Enforcement of Arbitral Award under Arbitration and Conciliation,1996
Enforcement of Arbitral Awards under the Arbitration and Conciliation Act, 1996
1. Background
The Arbitration and Conciliation Act, 1996 (hereinafter "the Act") governs arbitration proceedings in India, including the enforcement of arbitral awards. The Act is largely based on the UNCITRAL Model Law on International Commercial Arbitration.
Once an arbitral award is made, enforcement is crucial as it gives the award a binding and executable status similar to a court decree.
2. What is Enforcement of Arbitral Award?
Enforcement refers to the legal process through which a party ensures compliance with the arbitral award. If the losing party does not voluntarily comply, the winning party can seek judicial assistance to enforce the award, making it executable as a decree of the court.
3. Relevant Provisions of the Act on Enforcement
a) Section 36 - Enforcement of Arbitral Award
After an arbitral award is passed, it is enforceable as a decree of the court.
The party in whose favor the award is made can apply to the court for enforcement.
The court shall grant enforcement unless the award is set aside or suspended by the arbitral tribunal or a court.
b) Section 47 - Enforcement of Foreign Awards
Enforcement of foreign arbitral awards under the New York Convention or Geneva Convention.
Courts can refuse enforcement on limited grounds such as incapacity, invalid arbitration agreement, violation of public policy, or improper notice.
c) Section 48 - Conditions for Refusal of Enforcement of Foreign Awards
Courts can refuse enforcement if:
The arbitration agreement is invalid.
The party was not given proper notice or unable to present the case.
The award deals with a dispute not arbitrable.
The award is in conflict with the public policy of India.
The award is not yet binding or set aside in the country of origin.
4. Procedure for Enforcement
The party seeking enforcement files an application before the competent District Court or High Court.
The court examines the award and may order its execution.
The award is treated as a decree and can be executed like a court judgment (attachment of assets, sale of property, etc.).
5. Grounds for Refusal or Challenge to Enforcement
The Act restricts courts from re-examining the merits of the dispute and limits grounds for refusal to procedural or jurisdictional issues such as:
Invalid arbitration agreement.
Lack of proper notice.
Award passed beyond the scope of arbitration agreement.
Award violates Indian public policy.
Award is set aside or suspended by a competent authority.
6. Important Case Law on Enforcement
a) Renusagar Power Co. Ltd. v. General Electric Co. (1994) AIR SC 860
The Supreme Court held that Indian courts will not interfere with the arbitral award on merits.
Enforcement can be refused only on narrow grounds prescribed under the Act.
Significance: Established a pro-enforcement approach.
b) Associate Builders v. Delhi Development Authority (2015) 3 SCC 49
The Supreme Court clarified the scope of "public policy" under Section 48(2)(b).
Public policy should not be interpreted broadly to reject awards on mere allegations.
Only violations of fundamental policy of Indian law, perversity, or arbitrator acting outside jurisdiction are grounds for refusal.
This case emphasized minimal judicial interference and reinforced enforcement.
c) Bharat Aluminium Co. v. Kaiser Aluminium Technical Service, Inc. (BALCO) (2012) 9 SCC 552
Held that Section 34 (challenge of award) applies only to domestic awards.
Enforcement of foreign awards under Sections 47 and 48 are to be treated separately.
Also restricted judicial interference in enforcement.
d) ONGC Ltd. v. Western Geco International Ltd. (2014) 9 SCC 263
Supreme Court held that Section 36 mandates enforcement of the arbitral award unless it is set aside or suspended.
Courts cannot delay enforcement by entertaining frivolous challenges.
Strengthened the mandate of enforcement without delay.
7. Summary: Enforcement Process and Judicial Attitude
| Step | Explanation |
|---|---|
| Award passed by tribunal | The arbitral award is final and binding |
| Application for enforcement | File before competent court under Section 36 or 47 |
| Court’s role | Grant enforcement unless limited grounds exist |
| Grounds for refusal | Invalid agreement, no notice, non-arbitrability, public policy, award set aside |
| Execution | Court enforces as decree; execution proceedings follow |
8. Key Principles from Case Law
Minimal interference by courts: Courts must avoid re-examining the merits.
Narrow interpretation of public policy: Enforcement is favored unless fundamental law is breached.
Timely enforcement: Courts should enforce awards promptly to uphold arbitration’s finality.
Distinction between domestic and foreign awards: Different provisions govern enforcement and challenge.
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