Enforcement of Foreign Award Upheld: Limitation Accrues from Show Cause Notice, Not Award Date.

The Petitioners (Vedanta Limited and Ravva Oil) entered into a Production Sharing Contract (PSC) with the Government of India (GoI) in 1994 for the development of Ravva Oil Field

Disputes arose regarding the interpretation of the PSC, leading to arbitration seated in Kuala Lumpur, Malaysia. A Partial Award was issued on 12.10.2004, and a Final Award on quantification was issued on 26.10.2016

The GoI challenged both awards in Malaysian Courts, which ultimately upheld them by 2011 (Partial) and 2019 (Final)

GoI issued a Show Cause Notice (SCN) on 10.07.2014 to recover USD 99 million, alleging the Petitioners had depressed the Post Tax Rate of Return (PTRR) calculations

Petitioners filed this petition for enforcement under Sections 47 and 49 of the Arbitration and Conciliation Act, 1996 ("1996 Act"), while GoI resisted under Section 48

The court applied Article 137 of the Limitation Act, 1963, which provides a three-year residency period for applications from the date the "right to apply accrues"

It relied on the precedent Union of India v. Vedanta Ltd. (2020), which established that Section 5 of the Limitation Act applies to foreign award enforcement and that the "right to apply" can accrue from the date of a recovery SCN

The court strictly applied the narrow scope of Section 48 of the 1996 Act, which prohibits a review on the merits

It further applied the "Fundamental Policy of Indian Law" and "Public Policy" tests as defined in Renusagar Power Co. Ltd. v. General Electric Co. and Shri Lal Mahal Ltd. v. Progetto Grano SPA

The court first determined that the petition was within the limitation period because the "right to apply" accrued only when the GoI issued the SCN on 10.07.2014, making the 2017 filing timely per Vedanta (2020)

Regarding the merits, the court held that the AT's interpretation of "Contract Costs" versus "Past Costs" under Article 3.3 and Appendix D of the PSC was a matter of contractual interpretation within the AT’s exclusive domain

The court refused to substitute its view for the AT’s plausible interpretation, noting that perversity was not shown

The "Public Policy" objection based on the Doctrine of Public Trusteeship was rejected because the Hon'ble Supreme Court had already addressed this in Vedanta (2020) and the GoI’s subsequent 10-year extension of the PSC demonstrated that the contract was not inherently contrary to national interests

Finally, the court upheld the AT’s jurisdiction to pass the Final Award, noting the AT never terminated proceedings and the delay was largely due to the GoI’s own challenges in Malaysian courts

It held that the petition was filed within the three-year limitation period under Article 137

The awards did not violate the Public Policy of India or the Fundamental Policy of Indian law

The court directed the release of the bank guarantees submitted by the Petitioners within eight weeks