ENFORCEMENT OF ARBITRAL AWARD IN INDIA

Submitted by:

Shreya Shankar

Roll No. 1762

B.A., LL.B (Hons.)

Submitted to:

Mr. Hrishikesh Manu

Assistant Professor of Law

A research submitted in fulfilment of the course ADR for attaining the degree of

B.A., LL.B (Hons.)

May, 2020

CHANAKYA NATIONAL LAW UNIVERSITY

Nyaya Nagar, Mithapur, Patna (800001)

1
DECLARATION BY CANDIDATE

I hereby declare that the work reported in the B.A., L.L.B (Hons.) Project entitled
“ENFORCEMENT OF ARBITRAL AWARD IN INDIA” submitted at Chanakya National
Law University is an authentic record of my work carried out under the supervision of Mr.
Hrishikesh Manu, Assistant Professor of Law, I have not submitted this work elsewhere for
any other degree diploma. I am fully responsible for the contents of my Project.

SIGNATURE OF CANDIDATE:

NAME OF CANDIDATE: SHREYA SHANKAR

CHANAKYA NATIONAL LAW UNIVERSITY, PATNA

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 ACKNOWLEDGEMENT

I would like to express my gratitude towards Assistant Professor of Law Mr. Hrishikesh
Manu for assigning me such a topic for research work ENFORCEMENT OF ARBITRAL
AWARD IN INDIA and for helping me to go in furtherance with this topic. Without the
support of professor this work could not be possible.

I would also like to thank my batch mates, seniors, friends and relatives for their valuable
support and guidance that helped me to reach on the conclusion.

Without the help all these people, this project would not have been possible, and I would not
have been able to reach on the conclusion so here by, I acknowledge their helpful
contributions.

- SHREYA SHANKAR 

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 TABLE OF CONTENTS

Declaration by the candidate…………………………………………. 2

Acknowledgement …………………………………………………….3

Chapter-1 Introduction ………………………………………….….…5

Aims and objectives…………………………………………… ….…. 7

Hypothesis……………………………………...……………… ……...7

Research methodology ……………………………………… ……...…7

Sources of data………………………………………………… ……....7

Limitations of project……………………………………………… …..7

Chapterisation………………………………………………………..….8

Chapter-2 Enforcement of domestic and foreign awards …… … ….…9

Chapter- 3 Enforcement of arbitral awards: appropriate forum &

limitation……………………………………………………11

Chapter-4 Enforcement of foreign judgements in India…...…………..14

Chapter -5 Modes of execution ……………………………………..…18

Chapter - 6 Conclusion and suggestions………………………….……19

Bibliography……………………………………………………………22

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 Chapter-1
Introduction

The growth of international commerce has necessitated the creation of efficient methods of
resolution of disputes like arbitration and enforcement of the consequent awards that
determine the rights and obligations of the parties. In some situations securing an award or a
final judgment from the courts may only be a battle half won; this is especially true in the
Indian context.

We have come across situations where the opposite parties decide not to participate in the
arbitral process or abandon it mid-way. The enforcement of these awards/judgments where
the party is in absentio is sometimes more complicated than one where the opposite party has
participated in the proceedings. In some situations, objections have been raised even against
costs awarded by the tribunal or the jurisdiction of the tribunal or court, as the case may be.
Therefore, the stage of execution of an award or decree warrants a high degree of caution.

The procedure for enforcement and execution of decrees in India is governed by the Code of
Civil Procedure, 1908 (“CPC”) while that of arbitral awards in India is primarily governed by
the Arbitration & Conciliation Act, 1996 (“Act”) as well as the CPC.

Arbitration Award is a determination on the merits by an arbitration tribunal in arbitration,

and is analogous to the judgment in the Court of Law. Arbitration is particularly a means of
dispute resolution in the commercial sphere. One of the reasons for doing so is that in
international trade it is often easier to enforce a foreign arbitral award than to enforce a
judgment of the Court. The closing decades of the twentieth century saw arbitration gain
worldwide acceptance as the normal means of resolving commercial disputes. National laws
on arbitration have been modernized on all continents. The Arbitration & Conciliation Act,
1996 is one such step by India to make the arbitration law more responsive to contemporary
requirements, taking into account the Model law and Rules adopted by the United Nations
Commission on International Trade Law (UNCITRAL). International treaties on arbitration
have been signed or adhered to with impressive success. With the gradual removal of
political and trade barriers and the rapid globalization of the world economy, new challenges
have been created for arbitration institutions in response to the growing demand of parties for

5
certainty and predictability, greater rapidity and flexibility as well as neutrality and efficacy
in the resolution of disputes.

