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navin kumar law Foreign Arbitral Awards under the Arbitration and Conciliation Act, 1996 Scope and Enforcement
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  • December 17, 2025
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Foreign Arbitral Awards under the Indian Arbitration and Conciliation Act, 1996: Scope and Enforcement

The rise in complex business transactions across globe has given rise to integration of business across world economy. Business activities no longer belong to nations and length of business empires have stretched beyond nations. Such empires cannot operate effectively under traditional legal setup of resolving disputes. The need for more effective dispute resolution system to settle cross countries companies disputes emerged in the form of Arbitration agreements being undertaken among them. With the growth of international commerce there was an increase in disputes arising out of such transactions being adjudicated though arbitration. One of the problems faced in such arbitrations related to recognition and enforcement of an arbitral award made in one country by the Courts of other countries.

HISTORICAL BACKGROUND

The first such international convention was the Geneva Protocol 1923. The Geneva Protocol of 1923 was followed by the Geneva Convention of 1927 which also drawn up under the auspices of the League of Nations. The purpose of this Convention was to widen the scope of the Geneva Protocol of 1923 by providing recognition and enforcement of protocol awards within the territory of contracting states, (not merely the state in which the award was made). India was a signatory to the protocol of 1923 and the Convention of 1927. The enforcement of foreign arbitral awards under Geneva Convention is covered in Chapter II, Part II of the Arbitration and Conciliation Act of 1996, with relevant provisions given under Sections 53 to 60.

A number of problems were encountered in the operation of the aforesaid Geneva treaties inasmuch as there were limitations in relation to their field of application and under the Geneva Convention of 1927, a party seeking enforcement had to prove the conditions necessary for enforcement and in order to show that the awards had become final in its country of origin the successful party was often obliged to seek a declaration in the countries where the arbitration took place to the effect that the award was enforceable in that country before it could go ahead and enforce the award in the courts of the place of enforcement. ICC, in 1953, promoted a new treaty to govern international commercial arbitration.

New York Convention

The New York Convention is an improvement on the Geneva Convention of 1927 in the sense that it provides for a much more simple and effective method of obtaining recognition and enforcement of foreign arbitral awards and it replaces Geneva Convention of 1927 as between the States which are parties to both the Conventions. The New York Convention also gives much wider effect to the validity of arbitration agreements than the Geneva Protocol of 1923. India was a party to the New York Convention. The enforcement of Foreign Awards under New York Convention Awards is covered in Chapter I Part II of  Arbitration and Conciliation Act, 1996 with relevant provisions given under Section 44 to 52.

Foreign Awards Act

The Foreign Awards Act has been enacted to give effort to the New york Convention and for purposes connected therewith. In the Statement of Objects and Reasons, reference has been made to the defects in the Geneva Convention of 1927 which "hampered the speedy settlement of disputes through arbitration and hence no longer met the requirements of international trade" and which led to the adoption of the New York Convention. Section 2 of the Act defines the expression 'foreign award'. Section 3 makes provision for stay of proceedings in respect of matters to be referred to arbitration. Section 4 deals with effect of foreign awards. Sub-section (1) of Section 4 provides that a foreign award shall, subject to the provisions of this Act, be enforceable in India as if it were an award made on a matter referred to arbitration in India. Sub-section(2) prescribes that any foreign award which would be enforceable under this Act shall be treated as binding for all purposes on the persons as between whom it was made and may be relied on by any of those persons by way of defence, set off or otherwise in any legal proceedings in India. Section 5 makes provision for filing of foreign award in Court. In Sub-section (1) it is laid down that any person interested in a foreign award may apply to any court having jurisdiction over the subject matter of the award that the award be filed in Court. Sub-section (2) requires that such an application shall be in writing and shall be numbered and registered as a suit between the applicant as plaintiff and the other parties as defendants. Sub-section (3) requires the court to give notice to the parties to the arbitration other than the applicant requiring them to show cause, within a time specified why the award should not be filed. Section 6 deals with enforcement of foreign awards. Sub-section (1) lays down that where the Court is satisfied that the foreign award is enforceable under the Act, the Court shall order the award to be filed and shall proceed to pronounce judgment according to the award. Sub-section (2) provides that upon the judgment so pronounced a decree shall follow, no appeal shall lie from such decree except insofar as the decree is in excess of or not in accordance with the award. Section 7 contains the conditions for enforcement of foreign awards and prescribes the circumstances under which foreign awards will not be enforced. Section 8 requires the production of the original award or a duly authenticated copy thereof as well as original agreement for arbitration or a duly certified copy thereof and the production of evidence to prove that the award is a foreign award. Section 9 is a saving clause which excludes the applicability of the Act to matters specified therein. Section 10 provides for repeal of the Arbitration (Protocol and Convention) Act, 1937, in relation to foreign awards to which the Act applies. Section 11 provides for rule making power of the High Court. The New York Convention is appended as a schedule to the Foreign Awards Act.

