How to enforce a foreign arbitral award in India?
A foreign award (i.e. one which has been issued by a tribunal whose seat is outside India), has to be enforced under the New York Convention for the Enforcement and Recognition of Foreign Arbitral Awards, 1959 or the Geneva Convention on the execution of Foreign Arbitral Awards, 1927 read with the Geneva Protocol on Arbitration Clauses 1923. In the event that a country is a signatory of both the Conventions, the norms of the New York Convention (as long as both the nations are signatories) will take precedence.
Both the Conventions lay down procedures for enforcement of arbitral awards.
The procedure for the enforcement of the arbitral award is laid out in Sections 49 (enforcement of foreign awards - New York Convention Awards) and 58 (enforcement of foreign awards – Geneva Convention Awards) of Part II of the Arbitration and Conciliation Act, 1996. Wherein, an award passed under the two conventions is deemed to be a decree of a Court.
While highlighting the conditions that are laid out in determining the validity of an award under the two conventions, India has maintained the ‘reciprocity’ and ‘commercial’ reservations. This means that awards become enforceable in India where the other country (being a signatory to either convention) where the award is made is declared by the Central Government to be a country which has a reciprocal provision (like under section 44(b) and Section 53(c)).
Furthermore, the commercial reservation highlights that if the subject of the award does not arise from a commercial hold, the same would not be enforceable.
For enforcing an arbitral award an application has to be made by a party before the court and following documents are to be produced along with the application:
- a) original award or a duly authenticated copy thereof;
- b) original arbitration agreement or a duly certified copy thereof; and
- c) any evidence required to establish that the award is a foreign award.
Once an application for enforcement of a foreign award is made, the other party has the opportunity to file an objection against enforcement on the grounds recognized under Section 48 of the Act.
As a foreign award is to be treated as a decree of the court of India, they can be enforced once the period highlighted in Section 34 (application for setting aside arbitral award) of the Arbitration and Conciliation Act, 1996 for setting aside an arbitral award is over, and the conditions when enforcement of foreign awards highlighted in Sections 48 and 57 of the Arbitration and Conciliation Act, 1996 have been satisfied.
The conditions being, namely:
- the party is not under an incapacity;
- the party has been given appropriate notice of arbitration;
- the subject of the dispute falls within the terms of the submission to arbitration;
- the composition of the tribunal or the arbitral procedure was in accordance with the arbitration agreement;
- when the award is enforceable or has not been set aside or has been suspended by a competent authority of a country where the award has been made;
- There is no violation of the basic notions of morality and justice;
- There is no breach of the fundamental policy of India;
- the making of the award is not induced by fraud or corruption or is violative of sections 75 or 81.
Any foreign award which is enforceable shall be treated as binding for all purposes on the persons between whom it is made and shall be relied upon by those persons by way in any legal proceedings in India.
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.