Open Access Research Article
ENFORCEMENT OF FOREIGN ARBITRAL AWARDS (BY-MEHAK ANEJA)
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Article Details
ENFORCEMENT
OF FOREIGN ARBITRAL AWARDS
AUTHORED BY- 1. MEHAK ANEJA
MASTER OF LAWS (LLM) ALTERNATIVE DISPUTE RESOLUTION
JINDAL GLOBAL LAW SCHOOL
Abstract
Today, India is an important
part of the global economy. The rise in globalization has led to more
international commercial disputes. International arbitral awards become
important in this fight because they have to be followed. The laws that
regulate the enforcement of foreign awards will be examined in this study. The
New York Convention and the Geneva Convention regulate overseas arbitration
awards. The common law principles of justice, equality, and good conscience,
which are included into awards, make non-conventional judgments enforceable in
India as well. Many awards need to be done in the field of arbitration when a
foreign court rules in favor of one party. The Act itself needs to be
rethought, and the legal precedent set by the courts is hard to understand.
Both the national and international levels of enforcement must collaborate in
order to enforce foreign awards. There must be agreement between those who
adhere to the New York Convention and the 1996 Arbitration Act.
Introduction
Alternative dispute
resolution (ADR) is not a new concept to the people of this nation. It has
existed from the beginning of time. According to legal history, throughout
history, man has experimented with ways to make obtaining justice easy,
affordable, and convenient. The old way of conflict resolution had a vital role
in the resolution of family, group, and small conflicts. India started the Lok
Adalat conflict resolution system in 1982 in response to the changing system of
globalization[1].
In 1940, the Arbitration Act was made official, and in 1996, it was changed to
the Arbitration & Conciliation Act, which is now called the Arbitration
Act. When an arbitration ruling is made in a country other than the one where
it is to be enforced, things get more complicated. People from other countries
or people who have used foreign legal processes may not be able to get awards
in their home country. To enforce foreign arbitral rulings, both countries and
the world need to work together. International arbitration is governed by the
New York Convention, whereas domestic arbitration is governed by the
Arbitration and Conciliation Act of 1996.Certain precautions are still missing
from the enforcement mechanism, which are required to make it more efficient.
The domestic court, which operates under national legislation that allow for
domestic award enforcement, has undisputed authority to enforce domestic
arbitral judgments. A nation's court system does not have inherent jurisdiction
over cases determined in another country. Commercial arbitration rulings from
other countries don't get the same treatment as those from domestic arbitration
when it comes to recognition and enforcement.
The
Foreign Awards
The ultimate form in which the
Arbitration ruling is presented is the award. A "foreign award," as
defined by the Arbitration and Conciliation Act, is an arbitration award made
after October 11, 1960, on conflicts between individuals that were generated by
legal ties, whether contractual or not, as defined by the Act.
As part of a signed arbitration
agreement that says the First Schedule convention applies, and as part of that
agreement, the arbitration will be done.
If the Central Government
decides to apply this convention to one of the territories it has chosen, it
will put it in the official Gazette. If it thinks that reciprocal arrangements
have been made, the Central Government will do this[2].
When a "foreign
award" is defined as "an arbitral award on disputes relating to
things deemed commercial under Indian law that was made after July 28,
1924," it is included under Section 53 of the Arbitration and Conciliation
Act of 1996.
As part of an arbitration
agreement that follows the process in the second schedule, and as part of a
settlement.
As a group, between people who
are governed by the same thing, like the Central Government. There are a few of
the six exceptions to the rules in Section 13 of the CPC 1908. The case of
Vishwanath vs. Abdual Wajid from Air 1963 SC.
The
Enforcement Of Foreign Awards
Both the Geneva Convention on
Foreign Arbitral Awards (1927) and the New York Convention on Foreign Arbitral
Awards (1958) have been signed by India. The Geneva Convention oversees
international arbitration judgements' execution. If the award is made in a
nation that has signed the Geneva Convention or the New York Convention, it
will be recognized in India. Only 48 of the world's 196 countries have been
certified as reciprocating countries with Mauritius by the federal government.
