Introduction
The Supreme Court in Shriram EPC Limited v. Rioglass Solar SA,
has unwittingly reopened the debate whether contravention of Indian
exchange control regulations i.e., the Foreign Exchange Management
Act ("FEMA"), constitutes a breach of 'public
policy', entitling a court to refuse enforcement of a foreign
arbitral award in India.
The observations by the Supreme Court now casts doubt over the
much-applauded judgment of the Delhi High Court in Cruz City 1
Mauritius Holdings v Unitech Limited1, which refused to
decline enforcement of a foreign award on the ground of an alleged
breach of Indian exchange control provisions viz, FEMA. The Delhi
High Court whilst enforcing a foreign award ruled that breach of
Indian exchange controls would not offend public policy and would
not constitute a valid ground to challenge recognition and
enforcement in India.
