ENFORCEMENT AND RECOGNITION OF INTERNATIONAL ARBITRAL AWARDS IN INDIA
Updated: Apr 15
- Kanak Bhardwaj
India's Arbitration and Conciliation Act, 1996 provides a legal structure to the authorization of foreign mediation honours given in nations that square measure signatories to either the 1927 Convention on the Execution of Foreign mediation Awards (Geneva Convention) or the 1958 Convention on the popularity and social control of Foreign mediation Awards (New dynasty Convention).
Beneath section forty-four of the Indian Arbitration and Conciliation Act, 1996, “foreign mediation grant” by definition implies an honour a passed in such space, because the Central Government by warning might proclaim to be a district to that the New York Convention applies. Thus, despite whether or not a nation may be a person to the New York Convention, it does not ipso facto implies that an honour passed in such a nation would be enforceable in India. There should be any notice announced by the Central Government stating that nation to be a website to that the New York Convention applies. Around forty nations are told to this point by the Indian government. The USA, UK, France, Germany, Japan, and Singapore square measure among the nations told by India. Consequently, an Arbitration grant noninheritable within the USA is enforceable in India. India has attached to the Big Apple Convention of 1958 on the acknowledgment and demand of foreign mediation honours. In Bhatia International v. Bulk commerce, the Supreme Court viewed that a discretion grant not created in a show nation will not be viewed as a foreign honour and, consequently, a distinct activity ought to be crammed supported the honour. The square measure many necessities for a distant arbitral award to be enforceable beneath the Arbitration and Conciliation Act.
(i) business dealing
(iii) Agreement should be valid
(iv) Award should be unambiguous
Enforcement and Execution
The party seeking social control of a far-flung award beneath the provisions of the Arbitration and Conciliation Act should build an application to the court of competent jurisdiction with the next documents:
(i) the original/duly documented copy of the award;
(ii) the original/duly documented copy of the agreement, and
(iii) such proof might even be necessary to prove that the award could also be distant.
On fulfilling the statutory conditions mentioned on top of a far-flung award square measure reaching to be deemed, a decree of the Indian court implementing the award and thenceforth square measure reaching to be binding for all functions on the parties subject to an award. The Indian Arbitration and Conciliation Act, 1996 the governing arbitration adopted by the international organization Commission on International Trade Laws (UNCITRAL) in 1985. Section forty-eight of the Indian Arbitration and Conciliation Act, 1996 lays down the conditions for implementing a faraway arbitration award in India. Grounds for refusal of social control square measure provided for beneath Section forty- eight square measure nearly just like the New York Convention. If the court is happy that the foreign award is enforceable, the same shall be deemed to be a decree of the court. The Supreme Court has controlled that no separate application wants to be crammed for the execution of the award. One application for social control of award would bear a two- stage method. Inside the primary stage, the enforceability of the award, having relation to the
requirements of the Act (New dynasty Convention grounds) would be determined. Once the court decides that the foreign award is enforceable, I shall proceed to want any steps for execution of the same.
The social control of a faraway mediation award in India is based on the fundamental principle of stripped judicial intervention thus on understanding any India's pro-arbitration and consequently pro-foreign investment climate. Thus, on understanding this goal, the laws regarding the social control of foreign mediation awards squares measure consistently amend to limit the scope of defences offered to unsuccessful parties and stop the courts from enterprising an honest interpretation of the offered defences. As such, a large range of foreign mediation awards squares measure with success implemented in India.
Further, the amended arbitration laws offer a simplified and settled one-stop-procedure. The social control of a faraway award in India is initiated by filing a petition for social control. The unsuccessful party will object to such petition as per the defences offered beneath the Arbitration and Conciliation Act 1996, when that the court can confirm whether or not the award adheres to the act. Once a present is found to be enforceable, its reaching is to be implemented inside a similar means as a court decree. This simplified procedure has reduced the time that it takes the courts to render a judgment on the social control of a faraway mediation award. As a result of the courts square measure in favour of prompt social control of foreign mediation awards, foreign parties that attain arbitration proceedings will usually relish such proceedings in India. However, in its recent call-in Campos Brothers Farms v. Matru Bhumi provide Chain Pvt Ltd, the urban centre Supreme Court refused to enforce a faraway mediation award beneath the Arbitration and Conciliation Act. This text analyses
the court's call, its reasons for refusing the social control of the award, and whether or not this judgment could also be a step back for Indian Arbitration law.
Foreign Awards (Recognition & Enforcement) Act: The Foreign Awards (Recognition & Enforcement) Act 1961 was the first throughout a series of laws on the social control of foreign awards. Section seven of the act is that the foundational provision on that the social control of foreign mediation awards in India nowadays is based. Section 7(1)(a) contains technical and procedural grounds for refusing social control.
The phrase 'public policy' is undefined and may be interpreted widely by the courts. Within the landmark judgment Renusagar power service Limited v. General Electric Co., the court
interpreted that the term 'public policy' in Section (1)(b)(ii) has been utilized in a narrower
sense which to believe this ground, an award's enforcement must invoke something quite a
violation of Indian law.
The recent developments show signs of restraint from courts in their approach towards interfering with the enforcement of foreign arbitral awards. The narrow exceptions are to be construed with an eye fixed on ensuring the award holder is in a position to understand the fruits of the award without stretching the timeline and not allowing the judgment debtor to possess a second bite at the cherry. Thus, an uniform approach by the courts towards foreign arbitral awards is important for building confidence within the international arbitration regime in India. The Supreme Court's interpretation in NAFED v. Alimenta SA is often seen as nothing quite an exception to its general stance towards enforcement. We anticipate the courts to exercise inherent discretion cautiously without prejudicing the award holder's rights.
Kanak Bhardwaj is a second year student at Pravin Gandhi College of Law, Mumbai.
AIR 2002 SC 1432.
1994 Supp (1) SCC 644.