ENFORCEMENT OF FOREIGN ARBITRAL AWARD IN INDIA

TOPIC ENFORCEMENT OF FOREIGN ARBITRAL AWARDS

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INTRODUCTION MEANING OF ARBITRATION ARBITRATION UNDER UNDE R THE ACT FOREIGN ARBITRATION ARBITRATION INDIAN RESERVATIONS FOREIGN AWARD – COMMERCIAL IN NATURE PROCEDURE OF ENFORCEMENT UNDER THE CONCVENTION CHALLEGE TO FOREIGN ARBITRAL ARBI TRAL AW AWARDS ENFORECEMENT OF AWARDS TO WHICH CONVENTIONS DO NOT APPLY APPLY AWARDS UNDER INDIAN PROCEDURAL LAWS AWARDS MADE OUTSIDE INDIA UNDER FOREIGN PROCEDURAL LAWS AWARDS MADE OUTSIDE INDIA UNDER INDIAN INDI AN PRECEDURAL LAWS LAWS NEW YORK CONVENTION – AWARDS GENEVA CONVENTION – AWARDS ENGLISH ARBITRATION ARBITRATION ACT – 1950 1 950 FOREIGN FORE IGN AWARDS TIME LIMIT POST ENFORCEMENT FORMALITIES CONCLUSION BIBLIOGRAPHY













INTRODUCTION The law on arbitration in India is at present contained in three enactments viz. The Arbitration Act 1940 The Arbitration (Protocol and Convention) Act Act ,1937 The Foreign Awards Awards (Recognition ( Recognition and Enforcement) Act,1961 Act,1961

It was widely felt that the 1940 act, which contained the general laws of arbitration, had become outdated. The law law commission commission of of India, several representative of bodies bodies of trade and commerce and expert of the field of arbitration had experts of the field of arbitration had proposed amendments to this act to make it more responsive to the contemporary requirements. It was also recognized that our economic reforms may not become fully













international commercial disputes remain out of tune with such reforms. Taking into the consideration the enforcement of foreign award, it can be enforced in India under the multilateral international conventions to which India is a party viz. Geneva Convention of 1927 New York Convention of 1958 Further, Further, the award must have been made in the country that has ratified them. The Geneva convention had has ceased to apply those awards to which the New York convention applies now. The arbitration (protocol and convention) act, 1937 came into effect on 4th march 1937 and provided for the enforcement of foreign arbitral award to which the Geneva Convention of 1927 applied. Similarly, Similarly, the foreign awards (Recognition and Enforcement) act, which













procedure for the enforcement of foreign awards in India to which they said convention applied. The United Nations commission on international trade law [UNCITRAL] adopted in 1985 the model law on International Commercial Arbitration. Arbitration. The General Assembly of the United Nations has recommended that all countries give due consideration to the said model law ,in view of the desirability of uniformity of law of arbitral procedures and the specific needs of international commercial arbitration practice. An important feature of the said UNCITRAL model law and rules is that they have harmonized concepts of arbitration and conciliation of different legal systems systems of the world and thus contained provisions universal application. Though the said UNCITRAL model law and rules are intended to deal with international commercial arbitration and conciliation, they could













The two previous enactments on such stands repealed and the arbitration and conciliation act 1961,which is a comprehensive and uniform law relating to arbitration which has been put on statute with a view to provide an alternative forum which is less formal than the court proceedings more effective ,speedy ,quicker and cheaper. The procedure for enforcement of foreign awards can now be found in Part [2] of the new 1996 act which maintains the same scheme for enforcement albeit in a consolidation form. MEAN ING OF ARBITRATION ARBITRATION UNDER THE ACT Arbitration means a reference to the decision of one or more persons, either with or without an umpire of some matter or matters between the parties as held in COLLINS vs. COLLINS The essence of arbitration is that the arbitrator decides the case and his award is in nature of a judgment which is later on incorporated into a















FOREIGN ARBITRATION ARBITRATION Foreign arbitration is an award or arbitration conducted in a place outside India The resultant award is an award, if sought to be enforced in India, constitutes a foreign award, Section 2(7) of the 1996 act states that an arbitral award made under \Part [1] of the act shall be considered as a domestic award. Section 2(2) mandates that Part [1] shall apply where place of arbitration is in India. It follows a logical thing that where the place of arbitration is not in India, Part [1] shall not apply to such arbitration. Thus an award resulting from such arbitration shall not be considered a domestic award.













been criticized for blatantly ignoring the unequivocal wordings of the statute but nevertheless constitutes the prevailing law on the point. INDIAN RESERVATIONS India has made two reservations while ratifying the conventions namely, namely, that it would apply the conventions to the recognition and enforcement of an award only if it was made in the territory of another state that is bound by contract. In pursuance of said reservations, the two implementing acts of 1937 and 1961 provided that the government of India would notify the names of the countries to which which the conventions would would apply and and also the countries to which have made reciprocal provision for the enforcement of Indian awards in those countries.













of two states. It takes within its fold all legal relationships pertaining to international trade in all its form between the different states. Courts have interpreted the term ‘commercial dispute’ under the two acts, in certain decisions where the question was at issue. It has been held that the provisions of the conventions and implementing 1937 and 1961 acts earlier and the 1996 act now are designed to sub serve the cause of facilitating international trade and promotion interpretation consistent with its literal and grammatical meaning. The law as settled by the courts in the following cases is relevant even today for the new 1996 enactments maintain the same scheme. In R.M INVESTMENT INVEST MENT AND TRADING CO. LTD. Vs.













