Holding

The Supreme Court held that the foreign awards are enforceable, none of the Section 48 grounds are satisfied, and the appeals under Article 136 are dismissed.

Summary

The Supreme Court dismissed the appeals of Vijay Karia and others against the Bombay High Court’s order enforcing four LCIA awards arising from a joint‑venture dispute with Prysmian Cavi E Sistemi SRL. The Court held that none of the grounds pleaded under Section 48 of the Arbitration and Conciliation Act, 1996 – including alleged denial of a fair hearing, violation of FEMA rules, bias, perverse interpretation of the JVA or a valuation that shocked the conscience – were made out. A breach of FEMA regulations does not amount to a violation of the "fundamental policy" of India, and the award does not offend public policy. The Court also reiterated that Article 136 cannot be used to circumvent the legislative policy that only judgments refusing enforcement of a foreign award are appealable. Consequently, the foreign awards are enforceable and the appeals were dismissed with costs.

Issues considered

The applicability of Section 48(1)(b) of the Arbitration and Conciliation Act, 1996 to post‑award conduct and whether the appellants were "otherwise unable to present their case".
Whether a violation of the Foreign Exchange Management Act, 1999 (FEMA) or its rules renders the foreign award contrary to the fundamental policy of Indian law.
Whether the foreign award shocks the conscience of the Court or violates the public policy of India under Section 48(2)(b).
Whether alleged bias, perverse interpretation of the JVA, or valuation methodology constitute grounds for refusal of enforcement under Section 48.
Whether Article 136 of the Constitution permits an appeal against a judgment that recognises and enforces a foreign award.

Legislation cited

Arbitration and Conciliation Act, 1996s. 103, s. 34(2)(b)(i), s. 34(2)(b)(ii), s. 37, s. 45, s. 46, s. 47, s. 48(1)(b), s. 48(2)(b), s. 50, s. 68
Arbitration and Conciliation (Amendment) Act, 2015s. 48
Foreign Awards Act, 1961
Foreign Exchange Management Act, 1999 (FEMA)
New York Convention (1958)

Subjects

ArbitrationForeign award enforcementSection 48Public policy of IndiaFEMANatural justiceArticle 136New York ConventionBiasValuationJoint venture agreement

Judgment

336 [2020]REPORTS
SUPREME COURT 4 S.C.R. 336 [2020] 4 S.C.R.

A VIJAY KARIA & ORS.
v.
PRYSMIAN CAVI E SISTEMI SRL & ORS.
(Civil Appeal No. 1544 of 2020)
B FEBRUARY 13, 2020
[R. F. NARIMAN, ANIRUDDHA BOSE AND
V. RAMASUBRAMANIAN, JJ.]
Arbitration and Conciliation Act, 1996: s.48(1)(b) –
Enforcement of foreign awards – Violation of provisions of FEMA
C
– Whether amounts to breach of Public Policy of India – If a
particular act violates any provision of FEMA or the Rules framed
thereunder, permission of the Reserve Bank of India may be obtained
post-facto if such violation can be condoned – Neither the award,
nor the agreement being enforced by the award, can, therefore, be
D held to be of no effect in law – This being the case, a rectifiable
breach under FEMA can never be held to be a violation of the
fundamental policy of Indian law – Further, even if the Reserve
Bank of India were to take action under FEMA, the non-enforcement
of a foreign award on the ground of violation of a FEMA Regulation
or Rule would not arise as the award does not become void on that
E
count – The fundamental policy of Indian law, must amount to a
breach of some legal principle or legislation which is so basic to
Indian law that it is not susceptible of being compromised –
“Fundamental Policy” refers to the core values of India’s public
policy as a nation, which may find expression not only in statutes
F but also time-honoured, hallowed principles which are followed by
the Courts – Judged from this point of view, resistance to the
enforcement of a foreign award cannot be made on this ground.
Arbitration and Conciliation Act, 1996: s.48(1)(b) –
Enforcement of foreign awards – Refusal at the request of party if
G that party furnishes to the court that he was unable to present his
case – Expression “was otherwise unable to present his case” –
Interpretation of – Held: Expression “was otherwise unable to
present his case” occurring in s.48(1)(b) cannot be given an
expansive meaning and would have to be read in the context and
colour of the words preceding the said phrase – This expression
H
336
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 337

would be a facet of natural justice, which would be breached only A
if a fair hearing was not given by the arbitrator to the parties –
Read along with the first part of s.48(1)(b), this expression would
apply at the hearing stage and not after the award is delivered –
Such breach should be clearly made out on the facts of a given
case, and that awards must always be read supportively with an
B
inclination to uphold rather than destroy, given the minimal
interference possible with foreign awards under s.48 of the Act –
Mere failure to consider a material issue would not fall within the
rubric of s.48(1)(b) – However, if a foreign award fails to determine
a material issue which goes to the root of the matter or fails to
decide a claim or counter- claim in its entirety, the award shocking C
the conscience of the Court may be set aside on the ground of
violation of the public policy of India, in that it would then offend a
most basic notion of justice in this country – Poor reasoning, by
which a material issue or claim is rejected, can never fall in this
class of cases – The foreign award must be read as a whole, fairly,
D
and without nit-picking – In the instant case, when award is read as
a whole, it has addressed the basic issues raised by the parties and
has, in substance, decided the claims and counter-claims of the
parties, its enforcement must follow.
Arbitration and Conciliation Act, 1996: s.48 – Recognition
and enforcement of foreign awards – Scope of interference under E
Art.136 – The legislative policy so far as recognition and
enforcement of foreign awards is that an appeal is provided against
a judgment refusing to recognise and enforce a foreign award but
not the other way around (i.e. an order recognising and enforcing
an award) – This is because the policy of the legislature is that F
there ought to be only one bite at the cherry in a case where
objections are made to the foreign award on the extremely narrow
grounds contained in s.48 of the Act and which have been rejected
– This is in consonance with the fact that India is a signatory to the
Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, 1958 (“New York Convention”) and intends - through this G
legislation - to ensure that a person who belongs to a Convention
country, and who, in most cases, has gone through a challenge
procedure to the said award in the country of its origin, must then
be able to get such award recognised and enforced in India as
soon as possible – Bearing this in mind, the Supreme Court’s H
338 SUPREME COURT REPORTS [2020] 4 S.C.R.

A jurisdiction under Art.136 should not be used to circumvent the
legislative policy so contained – Constitution of India – Art.136 –
Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, 1958.
Dismissing the appeals, the Court
B HELD: 1. Unlike Section 37 of the Arbitration Act, which
is contained in Part I of the said Act, and which provides an appeal
against either setting aside or refusing to set aside a ‘domestic’
arbitration award, the legislative policy so far as recognition and
enforcement of foreign awards is that an appeal is provided
C against a judgment refusing to recognise and enforce a foreign
award but not the other way around (i.e. an order recognising and
enforcing an award). This is because the policy of the legislature
is that there ought to be only one bite at the cherry in a case
where objections are made to the foreign award on the extremely
narrow grounds contained in Section 48 of the Act and which have
D been rejected. This is in consonance with the fact that India is a
signatory to the Convention on the Recognition and Enforcement
of Foreign Arbitral Awards, 1958 (“New York Convention”) and
intends - through this legislation - to ensure that a person who
belongs to a Convention country, and who, in most cases, has
E gone through a challenge procedure to the said award in the
country of its origin, must then be able to get such award
recognised and enforced in India as soon as possible. This is so
that such person may enjoy the fruits of an award which has been
challenged and which challenge has been turned down in the
country of its origin, subject to grounds to resist enforcement
F being made out under Section 48 of the Arbitration Act. Bearing
this in mind, the Supreme Court’s jurisdiction under Article 136
should not be used to circumvent the legislative policy so
contained. This is so because this matter has been argued for
several days before this court as if it was a first appeal from a
G judgment recognising and enforcing a foreign award. Given the
restricted parameters of Article 136, in cases like the present -
where no appeal is granted against a judgment which recognises
and enforces a foreign award - this Court should be very slow in
interfering with such judgments, and should entertain an appeal
only with a view to settle the law if some new or unique point is
H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 339

raised which has not been answered by the Supreme Court before, A
so that the Supreme Court judgment may then be used to guide
the course of future litigation in this regard. Also, it would only
be in a very exceptional case of a blatant disregard of Section 48
of the Arbitration Act that the Supreme Court would interfere
with a judgment which recognises and enforces a foreign award
B
however inelegantly drafted the judgment may be. [Para 24][375-
F-H; 376-A-E]
2. Enforcement of Foreign Awards under Section 48
Amendments were made by the Arbitration and Conciliation
(Amendment) Act, 2015. Section 48 was amended to delete the C
ground of “contrary to the interest of India”. In the context of
challenge to domestic awards, Section 34 of the Arbitration Act
differentiates between international commercial arbitrations held
in India and other arbitrations held in India. So far as “the public
policy of India” ground is concerned, both Sections 34 and 48
are now identical, so that in an international commercial arbitration D
conducted in India, the ground of challenge relating to “public
policy of India” would be the same as the ground of resisting
enforcement of a foreign award in India. This feature of the 2015
Amendment Act states that all grounds relating to patent illegality
appearing on the face of the award are outside the scope of E
interference with international commercial arbitration awards
made in India and foreign awards whose enforcement is resisted
in India. [Paras 37, 38][390-F, H; 391-A-B]
3. General approach to enforcement and recognition of
Foreign Awards F
The US cases show that given the “pro-enforcement bias”
of the New York Convention, which has been adopted in Section
48 of the Arbitration Act, 1996 - the burden of proof on parties
seeking enforcement has now been placed on parties objecting
to enforcement and not the other way around; in the guise of G
public policy of the country involved, foreign awards cannot be
set aside by second guessing the arbitrator’s interpretation of
the agreement of the parties; the challenge procedure in the
primary jurisdiction gives more leeway to Courts to interfere with
an award than the narrow restrictive grounds contained in the
H
340 SUPREME COURT REPORTS [2020] 4 S.C.R.

A New York Convention when a foreign award’s enforcement is
resisted. [Para 45][397-C-D]
4. Discretion of the Court to Enforce Foreign Awards
Enforcement of a foreign award may under Section 48 of
the Arbitration Act be refused only if the party resisting
B enforcement furnishes to the Court proof that any of the stated
grounds has been made out to resist enforcement. The said
grounds are watertight – no ground outside Section 48 can be
looked at. Also, the expression used in Section 48 is “may”. When
the grounds for resisting enforcement of a foreign award under
C Section 48 are seen, they may be classified into three groups –
grounds which affect the jurisdiction of the arbitration
proceedings; grounds which affect party interest alone; and
grounds which go to the public policy of India, as explained by
Explanation 1 to Section 48(2). Where a ground to resist
enforcement is made out, by which the very jurisdiction of the
D tribunal is questioned - such as the arbitration agreement itself
not being valid under the law to which the parties have subjected
it, or where the subject matter of difference is not capable of
settlement by arbitration under the law of India, it is obvious that
there can be no discretion in these matters. Enforcement of a
E foreign award made without jurisdiction cannot possibly be
weighed in the scales for a discretion to be exercised to enforce
such award if the scales are tilted in its favour. On the other hand,
where the grounds taken to resist enforcement can be said to be
linked to party interest alone, for example, that a party has been
unable to present its case before the arbitrator, and which ground
F is capable of waiver or abandonment, or, the ground being made
out, no prejudice has been caused to the party on such ground
being made out, a Court may well enforce a foreign award, even
if such ground is made out. When it comes to the “public policy
of India” ground, again, there would be no discretion in enforcing
G an award which is induced by fraud or corruption, or which violates
the fundamental policy of Indian law, or is in conflict with the
most basic notions of morality or justice. It can thus be seen that
the expression “may” in Section 48 can, depending upon the
context, mean “shall” or as connoting that a residual discretion
remains in the Court to enforce a foreign award, despite grounds
H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 341

for its resistance having been made out. What is clear is that the A
width of this discretion is limited in which case a balancing act
may be performed by the Court enforcing a foreign award. [Paras
46, 53, 54][397-E-F; 407-E-G; 408-A-C]
Shri Lal Mahal Ltd. v. Progetto Grano SPA (2014) 2
SCC 433; Phulchand Exports Ltd. v. O.O.O Patriot B
(2011) 10 SCC 300 : [2011] 15 SCR 1129; LMJ
International Ltd. v. Sleepwell Industries (2019) 5 SCC
302 : [2019] 4 SCR 617; Sohan Lal Gupta v. Asha Devi
Gupta (2003) 7 SCC 492 : [2003] 3 Suppl. SCR 249;
Glencore International AG v. Dalmia Cement (Bharat)
Limited (2017) SCC OnLine Del 8932 – referred to C

Sui Southern Gas Co. Ltd. v. Habibullah Coastal Power
Co. (2010) SGHC 62; Parsons & Whittemore Overseas
Co. v. Societe Generale De L’Industrie Du Papier 508
F.2d 969 (1974); Compagnie des Bauxites de Guinee v.
Hammermills Inc. (1992) WL 122712; Certain D
Underwriters at Lloyd’s London v. BCS Ins. Co. 239 F.
Supp.2d 812 (2003); Karaha Bodas Co., L.L.C v.
Perusahaan Pertambagan Minyak 364 F.3d 274
(2004); Admart AG v. Stephen and Mary Birch
Foundation Inc. 457 F.3d 302 (2006); Dallah Real E
Estate and Tourism Holding Co. v. The Ministry of
Religious Affairs, Government of Pakistan (2010)
UKSC 46 – referred to
5. The Natural Justice Ground under Section 48
5.1 Given the fact that the object of Section 48 is to enforce F
foreign awards subject to certain well-defined narrow exceptions,
the expression “was otherwise unable to present his case”
occurring in Section 48(1)(b) cannot be given an expansive
meaning and would have to be read in the context and colour of
the words preceding the said phrase. In short, this expression G
would be a facet of natural justice, which would be breached only
if a fair hearing was not given by the arbitrator to the parties.
Read along with the first part of Section 48(1)(b), it is clear that
this expression would apply at the hearing stage and not after
the award has been delivered, as has been held in Ssangyong. A
H
342 SUPREME COURT REPORTS [2020] 4 S.C.R.

A good working test for determining whether a party has been unable
to present his case is to see whether factors outside the party’s
control have combined to deny the party a fair hearing. Thus,
where no opportunity was given to deal with an argument which
goes to the root of the case or findings based on evidence which
go behind the back of the party and which results in a denial of
B
justice to the prejudice of the party; or additional or new evidence
is taken which forms the basis of the award on which a party has
been given no opportunity of rebuttal, would, on the facts of a
given case, render a foreign award liable to be set aside on the
ground that a party has been unable to present his case. This
C must, of course, be with the caveat that such breach be clearly
made out on the facts of a given case, and that awards must always
be read supportively with an inclination to uphold rather than
destroy, given the minimal interference possible with foreign
awards under Section 48. [Para 76][433-E-H; 434-A]
D Ssangyong Engineering & Construction Co. Ltd. v.
National Highways Authority of Indi (NHAI) Civil
Appeal No. 4779 of 2019 – relied on
Minmetals Germany GmbH v. Ferco Steel Ltd. (1999)
C.L.C. 647; Ajay Kanoria v. Tony Guinness (2006)
E EWCA Civ 222; Jorf Lasfar Energy Co. v. AMCI Export
Corp. 2008 WL 1228930; Dongwoo Mann+Hummel
Co. Ltd. v. Mann+Hummel GmbH (2008) SGHC 275;
Gbangbola v. Smith and Sheriff 1998 3 All ER 730;
Bahman Irvani v. Ali Irvani 1999 WL 1142456; Van
Der Giessen-De-Noord Shipbuilding Division B.V. v.
F Imtech Marine & Offshore B.V. (2008) EWHC 2904
(Comm); Malicorp Limited v. Government of Arab
Republic of Egypt (2015) EWHC 361 (Comm); Soh
Beng Tee & Co. v. Fairmount Development Pte Ltd.
(2007) SGCA 28; JVL Agro Industries Ltd v. Agritrade
G International Pte Ltd. (2016) SGHC 126; G.D. Midea
Air Conditioning Equipment Co. v. Tornado Consumer
Goods Ltd. (2017) SGHC 193; Hebei Import & Export
Corporation v. Polytek Engineering Company Ltd.
(1992) 2 HKC 205; Ascot Commodities NV v. Olam

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VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 343

International Ltd. 2001 WL 1560709; Zebra Industries A
v. Wah Tong Paper Products Group Ltd. (2012) HKCU
1308; Front Row Investment Holdings v. Daimler South
East Asia (2010) SGHC 80; TMM Division Maritime
SA v. Pacific Richfield Marine Pte Ltd. (2013) SGHC
186; AKN & Anr. v. ALC & Ors. (2015) SGCA 18; BAZ
B
v. BBA & Ors. (2018) SGHC 275 – referred to.
5.2 It is not possible to hold that failure to consider a
material issue would fall within the rubric of Section 48(1)(b).
However, if a foreign award fails to determine a material issue
which goes to the root of the matter or fails to decide a claim or
counter-claim in its entirety, the award may shock the conscience C
of the Court and may be set aside, as was done by the Delhi High
Court in Campos on the ground of violation of the public policy of
India, in that it would then offend a most basic notion of justice in
this country. It must always be remembered that poor reasoning,
by which a material issue or claim is rejected, can never fall in D
this class of cases. Also, issues that the tribunal considered
essential and has addressed must be given their due weight – it
often happens that the tribunal considers a particular issue as
essential and answers it, which by implication would mean that
the other issue or issues raised have been implicitly rejected.
[Paras 77, 78][434-C-F] E

Campos Brothers Farms v. Matru Bhumi Supply Chain
Pvt. Ltd. (2019) 261 DLT 201 – affirmed
6. Violation of FEMA Rules
If a particular act violates any provision of FEMA or the F
Rules framed thereunder, permission of the Reserve Bank of
India may be obtained post-facto if such violation can be condoned.
Neither the award, nor the agreement being enforced by the
award, can, therefore, be held to be of no effect in law. This being
the case, a rectifiable breach under FEMA can never be held to G
be a violation of the fundamental policy of Indian law. Even
assuming that Rule 21 of the Non-Debt Instrument Rules requires
that shares be sold by a resident of India to a non-resident at a
sum which shall not be less than the market value of the shares,
and a foreign award directs that such shares be sold at a sum less
than the market value, the Reserve Bank of India may choose to H
344 SUPREME COURT REPORTS [2020] 4 S.C.R.

A step in and direct that the aforesaid shares be sold only at the
market value and not at the discounted value, or may choose to
condone such breach. Further, even if the Reserve Bank of India
were to take action under FEMA, the non-enforcement of a
foreign award on the ground of violation of a FEMA Regulation
or Rule would not arise as the award does not become void on
B
that count. The fundamental policy of Indian law, as has been
held in Renusagar must amount to a breach of some legal
principle or legislation which is so basic to Indian law that it is
not susceptible of being compromised. “Fundamental Policy”
refers to the core values of India’s public policy as a nation, which
C may find expression not only in statutes but also time-honoured,
hallowed principles which are followed by the Courts. Judged
from this point of view, it is clear that resistance to the
enforcement of a foreign award cannot be made on this ground.
[Para 83][439-C-G]
D Renusagar Power Plant Co. Ltd. v. General Electric Co.
(1994) Supp (1) SCC 644 : [1993] 3 Suppl. SCR 22 –
relied on.
Cruz City 1 Mauritius Holdings v. Unitech Limited
(2017) 239 DLT 649; Dropti Devi v. Union of India
E (2012) 7 SCC 499 : [2012] 6 SCR 307 – relied on.
7. Challenge to Enforcement of the Foreign Award in this
case on facts
7.1 The Tribunal failed to deal with the Appellants’ counter-
claim pertaining to the incorporation of Jaguar Communication
F Consultancy Services Private Limited.
According to the Appellants, this ground of objection – i.e.
the incorporation of Jaguar - was pleaded by them as a “concealed
breach”, which became known to them only at a much later stage
of the arbitral proceedings. Despite the tribunal specifically ruling
G in the First Partial Final Award that a non-defaulting party could
rely on a “concealed breach” and treat the same as an unrectified
event of default under clause 23.4 of the JVA, the submission
made by the Appellant in this behalf was ignored in its entirety.
The First Partial Final Award was made only on 15.02.2013. When
the Respondent No.1 made its oral submissions and filed written
H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 345

closing submissions on 19.07.2013, the Appellants did not plead A
any case of breach due to Jaguar. It was only at the fag end, i.e. in
the Appellants’ Responsive Closing Submissions, filed on
20.08.2013, that the tribunal was invited to rule on this breach.
Obviously, by this time, the Respondent did not have any
opportunity to controvert this case put up for the first time by
B
the Appellants. Since this case had been put up for the first time
at the fag end of the proceedings, before passing of the Second
Partial Final Award dated 19.12.2013, the arbitrator cannot be
faulted for not dealing with this case. In the Second Partial Final
Award, the tribunal also recorded that the Appellants’ case on
clause 21.1 was limited to the acquisition of ACPL and direct C
sales into India. The argument of the Appellant, made at the fag
end of the proceedings, that since the Respondent held 99.99 %
shares of Jaguar, which is in a similar cable business as Ravin, as
evidenced by the Memorandum and Articles of Association of
Jaguar, is a case that has never been pleaded. This being the
D
case, it is obvious that the arbitrator was within his jurisdiction
not to deal with this so-called counter-claim at all. This objection,
therefore, does not fall within any of the grounds mentioned in
Section 48 and must, therefore, be rejected. [Paras 86, 87][441-
E-G; 442-C-F]
7.2 The Tribunal failed to make a determination on the E
Appellants’ counter-claim concerning ouster of the Appellants
It would be wholly incorrect to state that the tribunal has
failed to make a determination on the Appellants’ counter-claim
that the Respondent’s efforts to oust Appellant No. 1 and his
family amounted to a breach of the JVA. While considering the F
case of the Appellants and the cross-case of the Respondent, the
tribunal has adverted to pleadings, evidence and has given
detailed findings as to why the Appellants are in material breach
of the JVA, as a result of which the Respondent cannot be said to
be in material breach of the JVA. This being the case, it cannot G
be said that this material issue has not been answered by the
Second Partial Final Award. This ground, therefore, also does
not fall within any of the stated pigeon-holes under Section 48.
[Para 89][445-A-C]

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346 SUPREME COURT REPORTS [2020] 4 S.C.R.

A 7.3 The Tribunal failed to make a determination on the
Appellants’ counter-claim concerning registration of the Ravin
Trademark
It is clear from the perusal of the First Partial Final Award
that what was argued before the arbitrator, and therefore
B answered by the arbitrator, was whether the tribunal had
jurisdiction to go into the Trademark License Agreement. A
perusal of the transcript of the hearings on both 12th and 13th
December, 2012 before the arbitrator clearly showed that no
argument was ever made by the Appellants before the tribunal
that the Respondent had surreptitiously attempted to register
C the Ravin Trademark in its own name, and therefore was in breach
of the competition clauses of the JVA. Thus, this argument again
appears to be an afterthought which has no foundation in the
submissions made before the arbitrator. [Paras 90, 91][445-E;
447-D-E]
D 7.4 The Tribunal acted contrary to the Parties’ expert
witnesses and ignored critical evidence with regard to the
acquisition of ACPL
The tribunal went into the acquisition of ACPL in the Second
Partial Final Award, and held that Mr. Karia’s contemporaneous
E reaction to the acquisition of Draka, which led to an indirect
acquisition of 60 subsidiaries, one of which was ACPL, was that
he was very happy that Respondent No. 1 had so expanded its
business. Several congratulatory emails were referred to by the
arbitrator. Further, the arbitrator found that Mr. Karia’s
F statements in cross-examination showed that he had knowledge
of this acquisition way back in November 2010 but never
complained of material breach of the JVA. The arbitrator also
examined evidence as to serious actual loss or harm, finding no
such credible evidence, except occasional instances of both
companies tendering for the same business. It was held that there
G was no reliable evidence that the Ravin’s business had been lost
post the ‘Draka acquisition’ or that there had been any diversion
of business from Ravin to ACPL or vice versa. The arbitrator
then held that ACPL is a small specialist cable business and
operates principally in the area of instrumentation cables, which
H is not the area in which Ravin operates. The learned arbitrator
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 347

also adverted to the evidence of the expert witnesses in arriving A
at this conclusion. It also made a reference to Mr. Karia’s cross-
examination, stating that Mr. Karia himself considered ACPL to
be the 50 th or 60 th competitor given its small business. The
finding, therefore, was that the acquisition of ACPL did not in any
manner amount to a serious material breach of the JVA. Insofar
B
as the failure to produce documents by Respondent No.1 with
regard to its subsidiary ACPL is concerned, ACPL is not a direct
subsidiary of Respondent No. 1, being an indirect subsidiary of
Respondent No.1’s parent company consequent upon the
acquisition of Draka. It has an independent Board of Directors.
Above all, ACPL was not a party to these arbitral proceedings. C
The tribunal therefore made Procedural Order No. 5 dated
27.11.2012 in which it specifically recorded that if the Appellants
wish to pursue their request for disclosure of further documents
qua ACPL, they must approach the Courts to do so, as it was not
within the arbitrator’s power to direct a person who is not party
D
to the proceedings to produce documents. At no stage did the
Appellants act in compliance of this Procedural Order and
approach an English Court to direct ACPL to produce documents
within its possession. This being so, a party cannot complain of
breach of natural justice when it was within the control of such
party to approach a U.K Court for production of such documents. E
This not having been done, it is clear that no adverse inference,
could have been drawn by the arbitrator. This ground also,
therefore, does not fall within any of the grounds under Section
48. [Paras 94, 95][448-D-H; 449-A-D]
7.5 Perverse Interpretation of the JVA. F
The interpretation of an agreement by an arbitrator being
perverse is not a ground that can be made out under any of the
grounds contained in Section 48(1)(b). Without therefore getting
into whether the tribunal’s interpretation is balanced, correct or
even plausible, this ground is rejected. [Para 96][449-F] G
7.6 The Tribunal ignored critical evidence with regard to
the issue of agency agreements and Direct Sales
Having perused the Award in this behalf, it cannot be said
that the tribunal has in any manner ignored admissions or other
critical evidence with regard to the issue of direct sales. In any H
348 SUPREME COURT REPORTS [2020] 4 S.C.R.

A case, if at all, this ground goes to alleged perversity of the award,
which is outside the ken of Section 48. [Para 98][450-F-G]
7.7 The Tribunal adopted disparate thresholds in
determining material breach
All the allegations made under this ground go to perversity
B of the award, which is outside the ken of Section 48. That apart,
the tribunal indicates in paragraphs 104 to 106 of the Second
Partial Final Award, that no disparate thresholds in determining
material breach was adopted. [Para 99][451-A]
7.8 The Tribunal’s selective consideration of
C contemporaneous evidence
This argument must be rejected out of hand, as not falling
within the parameters of Section 48. Equally, the tribunal’s
consideration of evidence of key witnesses being selective and
perverse, must be rejected on the same ground. [Para 100]
D [451-G-H; 455-A]
7.9 The Tribunal appointed a conflicted valuer
The arbitrator has considered this point in some detail and
dismissed it. This objection again does not fall under any of the
grounds of Section 48. [Para 101][452-B; 453-H]
E
7.10 Valuation ignores Ravin’s stake in Power Plus
The appellant argued that the valuation made by Deloitte
ignored a stake of 49% of Ravin in a company called Power Plus,
which stake has been valued by the Appellants’ valuer (one BDO)
F at INR 563 crores. Considering that this aspect was not taken
into account by Deloitte, the valuation report ought not to have
been accepted by the arbitrator, also being contrary to the position
taken by both parties. This submission was dealt with by the
arbitrator in great detail in Final Award. Among other things, the
arbitrator referred to clause 17 of the JVA and stated that the
G said clause together with the formula prescribed therein was
followed by Deloitte. Since this was done, Deloitte cannot possibly
be faulted and cannot further be asked to take into account the
stake of Ravin in Power Plus, as that would go outside the JVA.

H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 349

This again is a matter for the arbitrator to determine. This again A
is a ground wholly outside grounds that can attract challenge to
foreign awards under Section 48. [Para 102][454-A-D]
7.11 Valuation Date
The appellant argued that the tribunal acted contrary to
the parties’ submissions in arriving at a valuation date of B
30.09.2014, much later on the date of the Final Award which is
11.04.2017, as the parties had agreed that this date ought to be
the date closest to the date of actual sale of share and would be
valid only until 31.12.2014. The arbitrator dealt with this objection
in the Final Award dated 11.04.2017. Having found that the delay C
in the valuation report was attributable largely to the Appellants
and that therefore the agreed date of 30.09.2014 is the correct
date, there is nothing in the award which can be said to even
remotely shock conscience of this Court. This ground is also
therefore rejected. The plea to exercise power under Article 142
of the Constitution of India, so as to shift the valuation date from D
30.09.2014 to the date of judgment is also rejected given the
arbitrator’s finding. Quite apart from this, nothing in Section 48
of the Arbitration Act would permit an enforcing court to add to
or subtract from a foreign award that must either be enforced or
rejected by reason of any of the grounds under Section 48 being E
made out to resist enforcement of such foreign award. This Court’s
power under Article 142 ought not to be used to circumvent the
legislative policy contained in Section 48 of the Arbitration Act.
[Para 103][454-E; 455-F-H; 456-A]
7.12 Violation of FEMA and the Rules thereunder F
The arbitrator awarded INR 63.90 per share as per the
Deloitte valuation, which was contractually binding under clause
17 of the JVA. The lower valuation of INR 16.88 per share as in
the M/s Kalyaniwalla & Mistry valuation report dated 04.03.2016
was not accepted. [Para 105][456-E] G
7.13 Bias of the Tribunal
The appellant argued that the arbitrator was clearly biased
in that the outcome of the Second Partial Final Award was clear

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350 SUPREME COURT REPORTS [2020] 4 S.C.R.

