Before going into the legislative language and judicial interpretation of the
enforcement of arbitral awards, whether domestic or foreign, it is worthy to
have basic nuances of the terminologies used herein and the enactment which
governs the process of the same.
The Arbitration and Conciliation Act, 1996 (hereinafter referred to as A&C
Act') accompanied by certain provisions of the Code of Civil Procedure, 1908
form a complete code on the enforcement of arbitral awards in India. The term
arbitral award' may be defined in simple language as final decision reached by
the Arbitration tribunal so constituted to resolve a dispute and connotes to the
last stage in arbitration proceeding. It is worthy to mention that arbitral
award is not defined in the A&C Act, but the Hon'ble Supreme Court up to a
certain extent has been able to define the same in the case of Centro trade
Mineral and Metal Inc v. Hindustan Copper Ltd
[i], wherein the court
In view of subsection 2 and 7 of section 2 read with section 44 of the Act the
award passed by the ICC arbitrator was not a domestic award. Subsection 7 of 2
provides that an arbitral award made under part-I shall be considered as
domestic award. So, the domestic award means an award made under the territory
of India (under Domestic Arbitration) and it also includes an international
arbitral award, where one party is other than India on any citizen, government
or institution other than India but award made in the territory of India. [ii]
And in lieu of the same, the enforcement or execution of the Arbitral Award is
governed by Chapter VIII (Section- 36 & 36) under Part-I of the A&C Act, which
in depth is discussed in the latter parts of this write-up.
Further, to understand the term foreign award
it is worthy to peruse
section-44 of the A&C Act, which defines foreign award' as:
In this Chapter, unless the context otherwise requires, foreign award
means an arbitral award on differences between persons arising out of legal
relationships, whether contractual or not, considered as commercial under the
law in force in India, made on or after the 11th day of October 1960:
- in pursuance of an agreement in writing for arbitration to which the
Convention set forth in the First Schedule applies, and
- in one of such territories as the Central Government, being satisfied
that reciprocal provisions have been made may, by notification in the
Official Gazette, declare to be territories to which the said Convention
And, the enforcement of the same is governed by Part-II titled as Enforcement
of Certain Foreign Awards' of the A&C Act, which is discussed in the latter
parts of this article.
The Arbitration & Conciliation Act, 1996: A Brief Overview
The A&C Act was enacted on the lines and in recognition of the UNCITRAL Model
Law 1985 and the UNCITRAL Conciliation Rules, 1980 and came into effect on
22nd August 1996 which extends to the whole of India with a rider for the State
of J&K u/s. 1(2) of the Act (which has no significance after the abrogation of
Article 370 of the Indian Constitution) for achieving the following purpose as
has been defined in its long title,
An Act to consolidate and amend the law relating to domestic arbitration,
international commercial arbitration and enforcement of foreign arbitral awards
as also to define the law relating to conciliation and for matters connected
therewith or incidental thereto.
Preamble. —WHEREAS the United Nations Commission on International Trade Law (UNCITRAL)
has adopted the UNCITRAL Model Law on International Commercial Arbitration in
WHEREAS the General Assembly of the United Nations has recommended that all
countries give due consideration to the said Model Law, in view of the
desirability of uniformity of the law of arbitral procedures and the specific
needs of international commercial arbitration practice; AND WHEREAS the UNCITRAL
has adopted the UNCITRAL Conciliation Rules in 1980;
WHEREAS the General Assembly of the United Nations has recommended the use of
the said Rules in cases where a dispute arises in the context of international
commercial relations and the parties seek an amicable settlement of that dispute
by recourse to conciliation;
WHEREAS the said Model Law and Rules make a significant contribution to the
establishment of a unified legal framework for the fair and efficient settlement
of disputes arising in international commercial relations;
WHEREAS it is expedient to make a law respecting arbitration and conciliation,
taking into account the aforesaid Model Law and Rules….[iii]
Thus, this article will now trace the stage after the publication of the award,
as has been shown in the image hereinabove attached.
Enforcement Of Domestic Awards
Section 36 of the A&C Act is a complete guide on the enforcement of domestic
awards, which shall be executed and enforced in the way identical to that of
execution of Decree under C.P.C. 1908, as awards are at par as Decree as has
been defied u/s. 2(2) of C.P.C. 1908.
It is pertinent to mention here, that the award holder (the person in whose
favour the arbitral award is made or passed) have to wait for 90 days before
applying for the enforcement or execution proceeding of the arbitral award
(which can also include the extension of further 30 days, on sufficient grounds
for condonation of delay) either from the date of passing of award or any
correction made, thereby, whichever is later.
It is noticeable that, Prior to the recent Arbitration and Conciliation
(Amendment) Act, 2015 (Amendment Act), an application for setting aside the
award would tantamount to a stay on proceedings for execution of the award.
