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CS Professional · Arbitration, Mediation and Conciliation · Arbitration under Investors' Grievances Redressal Mechanism of Stock Exchanges

Anita Finserv seeks to resist enforcement in India of a foreign award, arguing that the Indian court should re-examine whether the tribunal applied Indian securities law correctly on the facts. Under the Explanations to Section 48, how should the Court treat this argument?

The argument should be rejected. Explanation 2 to Section 48 provides that the test for contravention of the fundamental policy of Indian law does not involve a review on the merits of the dispute, so alleged errors in applying law or facts do not by themselves defeat enforcement.

  1. AAccept it, because any error of law is contrary to public policy
  2. BAccept it, because the court must review the merits to test fundamental policy
  3. CReject it, because the test of contravention of fundamental policy of Indian law does not entail a review on the merits of the disputeCorrect
  4. DReject it, because public policy is never a ground to refuse enforcement

Explanation

Explanation 2 to Section 48 states that the test of contravention with the fundamental policy of Indian law shall not entail a review on the merits. Public policy remains a valid ground under Section 48(2)(b), but only within the limits in Explanation 1, so the last option is wrong.

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