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    Adr Case2 Judgedment

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    Aryan Das

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    © All Rights Reserved
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    Adr Case2 Judgedment

    Uploaded by

    Aryan Das
    6 views2 pages

    Original Title

    ADR CASE2 JUDGEDMENT (1)

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    6 views2 pages

    Adr Case2 Judgedment

    Uploaded by

    Aryan Das

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

     The Supreme Court follow the dictum laid down by the three-judge bench(Justice

    G.B. Pattanaik , Justice S.N. Phukan, Justice S.N. Variava) in the case of Bhatia
    International vs. Bulk Trading S.A. & Anr. and stated that the provisions of Part I of
    the Act would apply to all arbitrations including international commercial arbitrations
    and all proceedings unless the parties by agreement, express or implied, exclude all or
    any of its provisions.
     Court held that the overriding section 11.5 (c) of the SHA cannot be ignored lightly.
    The non-obstante clause would override the entirety of the agreement including sub-
    section (b) which deals with the settlement of the dispute by arbitration. Sub-section
    (c), therefore, would apply to the enforcement of the Award which declares that,
    notwithstanding that the proper law or the governing law of the contract is the law of
    the State of Michigan, their shareholders shall at all times act in accordance with the
    Companies Act and other applicable Acts/Rules being in force in India at any time.
    Necessarily, enforcement has to be in India, as declared by this very section which
    overrides every other section in the Shareholders Agreement.

    The court held that respondent No.1, therefore, totally violated the agreement between
    the parties by seeking enforcement of the transfer of the shares in the Indian company
    by approaching the District Courts in the United States. Accordingly, both the orders
    passed by the City Civil Court and of the High Court are set aside. The court further
    held that we request the concerned Courts to dispose of the suit on merits one way or
    the other within a period of six months from the date of receipt of a copy of this
    judgment. The Civil appeal is allowed to this extent. No costs.

     In the case of ONGC v. SAW PIPES, Justices M.B. Shah and Arun Kumar, in a two-
    judge bench, broadened the interpretation of 'Public Policy of India'. This expanded
    interpretation has led to increased judicial interference in arbitral awards, a
    development not originally intended by the legislature, and has faced criticism both
    within and outside of India. Although the term 'Public Policy of India' is not
    specifically defined in the 1996 Act, it is referenced in section 34(2)(b)(ii) and section
    48(2)(b) of the Act. In this context, 'Public Policy of India' is understood to
    encompass the principles and standards that form the core policy of the State as
    enshrined in the Constitution and existing laws, as well as principles of justice and
    morality. In the present case, the Court expressed grave concerns that if an arbitral
    award concerning properties in India were to be enforced abroad and the debtor,
    residing in a foreign country, had to personally comply with the award, there could be
    a risk of bypassing Indian public policy and potential sanctions for contempt of court.

     The Court concluded that the Indian courts had jurisdiction to set aside a foreign
    arbitral award simply by following the reasoning of its earlier decision, Bhatia
    International,regarding the scope of Part I of the Indian Act 1996. The decision given
    in the present case has somehow shown the indication that the trend of the Indian
    Courts to subject foreign arbitral award to greater scrutiny and interference, even
    though the Act itself curtail to a greater extent the power of the Courts to interfere in
    the foreign award passed by the foreign seated arbitration

     The court observed that Sub-section (2) of section 2 of the Act states that Part I is to
    apply where the place of arbitration is in India. However, the court ruled that Part II
    would not apply to an international commercial arbitration which takes place in a non-
    convention country .

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