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Enforcement of Arbitral Awards

Execution of Arbitral Awards

Execution of a Arbitral Award

Definitions and preliminary proceedings

1. What is the definition of an arbitral award in your jurisdiction for the purpose of enforcement proceedings?

Arbitral award means the decision of an arbitral tribunal, whether in a domestic or international arbitration. Arbitral award also includes an interim award.

2. Are decisions in preliminary/provisional proceedings recognised and enforceable?

A preliminary/provisional award passed by an arbitral tribunal which may dispose of some issues is valid and enforceable.

Applicable conventions

3. What conventions is your jurisdiction a contracting party to?

India is a party to the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention).

India is also a party to the Geneva Protocol on arbitration clauses of 1923, and the Geneva Convention on the execution of foreign arbitral awards 1927.

Enforcing awards

4. What is the applicable statutory framework for enforcement of awards?

The Arbitration and Conciliation Act 1996 (AC Act) is the governing law in India for matters related to arbitration. Both the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention) as well as the Geneva Convention on the execution of foreign arbitral awards 1927 have been adopted and included in the legislation with respect to the enforcement of foreign awards.

5. What are the grounds for refusing enforcement?

 

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Domestic awards

Under the Arbitration and Conciliation Act 1996 (AC Act), the party aggrieved due to the arbitral award can file an application before the court which has jurisdiction for setting aside the award. In the event that no such application is filed within 30 days, the award holder can file for enforcement of the award following the Civil Procedure Code 1908 (CPC). An application for setting aside the arbitral award can be filed on the following grounds:

  • The applicant was under some incapacity.
  • The arbitration agreement is not valid under the law to which the parties have subjected themselves or, failing any indication of that, under the law for the time being in force.
  • The party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case.
  • The arbitral award deals with a dispute not contemplated by, or not falling within, the terms of the submission to arbitration, or it contains decisions on a matter beyond the scope of the submission to arbitration.
  • The composition of the arbitral tribunal or the arbitral procedure was:
    • not in accordance with the agreement of the parties, unless such an agreement was in conflict with a provision of the AC Act (from which the parties cannot derogate); or
    • not in accordance with the AC Act.
  • The subject-matter of the dispute is not capable of settlement by arbitration under the law.
  • The arbitral award is in conflict with the public policy of India.
  •  

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International awards

Under the AC Act, the enforcement of a foreign award can be refused at the request of the party against whom it is invoked, only if that party furnishes to the Indian court proof that:

  • The parties were under some incapacity.
  • The arbitration agreement is not valid under the law to which the parties have subjected themselves or, failing any indication of that, under the law of the country where the award was made.
  • 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.
  • The award deals with a dispute that was not contemplated by, or not falling within, the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration.
  • 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.
  • 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.
  • The subject matter of the dispute is not capable of settlement by arbitration under the law of India.
  • The award is contrary to the public policy of India.

6. Is the enforcing court required to examine the refusal grounds during the enforcement proceedings ex officio?

Irrespective of the grounds raised by the defendant, the court can examine whether

  • The subject matter of the dispute is not capable of settlement by arbitration under the laws of India.
  • The award is contrary to the public policy of India.

7. What is the effect of pending challenge proceedings in the foreign state where the decision is granted?

An award which is not binding on the parties, or has been set aside, or suspended by a competent authority or the law of the country in which the award was made, is one of the grounds for refusal of the enforcement of the arbitral award (see Question 5).

8. What types of arbitral awards are enforceable?

Money awards

Money awards are enforceable.

Awards containing injunctions ordering or prohibiting the doing of acts

There is a lacuna in the law at present with respect to the enforcement of interim awards by the arbitral tribunal. Although provisions do exist for filing applications before the arbitral tribunal, it is more practical for parties to file an application seeking remedies before the court, that is, either before, after or during the course of the arbitration proceedings.

 

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Decisions or awards by arbitral tribunals (including emergency arbitrators) granting provisional measures

This is the same position as for awards containing injunctions ordering or prohibiting the doing of acts, above.

Declaratory awards

Declaratory awards are enforceable.

Other awards

Not applicable.

9. Can parties seek to enforce only part of the award?

Parties can seek to enforce only part of the award.

10. Are any class of awards excluded from recognition and enforcement? If so, what types of awards?

If the award is found to be in violation of the conditions set out in Question 5, the court will not grant recognition and enforcement to such an award.

11. Will service that does not conform to the requirements of international treaties/regulations in force automatically result in a denial of the enforcement of a judgment/award/deed?

