How to enforce a domestic arbitral award?
A domestic award is to be treated as a decree by a court under section 36 of the Arbitration and Conciliation Act, 1996. The enforcement of the same would involve filing the award in court.
As per Section 10 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 all applications or appeals arising out of international commercial arbitrations would lie in the Commercial Division of the High Court, if they have been constituted in the relevant High Court.
If an award is passed in domestic arbitration and sought to be enforced anywhere it must satisfy the local laws for the validity of enforcement.
An award becomes enforceable once the period of three months for challenging the award as laid out under Section 34 of the Arbitration and Conciliation Act, 1996 has elapsed or that the application to set aside the award has been rejected.
However, it is to be noted that a Section 34 application does not result in a stay on the enforcement of an award. As recognized under Section 36(2) of the Arbitration and Conciliation Act, 1996, a court hearing the Section 34 application will have to pass a specific order directing a stay on the execution of the award.
What are the components of a legally valid arbitral award?
Section 31 of the Arbitration and Conciliation Act, 1996 clearly outlines the form and contents of an arbitral award under Indian law.
As Part I of the Arbitration and Conciliation Act, 1996 is applicable to all international arbitrations seated in India as well as domestic arbitrations, Section 31 will have to be kept in mind while drafting the award.
At the first instance, the award must be a reasoned written award i.e., containing the reasons behind the decision (the award must be a speaking order), unless the parties have agreed it would not be necessary for the reasons to be recorded or if the award so arrived at was through a settlement under section 30 of the Arbitration and Conciliation Act, 1996.
With regards to procedural validity, the following must be kept in mind:
- i) The arbitrator must record the date and place where the award was made; and
- ii) Signed copies of the award have to be delivered to the parties.
How to enforce foreign and domestic ‘interim’ awards?
An interim award as per Section 17(2) of the Arbitration and Conciliation Act, 1996 is to be treated as an order of the court and the interim award is deemed to be and enforced as an order of a Court under the Code of Civil Procedure.
Further, Section 9 (interim awards, etc., by the court) of the Arbitration and Conciliation Act, 1996 will be made applicable to international commercial arbitration, with an agreement to the same, as observed in the proviso to section 2(2) (Part I shall apply where the place of arbitration in India).
Being treated as ordered by the court, an interim award granted by an arbitral tribunal will be enforceable as an interim order under the Code of Civil Procedure.
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.