Delhi High Court recently allowed an execution petition to enforce a foreign award against an Indian company that challenged the award on the grounds that it was contrary to public policy. In Penn Racquet Sports v Mayor International Ltd, the court held that in order for the Indian courts to deny recognition and enforcement of a foreign award it should be “contrary to the fundamental policy of Indian law”.
The enforcement of the award had also been challenged on the grounds that the Indian company had been unable to present a counterclaim at the International Chamber of Commerce (ICC), Paris, where the award was made, as it could not afford the ICC’s fees. Dismissing this challenge, the court said that having agreed to resolve disputes through arbitration at the ICC, the company was bound by its rules. It could not challenge the award merely because its counterclaim had been left unconsidered.
US-based Penn Racquet Sports and New Delhi-based Mayor International had entered into a trademark license agreement (TLA) that contained an arbitration clause for settlement of any dispute by arbitration at the ICC. The TLA was to be governed by, and in accordance with, the laws of Austria.
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The update of court judgments is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted at lbhasin@bhasinco.in or lbhasin@gmail.com. Readers should not act on the basis of this information without seeking professional legal advice.
