Petitioner is a hydrocarbon extraction company that had a contract with the government of India to explore and extract petroleum and natural gas off the southeastern coast of India. The contract provided the petitioner had two years to assess the commercial viability of a discovered deposit if the deposit was petroleum, and five years if the deposit was natural gas. The petitioner then discovered a deposit that it claimed to be natural gas; India claimed it to be petroleum. After the two year assessment period, India claimed the petitioner lost the right the deposit. The petitioner filed arbitration. The tribunal found in favor of the petitioner, ordering India to award back the right to the deposit. The petitioner then sought to confirm the award with the federal court in the District of Columbia.
The court denied the motion to confirm, noting that the tribunal order was a specific performance, and it is contrary to the public policy of the United States to compel specific performance from the foreign sovereign.
A very rare case in which the court refuses to confirm an arbitral award! It is very important for litigators to remember that enforceability is everything. With the court refusing to recognize this award, it is not clear if the petitioner will be able to get any relief after all they have gone through.
On the other hand, in India, the Supreme Court has referred this to a larger bench for interpretation of "seat" and "venue" in this case. (2018) 7 SCC 374ReplyDelete