Enforcement of Foreign Awards in India

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In India, the enforcement of foreign awards and carrying out of these arbitral awards are guided by both the Arbitration and Conciliation Act of 1996 and the Code of Civil Procedure of 1908. An arbitral award is a decision made by a group of arbitrators, whether they are resolving a dispute within a country or internationally. This decision includes any temporary decisions made during the process.

When it comes to enforcing foreign arbitral awards in India, it falls under Part II of the Arbitration and Conciliation Act of 1996. This enforcement can happen either under the rules of the New York Convention or the Geneva Convention. The Arbitration and Conciliation Act of 1996 was created with the guidance of the Model Law on International Commercial Arbitration by the United Nations Commission on International Trade Law (UNCITRAL).

Meaning of Foreign Awards

Foreign arbitral awards refer to decisions made by arbitration panels in international or domestic arbitration proceedings. These awards, whether in India or abroad, include interim decisions. In India, their enforcement is governed by the Arbitration and Conciliation Act, 1996 and the Code of Civil Procedure, 1908.

The Act aligns with the UN Commission on International Trade Law’s Model Law on International Commercial Arbitration. Enforcement under the New York or Geneva Conventions is specified, with the process involving submission of necessary documents, objections, and, upon satisfaction, treating the award as a decree of the court, providing legal recognition to the arbitral decision.

Procedure for Enforcement of Foreign Arbitral Awards in India

The enforcement of foreign arbitral awards is regulated by Part II of the Arbitration and Conciliation Act of 1996, allows for this enforcement under either the New York Convention or the Geneva Convention. These applications are only presented before a High Court.

Yet, the authority of Indian courts to provide temporary relief in connection with arbitrations held in foreign locations, like emergency arbitration in India, is restricted.

Enforcement of Foreign Awards passed under the New York Convention

The enforcement of foreign awards under the New York Convention is covered in Chapter I, Part II of the Arbitration and Conciliation Act of 1996, with relevant provisions spanning Sections 44 to 52.

In Section 44, a foreign award is defined as an arbitral decision on disputes between individuals arising from a legal relationship, whether contractual or not. The dispute must be recognised as commercial under Indian law, on or after October 11, 1960. To qualify for enforcement, the country must be a signatory to the New York Convention and the award must be made in a state that the Central Government has identified as a reciprocating territory.

As per Section 47, the party seeking enforcement of the foreign award in India must submit the following when applying:

  • The original award or an authenticated copy.
  • The original arbitration award or its certified copy.
  • Any evidence of the foreign nature of the award.

Section 48 outlines specific grounds on which the opposing party can raise objections to such enforcement. Finally, under Section 49, if the Court is satisfied with the enforceability of the foreign award as per this Chapter, the award is treated as a decree of that Court.

Enforcement of Foreign Arbitral Awards passed under the Geneva Convention

The enforcement of foreign arbitral awards under Geneva Convention is covered in Chapter II, Part II of the Arbitration and Conciliation Act of 1996, with relevant provisions spanning Sections 53 to 60.

In Section 53, a foreign award is defined as an arbitral decision on disputes related to matters considered commercial under Indian law after July 28, 1924. The three prerequisites for enforcement are:

  • The award is in pursuance of an arbitration agreement covered by the Geneva Protocol on Arbitration Clauses, 1923.
  • The award is between parties subject to the jurisdiction of reciprocating territories, as designated by the Central Government and where the Geneva Convention on the Execution of Foreign Arbitral Awards, 1927 applies.
  • The award is made in a territory designated as reciprocating by the Central Government.

According to Section 56, the party seeking the enforcement of the foreign award in India must submit the following during the application:

  • The original award or an authenticated copy.
  • Evidence demonstrating that the award has become final.
  • Evidence proving that the award was made in accordance with a valid arbitration agreement under applicable law.

Section 57(2) outlines conditions under which the enforcement of the award can be refused. Finally, as per Section 58, when the Court is satisfied with the enforceability of the foreign award under this Chapter, the award is then treated as a decree of that Court.

Enforcement of Foreign Judgments in India

According to Section 2(6) of the CPC, foreign judgments in India are decisions from courts outside the country that do not have the authority of the Central Government. The process for enforcing these judgments depends on whether they come from a reciprocating or non-reciprocating country.

If it’s from a reciprocating nation, the party seeking enforcement must initiate execution proceedings in India. However, if it’s from a non-reciprocating country, a new suit needs to be filed in India. The time limit for filing an enforcement suit is three years from the date of the judgment. Section 44A of the CPC mandates the submission of a certified copy of the decree and a certificate from the superior court specifying the level of satisfaction or adjustment to execute a decree from a reciprocating nation.

Under Section 13 of the CPC, a foreign judgment can be conclusive as res judicata, but with some limitations. Courts have consistently held that if a party does not willingly submit to the jurisdiction of a foreign court, they are not bound by it. If the plaintiff provides evidence, the court will decide on the merits.

In the case of R. Vishwanathan v. Rukn – Ul- Mulk Syed Abdul Wajid, the Supreme Court emphasised that the enforcement of a foreign judgment can be compromised if the court fails to meet the minimum requirements of natural justice or if the foreign court was coerced or deceived into issuing the judgment.

Enforcement of Foreign Judgments from Non-Reciprocating Countries

Enforcing a foreign judgment from a non-reciprocating country in India requires filing a legal action based on the judgment. The plaintiff can sue based on either the foreign judgment or the original cause of action. If the litigation is unsuccessful, no further execution application is allowed. However, if successful, the decree can be enforced in India.

To enforce the foreign judgment, a certified copy of the judgment and an additional certificate from a representative of the Central Government of India in the foreign nation are necessary. The judgment must also meet the conditions outlined in Section 13 of the CPC before it can be enforced in India.

If the decree-holder makes efforts to execute a foreign decree in the country where the decree was issued and the decree is not fully satisfied, the decree-holder can file an execution petition in India within three years of the completion of the execution proceedings in the foreign country.

Challenging Enforcement of Foreign Awards in India

Concerning the challenging of enforcement of foreign arbitral awards in India, refusal may occur on grounds such as:

  • The parties to the arbitration agreement are incapacitated.
  • The arbitration agreement is invalid under the controlling legislation.
  • The party challenging the award did not receive proper notice of the arbitrator’s appointment or the arbitration proceedings or they were otherwise unable to present their case.
  • The award addresses a dispute not anticipated by or outside the scope of the submission to arbitration or it includes decisions on subjects beyond the submission’s scope.
  • The appointment of arbitrators or the arbitral procedure did not conform to the parties’ agreement or in the absence of such agreement, to the legislation of the country where the arbitration took place.
  • The award has not become binding on the parties or a competent authority has suspended or set it aside.
  • The subject matter of the dispute cannot be resolved by arbitration under Indian law.
  • Implementing the award would be contrary to India’s public policy.

Conclusion

In conclusion, the enforcement of foreign arbitral awards in India is a carefully regulated process under the Arbitration and Conciliation Act, 1996. The Act, inspired by international standards, distinguishes between awards from the New York Convention and the Geneva Convention, providing clear procedures and prerequisites for enforcement. Parties seeking enforcement must adhere to specific documentation requirements and objections can be raised under defined grounds.

The ultimate satisfaction of the court leads to the foreign award being treated as a decree, ensuring legal recognition. While India’s legal framework supports the enforcement of foreign arbitral awards, it concurrently upholds principles of fairness, legality and adherence to international norms in the arbitration process.


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