UNIT-IV

Enforcement of Certain Foreign Awards:

New York Convention Awards (SEC 44-52)

SEC 44 Definition. -
In this Chapter, unless the context otherwise requires, “foreign award”
means an arbitral award on differences between persons arising out of
legal relationships, whether contractual or not, considered as commercial
under the law in force in India, made on or after the 11th day of October,
1960-

(a) In pursuance of an agreement in writing for arbitration to which the

Convention set forth in the First Schedule applies, and

(b) In one of such territories as the Central Government, being satisfied

that reciprocal provisions have been made may, by notification in the
Official Gazette, declare to be territories to which the said Convention
applies.

SEC 45 Power of judicial authority to refer parties to arbitration. -

Notwithstanding anything contained in Part I or in the Code of Civil
Procedure, 1908 (5 of 1908) a judicial authority, when seized of an action
in a matter in respect of which the parties have made an agreement
referred to in section 44, shall, at the request of one of the parties or any
person claiming through or under him, refer the parties to arbitration,
unless it finds that the said agreement is null and void, inoperative or
incapable of being performed.

SEC 46 When foreign award binding. -

Any foreign award which would be, enforceable under this Chapter shall
be treated as binding for all purposes on the persons as between whom it
was made, and may accordingly be relied on by any of those persons by
way of defence, set off or otherwise in any legal proceedings in India and
any references in this Chapter to enforcing a foreign award shall be
construed as including references to relying on; an award.

SEC 47 Evidence. –
(1) The party applying for the enforcement of a foreign award shall, at
the time of the application, produces before the court-
 (a) The original award or a copy thereof, duly authenticated in the
manner required by the law of the country in which it was made;
(b) The original agreement for arbitration or a duly certified copy
thereof, and
(c) Such evidence as may be necessary to prove that the award is a
foreign award.

(2) If the award or agreement to be produced under sub-section (1) is in a

foreign language, the party seeking to enforce the award shall produce a
translation into English certified as correct by a diplomatic or consular
agent of the country to which that party belongs or certified as correct in
such other manner as may be sufficient according to the law in force in
India.

Explanation. -In this section and all the following sections of this
Chapter, “Court” means the principal Civil Court of original jurisdiction
in a district, and includes the High Court in exercise of its ordinary
original civil jurisdiction, having jurisdiction over the subject-matter of
the award if the same had been the subject-matter of a suit, but does not
include any civil court of a grade inferior to) such principal Civil Court,
or any Court of Small, Causes.

SEC 48. Conditions for enforcement of foreign awards. –

(1) Enforcement of a 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-
(a) The parties to the agreement referred to in section 44 were, under
the law applicable to them, under some incapacity, or the said agreement
is not valid under the law to which the parties have subjected it or, failing
any indication thereon, under the law of the country where the award was
made; or
(b) 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; or
(c) The award deals with a difference not contemplated by or not
falling within the terms of the submission to arbitration, or it contains
decisions on matters beyond the scope of the submission to arbitration:

Provided that, if the decisions on matters submitted to arbitration can be

separated from those not so submitted, that part of the award which
contains decisions on matters submitted to arbitration may be enforced; or
(d) The composition of the arbitral authority or the arbitral procedure was
not in accordance with the agreement of the parties, or, failing such
agreement, was not in accordance with the law of the country where the
arbitration took place; or

(e) The award has not yet become binding on the parties, or has been set
aside or suspended by a competent authority of the country in which, or
under the law of which, that award was made.

(2) Enforcement of an arbitral award may also be refused if the court

finds that-
(a) The subject-matter of the difference is not capable of settlement by
arbitration under the law of India; or
(b) The enforcement of the award would be contrary to the public
policy of India.

Explanation. -Without prejudice to the generality of clause (b) of this

section, 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.

(3) If an application for the setting aside or suspension of the award has
been made to a competent authority referred to in clause (e) of
sub-section (1) the court may, if it considers it proper, adjourn the
decision on the enforcement of the award and may also, on the
application of the party claiming enforcement of the award, order the
other party to give suitable security.

