JUDGMENT

VIBHU BAKHRU, J EA(OS) 713/2015

1. GEA EGI Contracting Engineering Co. Ltd. (hereafter 'GEA'), a company incorporated under the laws of Hungary and having its principal office at Hungary, has filed the present petition to enforce an arbitration award dated 21.08.2014 (hereafter 'the impugned award') rendered by an Arbitral Tribunal in respect of the disputes between GEA and Bharat Heavy Electricals Limited (BHEL), a Government company incorporated under the laws of India. The seat of arbitration was in Zurich, Switzerland and the arbitration was conducted in accordance with the UNCITRAL Rules.

2. BHEL has filed the aforementioned application (being EA (OS) 713/2015) under Section 48 of the Arbitration and Conciliation Act, 1996 (hereafter 'the Act'), inter alia, objecting to the enforcement of the impugned award principally for two reasons. First, that BHEL has instituted a suit - Suit No. 878/2014 (hereafter 'Noida Suit') - before the Civil Judge, Senior Division, Gautam Budh Nagar, inter alia, praying for a mandatory injunction restraining GEA to enforce the compliance of the impugned award; and second, that the impugned award is contrary to the public policy of India as, according to BHEL, the performance of the contract between the parties was rendered impossible because of civil war like situation in the Syrian Arab Republic (Syria).

3. Thus, the only controversy to be addressed is whether the impugned award is enforceable under Part II of the Act as a decree of this Court?

4. Briefly stated, the necessary facts relevant to address the aforesaid controversy are as under:-

4.1 Public Establishment of Electricity for Generation and Transmission (PEEGT) is the main shareholder of Tishreen Power Public Corporation which in turn operates the Tishreen Power Plant. PEEGT and BHEL entered into a contract on 29.10.2009 (hereafter 'the PEEGT Contract') whereby BHEL undertook to design, manufacture, transport, erect and commission necessary equipment for extension of the Tishreen Power Plant by addition of two units of 200 MW each to the existing capacity of the Tishreen Power Plant (hereafter ‘the Tishreen Project’).

4.2 On 01.12.2010, BHEL entered into an agreement (hereafter 'the Agreement') with GEA for supply and erection of Dry Cooling Heller System (hereafter 'the Equipment') for the Tishreen Project. In terms of the Agreement, GEA was to supply equipment, materials and spare parts, CIF Syrian Port of entry/CIP other modes of transportation. GEA also agreed to provide design/ data for erection and commissioning procedures; supervise the erection and commissioning of the equipment as well as the performance test procedures; completion of performance test; and training of operating and maintenance personnel. BHEL was obliged to pay for the Equipment in the manner as provided under the Agreement.

4.3 On 21.05.2012, BHEL requested GEA to defer dispatches of certain material, which were required at the later stage of the Tishreen Project. During the period, 23.05.2012 to 06.06.2012, GEA issued pre-shipment notices indicating their readiness to dispatch certain equipment as contracted.

4.4 Thereafter, on 13.06.2012, BHEL sent a letter requesting GEA to “stop dispatches against the subject contract with immediate effect”. The said letter also indicated that the said request was being made because BHEL’s operation at the site of the Tishreen Project was temporarily suspended with effect from 17.06.2012 till such time the situation becomes normal, due to “turbulent and unrest conditions” in Syria. The said letter was followed by a Force Majeure Notice dated 14.06.2012 whereby BHEL stated that it was temporarily suspending its site operations with effect from 17.06.2012 in view of the advisory received from the Embassy of India, Damascus advising BHEL to withdraw their staff from the Tishreen Project site due to rising unrest, continuing hostilities and worsening of the security situation in Syria. The said notice indicated that in