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PROBLEMS IN ENFORCEMENT OF FOREIGN ARBTIRAL AWARD IN INDIA
A foreign award means an “arbitral award on differences between persons arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India, made on or after the 11th day of October, 1960” according to section 44 of the Arbitration and Conciliation Act, 1996. To understand this definition in a more precise and easier way one can study the essentials of a foreign award as declared by Calcutta High Court in the case of Serajuddin v. Michael Golodetz which lays down that for an arbitration to be of foreign nature the arbitration should be held in foreign land by a foreign arbitrator and a party should be of foreign national and also the laws applied by arbitrator to decide the case should also be foreign in nature.
In India, two conventions are in force in relation to the enforcement of foreign arbitral award. The first convention is known as Geneva convention, 1927 which came into being in the age of league of Nations and was incorporated in Indian laws by the Colonial government through the enactment of Arbitration (Protocol & Convention) Act, 1937. The second more improved convention was that of New York Convention (NYC), 1958 which was ushered in the Era of United Nations and adopted by Indian government through the Foreign Awards (Recognition & Enforcement) Act, 196. The Indian government realised the existence of two separate codes on same subject matter and compiled the two of them in the Arbitration and Conciliation Act, 1996 where both the convention was adopted in different chapters in the part II of the mentioned Act. NYC was adopted in Chapter I under the heading of Enforcement of Certain Foreign Awards’ and ‘New York Convention Awards’ and the Geneva convention in Chapter II under “Geneva Convention Awards” and the earlier acts were repealed.
The Geneva Convention in reality grapples with some obvious issues that need to be resolved. The convention establishes limited difference between the international judgement or pronouncement and international arbitration. It also has a limited scope as it takes into account only the commercial aspects. Also another conflict which is created by the Act is that the both acts are held exclusive of one another and provisions of Chapter I and II cannot be enforced on one another. Section 52 of the Chapter II of the Arbitration Act declares that the provision given in the present chapter cannot be applied on the foreign arbitration carried under the Chapter II i.e., according to Geneva Conventions.
thus from the above discussion, it can be concluded that the NYC 1958 is undoubtedly a more refined set of guideline with wider scope and higher range of applicability. The said convention in Article VII (2) had itself laid stress on the need to absolve the use of Geneva convention. The NYC convention has already been recognised in many countries. IN India, the area of application of NYC is limited as according to the act it shall only be applicable on those states as notified by the official Gazette. Thus this also poses a difficulty in uniform application of foreign arbitral award. It is also recommended and would be beneficial if India too discards the dual model and lay its focus on the enforcement of NYC convention.
- Legal issues in enforcement of Arbitral Award
- The Conflict between the two conventions: NYC and GC
- A need for uniformity
