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2008 Supreme(SC) 41

TARUN CHATTERJEE, P.SATHASIVAM
Venture Global Engineering – Appellant
Versus
Satyam Computer Services Ltd. – Respondent


Judgement Key Points

Certainly. Based on the provided legal document, the key points are as follows:

  1. The judgment emphasizes that a judgment-debtor retains the right under Section 34 of the Arbitration and Conciliation Act to invoke the public policy of India to set aside an award, even if the award is foreign in nature (!) .

  2. The applicable law, the Arbitration and Conciliation Act, 1996, applies comprehensively to all arbitrations, including international commercial arbitrations, and to proceedings related thereto, unless explicitly excluded by agreement (!) (!) (!) .

  3. Part I of the Act, which contains core provisions such as Sections 34 and 9, is applicable to all arbitrations held in India and, unless parties agree otherwise, also to international commercial arbitrations held outside India. This broad applicability is supported by a comprehensive interpretation that avoids lacunae and conflicts within the Act (!) (!) (!) (!) (!) .

  4. The Act's provisions, including Section 34, are not inconsistent with Section 48, which deals with the enforcement of foreign awards. The public policy of India, as defined in the Act, includes fundamental policies, interests of India, justice, morality, and legality, and can be invoked to challenge awards that are patently illegal or contrary to Indian interests (!) (!) .

  5. The enforcement of foreign awards can be challenged in India under Section 34, and such challenges are permissible even if the award is passed outside India, provided they are based on public policy grounds (!) (!) .

  6. The legal process for transferring shares involves compliance with Indian laws such as the Companies Act and FEMA, including obtaining necessary endorsements, executing transfer forms, paying stamp duty, and registering the transfer with the company [p_67–p_73].

  7. Enforcement of awards in foreign courts, such as in the US, must respect Indian injunctions and orders, and proceeding contrary to such orders may constitute contempt and undermine the enforceability of foreign judgments or awards (!) (!) .

  8. Specific contractual provisions, such as non-obstante clauses in Shareholders Agreements, can override other dispute resolution mechanisms, including arbitration clauses, and require enforcement actions to be taken in accordance with Indian law [p_77–p_79] (!) .

  9. The orders of Indian courts, including injunctions, must be respected by foreign courts, and pursuing enforcement in foreign jurisdictions despite Indian orders may be deemed a violation of jurisdiction and legal protocol (!) (!) .

  10. The orders passed by lower courts and the High Court are set aside, affirming that Part I of the Act applies to foreign awards and that challenges to such awards on public policy grounds are valid and permissible in Indian courts (!) (!) .

These points collectively highlight the broad jurisdictional scope of Indian arbitration law, the importance of respecting Indian legal orders in enforcement proceedings abroad, and the rights of parties to challenge arbitration awards on public policy grounds within Indian courts.


JUDGMENT

P. Sathasivam, J. —

1.Leave granted.

2.Appellant - Venture Global Engineering (in short VGE), a company incorporated in the United States of America with its principal office at 33662, James J Pampo Drive, Fraser, Michigan, USA 48026 through its Constituted Attorney, Mr. Pradeep Yadav filed this appeal challenging the final order and judgment dated 27.2.2007 passed by the High Court of Judicature, Andhra Pradesh at Hyderabad in City Civil Court Appeal No. 26 of 2007 whereby the Division Bench of the High Court dismissed their appeal.

3.The facts, which are necessary for the disposal of this appeal, are as under:

On 20.10.1999, Appellant-Company and respondent No.1- Satyam Computer Services Limited (in short ‘SCSL’), a registered company having its office at Mayfair Centre, S.P. Road, Secunderabad entered into a Joint Venture Agreement to constitute a company named Satyam Venture Engineering Services Ltd. respondent No.2 herein (in short ‘SVES’) in which both the appellant and respondent No.1 have 50 per cent equity shareholding. Another agreement was also executed between the parties on the same day being the Shareholders Agreement (in short ‘SHA’) which provides that dispute

















































































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