SEC 49. Enforcement of foreign awards. -Where the court is satisfied

that the foreign award is enforceable under this Chapter, the award shall
be deemed to be a decree of that court.

SEC 50. Appealable orders. –

(1) An appeal shall lie from the order refusing to-
(a) Refer the parties to arbitration under section 45;
(b) Enforce a foreign award under section 48, to the court
authorised by law to hear appeals from such order.

(2) No second appeal shall lie from an order passed in appeal under this
section, but nothing in this section shall affect or take away any right to
appeal to the Supreme Court.
SEC 51. Saving. –
Nothing in this Chapter shall prejudice any rights, which any person
would have had of enforcing in India of any award or of availing himself
in India of any award if this Chapter had not been enacted.

52. Chapter II not to apply. -

Chapter II of this Part shall not apply in relation to foreign awards to
which this Chapter applies.

GENEVA CONVENTION AWARDS (SEC 53-60)

SEC 53. Interpretation. -

In this Chapter “foreign award” means an arbitral award on differences
relating to matters considered as commercial under the law in force in
India made after the 28th day of July, 1924, -

(a)In pursuance of an agreement for arbitration to which the Protocol set

forth in the Second Schedule applies, and
(b) Between persons of whom one is subject to the jurisdiction of some
one of such Powers as the Central Government, being satisfied that
reciprocal provisions have been made, may, by notification in the Official
Gazette, declare to be parties to the Convention set forth in the Third
Schedule, and of whom the other is subject to the jurisdiction of some
other of the Powers aforesaid, and
(c) In one of such territories as the Central Government, being satisfied
that reciprocal provisions have been made, may, by like notification,
declare to be territories, to which the said Convention applies, And for the
purposes of this Chapter an award shall not be deemed to be final if any
proceedings for the purpose of contesting the validity of the award are
pending in the country in which it was made

SEC 54. Power of judicial authority to refer parties to arbitration.

-Notwithstanding anything contained in Part I or in the Code of Civil
Procedure, 1908 (5 of 1908), a judicial authority, on being seized of a
dispute regarding a contract made between persons to whom section 53
applies and including an arbitration agreement,
whether referring to present or future differences, which is valid under
that section and capable of being carried into effect, shall refer the parties
on the application, of either of them or any person claiming through or
under him to the decision of the arbitrators and such reference shall not
prejudice the competence of the judicial authority in case the agreement
or the arbitration cannot proceed or becomes inoperative.
SEC 55. Foreign awards when binding. -Any foreign award which
would be enforceable under this Chapter shall be treated as binding for all
purposes on the persons as between whom it was made, and may
accordingly be relied on by any of those persons by way of defence, set
off or otherwise in any legal proceedings in India and any references in
this Chapter to enforcing a foreign award shall be construed as including
references to relying on an award.

SEC 56. Evidence. –

(1) The party applying for the enforcement of a foreign award shall, at
the time of application, produces before the court-
(a) The original award or a copy thereof duly authenticated in the
manner required by the law of the country in which it was made;
(b) Evidence proving that the award has become final; and
(c) Such evidence as may be necessary to prove that the conditions
mentioned in clauses (a) and (c) of sub-section (1) of section 57 are
satisfied.

(2) Where any document requiring to be produced under sub-section (1)

is in a foreign language, the party seeking to enforce the award shall
produce a translation into English certified as correct by a diplomatic or
consular agent of the country to which that party belongs or certified as
correct in such other manner as may be sufficient according to the law in
force in India.

Explanation. –In this section and all the following sections of this
Chapter, “Court” means the principal Civil Court of original jurisdiction
in a district, and includes the High Court in exercise of its ordinary
original civil jurisdiction, having jurisdiction over the subject-matter of
the award if the same had been the subject-matter of a suit, but does not
include any civil court of a grade inferior to such principal ‘Civil Court,
or any Court of Small Causes.

