Isabella Mariam

The High Court of Judicature for Rajasthan, Single Bench of Justice Anoop Kumar Dhand, upheld the enforcement of a foreign arbitral award rendered by the Grain and Feed Trade Association (GAFTA) in London in favour of the petitioner. Dismissing objections raised by Raj Grow Impex LLP, the Court held that the scope of interference with a foreign award at the enforcement stage is extremely limited and that an award-holder, having succeeded before both the arbitral and appellate tribunals, should not be left to feel that he has “won the battle but lost the war.” Justice Dhand observed that under Section 48 of the Arbitration and Conciliation Act, the Court cannot re-examine the merits or sit in appeal over the findings of the foreign tribunal

The petitioner invoked Chapter I of Part II of the Arbitration and Conciliation Act, 1996, seeking recognition of GAFTA Appeal Award No. 4618-A dated 28.09.2021 as a decree, pronouncement of judgment according to the award, payment of USD 999,382.28 with interest, attachment and sale of the respondent’s assets, and costs. The application specifically prayed that the award be “treated/recognized as a decree of this Court,” with interest from the filing of the application until realization, and sought attachment and sale of movable and immovable assets to satisfy the award.

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According to the petitioner’s submissions, the parties concluded three contracts dated 03.09.2018 for a total of 4188.740 MT of Whole Yellow Peas (Russian origin) for the 2018-2019 crop year, with Kolkata as the destination. Shipments were affected in 156 containers under 11 bills of lading from Novorossiysk, Russia to Kolkata via Hapag Lloyd, MSC, and Maersk in November 2018. The GAFTA Tribunal issued a final award on 03.08.2020 in favour of the seller, allowing the seller’s claim, rejecting the buyer’s counterclaim, and awarding sums including interest, price differences, storage/handling costs, and demurrage, together with specified interest terms. The respondent appealed; GAFTA Appeal Award No. 4618-A dated 28.09.2021 upheld and enhanced the sums payable, itemizing price differences, under-invoiced balances, late payment interest, additional free time, storage/handling costs combined with demurrage, container demurrage across carriers, legal fees, and costs of the earlier awards and the appeal.

The petitioner stated that the GAFTA awards were not challenged before any competent forum and had attained finality, relying on Chapter I of Part II of the 1996 Act for enforcement. The respondent opposed enforcement on the ground that the awards were contrary to Indian public policy, citing alleged irregularities relating to payment of charges and resultant GST implications, asserting the awards were untenable and unenforceable.

The Court recorded that the contracts gave rise to disputes, leading to GAFTA arbitration resulting in an award on 03.08.2020 and an amended Appeal Award on 28.09.2021 enhancing the amounts. It noted that the application sought enforcement of a Foreign Award while the respondent’s objection under Section 48 was that the award was contrary to public policy. The Court stated that the grounds for refusal under Section 48 are limited to instances where enforcement would be contrary to the fundamental policy of Indian law, the interests of India, or justice or morality, relying upon Shri Lal Mahal and related precedents distinguishing the narrower scope at the enforcement stage from Section 34 patent illegality. “the expression ‘public policy of India’ must be given narrow meaning and the enforcement of foreign award would be refused… if it is covered by… fundamental policy of Indian law;… the interests of India;… justice or morality”; “The application of ‘public policy of India’ doctrine for the purposes of Section 48(2)(b) is more limited”.

Further, the Court recorded: “Indian Courts would ensure enforcement of a foreign Award unless it is demonstrable that there is a clear violation of morality and justice… Refusal of enforcement of foreign award should only be in a rare case where, non-adherence to International Standards is clearly demonstrable.”

Applying these principles, the Court stated:“The objections raised by the respondent, at the stage of execution, cannot be allowed by this Court.” “Enforcement of a foreign award can only be refused in the rarest cases where there is clear non-adherence to International Standards.”

The Court also noted: “Court cannot sit in appeal on the findings recorded by the Arbitral Tribunal.”

The Court rejected the respondent’s objections: “the objections raised by the respondent do not hold any substance, and the same are hereby rejected. “The Foreign Award dated 28.09.2021… is accordingly treated as a decree of this Court, in view of Section 49 of the Act of 1996, which provides that, ‘Where the Court is satisfied that the foreign award is enforceable under this Chapter, the award shall be deemed to be a decree of that Court’.”

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“The subject foreign award deserves to be declared as decree of this Court and is accordingly so declared. Consequently, upon being declared decree of this Court, the said award is binding on the parties in terms of Section 46 of the Act of 1996 and is now liable to be enforced under Section 48 of the Act. Accordingly, the petitioner, upon taking further and necessary steps, is entitled to get the award executed as a decree of this Court, in accordance with the relevant provisions and the applicable laws.”

“The application is disposed of, in the terms indicated above with no orders as to costs.” The operative direction states: “it is ordered that the Foreign Award in question shall be enforceable and executable as a decree of this Court. For the purpose of enforcement and execution, the respondent is directed to disclose its assets by way of filing an affidavit, within a period of six weeks from today, before the Executing Court. The applicant shall be at liberty to seek further directions for the enforcement and execution of the Foreign Award, in question, strictly in accordance with law.”

Advocates Representing the Parties
For the Petitioners: Ms. Saloni Purohit; Mr. Udit Purohit.
For the Respondents: Mr. Rupendra Singh Rathore.

Case Title: Kingsroad Handelsges M.B.H. v. Raj Grow Impex LLP.

Neutral Citation: 2025: RJ-JP:37048.

Case Number: S.B. Arbitration Application No. 69/2022.

Bench: Justice Anoop Kumar Dhand.