Arbitration is a legal process, which takes place outside the courts, but still results in a final
and legally binding decision similar to a court judgment. Arbitration is a flexible method of
dispute resolution, which can give a quick, inexpensive, confidential, fair and final solution to
a dispute. It involves the determination of the dispute by one or more independent third
parties rather than by a court. The third parties, called arbitrators, are appointed by or on
behalf of the parties in dispute[1]. The arbitration is conducted in accordance with the terms
of the parties' arbitration agreement, which is usually found in the provisions of a commercial
contract between the parties.

For an arbitration to take place, the disputing parties must agree to take their dispute to
arbitration. In practice, this agreement is often made before the dispute arises and is included
as a clause in their commercial contract. In signing a contract with an arbitration clause, the
parties are agreeing that their dispute will not be heard by a court but by a private individual
or a panel of several private individuals. If parties have agreed to arbitration, they will
generally have to go to arbitration rather than court as the courts will normally refuse to hear
their case by staying it to force the reluctant party to honour their agreement to arbitrate.

Domestic and foreign awards are enforced in the same manner as a decree of the Indian court.
This is true even for consent awards obtained pursuant to a settlement between parties.
However, there is a distinction in the process for enforcement of an award based on the seat
of arbitration. While the enforcement and execution of an India - seated arbitral award
(“domestic award”) would be governed by the provisions of Part I of the Act, enforcement of
foreign - seated awards (“foreign award”) would be governed by the provisions of Part II of
the Act.

A few steps that are crucial for ensuring successful enforcement of arbitral awards and
execution of decrees are:

 Making effective service on opposite party/ judgment debtor is crucial to prevent

objections at later stage;
 Taking necessary steps by way of attachment/ notice/ arrest/ appointment of receiver
in another manner;
 Remember that principles of natural justice apply to even execution proceedings.

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In international trade, arbitration, rather than litigation, is the preferred method of dispute
resolution, since it is easier to enforce an arbitral award than a court decision, in a foreign
State. From a practical point of view, this is because there are more multilateral conventions
and bilateral treaties facilitating enforcement of foreign arbitral awards than there are for
enforcement of court decisions. From a theoretical point of view, enforcement of arbitral
awards is easier, because of the contractual nature of arbitration. An arbitral award is the
consequence of a private dispute settlement procedure, while a court ruling represents the
sovereignty of the State where they are issued. It is easier for a national court to enforce the
consequence of a contractual agreement between two private parties, than a decision
representing the sovereignty of a foreign State.

Aims and objectives:

The project aims to analyse the enforcement of arbitral awards in India.

Hypothesis:

The researcher tends to presume that enforcement of foreign award in India is a major
challenge.

Research methodology:

Doctrinal method of research has been adopted to complete the project.

Sources of Data:

Sources of Data are of two kinds – Primary sources and secondary sources.

1. The primary sources are –

a. Legislative materials such as Constitution of India.

b. Decisional materials (Judgements of the courts)

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c. The juristic writings (the opinions expressed by the imminent jurists and different
commissions)

2. Secondary sources are-

Books, magazine, journals, etc.

Limitations of the project:

The most important limitation for this project is the accumulation of relevant data. Also the
undertaking of non-doctrinal research or the qualitative research is not possible due limitation
of time and place. The financial support needed for the undertaking of the ground work and
other works for the project is also difficult to arrange. These are the prime hindrances to the
completion of the project

Chapterisation:

1. Introduction
2. Enforcement of domestic and foreign awards.
3. Enforcement of arbitral awards: Appropriate forum & limitation.
4. Enforcement of foreign judgements in India.
5. Modes of execution.
6. Conclusion and suggestions.

