September 9, 2016 In Uncategorized

ENFORCEMENT OF FOREIGN AWARDS IN INDIA

 

Part II of the Arbitration and Conciliation Act, 1996 (the Act) amended by the Arbitration and Conciliation (Amendment) Act, 2015 deals with enforcement of certain foreign awards. India recognises foreign awards under the New York Convention and the Geneva Convention.

CHAPTER I – NEW YORK CONVENTION AWARDS

1.        DEFINITION OF FOREIGN AWARD

According to Section 44 of the Act a foreign award means an arbitral award on disputes arising between parties to arbitration, whether in contractual or non-contractual relationship, considered as commercial under Indian laws enacted on or after the 11th day of October, 1960. But the country must be a signatory to the New York Convention and recognised by the Central Government of India as a Convention country and the award shall be passed in the territory of another contracting country which is a reciprocating territory, i.e the Central Government of India has notified it as Convention country in its Official Gazette.

2. POWER OF JUDICIAL AUTHORITY TO REFER PARTIES TO ARBITRATION

Section 45 of the Act empowers a judicial authority to refer the parties to arbitration at the request of one of the parties or any person claiming through or under him except in the situation when the agreement is found to be void, inoperative or incapable of being performed.

3.  FOREIGN AWARD WHEN BINDING

Section 46 of the Act provides that any foreign award which would be enforceable under this Chapter shall be treated as binding for all purposes on the persons as between whom it was made. It may be relied upon by the parties in any legal proceedings in India.

4. EVIDENCE REQUIRED TO APPLY FOR ENFORCEMENT OF A FORIEGN AWARD

According to section 47 of the Act a person seeking to enforce a foreign arbitral award shall make an application to a court, i.e. high court having jurisdiction in the matter as per the provisions of the Amendment Act, 2015 and provide the original award or its certified copy; original arbitration agreement or its duly certified copy; and if the award or agreement is in a foreign language, the party seeking to enforce must produce a certified copy of a foreign award translated into English and/or any other evidence to establish that the award is a foreign award. The burden of proof is on the party seeking to enforce the foreign arbitral award to prove that it is a genuine foreign award and the aforesaid documents form a prima facie evidence to establish the same.

5. CONDITION FOR ENFORCEMENT OF FOREIGN AWARDS

  1. As per section 48 (1) of the Act, a foreign award may not be enforced in India if it is proved by the party against whom it is sought to be enforced that:
  2. the parties to the agreement were under some incapacity to perform under the law to which they were subjected to and in the absence of any mention of such law, the law of the country where the award was made, i.e. the place of arbitration, or,
  3. the agreement was invalid under the law to which the parties have subjected it and in the absence of any mention of such law, the law of the country where the award was made, or,
  • a fair trial was not conducted by the tribunal passing the award by failing to adhere to the principles of fair hearing, or,
  1. the award passed was partly or wholly beyond the scope of the arbitration agreement, in which case the part of the award exceeding the scope of submission to arbitration may be separated from rest of the award, or,
  2. the composition of the arbitral tribunal or authority and/or the procedure of its appointment was not in accordance with the arbitration agreement or in the absence of any mention of the same in the agreement, it was not in accordance with the law of the country where the arbitration proceedings were held, i.e. the place of arbitration, or,
  3. the award has not yet been made binding on the parties or has been set aside or suspended by a competent authority of the country which is either the place or seat of arbitration.

The court may call upon such party making an application under section 48 (1) to provide evidence to prove the existence of any or all of the grounds for refusal of enforcement of award as mentioned above.

  1. As per section 48 (2) of the Act, a foreign award may not be enforced in India if it is found by the court in India that:
  2. the settlement of the award is not as per Indian arbitration laws, or
  3. the enforcement of the award is contrary to the public policy of India. This defense should be construed narrowly. It has to be something more than mere contravention of law to attract this defense. An award is said to be in conflict with the public policy of India if it has been affected by fraud or corruption; or it was in violation of the of the Act; or it was in contravention with the fundamental policy of Indian law or basic principles of morality or justice.

