BURN STANDARD COMPANY LIMITED vs McDERMOTT INTERNATIONAL INC. AND ANOTHER

The Supreme Court ruled that a Technical Collaboration Agreement entered into without the requisite approval from the Reserve Bank of India (RBI) under Section 28(1) of the Foreign Exchange Regulation Act, 1973 is void ab initio. The Court held that the failure to obtain RBI's permission renders the arbitration clause non-enforceable, as it is intrinsically linked to the validity of the agreement itself. Consequently, the appellant's challenge to the arbitration clause was upheld, affirming that the agreement could not be enforced due to the lack of necessary approvals.