RENUSAGAR POWER CO. LTD. V. GENERAL ELECTRIC CO INSC 410; AIR 1994 SC 860; 1994 Suppl.SCC 644; 1993 Suppl.JT 211; 1993 SCALE 44

Renusagar Power Co Ltd entered into a contract General Electric Company , which provided for arbitration under the auspices of the International Chamber of Commerce in Paris. A dispute arose and General Electric referred the matter to arbitration. Renusagar argued that the dispute did not fall within the scope of the arbitration agreement but the Supreme Court of India ruled against it. An award was rendered in favour of General Electric which it sought to enforce before the High Court of Bombay. The High Court enforced the award and Renusagar appealed to the Supreme Court, arguing that the arbitral tribunal had failed to inform it of the potential effects of certain of the Tribunal's decisions, thereby rendering it unable to present its case in violation of Section 7 of the Foreign Awards Act 1961 NYC); and, the terms of the award were grossly unfair, so enforcement would be contrary to public policy, in violation of Section 7 of the 1961 Act NYC). The Supreme Court dismissed Renusagar’s appeal and affirmed the lower court's decision. The Court rejected Renusagar’s contention that it had been unable to present its case in violation of Section 7 of the 1961 Act because Renusagar voluntarily refused to appear before the arbitral tribunal. Therefore, it could not complain of the alleged effects this had on presentation of its case at this stage in the proceedings. The Court also rejected Renusagar’s public policy argument. First, it held that the term “public policy” in Section 7 of the 1961 Act referred to the public policy of India and not the public policy of New York. It based this conclusion on Article V NYC, which it found to clearly refer to the public policy of the country enforcing the award. Second, it held that the award was not contrary to the public policy of India. The Court determined that under Section 7 of the 1961 Act, the enforcement an award violates the public policy of India if enforcement would be contrary to a fundamental policy of Indian law; the interests of India; or, justice or morality. The Court found that no aspect of the award or interest was excessive or unjust, and therefore enforcing the award would not be contrary to India's public policy. Judgement: In view of the aforesaid provision in the scheme, all pending suits, appeals or other proceedings of whatever nature by or against the transferor company, viz., Renusagar shall not abate or be discontinued or in any way be prejudicially affected by reason of the transfer of the undertaking of Renusagar and that the said proceedings may be continued, presented and enforced by or against Renusagar as if the scheme had not been made. The scheme of amalgamation does not, therefore, in any way affect the continuance of the proceedings in the above appeals in this Court by Renusagar and in these circumstances, we find no ground for substituting the name of Hindalco Industries Ltd. as the appellant in place of Renusagar in C.A. No. 71 of 1990. The said application is, therefore, rejected. In the result, C.A. Nos. 71 and 71-A of 1990 and C.A. No. 379 of 1992 are dismissed and the decree passed by the High Court is affirmed with the direction that in terms of the award an amount of US $ 12,333,355.14 is payable by Renusagar to General Electric out of which a sum of US $ 6,289,800.00 has already been paid by Renusagar in discharge of the decretal amount and the balance amount payable by Renusagar under the decree is US $ 6,043,555.14 which amount on conversion in Indian rupees at the rupee-dollar exchange rate of Rs 31.53 per dollar prevalent at the time of this judgment comes to Rs 19,05,53,293.56. Renusagar will be liable to pay future interest @ 18 per cent on this amount of Rs 19,05,53,293.56 from the date of this judgment till payment. The parties are left to bear their own costs.