This is the most recent addition to the collection. The filing of an execution
petition is the first step in the two-step process of executing a foreign award
in India. A competent court would first determine whether the award met the
Act's conditions, and then the award would be enforced as a court decree in the
second stage[3]. To slow down the process, the
award debtor may raise silly objections such as presenting an original or
authenticated copy of the award and the underlying agreement to the court. An
award is "foreign" if it meets two criteria. It must first address
issues arising from a legal connection that may be deemed commercial under
Indian law. Indian courts have used the term "business partnership"
in several different ways. As stated in RM Investments Trading Co. Pvt Ltd v
Boeing Co. and Others, the Supreme Court believes "the word
"commercial" should be given a broad connotation to include all
concerns arising from all business ties, contractual or not."
Requirements
For The Enforcement Of Foreign Awards
Ø It must be in its original form or a copy that has been legally
validated.
Ø The original agreement, or a fully documented copy of it that is
the same.
Ø There must be proof of the existence of a foreign reward.
Ø In order to be enforced, foreign arbitral awards must fulfil
specific criteria.
Ø A party may appeal a decision on the reasons listed below. If the
opposing party could establish that the award was invalid, it would be declared
null and void.
Ø There was some inability among the law-abiding members in the
arrangement.
Ø The contested agreement did not conform to the terms of the
parties' agreement or to the laws of the country in which the award was issued
(especially in case of foreign awards).
Ø The appointment of the arbitrator, as well as the arbitral
procedures, were not adequately publicised. Either side was either unable to
argue for himself in front of the arbitral tribunal or was unaware of the
existence of the tribunal.
Ø When a disagreement arises that is not addressed by the provisions
of the agreement, an award is given to resolve the situation.
Ø There are additional determinations in the award that were made
concerning issues that were not considered during the hearing.
Ø It was determined that either the arbitral authority or the
arbitral process did not comply with the conditions of the agreement.
Ø The arbitration did not adhere to the laws of the nation in which
it took place, as was intended. The arbitral authority did not adhere to the
laws of the nation in question (in case of foreign awards).
Ø People in the country where the award was made could not make it
binding on the parties, or the law of that country didn't make it binding on
them.
As long as the dispute is based
on Indian law, it cannot be arbitrated. To give the award would be against
Indian national policy, as well as morals and justice.
Foreign
Awards: Emergency Execution
The enforcement of a foreign
judgement takes time since it must be done in the same way as any other
litigation, and emergency arbitration only provides temporary relief for a
limited time. In the same way that an ad hoc tribunal only lasts for a short
time, this one does the same thing. For soft law enforcement of international
arbitral judgements, New York's Convention is a good first step in the correct
way. It serves as a wonderful example. An emergency arbitration decision is not
recognized by the New York convention since it has not yet reached a conclusion[4]. However, despite the
inclusion of emergency arbitration verdicts in many arbitrations’ jurisdiction
legislation, a number of U.S. courts must recognize and enforce a number of
court judgments in the U.S. as emergency arbitral awards
and such awards must be
recognized and enforced[5]. This implies that if both
parties have the power to seek interim relief via an emergency arbitration
session under the London Court of International Rules, the High Court in
England will be unable to issue a judgement.
During emergencies, people in
India can get help from a court at any time before the arbitral rulings come
into effect thanks to Section 9 of the Arbitration & Conciliation Act,
1996, which makes this possible. Indian courts can only apply the law to final
awards. This is because the Arbitration Act has a section called Part II, which
deals with the enforcement of foreign arbitral judgments from outside the
country, so only final awards can be used. Temporary awards are not valid in an
emergency arbitration, so they don't stand. As part of its 246th report, the
Law Commission said that the term "arbitrator" should be expanded to
include "emergency arbitrators," so that arbitration rules that allow
for an emergency arbitrator can be legally recognized in India, like they are
in the US and UK. If you were in the case of Raffles Design International India
Private Limited & Other People, the idea of "emergency
arbitration" was talked about all the time, which is what happened in the
case. Indian courts were hearing an application under the Arbitration Act,
which asked for temporary relief based on a decision by an emergency arbitrator
from the SIAC. The application asked for that relief. The Delhi High Court was
hearing the case, and it was going on. People can ask a judge to give them some
time to think about their case, even if they don't agree with an emergency
arbitrator. Section 9 of the Arbitration Act says this can happen even if the
judge doesn't agree with the emergency arbitrator[6].
It is clear that Indian law
doesn't allow an emergency arbitrator's ruling to be put into place. In many
ways, going to an emergency arbitrator instead of going to court is better. A
lot of times, the parties have agreed to give up their impartial jurisdiction so
that both sides are happy with the tribunal's judicial seat. In addition, the
time frame for getting interim relief isn't clear, but an emergency arbitrator
has to make a decision in a certain amount of time.