A to Respondent No.1, inasmuch as its agent, one M/s Gilbert
Tweed Associates, sent out an advertisement for recruiting
employees for Ravin, two months before the Second Partial Final
Award, thereby showing that this agent was clear as to the
outcome of the proceedings. This was strongly refuted by the
Respondent, stating that at no time had Gilbert Tweed Associates
B
been retained by them. As a matter of fact, an agency called M/s
Key2People was engaged by Respondent No.1 to identify
potential candidates who could be recruited for the company in
due course. M/s Key2People, in turn, appointed M/s Gilbert
Tweed Associates. In any case, the Respondent undertook to
C terminate the engagement of M/s Key2People by its email of
28.10.2013. The allegation of bias thus made was clearly a
desperate afterthought. The contention that the arbitrator was
otherwise biased was dealt with in the Final Award. [Para 106]
[456-F-H; 457-A]
D 8. The sole arbitrator exhaustively discussed the evidence
and arrived at detailed findings for each of the issues, claims and
counter-claims, and finally accepted the Respondent’s case and
rejected the Appellants’. Given the fact that jurisdiction under
Article 136 of the Constitution is itself limited, and given the fact
that this Court’s time has unnecessarily been taken by a case
E which has already been dealt with by four exhaustive awards on
merits and also by the impugned judgment, these appeals are
dismissed with costs of INR 50 lakhs, to be paid by the Appellant
to Respondent No.1. [Para 107][458-B-C]
Case Law Reference
F
[1993] 3 Suppl. SCR 22 relied on Para 30
(2014) 2 SCC 433 referred to Para 35
[2011] 15 SCR 1129 referred to Para 35
[2019] 4 SCR 617 referred to Para 36
G
[2003] 3 Suppl. SCR 249 referred to Para 57
[2012] 6 SCR 307 referred to Para 84

H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 351

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1544 A
of 2020
with
Civil Appeal No. 1545 of 2022.
From the Judgment and Order dated 07.01.2019 of the High Court
of Judicature at Bombay in Arbitration Petition No. 442 of 2017. B
Dr. Abhishek Manu Singhvi, Nakul Dewan, Ritin Rai, Sr. Advs.,
Moazzam Khan, Ms. Bhavana Sunder, Amit Bhandari, Pradhuman Gohil,
Mrs. Taruna Singh Gohil, Ms. Ranu Purohit, Alipak Banerjee, Brijesh
Ujjainwal, Vikash Singh, Advs. for the Appellants.
Kapil Sibal, K.V. Viswanathan, Sr. Advs., Ms. Shreya Gupta, C
Ms. Akanksha Banerjee, Raghav Tankha, Ms. Anusha Nagrajan, Apoorv
Singhal, King Dungerwal, Kunal Vajani, Ms. Sonam Gupta, Advs. for
the Respondents.
The Judgment of the Court was delivered by
R. F. NARIMAN, J. D
1. Leave granted.
2. The present appeals are filed against the judgment of a Single
Judge of the Bombay High Court dated 07.01.2019, by which four final
awards made by a sole arbitrator in London under the London Court of
International Arbitration Rules (2014) (hereinafter referred to as the
E
“LCIA Rules”) were held to be enforceable against the Appellants in
India.
3. The brief facts of this case are as follows. The Appellants, i.e.
Appellant No.1 Shri Vijay Karia, and Appellants No.2 to 39 (who are
represented by Appellant No.1) are individual, non-corporate shareholders
of Ravin Cables Limited (hereinafter referred to as “Ravin”). On F
19.01.2010, the Appellants and Ravin entered into a Joint Venture
Agreement (hereinafter referred to as “JVA”) with Respondent No.1,
i.e. Prysmian Cavi E Sistemi SRL – a company registered under the
laws of Italy. By this JVA, Respondent No.1 acquired a majority
shareholding (51%) of Ravin’s share capital. The material clauses of G
the JVA are set out hereinbelow:
“8. Purpose and Objectives
8.1 Purpose of the Company and Scope of the Agreement
Subsequent to Closing, the Company shall be a joint venture
between Prysmian and the Existing Shareholders for the purposes H
352 SUPREME COURT REPORTS [2020] 4 S.C.R.

A of undertaking and conducting the business of the company, or
for such other activities as may be determined by the Shareholders
from time to time, subject to the applicable law. The business of
the company shall be conducted in the best interests of the
Company, and in accordance with sound professional and
commercial principles.”
B
“12.6. Chairman and Managing Director
12.6.1 Mr. Karia shall be the Chairman of the Board as well as
the Managing Director of the Company until:
(i) Expiry of seven (7) years from the Agreement Date; or
C
(ii) The date of which the Existing Shareholders cease to hold in
the aggregate at least ten percent (10%) of the share capital of
the Company:
Whichever occurs earlier.
D It is hereby agreed that Mr. Karia shall not, during such term, be
entitled to be removed as a Chairman and Managing Director by
the passing of an ordinary resolution at a general meeting of the
Company…”
“12.6.4.Without prejudice to the aforesaid clause 12.6.3, the
E Managing Director shall continue to remain responsible for the
day to day management of the Company in accordance with the
Interim Period Policy adopted by the Board on the Closing Date,
until the appointment of the CEO of the Company (“Interim
Period”)”
F “12.6.5 As soon as practicable after the efflux of the Interim
Period, a Board shall be convened to resolve upon a new policy,
applicable for a period of 6 (six) months thereafter (the
“Integration Period”), for the delegation of the powers to the
managers of the Company (the “Delegation of Powers Policy”)
all powers not delegated to the managers of the Company pursuant
G to such Delegation of Powers Policy, shall be delegated jointly to
the CEO and the Managing Director…”
“12.6.6 Provided however, that subject to the overall supervision
of the Board, after the efflux of the Integration Period, the
Managing Director shall be directly responsible solely for managing
H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 353
[R. F. NARIMAN, J. ]

the internal audit as well as the strategy and business development A
of the Company and present to the Board his findings and analysis
for final determination by the Board. Accordingly all the powers
which are not delegated to the managers of the Company pursuant
to the Delegation of Powers Policy, as may be amended by the
Board from time to time, shall be delegated to the Managing
B
Director to the extent such powers fall within his duties as
aforesaid.
12.6.7 After the Integration Period, the Managing Director may
appoint an internal auditor to assist the Managing Director in his
responsibility towards the internal audit of the company. This
internal auditor shall report directly to the Managing Director and C
functionally report to the internal audit department of Prysmian
S.P.A.”
“12.7 Chief Executive Officer
12.7.1 The CEO shall be appointed by and shall directly report to D
the Board.
12.7.2 Without prejudice to the aforesaid Clause 12.7.1, the CEO
shall from the date of its appointment till the efflux of the Integration
Period, be responsible for the day to day management of the
Company jointly with the Managing Director. E
12.7.3 Provided however, that subject to the overall supervision
of the Board, after the efflux of the Integration Period, the CEO
shall be responsible for the day to day management of the Company
excluding solely the internal audit and the strategy and business
development of the Company for which the Managing Director F
shall be responsible. Accordingly all the powers which are not
delegated to the managers of the Company pursuant to the
Delegation of Powers Policy, as may be amended by the Board
from time to time, shall be delegated to the CEO to the extent
such powers fall within his duties as aforesaid.”
G
“17. PROCEDURE FOR FAIR MARKET VALUATION
17.1 Notwithstanding anything contained in this Agreement, all
references in this Agreement to Fair Market Value shall be the
fair market value as determined, applying the definition of
EBITDA, Net Financial Indebtedness (NFI) and Net Working
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354 SUPREME COURT REPORTS [2020] 4 S.C.R.

A Capital (NWC) set forth under Schedule X, by any one of the
following four accounting firms settled in India:
(a) KPMG
(b) Ernst & Young;
B (c) PriceWaterhouseCoopers;
(d) Deloitte
17.2 The accounting firm shall be chosen from among those
indicated under clause 17.1 above by the Party that, according to
clauses 23 and 24, is called by the other Party to sell, in whole or
C in part its share participation in the Company to the other Party;
or by the Party that, according to Clauses 11.5 (iv), 16 and 23,
calls the other Party to buy, in whole or in part, its share participation
in the Company (in either case the “Exiting Party”). If the Exiting
Party fails to choose the accounting firm within thirty (30) calendar
D days from (i) the receipt of the notice by which the other Party
has intimated it to sell, in whole or in part, its share participation in
the Company to the other Party; or (ii) from the serving of notice
to the other Party to buy, in whole or in part, its share participation
in the Company, then the accounting firm shall be chosen by the
Party (the “Non-Exiting Party”) that called the other Party to sell,
E in whole or in part, its share participation in the Company to the
other Party or was called by the Exiting Party to buy, in whole or
in part, the Exiting Party’s share participation in the Company.”
“20. Mutual Covenants and Undertakings
xxx xxx xxx
F
20.1.2 The Parties further agree to cooperate and act in good
faith, fairness and equity as between themselves.”
“21. Business in India
21.1 The Parties agree that neither Prysmian nor Mr. Karia,
G whether directly or through their Affiliates, shall invest, acquire or
participate in the Cable Business in India, save and except through
the Company in accordance with this agreement.”
“21.5 Further, it is agreed that, within March 31, 2011, the
Promoters shall either stop or cease to have any interest in any
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VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 355
[R. F. NARIMAN, J. ]

activity they are currently or will be conducting in India, directly A
or indirectly through any Affiliates, which is in competition with
the business of the Company. Such ceased activities shall then
not be offered by Mr. Karia to the Company, pursuant to Clause
21.2 for a period of three years from the date of such cessation.
For the sake of clarity, it is agreed that this Clause 21.4 shall B
apply, without being limited, to the activities carried out by (i) Vijay
Industrial Electricals, a company incorporated under the laws of
India and having its registered office at 302, Akruti Trade Centre,
Third Floor, Road no. 7, MIDC, Marol, Andheri(east) Mumbai-
400093 (ii) Special Cable Industries, a company incorporated under
the laws of India and having its registered office at A-1/404 GIDC C
Estate, Ankleshwar 393002.”
“23. Event of Default
23.1 If any party (“Defaulting Party”) is in material breach of any
provisions, obligations, covenants, conditions and undertakings D
under this Agreement , or in the event of insolvency or bankruptcy
of the Defaulting Party or if the substantial undertaking or assets
of the Defaulting Party is under receivership or any other
equivalent status, it shall be considered as an event of default
(“Event of Default”).
E
23.2 In such an event, the other party (“Non Defaulting Party”)
may give notice of the same (“Determination Notice”) to the
Defaulting Party.
23.3 The Defaulting Party shall have a period of 60 (sixty) calendar
days from the receipt of the Determination Notice (or Such further F
period as the Non Defaulting Party may agree in writing) to rectify
the Event of Default (“Rectification Period”). It is hereby clarified
that this clause 23.3 is not applicable if the Event of Default is
represented by the insolvency or bankruptcy of the defaulting Party
in which case the Non Defaulting Party may forthwith serve the
EOD Notice to the Defaulting Party. G
23.4 If upon expiry of the Rectification Period, the Event of Default
has not been so rectified the Non Defaulting Party may require
the Defaulting Party by written notice (“EOD Notice”) to either
(i) sell to the Non Defaulting Party or such other Person as may
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356 SUPREME COURT REPORTS [2020] 4 S.C.R.

A be nominated by the Non Defaulting Party, all , but not less than
all, the Shares held by the Defaulting Party (“Defaulting Party
Shares”) at the 10% (ten percent) discount to the Fair Market
Value (“Discounted Price”) or (ii) buy from the Non Defaulting
Party all, but not less than all, the Shares held by the Non Defaulting
Party at 10% (ten percent) over the Fair Market Value (“Premium
B
Price”). The Defaulting Party shall be then under the obligation
to either (I) sell all, but not less than all, its Shares in the Company
within 30 (thirty) calendar days of the EOD Notice or (II) buy all,
but not less than all, the Non Defaulting Party Shares in the
Company within 30 (thirty) calendar days of the EOD Notice, as
C the case may be.
23.5 It is hereby agreed that:
23.5.1 If Prysmian is the Defaulting Party, then Mr. Karia only
(and not the Existing Shareholders) will be entitled to either (a)
buy all(but not less than all) Prysmian Shares at the Discounted
D Price or (b) sell to Prysmian all (but not less than all its own
shares) and those of the Existing Shareholders at the Premium
Price.
23.5.2 If Mr. Karia or any of the Existing Shareholders is the
Defaulting Party, then Prysmian will be entitled to either (a) buy
E all ( but not less than all) the Shares held by Mr. Karia and Existing
Shareholders at the Discounted Price or (b) sell to Mr. Karia all
( but not less than all) its own shares at the Premium Price.
For sake of clarity, the Parties agree that for the purpose of this
Clause 23.5 any reference to Mr. Karia Shares, Prysmian Shares
F and Existing Shareholders Share shall be deemed to include any
Shares transferred to any or their respective Affiliates pursuant
to the provisions of Clause 10.4 above.”
“27. ARBITRATION
27.1 Dispute Resolution
G
27.1.1 The Parties agree to use all reasonable efforts to resolve
any dispute under, or in relation to this Agreement quickly and
amicably to achieve timely and full performance of the terms of
this Agreement.
H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 357
[R. F. NARIMAN, J. ]

27.1.2 Any dispute, controversy or claim arising out of or relating A
to or in connection with this Agreement including a dispute as to
the validity or existence of the Agreement or the arbitration
agreement, or any breach or alleged breach thereof, shall be settled
exclusively by arbitration under the Rules of Arbitration of the
London Court of International Arbitration (“LCIA”) as amended
B
from time to time.
27.1.3 The arbitral tribunal (“Tribunal”) shall consist of one (1)
arbitrator, to be appointed by the LCIA. The arbitrator shall be
from a neutral nationality, i.e. from a nationality and origin other
than any of the Parties.
C
27.1.4 The seat of the arbitration shall be London, United Kingdom.
27.1.5 The language to be used in the arbitration shall be English.
27.1.6 The law applicable and governing the arbitration agreement
(proper law of the arbitration agreement) and in all respects
including the conduct of the proceedings shall be English Law. If D
the Institution above named ceases to exist or is unable for any
reason to administer the arbitration proceedings then the arbitration
shall be conducted in accordance with the (English) Arbitration
ACT 1996 as amended from time to time or any statute that may
replace the said Act. E
27.1.7 Parties expressly agree that Part I of the (Indian) Arbitration
and Conciliation Act, 1996 (as amended from time to time and
any statutory enactment thereof) shall have no application to the
arbitration agreement or the conduct of arbitration or to the setting
aside of any award made there under, and the provisions of Part F
I ) including the provisions of section 9 of the Arbitration and
Conciliation Act, 1996 is hereby expressly excluded….
27.1.9 The arbitration award (the “Award”) shall be final and
binding on the Parties.
27.1.10 The courts of London (United Kingdom) shall have G
exclusive jurisdiction in respect of all matters arising in connection
with the arbitration and Existing Shareholders submits to the
jurisdiction of the said courts. Provided however that the Award
may be enforced in any appropriate jurisdiction. If to be enforced
in India the Award shall be a foreign award to which the legislative
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358 SUPREME COURT REPORTS [2020] 4 S.C.R.

A provisions incorporated in the applicable Indian Act to give effect
to the New York Convention on foreign arbitral awards 1958 ( the
New York Convention) shall apply(currently Part II of the (Indian)
Arbitration and Conciliation Act 1996)…”
4. By a separate ‘Control Premium Agreement’ of the same date,
B Respondent No.1 paid €5 million to the Appellants as ‘control premium’
for the acquisition of the share capital of Ravin.
5. On 10.08.2010, pursuant to clause 12 of the JVA - as the interim
period of six months under the JVA had come to an end - one Mr. Luigi
Sarogni was appointed as CEO of Ravin by Respondent No.1. Until the
C expiry of the ‘integration period’, Ravin was to be jointly managed by
the said CEO and the Managing Director for another period of six months.
Factually, however, we are informed that the said ‘integration period’
carried on beyond December 2010 and continued until September 2011.
6. In April 2011, Mr. Giancarlo Esposito was designated by
D Respondent No.1 as the H.R. Director of Ravin. On 15.09.2011, the
Board of Directors of Ravin conferred exclusive powers of the day to
day management of the company on the CEO so appointed by Respondent
No.1. It is the case of Respondent No.1 that the appointed CEO was
thwarted in jointly managing the company during this ‘integration period’,
as a result of which, in November 2011, one Ms. Cinzia Farise was
E appointed as CEO in the place of Mr. Sarogni by the Board of Directors.
Since the Board Resolution of 01.11.2011 conferred on Ms. Farise the
power to employ and lay-off permanent staff, she imposed a temporary
freeze and check on new hiring without her approval, which was alleged
to be breached by the Appellants. Later, from December 2011 till February
F 2012, Ms. Farise sought to convene a board-meeting to finalise one
Mr. Brunetti’s appointment as CFO of Ravin, which was assented to by
the Respondent’s Directors, but not signed by the Appellant’s Directors.
Things reached a head on 31.01.2012 when the employees of the
company went on a strike at Ravin’s Akruti office. By February 2012,
the Appellants and Respondent No.1 were at loggerheads, as a result of
G which Respondent No.1 issued a request for arbitration in terms of clause
27 of the JVA, claiming that the Appellants had committed ‘material
breaches’ of the JVA, inter alia, by ousting Respondent No.1 from the
control of Ravin altogether. On 26.03.2012, the Appellants responded to
the request for arbitration and included several counter claims. Each
H party claimed that the other had committed material breaches, as a result
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 359
[R. F. NARIMAN, J. ]

of which the successful party in the arbitration would be entitled under A
the JVA to buy out the other party at a 10% premium or discount (as the
case may be). Given the fact that the JVA required service of a
‘Determination Notice’ which alleged material breaches, such notice
was served by Respondent No.1 on the Appellants on 26.03.2012. Sixty
days from this date, called a ‘Rectification Period’ under the JVA, notice
B
was given by the Respondent No.1 to the Appellants to remedy/rectify
the alleged breaches. Further time even beyond the sixty days, i.e. until
06.07.2012 was given, but according to Respondent No.1, none of the
breaches were remedied. As a result, on 06.06.2012, the LCIA appointed
a sole arbitrator - one Mr. David Joseph QC - to adjudicate the dispute
between the parties. C
7. An early skirmish was contained in a letter dated 07.06.2012,
alleging that the learned arbitrator was conflicted, as he had been engaged
as counsel by Respondent’s advocates, Bharucha and Partners, in another
unconnected matter. However, on 08.06.2012, Bharucha and Partners
wrote a letter making it clear there was no such conflict. The sole D
arbitrator also denied any such conflict. The LCIA Registry informed
the Appellants that they could challenge the appointment of the sole
arbitrator under the LCIA Rules if they so desired. The Appellants,
however, gave up the right to any such challenge. As a result, on
04.07.2012, Respondent No.1 filed its Statement of Claim before the
learned sole arbitrator. On 09.09.2012, the Appellants then filed their E
statement of defence and counter claims. On 28.09.2012, Respondent
No.1 filed its rejoinder and opposition to the counter claim.
8. Meanwhile, various procedural orders were passed by the
learned arbitrator for production of documents etc. A hearing then took
place in December 2012 on questions relating to the construction of F
various clauses of the JVA and jurisdictional issues raised by Respondent
No.1 in respect of certain counter claims of the Appellants. Deciding
these issues, by what was called the ‘First Partial Final Award’ dated
15.02.2013, the sole arbitrator delineated the scope of the first award
stating that it was restricted only to issues of interpretation of the JVA G
and questions of jurisdiction, and not to the merits of either the claims or
counter claims made. In particular, the sole arbitrator construed clause
21.1 of the JVA as follows:
“82. This then brings directly into question the scope and meaning
of the words used in Clause 21.1 when each of the Claimant and H
360 SUPREME COURT REPORTS [2020] 4 S.C.R.

A the First Respondent agreed that it would not directly or through
its Affiliates “invest, acquire or participate in the Cable Business
in India save through the Company in accordance with this
Agreement”.
83. The Tribunal concludes that these words themselves do not
B prohibit the Claimant from selling cables directly in India. Such
direct sales might still amount to a breach of Clause 8 or indeed
Clause 20 of the JVA, but direct sales as a stand-alone activity is
not an investment, acquisition or participation in the Cable Business
in India.
C 84. It seems to the Tribunal that each of these expressions connotes
different forms of long term engagement, arrangement or
commitment involving either an injection or exchange of capital
or know how on the part of the investor, acquirer or participator
in the sphere of the activities identified by the compendious
definition of Cable Business in India.
D
85. A person who concludes a contract of sale of goods to another
counter-party is not in accordance with ordinary parlance investing,
acquiring or participating in the Cable Business in India.
86. Therefore, the Tribunal concludes that on a true construction
E of the JVA simply by applying the ordinary meaning of the words
deployed together with the contractual definition, the Respondents
do not succeed in their primary submission namely that the
conclusion of one or more contracts of sales of cables directly in
India by the Claimant itself or through its subsidiaries constituted
the investment, acquisition or participation in the Cable Business
F in India contrary to the terms of Clause 21.1 of the JVA.
xxx xxx xxx
93. In summary therefore contracts of sale for cables within the
definition of Cable Business concluded directly by the Claimant
or its affiliates and otherwise than through Ravin do not of itself
G
constitute a breach of Clause 21.1.
94. The conclusion of a series of such contracts might, however,
depending on the facts, constitute a breach of Clause 8 or Clause
20 of the JVA. Yet further, the Tribunal does not rule out the
possibility of the Respondents alleging and proving some kind of
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VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 361
[R. F. NARIMAN, J. ]

investment or participation which consist of some kind of long A
term contractual arrangement itself involving sale, export, import
or distribution. Nothing stated herein, however, in any way decides
or considers the materiality of any such allegation or the
consequences of any such breach even if proven.”
9. Insofar as the parent company of Respondent No.1 (one B
Prysmian SA) had made a global acquisition of the ‘Draka Group’ in
February/March 2011, which included - as one out of 60 companies
belonging to the Draka Group - one ‘Associated Cables Private Limited’
(hereinafter referred to as “ACPL”), which was an Indian Company
doing business in India, the learned arbitrator held:
C
“108. The Tribunal is once more careful to make it clear that
these pleaded allegations have not been proved yet. The proof of
these allegations is left to be explored at the substantive merits
hearing. Nevertheless, on the basis of the parties’ respective
pleaded cases, the Tribunal concludes that on a true construction
of Clause 21, the wider acquisition by Prysmian Spa of Draka, D
which in turn holds a 60% shareholding in ACPL, is capable of
amounting to an acquisition in the Cable Business in India through
an Affiliate of the Claimant in circumstances where it is not
disputed that Prysmian Spa is another person which Controls the
Claimant. Equally, the continued carrying on of business in India E
through ACPL is capable of amounting to the participation in the
Cable Business in India through an Affiliate of the Claimant;
namely through another person, ACPL. Although there has not
been any proof of this question, there would at least appear to be
some evidence on which the Respondents might contend that
ACPL is Controlled by the same person, namely Prysmian Spa, F
who directly or indirectly Controls the Claimant so as to come
within the parameters of sub-paragraph (c) of the definition of
Affiliate.”
10. The learned arbitrator then construed clause 23, which speaks
of ‘material breaches’ by the parties, as follows: G
“132. The Tribunal’s conclusions are as follows:
1) Clauses 23.1 and 23.2 do require the giving of a Determination
Notice of an Event of Default by the Non Defaulting Party, if
indeed the Non Defaulting Party wishes to make complaint,
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362 SUPREME COURT REPORTS [2020] 4 S.C.R.

A and if, ultimately, the Non Defaulting Party wishes to invoke
the provisions of Clauses 23.4 and 23.7, even in circumstances
where the Non Defaulting Party contends that the material
breach is irremediable;
2) Clause 23.3 does require the Non Defaulting Party to give the
B Defaulting Party a period of 60 days, the Rectification Period,
to rectify the Event of Default even in a case where the Non
Defaulting Party alleges that the Event of Default is
irremediable. The only exception to this in Clause 23.3 is with
respect to what might be called events of insolvency, which
amount to Events of Default;
C
3) Excluding the cases of insolvency events, which are expressly
exempted, the service of a written EOD Notice pursuant to
Clause 23.4 must be upon the expiry of the Rectification Period;
4) Adapting one of the principal hypothetical examples given by
D the Claimant’s counsel in the course of its submissions, if a
Non Defaulting Party gives a Determination Notice to the
Defaulting Party identifying material breach (1) but the
Defaulting Party has in fact concealed material breach (2)
and in any event does not rectify one or both, then the Non
Defaulting Party when it gives its EOD Notice under Clause
E 23.4 and then subsequently seeks to justify its EOD Notice in
arbitration can rely upon both the un-rectified material breach
(i) and/or material breach (2) if it is subsequently discovered.
This is because a concealed, but subsequently discovered,
Event of Default which has not been rectified at the end of
F the Rectification Period is still an un-rectified Event of Default
for the purpose of Clause 23.4;
5) Equally, if a Defaulting Party has not rectified a concealed
Event of Default at the end of a Rectification Period, then, it is
a matter which can be relied upon by the Non Defaulting Party
G under Clause 23.7, so to give rise to the deprivation or alteration
of rights set out therein;
6) An Event of Default is defined as a material breach of any
provisions, obligations, covenants, conditions, and undertakings.
The definition of an Event of Default is not conditional upon
H the giving of a Determination Notice. The consequences,
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 363
[R. F. NARIMAN, J. ]

however, under Clause 23 do depend upon the giving of a A
Determination Notice and expiry of a Rectification Period;
7) Notwithstanding the provisions of Clause 23 and Clause 23.4,
in particular with regard to Events of Default and Determination
Notice, the Non Defaulting Party in addition possesses all the
rights to damages and performance expressed in Clause 23.6; B
8) It remains open for argument, and the Tribunal makes no
decisions as to whether a party can give a Determination
Notice to the other party, if in fact at the time of the giving of
the notice, the party giving the notice is itself in material breach.
This question was raised by the Tribunal in the course of oral C
submissions, but has not been fully addressed by the parties,
and, indeed, is probably best addressed at the full merits
hearing.”
11. Insofar as the arbitrator’s ruling on jurisdiction was concerned,
it was held that a dispute regarding the right to register the ‘Ravin’ D
trademark falls outside the scope of the arbitration clause under the
JVA. He further held that the trademark licence agreements contained
arbitration clauses which provided for disputes to be referred to arbitration
in Milan, Italy under Italian law, and this being the case, any dispute in
relation to these agreements would be outside the ken of the arbitration
clause contained in the JVA. E

12. The ‘Second Partial Final Award’ dated 19.12.2013 then dealt
with which of the parties materially breached the terms and conditions
of the JVA. The claims, in this respect, made by Respondent No.1, were
disposed of as follows:
F
“199. The Tribunal’s findings and conclusions in relation to the
particulars of the Claimant’s allegations of material breach are
set out below. The Tribunal finds that:
1) The Respondents interfered with the proper and effective
functioning of the CEO by refusing to implement and/or by
G
preventing the implementation of the Board of Directors’
resolution empowering the CEO to operate Ravin’s bank
accounts in material breach of JVA Clauses 12 and/or 8 and/
or 20.1.2;
2) in refusing to pass resolutions, whether at a Board meeting or
by circulation, to appoint the Claimant’s nominee as the CFO H
364 SUPREME COURT REPORTS [2020] 4 S.C.R.

A of Ravin the Respondents were not in material breach of the
JVA;
3) the Respondents employed Ms. Mathure and created a false
record with regard thereto in material breach of JVA Clauses
12 and /or 8 and/or 20.1.2;
B 4) the Respondents denied the HR Director and the CEO full
and unconditional access to the HR and payroll data systems
of Ravin in material breach of JVA Clauses 12 and/or 8 and/or
20.1.2;
5) the Respondents refused to report to the or attend management
C meetings convened by the CEO in material breach of JVA
Clauses 12 and /or 8 and/or 20.1.2;
6) when the incidents of 12 and 13 January 2012 and 4 February
2012 are considered in isolation there is insufficient evidence
to conclude that there has been a material breach by the
D Respondents. When the incidents are considered together and
set in their proper context the Tribunal concludes that they
form part of a pattern of the Respondent’s conduct which
constituted a material breach of the JVA. As such, there is a
material breach in relation to the Claimant’s combined
E allegations that the Respondents incited staff to surround,
sequester, heckle, humiliate and threaten Mr Esposito and
Mr Kamdar on those dates;
7) the Respondents encouraged and failed to prevent Company
employees from going on strike on 31 January 2012 and the
F Respondents encouraged and incited indiscipline and breach
of Company policies and procedures by supporting Mr. Dhall
in his insubordination and defiance of direct orders of
Mr. Esposito and Ms Farise in material breach of JVA Clauses
12 and/or 8 and/or 20.1.2;
8) see (7) above;
G
9) the Respondents were not in breach of the JVA by refusing to
convene a Board meeting at short notice;
10) Mr. Karia’s letters to the FRRO were hand-delivered on 29
February 2012 and therefore cannot be considered in relation
H to the events constituting material breach as alleged in the
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 365
[R. F. NARIMAN, J. ]

Request dated 27 February 2012. Nevertheless, the Tribunal A
finds that the letters to the FRRO are consistent with Mr
Karia’s modus operandi and support the Tribunal’s other
findings of material breach.
(4) Rectification of the Events of Default found to have been
committed by the Respondents B
200. The Claimant submits that none of the alleged material
breaches were rectifiable and, in any event, by the end of the
Rectification Period, i.e. 27 April 2012, and by the end of the
extended period for rectification, i.e. 6 July 2012, the Respondents
had not rectified any of their breaches. On the contrary, the C
Claimant submits that during the period between 28 February 2012
and 6 July 2012, the Respondents continued to breach the JVA
by conduct which was calculated to destroy the relationship of
trust and confidence between the parties and completely remove
or render redundant any element of Claimant control over Ravin.
As stated above, however, these post-Request breaches are not D
the subject of this Award (see, inter alia, Claimant’s CS §§730-
737).
201. The Respondents do not contend that they rectified any of
the alleged breaches of the JVA by 6 July 2012.
E
202. The Tribunal concludes that, in relation to the material
breaches committed by the Respondents, the Respondents failed
to rectify those breaches within the extended period for
rectification, i.e. by 6 July 2012.”
13. So far as the counter claims of the Appellants were concerned, F
the arbitrator dealt with the effect of Prysmian SA acquiring ACPL,
which was a competing business of Ravin [through Prysmian’s acquisition
of the Draka group, of which ACPL was a subsidiary]. The sole arbitrator
first dealt with the reaction of Shri Karia on the Draka takeover together
with Shri Karia’s evidence as follows:
G
“233. The Tribunal finds the many changes to the story of
Mr. Karia in this regard to be of considerable significance. In
truth, Mr. Karia did know as long back as July 2009 of the ACPL/
Draka connection. When the merger between Draka and
Prysmian was announced Mr. Karia did understand that Prysmian
had acquired a controlling stake in ACPL as he fully accepted in H
366 SUPREME COURT REPORTS [2020] 4 S.C.R.

