Foreign Awards

The arbitration and conciliation Act, 1996 has been the main statute in India
dealing with alternate forms of dispute resolution. The preamble of the Act is to
consolidate and amend the law relating to domestic arbitration, international
commercial arbitration and enforcement of foreign arbitral awards.

Shit-Etsu Chemical Company Ltd. and Others v. Vindhya Telelinks Ltd. and
Others,(2009) 14 SCC16, it has been held that Sections 45 and 50 in part II of the Act
relating to ‘enforcement of certain foreign awards’, correspond to Sections 8 and 37
of Part I of the Act. It, however, clarifies that nothing in Section 50 shall affect or
take away any right to appeal to the Supreme Court.

Part II of the Act relates to enforcement of certain foreign awards. Chapter 1

of this Part deals with New York Convention Awards. Chapter-II relates to the
awards made under Geneva Convention.

Section 46 of the Act speaks as to when a foreign award is binding.

Section 47 states as to what evidence the party applying for the enforcement of a
foreign award should produce before the court.
Section 48 states as to the conditions for enforcement of foreign awards.
Section 49, states that a foreign award is enforceable and the award shall be deemed
to be a decree of that court if the court is satisfied.

NewYork Convention Awards

It is one of the most important international arbitration laws made in the United
Nations Convention on commercial Arbitration. It has been adopted in New York,
10th June 1958. Enforcement of foreign awards comes under the ambit of section
44-52 of the Act, 1996.

Definition of foreign award:- Section 44 defines the term ‘foreign award’ as an

arbitral award on differences between persons arising out of legal relationships,
whether contractual or not.

National Institute of Banking Studies & Corporation Management (NIBSCOM) v. Vij

construction Ltd., 120(2005) DLT 563, it is held that, the appeal against the Order of
the Sole Arbitrator who directed deletion of certain counter-claims is allowed and
order is hereby set aside and the Arbitrator is directed to entertain and adjudicate
upon all the counter-claims made by the appellant.
Power of judicial authority to refer parties to arbitration:-Section 45 provides that if
a court concludes that a matter in a suit is the subject matter of an agreement under
section 44 of the Act, it shall refer the parties to arbitration on a request being made.

When foreign award binding:- Section 46 provides that any foreign award which
would be enforceable shall be treated as binding for all purposes on the persons as
between whom it was made.

Evidence:- Section 47 provides that the party applying for the enforcement of a
foreign awards shall, produce before the court,
a) The original award or a copy thereof, duly authenticated in the manner
required by the law of the country in which it was made;
b) The original agreement for arbitration or a duly certified copy thereof; and
c) Such evidence as may be necessary to prove that the award is a foreign award
M/s Fuerst Day Lawson Ltd.v. Jindal Exports Ltd,(2001) 3 SCR 479, it has been
observed that a party holding foreign award can apply for enforcement of it but the
court before taking further effective steps for the execution of the award has to
proceed in accordance with sections 47 to 49. It is also clear from objectives and
scheme of the Act that every final arbitral award is to be enforced;

Conditions for enforcement of foreign awards:- Section 48 provides that

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;
a. Incapacity of the parties to the agreement
b. Invalidity of the agreement under the law
c. Lack of proper notice of the appointment of the arbitrator
d. Lack of proper notice of the arbitral proceedings
e. Otherwise unable to present his case
f. Award beyond the scope of the submission to arbitration
g. Defective composition of arbitral authority or procedure
h. Award has not yet become binding on the parties
i. Award has been set aside or suspended by a competent authority
Enforcement of an arbitral award may also be refused in the following case.
a. It is not capable of settlement by arbitration under the law of India
b. Award is in conflict with the public policy of India
c. The award was induced or affected by fraud or corruption

Enforcement of Foreign Awards:- Section 49 provides that where the court is

satisfied that the foreign award is enforceable under this chapter, the award shall be
deemed to be a decree of that court.
 Renusagar Power Co.Ltd.V.General Electric Co., AIR 1994 SC 860, it has been
held that the awards must not be contrary to the fundamental policy of the law in
India, interests of India or justice or morality.

Appealable orders:- Section 50 provides that an appeal shall lie from the order
refusing to
a) Refer the parties to arbitration under section 45
b) Enforce a foreign award under section 48
Orma Impex Pvt.Ltd. v .Nissai Asb Pte.ltd., AIR 1999 SC 2871, it has been held that
the High Court has taken the view that no further appeal would lie under section 50
against an order under section 45 refusing to refer parties to arbitration as passed by
learned single judge. No need to take two separate proceedings in multiplicity of
litigation

Saving:- Section 51 provides that nothing in this chapter shall prejudice any rights,
which any person would have of enforcing in India had not been enacted.

Non-application of Chapter II: Section 52 provides that Chapter II of this part shall
not apply in relation to foreign awards to which this chapter applies.

GENEVA CONVENTION AWARDS

Chapter-II of Part II:- Chapter-II of Part II deals with Geneva Convention Awards
Section 53-60 of the arbitration and conciliation Act, 1996 contains provisions
relating to foreign awards passed under the Geneva convention.

Meaning of Foreign Award:- Section 53 has been enacted in tune with Article 1 of
the Geneva Protocol and Article 1(1) of the Geneva Convention. Section 53 defines
‘foreign awards’ as an arbitral award on differences relating to matters considered as
commercial under the law in force in India made after 28th day of July,1924.

Power of judicial authority to refer parties to arbitration:-Section 54 provides that a

judicial authority, on being seized of a dispute regarding a contract made between
persons, shall refer the parties on the application of either of them or any person
claiming through the decision of the arbitrators.

Foreign awards when binding:- Section 55 provides that any foreign award which
would be enforceable shall be treated as binding for all purposes on the persons as
between whom it was made.

Evidence:- Section 56 provides that the party applying for the enforcement of a
foreign award shall, at the time of application, produce before the court.
 a) The original award or a copy thereof duly authenticated in the manner
required by the law of the country in which it was made;
b) Evidence proving that the award has become final; and
c) Such evidence as mat be necessary to prove that the conditions mentioned
under Section 57 are satisfied
Where any document requiring to be produced is in a foreign language, the party
seeking to enforce the award shall produce a translation into English certified as
correct by a diplomatic agent of the country.

Conditions for enforcement of foreign awards:- Section 57 provides that is order

that a foreign award may be enforceable, it shall be necessary that
a) The award has been made in pursuance of a submission to arbitration which is
valid under the law applicable thereto;
b) The subject matter of the award is capable of settlement by arbitration under
the law of India
c) The award has been made by the arbitral tribunal provided in the manner
agreed upon by the parties.
d) The award has become final in the country in which it has been made.
e) The enforcement of the award is not contrary to the public policy or the law of
India
Societa Anonmina Lucchesse Qlii v.Gorakharam Gokalchand, CIR 1964 Mad 532, it
has been held that in any event; when a contract is illegal under the Indian law, the
courts here will not enforce any award on the basis of an arbitration which is part of
the contracts; the arbitration itself will be equally void in law.
Enforcement of foreign awards:- Section 58 provides that where the court is
satisfied that the foreign award is enforceable under this chapter, the award shall be
deemed to be a decree of the court.

Appealable orders:- Section 59 of provides that an appeal shall lie from the order
refusing
a) To refer the parties to arbitration under section 54; and
b) To enforce a foreign awards under section 57, to the court authorized by law
to hear appeals from such order.

Saving: - Section 60 of provides that nothing in this chapter shall prejudice any rights
which any person would have had of enforcing in India of any award if this chapter
had not been enacted.