Arbitration and Enforcement of Arbitral Awards in India
Increased levels of business operations may result in a rising number of disputes amongst the transacting parties. With the different available options to resolve the differences between the parties such as filing of a suit in the Court of law, alternate dispute redressal mechanism including arbitration is gaining popularity.
Enforcement of Arbitral Awards
There exists a procedure under the Arbitration And Conciliation Act, 1996 for the enforcement of domestic awards and foreign awards.
Enforcement of domestic arbitral award
The procedure for the enforcement of domestic arbitral award is contained under Part-I, Section 36 of the Arbitration and Conciliation Act, 1996. Thus, only when the time for making an application under Section 34 of the Act has expired or it has been refused, the award holder can file an application under Section 36 of the Act for the enforcement of domestic award. The time period for filing an application under Section 34 of the Act is three months from the date on which the award debtor had received the arbitral award. Thus, after the expiry of said three months, the award holder can file an application under the said section for the enforcement of arbitral award. The award holder can file the application for the enforcement anywhere in the country where the assets of the award debtor are located.
Enforcement of Foreign Awards
The foreign awards are enforced under Sections 46 to 49 of the Arbitration and Conciliation Act, 1996 for New York Convention Awards and under sections 55 to 58 for the Geneva Convention Awards. Thus, in case of convention countries, the foreign arbitral award is enforced as a decree of the court by filing an application under the said sections and in case of non-convention countries, the foreign arbitral award is enforced by filing a suit under Order VI, VII of the C.P.C., 1908 on the basis of award. There have been various judicial pronouncements for the enforcement of foreign arbitral award if it arises out of non-convention countries. In the case of Bhatia International Vs Bulk Trading S.A. And Anr.it was held by the Supreme Court of India that the foreign arbitral awards which does not fall under Part-II of the Arbitration Act, will be deemed to be included in the Part-I of the Act and for the purposes of enforcement , it will be considered as a domestic award and will be enforced under Part-I of the Act. But the decision of the Hon’ble Supreme Court of India in the case of Bharat Aluminum Co. Vs Kaiser Aluminium Technical Services has overruled its own decision in the case of Bhatia Supra, and categorically held that non convention awards cannot be incorporated in the Arbitration Act, 1996 by process of Interpretation. It is pertinent here to note that Bharat Aluminum (Supra) case ruling is prospective in nature. In case of foreign seated arbitration, which comes from a non-convention country neither Part-II nor Part-I will be applicable for the enforcement of foreign award in India. Thus, in cases of non-convention awards, it has to be enforced after filing of a suit under Orders VI and VII of Code of Civil Procedure (C.P.C.), 1908.
While for the enforcement of foreign arbitral awards arising out of New York Convention Awards and Geneva Convention Awards, it is a pre-requisite that the party which applies for enforcement at the time of filing application shall produce before the court the original award or duly certified copy of that award and the original agreement for arbitration and if the original arbitration agreement is not available, then a duly certified copy of the agreement is required. Thus, after the amendment made in the year 2015 in the Arbitration and Conciliation (Amendment) Act, 2015, the court for filing an application under the said section shall be High Court having original jurisdiction. Thus, the process for the enforcement of arbitral awards has been simplified after the amendment made in the year 2015 in the arbitration act.
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