Alternative dispute settlement mechanisms often require assistance of the
legal system in order to be effective. Arbitration is also one of them.
The Indian arbitration space warranted efficient method of enforcement of the
consequent award determining rights and liabilities of the parties; as obtaining
an award may only be half the battle won in some cases. The procedure of
enforcement and execution of the award is governed by the Arbitration and
Conciliation Act, 1996 (“the Act”) and Code of Civil Procedure, 1908.
Arbitral award is the decision of the arbitral tribunal on merits and includes
both final as well as interim award. It must be in writing and signed by all the
members of the tribunal and reasons for the award have to be specified unless
The mandate of the Act is that the award is final and binding on the parties.
This finality of arbitral awards is often touted as one of the advantages of
arbitration saving both time and money to the parties.
There is no provision for appeal against an arbitral award as to its merits.
However, parties are not without a remedy, the aggrieved party may apply to the
court for setting aside of the award on grounds provided under the Act.
These, inter-alia, include capacity of a party, invalidity of arbitration
agreement, violation of principles of natural justice, the exceeding of terms of
reference by arbitrator, non-arbitrability of the subject matter of the dispute
or that the award is in conflict with public policy of India.
If there is no merit in the application for challenge, the award is enforceable
as a decree of the court. Besides, a right to appeal against the order of the
court setting aside or refusing to set aside the award is available to the
parties. Whilst no second appeal lies, the constitutional right to file a
special leave petition is unaffected.
The provisions of enforcement of domestic and foreign awards are dealt with
separately under Part I and Part II of the Act, respectively. A domestic award
does not require a separate enforcement proceeding, it becomes enforceable only
90 days after the receipt of the award.
During the intervening period, the opposite party may apply for setting aside of
the award. By virtue of a recent amendment, a party challenging an award is
obliged to move a separate application seeking a stay on the execution of an
With respect to foreign awards, India is a signatory to the New York Convention
and the Geneva Convention. The enforceability of the award in India primarily
depends on whether the award is received from a country which is a signatory to
either of the two conventions.