There has been a lot of discussion recently on the impact of the judgment of the Supreme Court of India in the case of Venture Global Engineering Vs. Satyam Computer Services Ltd. and Another delivered in January 2008 ("Satyam Case"). The legal community outside India have expressed surprise and concern that the courts in India are trying to usurp jurisdiction in respect of a challenge to an award even in cases of international commercial arbitration. The general view being formed is that even a foreign award is now not sacrosanct and carries the risk of being set aside by Indian Courts in exercise of powers under section 34 of the Arbitration & Conciliation Act, 1996 ("Act"). The concern appears to be unjustified.
Prior to the decision in the Satyam Case the enforcement of a foreign award in India could be defended on the grounds provided in section 48 of the Act. When such grounds are compared to the grounds for challenge under section 34 it appears the grounds of defense under section 48 are nearly the same.
Accordingly, the only thing that the Satyam Case achieves is that it allows the carriage of proceedings to move in favour of the judgment debtor rather than requiring the judgment debtor to await enforcement of a foreign award by a judgment creditor and then oppose such enforcement on similar grounds available to the judgment debtor to launch a challenge to such award and preempt enforcement proceedings. Further, the Supreme Court has also held that the applicability of section 34 can be negated to a foreign award by express agreement in these regards by the parties to the agreement. In view of the above one cannot understand the deep concern being expressed by the legal community in respect of the Satyam Case.
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