An arbitration award made in a foreign country is enforceable in India under the Foreign Awards (Recognition and Enforcement) Act, 1961, if it is binding on the parties and is not contrary to public policy.

Mrs. SUJATA MANOHAR, J:---This is an appeal from a judgment and order of a learned Single Judge of this Court under which he has held a foreign award dated 16th September, 1986 made in Paris under the arbitration rules of the International Chamber of Commerce as enforceable under the Foreign Awards (Recognition and Enforcement) Act, 1961. He has accordingly passed a decree under section 6 of the Act. The appellants have challenged his findings and decree.

Relevant Facts.

2. The appellant---Renusagar Power Company Ltd. is a Company registered under the Indian Companies Act, 1956. Its registered office is at Renukoot, District Mirzapur in Uttar Pradesh. It is a wholly owned subsidiary of Hindustan Aluminium Corporation Limited ('HINDALCO'). The respondent/General Electric Company is a company constituted under the laws of the State of New York. United States of America and carries on its business, inter alia, at 570. Lexington Avenue, New York, U.S.A.

3. By a contract in writing dated 24th August, 1964 between Renusagar Power Company Ltd. (hereinafter called 'Renusagar') and General Electric Company (hereinafter called 'G.E.C.') the latter agreed to sell to Renusagar plant, machinery and equipment for setting up a thermal power plant at Renukoot on the terms and conditions set out in the contract. G.E.C. under the contract, agreed to supply equipment and machinery for the plant, spare parts and services for the purpose of erection of the said power plant. The delivery of the equipment and spare parts by G.E.C. was to commence from 31st December, 1964 and was to be completed within 15 months i.e. by 30th March, 1966. The erection of the power plant was to be completed between 1-4-1966 and 30-6-1967. The parties contemplated that the plant would be fully operational by 30th June, 1967. The total purchase price agreed upon was U.S. $ 13,195.000 plus interest as stipulated in the contract. 10% of the price was to be paid by Renusagar within 30 days of the contract effective date. The balance 90% of the purchase price plus interest were to be paid in instalments in accordance with the schedule of payments set out in the agreement. Four series of promissory notes, each series containing 16 promissory notes were executed by Renusagar in favour of G.E.C. in respect of these payments. In case G.E.C. received an exemption from the Government of India, from payment of Indian income-tax on interest receivable by it from Renusagar the interest payable to Renusagar was agreed to be reduced to 6% instead of 6½% per annum. Article XIV (d) of the contract further provided that should G.E.C.'s application for tax exemption be denied by the Government of India Renusagar may withhold the Indian income-tax payable on any payment of interest. Renusagar, however, was required to furnish to G.E.C. the tax receipts on "all withheld tax amounts paid to the Central Government of India".

4. Article XVII of the contract contained an arbitration clause under which any disagreement arising out of or related to the contract was to be referred to arbitration in accordance with the Arbitration Rules of the International Chamber of Commerce.

5. Pursuant to the contract, an application was made to obtain from the Government of India exemption from payment of Indian income tax on interest payments to be made by Renusagar to G.E.C. By two orders dated 3rd September, 1965 and 7th June, 1967 the Government of India granted exemption to G.E.C. from payment of income-tax on interest receivable by G.E.C. from Renusagar. The Government of India, however, by its order dated 11th September, 1969 retrospectively revoked the exemption so granted.

6. In February 1970 Renusagar filled a writ petition being Writ Petition No. 179 of 1976 in the Delhi High Court challenging the order dated 11th September, 1969 cancelling the tax exemption granted to G.E.C. Renusagar prayed for an interim injunction from the Delhi High Court, inter alia, restraining the Government of India from t