VS INVEST IMPORT, It was held that a party from a country which has not ratified the New York convention of 1958 can’t maintain its application seeking any benefit from the court under any enactment, made on the basis of the conventions. In N.T.P N.T.P.C .C vs. SINGER & CO. It was held that an award will not be tenable if it is opposed to the public policy of the county in which it is to be enforced. Mere contravention of the public policy may not attract att ract the bar. It may not be repugnant to the fundamental policy of Indian law or to justice or













out of a legal relationship, relationship, whe ther contracted or not, considered as commercial under the law in force in India. The question of commercial relationship has been considered by various courts in a number of cases. Emphasizing the ambit of an activity which takes the character of a commercial relationship in the context of Article 301of the constitution of India The supreme court noted in the case ATIABARI TEA CO. LTD. vs. STATE OF ASSAM the trade doesn’t mean merely traffic in goods i.e. exchange of commodities for money or other commodities in the complexities of modern conditions in their sweep are included carriage of persons and















arising there under is a commercial dispute. Therefore, as far as the meaning of commercial is concerned, the absence of a formal definition didn’t hinder an expansive interpretation. PROCEDURE OF ENFORCEMENT UNDER CONVENTIONS

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The procedure of enforcement of foreign awards under the conventions are pretty much the same .Any person interested in enforcing a foreign award may apply in a writing to any court having jurisdiction over the subject matter of the award. In













filed. The court on being satisfied that the foreign award being enforceable under the act will pronounce judgments according to the award. Upon the judgment so pronounced, a decree will follow as in case of domestic awards. No appeal shall lie from such a decree except in so far as the decree is in excess of or not in accordance with h the award. The various high courts, including the Bombay and Calcutta, have made rules regarding the procedure and forms to be used for application for the enforcement of foreign awards.













before the arbitrator arbitr ator as held in the case

SWANITOMO SW ANITOMO HEAVY HEAVY

INDUSTRIES INDUSTRI ES LTD. VS. O.N.G.C LTD. ENFORCEMENT OF AWARD TO WHICH THE CONVENTINS DONOT DONO T APPLY APPLY

The awards which are made in the countries that are not a party to either of the conventions cannot be enforced with the same facility as in the case of the foreign awards to which the conventions apply.













that there was a contract between the parties where under disp disput utes es betw betwee een n them them were were refe referr rred ed to arbi arbitr trat atio ion n to an arbitral tribunal in a foreign country. that award is in accordance with the terms of the agreement. that the award is not invalid according to the law governing arbitration proceedings obtaining in the country where award was made. That it was a subsisting award at the time of filing of the suit.













It has been held that the term award used in the Indian Arbitrationact, 1996, mean an award under the act while section 49 of the act provides that a foreign award shall become a decree of the court where the court is satisfied that the foreign award is enforceable, there is there is no provision for the issue of a notice to the affected party before the court expresses such satisfaction. Section 50 0f the 1996 act provides for an appeal from an order refusing to:-















AWARD MADE IN INDIA INDI A UNDER FOREIGN PROCEDURAL LAWS An award made in India under the foreign procedural law is one to which neither the arbitration act nor the conventions will apply. apply. Its enforceability in India depends on the general laws.













in N.T.P.C VS. THE SINGER & CO. and held that such an award but will be a foreign award as a domestic award under the Part [1] of the act. This decision has been criticised as it is given under the old act 1961. Since the new act is enforced yet the decision still is good as it has not been over-ruled.













BHATIA BHATIA INTER I NTERNA NATION TIONAL AL V/s BULK TRADING S.A. There has to be an agreement in writing between the parties for invoking Section 45. However, However, if any of the parties feel that such an argument is













If there is valid arbitration agreement, the suit must be stayed and the matter referred to arbitration as held in the case. SOCIETE COMMERCIAL CEREALS etc. V/s S.P.C













Under Section 47, the manner for adducing evidence to prove that the award is a foreign award. When the award given in a foreign country (UKRAINS) is valid under the law of the country the award being governed by the law of that country then the enforcement of that award of India does not violate















FUREST DAY LAWSON Ltd V/S JINDAL EXPORTS Ltd. 1

Under section 49, the court court cannot cannot directly directly enforce foreign award













If under this section any order is passed in appeal, second appeal cannot be filed against such order. But appeal to the Supreme Court can be













The protoc protocol ol applie appliess betwe between en people people subjec subjectt to jurisd jurisdict iction ion of such such pow power erss as may may be decl declar ared ed by orde orders rs in coun counci cill to the the part partie iess of













There are some conditions to be fulfilled before, re, for the enforceability of foreign awards. It must have been













the proceedings for the testing of its validity are pending in the country in which it was made.



















































ENFORCEMENT OF FOREIGN ARBITRAL AWARD IN INDIA

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