The Arbitration and Conciliation Act, 1996
Enforcement of Awards and Foreign Awards
Introduction to Enforcement of Awards
The Arbitration and Conciliation Act, 1996 provides a comprehensive framework for enforcement of both domestic and foreign arbitral awards in India. The Act distinguishes between awards made in India (Part I) and foreign awards (Part II).
Key Provisions:
Section 36: Enforcement of domestic arbitral awards
Sections 47-49: Enforcement of foreign awards under the New York Convention
Section 51-60: Enforcement of foreign awards under the Geneva Convention
Example 1: Domestic Award Enforcement
ABC Ltd. obtained an arbitral award of Rs. 50 lakhs against XYZ Ltd. in a domestic arbitration held in Mumbai. After the 3-month appeal period expired without any challenge, ABC Ltd. can directly enforce this award as a court decree under Section 36 of the Act.
Enforcement of Domestic Arbitral Awards (Part I)
Section 36 - Enforcement
An arbitral award made under Part I of the Act shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908 as if it were a decree of the Court.
Key Features:
● Award becomes enforceable after expiry of 3 months from the date on which it is received (time for filing Section 34 application)
● If Section 34 application is filed, enforcement is stayed until disposal
● Award holder can execute it like a court decree
● No separate suit required for enforcement
Example 2: Timeline for Enforcement
An arbitral award was passed on January 1, 2025. The unsuccessful party has time until April 1, 2025 to file a Section 34 application to set aside the award. If no application is filed by April 1, 2025, the award becomes enforceable immediately thereafter. However, if an application is filed on March 15, 2025, enforcement is automatically stayed pending the court's decision on the Section 34 application.
Enforcement of Foreign Awards (Part II)
New York Convention Awards (Sections 44-52)
Foreign awards from countries that are signatories to the New York Convention, 1958 are enforceable in India under Part II of the Act.
Requirements for Enforcement (Section 47):
● Original award or duly authenticated copy
● Original arbitration agreement or certified copy
● Evidence proving that the award is foreign
● Certified translation (if not in English)
Example 3: Foreign Award Enforcement
A Singapore-based company obtained an arbitral award of USD 2 million against an Indian company in a Singapore arbitration conducted under SIAC rules. Since Singapore is a signatory to the New York Convention, the award can be enforced in India by filing an application under Section 47 in the appropriate Indian court along with the required documents.
Geneva Convention Awards (Sections 53-60)
Awards from countries that are only signatories to the Geneva Convention, 1927 (and not the New York Convention) are governed by these provisions.
Procedure for Enforcement
For Domestic Awards:
Step 1: Wait for 3 months from receipt of award (Section 34 period)
Step 2: If no Section 34 application filed, file execution petition in competent court
Step 3: Court treats award as decree and issues execution notice
Step 4: Recovery through court execution mechanisms (attachment, sale, etc.)
For Foreign Awards:
Step 1: File application under Section 47 in competent court
Step 2: Submit required documents (award, agreement, translations)
Step 3: Court examines grounds under Section 48
Step 4: If no grounds for refusal, court enforces award as decree
Step 5: Execution through normal court processes
Grounds for Refusal of Enforcement
For Domestic Awards (Section 34):
● Party under incapacity
● Arbitration agreement not valid
● Lack of proper notice or opportunity
● Award deals with matters beyond submission to arbitration
● Improper composition of arbitral tribunal
● Subject matter not arbitrable
● Award in conflict with public policy of India
For Foreign Awards (Section 48):
● Similar grounds as Section 34
● Award not binding on parties
● Award has been set aside in country of origin
● Dispute not arbitrable under Indian law
● Enforcement contrary to public policy of India
Important Note:
The Supreme Court has held that the scope of interference with arbitral awards should be minimal. Courts cannot re-appreciate evidence or sit in appeal over the arbitrator's findings.
Leading Case Laws
1. Shri Lal Mahal Ltd. v. Progetto Grano Spa (2014) 2 SCC 433
Facts:
● Italian company obtained arbitral award in London against Indian company
● Sought enforcement in India under Section 47
● Indian company challenged enforcement on grounds of public policy
Held by Supreme Court:
● Foreign awards can only be challenged on limited grounds under Section 48
● Public policy means fundamental policy of Indian law
● Courts cannot re-examine merits of foreign awards
● Enforcement cannot be refused merely because Indian court would have decided differently
Significance:
This case established the principle of minimal judicial intervention in enforcement of foreign awards and clarified the narrow scope of public policy exception.
2. Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. (BALCO) (2012) 9 SCC 552
Facts:
● American company obtained award in London against Indian PSU
● BALCO filed petition under Section 34 to set aside the award
● Question arose whether Part I applies to international commercial arbitrations held outside India
Held by Supreme Court:
● Part I of the Act applies only to arbitrations held in India
● Section 34 cannot be invoked for awards made outside India
● Foreign awards can only be challenged under Section 48 at enforcement stage
● Clear demarcation between domestic and foreign awards
Significance:
Landmark judgment clarifying territorial applicability of Part I and Part II. Established that foreign awards cannot be challenged under Section 34.
3. Fuerst Day Lawson Ltd. v. Jindal Exports Ltd. (2011) 8 SCC 333
Facts:
● Award debtor challenged enforcement claiming time bar under Limitation Act
● Question of applicability of limitation to execution of arbitral awards
Held by Supreme Court:
● Limitation period of 3 years applies to execution of arbitral awards
● Period starts from date when award becomes enforceable under Section 36
● Award holder must initiate execution within limitation period
● Provisions of Limitation Act, 1963 apply to arbitral awards
Significance:
Clarified that arbitral awards are subject to limitation for execution purposes and award holders must be diligent in enforcement.
4. Vijay Karia v. Prysmian Cavi E Sistemi SRL (2020) 11 SCC 1
Facts:
● Question regarding when a foreign award becomes enforceable
● Whether automatic stay applies to enforcement of foreign awards
Held by Supreme Court:
● Foreign awards are enforceable immediately upon filing Section 47 application
● No automatic stay on enforcement of foreign awards
● Court may grant stay only in exceptional circumstances
● Burden is on award debtor to show grounds for stay
Significance:
Strengthened enforcement regime for foreign awards by removing automatic stay provisions.
5. Ssangyong Engineering & Construction Co. Ltd. v. NHAI (2019) 15 SCC 131
Facts:
● Scope of judicial review under Section 34 examined
● Meaning of public policy in context of arbitral awards
Held by Supreme Court:
● Public policy includes fundamental policy of Indian law, interest of India, and justice or morality
● Patent illegality is limited to domestic awards only
● Courts cannot re-appreciate evidence in Section 34 proceedings
● Minimal judicial intervention is the guiding principle
Significance:
Comprehensive analysis of public policy exception and limits of judicial review in arbitration matters.
Comparison Table: Domestic vs. Foreign Awards
| Aspect | Domestic Awards (Part I) | Foreign Awards (Part II) |
|---|---|---|
| Governing Provisions | Sections 34-36 | Sections 47-49 (New York Convention) |
| Challenge Mechanism | Section 34 - Set aside application | Section 48 - Resistance at enforcement stage |
| Time Limit for Challenge | 3 months from receipt of award (extendable by 30 days) | At time of enforcement proceedings |
| Automatic Stay | Yes, if Section 34 application filed | No automatic stay on foreign awards |
| Enforcement | After 3 months or disposal of Section 34 | Immediately upon filing Section 47 application |
| Grounds for Refusal | Section 34 - Including patent illegality | Section 48 - No patent illegality ground |
| Territorial Scope | Arbitration held in India | Arbitration held outside India |
| Appeal Against Refusal | Appeal to High Court/Supreme Court | Appeal to High Court/Supreme Court |
| Documents Required | Award and arbitration agreement | Award, agreement, evidence of foreign nature, translations |
| Public Policy Scope | Broader scope including patent illegality | Narrower scope - fundamental policy only |
Enforcement Flowcharts
Domestic Award Enforcement Flow
Foreign Award Enforcement Flow
Practice Questions and Solutions
Question 1: What is the time limit for filing a Section 34 application?
Click to Show AnswerQuestion 2: Can a foreign award be challenged under Section 34 of the Act?
Click to Show AnswerQuestion 3: What documents are required to enforce a foreign award in India?
Click to Show AnswerQuestion 4: Is there an automatic stay on enforcement when a Section 34 application is filed?
Click to Show AnswerQuestion 5: What is the meaning of 'public policy' as a ground for refusing enforcement?
Click to Show AnswerQuestion 6: Distinguish between New York Convention and Geneva Convention awards.
Click to Show AnswerSummary and Key Takeaways
● Domestic awards under Part I are enforceable after the 3-month Section 34 period expires
● Foreign awards under Part II are enforceable immediately without waiting period
● Automatic stay applies to domestic awards but not foreign awards
● Courts follow minimal intervention principle in arbitration matters
● Public policy is a narrow ground and cannot be used for re-appreciation of evidence
● Proper documentation is crucial for enforcement of foreign awards
● Limitation period of 3 years applies to execution of all arbitral awards