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Concept of the fundamental policy of Indian Law to mean
Concept of the fundamental policy of Indian Law to mean
Arbitration - Public Policy - The court held that the concept of the fundamental policy of Indian Law to mean (1) compliance of the statutes and judicial precedence, (2) need for judicial approach, (3) natural justice compliance, and (4) standards of reasonableness. Court relied on the decision in Renusagar (supra) for interpreting the expression “public policy.” Associate Builders v. Delhi Development Authority, (2015) 3 SCC 49, the Court relied on the decision in Renu sagar (supra) for interpreting the expression “public policy.”, referred. #2020 SCeJ 676
“public policy” relates to the public policy of the country where award is being enforced
“public policy” relates to the public policy of the country where award is being enforced
Arbitration - Public Policy - Foreign Awards (Recognition and Enforcement) Act, 1961- Section 7 – Section 7 inter alia provides that a foreign award may not be enforced if the “enforcement of the award will be contrary to public policy” - The expression “public policy” relates to the public policy of the country where award is being enforced - Section 23 of the Contract Act, 1872 deals with what consideration and objects are lawful and what not - If the court regards it as immoral or opposed to public policy, in that event, the consideration or object of agreement is said to be unlawful, and any agreement of which the object or consideration is unlawful is void. Held, It is apparent from above-mentioned decisions as to enforceability of foreign awards, Clause 14 of FOSFA Agreement and as per the law applicable in India, no export could have taken place without the permission of the Government, and the NAFED was unable to supply, as it did not have any permission in the season 1980-81 to effect the supply, it required the permission of the Government. The matter is such which pertains to the fundamental policy of India and parties were aware of it, and contracted that in such an exigency as provided in clause 14, the Agreement shall be cancelled for the supply which could not be made. It became void under section 32 of the Contract Act on happening of contingency. Thus, it was not open because of the clear terms of the Arbitration Agreement to saddle the liability upon the NAFED to pay damages as the contract became void. There was no permission to export commodity of the previous year in the next season, and then the Government declined permission to NAFED to supply. Thus, it would be against the fundamental public policy of India to enforce such an award, any supply made then would contravene the public policy of India relating to export for which permission of the Government of India was necessary. [Para 68] Held, In our considered opinion, the award could not be said to be enforceable, given the provisions contained in Section 7(1)(b)(ii) of the Foreign Awards Act. As per the test laid down in Renusagar (supra), its enforcement would be against the fundamental policy of Indian Law and the basic concept of justice. Thus, we hold that award is unenforceable, and the High Court erred in law in holding otherwise in a perfunctory manner. [Para 69] #2020 SCeJ 676
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