A cross examination. Mr. Karia had that knowledge in November
2010. Nevertheless, Mr. Karia did not complain of any material
breach to the JVA under Clause 21. The Tribunal further accepts
the truth of the evidence given by Ms. Farise that first of all when
Mr. Karia heard of her appointment to the ACPL Board some
time in late 2011 possibly December, Mr. Karia did not complain
B
but congratulated her (§18,EI/5/28). This fits in with his earlier
congratulatory email to Mr. Battista. Nevertheless by the time
one gets to February 2012 Mr. Karia had completely changed his
tune and saw Ms. Farise’s appointment to the ACPL as a device,
an excuse, to try to derail her carrying on as CEO on the Ravin
C Board and thus further his campaign not to cede day to day control
of Ravin to the Claimant. The Tribunal accepts the evidence given
by the Claimant witnesses on this. Mr. Karia has changed his
tune. The Tribunal rejects the veracity of the story originally being
told by Mr. Karia as not only inconsistent with the documents
before the Tribunal but also mutually inconsistent with his evidence
D
in cross-examination.
234. The Tribunal has spent some time analysing this material
because Mr. Karia’s contemporaneous reaction is highly instructive
in determining whether this is really to be analysed as a serious or
material breach with serious adverse effect or rather as a pretext,
E an excuse. The Tribunal concludes it is the latter not the former.
The Respondents somewhat bravely in their Closing Submissions
assert that the Tribunal is not allowed to have regard to this
material because the Claimant has not pleaded waiver or
affirmation. This submission is completely rejected. As is clear
F from the authorities referred to above whether a breach is material
or not is determined by reference to all the relevant facts and this
will include a parties’ reaction to the events at the time.
xxx xxx xxx
237. The Tribunal ultimately concluded that the Respondent did
G not adduce any credible evidence of actual serious adverse impact.
238. It is true that there was some evidence (albeit mainly dating
back to 2008-2009) of occasional instances of both companies
tendering for the same business. Yet there was no reliable
evidence that business had been lost from Ravin to ACPL post
H the Draka acquisition, or that there had been any diversion of
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 367
[R. F. NARIMAN, J. ]

business from Ravin to ACPL or that there had been any targeting A
of Ravin’s business by ACPL or indeed vice versa.
239. In the end the two companies operate in a very different
space. ACPL is a small specialist cable business with a turnover
of € 7-7.5m per annum. This is approximately 10% of that of
Ravin. ACPL operates principally in the area of instrumentation B
cables. Ravin operates principally in the area of power and control
cables. Yet further, a large part of the small turnover of ACPL
constitutes exports from ACPL to its Omani shareholder. This
renders the notion of serious adverse harm by reference to ACPL’s
turnover even more remote.
C
240. The contemporaneous management documents at Ravin did
not show that Ravin considered ACPL as one of its competitors
or indeed operating in the same space. When Mr. Karia was
asked about this in cross examination, he said that when a company
examines its competitors it does not make a list down to the 50th
or 60th competitor (Day 9, p.82). This gives an eloquent indication D
of how far down the list Ravin would have considered ACPL.
241. Equally, the fact that a list of company names was identified
and relied upon by the respondent to show that Ravin and ACPL
sell cables to some of the same companies is stretching a point
beyond where it can naturally go. This does not yield an answer E
of material breach. The evidence adduced by the Respondents is
not of a quality which would enable the Tribunal to conclude that
a breach had been committed with serious adverse effect.
242. The Tribunal further makes mention of the assistance it
received from two distinguished experts of long standing F
participation in the market; Messrs Honavar and Hargopal. The
Tribunal did get some benefit from this evidence in the clear
explanation of different types of cables together with samples
and this explanation was also helpfully provided in part by
Mr. Karia himself. Nevertheless, once more this evidence G
somewhat missed the point. It is not enough to establish material
breach to identify certain types of cables produced and sold by
each company. There was no reliable analysis advanced by the
Respondents’ evidence of serious adverse effect either on Ravin
today or likely in the future.
H
368 SUPREME COURT REPORTS [2020] 4 S.C.R.

A 243. Finally, the Tribunal for completeness makes it clear that it
completely rejects the further allegation that ACPL had been
acquired in bad faith by the Claimant with a view to destroying
value in Ravin or that it has since pursued the operations of ACPL
with that aim in view.
B 244. There is quite simply no credible evidence to support such
an allegation and indeed the Tribunal is of the view that it is an
allegation which should not have been advanced.”
14. So far as the counter claim dealing with direct sales in India
which competed with the business of Ravin, and agency/distribution
C agreements, the arbitrator held as follows:
“252. Essentially the Respondents have not established that the
Agency Agreements on which they place reliance, involved such
an arrangement, commitment or engagement as stated in the First
Partial Award. Indeed the Respondents have not even addressed
D the requirement identified in paragraph 84 of the First Partial Final
Award but instead focused on the length or duration of the
relationship and whether or not each relationship was exclusive
or non-exclusive. This is not sufficient. For the avoidance of doubt
the Tribunal concludes that there was no satisfactory basis on
which it could be concluded that these Agency Agreements
E involved an injection or exchange of capital or know how on the
part of the investor, acquirer or participator. They are best analysed
as classic sales distribution/agency agreements pursuant to which
an agent receives a sales commission in return for the promotion
and conclusion of identified types of sales in India.
F xxx xxx xxx
273. Making every conceivable allowance in favour of the
Respondents, the Tribunal concludes that the Respondents
(perhaps for understandable reasons following the First Partial
Final Award) have tried to alter their case and now advance a
G case that the fact of direct sales amounts to a material breach of
Clauses 8 and 20 of the JVA. That was not advanced in the
Determination Notice or in its pleaded case and is not open to the
respondents.
(I) No material breach in any event.
H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 369
[R. F. NARIMAN, J. ]

274. Yet further, even ignoring the limitations of the Determination A
Notice and pleadings, the Tribunal yet further concludes that the
Respondents have not in any event succeeded in showing material
breach of Clauses 8 or 20 on the facts of the case.
275. The Tribunal concludes that the Respondents’ analysis is
too simplistic to be of any real utility in analysing the issue. B
276. The Respondents start by referring to a total 644m of sales
which were made directly into India by various Prysmian affiliates.
277. Those sales, however, were for all practical purposes made
up of sales of telecom cables, industrial special cables, automotive
cables, network and component and services. Ravin did not C
manufacture those types of cables. Indeed over 85% of the sales
came from two affiliates manufacturing telecom cables, which
Ravin did not manufacture and had no experience in selling either.
Indeed the Tribunal accepts the evidence of Ms. Farise and
Mr. Koch and Mr. Karve on this issue (see, inter alia, §§5-8, E(I)/ D
10/56-57, §23, E(I)/26/206, §23, E(I)/26/207, §§18-32. E(I)/23/
184-186, 11 December 2012 hearing, pp. 134-140, §46, E(I)/17/
92, Day 2, pp. 83-86, §18 of, E(I)/24/189).This renders the whole
argument of diversion of sales or breach of good faith by virtue of
these direct sales somewhat academic.
E
278. Indeed these figures illustrate exactly why the Respondents
placed so much emphasis on their argument that the mere fact of
sales was a breach irrespective of anything else. This was once
more how it was put by Mr. Salve SC in his oral closing argument
(Day 10, pp. 183-185) the Tribunal has, however, found against
the Respondents on this point. F
279. The Tribunal concludes that the Respondents have not shown
any material breach on the part of the Claimant in the development
of Ravin’s business in accordance with clause 8 or any breach of
the good faith obligations under Clause 20 with respect to direct
sales.” G
15. So far as the breach of confidentiality by Respondent No.1
was concerned, the counter claim of the Appellants was rejected thus:
“284. Ms. Farise was quite clear in her First Witness Statement
of 20 July 2012 (E(I)/5/29) at paragraph 22 (j) – (I) that she was
H
370 SUPREME COURT REPORTS [2020] 4 S.C.R.

A a non-executive director at ACPL, that she was quite aware of
her responsibilities to both companies and did not at any time pass
on confidential or other information to ACPL from Ravin or from
ACPL to Ravin.
285. The Respondents did not cross examine Ms Farise on this
B important evidence. It is accepted by the Tribunal.
286. The Respondents instead in their Closing Submissions do
not address the question of evidence of actual breach but instead
try to build up a case of surmise or inference. The Respondents
rely upon the fact that Prysmian referred to ACPL and Ravin as
C part of “Prysmian India”. They also rely upon the fact that they
contend that the appointment of Ms Farise to ACPL was covertly
carried out. The first point leads nowhere. It is not evidence of
breach of the JVA. The second point is in any event rejected by
the Tribunal. As has been referred to above in the context of the
analysis of the Claimant’s allegations of material breach, the
D Tribunal finds that Ms. Farise did inform Mr. Karia of her
appointment at ACPL. In the first instance Mr. Karia congratulated
her and only objected later as the power struggle grew and this
was used as a weapon in order to try to have Ms. Farise excluded
from the Ravin Board.”
E 16. So far as multiple acts of alleged mismanagement by
Respondent No.1 in breach of clauses 8 and 20 of the JVA were
concerned, the learned sole arbitrator dealt with this as follows:
“290. The remaining allegations can be seen as essentially the
flip side of the Claimant’s allegations of material breach directed
F at the Respondents. Three examples will suffice for present
purposes:
i. the strike orchestrated by the Respondents in response to the
suspension of Mr. Dhall;
ii. the attendance or non-attendance of Claimant nominees at
G
the Akruti offices;
iii. the circumstances surrounding the appointment of the CEO
and CFO of Ravin.
291. Given the findings made by the Tribunal in favour of the
H claimant’s allegations of material breach it naturally follows that
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 371
[R. F. NARIMAN, J. ]

the Respondents do not succeed in these allegations of A
mismanagement.
292. The Respondents were themselves in material breach with
regard to the whole conduct surrounding Mr. Dhall’s appointment
of Ms. Mathure and the so called authorisation form. The Claimant
was not in material breach in suspending Mr. Dhall. Far from it. B
The Respondents, however, were plainly in material breach by
their reaction to this suspension effectively leading to a one day
strike.
293. The question of the attendance of Claimant nominees at the
Akruti office is another chapter of the saga in which the C
Respondents do not emerge without serious criticism. As is clear
from this Award the Respondents engendered a toxic atmosphere
at Akruti in January 2012 (even in its fire stricken state) and such
was the situation at the ground that it was not really possible for
Claimant nominees to attend without fear of their own safety.
D
294. Lastly, the circumstances surrounding the appointment of
the CEO and CFO does not give rise to any conceivable material
breach on the part of the Claimant. The claimant was entitled to
nominate a CFO and the CEO. They did so. The Respondents did
not oppose the appointment of Ms Farise. Nevertheless they did
obstruct her at every turn once she was appointed because it E
became apparent that she intended pursuant to the JVA to take
day to day control of Ravin and the Respondents did not wish this
to happen. As regards Mr. Brunetti, the CFO, the Respondents
did veto his appointment. This was not a material breach on their
part as it was their right to do so under Schedule IX to the JVA. F
Nevertheless it cannot be said to be a material breach by the
Claimant. That is unsustainable.”
17. Holding thus, the learned sole arbitrator concluded that none
of the counter claims were made out, as a result of which they were all
dismissed. G
18. The Third Partial Final Award was delivered on 14.01.2015.
Prior to this award, on 23.06.2014, the Karias, through their legal counsel,
informed the tribunal that they would no longer be represented by
M/s Nishith Desai Associates. This was the prelude to Shri Vijay Karia
writing to the LCIA Court on 28.09.2014, a few days before the hearing
H
372 SUPREME COURT REPORTS [2020] 4 S.C.R.

A fixed before the arbitrator, seeking revocation of the appointment of the
arbitrator, on the ground of alleged lack of impartiality or independence.
At the hearing fixed on 1st-2nd October 2014, Shri Vijay Karia did not
appear. On 10.10.2014, the LCIA Court communicated to the tribunal
that it had dismissed the challenge made to the arbitrator on the ground
that the said application was made out of time under the provisions of
B
the LCIA Rules. The award then went on to address some of the written
submissions dated 02.06.2014 of Shri Vijay Karia. The learned arbitrator
explained how he was not ‘functus officio’ with respect to the relief
sought. He further went on to state that he could not now review the
Second Partial Final Award as he had no jurisdiction to do so, and made
C it clear that he did not go beyond the claims submitted by the claimant to
him, or beyond the scope of the JVA. The award also recorded the fact
that the present Appellants did not take the necessary steps to appoint a
valuer, as a result of which KPMG refused to go ahead with the valuation.
As Deloitte was the only other valuer, Deloitte was then requested to go
ahead with the valuation. The Third Partial Final Award then declared
D
as follows:
“1. The Respondents are the Defaulting Party under clause 23.7
of the JVA;
2. All rights of whatsoever nature conferred on the Respondents
E and specifically Mr. Karia under the JVA have ceased to be
effective;
3. Any reference in the JVA to any rights of the Respondents and
specifically Mr. Karia including the requirement of consent or
approval of Respondents and specifically Mr. Karia stand omitted;
F 4. The Respondents are prohibited from exercising or attempting
to exercise any rights under the JVA including in particular any
representation on the Board of the Company;
5. The date for the assessment of the Discounted Price be 30
September 2014 and that this date be substituted for the finding in
G paragraph 335(4) of the Second Partial Final Award, which date
and finding the parties agreed would be remitted back to the Tribunal
for further consideration;
6. The Tribunal reserves the matters set out in paragraph 31 above,
which includes the costs of the arbitration.
H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 373
[R. F. NARIMAN, J. ]

7. Notwithstanding paragraph 6 above, the Tribunal records the A
further costs of the arbitration (other than the legal or other costs
incurred by the parties themselves and other than those costs
recorded in the Second Partial Final Award) up to the date of this
Award, which have been determined by the LCIA Court, pursuant
to Article 28.1 of the applicable (1998) Rules, to be as follows:
B
LCIA’S administration charge £6,353.33
Tribunal’s fees £29,800.00
Total further costs of the arbitration £36,153.33
8. The Tribunal’s previous Procedural Orders and Interim Relief C
as amended by Procedural Order No.12 are to continue in effect
until further Order.”
19. By the Final Award dated 11.04.2017, the learned sole arbitrator
dealt with why and how Deloitte was appointed as the valuer of the
shares; why Ravin’s 49% stake in ‘Power Plus’ was excluded for D
purposes of valuation as clause 17.1 of the JVA and the formula stated
in Schedule X would have to be strictly followed; and as to what then is
the fair market value of the shares of the Appellants in Ravin that was to
be bought out by the Respondent No. 1.
20. Ultimately, the final relief granted by the said award was as
E
follows:
“FINDS, HOLDS, ORDERS AND DECLARES as follows:
1) The Respondents do transfer to the Claimant 10,252,275 shares
held by them to the Claimant the Discounted Price of INR
63.9 per share aggregating to INR 655,200,000. F
2) The Third Respondent, Mr. Karia (who holds Power of
Attorney executed by each Existing shareholder) do forthwith
and without delay execute the requisite transfer forms for
transfer of 10,252,275 shares in favour of the Claimant.
3) The Third Respondent and the Twelfth Respondent, Mr. Piyush G
Karia, who purport to be and continue to act as director of the
Company, do forthwith and without delay:
a) Convene and hold a meeting of the Board of Directors of
the Company not later than 21 days after the date of this
Final Award limited to noting and registering the transfer H
374 SUPREME COURT REPORTS [2020] 4 S.C.R.

A of 10,252,275 shares from the Respondents in favour of
the Claimant;
b) Table before that meeting the executed transfer forms;
c) Vote in favour of the resolution / motion to register the
transfer of the 10,252,275 shares in favour and in the name
B of the Claimant; and
d) On registration of the transfer of the shares as aforesaid
to resign from the Board of the Company as Chairman
and Managing Director and as Executive Director of the
Company respectively.
C
4) Each of the Respondents and particularly the Third and Twelfth
Respondents, Mr. Karia and Mr. Piyush Karia, are restrained
from acting themselves or through servants or agents, from:
a) Claiming or attempting to exercise or exercising any rights
D whatsoever under the JVA in relation to the Company
including but not limited to representation on the Board of
the Company or their consent or approval being required
in any matter relating to the Company whether at the Board
of the Company or at meetings of the shareholders of the
Company.
E
b) Claiming or attempting to claim, or representing or
attempting to represent, the Company in any matter and in
any manner whatsoever.
c) Using or attempting to use any assets, properties or facilities
of the Company including but not limited to the Company’s
F
offices and communication facilities.
5) The third and Twelfth Respondents, Mr. Karia and Mr. Piyush
Karia, themselves or through servants or agents are restrained
from acting, or claiming or holding themselves out to be the
Chairman or Managing Director and as Executive Director,
G respectively, or directors of the Company (except for the limited
purpose as set out in (3)(above)).
6) The Respondents jointly and severally do pay to the Claimant
the legal and sundry disbursements costs of and relating to
this Arbitration in the sum of US $ 2,317,199.82.
H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 375
[R. F. NARIMAN, J. ]

7) The Respondents are to bear and, insofar as not already paid, A
to reimburse the Claimant the total costs of the Arbitration as
determined by the LCIA Court pursuant to Article 28.1 of the
LCIA Rules, which are £ 283,043.71.
8) All other claims of the Claimant and Respondents are
dismissed.” B
21. It is important to note that no challenge was made to the
aforesaid award under the English Arbitration Law, though available. It
is only when the aforesaid award was brought to India for recognition
and enforcement that objections to the said award were made under
Section 48 of the Arbitration and Conciliation Act, 1996 (hereinafter C
referred to as the “Arbitration Act”).
22. The learned single Judge, in the impugned judgment, recorded
the arguments of both parties, dealt with the allegation of bias against
the arbitrator and all other objections raised by the Appellants to the
award, but finally found that the award must be recognised and enforced D
as the objections do not fall within any of the neat legal pigeonholes
contained in Section 48 of the Arbitration Act.
23. As Section 50 of the Arbitration Act does not provide an appeal
when a foreign award is recognised and enforced by a judgment of a
learned Single Judge of a High Court, the Appellants have appealed E
against the said judgment under Article 136 of the Constitution of India.
24. Before referring to the wide ranging arguments on both sides,
it is important to emphasise that, unlike Section 37 of the Arbitration Act,
which is contained in Part I of the said Act, and which provides an
appeal against either setting aside or refusing to set aside a ‘domestic’ F
arbitration award, the legislative policy so far as recognition and
enforcement of foreign awards is that an appeal is provided against a
judgment refusing to recognise and enforce a foreign award but not the
other way around (i.e. an order recognising and enforcing an award).
This is because the policy of the legislature is that there ought to be only
one bite at the cherry in a case where objections are made to the foreign G
award on the extremely narrow grounds contained in Section 48 of the
Act and which have been rejected. This is in consonance with the fact
that India is a signatory to the Convention on the Recognition and
Enforcement of Foreign Arbitral Awards, 1958 (hereinafter referred to
as “New York Convention”) and intends - through this legislation - to
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376 SUPREME COURT REPORTS [2020] 4 S.C.R.

A ensure that a person who belongs to a Convention country, and who, in
most cases, has gone through a challenge procedure to the said award in
the country of its origin, must then be able to get such award recognised
and enforced in India as soon as possible. This is so that such person
may enjoy the fruits of an award which has been challenged and which
challenge has been turned down in the country of its origin, subject to
B
grounds to resist enforcement being made out under Section 48 of the
Arbitration Act. Bearing this in mind, it is important to remember that
the Supreme Court’s jurisdiction under Article 136 should not be used to
circumvent the legislative policy so contained. We are saying this because
this matter has been argued for several days before us as if it was a first
C appeal from a judgment recognising and enforcing a foreign award. Given
the restricted parameters of Article 136, it is important to note that in
cases like the present - where no appeal is granted against a judgment
which recognises and enforces a foreign award - this Court should be
very slow in interfering with such judgments, and should entertain an
appeal only with a view to settle the law if some new or unique point is
D
raised which has not been answered by the Supreme Court before, so
that the Supreme Court judgment may then be used to guide the course
of future litigation in this regard. Also, it would only be in a very exceptional
case of a blatant disregard of Section 48 of the Arbitration Act that the
Supreme Court would interfere with a judgment which recognises and
E enforces a foreign award however inelegantly drafted the judgment may
be. With these prefatory remarks we may now go on to the submissions
of counsel.
25. Dr. Abhishek Manu Singhvi, Senior Advocate, led the charge
so far as the Appellants are concerned. Ably assisted by Shri Nakul
F Dewan on the law, the learned Senior Advocates argued a large number
of points which they sought to put into three legal pigeonholes, namely,
the pigeonhole contained in Section 48(1)(b) of the Arbitration Act, and
that the foreign award would be contrary to the ‘public policy of India’
[as under Section 48(2)(b) of the Arbitration Act] in two respects: (1)
that it would be in contravention of the fundamental policy of Indian law;
G and (2) that in several respects it would violate the most basic notions of
justice.
26. Dr. Singhvi’s arguments were as follows:
(1) That the arbitral tribunal entirely failed to deal with the
H Appellants’ counter claim pertaining to the incorporation of
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 377
[R. F. NARIMAN, J. ]

one Jaguar Communication Consultancy Services Private A
Limited (hereinafter referred to as “Jaguar”), which would
show that, in material breach of the non-compete provisions
of the JVA, this company was set up in India by Respondent
No.1 to do business in the manufacture and sale of cables,
in competition with the joint venture company, i.e. Ravin.
B
(2) That the tribunal failed to make a determination on the
Appellants’ counter claim that Respondent No.1’s efforts
to oust the Appellant No.1 and his family from Ravin
amounted to a breach of the JVA.
(3) That the tribunal failed to make any determination on the C
Appellants’ counter claim that Respondent No.1 made a
surreptitious attempt to register the Ravin trademark in its
own name, which would be a breach of the material clauses
of the JVA.
(4) That the tribunal has acted contrary to the admissions made D
by expert witnesses of both parties, both of whom stated
that ACPL - a company acquired by the parent of
Respondent No.1 - was in competition with Ravin, and that
this would therefore vitiate the award. In addition, since
the most material evidence with regard to the acquisition of
ACPL was ignored by the tribunal, this would also vitiate E
the award. Insofar as ACPL was concerned, Respondent
No.1’s failure to produce documents that were with ACPL
ought to have led to an adverse inference being drawn
against Respondent No.1, which was not done by the learned
arbitrator. F
(5) The tribunal was perverse in considering the issue of material
breach in that it applied the maxim de minimus non curat
lex to ACPL, being a small specialist cable business.
(6) That a perverse interpretation of the JVA was given by the
learned arbitrator in the First Partial Final Award of clause G
21.1, stating that it only prohibited long-term arrangements
and engagements, which was a condition added by the
arbitrator himself into the said clause.
(7) So far as direct sales of Respondent No.1 in India were
concerned, the tribunal ignored material evidence and H
admissions of Respondent No.1.
378 SUPREME COURT REPORTS [2020] 4 S.C.R.

A (8) That the tribunal’s analysis of the contemporaneous conduct
of the parties was both selective and perverse, that the
consideration of the evidence of key witnesses was also
selective and perverse.
(9) That Deloitte was a conflicted valuer and should not have
B been appointed at all. The valuer adopted a course for valuation
that is contrary to both parties’ position, in that, Ravin’s 49%
shareholding in Power Plus which had been valued by another
valuer ‘BDO’ at INR 563 crores was completely ignored. What
is very important is that the tribunal had acted contrary to the
parties’ submissions in arriving at the valuation date, as the
C said date should have been the date closest to the date of the
actual sale of shares, instead of which, a 2017 award took a
date of September 2014 which date in any case expired by the
end of December 2014.
(10) That the ruling contained in the First and Second Partial
D Final Awards regarding interpretation of clause 21 of the JVA
were inconsistent and irreconcilable.
(11) That a private communication had been made of the
outcome of the arbitration by the tribunal two months prior to
the award, published through an agent of Respondent No.1,
E one M/s Gilbert Tweed Associates, which would show that
Respondent No.1 knew that the Second Partial Final Award
would be in its favour. The mere undertaking to terminate the
engagement of M/s Key2People as the agent, who in turn had
employed M/s Gilbert Tweed Associates, and an apology made
F by Respondent’s counsel, ought not to have been held to have
been sufficient to condone this lapse by the learned sole
arbitrator.
(12) That the award is in contravention of the Foreign Exchange
Management Act, 1999 (hereinafter referred to as “FEMA”)
G in that it directed the sale of shares of Ravin at a 10% discount,
which would be in the teeth of rule 21(2)(b)(iii) of the Foreign
Exchange Management (Non-Debt Instrument) Rules, 2019
(hereinafter referred to as “the Non-Debt Instrument Rules”).
27. Shri Nakul Dewan cited a large number of judgments largely
from Singapore, Hong Kong and the U.K. to buttress his submission
H
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[R. F. NARIMAN, J. ]

that an award which fails to deal with or make any determination on the A
claim of a party ought to be set aside on the ground contained in Section
48(2)(b) of the Arbitration Act, as it would be in breach of the audi
alteram partem principle, and also on the ground that it would shock the
conscience of the court, being contrary to a basic notion of justice in this
country. He also argued that where an award is directly contrary to
B
admitted facts, it would be perverse, and hence liable to be set side.
Also, where a party is unable to present its case on account of the
opposite party’s wilful failure to produce documents ordered, and the
tribunal’s failure to draw an adverse inference therefrom, on most material
aspects of the case, would render such award unenforceable.
28. He also cited judgments on awards which treat parties unequally C
in that they adopt disparate thresholds for determining material breach,
as a result of which an award read as a whole would be vulnerable on
account of egregious bias. Also, a private communication of the outcome
of the arbitration by the tribunal to one party to the exclusion of another
would fatally undermine the independence and impartiality of the D
arbitration process, rendering the award vulnerable on the ground of
bias.
29. Both Dr. Singhvi and Mr. Nakul Dewan, after setting out all
the aforesaid grounds and case law supporting such grounds, have
attacked the impugned High Court judgment, stating that a large number E
of these points were not answered by the High Court at all, and when
answered would show that even where there was bias, perversity and
breach of natural justice, all these grounds were merely brushed aside,
and therefore no real determination of all the points argued before the
High Court was at all undertaken by the learned Single Judge. As a
‘without prejudice’ argument, Dr. Singhvi exhorted us to modify the F
impugned award, in case he were to fail on all other arguments, to state
that the valuation date of 30.09.2014 ought at least to be the date of the
judgment delivered in this case, as otherwise the sale of the Karia block
of shares in Ravin would be at a tremendous undervalue. This he exhorted
us to do under Article 142 of the Constitution of India. G
30. Shri Kapil Sibal, learned senior advocate appearing on behalf
of the Respondent No.1, read to us in copious detail each of the four
awards delivered by the arbitral tribunal. He argued that each and every
aspect of the matter that was argued on both sides was considered in
detail in each of the said awards. He stressed the fact that though H
380 SUPREME COURT REPORTS [2020] 4 S.C.R.