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 CHAPTER-2
ENFORCEMENT OF DOMESTIC AND FOREIGN AWARDS.

ENFORCEMENT OF DOMESTIC AWARDS

An award holder would have to wait for a period of 90 days after the receipt of the award
prior to applying for enforcement and execution. During the intervening period, 1 the award
may be challenged in accordance with Section 34 of the Act. After expiry of the aforesaid
period, if a court finds the award to be enforceable, at the stage of execution, there can be no
further challenge as to the validity of the arbitral award.

Prior to the recent Arbitration and Conciliation (Amendment) Act, 2015 (“Amendment Act”),
an application for setting aside an award would tantamount to a stay on proceedings for
execution of the award. However, by virtue of the Amendment Act, a party challenging an
award would have to move a separate application in order to seek a stay on the execution of
an award.

One of the declared objectives of the 1996 Act is that every final award: ‘is enforced in the
same manner as if it were a decree of the Court’2. Hence, the scheme of the Act is that it is up
to the losing party to object to the award and petition the court for setting it aside. The
winning party has to make no procedural move. If the objections to the award are not
sustained (or if there are no objections within the time allowed) the award itself becomes
enforceable as if it were a decree of the court 3. It would be noticed that the Indian law has
thus fundamentally departed from the Model Law in this regard. The Model Law requires an
application for enforcement (Art 35) and the grounds on which enforcement of an award may
be refused are as set forth in Art 36 thereof. This has been departed from under the Indian
regime as stated above with the result, that in so far as domestic awards are concerned, if
there is no application to set aside an award under s 34 (or if the objections if made have been
rejected), the award can straightaway be executed as a decree of the court. Thus, when the
period for filing objections has expired or objections have been rejected, the award can be
enforced under the Civil Procedure Code (CPC) in the same manner as if it were a decree
passed by a court of law. Section 36 declares that an arbitral award has the force of the
decree, though in fact it is not a decree. An ex parte Award passed by an Arbitral Tribunal
1
A further period of 30 days may be granted by a court upon sufficient cause being shown for condonation of
delay
2
Statement of Objects and Reasons to the 1996 Act, para 4(vii).
3
The 1996 Act, s 36.

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under Section 28 of the Act is also enforceable under Sec. 36. Even a settlement reached by
the parties under Section 30 of the Act can be enforceable under Sec. 36 of the Act as if it is a
Decree of the Court.

ENFORCEMENT OF FOREIGN AWARDS

India is a signatory to the Convention on the Recognition and Enforcement of Foreign

Arbitral Awards, 1958 (“New York Convention”) as well as the Geneva Convention on the
Execution of Foreign Arbitral Awards, 1927 (“Geneva Convention”). If a party receives a
binding award from a country which is a signatory to the New York Convention or the
Geneva Convention and the award is made in a territory which has been notified as a
convention country by India, the award would then be enforceable in India. Out of the 196
countries in the world only 50 countries have been notified by the Central Government as
reciprocating countries, with the most recent addition being Mauritius.4

The enforcement of a foreign award in India is a two-stage process which is initiated by filing
an execution petition. Initially, a court would determine whether the award adhered to the
requirements of the Act. Once an award is found to be enforceable it may be enforced like a
decree of that court. However at this stage parties would have to be mindful of the various
challenges that may arise such as frivolous objections taken by the opposite party, and
requirements such as filing original/ authenticated copy of the award and the underlying
agreement before the court

4
Australia; Austria; Belgium; Botswana; Bulgaria; Central African Republic; Chile; China (including Hong Kong
and Macau) Cuba; Czechoslovak Socialist Republic; Denmark; Ecuador; Federal Republic of Germany; Finland;
France; German Democratic Republic; Ghana; Greece; Hungary; Italy; Japan; Kuwait; Mauritius, Malagasy
Republic; Malaysia; Mexico; Morocco; Nigeria; Norway; Philippines; Poland; Republic of Korea; Romania;
Russia; San Marino; Singapore; Spain; Sweden; Switzerland; Syrian Arab Republic; Thailand; The Arab Republic
of Egypt; The Netherlands; Trinidad and Tobago; Tunisia; United Kingdom; United Republic of Tanzania and
United States of America. India has entered into an agreement with the United Arab Emirates for Juridical and
Judicial co-operation.

