ENFORCEMENT OF FOREIGN ARBITRAL AWARDS UNDER THE NEW YORK CONVENTION (1958) BY INDIAN COURTS
Chapter I of Part II of the Arbitration and Conciliation Act, 1996 (Sections 44 to 52) deals with the recognition and enforcement of foreign arbitral awards under the New York Convention (1958) by Indian courts. On the whole, Indian Courts have a pro-enforcement stand making India an arbitration-friendly jurisdiction, aligning with global arbitration standards.
Section 44 defines a foreign award as an arbitral award arising from disputes of a commercial nature, made in a country that is a signatory to the New York Convention and notified by the Indian government. As per Section 45, if a party initiates a legal suit despite an arbitration agreement, the court must refer the parties to arbitration, unless the agreement is invalid. Again Section 46 says that a foreign award is considered binding and can be relied upon in any legal proceedings in India.
The Enforcement Procedure of a foreign award is dealt in Sections 47 to 49. As per Section 47 a party seeking enforcement must submit:
- The original or certified copy of the award.
- The original or certified arbitration agreement.
- A certified translation if the award is in a foreign language.
As per Section 48, the Courts may refuse enforcement of a foreign award only on limited grounds, similar to Article V of the New York Convention, including:
- Lack of proper notice to a party.
- Incapacity of parties or invalid agreement.
- Award beyond the scope of arbitration.
- Violation of natural justice or improper procedure.
- Award set aside in the country where it was made.
- Violation of Indian public policy (e.g., fraud, corruption, or fundamental legal principles).
As per Section 49, if no valid objections are raised under Section 48, the award is deemed a decree of an Indian court and is enforceable as a domestic court judgment.
As per Section 50, an appeal can be filed against a court decision refusing enforcement of a foreign award but not against a decision allowing enforcement. Section 52 clarifies that other laws and treaties concerning foreign awards remain unaffected.