India’s Proposed Anti-Sanctions ‘Blocking Statute’: Shielding Indian Firms from Extraterritorial Sanctions

Constitutional & Statutory Framework

• Article 51 (DPSP): The State shall endeavour to promote international peace and security, foster respect for international law and treaty obligations, and encourage settlement of disputes by arbitration.
• Article 253: Parliament has exclusive power to legislate for implementing any treaty, agreement or convention.
• Article 73: Executive power of the Union extends to matters on which Parliament can legislate — including treaty-making.
• Foreign Trade (Development & Regulation) Act, 1992: the likely vehicle for an anti-sanctions clause.
• FEMA, 1999: regulates foreign exchange and would interact with any clawback provision.
• CPC s.13: a foreign judgment is not conclusive where it offends natural justice or Indian public policy.
• Arbitration & Conciliation Act, 1996, Part II: implements the New York Convention, 1958 — enforcement of foreign arbitral awards; the public-policy ground was narrowed in Renusagar (1994) and Ssangyong (2019).
• UN Charter Chapter VII (Art. 41-42) read with Article 25: Security Council sanctions bind member states.

CLAT Angle

The Legal Reasoning passage will sketch an Indian firm sued in a foreign court for breach of a Russia-linked contract, with the foreign court applying its own sanctions law as if it bound India. Questions will test: (i) whether the foreign judgment can be enforced under CPC s.13; (ii) whether the public-policy exception kicks in; (iii) whether a blocking statute can validly override India’s commitments under the New York Convention. The trap option will suggest that any law overriding a treaty is unconstitutional — false, because Art. 253 and Art. 51 together leave Parliament free to legislate inconsistently with non-binding international obligations.

Key Facts at a Glance

Mnemonic — Remember It Forever

B-L-O-C-K: Bar foreign litigation · Limit compliance with extraterritorial sanctions · Override foreign judgments · Clawback damages · Kountermand by injunction.

Hook the doctrine to a date: EU 1996, US 1949, India 2026. Hook the Constitution to a number: Art. 51 (peace) · Art. 253 (treaty) · CPC s.13 (foreign judgments).

Practice Quiz — 10 CLAT-Style Questions

Click an option to reveal the answer and explanation.