SEC 57. Conditions for enforcement of foreign awards. –

(1) In order that a foreign award may be enforceable under this Chapter,
it shall be necessary that-
(a) The award has been made in pursuance of a submission to
arbitration, which is valid under the law applicable thereto;
(b) The subject-matter of the award is capable of settlement by
arbitration under the law of India;
(c) The award has been made by the arbitrat tribunal provided for in
the submission to arbitration or constituted in the manner agreed upon by
the parties and in conformity with the law governing the arbitration
procedure;
(d) 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;
(e) The enforcement of the award is not contrary to the public policy
or the law of India.

Explanation. -Without prejudice to the generality of clause (e), 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-

(a) The award has been annulled in the country in which it was made;
(b) 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;
(c) The award does not deal with the differences contemplated by or
falling within the terms of the submission to arbitration or that it contains
decisions on matters beyond the scope of the submission to arbitration:

Provided that if the award has not covered all the differences submitted to
the arbitral tribunal, the court may, if it thinks fit, postpone such
enforcement or grant it subject to such guarantee as the court may decide.

(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.

SEC 58. Enforcement of foreign awards. -

Where the court is satisfied that the foreign award is enforceable under
this Chapter, the award shall be deemed to be a decree of the court.
SEC 59. Appealable orders. –
(1) An appeal shall lie from the order refusing-
(a) To refer the parties to arbitration under section 54; and
(b) To enforce a foreign award under section 57, to the court
authorised by law to hear appeals from such order.

(2) No second appeal shall lie from an order passed in appeal under this
section, but nothing in this section shall affect or take away any right to
appeal to the Supreme Court. .

SEC 60. Saving-

Nothing in this Chapter shall prejudice any right, which any person would
have had of enforcing in India of any award or of availing himself in
India of any award if this Chapter had not been enacted.

Conciliation

SEC 61. Application and scope. -

(1) Save as otherwise provided by any law for the time being in force
and unless the parties have otherwise agreed, this Part shall apply to
conciliation of disputes arising out of legal relationship, whether
contractual or not and to all proceedings relating thereto.

(2) This Part shall not apply where by virtue of any law for the time
being in force certain disputes may not be submitted to conciliation.

SEC 62. Commencement of conciliation proceedings. –

(1) The party initiating conciliation shall send to the other party a written
invitation to conciliate under this Part, briefly identifying the subject of
the dispute.
(2) Conciliation proceedings shall commence when the other party
accepts in writing the invitation to conciliate.
(3) If the other party rejects the invitation, there will be no conciliation
proceedings.
(4) If the party initiating conciliation does not receive a reply within
thirty days from the date on which he sends the invitation, or within such
other period of time as specified in the invitation, he may elect to treat
this as a rejection of the invitation to conciliate and if he so elects, he
shall inform in writing the other party accordingly.
SEC 63. Number of conciliators. –
(1) There shall be one conciliator unless the parties agree that there shall
be two or three conciliators.
(2) Where there is more than one conciliator, they ought, as a general
rule, to act jointly.

SEC 64. Appointment of conciliators. –

(1) Subject to sub-section (2), -
(a) In conciliation proceedings with one conciliator, the parties may
agree on the name of a sole conciliator;
(b) In conciliation proceedings with two conciliators, each party may
appoint one conciliator;
(c) In conciliation proceedings with three conciliators, each party
may appoint one conciliator and the parties may agree on the name of the
third conciliator who shall act as the presiding conciliator.

(2) Parties may enlist the assistance of a suitable institution or person in

connection with the appointment of conciliators, and in particular, -
(a) A party may request such an institution or person to
recommend the names of suitable individuals to act as conciliator; or
(b) The parties may agree that the appointment of one or more
conciliators be made directly by such an institution or person:

Provided that in recommending or appointing individuals to act as

conciliator, the institution or person shall have regard to such
considerations as are likely to secure the appointment of an independent
and impartial conciliator and, with respect to sole or third conciliator,
shall take into account the advisability of appointing conciliators of a
nationality other than the nationalities of the parties.

