This article has been written by Mr. Suraj Singh, a 1st year. LLB (Hons.) student from Allahabad University.
The international trade has increased manifold with infrastructural advancements i.e. transportation from ships, railroads, automobiles to airplanes. With influx of international trade, the bilateral and multilateral trade agreements have increased and so the disputes arising thereof. The disputes arising therein have always been preferred to be resolved through arbitration rather than the routine course of litigation. The parties to the international trade prefer arbitration for dispute resolution. However, there are several conventions and treaties which regulate and enable the enforcement of a foreign award in a signatory country.
In order that a foreign award may be enforceable under this Chapter, it shall be necessary that –
The award has been made in pursuance of a submission to arbitration, which is valid under the law applicable thereto;
a-The subject matter of the award is capable of settlement by arbitration under the law of India.
b-The award has become final in the country in which it has been made, in the sense that it will not be considered as such if it is open to opposition or appeal or if it is proved that any proceedings for the purpose of contesting the validity of the award are pending.
Explanation : Without prejudice to the generality of clause it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption.
(2) Even if the conditions laid down in sub-section (1) are fulfilled, enforcement of the award shall be refused if the Court is satisfied that –
- The award has been annulled in the country in which it was made;
- The party against whom it is sought to use the award was not given notice of the arbitration proceedings in sufficient time to enable him to present his case; or that, being under a legal incapacity, he was not properly represented;
(3) If the party against whom the award has been made proves that under the law governing the arbitration procedure there is a ground, other than the grounds referred to in clauses (a) and (c) of sub-section (1) and clauses (b) and (c) of sub-section (2) entitling him to contest the validity of the award, the Court may, if it thinks fit, either refuse enforcement of the award or adjourn the consideration thereof, giving such party a reasonable time within which to have the award annulled by the competent tribunal.
Arbitral Awards, Domestic and Foreign Awards:-
Arbitral awards refer to the decision of an arbitral tribunal, whether in a domestic or international arbitration. Arbitral awards include interim awards.
Domestic awards are governed by Part I whereas foreign awards are governed by part II of the Arbitration and Conciliation Act of India. A domestic award is an award passed under the provisions of Section 2 to 43 of the Act.
A domestic award Is a result of domestic arbitration, hence it confines itself to the territory of India, the parties should have a nexus or birth to Indian origin, basically territory comes into play in order to asses a domestic arbitration. Award given by an arbitral institution in India or an award even if given by a foreign state for a dispute where both the parties are of an Indian origin and the nationality is also governed by the Indian laws shall also come within the purview of domestic arbitration.
A Foreign award as per section 44 means an arbitral award which relates to differences relating to the matters considered as commercial under the law in force in India. Hence it’s safe to say that a ‘Foreign Award’ means an arbitral award made as a result of foreign arbitration not being a domestic one.
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