Featured image for Supreme Court Judgment dated 13-09-2018 in case of petitioner name M/S Shriram EPC Limited vs Rioglass Solar SA
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Landmark Judgment on Enforcement of Foreign Arbitral Awards in India

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On 13th September 2018, the Supreme Court of India delivered an important judgment in M/S Shriram EPC Limited v. Rioglass Solar SA, addressing a crucial question regarding the enforcement of foreign arbitral awards. The key issue was whether a foreign award must be stamped under the Indian Stamp Act, 1899 before it can be enforced under the Arbitration and Conciliation Act, 1996.

The judgment clarified that a foreign award is not required to be stamped under the Indian Stamp Act, ensuring that the enforcement process for such awards remains efficient and aligned with international arbitration standards. This ruling is a significant development for parties engaging in international commercial arbitration, as it reinforces India’s pro-arbitration stance and minimizes procedural hurdles in enforcing foreign arbitral awards.

Background of the Case

The case involved a dispute between Shriram EPC Limited, an Indian company, and Rioglass Solar SA, a foreign entity. The dispute was resolved through arbitration under the rules of the International Chamber of Commerce (ICC) in London. The tribunal, presided over by Christopher Style QC, delivered an award on 12th February 2015. The award directed Shriram EPC Limited to pay €4,366,598.70 to Rioglass Solar SA, comprising damages and interest.

Subsequently, Rioglass Solar SA sought enforcement of the award in India under Section 47 of the Arbitration and Conciliation Act, 1996. The enforcement petition was allowed by a Single Judge of the Madras High Court on 9th February 2017. However, Shriram EPC Limited challenged the enforcement, arguing that the award was not stamped under the Indian Stamp Act and, therefore, could not be enforced.

Legal Issues and Key Questions

The case raised fundamental questions regarding the enforcement of foreign arbitral awards in India:

  • Is a foreign arbitral award required to be stamped under the Indian Stamp Act, 1899 for enforcement?
  • Does the absence of a stamp duty payment render a foreign award unenforceable under Sections 48 and 49 of the Arbitration and Conciliation Act, 1996?
  • How should India interpret its obligations under the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards?

Arguments by the Appellant (Shriram EPC Limited)

The counsel for Shriram EPC Limited argued:

  • Under the Indian Stamp Act, 1899, an award is an “instrument” that is liable to stamp duty.
  • Award enforcement cannot proceed unless the award has been stamped as required by law.
  • Failure to pay stamp duty makes the award inadmissible as per Sections 33 and 35 of the Indian Stamp Act.
  • The enforcement of an unstamped foreign award would be against the fundamental public policy of India.

Arguments by the Respondent (Rioglass Solar SA)

The counsel for Rioglass Solar SA countered:

  • The definition of “award” under the Indian Stamp Act applies only to domestic arbitral awards, not foreign awards.
  • The Arbitration and Conciliation Act, 1996 does not require a foreign award to be stamped.
  • Requiring stamp duty on foreign awards would violate India’s obligations under the New York Convention.
  • The enforcement of a foreign award is governed by Section 47 of the Arbitration Act, which does not mention stamping.

Supreme Court’s Observations

The Supreme Court, comprising Justice R.F. Nariman and Justice Indu Malhotra, delivered a detailed analysis of the legal framework surrounding the enforcement of foreign awards.

The Court held:

“The expression ‘award’ in the Indian Stamp Act applies only to domestic awards and does not include foreign awards. A foreign award not being included in Schedule I of the Indian Stamp Act is not liable for stamp duty.”

The Court relied on previous decisions and international conventions, emphasizing that:

  • A foreign award is already stamped as a decree under Section 49 of the Arbitration and Conciliation Act, 1996.
  • The New York Convention prohibits imposing conditions that make foreign award enforcement more difficult than domestic awards.
  • Foreign awards do not require additional procedural compliance beyond what is stated in Section 47 of the Arbitration Act.

Final Judgment

The Supreme Court dismissed the appeal, affirming the Madras High Court’s ruling that the foreign award was enforceable without the requirement of stamp duty.

The judgment concluded:

“We hold that the fact that a foreign award has not borne stamp duty under the Indian Stamp Act, 1899, does not render it unenforceable.”

Impact of the Judgment

This landmark decision reinforces India’s commitment to international arbitration and simplifies the enforcement process for foreign arbitral awards. The key takeaways from this ruling are:

  • Foreign awards are enforceable without stamp duty: This removes unnecessary procedural barriers in arbitration.
  • Pro-arbitration stance: The judgment aligns with global best practices, enhancing India’s reputation as an arbitration-friendly jurisdiction.
  • New York Convention compliance: The ruling ensures that India upholds its obligations under the international convention on arbitration.
  • Efficiency in dispute resolution: Parties can now enforce foreign awards without unnecessary delays caused by stamp duty disputes.

This case sets an important precedent for the enforcement of foreign arbitral awards in India, making it easier for international investors and businesses to resolve disputes effectively.


Petitioner Name: M/S Shriram EPC Limited.
Respondent Name: Rioglass Solar SA.
Judgment By: Justice R.F. Nariman, Justice Indu Malhotra.
Place Of Incident: London (Arbitration Seat).
Judgment Date: 13-09-2018.

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