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Vijay Karia & Ors. v. Prysmian Cavi E Sistemi SRL & Ors.

Civil Appeal · 2020 INSC 178Decided 13 Feb 2020
Civil Appeal No. 1544 of 2020
Justice Rohinton Fali Nariman · Justice Aniruddha Bose · Justice V. Ramasubramanian

Background

Vijay Karia and other Indian shareholders of Ravin Cables Limited had entered a Joint Venture Agreement with the Italian company Prysmian Cavi E Sistemi SRL, which took a 51% stake in Ravin. Disputes arose over the running of the joint venture and alleged breaches of the agreement, leading Prysmian to invoke arbitration under LCIA (London Court of International Arbitration) Rules. A sole arbitrator in London passed four awards against the Indian shareholders, including directing a sale of their shares. The Bombay High Court held these foreign awards enforceable in India, and the shareholders appealed to the Supreme Court resisting enforcement.

Decision Breakdown

The Supreme Court dismissed the appeals and upheld enforcement of the foreign awards. It held that under Section 48 of the Arbitration and Conciliation Act, 1996, the grounds to resist enforcement of a foreign award are extremely narrow, and Indian courts cannot re-examine the merits of the dispute or act as a court of appeal over the arbitrator's findings. The Court went through each objection raised (alleged violation of the JVA's valuation procedure, alleged bias of the arbitrator, alleged breach of FEMA rules, alleged perversity and conflicting findings) and rejected all of them, finding none met the high threshold of "public policy of India" or other Section 48 grounds. It also awarded costs of INR 50 lakhs against the appellants for what it called speculative litigation attempting to re-open a dispute already decided on merits by four detailed arbitral awards and the High Court.

Lesson Learnt

Indian courts give strong deference to foreign arbitration awards and will not reopen the merits of a case merely because a party disagrees with the outcome; objections to enforcement under Section 48 must fit narrowly-defined grounds like genuine bias or fundamental violation of Indian public policy, not general unhappiness with the result.

Official source (sci.gov.in)View Judgment (PDF)

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