10
 CHAPTER-3
ENFORCEMENT OF ARBITRAL AWARDS: APPROPRIATE FORUM &
LIMITATION

5
The Supreme Court in its recent ruling in, Sundaram Finance Ltd. v. Abdul Samad and Anr.
clarified that an award holder can initiate execution proceedings before any court in India
where assets are located. In case the subject-matter of the arbitration is of a specified value, 6
commercial courts established under the Commercial Courts, Commercial Division and
Commercial Appellate Division of High Courts Act 2015 (“Commercial Courts Act”) would
have jurisdiction, as given below:

I. Award arising out of an India seated arbitration (being an International Commercial

Arbitration)

By virtue of the Commercial Courts Act and the Amendment Act, the Commercial Division
of a High Court where assets of the opposite party lie shall have jurisdiction for applications
relating to enforcement of such awards if the subject matter is money. In case of any other
subject matter, Commercial Division of a High Court which would have jurisdiction as if the
subject matter of the award was a subject matter of a suit shall have jurisdiction, i.e., where
the opposite party resides or carries on business or personally works for gain.

II. Award arising out of an India seated arbitration (not being an International
Commercial Arbitration)

As per the Commercial Courts Act and the Amendment Act, for such cases, the appropriate
court would be the Commercial Court exercising such jurisdiction which would ordinarily lie
before any principal Civil Court of original jurisdiction in a district, as well as the
Commercial Division of a High Court in exercise of its ordinary original civil jurisdiction.

III. Foreign Awards

Where the subject matter is money, the Commercial Division of any High Court in India
where assets of the opposite party lie shall have jurisdiction. In case of any other subject

5
(2018) 3 SCC 622
6
Commercial Courts Act, s 2(1)(i), “Specified Value”, in relation to a commercial dispute, shall mean the value
of the subject-matter in respect of a suit as
determined in accordance with section 12 which shall not be less than one crore rupees or such higher value,
as may be notified by the Central Government”

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matter, Commercial Division of a High Court which would have jurisdiction as if the subject
matter of the award was a subject matter of a suit shall have jurisdiction.

A. LIMITATION PERIOD FOR ENFORCEMENT OF AWARDS

i. Domestic awards

Since arbitral awards are deemed as decrees for the purposes of enforcement (as observed by
the Supreme Court in M/s Umesh Goel v. Himachal Pradesh Cooperative Group Housing
Society,7 the Limitation Act 1963 applies to arbitrations. The limitation period for
enforcement of such an award is twelve years.

ii. Foreign awards

Various High Courts have given varying interpretations on the limitation period within which
a party may enforce an award. The Bombay High Court 8 has observed that since a foreign
award is not a decree per se and would not be binding on parties unless a competent court
records it as enforceable, it would undergo a two-step process. Thus, the application for
enforcement of a foreign award would fall within the residuary provision of the Schedule to
the Limitation Act, that is, the limitation period would be three years. Thereafter, on
recognizing the award as a decree, the limitation period for execution of such a decree would
be twelve years therefrom. However, the Madras High Court held a contrary view by
referring to foreign awards as deemed decrees, and the corresponding limitation period would
be twelve years. It held that, “the foreign award is already stamped as a decree and the party
having a foreign award can straight away apply for enforcement of it and in such
circumstances, the party having a foreign award has got 12 years’ time like that of a decree
holder.”9

The Act provides that certain conditions (as listed above) have to be assessed prior to
enforcement of a foreign award, and where the court is satisfied that the foreign award is
enforceable, the award would be deemed to be a decree of that court. 10 The Supreme Court in
M/s. Fuerst Day Lawson Ltd v. Jindal Exports Ltd. 11, held that under the Act a foreign award
is already stamped as the decree. It observed that, “In one proceeding there may be different
7
(2016) 11 SCC 313)
8
Noy Vallesina v Jindal Drugs Limited 2006 (5) BomCR 155

