Enforcement of Award under the Arbitration & Conciliation Act, 1996
One of the objectives of the Arbitration and Conciliation Act, 1996, (“the Act”) is that each and every final award is to be enforced in the manner as the decree of the Indian Court would be. Sub-divided into two parts, Part I of the Act stipulates the enforcement of different types of foreign arbitral awards not covered by the ambit of New York or the Geneva Conventions and is modelled upon the UNCITRAL Model Law. Enforcement of awards can be challenged in cases wherein the award is contrary to either the fundamental policy or interest of India is violated.
The 2015 Amendments to the Act were brought about with the aim to modernize the Indian Arbitration law regime, expedite resolution of disputes, minimize and limit the supervisory role of courts of law over arbitration proceedings and limit the grounds on which arbitral awards may be challenged.
Enforcement of Foreign Arbitral Awards in India is a two-step process initiated by filing an execution petition before a court of law. The court would examine whether the arbitral award is in consonance with the requirements of the Act. At this stage, the party seeking to enforce an award must be mindful of the several objections that can be taken by the opposing party such as filing an authenticated copy of the award and the underlying agreement before the court.
Requirements for enforcement of Foreign Awards
As under Section 47 of the Act, the following shall be produced before the court at the time of application for enforcement of foreign arbitral awards:
- Original award/duly authenticated copy of the award in the manner required by the nation where it is passed/made;
- Original/ duly certified copy of the arbitration agreement; and
- Evidence to prove that the award is a foreign award.
Conditions for refusal of enforcement of Foreign Award
As under Section 48(1) of the Act, the following are the grounds under which enforcement may be refused:
- Incapacity of parties under the agreement;
- The Arbitration Agreement is not in accordance with the law of the seat of arbitration or under the law of the country where the awards were made;
- No proper notice of appointment of the arbitrator or of initiation of arbitration proceedings or the party against whom the awards are made;
- Awards is ultra vires the arbitration agreement or submission to arbitration;
- Composition of the arbitral authority/panel is ultra vires the arbitration agreement or not in accordance with the laws of the venue of proceedings;
- The award has not become binding on the parties or has been set aside by a competent authority of the country of seat and venue of the arbitration proceedings;
- Subject matter of the dispute is not capable of settlement by arbitration under Indian laws;
- Enforcement of the award would be contrary to the public policy or interests of India and its government policies. As per the amendments to the Act, awards would be unenforceable on grounds of public policy of India if:
– The award is fraudulent/corrupt (or in violation of ) under Section(s) 75 and 81 of the Indian Evidence Act, 1872;
– The award conflicts with the fundamental policy of Indian law;
– The awards are in conflict with the most rudimentary notion of morality or justice.
Valuation on the basis of merits, any grounds used as an afterthought or not taken before the learned arbitrator(s) and interpretation of an agreement by an arbitrator being perverse falls outside the scope of Section 48 and Section 48(1)(b), respectively, and are not grounds that can be relied upon by the opposing party.
In Shri Lal Mahal Ltd. vs. Progetto Grano Spa, (2014) 2 SCC 43], the Supreme Court held that while taking into consideration enforceability of foreign awards, the Court does not exercise appellate jurisdiction and nor does it enquire into the process and procedure followed by the arbitral tribunal in making such an award.
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. Further, despite all efforts that have been made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre shall not be responsible for any errors caused due to human error or otherwise.