Foreign Arbitration Award
Introduction
The successful implementation of an arbitration award determines the efficacy of any arbitral proceeding. The rules for implementing foreign judgments in India are laid forth in Part II of the Arbitration and Conciliation Act,1961. In order to harmonise the Arbitration Act with the UNCITRAL Model Law on Arbitration, the Indian government enacted the aforementioned Act in 1996.
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In contrast to the conventional technique, parties are eager and prepared to join an arbitration award since it quickly settles the dispute. However, the entire process of arbitration is rendered useless if the judgments are not upheld by the nation. Without effective and speedy execution of the international arbitration ruling, the parties will choose to take their problems to traditional courts. The legislators and the judiciary that interpret the laws are responsible for ensuring that arbitration rulings are upheld.
“According to the WIPO “Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court.
Its principal characteristics are:
- Arbitration is consensual
- The parties choose the arbitrator(s)
- Arbitration is neutral
- Arbitration is a confidential procedure
- The decision of the arbitral tribunal is final and easy to enforce”
Arbitral award
The judgement rendered by an arbitration tribunal while in an arbitration procedure is known as an arbitral award. The judgement rendered by an Arbitral Tribunal is akin to the judgement rendered by a court establish by law. Interim injunction relief, the unambiguous fulfilment of a contract, correction, annulment of a deed, compensation, statement on an issue and setting aside of a deed is among the various arbitral awards. Section 2(1)(c) of the Arbitration and Conciliation Act defines an arbitral award as, “one that includes an interim award. It can be understood as a decree or order passed by the court of law, and the decision is entirely based on the merits of the case”.
A foreign award is described as “an arbitral award on differences that are related to the matters which are deemed commercial under the Indian law” in Section 447 of the Arbitration and Conciliation Act, 1996. The first need for an award to qualify as a foreign award is that it must reconcile any differences arising from a commercial legal connection or one that is deemed commercial by Indian law. Second, the nation delivering the award should be one that the Indian Government has identified as a nation where the New York Convention is made enforceable. Therefore, only these arbitral awards are taken into account and applied as foreign arbitral awards.
Background of the Foreign Award
Two significant acts, the Foreign Awards (Recognition and Enforcement) Act of 1961 and the Arbitration (Protocol and Convention) Act of 1937, are responsible for India’s compliance system for arbitral awards. The Geneva Protocol of 1923 and the Geneva Convention of 1927 serve as the foundation for the Arbitration Act of 1937. Corresponding to this, the New York Convention, 1958 serves as the foundation for the Foreign Awards (Recognition and Enforcement) Act, 1961.
The Indian Government relied on the Geneva Protocol and international Conventions with regard to the arbitration terms and carrying out the foreign arbitral ruling.
On July 13, 1960, India ratified the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards. With the adoption of the Arbitration and Conciliation Act, 1996, the two Acts—the Arbitration (Protocol and Convention) Act, 1937, and the Foreign Awards (Recognition and Enforcement) Act, 1961—were repealed. The 1996 Arbitration Act was created using the UNCITRAL Model Law and Rules.
Implementation Of the Foreign Arbitral Award In India
The “execution of the arbitral awards in India” is governed by the Code of Civil Procedure and the Arbitration and Conciliation Act, 1996. The Indian procedure stipulates that the party that receives an arbitral judgement in its support must hold off on submitting a request for the arbitral award’s enforcement for three months. Section 34 of the Arbitration and Conciliation Act states that the opposite party has three months to dispute the decision. The award may be brought before the appropriate court for execution once these three months have elapsed. If the award is then put into effect by the judge at the implementation stage, there is no longer any room for an objection. A decree may be enacted under Order 21 CPC, and the limited time for carrying it out is 12 years.
A three-stage process is pursued for the implementation of a foreign arbitral ruling, and the initial step is for the party that has the award, to file an application under Section 47 of the Arbitration Act with all relevant documents. The opposing party must raise a defense in accordance with Section 48 of the Act and must also provide all necessary information as part of the second phase. Last but not least, if the court determines that the award granted is actionable in light of all the evidence presented to the court by the parties, the court shall enforce the award pursuant to Section 49.
Judgements of the Courts
The Delhi High Court stated in Unitech Ltd. v. Cruz City I Mauritius Holdings that the public policy as a defense should be interpreted narrowly and that foreign awards should only be declared inadmissible if they go against the fundamental justifications, ideals, and ideas that guide Indian law. It also ruled that a claimed violation of an Indian legal requirement does not equate to a violation of India’s basic policy. The Court cited the Renusagar Power Co. Ltd. v. General Electric Co., 1994 SCC Supl. (1), a landmark decision in its decision.
The subsequent ruling by a three-judge panel of the Supreme Court of India in Vijay Karia v. Prysmian Cavi E Sistemi Srl,2020, emphasises the shift in the Indian judiciary toward a stronger pro-enforcement environment. In its decision, the Supreme Court urged the Indian courts to uphold the non-interference concept when carrying out international arbitral decisions under domestic law. The Supreme Court has validated the pro-enforcement system and defined the scope of “appropriate” defenses available to the litigants under Article 48 of the Act.
Conclusion
The Indian judiciary has been taking a proactive and comprehensive perspective on the implementation of the awards in order to behave in accordance with international standards. The decisions made by the Indian courts demonstrate their willingness to use a pro-administration mechanism and rely on the non-interference doctrine while carrying out arbitration verdicts. The smooth administration of arbitral judgments has been promoted by the Indian judiciary and laws, boosting India’s position as an arbitration-friendly nation.
The contract’s deadline and the arbitration process’s deadline for enforcing the arbitration ruling are both crucial. The judiciary, which has increasingly taken a pro-arbitration posture and is carrying out the international verdict when there is no conflict of law, has acknowledged the significance of efficient and prompt implementation of an international arbitration result.
Author: Pratham Bagani,3rd-year law student pursuing B.A. LL.B from DES Navalmal Firodia Fergusson Law College, Pune, in case of any queries please contact/write back to us at support@ipandlegalfilings.com or IP & Legal Filing.