However, by virtue of the Amendment Act, a party challenging an award would have
to move a separate application in order to seek a stay on the execution of an
Enforcement Of Foreign Awards
Prior to the enactment of A&C Act 1996, India being the signatory of NYC and GC,
had operated in its jurisdiction 2 different statutes for enforcement of foreign
awards, which are hereby illustrated:
- The Arbitration (Protocol & Convention) Act, 1937: It was enacted as a
result of Geneva Protocol (1923) & Geneva Convention, 1927 (the GC, 1927)
under the auspices of League of Nations.
- The Foreign Awards (Recognition & Enforcement) Act, 1961: It was enacted
as a result of the NYC (1958), under the auspices of United Nations
The enforcement of a foreign award in India is a two-stage process which is
initiated by filing an execution petition. Initially, a court would determine
whether the award adhered to the requirements of the Act. Once an award is found
to be enforceable it may be enforced like a decree of that court. However, at
this stage parties would have to be mindful of the various challenges that may
arise such as objections taken by the opposite party, and requirements such as
filing original/ authenticated copy of the award and the underlying agreement
before the court.
Thus, before applying for execution of foreign awards, the following
requirements should be properly adhered, as has been laid down in the A&C Act
which was clarified by the Hon'ble Supreme Court in the judgment of PEC Ltd.
v/s. Austbulk Shippin
- Original award or a duly authenticated copy in the manner required by
the country where it is made.
- Original agreement or duly certified copy.
- Evidence necessary to prove the award is a foreign award, wherever
Section 47 of the Act provides that the above shall be produced before the
court, at the time of the application for enforcement of the foreign award.
However, in a recent judgment, the Supreme Court of India interpreted that the
word shall appearing in Section 47 of the Act relating to the production of
the evidence as specified in the provision at the time of application has to be
read as may
. It further observed that such an interpretation would mean that a
party applying for enforcement of the award need not necessarily produce before
the court a document mentioned therein at the time of the application.
Nonetheless, it further clarified that such interpretation of the word shall
as may is restricted only to the initial stage of the filing of the
application and not thereafter.[vii]
Conditions For Enforcement Of Arbitral Awards: Domestic As Well As Foreign
In case the following condition is proved, then the Enforcement of a foreign
award may be refused[viii] and a domestic award may be set aside[ix]:
- The parties to the agreement were under some incapacity.
- The agreement in question is not in accordance with the law to which the
parties have subjected it, or under the law of the country where the award
was made (especially in case of foreign awards).
- There is a failure to give proper notice of appointment of arbitrator or
arbitral proceedings or the party against whom the award was rendered was
otherwise unable to present his case.
- Award is ultra vires the agreement or submission to arbitration.
- Award contains decisions on matters beyond the scope of submission to
- Composition of the arbitral authority or the arbitral procedure is ultra vires agreement.
- Composition of the arbitral authority or the arbitral procedure is not
in accordance with the law of the country where the arbitration took place.
- The award (specifically a foreign award) has not yet become binding on
the parties, or has been set aside or suspended by a competent authority of
the country in which, or under the law of which that award was made.
- Subject matter of the dispute is not capable of settlement by
arbitration under Indian law.
- Enforcement of the award would be contrary to the public policy of India.[x]
Stamping And Registration Requirements Of Awards – Domestic And Foreign
- Domestic Awards.
The Indian Stamp Act 1899 provides for stamping of arbitral awards with specific
stamp duties and Section 35 provides that an award which is unstamped or is
insufficiently stamped is inadmissible for any purpose, which may be validated
on payment of the deficiency and penalty (provided it was original). Issues
relating to the stamping and registration of an award or documentation thereof,
may be raised at the stage of enforcement under the Act.[xi].
The Supreme Court had also observed that the requirement of stamping an award
and registration is within the ambit of Section 47 of the C.P.C. 1908 and not
covered by Section 34 of the A&C Act.
The quantum of stamp duty to be paid would vary from state to state depending on
where the award is made. Currently, as per the Maharashtra Stamp Act, the stamp
duty for arbitral awards stands at five hundred rupees in Maharashtra; and in
case of Delhi, as per Schedule 1A to the Stamp (Delhi Amendment) Act 2001, the
stamp duty is calculated at roughly 0.1% of the value of the property to which
the award relates.
