The Supreme Court on Wednesday upheld the foreign arbitration award in favour of Vedanta and Videocon for the development of the Ravva oil and gas fields off the coast of Andhra Pradesh between 2000 and 2007.
The Ministry of Petroleum and Natural Gas had appealed against this foreign award allowing Vedanta and Videocon to recover $499 million, instead of $198 million capped by the government for the development of the Ravva oil and gas fields.
A bench comprising Justices S. Abdul Nazeer, Indu Malhotra and Aniruddha Bose stated that the Malaysian court had rightly examined the issue. It further concluded that the enforcement of the foreign award does not contravene the public policy of India, nor is it contrary to the basic notions of justice.
“A foreign award does not become a “foreign decree” at any stage of the proceedings. The foreign award is enforced as a deemed decree of the Indian Court which has adjudicated upon the petition filed under Section 47, and the objections raised under Section 48 by the party which is resisting enforcement of the award. A foreign award is not a decree by itself, which is executable as such under Section 49 of the Act. The enforcement of the foreign award takes place only after the court is satisfied that the foreign award is enforceable under Chapter 1 in Part II of the 1996 Act. After the stages of Sections 47 and 48 are completed, the award becomes enforceable as a deemed decree, as provided by Section 49. The phrase “that court” refers to the Indian court which has adjudicated on the petition filed under Section 47, and the application under Section 48.” the bench said.
The Centre had moved the Supreme Court challenging the decision of the Delhi High Court which allowed Vedanta to implement the foreign award of 2011, which allowed the company to seek a larger sum of recovery instead of the amount that was capped by the Indian government.
The Apex Court rejected the Government’s claim and affirmed the decision of the Delhi High Court. The Court said,
“We conclude that the enforcement of the foreign award does not contravene the public policy of India, or that it is contrary to the basic notions of justice. We affirm the judgment of the Delhi High Court dated 19.02.2020”