9
Compania Naviera ‘Sodnoc’ v. Bharat Refineries Ltd. AIR 2007 Mad 251
10
The Arbitration and Conciliation Act 1996, s 49
11
2001 (6) SCC 356

12
stages. In the first stage the Court may have to decide about the enforceability of the award
having regard to the requirement of the said provisions. Once the court decides that foreign
award is enforceable, it can proceed to take further effective steps for execution of the same.
There arises no question of making foreign award as a rule of court/decree again.”12

12
M/s. Fuerst Day Lawson Ltd v. Jindal Exports Ltd. 2001 (6) SCC 356

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 CHAPTER-4
ENFORCEMENT OF FOREIGN JUDGEMENTS IN INDIA

Section 2(6) of the CPC defines “foreign judgment” as “the judgment of a foreign Court,”
which refers to a Court situated outside India and not established or continued by the
authority of the Central Government.

At the time of enforcement of foreign judgments in India, two situations may arise depending
on whether the foreign judgment is passed by a court in:

i) A reciprocating country;13
ii) A non-reciprocating country.

A party seeking enforcement of a decree of a court in a reciprocating country is required to

file execution proceedings in India while in case of a decree from a non-reciprocating
country, a fresh suit has to be filed before the relevant court in India. The time limit for filing
a suit for enforcement for such foreign judgments is three years from such judgment being
delivered.

PROCEDURE FOR ENFORCEMENT OF FOREIGN JUDGMENTS

The first major step towards enforcement of foreign judgments in India is, to file execution
proceedings, which is done by following the procedure, as envisaged under Section 44A and
Order XXI of the CPC (illustrated above).

Regarding the “court” before which an execution petition is to be filed:

The Bombay High Court has an established view that Section 44A clearly gives jurisdiction
to the Bombay High Court which, for the purposes of execution of the decree, would be
considered as the District Court.14

13
“Reciprocating territory” means any country or territory outside India which the Central Government may,
by notification in the Official Gazette, declare to be a reciprocating territory for the purposes of Section 44A of
the Civil Procedure Code. Countries or territories which have been officially recognized as “reciprocating
territories” by the Central Government of India include:- Aden; Bangladesh; Federation of Malaya; Fiji Colony;
Hong Kong; New Zealand; Cook Islands and Western Samoa; Papua New Guinea; Republic of Singapore;
Trinidad and Tobago; United Kingdom of Great Britain and Northern Ireland; and Victoria. India has entered
into an agreement with the United Arab Emirates (“UAE”) for Juridical and Judicial co-operation. However, the
details regarding designation of courts in UAE have not yet been received, therefore, the notification under
Section 44A of the CPC in India has not been issued
14
Janardhan Mohandas Rajan Pillai and Anr. v. Madhubhai Patel and Ors., AIR 2003 Bom 490

14
However, the Delhi High Court has an unsettled view. On reference to Section 5(2) of the
Delhi High Courts Act 1966, notwithstanding anything contained in any law for the time
being in force, the High Court of Delhi shall also have in respect of the said territories
ordinary original civil jurisdiction in every suit the value of which exceeds rupees two crores.
Thus, a Single Judge of the Delhi High Court had observed that for avoiding “unnecessary
confusion…There is no legal impediment … to approach the High Court in the first instance
for execution of the decree of a value of more than Rs. 20 lakhs, as in the instant
case.”15However, it was set aside by the Division Bench of the Delhi High Court which
observed that “the legislature has vested such ‘District Court’ the power to execute the
‘foreign decree’ as if it had been passed by itself” and not the Delhi High Court. 16 This
judgment was further appealed before the Supreme Court of India, which has granted a stay
on the judgment of the Division Bench.17 This is now pending before the Supreme Court for
final disposal.

I. Requirements for enforcement of foreign judgment

Under Section 44A of the CPC, where certified copy of decree of any of the superior courts
of any reciprocating territory has been filed in a district court, the decree may be executed in
India as if it had been passed by the district court. For proceeding with the execution, the
certified copy of the decree shall be filed along with a certificate from such superior court
stating the extent, if any, to which the decree has been satisfied or adjusted. Such certificate
shall be deemed as the conclusive proof of the extent of such satisfaction or adjustment.