Section 48 only provides grounds for refusal of enforcement of foreign award as mentioned in A and B and it does not permit the court to make a review of the foreign award on the merits of the case; does not permit the court to exercise its appellate jurisdiction over the foreign award; and does not permit the court to enquire as to whether some error has been committed by the tribunal while passing the foreign award.

It is further provided that if an application for the setting aside or suspension of the award has been made to a competent authority, the court may, if it considers it proper adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable security.

6. ENFORCEMENT OF FOREIGN AWARDS

As per section 49 of the Act if a court decides to uphold the foreign award and enforce it then it shall be deemed to be a decree of the court and no appeal shall lie against the award so upheld except for a discretionary appeal to Supreme Court of India under Article 136 of the Constitution of India when it is a question of fundamental importance or public interest. But in the case of an award held to be non-enforceable by the court, an appeal may be allowed under section 50 (1) (b) of the Act.

The decree shall be executed, on application by the decree-holder, in accordance with the provisions of CPC by the court which passed it.

CHAPTER II – GENEVA CONVENTION AWARDS

  1. INTERPRETATION

As per section 53 of the Act a foreign award is an arbitral award on disputes relating to matters which are considered commercial under Indian laws enacted after 28th day of July, 1924 and comply with the following conditions:

  • The award is in accordance with the agreement for arbitration to which the Protocol laid down in the Second Schedule of the Act is applicable;
  • The award is with respect to the persons, one of whom is subjected to the jurisdiction of the country which has been recognised as a Convention party by the Central Government of India vide notification in the Official Gazette and the other who is subject to the jurisdiction of any other Convention country so recognised by India through notification in the Official Gazette.
  • The award has been made in any of the Convention countries so recognised by the Central Government of India vide notification in the Official Gazette and the award shall be deemed final only if no legal proceedings or appeal against such award is not pending in such jurisdictions.

2. POWER OF JUDICIAL AUTHORITY TO REFER PARTIES TO ARBITRATION

Section 54 of the Act empowers a judicial authority at the request of one of the parties or any person claiming through or under him to refer the parties to arbitration if it is satisfied about the validity of the agreement. The section is attracted only if there is an actual reference to the arbitration.

3. FOREIGN AWARD WHEN BINDING

Section 55 of the Act provides that an award which satisfies the conditions of enforceability mentioned under section 57 of the Act is enforceable and is to be treated as binding for all purposes and also on persons as between whom it was made. It may be relied upon by the parties in any legal proceedings in India. Any references to enforcing a foreign award shall be construed as including references to relying on an award.

4. EVIDENCE REQUIRED TO APPLY FOR ENFORCEMENT OF A FORIEGN AWARD

According to section 56 of the Act a party seeking to enforce a foreign arbitral award shall make an application to a court, i.e. high court having jurisdiction in the matter as per the provisions of the Amendment Act, 2015 and provide the original award or its certified copy; evidence to prove that the award has become final and is in pursuance with section 57 (1) (a) and (c); and if the award or agreement is in a foreign language, the party seeking to enforce must produce a certified copy of a foreign award translated into English and/or any other evidence to establish that the award is a foreign award.

If the award or agreement is in a foreign language, the party seeking to enforce must produce a certified copy of a foreign award translated into English. As per the Amendment Act, 2015 the application for enforcement of a foreign award will only lie to a high court having jurisdiction.

5.  CONDITION FOR ENFORCEMENT OF FOREIGN AWARDS

As per section 57 (1) of the Act, there are certain conditions for enforcement of foreign awards under the Geneva Convention, such as:

  • The award has been passed in accordance with the submission to arbitration by parties;
  • The Indian laws of arbitration allow the settlement of the award;
  • The award has been passed in accordance with the arbitration agreement by the tribunal or arbitral authority as determined by the parties mutually and according to the law governing the arbitration;
  • The award has become final in the country where it has been passed and no objections or appeal or any other proceedings are pending against it;
  • The enforcement of the award is not contrary to the public policy or the laws of India. An award is said to be in conflict with the public policy of India if it has been affected by fraud or corruption; or it is in violation of confidentiality provisions of an attempted conciliation under the Act; or it was in contravention with the fundamental policy of Indian law or basic principles of morality or justice.