What is a Foreign Arbitral Award?

The Foreign Arbitral Award basically means that an award is issued in country other than a place where it has to be enforced. These awards are issued by foreign tribunals and to maintain a sense of uniformity across globe they are being subjected to various international conventions, treaties and laws of the countries.

The foreign award under the Arbitration and Conciliation Act, 1996 has been defined under sec 44(which deals with New York Convention Awards) and Section 53 Chapter II (which deals with Geneva Convention Awards).

Section 44 of theArbitration and Conciliation Act, 1996 states that a foreign award means arbitral decision on dispute between persons arising out of legal relationships, whether contractual or not. The dispute must be recognized as commercial under the law in force in India, made on or after the 11th day of October, 1960. The second requirement for an award to be considered as foreign award is that country where such award has been issued must be a country notified by the Indian government to be a country where New York or Geneva Convention applies.

Section 53 of the Arbitration and Conciliation Act, 1996 states that a foreign award means an arbitral award on differences relating to matters considered as commercial under the law in force in India made after 28th day of July,1924. The three essentials for enforcement are-

  1. In pursuance of an agreement for arbitration to which the protocol set forth in the Second Schedule applies, and
  2. The award is between parties subject to the jurisdiction of reciprocating territories, as designated by the Central Government and where the Geneva Convention on the Execution of Foreign Arbitral Awards, 1927 applies.
  3. The award is made in a territory designated as reciprocating by the Central Government.

  Requirements for enforcement of Foreign Award (Section 47 and 56 which deals with New York and Geneva Convention Awards respectively)

Under Sec 47 and 56 of the Arbitration and Conciliation Act, 1996 the party applying for the enforcement of a foreign award shall, at the time of the application, produce before the court-

  1. The original award or copy duly authenticated in the manner required by the law of the country in which it was made:
  2. The original agreement for arbitration or a duly certified copy thereof; and
  3. Such evidence as may be necessary to prove that the award is a foreign award.
  4. Where the award or the arbitration agreement is in a foreign language, the party seeking enforcement of the award is required to produce a certified English translation of the same. Such translation must be certified as correct by a diplomatic or consular agent of the country to which the party belongs, or in such other manner as may be acceptable under the law in force in India.

Conditions for enforcement of foreign awards(Section 57)

Section 57 of the Arbitration and conciliation Act, 1996 states certain essential elements for an award to be enforceable under Geneva Convention Awards

  1. The award has been made in pursuance of a submission to arbitration which is valid under the law applicable thereto;
  2. The subject-matter of the award is capable of settlement by arbitration under the law of India;
  3. The award has been issued by the arbitral tribunal in the manner agreed upon by the parties and in conformity with the law governing the arbitration procedure;
  4. The award has become final in the country in which it has been made
  5. The enforcement of the award is not contrary to the public policy or the law of India.

Under Section 58 of the Act once the award is found to be enforceable it can be enforced like a decree of the court.

