TAISEI CORPORATION vs A.M — 2024 SCMR 640 SUPREME-COURT

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TAISEI CORPORATION VS A.M. CONSTRUCTION COMPANY (PVT.) LTD. Ss. 2(b), 2(c) & 2(e) ---International commercial arbitration---Foreign arbitral award---Scope---Whether an award made in a Contracting State, in pursuance to an arbitration agreement governed by the law of Pakistan, is a foreign arbitral award for applicability of the Recognition and Enforcement of Arbitration Agreement and Foreign Award Act 2011?---Held, that as per the definitions provided in sections 2(b), 2(c) & 2(e) of the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 ('the 2011 Act'), an arbitral award made in a State which is a party to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 or in such other State as may be notified by the Federal Government in the official Gazette, is a "foreign arbitral award" for applicability of the 2011 Act---Nothing more is required to make an award the "foreign arbitral award" for applicability of the provisions of the 2011 Act---Law governing the main contract between the parties, the law governing the arbitration agreement, and the law governing the arbitration proceedings are all irrelevant and extraneous in determining the status of an arbitral award under the 2011 Act---In defining a "foreign arbitral award" for applicability of the 2011 Act, the legislature has adopted a pure "territorial approach" and has made in this regard the "seat of arbitration" the sole criterion---Not only the governing laws but also the nationality of the parties to the award are irrelevant in determining the status of an arbitral award under the 2011 Act---In the present case the Award had been made in a Contracting State, i.e., Singapore---Nothing more was required to make it a foreign arbitral award, for applicability of the 2011 Act---In this regard, the facts that the main contract between the parties and the arbitration agreement were governed by the law of Pakistan, did not have any effect. Citation Name: 2024 SCMR 640 SUPREME-COURTBookmark this Case TAISEI CORPORATION VS A.M. CONSTRUCTION COMPANY (PVT.) LTD. S. 2(c)---Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (the "New York Convention"), Art. V---International commercial arbitration---Foreign arbitral award---Non-interference by domestic courts in Pakistan---Exceptions---Public policy---Objectives sought to be achieved by the New York Convention underscore the "pro-enforcement bias" informing the Convention, guiding the Courts towards a "narrow reading" of the grounds of defence listed in the Convention, particularly, the public policy ground---Ground of defence that the arbitrator's decision is erroneous in law or fact is, therefore, not provided in the Convention; it cannot be read into in any ground of defence provided in the Convention, particularly, the public policy ground, by a "liberal reading" instead of a "narrow reading" thereof---An expansive construction of the public policy ground "would vitiate the Convention's basic effort to remove preexisting obstacles to enforcement---Recognition and enforcement of a foreign arbitral award may be refused by the courts of Pakistan on the public policy ground only where it would violate the most basic notions of morality and justice prevailing in Pakistan---Public policy ground cannot be used to examine the merits of a foreign arbitral award or to create more grounds of defence that are not provided for in the Convention, such as misapplication of the law of Pakistan by the arbitrator in making the award or the arbitrator's decision being contrary to the law of Pakistan. Citation Name: 2024 SCMR 640 SUPREME-COURTBookmark this Case TAISEI CORPORATION VS A.M. CONSTRUCTION COMPANY (PVT.) LTD. art. I---International commercial arbitration---Pro-enforcement bias of the New York Convention for enforcing foreign awards, explained. Citation Name: 2024 SCMR 640 SUPREME-COURTBookmark this Case TAISEI CORPORATION VS A.M. CONSTRUCTION COMPANY (PVT.) LTD. Prospective and retrospective effect of a law---Principles stated. Citation Name: 2024 SCMR 640 SUPREME-COURTBookmark this Case TAISEI CORPORATION VS A.M. CONSTRUCTION COMPANY (PVT.) LTD. Ss. 1(3) & 4---arbitration act (X of 1940), S. 34---International commercial arbitration---Scope of section 1(3) as to the retrospective effect of the Recognition and Enforcement (arbitration agreements and Foreign arbitral awards) act, 2011 ('the 2011 act') on arbitration agreements---as for subsection (3) of Section 1 of the 2011 act, which states that the act shall apply to arbitration agreements made before the date of commencement of the act, it only applies for the purpose of Section 4 of the 2011 act to stay the legal proceedings in respect of a matter which is covered by the arbitration agreement and to refer the parties to arbitration---Notable point, however, is that because of the retrospective effect given by Section 1(3) of the 2011 act, all courts in Pakistan are to recognize and enforce arbitration agreements, wherein the parties have agreed to have the arbitration held in a Contracting State, within the scope of the provisions of Section 4 of the 2011 act, not of Section 34 of the arbitration act, 1940 ('the 1940 act'), despite that such agreements have been made before the commencement of the 2011 act. Citation Name: 2024 SCMR 640 SUPREME-COURTBookmark this Case TAISEI CORPORATION VS A.M. CONSTRUCTION COMPANY (PVT.) LTD. Preamble---Arbitration, concept of---Minimal interference by courts in international commercial arbitration---Minimal interference and support for the arbitration by the courts as an alternate mode of dispute