A available, no challenge was ever made in the courts in England to the
four awards. He defended the judgment of the learned Single Judge of
the High Court and said that if the awards were read, it would be clear
that the arbitrator adopted an extremely balanced approach, despite
extreme provocation from Shri Vijay Karia, who only started alleging
bias when he realized that the ‘Second Partial Final Award’ relating to
B
who was in material breach, would be decided against him. Despite this,
the learned arbitrator dispassionately considered every single claim and
counter-claim made by the parties. This being the case, none of the
grounds mentioned in Section 48 of the Arbitration Act would be available
in the form of objections to such well-reasoned and balanced awards. In
C particular, Shri Sibal stressed that since the decision of this Court in
Renusagar Power Plant Co. Ltd. v. General Electric Co. (1994)
Supp (1) SCC 644, any interference on the merits of the decision of the
arbitral tribunal would be outside the ken of Section 48 of the Arbitration
Act. Shri Sibal stressed the fact that Dr. Singhvi had argued this matter
as if it was a first appeal on merits, and that each and every ground
D
taken, if properly viewed, was really to invite this Court to interfere on
the merits of the awards, which would be clearly outside the grounds
contained in Section 48 of the Arbitration Act.
31. Shri Sibal stressed the fact that the central point of this case
was as to who was in material breach of the provisions of the JVA.
E Once the learned arbitrator held that it was the Appellants and not the
Respondent No.1 who materially breached the terms of the JVA, in that
post the integration period, the appointed CEO, who was to be in-charge
of the day to day affairs of Ravin, was never allowed to take over such
charge, would make it clear that this most material breach committed by
F the Appellants on facts, as held by the learned arbitrator, could not be
interfered with given the parameters of the Court’s jurisdiction under
Section 48 of the Arbitration Act. Once this was so, everything else
followed, as a result of which it was the Respondent No.1 who was to
buy-out the Appellants’ 49% stake in Ravin at a price arrived at by a
well-known independent valuer, Deloitte, at a date that was correctly
G fixed by the arbitral tribunal. This being the heart of the case, all the
contentions of Dr. Singhvi raising objections to the four awards in question
must fall, as every argument, though dressed up as arguments falling
within three grounds under Section 48, are really arguments addressing
the merits of the case. Without prejudice to this central argument, Shri
H Sibal took up every single point that was argued and answered each
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point. So far as the Jaguar Communication Consultancy Services Private A
Limited point was concerned, Shri Sibal stated that at no point did the
Appellant amend its counter-claim to include such argument, which was
in fact raised orally as an afterthought at the fag end of the proceedings.
Secondly, as Shri Sibal’s case of ouster was accepted by the arbitral
tribunal, the claim of the Appellants that it was really the other way
B
around was specifically addressed by the learned arbitrator and dismissed,
inter alia on the ground that ouster was not at all pleaded by the
Appellants. So far as the Ravin trademark is concerned, it is clear that
the Appellant’s own counsel made it clear that he would not be pressing
the point – the point being as to whether it was at all open to go into
registration of trademark of Ravin under separate license agreements C
which had separate arbitration clauses for arbitration in Italy. This was
argued by both sides and dealt with by the arbitrator as a jurisdictional
issue which was turned down by the arbitrator stating that the registration
of the Ravin trademark was an issue which would be outside the JVA
and hence not arbitrable. So far as ACPL was concerned, the learned
D
arbitrator made it clear that Shri Vijay Karia knew all along that ACPL
would come to Respondent No.1 as a result of the ‘Draka acquisition’
and never objected, but in fact congratulated the Respondent No.1 on
making such acquisition. That ACPL was in a competing business was
taken much later as an afterthought, Shri Vijay Karia admitting in cross-
examination that ACPL’s business was so small that it could be E
disregarded altogether. Also, Shri Sibal adverted to a Procedural Order
made by the learned arbitrator, in which it was stated that since ACPL
was not a party to the arbitration, the Appellants could approach the
Court in England to get a direction that ACPL produce the documents
asked for by them. This was never done. Further, Shri Sibal made it
F
clear that ACPL was not a subsidiary of Respondent No.1, but was an
indirect subsidiary of Respondent No.1’s parent company, consequent
upon the ‘Draka acquisition’, with a separate Board of Directors; and
being a different person in law and fact, who is not a party to the arbitral
proceedings, the learned arbitrator’s Procedural Order, which was never
challenged and never followed, was a complete answer to the contention G
that an adverse inference ought to be drawn. So far as the interpretation
of the JVA was concerned, Shri Sibal made it clear that it was interpreted
fairly, given the fact that there was no challenge to any part of the First
Partial Final Award, except the interpretation given to Clause 21.1, which
was an interpretation given by the learned arbitrator keeping in mind the
H
382 SUPREME COURT REPORTS [2020] 4 S.C.R.

A commercial background and commercial efficacy doctrine. According
to Shri Sibal, not only was it a possible interpretation, it was also a correct
interpretation. So far as the direct sales of Respondent No.1 in India
were concerned, the tribunal took into account all the material evidence
and dismissed, after a full hearing, the counter-claim of the Appellants in
this behalf. When it came to the Final Award, Shri Sibal pointed out that
B
on facts Deloitte was appointed by consent long after the valuer that
was chosen by lots finally stated its inability to conduct the valuation due
to the Appellants dragging their feet in this behalf. Secondly, such valuation
was conducted strictly as per the formula contained in the JVA, which
was Clause 17.1 read with Schedule X of the JVA. He was at pains to
C point out that though Power Plus Company LLC (hereinafter referred
to as “Power Plus”) was mentioned specifically in the JVA, yet nothing
about Power Plus was mentioned in the formula for valuation. Shri Sibal
also refuted any so called inconsistencies in the awards, stating that
given the interpretation of the JVA by the arbitrator in the First Partial
Final Award, all the awards that followed were in accord with the
D
interpretation so given. He also stated that the arbitrator considered
material breach with an even hand and arrived at the obvious conclusion
on facts that since the CEO was never allowed to function, it was the
Appellants and not the Respondent No.1 who had materially breached
the terms of the JVA. Shri Sibal then went into the bogey raised re
E M/s. Gilbert Tweed Associates. He maintained that the Respondent No.1
had no idea as to who M/s Gilbert Tweed Associates was and came to
know that the agent, M/s Key2People, who was employed by the
Respondent No.1, had in turn employed M/s Gilbert Tweed Associates,
who published an advertisement to employ certain persons. From this, to
jump to and try to make out a ground that the arbitrator was biased is a
F
huge leap not warranted either in fact or law. Shri Sibal then argued that
the award, in that it directed a sale of shares at a 10% discount, did not
in any manner contravene the Foreign Exchange Management Act, 1999
and Rules thereunder. He took us through the relevant Rules and argued
that unlike the Foreign Exchange Regulation Act, 1973 (hereinafter
G referred to as “FERA”), FEMA did not contain Section 47 of FERA
which voided agreements that were made contrary to FERA. According
to him, the FEMA regime is a permissive regime and any violation of the
Rules could be monitored by the Reserve Bank of India by way of a
direction of the sale of the shares without the discount, if at all. In any
case, the Appellants would be estopped from taking this plea, having
H
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[R. F. NARIMAN, J. ]

entered into a solemn agreement with the Respondent No.1 which they A
cannot go against. In any case, at worst, a violation of the Rules made
under FEMA, by which shares would be sold not at market price but at
something lower, contrary to the Rules, would also amount to a mere
violation of law, which is far removed from a violation of any fundamental
policy of Indian law, as foreign exchange is coming into the country and
B
not going out therefrom.
32. Shri K.V. Viswanathan, learned senior advocate appearing on
behalf of the Respondent No. 1, also supported the submissions made
by Shri Sibal. In particular, he dealt with the judgments cited by Shri
Nakul Dewan and cited judgments of his own to show that the parameters
contained in Section 48 of the Arbitration Act for resisting enforcement C
of foreign awards are extremely narrow, and the Court can in no
circumstance go into the merits of a foreign award. He was at pains to
point out that as a full hearing had been given and every opportunity
extended by the learned arbitrator to both parties, no ground relatable to
breach of natural justice or any prejudice as a result was made out on D
the facts. He then made it clear that public policy must be understood in
the narrow sense as understood and exposited by Renusagar (supra)
and the later decisions of this Court. There was also nothing in the awards
that would shock the conscience of the Court to attract the most basic
notions of justice exception contained in Section 48.
E
Enforcement of Foreign Awards under Section 48
33. Having heard learned counsel on both sides, it is important to
first set out the relevant parts of Section 48 of the Arbitration Act. Section
48 reads as follows:
“48.Conditions for enforcement of foreign awards.—(1) F
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 —
xxx xxx xxx
G
(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;
xxx xxx xxx
H
384 SUPREME COURT REPORTS [2020] 4 S.C.R.

A (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
(b) the enforcement of the award would be contrary to the public
B policy of India.
Explanation 1.—For the avoidance of any doubt, it is clarified that
an award is in conflict with the public policy of India, only if,—
(i) the making of the award was induced or affected by fraud or
C corruption or was in violation of section 75 or section 81; or
(ii) it is in contravention with the fundamental policy of Indian
law; or
(iii) it is in conflict with the most basic notions of morality or justice.
Explanation 2.—For the avoidance of doubt, the test as to whether
D
there is a contravention with the fundamental policy of Indian law
shall not entail a review on the merits of the dispute.”
34. One of the first judgments which construed pari materia
provisions in the Foreign Awards Act, 1961 was the celebrated judgment
in Renusagar (supra). This judgment was given pride of place in the
E recent judgment of Ssangyong Engineering & Construction Co.
Ltd. v. National Highways Authority of India (NHAI) Civil Appeal
No. 4779 of 2019, in which this court referred to Renusagar (supra) as
follows:
“33. In Renusagar (supra), this Court dealt with a challenge to a
F foreign award under Section 7 of the Foreign Awards (Recognition
and Enforcement) Act, 1961 [“Foreign Awards Act”]. The
Foreign Awards Act has since been repealed by the 1996 Act.
However, considering that Section 7 of the Foreign Awards Act
contained grounds which were borrowed from Article V of the
G Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, 1958 [“New York Convention”], which is almost in
the same terms as Sections 34 and 48 of the 1996 Act, the said
judgment is of great importance in understanding the parameters
of judicial review when it comes to either foreign awards or
international commercial arbitrations being held in India, the grounds
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[R. F. NARIMAN, J. ]

for challenge/refusal of enforcement under Sections 34 and 48, A
respectively, being the same. 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:
B
“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 C
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 D
Geneva Convention suffered from certain defects which
hampered the speedy settlement of disputes through 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 E
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 F
(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 G
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 H
386 SUPREME COURT REPORTS [2020] 4 S.C.R.

A 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 task 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
B
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.
C 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
D 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
E 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
impeach the award on merits.
F xxx xxx xxx
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,
G 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
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[R. F. NARIMAN, J. ]

of the foreign award must not be contrary to the public policy A
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.
B
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 public policy C
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 D
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 E
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 F
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.”
G
(emphasis supplied)
35. The judgment of Shri Lal Mahal Ltd. v. Progetto Grano
SPA (2014) 2 SCC 433 is important in that it made it clear that the
Renusagar (supra) position would continue to apply to cases which
arose under Section 48(2)(b), the wider meaning given “to public policy H
388 SUPREME COURT REPORTS [2020] 4 S.C.R.

A of India” in the domestic sphere not being applicable. In doing so it
overruled the judgment in Phulchand Exports Ltd. v. O.O.O Patriot
(2011) 10 SCC 300 as follows:
“28. We are not persuaded to accept the submission of
Mr. Rohinton F. Nariman that the expression “public policy of
B India” in Section 48(2)(b) is an expression of wider import than
the “public policy” in Section 7(1)(b)(ii) of the Foreign Awards
Act. We have no hesitation in holding that Renusagar [Renusagar
Power Co. Ltd. v. General Electric Co., 1994 Supp (1) SCC
644] must apply for the purposes of Section 48(2)(b) of the 1996
Act. Insofar as the proceeding for setting aside an award under
C Section 34 is concerned, the principles laid down in Saw
Pipes [ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705] would
govern the scope of such proceedings.
29. We accordingly hold that enforcement of foreign award would
be refused under Section 48(2)(b) only if such enforcement would
D be contrary to (1) fundamental policy of Indian law; or (2) the
interests of India; or (3) justice or morality. The wider meaning
given to the expression “public policy of India” occurring in Section
34(2)(b)(ii) in Saw Pipes [ONGC Ltd. v. Saw Pipes Ltd., (2003)
5 SCC 705] is not applicable where objection is raised to the
E enforcement of the foreign award under Section 48(2)(b).
30. It is true that in Phulchand Exports [Phulchand Exports
Ltd. v. O.O.O. Patriot, (2011) 10 SCC 300 : (2012) 1 SCC (Civ)
131] a two-Judge Bench of this Court speaking through one of us
(R.M. Lodha, J.) accepted the submission made on behalf of the
F appellant therein that the meaning given to the expression “public
policy of India” in Section 34 in Saw Pipes [ONGC Ltd. v. Saw
Pipes Ltd., (2003) 5 SCC 705] must be applied to the same
expression occurring in Section 48(2)(b) of the 1996 Act. However,
in what we have discussed above it must be held that the statement
in para 16 of the Report that the expression “public policy of India
G used in Section 48(2)(b) has to be given a wider meaning and the
award could be set aside, if it is patently illegal” does not lay
down correct law and is overruled.
xxx xxx xxx

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VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 389
[R. F. NARIMAN, J. ]

45. Moreover, Section 48 of the 1996 Act does not give an A
opportunity to have a “second look” at the foreign award in the
award enforcement stage. The scope of inquiry under Section 48
does not permit review of the foreign award on merits. Procedural
defects (like taking into consideration inadmissible evidence or
ignoring/rejecting the evidence which may be of binding nature)
B
in the course of foreign arbitration do not lead necessarily to excuse
an award from enforcement on the ground of public policy.
46. In what we have discussed above, even if it be assumed that
the Board of Appeal erred in relying upon the report obtained by
the buyers from Crepin which was inconsistent with the terms on
which the parties had contracted in the contract dated 12-5-1994 C
and wrongly rejected the report of the contractual agency, in our
view, such errors would not bar the enforceability of the appeal
awards passed by the Board of Appeal.”
36. In LMJ International Ltd. v. Sleepwell Industries (2019)
5 SCC 302, an ex-parte award was passed in London which was sought D
to be executed by the Respondents in the High Court of Calcutta. The
learned Single Judge of the High Court passed a common order in the
execution cases rejecting objections taken regarding the maintainability
of the applications. Against this, a review petition was rejected by the
High Court and so were Special Leave Petitions before this Court. What E
was argued before this Court was that grounds as to maintainability had
been taken, as a result of which grounds under Section 48 of the
Arbitration Act were not actually argued as objections before the Single
Judge. This plea of the appellant was rejected by this Court, given the
object of Section 48 of the Act. Since the appellant “might and “ought”
to have taken these grounds, before the learned Single Judge these F
grounds were barred by an application of doctrine of constructive res
judicata as follows:
“17. Be that as it may, the grounds urged by the petitioner in the
earlier round regarding the maintainability of the execution case
could not have been considered in isolation and dehors the issue G
of enforceability of the subject foreign awards. For, the same
was intrinsically linked to the question of enforceability of the
subject foreign awards. In any case, all contentions available to
the petitioner in that regard could and ought to have been raised
specifically and, if raised, could have been examined by the Court H
390 SUPREME COURT REPORTS [2020] 4 S.C.R.

A at that stage itself. We are of the considered opinion that the
scheme of Section 48 of the Act does not envisage piecemeal
consideration of the issue of maintainability of the execution case
concerning the foreign awards, in the first place; and then the
issue of enforceability thereof. Whereas, keeping in mind the
legislative intent of speedy disposal of arbitration proceedings and
B
limited interference by the courts, the Court is expected to consider
both these aspects simultaneously at the threshold. Taking any
other view would result in encouraging successive and multiple
round of proceedings for the execution of foreign awards. We
cannot countenance such a situation keeping in mind the avowed
C object of the Arbitration and Conciliation Act, 1996, in particular,
while dealing with the enforcement of foreign awards. For, the
scope of interference has been consciously constricted by the
legislature in relation to the execution of foreign awards. Therefore,
the subject application filed by the petitioner deserves to be
rejected, being barred by constructive res judicata, as has been
D
justly observed by the High Court in the impugned judgment.
xxx xxx xxx
20. Suffice it to observe that the Arbitral Tribunal has considered
all aspects of the matter and even if it has committed any error,
E the same could, at best, be a matter for correction by way of
appeal to be resorted to on grounds as may be permissible under
the English law, by which the subject arbitration proceedings are
governed. We may not be understood to have expressed any
opinion on the correctness of those issues.”

F 37. At this stage it is important to advert to amendments that
were made by the Arbitration and Conciliation (Amendment) Act, 2015
(hereinafter referred to as the “2015 Amendment Act”). Section 48 was
amended to delete the ground of “contrary to the interest of India”.
Also, what was important was to reiterate the Renusagar (supra) position,
that the test as to whether there is a contravention with the fundamental
G policy of Indian law shall not entail a review on the merits of the dispute
(vide Explanation 2 to Section 48(2)).
38. It will be noticed that in the context of challenge to domestic
awards, Section 34 of the Arbitration Act differentiates between
international commercial arbitrations held in India and other arbitrations
H held in India. So far as “the public policy of India” ground is concerned,
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 391
[R. F. NARIMAN, J. ]

both Sections 34 and 48 are now identical, so that in an international A
commercial arbitration conducted in India, the ground of challenge relating
to “public policy of India” would be the same as the ground of resisting
enforcement of a foreign award in India. Why it is important to advert to
this feature of the 2015 Amendment Act is that all grounds relating to
patent illegality appearing on the face of the award are outside the scope
B
of interference with international commercial arbitration awards made
in India and foreign awards whose enforcement is resisted in India. In
this respect, it is important to advert to paragraphs 30 and 43 of
Ssangyong (supra) as follows:
“30. What is important to note is that a decision which is perverse,
as understood in paragraphs 31 and 32 of Associate Builders C
(supra), while no longer being a ground for challenge under “public
policy of India”, would certainly amount to a patent illegality
appearing on the face of the award. Thus, a finding based on no
evidence at all or an award which ignores vital evidence in arriving
at its decision would be perverse and liable to be set aside on the D
ground of patent illegality. Additionally, a finding based on
documents taken behind the back of the parties by the arbitrator
would also qualify as a decision based on no evidence inasmuch
as such decision is not based on evidence led by the parties, and
therefore, would also have to be characterised as perverse.
E
xxx xxx xxx
43. We therefore hold, following the aforesaid authorities, that in
the guise of misinterpretation of the contract, and consequent
“errors of jurisdiction”, it is not possible to state that the arbitral
award would be beyond the scope of submission to arbitration if F
otherwise the aforesaid misinterpretation (which would include
going beyond the terms of the contract), could be said to have
been fairly comprehended as “disputes” within the arbitration
agreement, or which were referred to the decision of the arbitrators
as understood by the authorities above. If an arbitrator is alleged
to have wandered outside the contract and dealt with matters not G
allotted to him, this would be a jurisdictional error which could be
corrected on the ground of “patent illegality”, which, as we have
seen, would not apply to international commercial arbitrations that
are decided under Part II of the 1996 Act. To bring in by the
backdoor grounds relatable to Section 28(3) of the 1996 Act to be H
392 SUPREME COURT REPORTS [2020] 4 S.C.R.

A matters beyond the scope of submission to arbitration under Section
34(2)(a)(iv) would not be permissible as this ground must be
construed narrowly and so construed, must refer only to matters
which are beyond the arbitration agreement or beyond the
reference to the arbitral tribunal.”
B This statement of the law applies equally to Section 48 of the
Arbitration Act.
39. Indeed, this approach has commended itself in other
jurisdictions as well. Thus, in Sui Southern Gas Co. Ltd. v. Habibullah
Coastal Power Co. (2010) SGHC 62, the Singapore High Court, after
C setting out the legislative policy of the Model Law that the ‘public policy’
exception is to be narrowly viewed and that an arbitral award that shocks
the conscience alone would be set aside, went on to hold:
“48. It is clear, therefore, that in order for SSGC to have succeeded
on the public policy argument, it had to cross a very high threshold
D and demonstrate egregious circumstances such as corruption,
bribery or fraud, which would violate the most basic notions of
morality and justice. Nothing of the sort had been pleaded or proved
by SSGC, and its ambiguous contention that the Award was
“perverse” or “irrational” could not, of itself, amount to a breach
of public policy.”
E
General approach to enforcement and recognition of
Foreign Awards
40. The USA was a late signatory to the New York Convention,
acceding to the Convention only in 1970. However, in an early judgment
F of the U.S Court of Appeals, Second Circuit, namely Parsons &
Whittemore Overseas Co. v. Societe Generale De L’Industrie
Du Papier 508 F.2d 969 (1974), the Court in a succinct paragraph pointed
out the change made by the New York Convention when compared with
the older Geneva Convention of 1927 as follows:
“In 1958 the Convention was adopted by 26 of the 45 states
G
participating in the United Nations Conference on Commercial
Arbitration held in New York. For the signatory state, the New
York Convention superseded the Geneva Convention of 1927, 92
League of Nations Treaty Ser. 302.The 1958 Convention’s basic
thrust was to liberalize procedures for enforcing foreign arbitral
H awards: While the Geneva Convention placed the burden of proof
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 393
[R. F. NARIMAN, J. ]

on the party seeking enforcement of a foreign arbitral award and A
did not circumscribe the range of available defences to those
enumerated in the convention, the 1958 Convention clearly shifted
the burden of proof to the party defending against enforcement
and limited his defenses to seven set forth in Article V. See Contini,
International Commercial Arbitration, 8 Am.J.Comp.L. 283, 299
B
(1959). Not a signatory to any prior multilateral agreement on
enforcement of arbitral awards, the United States declined to sign
the 1958 Convention at the outset. The United States ultimately
acceded to the Convention, however, in 1970, (1970) 3 U.S.T.
2517, T.I.A.S. No. 6997, and implemented its accession with 9
U.S.C. 201-208. Under 9 U.S.C. 208, the existing Federal C
Arbitration Act, 9 U.S.C. 1-14, applies to the enforcement of
foreign awards except to the extent to which the latter may conflict
with the Convention. See generally, Comment, International
Commercial Arbitration under the United Nations Convention and
the Amended Federal Arbitration Statute, 47 Wash.L.Rev. 441
D
(1972).”
The Court then went on to hold:
“Perhaps more probative, however, are the inferences to be drawn
from the history of the Convention as a whole. The general
pro-enforcement bias informing the Convention and explaining its E
supersession of the Geneva Convention points toward a narrow
reading of the public policy defense. An expansive construction
of this defense would vitiate the Convention’s basic effort to
remove pre-existing obstacles to enforcement. See Straus,
Arbitration of Disputes between Multinational Corporations, in
New Strategies for Peaceful Resolution of International Business F
Disputes 114-15 (1971); Digest of Proceedings of International
Business Disputes Conference, April 14, 1971, in id. at 191
(remarks of Professor W. Reese). Additionally, considerations of
reciprocity— considerations given express recognition in the
Convention itself — counsel courts to invoke the public policy G
defense with caution lest foreign courts frequently accept it as a
defense to enforcement of arbitral awards rendered in the United
States.
We conclude, therefore, that the Convention’s public policy
defense should be construed narrowly. Enforcement of foreign H
394 SUPREME COURT REPORTS [2020] 4 S.C.R.

A arbitral awards may be denied on this basis only where
enforcement would violate the forum state’s most basic notions
of morality and justice.
xxx xxx xxx
Although the Convention recognizes that an award may not be
B enforced where predicated on a subject matter outside the
arbitrator’s jurisdiction, it does not sanction second-guessing the
arbitrator’s construction of the parties’ agreement. The appellant’s
attempt to invoke this defense, however, calls upon the court to
ignore this limitation on its decision-making powers and usurp the
C arbitrator’s role. The district court took a proper view of its own
jurisdiction in refusing to grant relief on this ground.”
(emphasis supplied)
41. This judgment was followed in Compagnie des Bauxites
de Guinee v. Hammermills Inc. (1992) WL 122712 where the US
D District Court, District of Colombia followed Parsons (supra) as follows:
“The principal purpose of the Convention and its implementation
by Congress was to “remove pre-existing obstacles to
enforcement” of foreign arbitration awards. Parsons &
Whittemore Overseas Co. v. Societe Generale de L’Industrie
E du Papier, 508 F.2d 969, 973 (2d Cir.1974). To facilitate this policy,
which applies with special force in the field of international
commerce, see Mitsubishi Motors Corp. v. Soler Chrysler–
Plymouth, Inc., 473 U.S. 614, 625 (1985), the courts have
developed a “general pro-enforcement bias,” Parsons &
F Whittemore Overseas Co., 508 F.2d at 973, under which the burden
of proof rests on the party challenging the arbitration award,
Dworkin Cosell Interair Courier Servs., Inc. v. Avraham, 728
F.Supp. 156, 158 (S.D.N.Y.1989); Overseas Private Invest.
Corp. v. Anaconda Co., 418 F.Supp. 107, 110 (D.D.C.1976),
and the grounds for refusing to recognize arbitral awards are
G narrowly construed, Parsons & Whittemore Overseas Co., 508
F.2d at 976–77.
xxx xxx xxx
The few courts to address this provision of the Convention have
concluded that the provision “essentially sanctions the application
H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 395
[R. F. NARIMAN, J. ]

of the forum state’s standards of due process.” See Parsons & A
Whittemore Overseas Co., 508 F.2d at 975; Geotech Lizenz AG
v. Evergreen Systems, Inc., 697 F.Supp. 1248, 1263
(E.D.N.Y.1988) (citing Parsons & Whittemore Overseas Co.).
Due process requires notice “reasonably calculated, under all the
circumstances, to apprise interested persons of the pendency of
B
the action and afford them an opportunity to present their
objections.” Mullane v. Central Hanover Bank & Trust Co.,
339 U.S. 306, 314 (1950).”
42. In Certain Underwriters at Lloyd’s London v. BCS Ins.
Co. 239 F.Supp.2d 812 (2003), the US District Court, N.D Illinois referred
to the Federal Arbitration Act and went on to hold that the review of a C
panel decision is “grudgingly narrow”. (See paragraphs 2 and 3).
43. In Karaha Bodas Co., L.L.C v. Perusahaan Pertambagan
Minyak 364 F.3d 274 (2004), the United States Court of Appeals for
the 5th Circuit analysed the New York Convention thus:
D
“The New York Convention provides a carefully structured
framework for the review and enforcement of international arbitral
awards. Only a court in a country with primary jurisdiction over
an arbitral award may annul that award. Courts in other countries
have secondary jurisdiction; a court in a country with secondary
jurisdiction is limited to deciding whether the award may be E
enforced in that country. The Convention “mandates very different
regimes for the review of arbitral awards (1) in the countries in
which, or under the law of which, the award was made, and (2) in
other countries where recognition and enforcement are sought.”
Under the Convention, “the country in which, or under the F
arbitration law of which, an award was made” is said to have
primary jurisdiction over the arbitration award. All other signatory
states are secondary jurisdictions, in which parties can only contest
whether that state should enforce the arbitral award. It is clear
that the district court had secondary jurisdiction and considered
only whether to enforce the Award in the United States. G
Article V enumerates specific grounds on which a court with
secondary jurisdiction may refuse enforcement. In contrast to the
limited authority of secondary-jurisdiction courts to review an
arbitral award, courts of primary jurisdiction, usually the courts of
the country of the arbitral situs, have much broader discretion to H
396 SUPREME COURT REPORTS [2020] 4 S.C.R.

A set aside an award. While courts of a primary jurisdiction country
may apply their own domestic law in evaluating a request to annul
or set aside an arbitral award, courts in countries of secondary
jurisdiction may refuse enforcement only on the grounds specified
in Article V.
B The New York Convention and the implementing legislation,
Chapter 2 of the Federal Arbitration Act (“FAA”), provide that a
secondary jurisdiction court must enforce an arbitration award
unless it finds one of the grounds for refusal or deferral of
recognition or enforcement specified in the Convention. The Court
may not refuse to enforce an arbitral award solely on the ground
C that the arbitrator may have made a mistake of law or fact. “Absent
extraordinary circumstances, a confirming court is not to reconsider
an arbitrator’s findings.” The party defending against enforcement
of the arbitral award bears the burden of proof. Defences to
enforcement under the New York Convention are construed
D narrowly “to encourage the recognition and enforcement of
commercial arbitration agreements in international contracts…””
(emphasis supplied)
44. Likewise, in Admart AG v. Stephen and Mary Birch
Foundation Inc. 457 F.3d 302 (2006), the U.S Court of Appeals, 3rd
E Circuit, after setting out Article V of the New York Convention, held as
follows:
“To carry out the policy favoring enforcement of foreign arbitral
awards, courts have strictly applied the Article V defenses and
generally view them narrowly. See China Minmetals, 334 F.3d
F at 283. In Yusuf Ahmed Alghanim & Sons, W.L.L. v. Toys “R”
Us, Inc., 126 F.3d 15 (2d Cir.1997), the court emphasized the
limited power of review granted to district courts under the
Convention. The court examined the distinction between awards
rendered in the same nation as the site of the arbitral proceeding
G and those rendered in a foreign country. The court concluded that
more flexibility was available when the arbitration site and the
site of the confirmation proceeding were within the same
jurisdiction. Id. at 22–23. However, “the [C]onvention is equally
clear that when an action for enforcement is brought in a foreign
state, the state may refuse to enforce the award only on the grounds
H explicitly set forth in Article V of the Convention.” Id. at 23.
xxx xxx xxx
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 397
[R. F. NARIMAN, J. ]

In the same vein, in Parsons & Whittemore Overseas Co., Inc. A
v. Societe Generale de L’Industrie du Papier (RAKTA), 508
F.2d 969 (2d Cir.1974), the Court of Appeals reviewed the grounds
for refusal contained in the Convention and said that the public
policy defense is available “only where enforcement would violate
the forum state’s most basic notions of morality and justice.” Id.
B
at 974. Similarly, the court noted that an award cannot be enforced
under the Convention where it is “predicated on a subject matter
outside the arbitrator’s jurisdiction,” but the Convention does not
“sanction second-guessing the arbitrator’s construction of the
parties’ agreement.” Id. at 977.”
45. The U.S cases show that given the “pro-enforcement bias” C
of the New York Convention, which has been adopted in Section 48 of
the Arbitration Act, 1996 - the burden of proof on parties seeking
enforcement has now been placed on parties objecting to enforcement
and not the other way around; in the guise of public policy of the country
involved, foreign awards cannot be set aside by second guessing the D
arbitrator’s interpretation of the agreement of the parties; the challenge
procedure in the primary jurisdiction gives more leeway to Courts to
interfere with an award than the narrow restrictive grounds contained in
the New York Convention when a foreign award’s enforcement is resisted.
Discretion of the Court to Enforce Foreign Awards E
46. Thus far, it is clear that enforcement of a foreign award may
under Section 48 of the Arbitration Act be refused only if the party
resisting enforcement furnishes to the Court proof that any of the stated
grounds has been made out to resist enforcement. The said grounds are
watertight – no ground outside Section 48 can be looked at. Also, the F
expression used in Section 48 is “may”. Shri Viswanathan has argued
that “may” would vest a discretion in a Court enforcing a foreign award
to enforce such award despite the fact that one or more grounds may
have been made out to resist enforcement. For this purpose, he relied
upon Sections 45 to 47, which contain the word “shall” in contradistinction
to the word “may”. He also relied upon Article V of the New York G
Convention which also uses the word “may”.
47. Gary Born in International Commercial Arbitration, Vol. II
(2009) puts it thus:
“No Obligation under New York Convention to Deny
H
Recognition of Awards
398 SUPREME COURT REPORTS [2020] 4 S.C.R.

