii)(e)
[2019] 4 SCR 617
referred to
Part B, Para (ii)(f)
[2003] 3 SCR 691
referred to
Part C, Para (vi)
[2012] 12 SCR 327
referred to
Part C, Para (x)
[2013] 13 SCR 599
referred to
Part D, Para (ii)
[1993] 3 Suppl. SCR 22
referred to
Part D, Para (iii)
(2014) 9 SCC 263
referred to
Part D, Para (vi)
[2005] 5 Suppl. SCR 302 relied on
Part D, Para (ix)
[2019] 7 SCR 522
relied on
Part D, Para (ix)
[1993] 3 Suppl. SCR 22
referred to
Part D, Para (xv)
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3185
of 2020.
From the Judgment and Order dated 19.02.2020 of the High Court
of Delhi at New Delhi in O.M.P. (EFA) (COMM.) No. 15 of 2020.
K. K. Venugopal, AG, Tushar Mehta, SG, Gourab Banerji, Harish
Salve, C.A. Sundaram, Akhil Sibal, Sr. Advs., K. R. Sasiprabhu,
Ms. Neelu Mohan, Tushar Bhardwaj, Vinayak Maini, Madhur Baya,
Ms. Chetna Nayantara Rai, Sameer Parekh, M/s. Parekh & Co., Anirudh
Das, Aashish Gupta, Arjun Pal, Anirudh Lekhi, Ms. Rohini Musa,
Abhishek Gupta and S.S. Shroff, Advs. for the appearing parties.
A
B
C
D
E
F
G
H
17
 The following Judgment of the Court was delivered :
JUDGMENT
INDEX*
I
Background Facts
2
II
Relevant Terms of the Production Sharing
Contract
3
III
Genesis of Dispute
8
IV
Challenge to the Award before the Seat Courts at
Kuala Lumpur
13
V
Submissions on behalf of the Appellants
15
VI
Submissions on behalf of the Respondents
22
VII
Discussion and Analysis
28
Part A
Limitation for filing an enforcement/ execution
petition of a foreign award under Section 47
of the 1996 Act
28
Part B
Scheme of the 1996 Act for enforcement of
New York Convention awards
37
Part C
Whether the Malaysian Courts were justified in
applying the Malaysian law of public policy
while deciding the challenge to the foreign
award?
44
Part D
Whether the foreign award is in conflict with the
Public Policy of India?
54
INDU MALHOTRA, J.
1. Leave granted.
2. The present Civil Appeal has been filed by the Government of
India to challenge the Judgment and Order dated 19 February 2020 passed
by the Delhi High Court, wherein the application under Section 48 of the
Arbitration and Conciliation Act, 1996 being I.A. No. 3558 of 2015 filed
by the Government of India has been dismissed; the Application filed
under Section 47 read with 49 being O.M.P. (EFA) (Comm) 15 of 2016
for the enforcement of the foreign award by the Respondents, and the
I.A. No. 20149 of 2014 for condonation of delay in filing the execution
petition by the Respondents were allowed.
GOVERNMENT OF INDIA v. VEDANTA LIMITED (FORMERLY
CAIRN INDIA LTD.) ETC. [INDU MALHOTRA, J.]
*The Index is as per the Original Judgment.
A
B
C
D
E
F
G
H
18
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[2020] 12 S.C.R.
I. Background Facts
In 1993, the Government of India was desirous of exploring and
developing the petroleum resources in the Ravva Gas and Oil Fields
(lying 10 to 15 kms offshore in the Bay of Bengal), for which a global
competitive tender was floated to invite bids. Pursuant thereto, Videocon
International Ltd. and Command Petroleum Holdings NV, the
predecessors of the Respondents submitted their bid to develop the Ravva
Field along with other bidders. The contract for this petroleum
development was to be given on a production sharing basis through a
Production Sharing Contract.
On 28.10.1994, the Production Sharing Contract (the "PSC") was
executed between the Government of India and the following parties to
commercially explore and develop the Ravva Oil and Gas Field:
(a)
Command Petroleum (India) Pvt. Ltd, an Australian
Company established under the laws of the State of New
South Wales, which has since been renamed as Cairn
Energy India Pty. Ltd;
(b)
Ravva Oil (Singapore) Pty. Ltd, a company established under
the laws of Singapore;
(c)
Videocon Industries Limited, a company established under
the laws of India; and
(d)
Oil and Natural Gas Corporation Ltd (ONGC).
The PSC was for a period of 25 years, and the development and
exploration of the Ravva Field was to be conducted in terms of the
'Ravva Development Plan'. As per Articles 11.1 and 11.2 of the PSC,
Addendums 1 and 2 to the Rvva Development Plan were annexed to
the PSC as Appendix F. The Respondents were required to carry out
Petroleum Operations in the Ravva Field as per the said Plan. The Ravva
Development Plan inter alia contemplated the drilling of 19 oil and 2
gas wells in the Ravva Field.
II. Relevant Terms of the Production Sharing Contract
The dispute between the Parties emanates from Article 15 of the
PSC which inter alia provides for the recoverability of Base
Development Costs ("BDC") incurred by the Respondents-Claimants
for the development of the Ravva Field. The relevant clauses of the
PSC are extracted hereinbelow :
A
B
C
D
E
F
G
H
19
(i) Article 11.2 of the PSC reads as :
"11.2
Ravva Development Plan
Appendix F to this contract shall constitute the approved
development plan for the Existing Discoveries (hereinafter
to as "the Ravva Development Plan"). The Ravva
Development Plan shall be deemed to have been approved
by the Managing Committee."
(ii) The Proposed Development Plan for the Ravva Field (including
Addendums 1 and 2), which was accepted by the Parties as
the approved Ravva Development Plan, states as follows :
Ravva Field Development Drilling
Estimated Average Well Cost (in US dollars)
TOTAL COST OF AVERAGE WELL $ 2,430,000
Attachment 10
Ravva Field Development Capital Costs
ITEM
COST
US $ million
Development of R10 and R17 Blocks
Oil and Associated Gas Reserves
Drill and Complete 19 Wells
SPM and Tanker Loading Line
Four Platforms
 201.1
Production/Injection Pipelines to/from Shore
Infield Flowlines
Onshore Oil Process Facilities
Onshore Oil Storage
Gas Treatment and Compression
Water Injection
Gas Lift Pipeline and Compression
Project Management etc.
Development of R1,7,9
Non-Associated Gas Reserves
GOVERNMENT OF INDIA v. VEDANTA LIMITED (FORMERLY
CAIRN INDIA LTD.) ETC.