ENFORCEMENT AND EXECUTION OF

FOREIGN ARBITRAL AWARDS

Provided upon request only

 Enforcement of awards

• Domestic Award (Indian award)

• Enforcement in India
• Enforcement outside India
• Foreign Award
• Enforcement in India
Awards made only in countries that have been notified by the Central Government in the
official gazette
• Enforcement outside India
Law of the relevant country

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 Enforcement of foreign awards : Appropriate forum

• Where the subject matter is money, the Commercial Division of any High Court in India where
assets of the opposite party lie shall have jurisdiction. [Sundaram Finance Ltd. v. Abdul Samad
and Anr, (2018) 3 SCC 622]

• In case of any other subject matter, Commercial Division of a High Court which would have
jurisdiction as if the subject matter of the award was a subject matter of a suit shall have
jurisdiction.

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 Enforcement of awards: Limitation period

Foreign awards:
Enforcement of a foreign award under Part II of the Arbitration Act would be covered by Article 137
of the Limitation Act which provides a period of three years, from when the right to apply accrues.
[Government of India v. Vedanta Ltd. and Ors., Civil Appeal No. 3185 of 2020, judgment
dated 16 September 2020]

Domestic awards:
The Limitation Act 1963 applies to arbitrations - the limitation period for enforcement of such an
award is three years/twelve years

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 How courts examine awards:

How courts examine awards:

• Executing court cannot re-examine the award apart from satisfying itself on a superficial basis
about the award.

• Executing court cannot examine the merits of the case.

• The exercise is not an “appeal” on merits against order of tribunal, but merely review.

• Accordingly, the court has to first make enquiry as to enforceability of award and secondly hold
that it is enforceable and thereafter enforce it.

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 Applicability of the 2015 Amendment Act
• After the 2015 Amendment, there were conflicting decisions passed by the various High Courts on whether the 2015
Amendment applies to pending court proceedings or not. The position was finally settled by the Supreme Court in Board
of Control for Cricket in India v. Kochhi Cricket (P) Ltd., 2018 (6) SCC 287. The Supreme Court held that Section 36
was procedural in nature and hence, the 2015 Amendment would be applicable to pending court proceedings as well.
Consequently, in order to stay enforcement of arbitral award, an application would have to be filed before the competent
court and that mere challenge to arbitral award will not make the arbitral award non-executable.

• Section 87 to Arbitration Act was amended by way of Section 13 of the Arbitration and Conciliation (Amendment) Act,
2019 to clarify that unless parties otherwise agreed, the 2015 Amendment shall not apply to arbitral proceedings which
have commenced before the commencement of the 2015 Amendment; and court proceedings arising out of or in relation
to such arbitral proceedings irrespective of whether such court proceedings have commenced prior to or after the
commencement of the 2015 Amendment.

• This amendment was challenged before the Supreme Court in Hindustan Construction Co. Ltd. v. Union of India, 2019
SCC Online SC 1520. The Supreme Court struck down the insertion of Section 87 by the 2019 Amendment Act.

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 Enforcement of Foreign Awards

• If a party receives a binding award from a country which is a signatory to the New York
Convention or the Geneva Convention and the award is made in a territory which has been
notified as a convention country by India, the award would then be enforceable in India.
• Out of the 196 countries in the world only 48 countries have been notified by
the Central Government of India as reciprocating countries.
• The enforcement of a foreign award in India is a two-stage process:

Once an award is found to be enforceable it may be enforced like a decree of that court
(Order XXI of the Code of Civil Procedure 1908 would be applicable).

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 Reciprocity requirements

Article 1(3) of the New York Convention

“When signing, ratifying or acceding to this Convention, or notifying extension under article X
hereof, any State may on the basis of reciprocity declare that it will apply the Convention to the
recognition and enforcement of awards made only in the territory of another Contracting State. It
may also declare that it will apply the Convention only to differences arising out of legal
relationships, whether contractual or not, which are considered as commercial under the national
law of the State making such declaration”.