A Nothing in the New York Convention requires a Contracting State
ever to deny recognition to an arbitral award. The Convention
requires only that Contracting States recognize awards (and
arbitration agreements) in specified circumstances. Nothing in
Article V, nor the basic structure and purpose of the Convention,
imposes the opposite obligation not to recognize an award (or
B
arbitration agreement).
Article III of the Convention requires Contracting States to
recognize arbitral awards made abroad, subject to procedural
requirements no more onerous than those for domestic awards,
provided that the minimal proof requirements of Article IV are
C satisfied. Articles V(I) and V(2) then provide exceptions to this
affirmative obligation, beginning with the prefatory statement that
“[r]ecognition and enforcement of the awards may be refused”
in certain circumstances. The most significant aspect of this
provision is its structure, which is to establish an affirmative
D obligation to recognize arbitral awards, subject to specified
exceptions – but not to establish an affirmative obligation to deny
recognition. Critically, the Article V(I) exceptions are just that:
exceptions to an affirmative obligation, and not affirmative
obligations in their own right.
E Although the matter can be debated, the text of Article V supports
this structural conclusion. The English language text of Article V
is unmistakably permissive, providing that Contracting States
“may” refuse recognition of an award; the Russian and Chinese
versions of the Convention are identical in meaning. The Spanish
version of Article V also indicates that recognition may be denied,
F without indicating that it must be. The only exception is the French
text, which has been relied on by some authorities as supposedly
establishing an obligation to deny recognition to awards that have
been annulled in the arbitral seat. In fact, the better view appears
to be that the French text is ambiguous, assuming that awards
G falling within one of Article V’s exceptions would not be enforced,
but not affirmatively requiring this result.
This is also consistent with Article VII of the Convention, which
provides that the Convention shall not “deprive any interested party
of any right he may have to avail himself of an arbitral award in
H the manner and to the extent allowed by the law or the treaties of
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 399
[R. F. NARIMAN, J. ]

the country where such award is sought to be relied upon.” This A
provision expresses a fundamental objective of the Convention –
which was to facilitate, not limit, the circumstances in which
international arbitral awards could be recognized. Indeed, there is
not a hint in the drafting history of the Convention of any intention
to prevent Contracting States from recognizing foreign awards
B
under provisions of local law that are more liberal than Article V.”
48. Redfern and Hunter on International Arbitration, 6th Edn.
(2015) states:
“11.59 Fourthly, even if grounds for refusal of recognition and
enforcement of an award are proved to exist, the enforcing court C
is not obliged to refuse enforcement. The opening lines of Article
V(1) and (2) of the Convention say that enforcement ‘may’ be
refused; they do not say that it ‘must’ be refused. The language is
permissive, not mandatory. The same is true of the Model Law.”
49. Likewise, Albert Jan van den Berg’s The New York D
Arbitration Convention of 1958 (1981) states:
“It is to be noted that the opening lines of both the first and the
second paragraph of Article V employ a permissive rather than
mandatory language: enforcement “may be” refused. For the first
paragraph it means that even if a party against whom the award E
is invoked proves the existence of one of the grounds for refusal
of enforcement, the court still has a certain discretion to overrule
the defence and to grant the enforcement of the award. Such
overruling would be appropriate, for example, in the case where
the respondent can be deemed to be estopped from invoking the
ground for refusal.” F
50. Russel on Arbitration, Sweet & Maxwell (24th Edn., 2015)
states:
“8-033 Opposing enforcement of a New York Convention
Award
G
As stated above, subject to production of the required documents
the court has no discretion but to recognise and enforce a New
York Convention award unless the party opposing enforcement
proves one or more of the grounds specified in s.103 of the
Arbitration Act 1996. These grounds of refusal are exhaustive,
H
400 SUPREME COURT REPORTS [2020] 4 S.C.R.

A and if none of the grounds is present the award will be enforced.
Much has been written about these grounds and a detailed analysis
of their international application is beyond the scope of this book
but they will be treated summarily in this chapter. The onus of
proving the existence of a ground rests upon the party opposing
enforcement, but that may not be the end of the matter. There is
B
an important public policy in the enforcement of awards and the
courts should only refuse to enforce an award under s.103 in a
clear case.
xxx xxx xxx
C 8-035 Discretion
The court also has a discretion to allow enforcement even in
circumstances where one or more of the grounds are made out.
This discretion is not to be exercised arbitrarily however because
the word “may” in s.103(2) is intended to refer to the corresponding
D word in the New York Convention. In any event the discretion is
a very narrow one. If one or more of the grounds in s.103(2) is
made out, the strong presumption is that the award will not be
enforced. The discretion to enforce notwithstanding will not be
exercised where the award in question was subject to a
fundamental or structural defect. The discretion may however be
E available where
“despite the original existence of one or more of the listed
circumstances, the right to rely on them had been lost by, for
example, another agreement or estoppel”,

F Or where there are circumstances
“which might on some recognisable legal principles affect the
prima facie right to have an award set aside arising in cases
listed in s.103(2).”
51. An interesting judgment of the U.K. Supreme Court is reported
G as Dallah Real Estate and Tourism Holding Co. v. The Ministry
of Religious Affairs, Government of Pakistan (2010) UKSC 46. In
this judgment - given the resistance to a foreign award in the U.K - the
discretion of a Court to enforce such award, even if grounds to resist the
award have been made out, was set out thus:
H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 401
[R. F. NARIMAN, J. ]

“Per Lord Mance: A
Discretion
67. Dallah has a fall-back argument, which has also failed in both
courts below. It is that s.103(2) of the 1996 Act and Article V(1)
of the New York Convention state that “Recognition and
enforcement of the award may be refused” if the person against B
whom such is sought proves (or furnishes proof of) one of the
specified matters. So, Miss Heilbron submits, it is open to a court
which finds that there was no agreement to arbitrate to hold that
an award made in purported pursuance of the non-existent
agreement should nonetheless be enforced. In Dardana Ltd v C
Yukos Oil Company [2002] 1 All ER (Comm) 819 I suggested
that the word “may” could not have a purely discretionary force
and must in this context have been designed to enable the court to
consider other circumstances, which might on some recognisable
legal principle affect the prima facie right to have enforcement or
recognition refused (paras 8 and 18). I also suggested as possible D
examples of such circumstances another agreement or estoppel.
68. S.103(2) and Article V in fact cover a wide spectrum of
potential objections to enforcement or recognition, in relation to
some of which it might be easier to invoke such discretion as the
word “may” contains than it could be in any case where the E
objection is that there was never any applicable arbitration
agreement between the parties to the award. Article II of the
Convention and ss.100(2) and 102(1) of the 1996 Act serve to
underline the (in any event obviously fundamental) requirement
that there should be a valid and existing arbitration agreement F
behind an award sought to be enforced or recognised. Absent
some fresh circumstance such as another agreement or an
estoppel, it would be a remarkable state of affairs if the word
“may” enabled a court to enforce or recognise an award which it
found to have been made without jurisdiction, under whatever
law it held ought to be recognised and applied to determine that G
issue.
69. The factors relied upon by Dallah in support of its suggestion
that a discretion should be exercised to enforce the present award
amount for the most part to repetition of Dallah’s arguments for
H
402 SUPREME COURT REPORTS [2020] 4 S.C.R.

A saying that there was an arbitration agreement binding on the
Government, or that an English court should do no more than
consider whether there was a plausible or reasonably supportable
basis for its case or for the tribunal’s conclusion that it had
jurisdiction. But Dallah has lost on such points, and it is impossible
to re-deploy them here. The application of s.103(2) and Article
B
V(1) must be approached on the basis that there was no arbitration
agreement binding on the Government and that the tribunal acted
without jurisdiction. General complaints that the Government did
not behave well, unrelated to any known legal principle, are equally
unavailing in a context where the Government has proved that it
C was not party to any arbitration agreement. There is here no scope
for reliance upon any discretion to refuse enforcement which the
word “may” may perhaps in some other contexts provide.
xxx xxx xxx
Per Lord Collins:
D
Discretion
126. The court before which recognition or enforcement is sought
has a discretion to recognise or enforce even if the party resisting
recognition or enforcement has proved that there was no valid
E arbitration agreement. This is apparent from the difference in
wording between the Geneva Convention on the Execution of
Foreign Arbitral Awards 1927 and the New York Convention. The
Geneva Convention provided (article 1) that, to obtain recognition
or enforcement, it was necessary that the award had been made
in pursuance of a submission to arbitration which was valid under
F the law applicable thereto, and contained (article 2) mandatory
grounds (“shall be refused”) for refusal of recognition and
enforcement, including the ground that it contained decisions on
matters beyond the scope of the submission to arbitration. Article
V(1)(a) of the New York Convention (and section 103(2)(b) of
G the 1996 Act) provides: “Recognition and enforcement of the award
may be refused …” See also van den Berg, p 265; Paulsson, May
or Must Under the New York Convention: An Exercise in
Syntax and Linguistics (1998) 14 Arb Int 227.
127. Since section 103(2)(b) gives effect to an international
convention, the discretion should be applied in a way which gives
H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 403
[R. F. NARIMAN, J. ]

effect to the principles behind the Convention. One example A
suggested by van den Berg, op cit, p 265, is where the party
resisting enforcement is estopped from challenge, which was
adopted by Mance LJ in Dardana Ltd v Yukos Oil Co [2002] 2
Lloyd’s Rep 326, para 8. But, as Mance LJ emphasised at para
18, there is no arbitrary discretion: the use of the word “may”
B
was designed to enable the court to consider other circumstances,
which might on some recognisable legal principle affect the prima
facie right to have an award set aside arising in the cases listed in
section 103(2). See also Kanoria v Guinness [2006] 1 Lloyd’s
Rep 701, para 25 per Lord Phillips CJ. Another possible example
would be where there has been no prejudice to the party resisting C
enforcement: China Agribusiness Development Corpn v Balli
Trading [1998] 2 Lloyd’s Rep 76. But it is not easy to see how
that could apply to a case where a party had not acceded to an
arbitration agreement.
128. There may, of course, in theory be cases where the English D
court would refuse to apply a foreign law which makes the
arbitration agreement invalid where the foreign law outrages its
sense of justice or decency (Scarman J’s phrase in In the Estate
of Fuld, decd (No 3) [1968] P 675, 698), for example where it is
discriminatory or arbitrary. The application of public policy in the
New York Convention (article V(2)(b)) and the 1996 Act (section E
103(3)) is limited to the non-recognition or enforcement of foreign
awards. But the combination of (a) the use of public policy to
refuse to recognise the application of the foreign law and (b) the
discretion to recognise or enforce an award even if the arbitration
agreement is invalid under the applicable law could be used to F
avoid the application of a foreign law which is contrary to the
court’s sense of justice.
xxx xxx xxx
130. In the United States the courts have refused to enforce
awards which have been set aside in the State in which the award G
was made, on the basis that the award does not exist to be
enforced if it has been lawfully set aside by a competent authority
in that State: Baker Marine (Nigeria) Ltd v Chevron (Nigeria)
Ltd, 191 F 3d 194 (2d Cir 1999); TermoRio SA ESP v Electranta
SP, 487 F 3d 928 (DC Cir 2007). But an Egyptian award which H
404 SUPREME COURT REPORTS [2020] 4 S.C.R.

A had been set aside by the Egyptian court was enforced because
the parties had agreed that the award would not be the subject of
recourse to the local courts: Chromalloy Aeroservices v Arab
Republic of Egypt, 939 F Supp 907 (DDC 1996). That decision
was based both on the discretion in the New York Convention,
article V(1) and on the power under article VII(1) (see Karaha
B
Bodas Co v Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, 335 F 3d 357, 367 (5th Cir 2003)) and whether it was
correctly decided was left open in TermoRio SA ESP v Electranta
SP, ante, at p 937.
131. The power to enforce notwithstanding that the award has
C been set aside in the country of origin does not, of course, arise in
this case. The only basis which Dallah puts forward for the exercise
of discretion in its favour is the Government’s failure to resort to
the French court to set aside the award. But Moore-Bick LJ was
plainly right in the present case (at para 61) to say that the failure
D by the resisting party to take steps to challenge the jurisdiction of
the tribunal in the courts of the seat would rarely, if ever, be a
ground for exercising the discretion in enforcing an award made
without jurisdiction. There is certainly no basis for exercising the
discretion in this case.”
E 52. A learned single judge of the Delhi High Court in Cruz City 1
Mauritius Holdings v. Unitech Limited (2017) 239 DLT 649, adverted
to this issue and held:
“28. Whilst this court accepts the contention that the use of the
word “may” as used in the context of Section 48 of the Act does
F not confer an absolute discretion on the courts, it is not possible to
accept that the word “may” should be read as “shall” and the
court is compelled to refuse enforcement, if any of the grounds
under Section 48 are established. First of all, the plain meaning of
the word “may” is not “shall”; it is used to imply discretion and
connote an option as opposed to compulsion.
G
29. In re, Nichols v. Baker: 59 LJ Ch 661, Cotton L.J. observed
that ‘“May’ can never mean must, so long as the English
language retains its meaning; but it gives a power and then it
may be a question, in what cases, when any authority or body

H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 405
[R. F. NARIMAN, J. ]

has a power given it by the word ‘may’, it becomes its duty to A
exercise that power”.
30. In Official Liquidator v. Dharti Dhan (P) Ltd.: (1977) 2 SCC
166 the Supreme Court had explained that in certain cases where
the legal and factual context in which the discretionary power is
to be exercised is specified, it is also annexed with a duty to exercise B
it in that manner. Keeping the aforesaid in mind, there can be no
cavil that since Section 48 of the Act enables the court to refuse
enforcement of a foreign award on certain grounds, this court
would be required to do so; however, if there are good reasons
founded on settled principles of law, the court is not precluded
from declining the same. The word “may” in Section 48(1) and C
(2) of the Act must be interpreted as used in a sense so as not to
fetter the courts to refuse enforcement of a foreign award even if
the grounds as set out in Section 48 are established, provided
there is sufficient reason to do so. Viewed from this perspective,
the considerations that this court may bear while examining grounds D
as set out under Section 48(1) (enacted to give effect to Article
V(1) of the New York convention) may be materially different
from the consideration that this court may bear while examining
the issue of declining enforcement of a foreign award on the
ground of public policy (Section 48(2) of the Act). Whereas the
grounds as set out under Section 48(1) essentially concern the E
structural integrity of the arbitral process and inter party rights
therefore considerations such as the conduct of parties, balancing
of the inter se rights etc are of material significance but such
considerations may not be of any significant relevance in
considering whether enforcing the award contravenes the public F
policy of India.
31. It is necessary to bear in mind that Section 48 of the Act is a
statutory expression of Article V of the New York Convention
and is similarly worded. The object of Article V of the New York
Convention is to enable the signatory States to retain the discretion G
to refuse enforcement of a foreign award on specified grounds
and none other; it does not compel the member States to decline
enforcement of foreign awards. Article V of the convention thus
sets out the maximum leeway available to member States to refuse
enforcement of a foreign award. This view has also been accepted
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406 SUPREME COURT REPORTS [2020] 4 S.C.R.

A by courts in the United States. In Chromalloy
Aeroservices. v. The Arab Republic of Egypt: 939 F. Supp. 907
(DDC 1996), an Egyptian award, which was set aside by an
Egyptian court, was enforced notwithstanding Article V(1)(e) of
the New York Convention.
B 32. The principle that courts may enforce a foreign award
notwithstanding that one or more of the specified grounds have
been established, is also accepted in the United Kingdom.
(See: China Agribusiness Development Corporation v. Balli
Trading: [1998] 2 Lloyd’s Rep 76).
C xxx xxx xxx
37. The grounds as set out in Section 48 of the Act for refusing
enforcement of the award encompass a wide spectrum of acts
and factors as they are set in broad terms. While in some cases,
it may be imperative to refuse the enforcement of the award while
D in some other, it may be manifestly unjust to do so. Section 48 is
enacted to give effect to Article V of the New York Convention,
which enables member States to retain some sovereign control
over enforcement of foreign awards in their territory. The ground
that enforcement of an award opposed to the national public policy
would be declined perhaps provides the strongest expression of a
E Sovereign’s reservation that its executive power shall not be used
to enforce a foreign award which is in conflict with its policy. The
other grounds mainly relate to the structural integrity of the arbitral
process with focus on inter party rights.
38. In terms of Sub-section (1) of Section 48 of the Act, the Court
F can refuse enforcement of a foreign award only if the party
resisting the enforcement furnishes proof to establish the grounds
as set out in Section 48(1) of the Act. However, the court may
refuse enforcement of a foreign award notwithstanding that a
party resisting the enforcement has not provided any/sufficient
G proof of contravention of public policy. In such cases, the Court is
not precluded from examining the question of public policy suo
motu and would refuse to enforce the foreign award that is found
to offend the public policy of India. The approach of the court
while examining whether to refuse enforcement of a foreign award
would also depend on the nature of the defence established.
H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 407
[R. F. NARIMAN, J. ]

39. Even where public policy considerations are to be weighed, it A
is not difficult to visualise a situation where both permitting as
well as declining enforcement would fall foul of the public policy.
Thus, even in cases where it is found that the enforcement of the
award may not conform to public policy, the courts may evaluate
and strike a balance whether it would be more offensive to public
B
policy to refuse enforcement of the foreign award - considering
that the parties ought to be held bound by the decision of the
forum chosen by them and there is finality to the litigation - or to
enforce the same; whether declining to enforce a foreign award
would be more debilitating to the cause of justice, than to enforce
it. In such cases, the court would be compelled to evaluate the C
nature, extent and other nuances of the public policy involved and
adopt a course which is less pernicious.
xxx xxx xxx
43. Thus, whilst there is no absolute or open discretion to reject
the request for declining to enforce a foreign award, it cannot be D
accepted that it is totally absent. The width of the discretion is
narrow and limited, but if sufficient grounds are established, the
court is not precluded from rejecting the request for declining
enforcement of a foreign award.”
53. When the grounds for resisting enforcement of a foreign award E
under Section 48 are seen, they may be classified into three groups –
grounds which affect the jurisdiction of the arbitration proceedings;
grounds which affect party interest alone; and grounds which go to the
public policy of India, as explained by Explanation 1 to Section 48(2).
Where a ground to resist enforcement is made out, by which the very F
jurisdiction of the tribunal is questioned - such as the arbitration agreement
itself not being valid under the law to which the parties have subjected it,
or where the subject matter of difference is not capable of settlement by
arbitration under the law of India, it is obvious that there can be no
discretion in these matters. Enforcement of a foreign award made without
jurisdiction cannot possibly be weighed in the scales for a discretion to G
be exercised to enforce such award if the scales are tilted in its favour.
54. On the other hand, where the grounds taken to resist
enforcement can be said to be linked to party interest alone, for example,
that a party has been unable to present its case before the arbitrator, and
which ground is capable of waiver or abandonment, or, the ground being H
408 SUPREME COURT REPORTS [2020] 4 S.C.R.

A made out, no prejudice has been caused to the party on such ground
being made out, a Court may well enforce a foreign award, even if such
ground is made out. When it comes to the “public policy of India” ground,
again, there would be no discretion in enforcing an award which is induced
by fraud or corruption, or which violates the fundamental policy of Indian
law, or is in conflict with the most basic notions of morality or justice. It
B
can thus be seen that the expression “may” in Section 48 can, depending
upon the context, mean “shall” or as connoting that a residual discretion
remains in the Court to enforce a foreign award, despite grounds for its
resistance having been made out. What is clear is that the width of this
discretion is limited to the circumstances pointed out hereinabove, in
C which case a balancing act may be performed by the Court enforcing a
foreign award.
The Natural Justice Ground under Section 48
55. Shri Sibal has argued that the expression “or was otherwise
unable to present his case” occurring in Section 48(1)(b) of the Act
D must be read along with the words preceding it noscitur a sociis, and,
given the fact that the grounds for resistance of enforcement have to be
construed narrowly in the case of ambiguity, this expression cannot
possibly go beyond the hearing before the arbitrator and to the award
rendered by the arbitrator. Shri Nakul Dewan, on the other hand, argued
E that the expression “unable to present his case” was co-terminus with
breach of natural justice which went to not only the hearing before the
arbitrator, but also to the award, in that, if the arbitrator were not to give
a finding on a material issue or were not to decide a claim or counter-
claim, this would breach the broader requirements of the audi alteram
partem rule of natural justice and would, therefore, be covered by Section
F 48(1)(b) of the Act.
56. This Court in Ssangyong (supra) has dealt with this aspect of
Section 48 as follows:
“37. Under the rubric of a party being otherwise unable to present
G its case, the standard textbooks on the subject have stated that
where materials are taken behind the back of the parties by the
Tribunal, on which the parties have had no opportunity to comment,
the ground under Section 34(2)(a)(iii) would be made out. In New
York Convention on the Recognition and Enforcement of
Foreign Arbitral Awards – Commentary, edited by Dr. Reinmar
H Wolff (C.H. Beck, Hart, Nomos Publishing, 2012), it is stated:
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 409
[R. F. NARIMAN, J. ]

“4. Right to Comment A
According to the principle of due process, the tribunal must grant
the parties an opportunity to comment on all factual and legal
circumstances that may be relevant to the arbitrators’ decision-
making.
a) Right to Comment on Evidence and Arguments B
Submitted by the Other Party
As part of their right to comment, the parties must be given an
opportunity to opine on the evidence and arguments introduced in
the proceedings by the other party. The right to comment on the
counterparty’s submissions is regarded as a fundamental tenet of C
adversarial proceedings. However, in accordance with the general
requirement of causality, the denial of an opportunity to comment
on a particular piece of evidence or argument is not prejudicial,
unless the tribunal relied on this piece of evidence or argument in
making its decision. D
In order to ensure that the parties can exercise their right to
comment effectively, the arbitral tribunal must grant them access
to the evidence and arguments submitted by the other side.
Affording a party the opportunity to make submissions or to give
its view without also informing it of the opposing side’s claims and E
arguments typically constitutes a violation of due process, unless
specific non-disclosure rules apply (e.g., such disclosure would
constitute a violation of trade secrets or applicable legal privileges).
In practice, national courts have afforded arbitral tribunals
considerable leeway in setting and adjusting the procedures by F
which parties respond to one another’s submissions and evidence,
reasoning that there were “several ways of conducting arbitral
proceedings.” Accordingly, absent any specific agreement by the
parties, the arbitral tribunal has wide discretion in arranging the
parties’ right to comment, permitting or excluding the introduction
of new claims, and determining which party may have the final G
word.
b) Right to Comment on Evidence Known to or Determined
by the Tribunal

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410 SUPREME COURT REPORTS [2020] 4 S.C.R.

A The parties’ right to comment also extends to facts that have not
been introduced in the proceedings by the parties, but that the
tribunal has raised sua sponte, provided it was entitled to do so.
For instance, if the tribunal gained “out of court knowledge” of
circumstances (e.g., through its own investigations), it may only
rest its decision on those circumstances if it informed both parties
B
in advance and afforded them the opportunity to comment thereon.
The same rule applies to cases where an arbitrator intends to
base the award on his or her own expert knowledge, unless the
arbitrator was appointed for his or her special expertise or
knowledge (e.g., in quality arbitration). Similarly, a tribunal must
C give the parties an opportunity to comment on facts of common
knowledge if it intends to base its decision on those facts, unless
the parties should have known that those facts could be decisive
for the final award.”(emphasis in original)
In Fouchard, Gaillard, Goldman on International Commercial
D Arbitration (Kluwer Law International, 1999) [“Fouchard”] it is
stated:
“In some rare cases, recognition or enforcement of an award has
been refused on the grounds of a breach of due process. One
example is the award made in a quality arbitration where the
E defendant was never informed of the identity of the arbitrators
hearing the dispute [Danish buyer v German (F.R.) seller, IV
Y.B. Comm. Arb. 258 (1979) (Oberlandesgericht Cologne)]. It
also occurred in a case where various documents were submitted
by one party to the arbitral tribunal but not to the other party
[G.W.I. Kersten & Co. B.V. v. Société Commerciale Raoul Duval
F et Co., XIX Y.B. Comm. Arb. 708 (Amsterdam Court of Appeals)
(1992)], in another case where the defendant was not given the
opportunity to comment on the report produced by the expert
appointed by the tribunal [Paklito Inv. Ltd. v. Klockner East
Asia Ltd., XIX Y.B. Comm. Arb. 664, 671 (Supreme Court of
G Hong Kong) (1994)], and again where the arbitral tribunal criticized
a party for having employed a method of presenting evidence
which the tribunal itself had suggested [Iran Aircraft Indus. v
Avco Corp., 980 F.2d 141 (2nd Cir. 1992)].”(at p. 987)
Gary Born (supra) states:
H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 411
[R. F. NARIMAN, J. ]

“German courts have adopted similar reasoning, holding that the A
right to be heard entails two related sets of rights: (a) a party is
entitled to present its position on disputed issues of fact and law,
to be informed about the position of the other parties and to a
decision based on evidence or materials known to the parties [See,
e.g., Judgment of 5 July 2011, 34 SCH 09/11, II(5)(c)(bb)
B
(Oberlandesgericht Munchen)]; and (b) a party is entitled to a
decision by the arbitral tribunal that takes its position into account
insofar as relevant [See, e.g., Judgment of 5 October 2009, 34
Sch 12/09 (Oberlandesgericht Munchen)]. Other authorities
provide comparable formulations of the content of the right to be
heard [See, e.g., Slaney v. Int’l Amateur Athletic Foundation, C
244 F.3d 580, 592 (7th Cir. 2001) (at p. 3225)
Similarly, in Redfern and Hunter (supra):
“11.73. The national court at the place of enforcement thus has a
limited role. Its function is not to decide whether or not the award
is correct, as a matter of fact and law. Its function is simply to D
decide whether there has been a fair hearing. One mistake in the
course of the proceedings may be sufficient to lead the court to
conclude that there was a denial of justice. For example, in a case
to which reference has already been made, a US corporation,
which had been told that there was no need to submit detailed E
invoices, had its claim rejected by the Iran-US Claims Tribunal,
for failure to submit detailed invoices! The US court, rightly it is
suggested, refused to enforce the award against the US company
[Iran Aircraft Ind v Avco Corp. 980 F.2d. 141 (2nd Cir. 1992)].
In different circumstances, a German court held that an award
that was motivated by arguments that had not been raised by the F
parties or the tribunal during the arbitral proceedings, and thus on
which the parties had not had an opportunity to comment, violated
due process and the right to be heard [See the decision of the
Stuttgart Court of Appeal dated 6 October 2001 referred to in
Liebscher, The Healthy Award, Challenge in International G
Commercial Arbitration (Kluwer law International, 2003), 406].
Similarly, in Kanoria v Guinness, [2006] EWCA Civ. 222, the
English Court of Appeal decided that the respondent had not been
afforded the chance to present its case when critical legal
arguments were made by the claimant at the hearing, which the
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412 SUPREME COURT REPORTS [2020] 4 S.C.R.

A respondent could not attend due to a serious illness. In the
circumstances, the court decided that ‘this is an extreme case of
potential injustice’ and resolved not to enforce the arbitral award.
11.74. Examples of unsuccessful ‘due process’ defences to
enforcement are, however, more numerous. In Minmetals
B Germany v Ferco Steel, [1999] CLC 647, the losing respondent
in an arbitration in China opposed enforcement in England on the
grounds that the award was founded on evidence that the arbitral
tribunal had obtained through its own investigation. An English
court rejected this defence on the basis that the respondent was
eventually given an opportunity to ask for the disclosure of evidence
C at issue and comment on it, but declined to do so. The court held
that the due process defence to enforcement was not intended to
accommodate circumstances in which a party had failed to take
advantage of an opportunity duly accorded to it.”
57. This Court’s judgment in Sohan Lal Gupta v. Asha Devi
D Gupta (2003) 7 SCC 492, lays down the ingredients of a fair hearing as
follows:
“23. For constituting a reasonable opportunity, the following
conditions are required to be observed:

E 1. Each party must have notice that the hearing is to take place.
2. Each party must have a reasonable opportunity to be present
at the hearing, together with his advisers and witnesses.
3. Each party must have the opportunity to be present throughout
the hearing.
F
4. Each party must have a reasonable opportunity to present
evidence and argument in support of his own case.
5. Each party must have a reasonable opportunity to test his
opponent’s case by cross-examining his witnesses, presenting
rebutting evidence and addressing oral argument.
G
6. The hearing must, unless the contrary is expressly agreed, be
the occasion on which the parties present the whole of their
evidence and argument.”
58. A recent Delhi High Court judgment in Glencore International
H AG v. Dalmia Cement (Bharat) Limited 2017 SCC OnLine Del 8932
puts it thus:
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 413
[R. F. NARIMAN, J. ]

“25. The inability to present a case as contemplated under section A
48(1)(b) of the Act (which is pari materia to Article V(I)(b) of
the New York Convention) must be such so as to render the
proceedings violative of the due process and principles of natural
justice. It is rudimentary that for a fair decision each party must
have full and equal opportunity to present their respective cases
B
and this includes due notice of proceedings. In the event a party
opposing the enforcement of a foreign award is able to present
sufficient proof of such infirmity in the arbitral proceedings, the
courts may decline to enforce the foreign award.
26. A clear distinction needs to be drawn between cases where a
party is unable to present its case, rendering the arbitral award C
susceptible to challenge as falling foul of the minimal standards of
due process/natural justice and cases where the arbitral tribunal
does not accept the case sought to be set up by a party. The latter
case, obviously, does not give rise to a ground as mentioned in
section 48(1)(b) of the Act, even if the decision of the arbitral D
tribunal is erroneous.”
59. The English judgments advocate applying the test of a person
being prevented from presenting its case by matters outside his control.
This was done in Minmetals Germany GmbH v. Ferco Steel Ltd.
(1999) C.L.C. 647 as follows: E
“In my judgment, the inability to present a case to arbitrators within
s.103(2)(c) contemplates at least that the enforcee has been
prevented from presenting his case by matters outside his control.
This will normally cover the case where the procedure adopted
has been operated in a manner contrary to the rules of natural F
justice. Where, however, the enforcee has, due to matters within
his control, not provided himself with the means of taking advantage
of an opportunity given to him to present his case, he does not in
my judgment, bring himself within that exception to enforcement
under the convention. In the present case that is what has
happened” G
60. Likewise, in Ajay Kanoria v. Tony Guinness (2006) EWCA
Civ 222 the Court of Appeal in England referred to Minmetals (supra)
with approval as follows:

H
414 SUPREME COURT REPORTS [2020] 4 S.C.R.

