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The case of Vijay Karia v. Prysmian Cavi E Sustemi Srl & Ors.
The case of Vijay Karia v. Prysmian Cavi E Sustemi Srl & Ors.
In recent years, Indian courts have taken a more pro-enforcement posture concerning international arbitral decisions. The Supreme Court's recent decision in Vijay Karia[1] is not only a reaffirmation of this stance, but it can also be interpreted as an attempt to dissuade litigious parties from exhausting all available avenues of a challenge to foreign arbitral awards.
Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter “Act”) establishes the foundation for setting aside arbitral judgments issued in domestic and international arbitrations held in India. Though foreign awards cannot be disputed in India, the fulfilment of such awards in India may be lawfully challenged by the award debtor on the grounds set out in Section 48 of the Act.
Facts
Respondents in the instant matter had initiated arbitration under the London Court of International Arbitration Rules (2014) against the Appellants, alleging material breach of contractual obligations. The Appellants, in turn, had raised several counterclaims against the Respondents. The arbitrator had pronounced three partial awards on jurisdiction, material breaches, and counterclaims as raised by the Appellant. Subsequently, the final award was passed in April 2017. The arbitrator had issued three partial awards on the Appellant's issues of jurisdiction, substantial breaches, and counterclaims. The final award was then passed in April 2017. The four awards in question were not contested in England's courts, even though the Appellants could do so. When they were attempted to be enforced in the High Court of Bombay, these awards were challenged for the first time. The High Court of Bombay, on the other hand, dismissed the appeal, noting that none of the arguments made to prevent the awards from being enforced was under the restricted exclusions outlined in Section 48 of the Arbitration and Conciliation Act, 1996 ("Arbitration Act"). Following that, the Appellants filed a special leave petition with the Supreme Court under Article 136 of the Indian Constitution.
Judgment
The Supreme Court upheld the lone arbitrator's decision and rejected the appeals with high fees after reviewing the facts and arguments. The Court held that its constitutional power under Article 136 is quite restricted. Also, the burden of evidence has moved from parties pursuing enforcement to those opposing enforcement under the New York Convention's "pro-enforcement bias," which was established in Section 48 of the Arbitration Act of 1996.
Conclusion
After the initial setbacks of the prior instances, the Vijay Karia decision clearly shows that Indian law has evolved on the topic of foreign arbitral decisions being enforced under the Act.
[1] Civil Appeal No. 1544 of 2020
References:
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- In recent years, Indian courts have taken a more pro-enforcement posture with regard to international arbitral decisions
- Following that, the Appellants filed a special leave petition with the Supreme Court under Article 136 of the Indian Constitution.
- The Supreme Court upheld the lone arbitrator's decision and rejected the appeals with high fees after reviewing the facts and arguments.