Section 44(b) of the Arbitration Act while adopting the reciprocity reservation, has created an
additional requirement:

“in one of such territories as the Central Government, being satisfied that reciprocal provisions
have been made may, by notification in the Official Gazette, declare to be territories to which the
said Convention applies”

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 List of reciprocating territories:

Australia; Austria; Belgium; Botswana; Bulgaria; Canada, Central African Republic; Chile; China
(including Hong Kong and Macau), Cuba; Czechoslovak Socialist Republic; Denmark; Ecuador;
Federal Republic of Germany; Finland; France; German Democratic Republic; Ghana; Greece;
Hungary; Italy; Japan; Kuwait; Mauritius, Malagasy Republic; Malaysia; Mexico; Morocco;
Nigeria; Norway; Philippines; Poland; Republic of Korea; Romania; Russia; San Marino;
Singapore; Spain; Sweden; Switzerland; Syrian Arab Republic; Thailand; The Arab Republic of
Egypt; The Netherlands; Trinidad and Tobago; Tunisia; United Kingdom; United Republic of
Tanzania and United States of America

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 General requirements:
• Original award or a duly authenticated copy in the manner required by the country where it is
made.

• Original agreement or duly certified copy of the award.

• Evidence necessary to prove the award is a foreign award, wherever applicable.

• Conformity with the conditions for enforceability of the award

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 The case of ‘public policy’ in India
Ground Domestic Award Foreign Award
Fundamental Policy of Indian Law Yes Yes
• Disregarding orders of superior courts in India;
• Disregarding the binding effect of the judgment of a superior
court;
• Principles of natural justice, including contravention of the
principle of audi alteram partem principle;
• Contravention of the provisions of the Foreign Exchange
Regulation Act as it is a statute enacted for the national
economic interest.
Justice Yes Yes
An award is against justice when it shocks the conscience of the
court.
Morality Yes Yes
Morality includes within it ‘sexual morality’. It would cover
agreements which are not illegal per se but would not be
enforced given the prevailing mores of the day.

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 Ground Domestic Award Foreign Award
Patent Illegality Yes (in case of No
a. Patent illegality appearing on the face of the award, arbitral awards
which refers to such illegality that goes to the root of the arising out of
matter. However, this does not include a mere erroneous arbitrations other
application of the law or reappreciation of evidence. than international
b. An award may be set aside if an arbitrator does not give commercial
reasons for the award and contravenes Section 31(3) of arbitrations)
the Arbitration Act;
c. An award may be set aside if an arbitrator construes the
contract in a manner that no fair-minded or reasonable
person would;
d. An award may be set aside if an arbitrator commits an
error of jurisdiction by wandering outside the contract
and dealing with matters not allotted to him;
e. A finding based on no evidence or an award which
ignored vital evidence in arriving at a decision would be
perverse and liable to be set aside;
f. A finding based on documents taken behind the back of
the parties would be considered an award based on no
evidence, and thus be liable to set aside for being
perverse.

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 Some common objections raised against enforcement of an award:

• Violation of principles of natural justice (especially in ex parte awards) and public policy

• Absence of any agreement of the judgment-debtors to the arbitral agreement

• No arbitration agreement in writing

• Emphasis on pathological errors in the arbitration agreement e.g. Rules of Singapore of

International Arbitration of Chambers of Commerce would not refer to SIAC Rules

• Non-stamping of the award

- Domestic awards have to be stamped, while foreign awards need not be.
[M/S Shriram EPC Limited v. Rioglass Solar SA, (2018) 18 SCC 313]

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 Section 48
“Section 48. Conditions for enforcement of foreign awards’
(1) Enforcement of a foreign award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the court proof
that—
(a) the parties to the agreement referred to in section 44 were, under the law applicable to them, under some incapacity, or the said agreement is not valid
under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or
(b) the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings or was
otherwise unable to present his case; or
(c) the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on
matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains
decisions on matters submitted to arbitration may be enforced; or
(d) the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement,
was not in accordance with the law of the country where the arbitration took place ; or
(e) the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under
the law of which, that award was made.
(2) Enforcement of an arbitral award may also be refused if the Court finds that—
(a) the subject-matter of the difference is not capable of settlement by arbitration under the law of India; or
(b) the enforcement of the award would be contrary to the public policy of India.
1[Explanation 1.—For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,—
(i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or
(ii) it is in contravention with the fundamental policy of Indian law; or
(iii) it is in conflict with the most basic notions of morality or justice.
Explanation 2.— For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a
review on the merits of the dispute.]
(3) If an application for the setting aside or suspension of the award has been made to a competent authority referred to in clause (e) of sub-section (1)
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.”
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 Modes of execution under the Code of Civil Procedure 1908

On an application made for execution of the award, the court may order the execution of the award by
one or more of the following modes:
• by delivery of any property specifically decreed
• by attachment and sale or by sale without attachment of any property
• by arrest and detention in prison
• by appointing a receiver
• by any other manner as the nature of the relief granted may require.

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 THANK YOU

© Nishith Desai Associates, 2016