2004 Supreme(Cal) 199

High Court Of Calcutta
Jayanta Kumar Biswas
KTC KOREA CO.LTD - Appellant
Versus
HOBB INTERNATIONAL PRIVATE LTD - Respondent
E. C.  37  Of  2002
Decided On : 03/18/2004

Enforcement of a foreign award may be refused if the arbitrator dealt with a difference not contemplated by or falling within the terms of the submission to arbitration, if the enforcement would be contrary to the public policy of India, or if the enforcement would be contrary to the concept of justice and morality.

Headnote:

FOREIGN AWARD ENFORCEMENT - ARBITRATION - SECTION 47 (2) OF THE ARBITRATION AND CONCILIATION ACT, 1996 - CERTIFICATION OF ENGLISH TRANSLATION OF FOREIGN AWARD - SECTION 48 (1) (C) OF THE ACT - REFUSAL OF ENFORCEMENT - ARBITRATION CLAUSE - SCOPE AND JURISDICTION OF ARBITRATOR - LIMITATION - PUBLIC POLICY OF INDIA - SECTION 48 (2) (B) OF THE ACT - ENFORCEMENT CONTRARY TO JUSTICE AND MORALITY.

Fact of the Case:

Petitioner filed an application for enforcement of a foreign award made in Korea in 2002. The respondent opposed the application, arguing that it should be dismissed for non-compliance with section 47(2) of the Arbitration and Conciliation Act, 1996 (Act) and that enforcement should be refused on grounds mentioned in section 48(1)(c) and section 48(2)(b) of the Act.

Finding of the Court:

1. The petitioner failed to comply with the requirement of section 47(2) of the Act by not producing a duly certified English translation of the award. However, the defect was procedural and did not warrant dismissal of the application. 2. Enforcement of the award should be refused under section 48(1)(c) of the Act as the arbitrator dealt with a difference not contemplated by or falling within the terms of the submission to arbitration. The arbitrator made the award on the basis of a forged and fabricated contract and exceeded his jurisdiction. 3. Enforcement of the award would be contrary to the public policy of India under section 48(2)(b) of the Act as it was obtained by fraud and was against the substantive law of limitation in India. 4. Enforcement of the award would also be contrary to the concept of justice and morality as the petitioner initiated the arbitration proceeding on the basis of a forged and fabricated contract.

Issues: 1. Whether the petitioner complied with the requirement of section 47(2) of the Act by producing a duly certified English translation of the foreign award? 2. Whether enforcement of the award should be refused under section 48(1)(c) of the Act as the arbitrator dealt with a difference not contemplated by or falling within the terms of the submission to arbitration? 3. Whether enforcement of the award would be contrary to the public policy of India under section 48(2)(b) of the Act as it was obtained by fraud and was against the substantive law of limitation in India? 4. Whether enforcement of the award would also be contrary to the concept of justice and morality?

Ratio Decidendi: 1. Section 47(2) of the Act requires a party seeking enforcement of a foreign award to produce a translation into English certified as correct by a diplomatic or consular agent of the country to which that party belongs, or certified as correct in such other manner as may be sufficient according to the law in force in India. In this case, the petitioner failed to produce a translation certified by a Korean diplomatic or consular agent or by a notary appointed under the Notaries Act, 1952. Therefore, the petitioner did not comply with the requirement of section 47(2) of the Act. 2. An arbitrator's jurisdiction is limited to the terms of the submission to arbitration. In this case, the arbitrator made the award on the basis of a forged and fabricated contract, which was not contemplated by or falling within the terms of the submission to arbitration. Therefore, the arbitrator exceeded his jurisdiction and the enforcement of the award should be refused under section 48(1)(c) of the Act. 3. Enforcement of the award would be contrary to the public policy of India under section 48(2)(b) of the Act as it was obtained by fraud and was against the substantive law of limitation in India. The petitioner initiated the arbitration proceeding on the basis of a forged and fabricated contract, which constituted fraud. Additionally, the claim was barred by limitation under the Limitation Act, 1963, which is the substantive law of limitation in India. 4. Enforcement of the award would also be contrary to the concept of justice and morality as the petitioner initiated the arbitration proceeding on the basis of a forged and fabricated contract.

Final Decision: The application for enforcement of the foreign award was dismissed with costs.