Procedure for Enforcement of Foreign Arbitral Awards in India
To further India's pro-arbitration and pro-foreign investment environment, the basic principle of minimal judicial intervention is followed in terms of enforcement of foreign seated arbitral awards in India. The defenses available to unsuccessful parties and wide interpretation of the available defenses under the Indian Arbitration Law is limited by introducing limitations via Amendments. The Arbitration and Conciliation (Amendment) Act, 1996; the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, (“New York Convention”) and the Geneva Convention on the Execution of Foreign Arbitral Awards, 1927, (“Geneva Convention”) constitute the body of laws governing India’s position on the enforcement of foreign arbitral awards which, is in line with international standards. The Geneva convention ceased to apply to those awards to which the New York Convention is applicable.
What is Enforcement?
Under the New York Convention, an award issued by any contracting state can be freely enforced in other such contracting states including India. Once a final award is passed by the arbitral tribunal, the party in whose favour the can apply to the Indian courts of law to pass the awards as a decree of the court having the same enforceability as that only other decree passed by such court under Section 49 of the Arbitration and Conciliation Act, 1996. Execution proceedings for the enforcement of the decree/ award are initiated under Section(s) 36 to 74 and Order XXI of the Civil Procedure Code, 1908.
As defined under Section 44, Part II of the act and elaborated under Article I (3) of the Convention, the state would only recognize or enforce awards made in foreign states on the basis of reciprocity, that it will apply the provision of the convention on where the disputes between the parties arise out of legal relationships which are considered commercial by the state making the declaration or in pursuance of an arbitration agreement for which the First Schedule of the Convention applies.
Section 44(b) of the Act requires that the Central Government must issue a notification in the Official Gazette to recognize a reciprocating party which means that an award made in a non-notified state would not be categorised as a ‘foreign award’ within the meaning of Section 44 of the Act and therefore, would be unenforceable.
Awards arising from International Commercial Arbitration
The term ‘commercial’ is construed liberally and with a broad meaning in India. In R.M. Investment and Trading Co. (P) Ltd. vs Boeing Co and Anr, 1994 AIR 1136, the role of the Petitioner was to provide commercial and managerial assistance and information to the Respondent and therefore, their relationship was considered to be of commercial nature by the Court.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.