II. Grounds of challenge to enforcement of foreign judgments

Section 13 of the CPC provides that a foreign judgment may operate as res judicata by being
conclusive with respect to any matter adjudicated upon thereby (which does not include the
reasons laid down in the foreign judgment). However, this shall not be applicable where:

a. It has not been pronounced by a Court of competent jurisdiction. While ascertaining

competence of a foreign court, it has to be established that the concerned court is
vested with jurisdiction in terms of its pecuniary and territorial limits, as well as rules
of private international law.
b. It has not been given on the merits of the case;

15
Messer Griesheim Gmbh v. Goyal MG Gases Pvt. Ltd. (2013) 139 DRJ 556
16
Goyal MG Gases Pvt. Ltd. v. Messer Griesheim Gmbh (judgment passed on 1 July 2014 in EFA (OS) 3 of 2014)
17
SLP (C) No. 22539/2014 (order dated 1 September 2014)

15
 c. It appears on the face of the proceedings to be founded on an incorrect view of
international law or a refusal to recognise the law of India in cases in which such law
is applicable;
d. The proceedings in which the judgment was obtained are opposed to natural justice;
e. It has been obtained by fraud;
f. It sustains a claim founded on a breach of any law in force in India

III. Judicial Approach

Courts have been consistent of the view that a party would not be bound by the jurisdiction of
a foreign court if it has not submitted to such jurisdiction of the foreign court [Raj Rajendra
Sardar Maloji v. Sri Shankar Saran 18; R.M.V. Vellachi Achi v. R.M.A. Ramanathan
Chettiar19]. Whether a party has voluntarily submitted to the jurisdiction of the foreign court,
would depend on the facts and circumstances of the concerned case, for example, if a
defendant appears in the Court where the suit is instituted and questions both the jurisdiction
and challenges the action on merits, he is said to have submitted to the jurisdiction
voluntarily.20 Generally, as noted by the Madras High Court, the following denote instances
of submission to the jurisdiction of the foreign court:

 Where the person is a subject of the foreign country in which the judgment has been
obtained against him on prior occasions.
 Where he is a resident in foreign country when the action is commenced.
 Where a person selects the foreign Court as the forum for taking action in the
capacity of a plaintiff, in which forum he is sued later
 Where the party on summons voluntarily appears
 Where by an agreement a person has contracted to submit himself to the forum in
which the judgment is obtained.21

As had been held in International Woollen Mills v. Standard Wool (U.K.) Ltd 22, a judgment
shall be considered to be given on merits if some evidence (oral and/or documentary) is

18
AIR 1962 SC 1737
19
AIR 1973 Mad. 141

20
Chormal Balchand Firm v. Kasturi Chand AIR 1938 Cal 511
21
Ramanathan Chettiar v. Kalimuthu Pillai AIR 1914 Mad. 556
22
(2001) 5 SCC 265

16
adduced on behalf of the plaintiffs. The Odisha High Court in Trilochan Choudhury v.
23
Dayanidhi Patra, observed that a judgment, however, brief, would be enforceable if it is
based on a consideration of evidence. Similarly, the Bombay High Court, in Marine
Geotechnics LLC, v. Coastal Marine Construction & Engineering Ltd 24 held that ex parte
decrees would also be valid. Judgments which follow summary procedure or otherwise shall
not be considered as judgments given on merits of the case if there has been no examination
of the evidence. Further, judgments based on consent or terms of settlement are also
considered valid as being given on merits of the case, as observed by the Bombay High Court
in HSBC Bank USA v. Silverline Technologies Ltd AIR 2006 Bom 134. However, cases
where the decree results from the sheer absence of the defendant either by way of penalty or
in a formal manner, the judgment may not be one based on the merits of the case.