One of the grounds for denial of enforcement is that the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings (see Question 5).

12. What methods of service are not acceptable against defendants domiciled in the state where enforcement is sought?

Not applicable.

Public policy

13. Which country's public policy applies? Does the court approach the issue differently depending on whether the award is a domestic or international award?

Domestic awards

See Enforcement of judgments in India, Questions 11 to 13.

International awards

The public policy of India applies to both domestic and international awards which are being enforced in India.

14. In which cases and against which awards has the principle of public policy generally been applied?

The Supreme Court of India has dealt with question of public policy in several cases. In the case of Shir Lal Mahal Ltd. vs. ProgettoGrano Spa [(2014) 2 SCC 433], it was held that, while considering the enforceability of foreign awards, the court does not exercise appellate jurisdiction over foreign awards, nor does it enquire as to whether, while rendering a foreign award, some error has been committed by the foreign court. Under Section 48(2)(b) of the Arbitration and Conciliation Act 1996 (AC Act), the enforcement of a foreign award can be refused only if such enforcement is found to be contrary to:

  • The fundamental policy of Indian law.
  • The interests of India.
  • The justice or morality.

If objections raised by the judgment debtor do not fall into any of the these categories, the foreign award cannot be held to be contrary to the public policy of India as contemplated under Section 48(2)(b) of the AC Act.

 

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Enforcement proceedings

Procedure

15. What is the procedure for enforcing arbitral awards?

Domestic awards

The procedure is set out under the Civil Procedure Code 1908 (CPC).

Ex parte or on notice. Notice is issued to the defendant at first instance.

Applicable court. An application can be filed before the principal civil court of the original jurisdiction, including the high court in exercise of its ordinary original civil jurisdiction. This court can decide on questions forming the subject-matter of the arbitration. The applicable court does not include any civil court of a grade inferior to the principal civil court, or any small claims court.

Limitation period. The limitation period is the same as for civil proceedings, which is a limit of 12 years for execution from the date of award.

Timing. The timing of the procedure can be (ideally) around six months.

Court fees. The court fee varies for each court and jurisdiction and depends on the value of the award.

Recourse. Appeals can be filed in the court of appeal as stated in the Arbitration and Conciliation Act 1996 (AC Act).

International awards

The enforcement procedure for international awards is set out in Part II of the AC Act. An application for the enforcement of a foreign award can be filed under Section 44 of the AC Act.

Ex parte or on notice. At first instance, the respondent is notified of the proceedings as under the CPC.

Applicable court. This is the same as for domestic awards, see above.

Limitation period. The limitation for filing enforcement proceedings for arbitral awards is three years. Once the enforcement is allowed, the award is deemed decreed and execution can effectively be done within 12 years from date of the award.

Timing. The procedure should take (ideally) around six months.

Court fees. These vary for each court and jurisdiction, and depend on the value of the lawsuit.

Recourse. Appeals can be filed in the court of appeal as under the AC Act.

 

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16. Can the enforcing court review the foreign award if all formalities were complied with and if the award meets all requirements?

The Supreme Court of India in the case of Bharat Aluminium Company and Ors vs. Kaiser Aluminium Technical Service, Inc. and Ors [(2012) 9 SCC 552)] dealt with, among other issues, whether Part I of the Arbitration and Conciliation Act 1996 (AC Act) was applicable to international arbitration.

The Constitution Bench of the Court held that an Indian court has no jurisdiction to set aside a foreign arbitral award under Section 34 (Part I), unless the arbitration agreement was made before 6 September 2012 (the date of the judgment). This judgment, famously known as the BALCO judgment, has made it clear that Indian courts have no jurisdiction to examine the subject matter of the case when the seat of arbitration is outside India. Further in the Shir Lal Mahal Ltd case (supra), the Supreme Court made it clear that Indian courts do not exercise appellate jurisdiction over foreign awards and the enforcement of a foreign award can be refused only if such enforcement is found to be contrary to the fundamental policy of Indian law, the interests of India, or justice or morality.

Formalities

17. What are the documentary requirements for enforcement?

Documentary requirements

The documentary requirements are:

  • An original award or copy of the award duly authenticated.
  • The original arbitration agreement or duly certified copy of this.
  • Such evidence as may be necessary to prove that the award is a foreign award.

If any of the documents are not in English, then English translation of the documents, certified as correct by a diplomatic or consular agent of the country to which it belongs to, or certified as correct, can be sufficient under Indian laws.

For more info on the subject, please dial 99888-17966.

 

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