A “23. There is not much authority on the meaning of section
103(2)(c) of the 1996 Act. In Minmetals Germany GmbH v Ferco
Steel Ltd [1999] 1 All ER (Comm) 315 , 326, Colman J observed:
“In my judgment, the inability to present a case to arbitrators within
section 103(2)(c) contemplates at least that the enforcee has been
B prevented from presenting his case by matters outside his control.
This will normally cover the case where the procedure adopted
has been operated in a manner contrary to the rules of natural
justice.””
61. An application of this test is found in Jorf Lasfar Energy
C Co. v. AMCI Export Corp. 2008 WL 1228930, where the U.S District
Court, W.D. Pennsylvania decided that if a party fails to obey procedural
orders given by the arbitrator, it must suffer the consequences. If evidence
is excluded because it is not submitted in accordance with a procedural
order, a party cannot purposefully ignore the procedural directives of the
decision-making body and then successfully claim that the procedures
D were unfair or violative of due process. Likewise, in Dongwoo
Mann+Hummel Co. Ltd. v. Mann+Hummel GmbH (2008) SGHC
275, the Singapore High Court held:
“145. A deliberate refusal to comply with a discovery order is not
per se a contravention of public policy because the adversarial
E procedure in arbitration admits of the possible sanction of an
adverse inference being drawn against the party that does not
produce the document in question in compliance with an order.
The tribunal will of course consider all the relevant facts and
circumstances, and the submissions by the parties before the
F tribunal decides whether or not to draw an adverse inference for
the non-production. Dongwoo also had the liberty to apply to the
High Court to compel production of the documents under s 13
and 14 of the IAA, if it was not content with merely arguing on
the question of adverse inference and if it desperately needed the
production by M+H of those documents for its inspection so that
G it could properly argue the point on drawing an adverse inference.
However, Dongwoo chose not to do so.
146. Further, the present case was not one where a party hides
even the existence of the damning document and then dishonestly
denies its very existence so that the opposing party does not even
H have the chance to submit that an adverse inference ought to be
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 415
[R. F. NARIMAN, J. ]

drawn for non-production. M+H in fact disclosed the existence A
of the documents but gave reasons why it could not disclose them.
Here, Dongwoo had the full opportunity to submit that an adverse
inference ought to be drawn, but it failed to persuade the tribunal
to draw the adverse inference. The tribunal examined the other
evidence before it, considered the submissions of the parties and
B
rightfully exercised its fact finding and decision making powers
not to draw the adverse inference as it was entitled to do so. It
would appear to me that the tribunal was doing nothing more than
exercising its normal fact finding powers to determine whether or
not an adverse inference ought to be drawn.”
62. Other English judgments deal with the expression “unable to C
present his case” as a breach of a facet of natural justice at the hearing
stage only. Thus, in Gbangbola v. Smith and Sheriff 1998 3 All ER
730, the Court held:
“A tribunal does not act fairly and impartially if it does not give a
party an opportunity of dealing with arguments which have not D
been advanced by either party. It is not suggested by the claimant
contractor that either of the two points mentioned in the arbitrator’s
letter was raised by it in the arbitration as being influential on the
overall burden and determination of costs. Unless such an
opportunity is given there is danger that the final result will not be E
determined fairly against the party who would be ordered to pay
the costs. That is indeed the position as regards both the first and
second points.”
Likewise, in Bahman Irvani v. Ali Irvani 1999 WL 1142456,
the Court found: F
“181. …Nor was it satisfactory that Mr Amin’s questions were
only replied to with the award, instead of being dealt with in
advance of the award so that comment could be advanced.”
63. Another facet of “unable to present his case” was stated in
Van Der Giessen-De-Noord Shipbuilding Division B.V. v. Imtech G
Marine & Offshore B.V. (2008) EWHC 2904 (Comm). The UK Court
held:
“In those circumstances it has breached its duty of fairness by
ignoring the agreed position of the parties that a claim under this
head should not include the cabling for the HVAC equipment. In H
416 SUPREME COURT REPORTS [2020] 4 S.C.R.

A “double-counting” in this respect, the Tribunal has awarded Imtech
more than it asked for, or could reasonably ask for. GN submits
that the double-counting is probably a very significant part of the
€1,000,000 awarded, on the basis that the Tribunal had previously
awarded a larger amount under the HVAC claim (Claim 1, VTC
1). Whatever the size of the double-counting may be, it is unlikely
B
to be minimal. I am satisfied that GN has been caused substantial
injustice by having, on the face of the Award, to pay more than it
should to Imtech for extra work.”
This finding was given pursuant to Section 68 of the Arbitration
Act, 1996 (U.K) by which a “serious irregularity” would lead to the
C award being set aside or remitted or being declared to be of no effect in
whole or in part.
64. In Malicorp Limited v. Government of Arab Republic of
Egypt (2015) EWHC 361 (Comm), the U.K Court held that the
Government of Egypt had no warning of the manner in which the award
D was made. The Court held:
“41. In these circumstances I have no doubt whatsoever that the
award of damages under article 142 must have been a complete
surprise to Egypt. So, too, must have been the basis upon which
such an award was made – apportioning to the Republic 10%
E responsibility for the relevant mistake, and allowing as the major
part of the award a substantial sum for loss of profit. It would
have been astonishing, if there had been any suggestion that this
was in contemplation, that Egypt would fail to protest that the
tribunal ought to make a finding on its case on fraud rather than
F allocate responsibility on the footing of a good faith mistake on
the part of Malicorp. It would similarly have been astonishing, if
there had been any suggestion that damages in place of
reinstatement were contemplated, that Egypt would fail to protest
that such damages could not properly incorporate an element for
loss of profit. There were undoubtedly strong arguments for Egypt
G to advance in these respects among others. The notion that, in the
absence of any mention of these matters, Egypt could and should
have anticipated the basis of proceeding adopted in the Cairo
award, is to my mind manifestly repugnant to elementary principles
of fairness.
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VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 417
[R. F. NARIMAN, J. ]

42. The failure of the tribunal to ensure that Egypt had warning A
of these matters can only constitute a serious breach of natural
justice. In so far as I have any discretion to enforce the award
despite that breach, I decline to do so: the breach is too serious,
and the consequences for Egypt are too grave. It is suggested
that the hearing be reconvened so that Mr Soliman can give
B
evidence and be cross-examined. I decline to take this course: for
the reasons given above, Mr Soliman’s statement cannot assist
Malicorp.”
65. The judgments from the Singapore Courts are also instructive.
In Soh Beng Tee & Co. v. Fairmount Development Pte Ltd. (2007)
SGCA 28, the Court fleshed out what was meant by “fair hearing” for C
the purposes of Section 48(1)(a)(vii) of the Arbitration Act, 2002
(Singapore) as follows:
“59. These cases must be read in the context of the current judicial
climate which dictates that courts should not without good reason
interfere with the arbitral process, whether domestic or D
international. It is incontrovertible that international practice has
now radically shifted in favour of respecting and preserving the
autonomy of the arbitral process in contrast to the earlier practice
of enthusiastic curial intervention: see, for instance, Arbitration
Act 1996 ([27] supra) at p 1 on the English position; and Robert E
Morgan, The Arbitration Ordinance of Hong Kong: A
Commentary (Butterworths Asia, 1997) on the position in Hong
Kong, which also essentially reflects the English practice. As rightly
observed in Weldon Plant Ltd v The Commission for the New
Towns [2001] 1 All ER (Comm) 264 (“Weldon”) at [22], “[a]n
award should be read supportively … [and] given a reading which F
is likely to uphold it rather than to destroy it”. Similarly, in Vee
Networks Ltd v Econet Wireless International Ltd [2005] 1 Lloyd’s
Rep 192, the court, at [90], held:
Above all it is not normally appropriate for the court to try the
material issue in order to ascertain whether substantial injustice G
has been caused. To do so would be an entirely inappropriate
inroad into the autonomy of the arbitral process.
xxx xxx xxx

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418 SUPREME COURT REPORTS [2020] 4 S.C.R.

A 65. The foregoing survey of case law and principles may be further
condensed into the following core principles:
(a) Parties to arbitration have, in general, a right to be heard
effectively on every issue that may be relevant to the resolution
of a dispute. The overriding concern, as Goff LJ aptly noted in
B The Vimeira ([45] supra), is fairness. The best rule of thumb to
adopt is to treat the parties equally and allow them reasonable
opportunities to present their cases as well as to respond. An
arbitrator should not base his decision(s) on matters not submitted
or argued before him. In other words, an arbitrator should not
make bricks without straw. Arbitrators who exercise unreasonable
C initiative without the parties’ involvement may attract serious and
sustainable challenges.
(b) Fairness, however, is a multidimensional concept and it would
also be unfair to the successful party if it were deprived of the
fruits of its labour as a result of a dissatisfied party raising a
D multitude of arid technical challenges after an arbitral award has
been made. The courts are not a stage where a dissatisfied party
can have a second bite of the cherry.
(c) Indeed, the latter conception of fairness justifies a policy of
minimal curial intervention, which has become common as a matter
E of international practice. To elaborate, minimal curial intervention
is underpinned by two principal considerations. First, there is a
need to recognise the autonomy of the arbitral process by
encouraging finality, so that its advantage as an efficient alternative
dispute resolution process is not undermined. Second, having opted
F for arbitration, parties must be taken to have acknowledged and
accepted the attendant risks of having only a very limited right of
recourse to the courts. It would be neither appropriate nor
consonant for a dissatisfied party to seek the assistance of the
court to intervene on the basis that the court is discharging an
appellate function, save in the very limited circumstances that
G have been statutorily condoned. Generally speaking, a court will
not intervene merely because it might have resolved the various
controversies in play differently.
(d) The delicate balance between ensuring the integrity of the
arbitral process and ensuring that the rules of natural justice are
H complied with in the arbitral process is preserved by strictly
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 419
[R. F. NARIMAN, J. ]

adhering to only the narrow scope and basis for challenging an A
arbitral award that has been expressly acknowledged under the
Act and the IAA. In so far as the right to be heard is concerned,
the failure of an arbitrator to refer every point for decision to the
parties for submissions is not invariably a valid ground for challenge.
Only in instances such as where the impugned decision reveals a
B
dramatic departure from the submissions, or involves an arbitrator
receiving extraneous evidence, or adopts a view wholly at odds
with the established evidence adduced by the parties, or arrives
at a conclusion unequivocally rejected by the parties as being trivial
or irrelevant, might it be appropriate for a court to intervene. In
short, there must be a real basis for alleging that the arbitrator has C
conducted the arbitral process either irrationally or capriciously.
To echo the language employed in Rotoaira ([55] supra), the
overriding burden on the applicant is to show that a reasonable
litigant in his shoes could not have foreseen the possibility of
reasoning of the type revealed in the award. It is only in these
D
very limited circumstances that the arbitrator’s decision might be
considered unfair.
(e) It is almost invariably the case that parties propose diametrically
opposite solutions to resolve a dispute. They may expect the
arbitrator to select one of these alternative positions. The arbitrator,
however, is not bound to adopt an either/or approach. He is perfectly E
entitled to embrace a middle path (even without apprising the parties
of his provisional thinking or analysis) so long as it is based on
evidence that is before him. Similarly, an arbitrator is entitled –
indeed, it is his obligation – to come to his own conclusions or
inferences from the primary facts placed before him. In this F
context, he is not expected to inexorably accept the conclusions
being urged upon him by the parties. Neither is he expected to
consult the parties on his thinking process before finalising his
award unless it involves a dramatic departure from what has been
presented to him.
G
(f) Each case should be decided within its own factual matrix. It
must always be borne in mind that it is not the function of the
court to assiduously comb an arbitral award microscopically in
attempting to determine if there was any blame or fault in the
arbitral process; rather, an award should be read generously such
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420 SUPREME COURT REPORTS [2020] 4 S.C.R.

A that only meaningful breaches of the rules of natural justice that
have actually caused prejudice are ultimately remedied.”
(emphasis supplied)
66. In JVL Agro Industries Ltd v. Agritrade International
Pte Ltd. (2016) SGHC 126, the Court held that the natural justice provision
B contained in Section 24(b) of the International Arbitration Act (Singapore)
was breached when new points are taken up by the arbitrator, i.e. points
not argued by either party, which formed the basis of the award. Since
these new points were not put to the parties, natural justice was said to
be breached in the facts of that case. Likewise, in G. D. Midea Air
C Conditioning Equipment Co. v. Tornado Consumer Goods Ltd.
(2017) SGHC 193, the Court found:
“65. A party seeking to set aside an arbitral award under Art
34(2)(a)(ii) of the Model Law or s 24(b) of the IAA must establish
(a) which rule of natural justice was breached; (b) how that rule
D was breached; (c) in what way the breach was connected to the
making of the award; and (d) how the breach prejudiced the party’s
rights: Soh Beng Tee & Co Pte Ltd v Fairmount Development
Pte Ltd [2007] 3 SLR(R) 86 (“Soh Beng Tee”) at [29].
66. The crux of Midea’s case was that the Tribunal’s finding on
E cl 4.2 breached the fair hearing rule because Midea was denied a
full opportunity to present its case. As stated earlier (see [62]
above), the issue of a breach of cl 4.2 did not arise in the
Arbitration; the Tribunal made its finding on cl 4.2 without giving
notice to the parties. The Tribunal’s breach was clearly connected
to the making of the Award as its finding on cl 4.2 was the basis
F upon which the impugned findings in the Award (including the
finding that Midea was not entitled to terminate the MBA) were
made. I agreed with Midea that the Tribunal’s finding on cl 4.2
was in breach of the rules of natural justice.”
67. A Hong Kong Judgment reported as Hebei Import & Export
G Corporation v. Polytek Engineering Company Ltd. (1992) 2 HKC
205, found that the tribunal in the course of proceedings received
communications from only one party, in the absence of the other, the
other party being kept in the dark as to what those communications
were. On this point, therefore it was held:
H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 421
[R. F. NARIMAN, J. ]

“On the other hand, we think it is quite clear that the defendant A
did not have the opportunity of hearing what was presented to the
Chief Arbitrator by the plaintiff’s employees during the inspection
of the equipment and hence was not able to present its side of the
case before the experts prepared their report. This was to some
extent mitigated by the provision of a copy of the experts’ report
B
and the chance to comment on it. But neither the reply from the
Tribunal or the report mentioned what transpired during the briefing
session. In the peculiar circumstances of this case, we think that
the Tribunal should have held further hearings with regard to the
matters which had arisen from the inspection and the experts’
report. There was no request or consent that an oral hearing could C
be omitted. In our view, the defendant has a legitimate complaint
that there was a breach of Art 32 of the Arbitration rules and Art
45 of the PRC Arbitration Law. It can be said that the defendant
did not have a proper opportunity to present its case to the Tribunal
after the inspection and the compilation of the experts’ report.”
D
68. Shri Nakul Dewan, however, relied upon a number of judgments
to buttress his submission that failure to deal with material issues would
fall within Section 48(1)(b) of the Arbitration Act, as a result of which a
foreign award could not be enforced. He cited Ascot Commodities
NV v. Olam International Ltd. 2001 WL 1560709, for this proposition.
This judgment was delivered keeping in mind Section 68 of the Arbitration E
Act, 1996 (U.K), which states as follows:
“68. Challenging the award: serious irregularity.
(1) A party to arbitral proceedings may (upon notice to the other
parties and to the tribunal) apply to the court challenging an award F
in the proceedings on the ground of serious irregularity affecting
the tribunal, the proceedings or the award.
A party may lose the right to object (see section 73) and the right
to apply is subject to the restrictions in section 70(2) and (3).
(2) Serious irregularity means an irregularity of one or more of G
the following kinds which the court considers has caused or will
cause substantial injustice to the applicant—
xxx xxx xxx

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422 SUPREME COURT REPORTS [2020] 4 S.C.R.

A (d)failure by the tribunal to deal with all the issues that were put
to it;”
It was in this context that the Court held:
“Has the Board dealt with all essential issues? GAFTA findings
are habitually brief. Many would regard that as a virtue. It is
B certainly not an irregularity. Nor is it incumbent on arbitrators to
deal with every argument on every point raised. But an award
should deal, however concisely, with all essential issues. One of
the heads of serious irregularity recognised in section 68(2)(d) is
“Failure by the tribunal to deal with all the issues that were put to
C it”. The central point raised by Ascot on its appeal was that if the
bills of lading were pledged as security, as appears on the face of
the October 1998 contract, Olam’s loss was not to be approached
in the same way as if they were beneficial owners of the cargo.
The point has, with respect, not been addressed…Since the whole
process of arbitration is intended as a way of determining points
D at issue, it is more likely to be a matter of serious irregularity if on
a central matter a finding is made on a basis which does not reflect
the case which the party complaining reasonably thought he was
meeting, or a finding is ambiguous, or an important issue is not
addressed, than if the complaints go simply to procedural matters.
E Mr Young submitted that Ascot’s real complaint is that its arguments
were not accepted and that this cannot be an irregularity. He
noted that there has been no application for permission to appeal.
He also submitted that if the terseness of the Board’s findings
made it legitimate for Ascot to have requested further reasons,
they could have asked for them but have not done so.
F
On a fair reading of the award it seems to me that this is not case
in which the tribunal has directed itself to, and rejected, the central
issue argued by Ascot but has, in truth, missed it…But if an award,
as delivered, fails to contain a finding on a central issue, it would
be odd to ask for reasons for something which is not there.”
G
69. Likewise, in Zebra Industries v. Wah Tong Paper Products
Group Ltd. (2012) HKCU 1308, the Hong Kong Statute, namely, Section
23(2) of Old Arbitration Ordinance (Cap 391), enabled an award to be
set aside on the ground of error of law. In this context, it was held:

H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 423
[R. F. NARIMAN, J. ]

“44. In light of Zebra’s above submissions, the question of law A
that arises is whether the arbitrator was wrong in law in failing to
take into account of the Venture Capital Clauses in determining
Zebra’s claim for damages.
xxx xxx xxx
47. In my view, properly looked at, a claim on damages for breach B
of the Agreement based on and by reference to the Venture
Capital Clauses had been put forward by Zebra in the SD.
xxx xxx xxx
49. In the circumstances, I think the arbitrator has also committed C
an error of law in failing to consider and address this part of Zebra’s
claim for consequential damages, if any, for the loss of chance in
securing a venture capital fund investment and the listing of the
company.
50. I would therefore also remit this part of the Award to the D
arbitrator for his reconsideration. These issues for reconsideration
are closely tied with the assessment of the relevant parts of the
evidence on the alleged loss of chance, if any, and should best be
dealt with by the arbitrator. In doing so, the arbitrator should take
into account of the Venture Capital Clauses to consider and decide
this part of Zebra’s claim for consequential damages as mentioned E
in paragraph 42 above.”
70. In A v. B (2015) 3 HKLRD 586, the Court held:
“33. It is fundamental to concepts of fairness, due process and
justice, as recognized in Hong Kong, that key and material issues
F
raised for determination, either by a court or the arbitral tribunal,
should be considered and dealt with fairly. An award should be
reasoned, to the extent of being reasonably sufficient and
understandable by the parties (ie within the confines set out in R v
F [2012] 5 HKLRD 278). Under Article 33(2) of the Model Law,
the award should state the reasons upon which it is based. Having G
carefully considered the Award, I have to agree that the parties
are entitled to query whether the Limitation Defence had been
considered at all by the Arbitrator, and if rejected by the Arbitrator
after due consideration, why it was rejected. The process of
arbitration is intended as a way of determining disputes and points
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424 SUPREME COURT REPORTS [2020] 4 S.C.R.

A at issue, and I agree with the sentiments expressed by the court in
Ascot Commodities NV v Olam International Ltd [2002] CLC
277 and in Van der Giessen-de Noord Shipbuilding Division
BV v Imtech Marine and Off shore BV [2009] 1 Lloyd’s Rep
273 that it is a serious irregularity and a denial of due process
which causes substantial injustice and unfairness to the parties, if
B
an important issue, which the parties are entitled to expect to be
addressed, is not in fact addressed.
34. Even if the Arbitrator finds in favor of B on all its claims of
A’s inability and failure to deliver the Products in compliance with
the Relevant Standards and conforming to the contractual
C specifications, and A’s failure to develop the Products pursuant to
its contractual obligations, B’s action against A and its claims for
remedies in the Arbitration will fail, if the Limitation Defence
succeeds. The Limitation Defence is a material point and issue
which could have rendered the Award materially different, and
D the failure to consider it, or to explain the dismissal of the Limitation
Defence, results in unfairness to A, as well as a real risk of injustice
and prejudice to its case. Based on what was set out in the Reasons
for the Award and the materials before the Tribunal, it cannot be
said that it is plain and obvious, or beyond any doubt, that the
Award would have been the same, if the Limitation Defence had
E been considered (Brunswick Bowling & Billiards Corp v
Shanghai Zhonglu Industrial Co Ltd [2011] 1 HKLRD 707;
Paklito Investment Ltd v Kolckner East Asia Ltd [1993] 2 HKLR
49). This is not a case in which different defences are raised, any
one of which would have defeated the claims made, such that the
F failure to deal with any one of the other defences would not have
made any difference to the award.
35.For the above reasons, I consider that there is sufficient injustice
arising out of the Award, in its current form, which cannot be
overlooked by the Court’s conscience, and that enforcement of
G the Award would offend our notions of justice.”
This finding was given under Article 34(2)(b) of the UNCITRAL
Model Law on International Commercial Arbitration, 1985 which states
as follows:

H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 425
[R. F. NARIMAN, J. ]

“Article 34. Application for setting aside as exclusive A
recourse against arbitral award
2. An arbitral award may be set aside by the court specified in
article 6 only if:
(b) the court finds that:
B
(i) the subject-matter of the dispute is not capable of settlement
by arbitration under the law of this State; or
(ii) the award is in conflict with the public policy of this State.”
71. Shri Dewan strongly relied upon judgments from Singapore in
support of the proposition that non-consideration of material issues would C
amount to a breach of natural justice and, therefore, would fit within the
ground mentioned in Section 48(1)(b). In Front Row Investment
Holdings v. Daimler South East Asia (2010) SGHC 80, the Singapore
High Court decided whether there was a breach of natural justice in
connection with the making of the award by which the rights of any D
party has been prejudiced under Section 48(1)(a)(vii) of the Arbitration
Act, 2002 (Singapore). It referred to breach of natural justice if an award
was set aside on a basis not raised or contemplated by the parties since
the affected party would have been deprived of its opportunity to be
heard. It then held that the corollary of this would be that an arbitral
tribunal will be in the breach of natural justice if in the course of reaching E
its decision it disregarded the submissions and arguments made by the
parties on the issues without considering the merits thereof. For this, it
relied upon three Australian cases and an earlier judgment which
considered these three cases. The Court then concluded:
“53. As I have concluded earlier, an arbitrator’s failure to consider F
material arguments or submissions is a breach of natural justice.
In the present case, the Arbitrator had dismissed Front Row’s
counterclaim without considering the grounds of its counterclaim
in full because he was under the misapprehension that Front Row
had abandoned its reliance on the Representation. Had he not
G
been mistaken, he would have had to decide whether or not the
Representation was false. A decision that there had been a
misrepresentation in regard thereto would have resulted in an
award in favour of Front Row, assuming the other ingredients for
a successful claim (viz, “reliance” and “detriment”) were satisfied.
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426 SUPREME COURT REPORTS [2020] 4 S.C.R.

A It was not for me to delve further into the question whether Front
Row’s reliance upon the Representation would have succeeded
but for the arbitrator’s misrepresentation. It sufficed that the
Arbitrator failed to consider such a material ground. That alone
was sufficient prejudice to Front Row.
B 54. In the result, I allowed Front Row’s application and ordered
that the part of the Award dealing with Front Row’s counterclaim
and with costs of the Arbitration be set aside as a whole. I further
ordered that the part of the Award so set aside be tried afresh by
a newly appointed arbitrator. Finally, I also ordered that the costs
of and incidental to Front Row’s application be paid by Daimler to
C Front Row.”
72. In TMM Division Maritime SA v. Pacific Richfield
Marine Pte Ltd. (2013) SGHC 186, the Singapore High Court referred
to Section 24(b) of the International Arbitration Act (Singapore), which
requires an award to be set aside if the rules of natural justice are
D breached. In arriving at its conclusion under the caption “General
Principles of Curial Scrutiny”, the Court held “However, it does not follow,
and neither do I accept, that this process always entails sifting through
the entire record of the arbitral proceedings with a fine-tooth comb.”
(See paragraph 42). The Court also held, “the Court should not nit-pick
E at the award. Infelicities are to be expected and are generally irrelevant
to the merits of any challenges” (See paragraph 45). The Court went on
to hold that the high standard of cogent reasons required by the judiciary
should not be applied to arbitration awards (See paragraph 102). The
Court then outlined what standards could be applied to arbitral awards
as follows:
F
“103. The Singapore Court of Appeal’s decision in Thong Ah
Fat v Public Prosecutor [2012] 1 SLR 676 (“Thong Ah Fat”)
which sets out the scope and content of the court’s duty to give
reasons offers, in my view, an instructive parallel. I note in passing
that Professor Jeffrey Waincymer suggests that it is unhelpful to
G define the content of arbitrators’ duty to give reasons by reference
to judicial standards: Waincymer at para 16.9.3. In support of his
view, he referred to the High Court of Australia decision of
Westport Insurance Corporation & Ors v Gordian Runoff
Limited [2011] HCA 37 where Kiefel J stated (at [168]–[169])
H that there is nothing in the relevant Australian legislation, the
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 427
[R. F. NARIMAN, J. ]

Commercial Arbitration Act 1984, which stipulates that the A
standard for giving reasons in arbitration should be the same as
the judicial standard. The same is true of the IAA but as the court
in Thong Ah Fat held (at [19]), the general duty of a judicial body
to explain its decision is ineluctably “a function of due process,
and therefore of justice”. While there are structural differences
B
between a court and an arbitral tribunal, it cannot be gainsaid that
arbitrations are subject to the same ideals of due process and
justice. It bears mentioning that Kiefel J concluded that the
requirement to give a reasoned award cannot be devoid of content
and for that reason, he was content to adopt Donaldson LJ’s
statement in Bremer (see [101] above). C
104. Therefore, in my view, the standards applicable to judges
are assistive indicia to arbitrators. While the rules of natural justice
must be applied rigorously in arbitrations as they are in court
litigation, the practical realities of the arbitral ecosystem such as
promptness and price are also important (see Soh Beng Tee at D
[63]). On this note, the following are clear from Thong Ah Fat:
(a) The standard of explanation required in every case must
correspond to the requirements of the case. Costs and delays are
relevant factors to consider when determining the extent to which
reasons and explanations are to be set out in detail: at [29]–[30]. E
(b) In “very clear cases” with specific and straightforward factual
or legal issues, the court may even dispense with reasons. Its
conclusion will be sufficient because the reasons behind the
conclusion are a matter of necessary inference: at [32].
(c) Decisions or findings which do not bear directly on the substance F
of the dispute or affect the final resolution of the parties’ rights
may not require detailed reasoning. As a rule of thumb, the more
profound the consequences of a specific decision, the greater the
necessity for detailed reasoning: at [33].
(d) There should be a summary of all the key relevant evidence G
but not all the detailed evidence needs to be referred to: at [34].
(e) The parties’ opposing stance and the judge’s findings of fact
on the material issues should be set out. However, the judge does
not have to make an explicit ruling on each and every factual
issue: at [35]–[36]. H
428 SUPREME COURT REPORTS [2020] 4 S.C.R.