25
Similarly, the Supreme Court in R. Vishwanathan v. Rukn – Ul- Mulk Syed Abdul Wajid,
observed that enforcement of a foreign judgment would be vitiated on non-observance of the
judicial process, i.e. if the court rendering the judgment fails to observe the minimum
requirements of natural justice. Thus, it is required that parties are given reasonable notice
and adequate opportunity of presenting their respective cases. Additionally, a foreign
judgment would be rendered unenforceable if the foreign court was imposed upon or tricked
into giving the judgment.26

23
AIR 1961 Ori 136
24
(2014) 3 AIR Bom R 193
25
AIR 1963 SC 1
26
Sankaran Govindan v. Lakshmi Bharathi & Others AIR 1974 SC 1764; Satya v. Teja Singh AIR 1975 SC 105

17
 CHAPTER-5
MODES OF EXECUTION

Since foreign awards, domestic awards and foreign judgments (from reciprocating countries)
are to be executed in India as a decree passed by an Indian court, the modes of execution for
foreign awards and judgments and domestic awards and judgments are also common.

On an application made by the decree-holder for execution of the decree/ award (whether
foreign or domestic), the court may order the execution of the decree / award by one or more
of the following modes:

 ƒ by delivery of any property specifically decreed

 ƒ by attachment and sale or by sale without attachment of any property
 ƒ by arrest and detention in prison
 ƒ by appointing a receiver
 ƒ by any other manner as the nature of the relief granted may require.

In case of decrees involving payment of money, execution by detention in prison shall be

ordered only after the judgment debtor is given an opportunity of showing cause as to why he
should not be imprisoned. In doing so, the court has to record in writing and be satisfied that
the judgment debtor would obstruct or delay the execution of the decree 27. An executing court
cannot go behind the decree, that is, it does not have the power to modify the terms of the
decree and must take it as it stands. In case there are multiple decree-holders, the assets, after
deducting the costs of realization, shall be distributed among all such persons.

27
Sunil Malhotra, ‘Enforcement of Arbitral Awards’, ICA’s Arbitration Quarterly, ICA, 2006, vol. XL/No.4

18
 CHAPTER-6
CONCLUSION AND SUGGESTIONS

The Parliament has enacted the Arbitration and Conciliation Act with a view to provide
speedy remedy by arbitration and to achieve this objective, section 5 of the Act puts a
complete bar on the intervention of the courts in matters where there exists an arbitration
clause. The law of arbitration in India is very much at its crossroads. As things stand today,
arbitration is poised to effect great changes to the ways in which dispute resolution is
conducted. It brings with it the solemnity and finality of the judicial process and couples it
with the procedural flexibilities of non-conventional dispute resolution methods. There is,
however, an equally pressing need to recognize that much more can and should be done to
improve the conduct of arbitral proceedings in India but most importantly, we feel that there
is a need to effect a change in perceptions.

As our nation moves towards increasing litigiousness, alternative methods of dispute

resolution might just provide the key to resolving the problems of overburdened case loads,
long pendency of cases and an all too frequent case of justice being delayed. For long, the
problem plaguing the effective implementation of ADR methods has been their perception as
being subordinate to the court process- a perception shared and fostered by lawyers and
people alike. It is imperative, that this be changed and this can only be achieved if there is
active engagement from all the stakeholders in this process. Certainly, there are some
disputes inherently unsuited for alternative channels but there are so many more which fit
perfectly within the vision envisaged for a system of rendering justice that runs concurrent to
the Courts. It is necessary for the Courts themselves to mandate recourse to ADR methods in
inter alia international commercial disputes, employment disputes, matrimonial cases,
compoundable criminal offences, to name just a few.. Saw Pipe case’s expanded judicial
review is especially unsuitable in the Indian context where courts are overwhelmed with
backlog.

In such scenario to permit a challenge on merits would considerably delay the enforcement
proceedings. A majority of parties opting for arbitrations do so to avoid court delays and legal
niceties. An unfortunate side effect of this decision is that it has become a ground for parties
to shift the venue of arbitration outside India. The Supreme Court’s decision (Venture Global
Engineering case) flies in the face of modern commercial practice. At the end of the day,
what should take precedence is the provision of justice, in substance more than in form. As
our country grows and flowers, taking wing on issues unimagined before, it is time also for

19
our dispute resolution systems, the undisputed backbone of our nation, to follow suit. At the
end of the day arbitration would see the day light of reality and true success when people
would start accepting the arbitral award and its finality as that of a judgment by the Supreme
Court not because it is justice always but because it is final always, having no further appeal.

