NOY VALLESINA ENGINEERING SPA A V. JINDAL DRUGS LIMITED
Noy Vallesina Engineering Spa A v. Jindal Drugs Limited 2006 (3) ARBLR 510 Bom
Whether foreign awards be challenged in Indian Courts?
Regardless of when the contract was signed, only the foreign court located at the seat of the arbitration can rule on a substantive challenge to a foreign award.
Jindal and NV Engineering signed a contract for setting up a plant.
When disputes arose, the case was brought before the International Court of Arbitration in 1996 after the Appellant terminated the contract and demanded damages.
In 2000, the Tribunal ordered a partial award and Jindal then petitioned the Bombay High Court, and following this, the ICA passed the final award.
As a petition to challenge a foreign award through a petition was not maintainable under Section 34 of the Arbitration and Conciliation Act, 1996, the petition filed with the Bombay High Court was denied.
Jindal filed a plea and the Bombay High Court division bench granted it. The division bench reversed the single judge’s decision and determined that legitimate procedures under Section 34 of the Arbitration and Conciliation Act, 1996.
The Appellant approached the Apex Court.
The Supreme Court held that a challenge to a foreign award is not maintainable.
The Supreme Court referred the judgment in Bharat Aluminium Company v. Kaiser Aluminium Technical Services, observed that even under the pre-BALCO regime, if parties have agreed that the seat of arbitration will be outside India, then Part – II of the Arbitration & Conciliation Act 1996 will not be applicable
Hence, in this case, the seat of arbitration between NV Engineering and Jindal was London therefore the award cannot be challenged under section 34 of the Act.
Regardless of when the contract was signed, a substantive challenge to a foreign award may only be decided upon by the foreign court located at the seat of the arbitration.