Foreign Awards when not enforceable (Section 48)

Under Sec 48(1) of the act enforcement of foreign award may be refused, at the request of the party against whom it is invoked on following grounds:-

  1. The parties were under some incapacity under the law applicable to them or the arbitration agreement is not valid under that law.
  2. The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings or was otherwise unable to present his case.
  3. The award addresses a dispute not anticipated by or outside the scope of the submission to arbitration or it includes decisions on subjects beyond the submission’s scope.
  4. The award addresses a dispute not anticipated by or outside the scope of the submission to arbitration or it includes decisions on subjects beyond the submission’s scope.
  5. The award has not yet become binding, or has been set aside or suspended by a competent authority of the country in which or under the law of which, the award was made.
  6. The subject-matter of the difference is not capable of settlement by arbitration under the law of India.
  7. The enforcement of the award would be contrary to the public policy of India.

The evolution from the Geneva Protocol (1923) to the New York Convention (1958) marks a significant shift toward a unified and efficient global framework for international arbitration. India’s incorporation of these principles through the Arbitration and Conciliation Act, 1996ensures that foreign arbitral awards can be recognized and enforced with minimal judicial interference promoting confidence among international investors and facilitating global trade and commerce.

Judicial Overview

In Bhatia International vs. Bulk Trading S.A. and Ors. (13.03.2002 - SC) : MANU/SC/0185/2002,the hon’ble Supreme Court made some important observations with regard to Foreign Arbitral Award. “Sections 44 in (Chapter I) and Section 53 (in Chapter II) define foreign awards, as being awards covered by arbitrations under the New York Convention and the Geneva Convention respectively. Part II then contains provisions for enforcement of "foreign awards" which necessarily would be different. For that reason, special provisions for enforcement of foreign awards are made in Part II. To the extent that Part II provides a separate definition of an arbitral award and separate provisions for enforcement of foreign awards, the provisions in Part I dealing with these aspects will not apply to such foreign awards. It must immediately be clarified that the arbitration not having taken place in India, all or some of the provisions of Part I may also get excluded by an express or implied agreement of parties. But if not so excluded the provisions of Part I will also apply to "foreign awards". The opening words of Sections 45 and 54, which are in Part II, read "notwithstanding anything contained in Part I". Such a non-obstante clause had to be put in because the provisions of Part I apply to Part II.”

The Supreme Court further observed “under Section 9 a party could apply to the court (a) before, (b) during arbitral proceedings or (c) after the making of the arbitral award but before it is enforced in accordance with Section 36. The words "in accordance with Section 36" can only go with the words "after the making of the arbitral award". It is clear that the words "in accordance with Section 36" can have no reference to an application made "before" or "during the arbitral proceedings". Thus it is clear that an application for interim measure can be made to Courts in India, whether or not the arbitration takes place in India, before or during arbitral proceedings. Once an Award is passed, then that award itself can be executed. Sections 49 and 58 provide that awards covered by Part II are deemed to be a decree of the Court. Thus "foreign awards" which are enforceable in India are deemed to be decrees. A domestic award has to be enforced under the provisions of Civil Procedure Code. All that Section 36 provides is that an enforcement of a domestic award is to take place after the time to make an application to set aside the award has expired or such an application has been refused. Section 9 does suggest that once an award is made an application for interim measure can only be made if the award is a "domestic award" as defined in Section 2(7) of the said Act. Thus where the Legislature wanted to restrict the applicability of Section 9 it has done so specifically.”

In Bharat Aluminium Co. Ltd. vs. Kaiser Aluminium Technical Services, Inc. (10.08.2005 - CGHC) : MANU/CG/0043/2005, the Supreme Court observed that “section 48(1)(a) of the Indian Act provides that enforcement of foreign award may be refused, at the request of the party against whom it is invoked if that party furnishes to the Court proof the agreement between the parties is not valid "under the law to which the parties have subjected it". But the language used in Section 48(1)(e) is different and it says that the enforcement of the foreign award may be refused at the request of the party against whom it is invoked only if that party furnishes to the Court proof that the award has been set aside or suspended by a competent authority of the country under the law of which that award was made. The Legislature by using two different expressions namely, "law to which the parties have subjected the agreement" and "the law under which the award was made" obviously has intended two different meanings and both the expressions cannot mean one and the same thing. In the present case. Since Article 22 of the agreement provides that the agreement will be governed by the prevailing law in India, it is the law of India to which parties have subjected the agreement within the meaning of the expression used in Section 48(1)(a) of the Indian Act. But since Article 22 also provides that in the case of Arbitration, the English Law will apply, it is the English Law under which the arbitration has been conducted and the award has been made.”