A (f) The decision should demonstrate an examination of the relevant
evidence and the facts found with a view to explaining the final
outcome on each material issue: at [36].”
73. In AKN & Anr. v. ALC & Ors. (2015) SGCA 18, the
Singapore High Court, again in considering the natural justice requirement
B contained in Section 24(b) of the International Arbitration Act (Singapore),
held as follows:
“38. In particular, there is no right of appeal from arbitral awards.
That is not to say that the courts can never intervene. However,
the grounds for curial intervention are narrowly circumscribed,
C and generally concern process failures that are unfair and prejudice
the parties or instances where the arbitral tribunal has made a
decision that is beyond the scope of the arbitration agreement. It
follows that, from the courts’ perspective, the parties to an
arbitration do not have a right to a “correct” decision from the
arbitral tribunal that can be vindicated by the courts. Instead, they
D only have a right to a decision that is within the ambit of their
consent to have their dispute arbitrated, and that is arrived at
following a fair process.”
(emphasis supplied)

E It then dealt with failure to consider important issues as follows:
“46. To fail to consider an important issue that has been pleaded
in an arbitration is a breach of natural justice because in such a
case, the arbitrator would not have brought his mind to bear on an
important aspect of the dispute before him. Consideration of the
F pleaded issues is an essential feature of the rule of natural justice
that is encapsulated in the Latin adage, audi alteram partem
(see also Soh Beng Tee & Co Pte Ltd v Fairmount Development
Pte Ltd [2007] 3 SLR(R) 86 (“Soh Beng Tee”) at [43], citing
Gas & Fuel Corporation of Victoria v Wood Hall Ltd &
Leonard Pipeline Contractors Ltd [1978] VR 385 at 386). Front
G Row is useful in so far as it demonstrates what must be shown to
make out a breach of natural justice on the basis that the arbitrator
failed to consider an important pleaded issue. It will usually be a
matter of inference rather than of explicit indication that the
arbitrator wholly missed one or more important pleaded issues.
However, the inference – that the arbitrator indeed failed to
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VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 429
[R. F. NARIMAN, J. ]

consider an important pleaded issue – if it is to be drawn at all, A
must be shown to be clear and virtually inescapable. If the facts
are also consistent with the arbitrator simply having misunderstood
the aggrieved party’s case, or having been mistaken as to the law,
or having chosen not to deal with a point pleaded by the aggrieved
party because he thought it unnecessary (notwithstanding that
B
this view may have been formed based on a misunderstanding of
the aggrieved party’s case), then the inference that the arbitrator
did not apply his mind at all to the dispute before him (or to an
important aspect of that dispute) and so acted in breach of natural
justice should not be drawn.
47. Front Row was recently considered in AQU v AQV [2015] C
SGHC 26 (“AQU”), where the High Court judge distilled the very
principles which we have just enunciated above (see AQU at
[30]–[35]). The judge in AQU also considered the High Court
decision of TMM Division Maritima SA de CV v Pacific
Richfield Marine Pte Ltd [2013] 4 SLR 972 (“TMM”), and D
reiterated the proposition that no party to an arbitration had a right
to expect the arbitral tribunal to accept its arguments, regardless
of how strong and credible it perceived those arguments to be
(see AQU at [35], citing TMM at [94]). This principle is important
because it points to an important distinction between, on the one
hand, an arbitral tribunal’s decision to reject an argument (whether E
implicitly or otherwise, whether rightly or wrongly, and whether
or not as a result of its failure to comprehend the argument and so
to appreciate its merits), and, on the other hand, the arbitral
tribunal’s failure to even consider that argument. Only the latter
amounts to a breach of natural justice; the former is an error of F
law, not a breach of natural justice.
xxx xxx xxx
59.With respect, poor reasoning on the part of an arbitral tribunal
is not a ground to set aside an arbitral award; even a
misunderstanding of the arguments put forward by a party is not G
such a ground. As noted by this court in BLC at [86], the court “is
not required to carry out a hypercritical or excessively syntactical
analysis of what the arbitrator has written” when considering
whether an arbitral award should be set aside for breach of natural
justice. Neither should it approach an arbitral award with a H
430 SUPREME COURT REPORTS [2020] 4 S.C.R.

A “meticulous legal eye endeavouring to pick holes, inconsistencies
and faults … with the objective of upsetting or frustrating the
process of arbitration” (likewise at [86] of BLC). Taking these
considerations into account, we find no breach of natural justice
as there is no basis for concluding that the Tribunal did not consider
the Liquidator’s Primary Argument. Accordingly, we answer
B
Appeal Issue 1 affirmatively.”
(emphasis supplied)
74. In BAZ v. BBA & Ors. (2018) SGHC 275, again with
reference to Section 24(b) of the International Arbitration Act (Singapore),
C the Court approached the issue of natural justice as follows:
“133. It is well established that to succeed in a claim under
s.24(b) of the IAA, the claimant needs to establish the following
four elements (see Soh Beng Tee at [29]; AKN v ALC 2015 at
[48]): (a) which rule of natural justice was breached; (b) how it
D was breached; (c) in what way the breach was connected to the
making of the award; and (d) how the breach prejudiced its rights.
134. The failure to consider an important issue that has been
pleaded in an arbitration is a breach of natural justice because in
such a case, the arbitrator would not have brought his mind to
E bear on an important aspect of the dispute before him (AKN v
ALC 2015 at [46]). It will usually be a matter of inference rather
than of explicit indication that the arbitrator wholly missed one or
more important pleaded issues. However, this inference must be
shown to be “clear and virtually inescapable” (AKN v ALC 2015
at [46]). The Court of Appeal cautioned against arguments dressed
F up to appear as breaches of natural justice: if the facts are also
consistent with the arbitrator simply having misunderstood the
aggrieved party’s case, or having been mistaken as to the law, or
having chosen not to deal with a point pleaded by the aggrieved
party because he thought it unnecessary, then the inference that
G the arbitrator did not apply his mind at all to the dispute before him
or to an important aspect of that dispute and so acted in breach of
natural justice should not be drawn.
xxx xxx xxx
141. Although the Majority did not comment on the legal basis for
H the application of a discount rate, it does not mean that it did not
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 431
[R. F. NARIMAN, J. ]

consider the issue. A tribunal does not have to give responses on A
all submissions made (SEF Construction Pte Ltd v Skoy
Connected Pte Ltd [2010] 1 SLR 733 at [60]).
xxx xxx xxx
159. The legal area concerning the enforcement and setting aside
of awards is governed by statute, namely the Arbitration Act (Cap B
10, 2002 Rev Ed) and the IAA. As such, the conceptual framework
outlined in UKM can be helpful to navigate public policy
considerations in arbitration, even though the subject matter of
the public policies that can be raised under Art 34(2)(b)(ii) of the
Model Law and Art V(2)(b) of the New York Convention may C
include both socio-economic policies and legal policies. When a
challenge on the ground of public policy is brought, the outline
draws attention to the importance of conducting a forensic exercise
to identify whether the alleged public policy exists, and the criteria
influencing the identification as explained in UKM are applicable.
The balancing exercise in the context of arbitration is between D
the policy of enforcing arbitral awards – as encapsulated in
s.19B(1) of the IAA which states that awards are “final and binding
on the parties” and the judicial policy of minimal curial intervention
– and the alleged public policy which the award purportedly
violates. This balance is generally in favour of the policy of E
enforcing arbitral awards, and only tilts in favour of the
countervailing public policy where the violation of that policy would
“shock the conscience” or would be contrary to “the forum’s most
basic notion of morality and justice”. In determining whether the
balance tilts towards the countervailing public policy, it is important
to consider both the subject nature of the public policy, the degree F
of violation of that public policy and the consequences of the
violation.”
75. In Campos Brothers Farms v. Matru Bhumi Supply Chain
Pvt. Ltd. (2019) 261 DLT 201, the Delhi High Court had to consider the
enforcement of a foreign award. The arbitrator in the aforesaid case did G
not give any finding on maintainability of the arbitration proceedings,
which was argued before her. In this fact circumstance, the Delhi High
Court held:
“55. In any case, the respondent nos. 1 and 2 had also made
submissions on merit before the Arbitrator. Though the learned H
432 SUPREME COURT REPORTS [2020] 4 S.C.R.

A counsel for the petitioner submitted that the same were rightly
excluded from consideration by the Arbitrator as the Arbitrator
had never sought for the same, the Award does not reflect any
such reason given by the Arbitrator for excluding them from
consideration. The Arbitrator does not record a finding that she
has intentionally ignored such submissions as they were filed
B
belatedly or beyond what was permitted. In fact, as noted above,
as per the Arbitrator no submission was filed by the respondents
by 13.06.2016, which is factually incorrect.
56. In exercise of powers under Section 48 of the Act, this Court
cannot consider the submissions made by the respondent nos. 1
C and 2 in their e-mail dated 13.06.2016 on merit as if it is a Court of
Original Jurisdiction and find out whether such submission of the
respondent nos. 1 and 2 had any merit or not. Once it is found that
the Arbitrator has ignored the submissions of a party in totality,
whatever be the merit of the submissions, in my opinion, such
D Award cannot be enforced being in violation of the Principles of
Natural Justice and contrary to the public policy of India as stated
in sub-Section 2(b) read with Explanation 1(iii) of Section 48 of
the Act.
xxx xxx xxx
E 76. It may be correct that the Arbitrator, upon considering evidence
led before it by the parties, comes to a conclusion that in the given
facts the transaction, though under different Contracts, is one or
that the corporate veil deserves to be lifted, however, for arriving
at such a finding the Arbitrator has to give reasons for the same.
F This Court, in exercise of its power under Section 48 and 49 of
the Act, cannot supplant such reasons by considering the claims
and defence of the parties on merit. Whether the request of the
respondent no. 1 to the petitioner to make shipments in the name
of respondent no. 2 under Contracts that had been executed
between the petitioner and respondent no. 1, would entitle the
G petitioner to file a consolidated statement of claim against
respondent nos. 1 and 2 or not, was an issue to be determined by
the Arbitrator and reasons for such determination were to be given
in the Award. From a reading of the Award it seems that the
Arbitrator was neither alive to the issue whether such claims
H against different Contracts can be consolidated as one, nor was
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 433
[R. F. NARIMAN, J. ]

she alive to the fact that joint and several liability cannot be fastened A
on respondent nos. 1 and 2 without lifting the corporate veil and
giving reasons for the same. The Award in question clearly qualifies
as a non speaking Award.
xxx xxx xxx
81. In any case, as noted above, if the arbitrator had considered B
this issue giving reasons therefore, this Court may not have the
power under Section 48 of the Act to test the validity of such
reasons, however, the present is the case where the arbitrator
has not only not given any reasons for her conclusion but infact,
the Award indicates that the Arbitrator is not even alive to such C
an issue.”
Thus, the ground on which the award was not enforced for failure
to consider a material issue relating to maintainability of the arbitral
proceedings was pigeon-holed not under Section 48(1)(b), but under the
“public policy of India” ground, stating that such a thing would violate D
the most basic notion of justice.
76. Given the fact that the object of Section 48 is to enforce foreign
awards subject to certain well-defined narrow exceptions, the expression
“was otherwise unable to present his case” occurring in Section 48(1)(b)
cannot be given an expansive meaning and would have to be read in the E
context and colour of the words preceding the said phrase. In short, this
expression would be a facet of natural justice, which would be breached
only if a fair hearing was not given by the arbitrator to the parties. Read
along with the first part of Section 48(1)(b), it is clear that this expression
would apply at the hearing stage and not after the award has been
delivered, as has been held in Ssangyong (supra). A good working F
test for determining whether a party has been unable to present his case
is to see whether factors outside the party’s control have combined to
deny the party a fair hearing. Thus, where no opportunity was given to
deal with an argument which goes to the root of the case or findings
based on evidence which go behind the back of the party and G
which results in a denial of justice to the prejudice of the party; or additional
or new evidence is taken which forms the basis of the award on
which a party has been given no opportunity of rebuttal, would, on the
acts of a given case, render a foreign award unenforceable on the
ground that a party has been unable to present his case.
H
434 SUPREME COURT REPORTS [2020] 4 S.C.R.

A This must, of course, be with the caveat that such breach be clearly
made out on the facts of a given case, and that awards must always be
read supportively with an inclination to uphold rather than destroy, given
the minimal interference possible with foreign awards under Section 48.
77. All the cases cited by Mr. Nakul Dewan are judgments based
B on the language of the particular statute reflected in each of them – for
example, Section 68 of the Arbitration Act, 1996 (U.K), Section 23(2) of
the Hong Kong Old Arbitration Ordinance (Cap 391), Section 24(b) of
the International Arbitration Act (Singapore) and Section 48(1)(a)(vii)
of the Arbitration Act, 2002 (Singapore), all of which are differently
worded from Section 48(1)(b). Each of these statutes deal with a breach
C of natural justice which, as we have seen, is a wider expression than the
expression “unable to present his case”. Thus, it is not possible to hold
that failure to consider a material issue would fall within the rubric of
Section 48(1)(b).
78. Having said this, however, if a foreign award fails to determine
D a material issue which goes to the root of the matter or fails to decide a
claim or counter-claim in its entirety, the award may shock the conscience
of the Court and may not be enforced as was done by the Delhi High
Court in Campos (supra) on the ground of violation of the public policy
of India, in that it would then offend a most basic notion of justice in this
E country1. It must always be remembered that poor reasoning, by which
a material issue or claim is rejected, can never fall in this class of cases.
Also, issues that the tribunal considered essential and has addressed
must be given their due weight – it often happens that the tribunal
considers a particular issue as essential and answers it, which by
implication would mean that the other issue or issues raised have been
F implicitly rejected. For example, two parties may both allege that the
1
In Sssangyong (supra), this Court cautioned that this ground would only be attracted
with the following caveat:
“48. However, when it comes to the public policy of India argument based
upon “most basic notions of justice”, it is clear that this ground can be attracted only in
G very exceptional circumstances when the conscience of the Court is shocked by infraction
of fundamental notions or principles of justice… However, we repeat that this ground
is available only in very exceptional circumstances, such as the fact situation in the
present case. Under no circumstance can any Court interfere with an arbitral award on
the ground that justice has not been done in the opinion of the Court. That would be an
entry into the merits of the dispute which, as we have seen, is contrary to the ethos of
H Section 34 of the 1996 Act, as has been noted earlier in this judgment.”
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 435
[R. F. NARIMAN, J. ]

other is in breach. A finding that one party is in breach, without expressly A
stating that the other party is not in breach, would amount to a decision
on both a claim and a counter-claim, as to which party is in breach.
Similarly, after hearing the parties, a certain sum may be awarded as
damages and an issue as to interest may not be answered at all. This
again may, on the facts of a given case, amount to an implied rejection of
B
the claim for interest. The important point to be considered is that the
foreign award must be read as a whole, fairly, and without nit-picking. If
read as a whole, the said award has addressed the basic issues raised by
the parties and has, in substance, decided the claims and counter-claims
of the parties, enforcement must follow.
Violation of FEMA Rules C

79. It has been argued by the Appellants, based on the Non-Debt
Instrument Rules, that a foreign award by which shares have to be
purchased at a discounted value, would violate the aforesaid Rules, and
therefore, would amount to a violation of the fundamental policy of Indian
law. Resultantly, the Appellants contended that as a result of this, the D
award in the present case would not be enforceable in India.
80. The relevant provisions of the aforesaid rules are set out
hereinbelow:
“2. Definitions: E
xxx xxx xxx
(ac) “investment” means to subscribe, acquire, hold or transfer
any security or unit issued by a person resident in India;
Explanation:-
F
(i) Investment shall include to acquire, hold or transfer depository
receipts issued outside India, the underlying of which is a security
issued by a person resident in India;
(ii) for the purpose of LLP, investment shall mean capital
contribution or acquisition or transfer of profit shares; G
xxx xxx xxx
3. Restriction on investment in India by a person resident
outside India.- Save as otherwise provided in the Act or rules or
regulations made thereunder, no person resident outside India shall
make any investment in India : H
436 SUPREME COURT REPORTS [2020] 4 S.C.R.

A Provided that an investment made in accordance with the Act or
the rules or the regulations made thereunder and held on the date
of commencement of these rules shall be deemed to have been
made under these rules and shall accordingly be governed by these
rules:
B Provided further that the Reserve Bank may, on an application
made to it and for sufficient reasons and in consultation with the
Central Government, permit a person resident outside India to
make any investment in India subject to such conditions as may
be considered necessary.
C xxx xxx xxx
9. Transfer of equity instruments of an Indian company by
or to a person resident outside India.-
A person resident outside India holding equity instruments of an
Indian company or units in accordance with these rules or a person
D resident in India, may transfer such equity instruments or units so
held by him in compliance with the conditions, if any, specified in
the Schedules of these rules and subject to the terms and conditions
prescribed hereunder:
(3) A person resident in India holding equity instruments of an
E Indian company or units, may transfer the same to a person resident
outside India by way of sale, subject to the adherence to entry
routes, sectoral caps or investment limits, pricing guidelines and
other attendant conditions as applicable for investment by a person
resident outside India and documentation and reporting
F requirements for such transfers as may be specified by the Reserve
Bank in consultation with the Central Government from time to
time;
xxx xxx xxx
21. Pricing guidelines –
G (1) The pricing guidelines specified in these rules shall not be
applicable for any transfer by way of sale done in accordance
with Securities and Exchange Board of India regulations where
the pricing is specified by Securities and Exchange Board of India.

H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 437
[R. F. NARIMAN, J. ]

(2) Unless otherwise prescribed in these rules, the price of equity A
instruments of an Indian company, -
xxx xxx xxx
(b) transferred from a person resident in India to a person resident
outside India shall not be less than,-
B
xxx xxx xxx
(iii) the valuation of equity instruments done as per any
internationally accepted pricing methodology for valuation on an
arm’s length basis duly certified by a Chartered Accountant or a
Merchant Banker registered with the Securities and Exchange C
Board of India or a practising Cost Accountant, in case of an
unlisted Indian company.”
81. Based on the aforesaid Rules, the Appellants have argued
that the transfer of shares from the Karias, who are persons resident in
India, to the Respondent No.1, who is a person resident outside India, D
cannot be less than the valuation of such shares as done by a duly certified
Chartered Accountant, Merchant Banker or Cost Accountant, and, as
the sale of such shares at a discount of 10% would violate Rule 21(2)(b)(iii),
the fundamental policy of Indian law contained in the aforesaid Rules
would be breached; as a result of which the award cannot be enforced.
E
82. Before answering this question, it is important to first advert
to the decision of the Delhi High Court in Cruz (supra). The learned
Single Judge was faced with a similar problem of a foreign award violating
the provisions of FEMA. In an exhaustive analysis, the learned Single
Judge referred to Renusagar (supra) and then held:
F
“97.It plainly follows from the above that a contravention of a
provision of law is insufficient to invoke the defence of public
policy when it comes to enforcement of a foreign award.
Contravention of any provision of an enactment is not synonymous
to contravention of fundamental policy of Indian law. The
expression fundamental Policy of Indian law refers to the principles G
and the legislative policy on which Indian Statutes and laws are
founded. The expression “fundamental policy” connotes the basic
and substratal rationale, values and principles which form the
bedrock of laws in our country.
H
438 SUPREME COURT REPORTS [2020] 4 S.C.R.

A 98. It is necessary to bear in mind that a foreign award may be
based on foreign law, which may be at variance with a
corresponding Indian statute. And, if the expression “fundamental
policy of Indian law” is considered as a reference to a provision
of the Indian statue, as is sought to be contended on behalf of
Unitech, the basic purpose of the New York Convention to enforce
B
foreign awards would stand frustrated. One of the principal
objective of the New York Convention is to ensure enforcement
of awards notwithstanding that the awards are not rendered in
conformity to the national laws. Thus, the objections to enforcement
on the ground of public policy must be such that offend the core
C values of a member State’s national policy and which it cannot be
expected to compromise. The expression “fundamental policy of
law” must be interpreted in that perspective and must mean only
the fundamental and substratal legislative policy and not a provision
of any enactment.
D xxx xxx xxx
102. Although, this contention appears attractive, however, fails
to take into account that there has been a material change in the
fundamental policy of exchange control as enacted under FERA
and as now contemplated under FEMA. FERA was enacted at
E the time when the India’s economy was a closed economy and
the accent was to conserve foreign exchange by effectively
prohibiting transactions in foreign exchange unless permitted. As
pointed out by the Supreme Court in Life Insurance Corporation
of India v. Escorts Ltd. (supra), the object of FERA was to ensure
that the nation does not lose foreign exchange essential for
F economic survival of the nation. With the liberalization and opening
of India’s economy it was felt that FERA must be repealed. FERA
was enacted to replace the Foreign Exchange Regulation Act,
1947 which was originally enacted as a temporary measure. The
Statement of Objects and Reasons of FERA indicate that FERA
G was enacted as the RBI had suggested and Government had
agreed on the need for regulating, among other matters, the entry
of foreign capital in the form of branches and concerns with
substantial non-resident interest in them, the employment of
foreigners in India etc.

H xxx xxx xxx
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 439
[R. F. NARIMAN, J. ]

110. The contention that enforcement of the Award against A
Unitech must be refused on the ground that it violates any one or
the other provision of FEMA, cannot be accepted; but, any
remittance of the money recovered from Unitech in enforcement
of the Award would necessarily require compliance of regulatory
provisions and/or permissions.”
B
83. This reasoning commends itself to us. First and foremost,
FEMA - unlike FERA - refers to the nation’s policy of managing foreign
exchange instead of policing foreign exchange, the policeman being the
Reserve Bank of India under FERA. It is important to remember that
Section 47 of FERA no longer exists in FEMA, so that transactions that
violate FEMA cannot be held to be void. Also, if a particular act violates C
any provision of FEMA or the Rules framed thereunder, permission of
the Reserve Bank of India may be obtained post-facto if such violation
can be condoned. Neither the award, nor the agreement being enforced
by the award, can, therefore, be held to be of no effect in law. This being
the case, a rectifiable breach under FEMA can never be held to be a D
violation of the fundamental policy of Indian law. Even assuming that
Rule 21 of the Non-Debt Instrument Rules requires that shares be sold
by a resident of India to a non-resident at a sum which shall not be less
than the market value of the shares, and a foreign award directs that
such shares be sold at a sum less than the market value, the Reserve
Bank of India may choose to step in and direct that the aforesaid shares E
be sold only at the market value and not at the discounted value, or may
choose to condone such breach. Further, even if the Reserve Bank of
India were to take action under FEMA, the non-enforcement of a foreign
award on the ground of violation of a FEMA Regulation or Rule would
not arise as the award does not become void on that count. The F
fundamental policy of Indian law, as has been held in Renusagar (supra),
must amount to a breach of some legal principle or legislation which is
so basic to Indian law that it is not susceptible of being compromised.
“Fundamental Policy” refers to the core values of India’s public policy
as a nation, which may find expression not only in statutes but also time-
honoured, hallowed principles which are followed by the Courts. Judged G
from this point of view, it is clear that resistance to the enforcement of a
foreign award cannot be made on this ground.
84. The Appellants, however, relied upon certain observations in
Dropti Devi v. Union of India (2012) 7 SCC 499. In that case, a
H
440 SUPREME COURT REPORTS [2020] 4 S.C.R.

A challenge was made to the constitutional validity of Section 3 of
Conservation of Foreign Exchange and Prevention of Smuggling
Activities Act, 1974 (hereinafter referred to as “COFEPOSA”), stating
that by reason of the new legal regime articulated in FEMA, in
replacement of FERA, the said provision has become unconstitutional in
the changed situation. This submission was repelled by this Court stating:
B
“66. It is true that provisions of FERA and FEMA differ in some
respects, particularly in respect of penalties. It is also true that
FEMA does not have provision for prosecution and punishment
like Section 56 of FERA and its enforcement for default is through
civil imprisonment. However, insofar as conservation and/or
C augmentation of foreign exchange is concerned, the restrictions
in FEMA continue to be as rigorous as they were in FERA. FEMA
continues with the regime of rigorous control of foreign exchange
and dealing in the foreign exchange is permitted only through
authorised person. While its aim is to promote the orderly
D development and maintenance of foreign exchange markets in
India, the Government’s control in matters of foreign exchange
has not been diluted. The conservation and augmentation of foreign
exchange continues to be as important as it was under FERA.
The restrictions on the dealings in foreign exchange continue to
be as rigorous in FEMA as they were in FERA and the control of
E the Government over foreign exchange continues to be as complete
and full as it was in FERA.
67. The importance of foreign exchange in the
development of a country needs no emphasis. FEMA
regulates the foreign exchange. The conservation
F and augmentation of foreign exchange continue to
be its important theme. Although contravention of
its provisions is not regarded as a criminal offence,
yet it is an illegal activity jeopardising the very
economic fabric of the country. For violation of
G foreign exchange regulations, penalty can be levied
and its non-compliance results in civil imprisonment
of t he default er. The whole int ent and i de a
behind Cofeposa is to prevent violation of foreign
exchange regulations or smuggling activities which

H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 441
[R. F. NARIMAN, J. ]

have serious and deleterious effect on national A
economy.”
It is important to note that this Court recognized that FEMA, unlike
FERA, does not have any provision for prosecution and punishment like
that contained in Section 56 of FERA. The observations as to
conservation and/or augmentation of foreign exchange, so far as FEMA B
is concerned, were made in the context of preventive detention of persons
who violate foreign exchange regulations. The Court was careful to
note that any illegal activity which jeopardises the economic fabric of
the country, which includes smuggling activities relating to foreign
exchange, are a serious menace to the nation and can be dealt with
effectively, inter alia, through the mechanism of preventive detention. C
From this to contend that any violation of any FEMA Rule would make
such violation an illegal activity does not follow. In fact, even if the
reasoning contained in this judgment is torn out of its specific context
and applied to this case, there being no alleged smuggling activity which
involves depletion of foreign exchange, as against foreign exchange D
coming into the country as a result of sale of shares in an Indian company
to a foreign company, it does not follow that such violation, even if proved,
would breach the fundamental policy of Indian law.
Challenge to Enforcement of the Foreign Award in this case
on facts E
85. Dr. Singhvi and Shri Dewan arguing for the Appellants have
raised fourteen submissions, all of which fall under Section 48(1)(b) read
with Explanation 1 (ii) and (iii) to Section 48(2)(b) of the Arbitration Act,
taken either cumulatively as grounds of objection or separately, depending
upon the nature of the ground argued. We now deal with each of these F
grounds seriatim.
I. The Tribunal failed to deal with the Appellants’ counter-
claim pertaining to the incorporation of Jaguar Communication
Consultancy Services Private Limited.
86. According to the Appellants, this ground of objection – i.e. the G
incorporation of Jaguar - was pleaded by them as a “concealed breach”,
which became known to them only at a much later stage of the arbitral
proceedings. Despite the tribunal specifically ruling in the First Partial
Final Award that a non-defaulting party could rely on a “concealed breach”
and treat the same as an unrectified event of default under clause 23.4
H
442 SUPREME COURT REPORTS [2020] 4 S.C.R.

A of the JVA, the submission made by the Appellant in this behalf was
ignored in its entirety. This was countered by Respondent No.1 by stating
that there was no “concealed breach” at all, inasmuch as, as early as
05.10.2012, the Appellant had filed a request calling upon the Respondent
to produce documents which included the list of clients, employees and
disclosure of business activities of Jaguar. These documents were called
B
for in order to buttress the case of the Appellant that the Respondent
was in breach of clause 21.1 of the JVA, and to ascertain whether the
employees of Jaguar were passing on Ravin’s confidential information
to Jaguar. In response to this request, on 12.10.2012, the Respondent
stated that no case of breach of clause 21.1 of the JVA had been pleaded;
C that Jaguar does not have any business of producing cables; and that it
had been set up for the sole purpose of hiring office premises. The
Memorandum of Association and the Articles of Association of Jaguar
were also handed over to the Appellants. What was stressed is that at
no time after 12.10.2012 did the Appellants seek the leave of the tribunal
to amend their counter-claim.
D
87. It must be remembered that the First Partial Final Award was
made only on 15.02.2013. When the Respondent No.1 made its oral
submissions and filed written closing submissions on 19.07.2013, the
Appellants did not plead any case of breach due to Jaguar. It was only at
the fag end, i.e. in the Appellants’ Responsive Closing Submissions, filed
E on 20.08.2013, that the tribunal was invited to rule on this breach.
Obviously, by this time, the Respondent did not have any opportunity to
controvert this case put up for the first time by the Appellants. Since this
case had been put up for the first time at the fag end of the proceedings,
before passing of the Second Partial Final Award dated 19.12.2013, the
F arbitrator cannot be faulted for not dealing with this case. In the Second
Partial Final Award, the tribunal also recorded that the Appellants’ case
on clause 21.1 was limited to the acquisition of ACPL and direct sales
into India. The argument of the Appellant, made at the fag end of the
proceedings, that since the Respondent held 99.99 % shares of Jaguar,
which is in a similar cable business as Ravin, as evidenced by the
G Memorandum and Articles of Association of Jaguar, is a case that has
never been pleaded. This being the case, it is obvious that the arbitrator
was within his jurisdiction not to deal with this so-called counter-claim at
all. This objection, therefore, does not fall within any of the grounds
mentioned in Section 48 and must, therefore, be rejected.
H
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 443
[R. F. NARIMAN, J. ]

II.The Tribunal failed to make a determination on the A
Appellants’ counter-claim concerning ouster of the Appellants
88. According to the Appellants, the tribunal failed to make a
determination on the Appellants’ counter-claim that the Respondent’s
efforts to oust Appellant No.1 and his family from Ravin amounted to a
breach of the JVA. In answer to this submission, the tribunal, in the B
Second Partial Final Award, expressly set out the following:
“6. Further, the parties both identify different catalysts for the
breakdown of the JVA relationship. In short, the Respondents
submitted that, as far as they were concerned, during the tenure
of Mr. Sarogni their relationship with the Claimant was good and C
both parties were working together to make Ravin a more
successful company. The swing point came and the trouble started
brewing when Ms. Farise was sent out to head the affairs of
Ravin with the single agenda to take control of Ravin and oust the
Karias. The Respondents’ overall case theory therefore focuses
on a clash of personalities combined with the acquisition of ACPL D
and the Claimant’s overriding intention to create a situation where
the Karias appeared to be in breach so that the Claimant could
buy the Respondents out for a lower price.
7. The Claimant submitted that whilst relations had not been good
from the time of the JVA onwards, matters took a turn for the E
worse after 15 September 2011, when the Integration Period came
to an end. The Claimant contends that up until this point Mr Karia
had been able to maintain a large degree of control over the
Company, both because of the arrangements in the Integration
Period and the fact that Mr. Sarogni had been absent from India F
for long periods of time. The end of the Integration Period was
followed shortly after by a change of CEO. Pursuant to the Board
Resolution of 1 November 2011, Ms. Farise was appointed CEO
of Ravin (H16/3381) and came to India with the legitimate intent
to actually take over the day to day management of Ravin. Indeed,
the Claimant does not shy away from the fact that Ms. Farise did G
intend to take control of Ravin, despite the Respondents’ own
particular interpretation of this event and motive. The Claimant’s
overall case theory therefore focuses not so much on any clash
of personalities per se, but on the date when power and control
under the terms of the JVA was to shift decisively away from H
Mr. Karia. It is the Claimant’s case that Mr. Karia was simply not
444 SUPREME COURT REPORTS [2020] 4 S.C.R.

