Enforcement of Foreign Arbitral Awards in India: Procedures, Challenges, and

Key Considerations
written by King Stubb & Kasiva | March 2, 2023

Arbitration is one of the most common ADR mechanisms to resolve disputes of a

civil and commercial nature. The primary legislation governing domestic
arbitration, international commercial arbitration, enforcement of foreign
arbitral awards, and conciliation matters is the Arbitration and Conciliation
Act, 1996 (A&C Act), which has been amended multiple times, such as in 2015,
2019, and 2021. The decision made by an Arbitral Tribunal is referred to as
an Award. Section 2 (1) (c) of the A&C Act further provides that an arbitral
award also includes an interim award.
Section 36 of the A&C Act provides for the enforcement proceedings for
domestic awards, which are to be done following the provisions of the Code of
Civil Procedure, 1908 (CPC). Enforcement of Foreign Arbitral Awards in India
is covered by Part II of the A&C Act, and such enforcement can occur either
under the New York Convention or under the Geneva Convention. The A&C Act has
been drafted and introduced keeping in mind the Model Law on International
Commercial Arbitration by the United Nations Commission on International
Trade Law (UNCITRAL).
This article aims to shed light on the procedure for enforcement of foreign
arbitral awards in India in the following manner:
Procedure for Enforcement of Foreign Arbitral Awards in India
Enforcement of Foreign Judgments in India
Challenging enforcement of Foreign Arbitral Awards
Procedure for Enforcement of Foreign Arbitral Awards in India
Enforcement of Awards passed under the New York Convention
Enforcement of Awards passed under the Geneva Convention
Enforcement of Foreign Judgments in India
Enforcement of Foreign Judgments from Non-Reciprocating Countries
Challenging Enforcement of Foreign Arbitral Awards
Conclusion
FAQs
What are the key considerations for the enforcement of foreign arbitral
awards in India?
Can a foreign arbitral award be challenged in India?
Is it necessary to obtain a court order for the enforcement of foreign
arbitral awards in India?
Procedure for Enforcement of Foreign Arbitral Awards in India
Enforcement of Foreign Arbitral Awards in India, as dealt with by Part II of
the A&C Act, provides for such enforcement to occur either under the New York
Convention or the Geneva Convention. These applications lie only before a
High Court.
However, the powers of Indian courts to grant interim relief relating to
foreign seated arbitrations, such as in situations of emergency arbitration
in India are limited.[1]
Enforcement of Awards passed under the New York Convention
This part is dealt in Chapter I, Part II of the A&C Act and the relevant
provisions range from Sections 44-52.
Section 44 defines a foreign award as an arbitral award on disputes between
persons that arise from a legal relationship, whether contractual or not. The
dispute must be recognized as a commercial one under the law in force in
India, on or after 11th October 1960. The two prerequisites for enforcement
here are that the country needs to be a signatory to the New York Convention
and the Award must be made in the territory of another state that the Central
Government notifies as a reciprocating territory.
Per Section 47, the party applying for the enforcement of the foreign award
in India is required tosubmitthe following at the time of application:
The original award or authenticated copy
The original arbitration award or its certified copy
Any evidence of the foreign nature of the Award
Section 48provides certain grounds on which the other party gets the
opportunity to file an objection against such enforcement.Finally, per
Section 49, when the Court is satisfied with the enforceability of the
foreign award under this Chapter, the award is then considered a decree of
that Court.
Enforcement of Awards passed under the Geneva Convention
This part is dealt with in Chapter II, Part II of the A&C Act and the
relevant provisions range from Sections 53-60.
Section 53 defines a foreign award as an arbitral award on disputes related
to matters considered commercial under the law in force in India after
28thJuly 1924. The three pre-requisites for enforcement here are:
The award is in pursuance of an agreement for arbitration to which the Geneva
Protocol on Arbitration Clauses, 1923 applies.
The award is between persons subject to the jurisdiction of reciprocating
territories, as designated by the Central Government and where the Geneva
Convention on the Execution of Foreign Arbitral Awards, 1927 applies.
The award is made in a territory designated as a reciprocating one by the
Central Government.
Per Section 56, the party applying for the enforcement of the foreign award
in India is required to submit the following at the time of application:
The original award or authenticated copy
Evidence showing that the award has become final
Evidence to prove that the award was made in pursuance of a valid arbitration
under the applicable law
Section 57(2) lays down certain conditions where the enforcement of the award
can be refused.Finally, per Section 58, when the Court is satisfied with the
enforceability of the foreign award under this Chapter, the award is then
considered a decree of that Court.
Enforcement of Foreign Judgments in India
Under Section 2(6)[2] of the CPC, foreign judgments in India are defined as
decisions of courts located outside the country that are neither formed nor
sustained by the authority of the Central Government. The procedure for
enforcing foreign judgments differs depending on whether the judgment is from
a reciprocating or non-reciprocating country.
If it is from a reciprocating nation, the party seeking enforcement must file
execution proceedings in India, whereas a non-reciprocating country decree
requires a new suit to be brought in India. The deadline for filing an
enforcement suit is three years after the verdict is delivered. Section 44A