resolution, explained. Citation Name: 2024 SCMR 640 SUPREME-COURTBookmark this Case TAISEI CORPORATION VS A.M. CONSTRUCTION COMPANY (PVT.) LTD. Prospective and retrospective effect of a law---Principles---While interpreting a provision of law or construing its effect, a constitutional court only declares what the law is and does not make or amend it---Law so declared by the court, therefore, as a general principle applies both prospectively to future cases and as well as retrospectively to pending cases, including the one in which it is declared---It is only as an exception to this general principle that while considering the possibility of some grave injustice or inconvenience due to the retrospective effect, the courts sometimes provide for the prospective effect of their judgments from such date as they think just and proper in the peculiar facts and circumstances of the case---But this exception cannot be invoked in a case where its effect would be tantamount to negation of the legislature's intent. Citation Name: 2024 SCMR 640 SUPREME-COURTBookmark this Case TAISEI CORPORATION VS A.M. CONSTRUCTION COMPANY (PVT.) LTD. Repealed law---Scope---Court cannot administer a repealed law, except to the extent specified by the legislature itself in the repealing law or some other general law providing the effect of the repeal of laws. Citation Name: 2024 SCMR 640 SUPREME-COURTBookmark this Case TAISEI CORPORATION VS A.M. CONSTRUCTION COMPANY (PVT.) LTD. Ss. 1(4) & 10(2)---arbitration (Protocol and Convention) act (VI of 1937) [since repealed], S. 2---International commercial arbitration---Foreign arbitral award---Scope of Section 1(4) as to the retrospective effect of the Recognition and Enforcement (arbitration agreements and Foreign arbitral awards) act, 2011 on foreign arbitral awards expounded. Citation Name: 2024 SCMR 640 SUPREME-COURTBookmark this Case TAISEI CORPORATION VS A.M. CONSTRUCTION COMPANY (PVT.) LTD. Preamble---Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act (XVII of 2011), Preamble---International commercial arbitration---Foreign arbitral award---Non-applicability of the Arbitration Act, 1940 ('the 1940 Act')---Since, the 1940 Act relates, in pith and substance, to domestic arbitration, its status after the 18th amendment to the Constitution is that of a provincial law---The 1940 Act, a provincial law after the 18th amendment that came into force on 19 April 2010, cannot deal with international arbitration and any award made therein---So, in no way the remedies available to a party, before the 18th amendment, under the 1940 Act in relation to the Award made in an international arbitration would continue to be so after the 18th amendment, and more so, after the enactment of the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 by the Federal Legislature. Citation Name: 2024 SCMR 640 SUPREME-COURTBookmark this Case TAISEI CORPORATION VS A.M. CONSTRUCTION COMPANY (PVT.) LTD. S. 2(c)---Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (the "New York Convention"), Arts. III & V---International commercial arbitration---Foreign arbitral award---Non-interference by domestic courts in Pakistan---Exceptions --The New York Convention implemented in Pakistan by the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 ('the 2011 Act'), contains no ground as to the invalidity of a foreign award or its being against the law of the Contracting States, to refuse its recognition and enforcement and thus leaves no room for the courts of a Contracting State to enter into the exercise of examining the merits of a foreign award on the points of facts or law---In accordance with its objective, the New York Convention grants the Courts of the Contracting States the discretion to refuse to recognize and enforce a foreign arbitral award only on the grounds listed in Article V of the Convention and places the burden to prove those grounds on the party opposing the recognition and enforcement of the award---Article V(1) provides five grounds whereby the recognition and enforcement of an award may be refused at the request of the party against whom it in invoked, and Article V(2) lists two further grounds on which the Court may refuse enforcement on its own motion---Ultimate burden of proof, however, remains on the party opposing recognition and enforcement---It is, therefore, only when the party against whom the award is invoked discharges this burden that a challenge may be sustained against the recognition and enforcement of an award---Language of Article V for refusing recognition and enforcement of foreign arbitral awards is permissive and not mandatory, and the exceptions stated therein are exhaustive and construed narrowly in view of the public policy favouring the enforcement of such foreign arbitral awards---Courts may nonetheless recognize and enforce the award even if some of the exceptions exist. Citation Name: 2024 SCMR 640 SUPREME-COURTBookmark this Case TAISEI CORPORATION VS A.M. CONSTRUCTION COMPANY (PVT.) LTD. Expression 'means' used in a statute to define any word, term or expression---When the legislature employs the verb "means" in defining any word, term or expression, the definition provided is restrictive and exhaustive, and nothing else can be added to the same---Such definition being itself the most authentic expression of the legislature's intent as to the meaning of a particular word used in the law enacted by the legislature is binding on the courts and leaves no room for them to discover by way of interpretation some other intent of the legislature.

TAISEI CORPORATION vs A.M — 2024 SCMR 640 SUPREME-COURT

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