Under Section 17 of the Registration Act, 1908 an award has to be compulsorily
registered if it affects immovable property, failing which, it shall be rendered
- Foreign Awards
As far as foreign awards are concerned, the Supreme Court of India has
categorically held that a foreign award is not liable to be stamped.[xii]
Previously, the Delhi High Court had observed that a foreign award would not
require registration and can be enforced as a decree, and the issue of stamp
duty cannot stand in the way of deciding whether the award is enforceable or
not.[xiii] Noting the trend, the similar observations also binds the Bombay High
Court and Madhya Pradesh High Court, by virtue of the judicial pronouncements of
their respective High Courts.[xiv]
Appropriate Forum For Application Of Enforcement Of Arbitral Awards: Domestic & Foreign Awards
The Supreme Court in its recent ruling in, Sundaram Finance Ltd. v. Abdul Samad
.[xv] clarified that an award holder can initiate execution proceedings
before any court in India where assets are located. In case the subject-matter
of the arbitration is of a specified value, commercial courts established under
the Commercial Courts, Commercial Division and Commercial Appellate Division of
High Courts Act 2015 (Commercial Courts Act) would have jurisdiction, as given
- Award arising out of an India seated arbitration (being an
international commercial arbitration)
By virtue of the Commercial Courts Act and the Amendment Act, the Commercial
Division of a High Court where assets of the opposite party lie shall have
jurisdiction for applications relating to enforcement of such awards if the
subject matter is money. In case of any other subject matter, Commercial
Division of a High Court which would have jurisdiction as if the subject matter
of the award was a subject matter of a suit shall have jurisdiction, i.e., where
the opposite party resides or carries on business or personally works for gain.
- Award arising out of an India seated arbitration (not being an
international commercial arbitration)
As per the Commercial Courts Act and the Amendment Act, for such cases, the
appropriate court would be the Commercial Court exercising such jurisdiction
which would ordinarily lie before any principal Civil Court of original
jurisdiction in a district, as well as the Commercial Division of a High Court
in exercise of its ordinary original civil jurisdiction.
- Foreign Awards
Where the subject matter is money, the Commercial Division of any High Court in
India where assets of the opposite party lie shall have jurisdiction. In case of
any other subject matter, Commercial Division of a High Court which would have
jurisdiction as if the subject matter of the award was a subject matter of a
suit shall have jurisdiction.
Hereby, quoting the limitation period for execution and enforcement of domestic
as well as foreign awards which is regarded to be12 years as has been associated
in the case of execution of Decree under the Code of Civil Procedure, 1908 r/w.
Limitation Act, 1963. This, owes from the interpretation by the Hon'ble Supreme
Court in plethora of cases, where Domestic & Foreign Awards have been treated
and regarded as Decree, per se.[xvi]
Thus, enforcement of arbitral awards though being specifically guided by the
Arbitration & conciliation Act, 1996 but the same doesn't exhaustively lays down
the entire code for execution. When A&C Act is accompanied and read with its
allied rules, international commitments, Code of Civil Procedure 1908 with the
Rules laid down therein and the Limitation Act 1963 with a peer review of the
Judicial Pronouncements that focuses on clear interpretation of substantive as
well as procedural aspects, brings on the table a complete guide for enforcement
of arbitral awards in India, including both Domestic as well as Foreign, as has
been briefly discussed in the present article.
Written By: Harshit Sharma,
- Centro trade Mineral and Metal Inc v. Hindustan Copper Ltd, (2006) 11
S.C.C. 245 (India).
- Shodhganga, Enforcement of Domestic Arbitral Awards, SHODHGNAGA (Apr. 11,
2020, 11:30 AM), https://shodhganga.inflibnet.ac.in/bitstream/10603/267070/12/12_chapter%204.pdf.
- Government of India- Legislative Department, The Arbitration &
Conciliation Act 1996, GOVERNMENT OF INDIA- LEGISLATIVE DEPARTMENT (Apr. 11,
2020, 12:05 PM), http://legislative.gov.in/sites/default/files/A1996-26.pdf.
- Amit Moza & Virendra Kumar Pal, Review of the Effectiveness of Arbitration,
ASCE LIBRARY (Apr. 11, 2020, 12:11 PM), https://ascelibrary.org/doi/10.1061/%28ASCE%29LA.1943-4170.0000204.
- Nishith Desai Associates, Enforcement of Arbitral Awards and Decrees in
India, NISHITH DESAI ASSOCIATES (Apr. 11, 2020, 12:33 PM), http://www.nishithdesai.com/fileadmin/user_upload/pdfs/Research%20Papers/Enforcement_of_Arbitral_Awards.pdf.
- Nishith Desai Associates, supra v.
- PEC Limited v. Austbulk Shipping SDN BHD, Civil Appeal No. 4834 of 2007
- Government of India, supra iii.
- Shodhganga, Enforcement of Foreign Arbitral Awards in India, SHODHGANGA
INFLIBNET (Apr. 11, 2020, 01:10 PM), https://shodhganga.inflibnet.ac.in/bitstream/10603/110130/16/16_chapter%206.pdf.
- M. Anasuya Devi and Anr v. M. Manik Reddy and Ors, (2003) 8 S.C.C. 565
- M/S. Shri Ram EPC Limited v Rioglass Solar SA, (2018) S.C.C. Online 147
- Naval Gent Maritime Ltd v Shivnath Rai Harnarain (I) Ltd, 174 (2009)
D.L.T. 391 (India).
- Nishith Desai Associates, supra v.
- Sundaram Finance Ltd. v. Abdul Samad and Anr, (2018) 3 S.C.C. 622 (India).
- Shodhganga, supra x.
5th Year, B.A., LL.B.(Hons.), Amity Law School, Amity University Madhya Pradesh.