A willing to abide by such provisions and wished to remain in day to
day control of Ravin and prevent the Claimant from exercising
such control. In other words there is a straightforward division
between the parties’ rival position. Neither party suggested that
both versions could in essence be correct. The Tribunal therefore
has to make findings as to where the evidence lies and which
B
version fits the facts as found.”
This case was answered in great detail, finding that it was the
Appellants and not the Respondent No.1 who materially breached the
JVA. Given this position, the tribunal finally held:
C “291. Given the findings made by the Tribunal in favour of the
Claimant’s allegations of material breach it naturally follows that
the Respondents do not succeed in these allegations of
mismanagement
292. The Respondents were themselves in material breach with
D regard to the whole conduct surrounding Mr. Dhall’s appointment
of Ms. Mathure and the so called authorisation form. The Claimant
was not in material breach in suspending Mr. Dhall. Far from it.
The Respondents, however, were plainly in material breach by
their reaction to this suspension effectively leading to a one day
strike.
E
293. The question of the attendance of Claimant nominees at the
Akruti office is another chapter of the saga in which the
Respondents do not emerge without serious criticism. As is clear
from this Award the Respondents engendered a toxic atmosphere
at Akruti in January 2012 (even in its fire stricken state) and such
F was the situation at the ground that it was not really possible for
Claimant nominees to attend without fear of their own safety.
294. Lastly, the circumstances surrounding the appointment of
the CEO and CFO does not give rise to any conceivable material
breach on the part of the Claimant. The Claimant was entitled to
G nominate a CFO and the CEO. They did so. The Respondents did
not oppose the appointment of Ms. Farise. Nevertheless they did
obstruct her at every turn once she was appointed because it
became apparent that she intended pursuant to the JVA to take
day to day control of Ravin and the Respondents did not wish this
to happen. As regards Mr. Brunetti, the CFO, the Respondents
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[R. F. NARIMAN, J. ]

did veto his appointment. This was not a material breach on their A
part as it was their right to do so under Schedule IX to the JVA.
Nevertheless it cannot be said to be a material breach by the
Claimant. That is unsustainable.
CONCLUSION
295. The Respondents have not succeeded in establishing any B
material breach of the JVA committed by the Claimant.”
89. This being the case, it would be wholly incorrect to state that
the tribunal has failed to make a determination on the Appellants’ counter-
claim that the Respondent’s efforts to oust Appellant No. 1 and his family
amounted to a breach of the JVA. While considering the case of the C
Appellants and the cross-case of the Respondent, the tribunal has
adverted to pleadings, evidence and has given detailed findings as to
why the Appellants are in material breach of the JVA, as a result of
which the Respondent cannot be said to be in material breach of the
JVA. This being the case, it cannot be said that this material issue has D
not been answered by the Second Partial Final Award. This ground,
therefore, also does not fall within any of the stated pigeon-holes under
Section 48.
III.The Tribunal failed to make a determination on the
Appellants’ counter-claim concerning registration of the Ravin E
Trademark
90. Dr. Singhvi then argued that the tribunal failed to make any
determination on the Appellants’ counter-claim that the Respondent
No.1’s surreptitious attempts to register the Ravin trademark in its own
name was a material breach of the JVA. When the First Partial Final F
Award is perused, it becomes clear that what was argued before the
arbitrator, and therefore answered by the arbitrator, is whether the tribunal
had jurisdiction to go into the Trademark License Agreement. The First
Partial Final Award records:
“IX. Tribunal’s ruling on jurisdiction
G
134. Finally, there were before the Tribunal three short points on
the scope of the jurisdiction of the Tribunal under the arbitration
agreement in the JVA.
135. Sensibly, the parties only made very brief submissions on
these points. At one point, it seemed that the Respondents’ H
accepted that the Tribunal did not have the jurisdiction which it
446 SUPREME COURT REPORTS [2020] 4 S.C.R.

A contended for, but instead was inviting the Claimant to agree upon
an expansion of the Tribunal’s jurisdiction in order to avoid any
possibility of multiplicity of proceedings under different agreements.
136. In the end, however, the Respondents’ counsel did invite the
Tribunal to rule upon these short points. The three points were as
B follows:
1) Whether under Clause 27.1 of the JVA the Tribunal has
jurisdiction to decide who has the right to register the Ravin
trademark.
2) Whether the Tribunal has jurisdiction to decide alleged
C breaches of the Trademark License Agreement.
3) Whether the Tribunal has jurisdiction to decide alleged
breaches of the Technical Assistance Agreement.
137. The Tribunal concludes that it does not have jurisdiction in
D respect of any of these three matters.
138. The ownership of the Ravin trademark and the right to register
the same is not a dispute arising out of, relating to, or in connection
with the JVA. There is no provision in the JVA permitting the
parties to the JVA to change the name of Ravin Cables to a new
name incorporating the word Prysmian – see Clause 9. There is
E
also a provision for Ravin to enter into a trademark licence
agreement in the form of Schedule 5, but that agreement deals
with the licence by Prysmian and not the Ravin trademark.
139. Quite simply a dispute regarding the right to register the Ravin
trademark falls outside of the scope of the arbitration clause.
F
140. This makes it unnecessary for the Tribunal to consider further
the interesting and difficult questions of the arbitrability of such
disputes, even if they were held to fall within the scope of the
arbitration agreement. The Tribunal makes no finding on this point,
it not having been argued, but observes that it is by no means a
G foregone conclusion that such disputes would under English law
be arbitrable.
141. Further, the disputes respectively under the Trademark
License Agreement (in the form of Schedule 5) and the Technical

H
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[R. F. NARIMAN, J. ]

Assistance Agreement (in the form of Schedule 6) fall outside the A
jurisdiction of the Tribunal.
142. It is common ground that the parties did enter into a Trademark
License Agreement in the form of Schedule 5 and the Technical
Assistance Agreement in the form of Schedule 6.
143. Equally, it is common ground that these agreements made B
provision for disputes to be referred to arbitration in Milan, ltaly
under Italian law. There is no warrant to construe the arbitration
agreement in the JVA as somehow trespassing upon the arbitration
agreement contained in two agreements, which the parties agreed
to enter into and, in fact, did enter into with these separate dispute C
resolution provisions. Disputes under or concerning the Trademark
License Agreement and Technical Assistance Agreement are to
be resolved in accordance with the dispute resolution provisions
under those agreements. The Tribunal observes that, if there had
been a dispute under Clause 9 of the JVA as to whether in fact
the covenant to enter into those two further agreements had been D
complied with, then this would be a dispute under the JVA
agreement. Nevertheless, this is not the case being advanced by
the Respondents in their pleaded case.”
91. We have gone through the transcript of the hearings on both
12th and 13th December, 2012 before the arbitrator which clearly show E
that no argument was ever made by the Appellants before the tribunal
that the Respondent had surreptitiously attempted to register the Ravin
Trademark in its own name, and therefore was in breach of the
competition clauses of the JVA. We are thus satisfied that this argument
again appears to be an afterthought which has no foundation in the F
submissions made before the learned arbitrator. This submission does
not again fall within any of the grounds referred to under Section 48.
IV. The Tribunal acted contrary to the Parties’ expert
witnesses and ignored critical evidence with regard to the
acquisition of ACPL G
92. Dr. Singhvi argued that the tribunal acted contrary to the
admissions of the parties’ expert witnesses and ignored critical evidence
with regard to the acquisition of ACPL. Further, since the Respondent
failed to produce the relevant documents regarding the competing
business carried out by ACPL, an adverse inference ought to be drawn
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448 SUPREME COURT REPORTS [2020] 4 S.C.R.

A against the Respondent No.1, which the Appellants allege the learned
arbitrator failed to do.
93. The learned arbitrator indicated his approach in the Second
Partial Final Award as follows:
“23. Whilst therefore the parties’ detailed submissions have set
B the parameters for the Tribunal’s decisions and have assisted the
Tribunal in reaching its conclusions on the individual particulars of
alleged material breach, it has simply not been possible and nor is
it desirable for the Tribunal to undertake an exhaustive analysis of
each sub-argument and each piece of evidence referred to.
C Instead, in disposing of this dispute the Tribunal will focus, in large
part, on the heart of the rival contentions with respect to the dispute
as a whole and the individual allegations in the rival Determination
Notices. This requires the detailed submissions to be substantially
stripped back to reveal the essential complaint being made, which
can then be assessed against the terms of the JVA and the rival
D theories.
24. In respect of the rival theories, the Tribunal has not lost sight
of the broader case theories which frame the disputed events and
allegations. The veracity of the individual and collective allegations
arising from the crucial period between November 2011 and March
E 2012 can and indeed must be tested by reference to the parties’
rival theories and should not necessarily be isolated and examined
in the abstract.”
94. The tribunal then went into the acquisition of ACPL in some
detail, from paragraphs 216 to 244 of the Second Partial Final Award,
F and held that Mr. Karia’s contemporaneous reaction to the acquisition
of Draka, which led to an indirect acquisition of 60 subsidiaries, one of
which was ACPL, was that he was very happy that the Respondent No.
1 had so expanded its business. Several congratulatory emails are referred
to by the arbitrator. Further, the arbitrator found that Mr. Karia’s
G statements in cross-examination showed that he had knowledge of this
acquisition way back in November 2010 but never complained of material
breach of the JVA. The arbitrator also examined evidence as to serious
actual loss or harm, finding no such credible evidence, except occasional
instances of both companies tendering for the same business. It was
held that there was no reliable evidence that the Ravin’s business had
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[R. F. NARIMAN, J. ]

been lost post the ‘Draka acquisition’ or that there had been any diversion A
of business from Ravin to ACPL or vice versa. The arbitrator then held
that ACPL is a small specialist cable business and operates principally in
the area of instrumentation cables, which is not the area in which Ravin
operates. The learned arbitrator also adverted to the evidence of the
expert witnesses in arriving at this conclusion. It also made a reference
B
to Mr. Karia’s cross-examination, stating that Mr. Karia himself
considered ACPL to be the 50th or 60th competitor given its small business.
The finding, therefore, was that the acquisition of ACPL did not in any
manner amount to a serious material breach of the JVA.
95. Insofar as the failure to produce documents by Respondent
No.1 with regard to its subsidiary ACPL is concerned, it must be C
remembered that ACPL is not a direct subsidiary of Respondent No. 1,
being an indirect subsidiary of Respondent No.1’s parent company
consequent upon the acquisition of Draka. It has an independent Board
of Directors. Above all, ACPL was not a party to these arbitral
proceedings. The tribunal therefore made Procedural Order No. 5 dated D
27.11.2012 in which it specifically recorded that if the Appellants wish to
pursue their request for disclosure of further documents qua ACPL,
they must approach the Courts to do so, as it was not within the
arbitrator’s power to direct a person who is not party to the proceedings
to produce documents. At no stage did the Appellants act in compliance
of this Procedural Order and approach an English Court to direct ACPL E
to produce documents within its possession. This being so, as has been
held hereinabove, a party cannot complain of breach of natural justice
when it was within the control of such party to approach a U.K Court
for production of such documents. This not having been done, it is clear
that no adverse inference, as has been argued, could have been drawn F
by the learned arbitrator. This ground also, therefore, does not fall within
any of the grounds argued before us under Section 48.
V. Perverse Interpretation of the JVA
96. According to Dr. Singhvi, the tribunal’s interpretation of clause
21 of the JVA is perverse. As has been held, referring to some of the G
judgments quoted hereinabove, in particular Shri Lal Mahal (supra),
the interpretation of an agreement by an arbitrator being perverse is not
a ground that can be made out under any of the grounds contained in
Section 48(1)(b). Without therefore getting into whether the tribunal’s
interpretation is balanced, correct or even plausible, this ground is rejected. H
450 SUPREME COURT REPORTS [2020] 4 S.C.R.

A VI. The Tribunal ignored critical evidence with regard to
the issue of agency agreements and Direct Sales
97. Dr. Singhvi argued that the tribunal ignored admissions of the
Respondent and other critical evidence with regard to the issue of agency
agreements and direct sales. The Second Partial Final Award deals with
B this issue and the issue regarding agreements with agents in great detail
from paragraph 245 to paragraph 279. As many as five reasons are
given, after examining the evidence, for rejecting the plea that agency or
distribution agreements were entered into in violation of the JVA. Further,
so far as direct sales into India were concerned, after considering the
pleadings and the evidence, the tribunal found that the Appellants altered
C their case from their pleaded case and now advanced a case that the
fact of direct sales amounts to a material breach of clauses 8 and 20 of
the JVA, contrary to what was stated in their determination notice. Even
otherwise, the tribunal found that there was no material breach for the
following reason:
D “277. Those sales, however, were for all practical purposes made
up of sales of telecom cables, industrial special cables, automotive
cables, network and component and services. Ravin did not
manufacture those types of cables. Indeed over 85% of the sales
came from two affiliates manufacturing telecom cables, which
E Ravin did not manufacture and had no experience in selling either.
Indeed the Tribunal accepts the evidence of Ms. Farise and
Mr. Koch and Mr. Karve on this issue (see, inter alia, §§5-8, E(I)/
10/56-57, §23, E(I)/26/206, §23, E(I)/26/207, §§18- 32. E(I)/23/
184-186, 11 December 2012 hearing, pp.134-140, §46, E(I)/17/
92, Day 2, pp.83-86, §18 of, E(l)/24/189). This renders the whole
F argument of diversion of sales or breach of good faith by virtue of
these direct sales somewhat academic.
278. Indeed these figures illustrate exactly why the Respondents
placed so much emphasis on their argument that the mere fact of
sales was a breach irrespective of anything else. This was once
G more how it was put by Mr Salve SC in his oral closing argument
(Day 10, pp. 183-185) The Tribunal has, however, found against
the Respondents on this point.”
98. Having perused the Award in this behalf, it cannot be said that
the tribunal has in any manner ignored admissions or other critical evidence
H with regard to the issue of direct sales. In any case, if at all, this ground
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 451
[R. F. NARIMAN, J. ]

goes to alleged perversity of the award, which as has been held by us A
hereinabove, is outside the ken of Section 48.
VII. The Tribunal adopted disparate thresholds in
determining material breach
99. Dr. Singhvi has then argued that the tribunal adopted disparate
thresholds for determining material breach between the Appellant and B
the Respondent. Again, all the allegations made under this ground go to
perversity of the award, which is outside the ken of Section 48. That
apart, the tribunal indicates in paragraphs 104 to 106 of the Second Partial
Final Award, that no disparate thresholds in determining material breach
was adopted as follows: C
“(3) Tribunal’s conclusions on the Events of Default relied
upon by the Claimant
104. The Tribunal has in mind the test for establishment of material
breach as identified in paragraphs 37-47 above. The Claimant
has particularised a number of different aspects of the conduct of D
the Respondents concentrating on the time frame from November
2011 to February 2012. Each of the Claimant and the Respondents
have advanced detailed evidence and submissions on each of these
particulars as addressed above. Nevertheless the breaches cannot
be treated in complete isolation. In many instance the breaches E
can be seen as forming part of a pattern of alleged conduct
involving the same witnesses and questions of their credibility as
regards the rival evidence and rival “case theories.” This does
not mean to say that the allegations all stand or fall together but a
finding in relation to the credibility of the story advanced by one
side or other in relation to one allegation does impact on the F
credibility of other parts of the story.
105. Therefore before turning to the individual allegations it is
necessary to say something about the chief witnesses on each
side and their credibility and demeanour, having reviewed and
considered carefully once more the evidence advanced. G
106. The Tribunal has no hesitation in reaching the conclusion
that the chief witnesses called by the Claimant were truthful, honest
and whilst faced with a difficult and tense situation in India
continued to try to resolve matters in accordance with the
provisions of the JVA.” H
452 SUPREME COURT REPORTS [2020] 4 S.C.R.

A VIII. The Tribunal’s selective consideration of
contemporaneous evidence
100. Dr. Singhvi then argued that the tribunal’s analysis of
contemporaneous conduct is selective and perverse. Without going into
any further details in this ground, this argument must be rejected out of
B hand, as not falling within the parameters of Section 48. Equally, the
tribunal’s consideration of evidence of key witnesses being selective
and perverse, must be rejected on the same ground.
IX. The Tribunal appointed a conflicted valuer
101. Dr. Singhvi then contended that the tribunal appointed a
C conflicted valuer, which prevented the Appellants from participating in
the valuation exercise. This has been dealt with in the Final Award dated
11.04.2017 by the learned arbitrator as follows:
“II. Deloitte Valuation Report and the Respondents’
Challenge to Deloitte
D
4. It is important at this stage to record one specific matter here
which is referred to and set out in the Claimant’s submissions
(see paragraph 24 and Annexure E thereto at pages 170-172) and
not contradicted by the Respondents in its submissions. On 14
October 2014 (Annexure E p. 171), Mr. Karia on behalf of the
E Respondents sent an email to the Claimant in response to the
Claimant’s request dated 14 October 2014 (Annexure E p.170)
that the Respondents do cause the Company in a timely fashion
to execute the Engagement letter for Deloitte. On 14 October
2014 (Annexure E p.171), Mr. Karia for the Respondents objected
F to the engagement of Deloitte contending that they were conflicted
out of acting as Valuer. This was a remarkable stance to take. On
30 April 2013 the Respondents, via an email sent by their solicitors,
had confirmed that the Respondents were agreeable to Deloitte
or KPMG acting as independent Valuers under the JVA. The
Tribunal noted and recorded this in the Preamble to Procedural
G Order No 12, albeit referring to the date as 30 April 2014. There
had been no material change in circumstance since April 2013 or
Procedural Order No 12, to justify this change of position. The
Tribunal concludes that the Respondents took this position in an
attempt to hinder, delay and frustrate the valuation exercise and
consequent transfer of shares. The Respondents advanced a series
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[R. F. NARIMAN, J. ]

of points in their email. Each was answered in the Claimant’s A
solicitors’ email dated 15 October 2014 (see Annexure E p.170 to
the Claimant’s submissions). In summary, the Respondent was
not in a position following Procedural Order No 12 and its prior
agreement to Deloitte subsequently to withhold its agreement to
or not to object to the appointment of Deloitte. It had been ordered
B
following the Respondents’ indication of agreement or non-
objection to Deloitte.
5. The Respondents had not previously sought to identify any
matters which disentitled Deloitte from acting but instead had
agreed to their name being put forward to the Tribunal for
appointment. Furthermore, the matters identified did not in any C
event impugn Deloitte’s independence or ability to act as Valuer
in accordance with the provisions of the JVA. The fact that Deloitte
had been approached by the Respondents to conduct an
independent valuation but had declined to act because of the
impending role for the Company as Valuer only serves to underline D
not undermine their independence. Also, the fact that the
Respondents had asked Deloitte earlier in the arbitration to
undertake some computer forensic exercise was not relied upon
by the Respondents nor did it impugn their independence. Finally,
the Respondents refer to Deloitte having acted as auditor of Power
Plus Cable Company LLC (“Power Plus”) a company E
incorporated in the UAE and based in Dubai in which Ravin holds
a 49% shareholding, This is not the same entity as the Company,
and did not impugn Deloitte’s independence and did not prohibit
them under the terms of Clause 17.3 of the JVA from being
appointed. Clause 17.3 only applied to a prohibition on the statutory F
auditor of the Parties to the JVA acting as Valuer. It is not suggested
that Deloitte was the statutory auditor of Ravin. Power Plus was
not a Party to the JVA. Further, Clause 17.1 of the JVA expressly
identified Deloitte as a suitable independent party to be appointed
as Valuer. In any event, Deloitte’s role as auditor of Power Plus
was known to the Respondents and having agreed not to object to G
Deloitte in their 30 April 2013 email it was no longer open to the
Respondents to advance this point. There was no breach of the
JVA but even if there had been it was waived by the Respondents.

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454 SUPREME COURT REPORTS [2020] 4 S.C.R.

A 6. Thus following this exchange, Deloitte were in due course
engaged albeit through the default mechanisms provided for in
Procedural Order No. 12.”
We are satisfied that the learned arbitrator has considered this
point in some detail and dismissed it. This objection again does not fall
B under any of the grounds mentioned in Section 48.
X. Valuation ignores Ravin’s stake in Power Plus
102. Dr. Singhvi then argued that the valuation made by Deloitte
ignored a stake of 49% of Ravin in a company called Power Plus, which
stake has been valued by the Appellants’ valuer (one BDO) at INR 563
C crores. Considering that this aspect was not taken into account by Deloitte,
the valuation report ought not to have been accepted by the learned
arbitrator, also being contrary to the position taken by both parties. This
submission was dealt with by the learned arbitrator in great detail in
paragraph 19 of the Final Award dated 11.04.2017. Among other things,
D the learned arbitrator referred to clause 17 of the JVA and stated that
the said clause together with the formula prescribed therein was followed
by Deloitte. Since this was done, Deloitte cannot possibly be faulted and
cannot further be asked to take into account the stake of Ravin in Power
Plus, as that would go outside the JVA. This again is a matter for the
arbitrator to determine. This again is a ground wholly outside grounds
E that can attract challenge to foreign awards under Section 48.
XI. Valuation Date
103. Dr. Singhvi then argued that the tribunal acted contrary to
the parties’ submissions in arriving at a valuation date of 30.09.2014,
F much later on the date of the Final Award which is 11.04.2017, as the
parties had agreed that this date ought to be the date closest to the date
of actual sale of share and would be valid only until 31.12.2014. The
learned arbitrator dealt with this objection in the Final Award dated
11.04.2017 as follows:
“D. Valuation date
G
24. The Respondents also complain that whilst Procedural Order
No. 12 provided for a valuation date of 30 September 2014, Deloitte
instead used data as at 31 July 2014. Respondents also complained
that since the Report was only issued in November 2015, the
valuation was out of date.
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[R. F. NARIMAN, J. ]

25. The Tribunal is unable to accept the validity of this criticism A
for the following reasons:
1) Deloitte records that it did request data from the Company up
to 30 September 2014, but this data was not provided to Deloite.
The Tribunal has earlier in this Award recited the facts from which
the Tribunal has reached the conclusion that the Company’s lack B
of cooperation with Deloitte was effectively controlled and directed
by the Respondent. This was most notably the case with regard
to the Company’s failure to issue the Engagement Letter to Deloitte
following Procedural Order No. 12. The Tribunal therefore
concludes that it is not open to the Respondents to complain of
the lack of further data being proved to Deloitte. It was the C
Respondents who were in control of the provision or non-provision
of that data.
2) The Tribunal also concludes that the Respondents are not entitled
to complain of the delay in the production of the Deloitte Valuation
Report since that delay was materially contributed to by reason D
of the Respondents’ complaint with regard to Deloitte’s
involvement which is made to the LCIA. It is notable that the
Respondents have not in their submission denied that they made
such a complaint to the LCIA and have not contradicted the
Claimant’s submission that this complaint materially contributed E
to the delay in the production of the Deloitte Report.
3) Furthermore, the Respondents are not entitled to complain that
Deloitte has used a valuation date of 30 September 2014. This
was the valuation date agreed to and requested by the
Respondents. Furthermore, as is recorded in the Recital to F
Procedural Order No. 12 prior to the hearing in October 2014
leading to the making of the order of the valuation date, the
Respondents expressly accepted that the question of the Valuation
date was a matter properly within the jurisdiction of and for the
determination of the Tribunal. The Tribunal then made an order
for the valuation as requested by the Respondents.” G
Having found that the delay in the valuation report was attributable
largely to the Appellants and that therefore the agreed date of 30.09.2014
is the correct date, we find nothing in the award which can be said to
even remotely shock our conscience. This ground is also therefore
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456 SUPREME COURT REPORTS [2020] 4 S.C.R.

A rejected. Dr. Singhvi’s fervent plea to exercise our power under Article
142 of the Constitution of India, so as to shift the valuation date from
30.09.2014 to the date of our judgment must also be rejected given the
learned arbitrator’s finding. Quite apart from this, nothing in Section 48
of the Arbitration Act would permit an enforcing court to add to or subtract
from a foreign award that must either be enforced or rejected by reason
B
of any of the grounds under Section 48 being made out to resist
enforcement of such foreign award. This Court’s power under Article
142 ought not to be used to circumvent the legislative policy contained in
Section 48 of the Arbitration Act.
XII. Inconsistent Awards
C
104. Dr. Singhvi then argued that the tribunal’s ruling in the First
and Second Partial Final Award, with regard to the interpretation of
clause 21, is inconsistent and irreconcilable. Apart from the fact that we
do not find anything in the said two awards with regard to clause 21
being inconsistent and irreconcilable, this ground again does not, in any
D manner, shock our conscience and is therefore rejected.
XIII. Violation of FEMA and the Rules thereunder
105. Dr. Singhvi then argued that in ordering the sale of shares at
a 10% discount of the fair market value arrived at by Deloitte, FEMA
E and the Rules made thereunder would be breached, resulting in the award
being contrary to the public policy of India, in that it would be against the
fundamental policy of the Indian law. As pointed out hereinabove, for
the reasons given in paragraphs 79 to 84 of this judgment, this ground
again is bereft of any merit. In fact, the learned arbitrator awarded INR
63.90 per share as per the Deloitte valuation, which was contractually
F binding under clause 17 of the JVA. Therefore, the lower valuation of
INR 16.88 per share as in the M/s Kalyaniwalla & Mistry valuation
report dated 04.03.2016 was not accepted.
XIV. Bias of the Tribunal
106. Lastly, Dr. Singhvi argued that the learned arbitrator was
G
clearly biased in that the outcome of the Second Partial Final Award
was clear to the Respondent No.1, inasmuch as its agent, one M/s Gilbert
Tweed Associates, sent out an advertisement for recruiting employees
for Ravin, two months before the Second Partial Final Award, thereby
showing that this agent was clear as to the outcome of the proceedings.
H This was strongly refuted by the Respondent, stating that at no time had
VIJAY KARIA & ORS. v. PRYSMIAN CAVI E SISTEMI SRL & ORS. 457
[R. F. NARIMAN, J. ]

Gilbert Tweed Associates been retained by them. As a matter of fact, A
an agency called M/s Key2People was engaged by Respondent No.1 to
identify potential candidates who could be recruited for the company in
due course. M/s Key2People, in turn, appointed M/s Gilbert Tweed
Associates. In any case, the Respondent undertook to terminate the
engagement of M/s Key2People by its email of 28.10.2013. The allegation
B
of bias thus made was clearly a desperate afterthought. The contention
that the arbitrator was otherwise biased was dealt with in the Final Award
as follows:
“16. The Respondents have also made a repeated reference to
an allegation that the Tribunal lacked independence and that the
Respondents have lost faith in the Tribunal continuing to give an C
impartial determination of the matters which remain in dispute.
17. These allegations have already been raised by the Respondents
and rejected by the LCIA Court. Furthermore, the Respondents
have not sought to invoke any procedure in the English Court,
which is the court of the seat with supervisory jurisdiction. If the D
Respondents wished to challenge the ruling of the LCIA Court
and challenge the further involvement of the Tribunal in the process,
the Respondents had to bring a challenge within the strict time
limits provided for in the English Arbitration Act 1996, but they
have not done so. It is regretted that the Respondents continued E
to advance this unfounded and unparticularised allegation. The
Tribunal has in the past pointed out the distinction between
independence and impartiality on the one hand and on the other
the role of an arbitrator who has to decide between rival arguments,
diametrically opposed and irreconcilable positions adopted before
it and direct clash of evidence before it and then apply such findings F
to the disputes before it. It is an inherent and an inevitable part of
the arbitral process that where parties, as indeed has been the
case in this arbitration, have taken radically opposing positions on
the evidence and the law that multiple decisions will have to be
made that will ultimately disappoint one of the parties. This has G
been exactly such a dispute. It has, however, been a distinct feature
of this process that the Respondents have not only voiced their
disappointment but have not complied with the orders of the
Tribunal to protect the Parties’ rights during the course of the
Arbitration and not complied with the terms of the JVA as has
H
458 SUPREME COURT REPORTS [2020] 4 S.C.R.

A been found and determined by the Tribunal in its prior Awards. In
a dispute such as the present where it has been necessary to
render a series of Awards, it is necessary for the Tribunal to apply
the prior findings in any subsequent Award.”
107. Having answered each of the submissions of Dr. Singhvi on
B behalf of the Appellants, we cannot help but be left with a feeling that
the Appellants are indulging in a speculative litigation with the fond hope
that by flinging mud on a foreign arbitral award, some of the mud so
flung would stick. We have no doubt whatsoever that all the pleas taken
by the Appellants are, in reality, pleas going to the unfairness of the
conclusions reached by the award, which is plainly a foray into the merits
C of the matter, and which is plainly proscribed by Section 48 of the
Arbitration Act read with the New York Convention. We have read, in
detail, the four awards passed by the learned sole arbitrator and are
satisfied that he has exhaustively discussed the evidence and arrived at
detailed findings for each of the issues, claims and counter-claims, and
D finally accepted the Respondent’s case and rejected the Appellants’.
Given the fact that our jurisdiction under Article 136 of the Constitution
is itself limited, and given the fact that this Court’s time has unnecessarily
been taken by a case which has already been dealt with by four exhaustive
awards on merits and also by the impugned judgment of the Bombay
High Court, we dismiss these appeals with costs of INR 50 lakhs, to be
E paid by the Appellant to Respondent No.1 within 4 weeks from today.

Devika Gujral
Appeals dismissed.

F

G

H