M/S Shriram Epc Limited v. Rioglass Solar Sa

Court

Supreme Court of India

Decided

13 September 2018

Case no.

C.A. No.-009515-009515 - 2018

Bench

Rohinton Fali Nariman, Indu Malhotra

Author

Rohinton Fali Nariman

Facts

The dispute arose from an ICC arbitration award delivered on February 12, 2015, in London, which ruled against Shriram EPC Limited, ordering them to pay Rioglass Solar SA €4,366,598.70 for breach of contract. Following the award, Shriram filed objections under Section 34 of the Arbitration and Conciliation Act, which were dismissed by the High Court. Subsequently, Rioglass filed a petition under Section 47 to enforce the award, which was granted by the High Court on February 9, 2017. An appeal by Shriram to the Division Bench was dismissed on March 14, 2018, leading to the current Special Leave Petition (SLP) to the Supreme Court.

Arguments

Petitioner Arguments

The Appellant argued that the foreign award could not be enforced due to non-payment of stamp duty as mandated by the Indian Stamp Act, 1899. They cited the Punjab and Haryana High Court's decision in
to support their claim that a foreign award falls under the purview of the Stamp Act. The Appellant contended that the absence of a stamp rendered the award unenforceable.

Respondent Arguments

The Respondent countered that the enforcement of the foreign award should not be hindered by the lack of stamp duty, referencing judgments from the Delhi and Madhya Pradesh High Courts that suggested a foreign award does not require stamping for enforcement. They argued that the Indian legal framework, particularly the Arbitration and Conciliation Act, allows for the enforcement of foreign awards without the necessity of stamping.

Precedents considered

Key precedents cited included

• 
  (2012), which established that objections to foreign awards under Section 34 are not maintainable.
• 
  (1962), which the Appellant relied upon to argue for the necessity of stamping.
• 
  (2009) and
  (2013), which the Respondent cited to argue against the necessity of stamping.

Legal principles

The court considered the legal principles surrounding the enforcement of foreign awards under the Arbitration and Conciliation Act, particularly Sections 48 and 49, which outline the conditions under which a foreign award may be enforced. The court also examined the implications of the Indian Stamp Act on foreign awards.

Decision and reasoning

Rationale

The Supreme Court reasoned that the enforcement of a foreign award should not be contingent upon the payment of stamp duty, as this would contradict the intent of the Arbitration and Conciliation Act to facilitate international arbitration. The court emphasized that the legislative framework aims to promote arbitration and that imposing additional requirements like stamping could undermine this objective.

Outcome

The Supreme Court dismissed the appeal, affirming the High Court's decision to enforce the foreign award. The court did not impose any conditions for bail or set specific timelines for further proceedings, indicating that the enforcement of the award should proceed without delay.

Conclusion

This judgment reinforces the principle that the enforcement of foreign arbitration awards in India should not be obstructed by procedural requirements such as stamping, thereby promoting the efficacy of international arbitration. It clarifies the legal landscape regarding the enforceability of foreign awards and underscores the importance of adhering to the legislative intent of the Arbitration and Conciliation Act.

Read the full judgment on the Supreme Court website (PDF)