Enforcement Should Not Be Declined On Grounds Which Could Have Been Raised Earlier: Delhi HC Upholds Foreign Arbitral Awards

The Delhi High Court  emphatically upheld the enforcement of foreign arbitral awards between Mercator Ltd. And Dredging Corporation of India Ltd., dismissing objections concerning the arbitral tribunal’s composition and alleged violations of public policy under the Indian legal framework.

The case involved the enforcement of three foreign arbitral awards related to charterparty agreements, arbitrated in London under the London Maritime Arbitrators Association (LMAA) terms, concerning disputes over dredger hire charges. The proceedings in India were governed by Sections 48 and 44 of the Arbitration and Conciliation Act, 1996.

Dredging Corporation of India Ltd., the judgment debtor, raised objections about the composition of the arbitral tribunal and asserted that the enforcement of the awards contravened the Merchant Shipping Act, 1958, thereby breaching Indian public policy. These challenges were previously addressed and dismissed in both Delhi High Court and English courts.

Tribunal Composition: Justice Prateek Jalan noted that the judgment debtor participated in the arbitration process without contesting the tribunal’s composition and only raised these points as an afterthought in enforcement proceedings. The court labeled such tactics as speculative litigation, unworthy of hindering enforcement.

Public Policy and Merchant Shipping Act: The court meticulously rejected claims that the enforcement would contravene the fundamental policy of Indian law, affirming that the objections regarding public policy had already been addressed adequately during the arbitration and upheld by the English court.

Decision: The objections to the enforcement of the arbitral awards were rejected, with the court directing the judgment debtor to deposit an overdue sum of Rs. 8 crores within four weeks.

Date of Decision: April 30, 2024.

Mercator Ltd. Vs. Dredging Corporation of India Ltd.