Enforcement of Foreign Awards

Enforcement of Foreign Awards

Under Indian law, foreign awards passed in New York Convention countries, to, inter alia, Singapore and England are capable of enforcement in India. Once an award is passed, a certified copy of the award and the original agreement for arbitration is required to be filed in a court of competent jurisdiction in India. Upon such application, the court would issue notice to the counterparty giving it an opportunity to either accept or object to such award. The counterparty has the option to raise the following grounds for dismissal of such an application for enforcement of foreign awards.

Enforcement of a foreign award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the court proof that –

Section 48 of the Arbitration and Conciliation Act, 1196
Conditions for the enforcement of foreign award:-
1. Incapacity: the parties to the agreement were, under the law applicable to them, under some incapacity. It could be the claimant’s incapacity or incapacity of both the parties. In the absence of choice of law provision, the validity of the arbitral clause must be decided according to the law of the seat of the arbitral tribunal.
2. Invalidity of Agreement: the agreement is not valid under the law to which the parties have subjected it or failing any indication thereon, under the law of the country where the award was made.
3. Inability to present his case:- He/she was not given proper notice of the arbitral proceedings or any valid reason
4. Award exceeds reference: the award must not deal with questions not referred or contain decisions on matters beyond the scope of the agreement. The award is not enforceable if it decides disputes as to the arbitrator’s jurisdiction which by the which by the foreign law they have no power to decide.
5. Legality of composition of arbitral tribunal and procedure : enforcement of any award may be refused is
a) The composition of the arbitral tribunal was not in accordance with either the agreement or the law of the country where the arbitration took place.
b) The arbitral procedure was not in accordance with the agreement or the law of the country where the arbitration took place.
c) Award not yet binding, set aside or suspended.
6. Other grounds:- sub section (2) of Section 48 empowers the court to refuse enforcement on two grounds
a) The subject matter of difference is not capable of settlement by arbitration under law in India.
b) Contrary to public policy.

	(a)	the parties to the agreement, were, under the law applicable to them, under some incapacity or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or
	(b)	the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
	(c)	the award deals with a difference not contemplated by or not failing within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
		Provided that, if the decisions on matter submitted to arbitration can be separated from those not so submitted, that pail of the award which contains decisions on matters submitted to arbitration may be enforced; or
	(d)	the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or
	(e)	the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which. or under the law of which, that award was made.
(2)	Enforcement of an arbitral award may also be refused if the Court finds that –

	(a)	the subject-matter of the difference is not capable of settlement by arbitration under the law of India; or
	(b)	the enforcement of the award would be contrary to the public policy of India.

Once the court is satisfied that the above do not apply the court shall to execute the proceedings.

Procedure for enforcement of a Domestic award
A person against whom a domestic award is made has to immediately approach a civil court for challenging the same by making an application under section 34 of the act otherwise the person in whose favour the award has been made can execute the same as a decree.

The author can be reached at: sprshprsd@legalserviceindia.com