Recent decisions of the Supreme Court of India show a shift of stance. The attitude of the
higher judiciary in India is taking a positive turn, and they are approaching international
arbitration with caution and pragmatism, in line with courts in some other parts of the world.
How this will filter down to the lower judiciary in India is yet to be fully tested, however, and
parties may yet find themselves engaged in litigation in the lower courts which must be
pursued on appeal, in order to gain the benefit of this new approach.

The business community also awaits steps from the Indian legislature to amend the Act, to
put an end to the varied interpretations provided over the years by the Indian judiciary.

At this juncture, it must be understood that although there exists a procedure for the
enforcement of foreign arbitral awards in India, such is not a smooth and efficient one and
has come in for severe criticism. One of the main criticisms is the fact that it is not at all
possible to be enforced in a quick and speedy manner as the Act stipulates that the award can
be enforced only once the time available for the Court to strike down the award has passed.
This is extremely inconvenient and one that leads to inordinate delays in the enforcement of
arbitration agreements as concerns Indian Parties. Further, the significant role that the Courts
play in what is essentially an alternative to the traditional judicial system is also a bone of
contention for many.

Overall, India does not pose to be a jurisdiction carrying anti-arbitration bias. Previously
there were no rules and regulations on enforcement of foreign awards in India. Hence, it can
easily be argued that the legal system of India strives towards creating a facilitative
environment for enforcement of foreign awards. A major problem with the Arbitration and
conciliation Act, 1996, is regarding enforcement, it treats foreign arbitral awards and foreign
court decisions similarly. Because of lack of distinction between foreign arbitral awards and
court decisions, issues particularly relating to foreign awards are not properly addressed in
Indian Law. Some improvements such as bringing in clarity on convention countries carrying
reciprocal provisions that are yet to be listed on the official gazette is required and a
legislation which directly deals with foreign arbitral award will make it possible to provide

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more structure to the arbitral process and keep India in line with advanced legal regimes
across the world.

To conclude, it can be stated that the Indian Legal System does indeed have a well laid down
and established the procedure for the enforcement of foreign awards in India. However, there
is a rising need to reform the same in order to make it more business-friendly and lessen the
burden on our already overworked judiciary.

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 BIBLIOGRAPHY

Statutes and acts-

• The Arbitration and Conciliation Act 1996.

Books-
• Avatar Singh: Arbitration and Conciliation, Eastern Law Book House, Lucknow 1998
• F.S.Nariman, Arbitration and ADR in India, Alternative Dispute Resolution, edited by
P.C.Rao and William Sheffield, Universal Law Publishing Co. Pvt. Ltd. New Delhi
(1997).
• Indu Malhotra, ‘Fast Track Arbitration’, ICA’s Arbitration Quarterly, ICA, 2006, vol.
XLI/No.1 at p 8-Indu Malhotra is an advocate of the Supreme Court of India.
• P.S. Narayana,J. The Arbitration and Conciliation Act, 1996, 4th. Edition(2008),
A.L.T. Publications.
• Saskatchewan, Enforcement of Foreign Arbitral Awards Act, S.S. 1996, c. E-9.12;
Yukon Territory.
• Public Policy in the Judicial Enforcement of Arbitral Awards : Lessons For and From
Australia, Winnie.

Journals-
• Asian International Arbitration Journal, 2008, vol.4.
• Sumeet Kachwaha,‘Enforcement of Arbitration Awards in India’, Asian International
Arbitration Journal, 2008, vol. 4.
• Sunil Malhotra, ‘Enforcement of Arbitral Awards’, ICA’s Arbitration Quarterly, ICA,
2006, vol. XL/No.4.

Web sources-
• http://www.icaindia.co.in/Jan-March12.pdf
• www.lawcommissionofindia.nic.in.
• http://www.icaindia.co.in/Jan-March12.pdf
• http://www.legalserviceindia.com/article/l296-Indian-Domestic-Arbitration.html.
• www.ficci.com

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