As per section 57 (2) of the Act, a foreign award may not be enforced in India if it is found by the court in India that:

  1. the award has been declared null and void by courts in the country in which it was made;
  2. fair trial was not held by the arbitrator, in the sense, that the party was not given a fair opportunity to be heard or that he was not properly represented by an advocate, pending which the award has been passed;
  3. the award is beyond the scope of the submission to arbitration: Provided that if the award has not covered all the disputes submitted to the arbitral tribunal, the court may either postpone such enforcement or grant it subject to such guarantee as the court may decide.

Section 57 only provides grounds for refusal of enforcement of foreign award as mentioned in A and B and it does not permit the court to make a review of the foreign award on the merits of the case; does not permit the court to exercise its appellate jurisdiction over the foreign award; and does not permit the court to enquire as to whether some error has been committed by the tribunal while passing the foreign award.

The party against whom the award has been passed, if he proves, that there exists any other ground other than mentioned above to challenge the validity of the award, then the court, may, either refuse the enforcement of such award or postpone the proceedings and give the party sufficient time to get the award cancelled by the competent tribunal.

6.  ENFORCEMENT OF FOREIGN AWARDS

As per section 58 of the Act if a court decides to uphold the foreign award and enforce it then it shall be deemed to be a decree of the court. The Arbitration Act and interpretations by the Supreme Court provide that every final arbitral award is enforced in the same manner as if it were a decree of the court and as per section 59 of the Act appeals may lie against the order refusing to refer the parties to arbitration under section 54; refusing to enforce a foreign award under section 57. Generally, no second appeal shall lie from the order passed in the appeal under section 58 but right to appeal to Supreme Court is not barred.

 

Reference:

[1] Renusagar Power Co. Ltd. v. General Electric Co., 1994 Supp (1) SCC 644

[2] Shri Lal Mahal Ltd. v. Progetto Grano Spa, 2013 (3) ARBLR 1 (SC).

[3]Fuerst Day Lawson Limited v. Jindal Exports Limited, (2011) 8 SCC 333- It was held that no appeal including a letters patent appeal shall be allowed.

[4] Shri Lal Mahal Ltd. v. Progetto Grano Spa, 2013 (3) ARBLR 1 (SC).

Comments (11)

installment loans without credit check

May 5, 2019, 10:46 am

Just commenting to register my support. Your opinion is well thought out Nice job!

Reply

Pay Per View Traffic

May 5, 2019, 4:59 pm

Fantastic article.

Reply

war campaign bfa

May 5, 2019, 12:23 pm

Good – I should certainly pronounce, impressed with your web site. I had no trouble navigating through all tabs as well as related info ended up being truly simple to do to access. I recently found what I hoped for before you know it at all. Quite unusual. Is likely to appreciate it for those who add forums or anything, site theme . a tones way for your client to communicate. Nice task..

Reply

Kent Nelles

Jun 6, 2019, 6:33 am

I need to to thank you for this fantastic read!! I certainly loved every little bit of it. I have you bookmarked to check out new stuff you post…

Reply

https://thuocgiamcan.webflow.io/

Jun 6, 2019, 1:57 pm

I’d like to thank you for the efforts you have put in penning this site.
I am hoping to check out the same high-grade content from you later on as well.
In fact, your creative writing abilities has motivated me to get my very own website
now 😉

Reply

Used iphone

Jun 6, 2019, 9:13 pm

Hi this is a great website that you have, thanks for sharing it with the human race

Reply

trick2g

Jun 6, 2019, 4:36 am

I am glad to be one of the visitors on this great website (:, appreciate it for posting .

Reply

get personal loan without cibil check

Jun 6, 2019, 2:05 pm

Don’t ever quit moving. Succeed!

Reply

fortnite aimbot free

Jun 6, 2019, 1:30 pm

This does interest me

Reply

acidswapper

Jul 7, 2019, 3:44 pm

This is interesting!

Reply

ezfrags

Jul 7, 2019, 8:04 pm

Just wanna input on few general things, The website layout is perfect, the articles is very superb : D.

Reply

Leave a Reply