The
Way That Awards Are Enforced Is As Follows:
The losing party must object to
the arbitral award right away and file a lawsuit to get it changed. In some
cases, a court order can be made if the objections to the award are not upheld
or if no objections are filed in time.
Only Section 36 of the Act can
be used to fight and overturn an award, and only if there are certain
conditions. Three months after the applicant gets the award, they can ask to
put it away. If there is good reason, they can get an extra 30 days. Any
application that comes in after the deadline will be late, and no more delays
will be allowed. The party can ask a court of law to have the arbitral award
put into effect after the time for changing the arbitral decision has passed.
It's possible to get money, injunctions that include money, and declaratory
awards that say what you can and can't do.
Jurisdiction
This means that
"court" refers to the main civil court in the country. This court has
first dibs on any issue that comes up during an arbitration, just like a
lawsuit would. So, the person who isn't happy with the award can try to get it
changed in the court that has jurisdiction over that person, where the person
who won is based, where the cause of action started, and where the arbitration
took place.
The following is the format of
the application that is filed with the court:
An application for the award's
enforceability and execution is sent to a court of law. It is important to
include all relevant facts and issues, as well as the arbitral tribunal's
conclusions, in the application. It's important to show how the claim was made
in its original form, as well as how far the enforcement award was pursued. The
court must receive authenticated copies of both the arbitration award and the
arbitration agreement.
Time
Limit For Enforcing Awards
When an award is given, Section
34 of the Act says that anyone who wants it to be overturned has three months
to do so. It can be extended for another 30 days if there is a good reason, but
not more than that. As long as there is a good reason why you didn't show up
for your hearing, the court usually doesn't care how long it took you to show
up.[7]
Several High Courts have
different ideas about how long a party has to follow a judge's ruling before it
can be enforced. Unlike
decrees, foreign awards must be declared by a court to be binding on the
parties, according to the Bombay High Court. The application for enforcement of
a foreign award comes under the residuary provision of the Schedule to
Limitation Act. So, the restriction period would be three years. Twelve years
after a competent court recognizes the award as a decree, the statute of
limitations for enforcing the decree is extended to that amount of time.
Foreign awards are already "decrees," the Madras High Court said.
"The foreign award can be enforced right away, and the person who owns a
foreign award has the same 12 years as someone who owns a decree." Foreign
awards are presumptive decrees, which means that if they are recognized as
such, the limitation period is twelve years. As for the Act, it says that
certain things must be done before a foreign award can be enforced, and that
the award can only be called a decree of that court if the court is sure the
foreign judgement is valid. According to the Bombay High Court, the petitioner
has the right to apply when they get the award. When it comes to executing a
foreign judgement, the Act doesn't say how long it should take. Supreme Court:
"There may be many steps in a single process[8]." First, the Court may
have to decide whether or not the award can be enforced, taking into account
the rules above. An extra step may be taken by the court after it has found out
that a foreign award can be used. "It can no longer be made part of the
law if it comes from outside the country." That's what the Supreme Court
said. Under the Act, a foreign award that was made outside of the country is
already a decree because it was made outside of the United States.
Conclusion
Despite the fact that there is
a system in India for enforcing foreign arbitral awards, it isn't very smooth
or efficient. It has been widely criticized for not being easy or quick. One of
the primary concerns is that it is impossible to implement the judgement
quickly and efficiently since the Act states that the award may only be
enforced after the time limit for the Court to strike it down has gone. This is
cumbersome, and it causes excessive delays in the execution of arbitration
agreements involving Indian parties. Furthermore, many people are unhappy with
the Courts' prominent engagement in what is basically an alternative to the
regular court system. To sum up, the Indian legal system does actually have a
well-defined and well-established framework for the execution of foreign awards
in India. However, there is an increasing need to change it to make it more
business-friendly and reduce the strain on our already overburdened court.
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Article Information
ENFORCEMENT OF FOREIGN ARBITRAL AWARDS (BY-MEHAK ANEJA)
Author Name: MEHAK ANEJA
Title: ENFORCEMENT OF FOREIGN ARBITRAL AWARDS
Email Id: Mehak.aaneja@gmail.com
- Journal IJLRA
- ISSN 2582-6433
- Published 2022/09/23
About Journal
International Journal for Legal Research and Analysis
- Abbreviation IJLRA
- ISSN 2582-6433
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