of the CPC requires that a certified copy of the decree and a certificate
from the superior court detailing the level of satisfaction or adjustment to
be filed to execute a decree from a reciprocating nation.
Under Section 13 of the CPC, a foreign ruling can be conclusive as res
judicata, but there are some restrictions. Courts have repeatedly maintained
that if a party does not willingly submit to the jurisdiction of a foreign
court, they are not bound by it. If the plaintiff presents evidence, the
court will rule on the merits.[3]
The Supreme Court in R. Vishwanathan v. Rukn – Ul- Mulk Syed Abdul Wajid[4]
held that the enforcement of a foreign judgment will be harmed if the court
fails to meet the bare minimum of natural justice criteria, or if the foreign
court was forced or duped into issuing the verdict.
Enforcement of Foreign Judgments from Non-Reciprocating Countries
To enforce a foreign decision from a non-reciprocating country in India, an
action must be filed on the verdict. The plaintiff might sue based on either
the foreign judgment or the original cause of action. If the litigation is
unsuccessful, no further application for execution can be brought; but, if
successful, the decree can be carried out in India.
To enforce the foreign judgment, a certified copy of the judgment and an
extra certificate from a representative of the Central Government of India in
the foreign nation is necessary, and the judgment must pass the conditions
set out in Section 13 of the CPC before it may be enforced in India.
If the decree-holder takes efforts to execute a foreign decree in the nation
where the decree was rendered and the decree is not fully satisfied, the
decree-holder may file an execution petition in India within three years of
the completion of the execution proceedings in the foreign country.
Challenging Enforcement of Foreign Arbitral Awards
Enforcement of Foreign Arbitral Awards in India may be refused on grounds
such as:
The parties to the arbitration agreement are incapacitated.
The invalidity of the arbitration agreement under the legislation controlling
it.
The party challenging the award did not get appropriate notice of the
arbitrator’s appointment or the arbitration proceedings, or they were
otherwise unable to present their case.
The award addresses a dispute not anticipated by or lying outside the scope
of the submission to arbitration, or it incorporates decisions on subjects
outside the scope of the submission.
The appointment of arbitrators or the arbitral procedure was not in
conformity with the parties’ agreement, or in the absence of such agreement,
with the legislation of the country in which the arbitration took place.
The award has not become binding on the parties, or a competent authority has
suspended or set it aside.
The subject matter of the dispute cannot be resolved by arbitration under
Indian law.
The award’s implementation would be contrary to India’s public policy.
Conclusion
Alternative Dispute Resolution (ADR) mechanisms have witnessed significant
growth over the past few decades owing to their several benefits. With the
globalized world and the increased transactions between companies in
different companies, disputes of a foreign nature arise quite often. In such
cases, it becomes crucial to lay down guidelines as to how foreign awards can
be enforced in a country and also provide for grounds to challenge such
enforcement. In India, the same has been provided in detail by the
Arbitration and Conciliation Act, which has ensured uniformity in all such
related matters. However, development regarding growing concepts and needs
such as that of emergency arbitration in India needs better recognition and
understanding.
FAQs
What are the key considerations for the enforcement of foreign arbitral
awards in India?
The important considerations for enforcing international arbitral awards in
India include ensuring that the award was rendered by a competent authority,
that the arbitration agreement is legal and enforceable, and that the award
is not averse to public policy. The party seeking enforcement must file an
application with the appropriate court and present an original or certified
copy of the award as well as the arbitration agreement. The court will review
the award to determine that it fits the standards for enforcement under
Indian law, and if so, will continue with the enforcement as if it were a
court order.
Can a foreign arbitral award be challenged in India?
Yes, in India, a foreign arbitral award can be challenged. The grounds for
challenge, however, are restricted and are stated in Section 48 of the
Arbitration and Conciliation Act, 1996. These include the incapacity of the
parties, the invalidity of the arbitration agreement, a lack of sufficient
notice, improper appointment of arbitrators, a violation of natural justice
principles, or the award being in opposition with Indian public policy. The
only way to oppose the award is to file an application with the appropriate
court, which will conduct a restricted review of the award.
Is it necessary to obtain a court order for the enforcement of foreign
arbitral awards in India?
No, obtaining a court order is not required for the enforcement of foreign
arbitral verdicts in India. Foreign awards can be directly enforced by filing
an execution petition with the appropriate court. The party seeking
enforcement must, however, present a certified copy of the arbitral award,
the original arbitration agreement, and evidence that the award is foreign.
The award must also meet the conditions for enforcement established by the
Arbitration and Conciliation Act.
[1]BALCO vs. Kaiser Aluminum Technical Services, (2012) 9 SCC 552.
[2] Section 2(6), Code of Civil Procedure, 1908.
[3]International Woollen Mills v. Standard Wool (U.K.) Ltd., (2001) 5 SCC
265.
[4]R. Vishwanathan v. Rukn – Ul- Mulk Syed Abdul Wajid, AIR 1963 SC 1.
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