The Supreme Court in this case further observed that “It is clear that where the contract contains a provision that it will be governed by the law of India, then in the absence of any other provision in the contract indicating a different law with regard to the law of arbitration to be applied, the arbitration agreement being part of the underlying contract will also be governed by the Indian Law, but where the parties clearly indicate in the contract that the contract will be governed by the Indian law but the arbitration will be held according to the English law, as in the present case, the arbitration is to be conducted in accordance with the English law. This is because the law of arbitration agreement may be different from the proper law of the main contract and in such cases the conduct of the arbitration and making of the award by the arbitrator would be governed by the law of the arbitration agreement and not by the law of the main contract.

The Supreme court derived support for its reasoning from Russel on Arbitration. Relevant portion of paragraph 2-094 of Russel on Arbitration (21st Edition) is quoted hereinbelow:

"2-004 : Law of arbitration agreement may be different from the proper law.-- While the law of an arbitration agreement usually follows the proper law of the main contract, an arbitration agreement is separate from the main contract between the parties and an arbitration agreement may have a different law from that of the proper law. The parties may choose different proper laws for the two agreements, and other factors may indicate that different laws should apply."

Thus, where parties to the agreement have subjected the agreement only to the Indian law and do not indicate in the agreement that the English Law will apply in case of arbitration, then the expression "the law to which the parties have subjected" the agreement in Section 48(1)(a) of the Indian Act and the expression "under the law of which the award is made". In Section 48(1)(e) of the Indian Act would be the Indian Law because the arbitration agreement would follow the proper law of the main contract. But where parties to the agreement have subjected the agreement to the Indian Law and have also indicated in the agreement that in case of arbitration, the English Law will apply, as in the present case, then the said two expressions in the said Section 48(1)(a) and Section 48(1)(e) will mean two different things and "the law to which parties have subjected" the agreement would be the Indian Law and the country "under the law of which the award is made" will be England.

In Shri Lal Mahal Ltd.  vs. Progetto Grano Spa (03.07.2013 - SC): MANU/SC/0655/2013, the Supreme Court stated that section 48 of the 1996 Act does not give an opportunity to have a 'second look' at the foreign award in the award-enforcement stage. The scope of inquiry Under Section 48 does not permit review of the foreign award on merits. Procedural defects (like taking into consideration inadmissible evidence or ignoring/rejecting the evidence which may be of binding nature) in the course of foreign arbitration do not lead necessarily to excuse an award from enforcement on the ground of public policy.While considering the enforceability of foreign awards, the court does not exercise appellate jurisdiction over the foreign award nor does it enquire as to whether, while rendering foreign award, some error has been committed.”

In the views of the Supreme Court of India, the phrase "public policy of India" used in Section 34 in context is required to be given a wider meaning. It can be stated that the concept of public policy connotes some matter which concerns public good and the public interest. What is for public good or in public interest or what would be injurious or harmful to the public good or public interest has varied from time to time. However, the award which is, on the face of it, patently in violation of statutory provisions cannot be said to be in public interest. Such award/judgment/decision is likely to adversely affect the administration of justice. Hence,in addition to narrower meaning given to the term "public policy" in Renusagar case it is required to be held that the award could be set aside if it is patently illegal. The result would be - award could be set aside if it is contrary to:

(a) fundamental policy of Indian law; or

(b) the interests of India; or

(c) justice or morality, or

(d) in addition, if it is patently illegal

Illegality must go to the root of the matter and if illegality is of trivial nature it cannot be held that award is against the public policy. Award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the court. Such award is opposed to public policy and is required to be adjudged void.

Navin Kumar

Law Offices of Navin Kumar

info@navinlaw.in