Public Policy Cannot Become a Backdoor Appeal: Rajasthan High Court Orders Enforcement of GAFTA Foreign Award Worth ₹7.63 Crores

“After Winning All the Battles, One Should Not Be Left to Feel as If He Has Lost the War”— Rajasthan High Court at Jaipur delivered a landmark judgment granting full enforcement of a foreign arbitral award passed by GAFTA (Grain and Feed Trade Association), London, and rejected all objections raised under Section 48 of the Arbitration and Conciliation Act, 1996.

Justice Anoop Kumar Dhand, while pronouncing the verdict, held that final foreign arbitral awards cannot be re-litigated under the guise of public policy, and declared that the GAFTA appellate award dated 28.09.2021 shall be treated "as a decree of this Court".

The petitioner—Kingsroad Handelsges M.B.H., Austria—had sought recognition and enforcement of the GAFTA Appellate Tribunal's Award awarding USD 999,382.28 (equivalent to ₹7,63,72,794), along with interest and costs. The judgment represents a powerful affirmation of India’s obligations under the New York Convention and the pro-enforcement regime under Part II of the Indian Arbitration Act.

"Public Policy of India Must Be Given a Narrow Meaning in Enforcement Proceedings Under Section 48"

The respondent, Raj Grow Impex LLP, resisted the enforcement of the award, invoking the public policy exception. It alleged that the GAFTA Tribunal ignored irregularities related to tax obligations, port payments made abroad, and procedural lapses that harmed Indian revenue interests.

However, the Court categorically ruled that such objections do not meet the strict threshold of public policy under Section 48(2)(b) of the Act.

Quoting the Supreme Court’s authoritative judgment in Shri Lal Mahal Ltd. v. Progetto Grano Spa, the Court observed:

“For the purposes of Section 48(2)(b), the expression ‘public policy of India’ must be given narrow meaning… Enforcement of foreign award would be refused only if it is contrary to (1) fundamental policy of Indian law; or (2) the interests of India; or (3) justice or morality.”

The Court added that: “Section 48 does not give power to review the Foreign Award on merit… the ground of Public Policy cannot be sustained as the same has already been settled by the Hon’ble Apex Court.”

“A Second Bite at the Cherry Is Not Permissible”: Respondent Precluded from Re-Litigating Merits After Failing to Challenge in England

Significantly, the Court emphasized that the respondent had ample opportunity to challenge the GAFTA awards under the English Arbitration Act, 1996, but failed to do so within the stipulated time.

Quoting from POL India Projects Ltd. v. Aurelia Reederei GmbH, the Court noted: “Even if the petitioners were not governed by English law or that there existed no arbitration agreement… once the arbitration award came to be passed… the same ought to have been challenged under English Arbitration Act… not having exercised such remedy, [the party] has lost its right to object the correctness of such award.”

In line with Eitzen Bulk A/S v. Ashapura Minechem Ltd., the Court stated:

“The intention is clearly to exclude the applicability of Part I to the instant Arbitration by Clause 28. The award was final and binding under English law.”

Thus, the respondent was barred by law from contesting the correctness of the foreign award in India, having failed to utilize legal remedies available in the agreed foreign jurisdiction.

“Judicial Review Is Not an Appeal on Merits”: Enforcement Court Cannot Reappreciate Evidence

Reiterating India’s consistent pro-enforcement posture under international arbitration law, the Court held:

“While considering the enforceability of foreign awards, the court does not exercise appellate jurisdiction over the foreign award… the objections raised by the appellant do not fall in any of these categories.”

Justice Dhand underlined the settled law from Union of India v. Vedanta Ltd., observing:

“The enforcement court cannot reassess or re-appreciate the evidence… Section 48 does not provide a de facto appeal on the merits of the award.”

The Court concluded that the objections raised by the respondent amounted to an impermissible “second look”, which the enforcement regime under Part II of the 1996 Act explicitly prohibits.

"Once the Sword Has Been Won, the Victorious Party Must Not Be Denied the Shield": Execution Ordered in Full

Invoking the powerful imagery in its opening remarks, the Court observed:

“The classic idiom ‘Won the battle but lost the war’… should not apply to award holders.”

Justice Dhand emphasized that finality of foreign arbitral awards is essential for commercial certainty and international trust in India's legal framework.

Accordingly, the Court:

• Declared the GAFTA appellate award dated 28.09.2021 to be a decree of the High Court

• Directed Raj Grow Impex LLP to pay USD 999,382.28 (₹7.63 crores approx.) with interest and costs

• Authorized attachment and sale of movable and immovable assets of the respondent to satisfy the decree

“The Enforcement of Foreign Awards Cannot Be Withheld Merely Because the Award Is In Contravention of Any Indian Law”— Public Policy Must Not Be Weaponized

In one of the judgment’s most critical legal declarations, the Court stated:

“Invocation of force majeure… and other reasons of delay now given by the respondent pertain to the merits of the dispute… Whether there is contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.”

This observation reaffirms India’s minimal intervention policy in international arbitration matters and further signals the judiciary’s alignment with international arbitration standards.

A Landmark Decision Reinforcing India’s Pro-Arbitration Credentials

The Rajasthan High Court’s judgment in Kingsroad Handelsges M.B.H. v. Raj Grow Impex LLP is a forceful restatement of India’s obligations under the New York Convention, and it sends a clear message: once a party submits to arbitration and loses, it cannot later invoke “public policy” as a tactical delay or escape route.

The ruling is bound to strengthen investor confidence and promote India as an arbitration-friendly jurisdiction, consistent with the legislative intent of the 1996 Act and India's international commitments.

Date of Decision: 17 September 2025