Supreme Court Refuses To Interfere With Enforcement Of Foreign Arbitral Awards In Favour Of Vedanta

The Supreme Court on Monday refused to interfere with the Delhi High Court's judgment allowing enforcement of two foreign arbitral awards in favour of Vedanta Limited and Ravva Oil (Singapore) Pte. Ltd. in a dispute with the Government of India over the calculation of the Centre's share of profit petroleum from the Ravva oil field.

The dispute centred over whether payments made towards Oil and Natural Gas Corporation's carry obligations could be included in calculating the post-tax rate of Return for determining the Government's share of petroleum profit under the 1994 Ravva Oil Field contract involving Vedanta's erstwhile Cairn India.

A Bench of Justices J.B. Pardiwala and Manmohan held that the High Court had committed no error in allowing enforcement of the foreign arbitral awards after considering the relevant aspects of the dispute.

The Bench observed:

“We are of the view that no error, not to speak of any error of law, could be said to have been committed by the High Court in passing the impugned judgment and order. The High Court has taken into consideration all the relevant aspects of the matter, and has passed a correct judgment.”

Appearing for the Government of India, Additional Solicitor General Vikramjit Banerjee advanced arguments challenging the enforcement of the arbitral awards and raised questions concerning the arbitral tribunal's jurisdiction and whether it had become functus officio.

The Bench questioned the ASG on the grounds of challenge being pressed by the Government, particularly in the absence of arguments concerning public policy or limitation.

Justice Pardiwala asked, “Only one question to you. No argument on public policy, no argument on limitation. Why do you say that the arbitral tribunal had become functus officio?”

The Bench also questioned the ASG about the timeline of the arbitral proceedings, referring to the original award and subsequent proceedings.

“Was the award passed in 2004? The dispute of 1994, partial award of 2012, full award of 2016. How many years?”, Justice Pardiwala asked.

The ASG referred to the earlier award of 2004 and submitted that the only issue left open concerned quantification, which had remained pending for several years. He also referred to the limitation period under Article 137 of the Limitation Act.

The Bench questioned the Government's approach to resisting enforcement of the award, observing:

“What are these arguments, Mr. Banerjee? You are frustrating an arbitral award like this? At the stage of enforcement of it?”

Senior Advocates Mukul Rohatgi and Akhil Sibal appeared for Vedanta Limited and Ravva Oil (Singapore) Pte. Ltd.

After hearing the parties, the top court found no ground to interfere with the Delhi High Court's decision permitting enforcement of the two foreign arbitral awards in favour of Vedanta and Ravva Oil. The Government of India's challenge was accordingly dismissed.