Enforcement of Foreign Awards in India
Enforcement of Foreign Awards in India
1. What is a Foreign Award?
A foreign award refers to an arbitral award made in a foreign country or under an international arbitration agreement. It is the decision given by an arbitration tribunal located outside India or under a foreign arbitration agreement.
2. Legal Framework for Enforcement
The enforcement of foreign awards in India is primarily governed by two laws:
The Arbitration and Conciliation Act, 1996 (Part II), which incorporates the New York Convention, 1958 and the Geneva Protocol, 1927.
The Foreign Awards (Recognition and Enforcement) Act, 1961, which mainly applies to awards made in countries other than those signatories to the New York Convention.
3. The New York Convention and Enforcement
India is a signatory to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
Section 44 and 45 of the Arbitration and Conciliation Act, 1996 deal with the enforcement of foreign awards.
The Convention mandates that signatory countries recognize and enforce foreign arbitral awards, subject to certain limited exceptions.
4. Process of Enforcement
The party seeking enforcement files a petition in the District Court or High Court where the award debtor’s assets are situated.
The court examines whether the award qualifies as a foreign award and then enforces it as if it were a decree of the court.
5. Grounds for Refusal of Enforcement (Under Section 48 of the Arbitration and Conciliation Act, 1996)
The court may refuse enforcement of a foreign award only on limited grounds such as:
Incapacity of the parties or invalid arbitration agreement.
The party was not given proper notice or unable to present the case.
The award deals with matters beyond the scope of arbitration.
The composition of the arbitral tribunal or procedure was not in accordance with the agreement or law.
The award has not yet become binding or has been set aside or suspended by a competent authority.
The subject matter of the dispute is not capable of settlement by arbitration under Indian law.
Enforcement would be contrary to the public policy of India.
6. What amounts to Public Policy?
The Supreme Court of India, in recent judgments, has narrowed the scope of public policy to prevent misuse and to encourage arbitration.
7. Important Case Laws
a) Bhatia International v. Bulk Trading S.A. (2002) 4 SCC 105
The Supreme Court held that Part I of the Arbitration and Conciliation Act applies to arbitrations both domestic and international, and thus Indian courts have supervisory jurisdiction over foreign-seated arbitrations.
This judgment expanded the Indian court’s powers in foreign awards, but it also caused some uncertainty until later clarified.
b) BALCO (Bharat Aluminium Co. v. Kaiser Aluminium Technical Services) (2012) 9 SCC 552
The Supreme Court overruled Bhatia International partially.
Held that Part I of the Arbitration Act does not apply to foreign-seated arbitrations.
This means Indian courts cannot interfere in foreign arbitration proceedings but only enforce awards under Part II.
c) ONGC Ltd. v. Saw Pipes Ltd. (2003) 5 SCC 705
This case provided a narrow interpretation of ‘public policy’ under Section 48.
The Court held that an award would be contrary to public policy only if it shocks the conscience of the court or is patently illegal.
d) Renusagar Power Co. Ltd. v. General Electric Co. (1994) 1 SCC 644
The Supreme Court held that enforcement could be refused if the award is against Indian public policy, which includes fundamental policy of Indian law, the interests of India, justice or morality.
8. Enforcement under Foreign Awards (Recognition and Enforcement) Act, 1961
This Act covers awards from countries that are not parties to the New York Convention.
The procedure is somewhat similar but less commonly used today since most countries are signatories to the New York Convention.
Summary Table
| Aspect | Details |
|---|---|
| Governing Law | Arbitration and Conciliation Act, 1996 (Part II) |
| International Treaties | New York Convention (1958), Geneva Protocol (1927) |
| Enforcement Court | District Court or High Court |
| Grounds for Refusal | Section 48 (Limited grounds, mainly procedural & public policy) |
| Public Policy | Narrowly construed (shocks conscience or patently illegal) |
| Landmark Judgments | Bhatia International, BALCO, ONGC v. Saw Pipes, Renusagar |
9. Practical Importance
Enforcement of foreign awards in India is designed to encourage international trade and arbitration.
Indian courts generally uphold foreign awards unless strict statutory grounds for refusal are met.
The law seeks to balance respect for arbitration autonomy and protection of Indian public interest.
RELATED Blog
0 comments