The Hon’ble Bombay High Court in Prysmian Cavi E Sistemi S.r.I. v. Vijay Karia (Arbitration Petition No. 442 of 2017) has held that the Arbitration and Conciliation Act (“the Act”) does not support the view that a prior challenge at the seat of arbitration is a pre-requisite to resisting enforcement of an award by a tribunal. Further, the court has also reiterated that the power of a court in proceedings under section 48 of the Act does not extend to a review of the merits of a case. The Court also shed light on the possible grounds under which enforcement of a foreign award could be refused (including what constitutes public policy) and noted that, breach of laws of India would not be a ground to reject the enforcement.

The Court, placing reliance on the decisions in the case of Dallah Real Estate and PT First Media held that merely because the decree has not being challenged does not render resistance to its execution under legitimate legal grounds invalid. The Court further held that, “The Arbitration & Conciliation Act, 1996 in its current avatar also does not support the view that resisting enforcement would be subject to a prior challenge at the seat of arbitration. It does not support the view that absent a challenge in the seat of the Arbitration, a party could not resist enforcement of the award in a different jurisdiction. If that were to be so the legislature would have provided for appropriate pre-conditions to resist enforcement of foreign award and justifiably so because if an award were to be set aside in the seat, there may be no occasion to resist enforcement. On the other hand if a challenge at the seat is repelled, a losing party could still resist enforcement on available grounds.” 

The Court, citing its judgement in Shri Lal Mahal Ltd., held that “Section 48 of the Act does not give an opportunity to have a ‘second look’ on the foreign award at the stage of enforcement.” The Court further explained that “The scope of enquiry under section 48 did not permit a review on merits and that under Section 48(2)(b) enforcement of a foreign award could be refused only if it is found to be contrary to (i) the fundamental policy of Indian Law; (ii) to the interest of India and (iii) justice of morality.”

The Court further relied on the case of  Pol India Projects wherein the Supreme Court had held since the expression “public policy’ covers the field not covered by the words “and the law of India” which follow that expression contravention of law alone will not attract the bar of public policy and something more than the contravention of law is required.