Foreign courts and India

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This is a collection of articles archived for the excellence of their content.

Enforceability in India

Can’t enforce award if against govt policy: SC/ 2020

Dhananjay Mahapatra, Can’t enforce foreign award if it is against govt policy: SC, April 23, 2020: The Times of India In an important judgment, the Supreme Court ruled that foreign awards against Indian companies could not be enforced if the contract was against the policy decision of the government and quashed a 30-year-old award against National Agricultural Cooperative Marketing Federation (Nafed) saving it hundreds of crores of rupees.

A bench of Justices Arun Mishra, M R Shah and B R Gavai set aside a 1989 award given by Federation of Oil, Seed and Fats Association Ltd in favour of Swiss food firm Alimenta SA asking Nafed to pay $46,81,000 with 10.5% interest from February 13, 1981, the date when the Swiss firm had moved for arbitration after Nafed expressed inability to ship groundnuts as contracted by it following the government’s refusal to grant permission for export.

Allowing Nafed’s appeal, the three-judge bench said, “It would have been unlawful for Nafed to effect the supply in view of the Union government’s refusal to extend the export permission, which was valid from 1970-80, to beyond 1980. If Nafed had made the supplies, it would have been unlawful. Thus, the parties had agreed for cancellation as such an award is against the basic law and public policy as applied to India.”

Not binding, but Indian authorities can take note

Shibu Thomas, ‘Indian authorities can take note of foreign court order’, March 4, 2018: The Times of India

In a significant order issued, a full bench of the Bombay high court ruled courts and quasijudicial forums in this country can take note of the conviction of an Indian citizen by a foreign court, but the judgment will not be binding on such authorities in India.

The full bench was called upon to decide the issue while dealing with an application filed by Prabodh Mehta, a trustee of the multi-specialty Lilavati Hospital and Research Centre in Bandra. In 2013, the joint charity commissioner had dismissed Mehta as a trustee of the hospital over his conviction for an offence involving moral turpitude by a court in Belgium.

“We are of the considered view that though the judgment and order of conviction of a foreign court can be noticed, looked into and recognised by judicial and quasi-judicial authorities in India, it cannot be said that the same will be ipso facto binding on such courts and authorities,” said the bench comprising justices Bhushan Gavi, K R Shriram and Burgess Colabawalla.

“If we hold that such a judgment of a foreign court for an offence committed in that country is binding on the courts and authorities in India, it will amount to directly or indirectly enforcing the judgment of the foreign court... No hard and fast rule can be laid for that purpose,” said the bench. The HC said courts in India will have to take a call based on the facts and circumstances of each case.

Senior advocate Rafiq Dada, counsel for Mehta, had said Indian courts cannot take note of judgments of a foreign court. The HC did not agree and said such a view would not only be “against public policy and principle of comity of nations”, but also amount to depriving the rights of a person.

The court referred to the rights available under the Constitution and the Criminal Procedure Code about double jeopardy which state a person convicted or acquitted for a crime cannot be tried again for the same charges.

The bench cited the example of a person who has been acquitted of a crime like murder in a foreign country or aboard a ship or airplane, in which case an Indian court will have to take note of the judgment.

“If the argument that the order of conviction cannot be looked into is to be accepted, not only would it be contrary to public policy of not permitting a person convicted for an offence involving moral turpitude to contest elections, it would also be against the breach of the comity which should exist between countries,” said the high court.

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