New York Convention Awards
Part 2 of the Arbitration and Conciliation Act 1996 deals with the enforcement of
certain foreign awards. Section 44 to 60 of the Arbitration and Conciliation act, 1996 deals
with this. Part two has been divided into two chapters. Chapter 1st (Section 44 to 52) deals
with New York Convention Award. and Chapter second (Section 53 to 60) deals with Geneva
Conventions Award.
What is a Foreign Award?
Section 44 of the Arbitration and Conciliation Act, 1996 defines the term foreign awards.
Foreign award means an arbitral award on differences between persons arising out of legal
relationships, whether contractual or not, considered as commercial under the laws in force
in India, made on or before 11th day of October 1960 –
1. In pursuance of an agreement in writing for the arbitration to which convention
applies.
2. One of such territories as the central government declared to be territories to which
the said convention applied.
Meaning of commercial
The term commercial used under Section 44 has not been defined in this act. The term has
been defined in footnote of UNCITRAL Model Law International Commercial Arbitration
1985.
According to this, the term commercial should be given a wide interpretation to cover
matters arising from all relationships of a commercial nature, whether contractual or not,
relationship of contractual nature include, but are not limited to this, following transactions:
any trade, transportation for supply, exchange of goods and services, distribution
agreements, commercial representation or agency, factoring, leasing, construction of works,
insurance, exploitation agreement, joint venture and other forms of industrial or business
operations, carriage of goods or passengers by air,sea,rail or road.”
Power of judicial authority to refer parties to arbitration.
Section 45 of the arbitration and conciliation act 1996 provides that notwithstanding anything
contained in part one or the CPC 1908, when matter is covered by Section 44, comes before the court in respect of which parties have made and arbitration agreement and one of the
parties to agreement request the code the court shall refer the parties to arbitration.
But court may not refer the party to arbitration if it finds that the arbitration agreement is null
and void in-operative for incapable of being performed.
When foreign award binding ?
Section 46 provides when foreign award is binding. according to Section 46 , any foreign
award is binding, if it is enforceable in this part and it is binding for all purposes on the
parties to the agreement. It can be relied on by way of defence, set off or otherwise in any
legal proceeding in India. A reference to enforce a foreign award it would also include a
reference to relying on award.
Evidence in enforcement of foreign awards.
Section 47 provides the matter of evidence to be taken in the enforcement of foreign
awards. According to Section 47 the party who wants to enforce a foreign award has to
produce at the time of application following documents-
1) The original award or duly authenticated copy.
2) The original agreement of arbitration or certified copy
3) Such other evidence as required to prove the award is foreign award.
If the award is in a language other than English the English certified version of the award
would have to be produced.
Refusal of enforcement of foreign award.
Section 48 provides the necessary conditions for the refusal of enforcement of foreign
award. Section 48 clause 1 and section 48 clause 2 lays down that enforcement of a foreign
award may be refused, at the request of the party against whom it is invoked only if –
- Proof is produced in respect of the grounds mentioned under Section 48 clause 1 (a )Section 48 clause 1 (e).
- The Court finds that the subject matter of the difference is not arbitrable or the enforcement of award is against public policy.
Grounds given under section 48(1) (a) to (e)
Following are the grounds on which court may refuse to enforce the arbitral award –
1. Incapacity of party
2. Invalidity of agreement
3. lack of proper notice
4. award beyond the scope of reference
5. illegality in composition of arbitral tribunal or arbitral procedure
6. award not at yet binding.
Ground of findings of court.
Section 48 clause 2 provides the following grounds on which court may refuse to enforce a
foreign award –
1. Difference not arbitrable .
2. Enforcement of award against public policy.
Adjournment of enforcement of foreign award.
Section 48 clause 3 provides the adjournment of enforcement of foreign award. The court
may adjourn the enforcement of a foreign award, if an application for setting aside or
suspension of the award has been made to a competent authority. The court may also order
the other party to give suitable security.
Enforcement of foreign award
Section 49 provides the enforcement of a foreign award. when the court is satisfied that the
foreign award is enforceable the award shall be deemed to be a decree of Civil Court. And it
will be enforceable as a decree is enforced .
Appealable orders
Section 50 of the Arbitration and Conciliation Act 1996 deals with the orders which are
appealable. Section 50(1) provides that an appeal shall lie –
1. from an order of judicial authority refusing to refer the parties to arbitration
under section 45
2. from the order of court refusing to enforce a foreign award under section 48.
Section 50(2) provide that no second appeal shall lie from an order passed in appeal but
right to appeal to the Supreme Court is not barred.
