Facts: The Applicant, an Italian corporation, entered into a Joint Venture Agreement (JVA) in 2010 with the Respondents (existing shareholders of Ravin Cables Limited). Disputes arose regarding control of the company, leading to arbitration under the London Court of International Arbitration (LCIA) Rules. The Arbitral Tribunal issued four awards, concluding that the Respondents were in material breach and were obligated to sell their 49% shareholding to the Applicant at a discounted Fair Market Value. The awards also directed the Respondents to resign from the Board and appointed the Applicant's nominees. The Applicant successfully sought a declaration of enforceability of these foreign awards under Section 48 of the Arbitration and Conciliation Act, 1996, which was upheld by the Supreme Court of India. Despite this, the Respondents resisted the actual execution, raising objections related to the Foreign Exchange Management Act (FEMA), the need for prior RBI approval, and the validity of the valuation date (2014).
Procedural Posture: The Applicant filed a Commercial Execution Application to implement the awards. The Respondents filed various Interim Applications and objections to stay or dismiss the execution. The matter was heard by a Single Judge of the Bombay High Court in its original civil jurisdiction.
Issue: Whether an execution court can go behind a foreign award already held to be enforceable to entertain fresh objections under FEMA or pricing guidelines; and whether the executability of a foreign award is a distinct stage from its enforceability under the Arbitration Act.
Holding: No, the execution court cannot go behind the award. Once a foreign award is held to be enforceable under Section 48, it is deemed to be a decree of the court under Section 49 and is necessarily executable. The objections raised were rejected, and the execution was allowed.
Reasoning: The Court reasoned that "enforcement" and "execution" are often used interchangeably in the context of the Arbitration Act. Once the court is satisfied that a foreign award is enforceable, the legal fiction under Section 49 operates, treating the award as a decree of that court. The court noted that the Respondents were attempting a "second bite at the cherry" by re-agitating issues already decided by the Supreme Court in the enforcement phase. Regarding FEMA, the court relied on the principle that a "rectifiable breach" of FEMA does not violate the fundamental policy of Indian law. Furthermore, Section 3 of FEMA does not require "prior" permission, and any necessary compliance or post-facto approval by the RBI can be handled during the process without making the award inexecutable. The court also exercised its residuary powers under Section 51(e) of the CPC to grant injunctive reliefs and directions for the appointment of directors to give full effect to the award.