SEC 65. Submission of statements to conciliator. -

(1) The conciliator, upon his appointment, may request each party to
submit to him a brief written statement describing the general nature of
the dispute and the points at issue. Each party shall send a copy of such
statement to the other party.
(2) The conciliator may request each party to submit to him a further
written statement of his position and the facts and grounds in support
thereof, supplemented by any documents and other evidence that such
party deems appropriate. The party shall send a copy of such statement,
documents and other evidence to the other party.
(3) At any stage of the conciliation proceedings, the conciliator may
request a party to submit to him such additional information, as he deems
appropriate.
Explanation. -In this section and all the following sections of this Part,
the term “conciliator” applies to a sole conciliator, two or three
conciliators as the case may be.

SEC 66. Conciliator not bound by certain enactments. -

The conciliator is not bound by the Code of Civil Procedure, 1908 (5 of
1908) or the Indian Evidence Act, 1872 (1 of 1872).

SEC 67. Role of conciliator. -

(1) The conciliator shall assist the parties in an independent and
impartial manner in their attempt to reach an amicable settlement of their
dispute.
(2) The conciliator shall be guided by principles of objectivity, fairness
and justice, giving consideration to, among other things, the rights and
obligations of the parties, the usages of the trade concerned and the
circumstances surrounding the dispute, including any previous business
practices between the parties.
(3) The conciliator may conduct the conciliation proceedings in such a
manner as he considers appropriate, taking into account the circumstances
of the case, the wishes the parties may express, including any request by a
party that the conciliator hear oral statements, and the need for a speedy
settlement of the dispute.
(4) The conciliator may, at any stage of the conciliation proceedings,
make proposals for a settlement of the dispute. Such proposals need not
be in writing and need not be accompanied by a statement of the reasons
therefor.

SEC 68 Administrative assistance. -

In order to facilitate the conduct of the conciliation proceedings, the
parties, or the conciliator with the consent of the parties, may arrange for
administrative assistance by a suitable institution or person.

SEC 69. Communication between conciliator and parties. –

(1) The conciliator may invite the parties to meet him or may
communicate with them orally or in writing. He may meet or
communicate with the parties together or with each of them separately.

(2) Unless the parties have agreed upon the place where meetings with
the conciliator are to be held, such place shall be determined by the
conciliator, after consultation with the parties, having regard to the
circumstances of the conciliation proceedings.
SEC 70. Disclosure of information. -
When the conciliator receives factual information concerning the dispute
from a party, he shall disclose the substance of that information to the
other party in order that the other party may have the opportunity to
present any explanation, which he considers appropriate:

Provided that when a party gives any information to the conciliator

subject to a specific condition that it be kept confidential, the conciliator
shall not disclose that information to the other party.

SEC 71. Co-operation of parties with conciliator. -

The parties shall in good faith cooperate with the conciliator and, in
particular, shall endeavor to comply with requests by the conciliator to
submit written materials, provide evidence and attend meetings.

SEC 72. Suggestions by parties for settlement of dispute. -Each

party may, on his own initiative or at the invitation of the conciliator,
submit to the conciliator suggestions for the settlement of the dispute.

SEC 73. Settlement agreements, -

(1) When it appears to the conciliator that there exist elements of a
settlement, which may be acceptable to the parties, he shall formulate the
terms of a possible settlement and submit them to the parties for their
observations. After receiving the observations of the parties, the
conciliator may reformulate the terms of a possible settlement in the light
of such observations.

(2) If the parties reach agreement on a settlement of the dispute, they

may draw up and sign a written settlement agreement. If requested by
the parties, the conciliator may draw up, or assist the parties in drawing
up, the settlement agreement.
(3) When the parties sign the settlement agreement, it shall be final and
binding on the parties and persons claiming under them respectively.

(4) The conciliator shall authenticate the settlement agreement and

furnish a copy thereof to each of the parties.

SEC 74. Status and effect of settlement agreement. -

The settlement agreement shall have the same status and effect as if it is
an arbitral award on agreed terms on the substance of the dispute
rendered by an arbitral tribunal under section 30.
SEC 75. Confidentiality. -
Notwithstanding anything contained in any other law for the time being
in force, the conciliator and the parties shall keep confidential all matters
relating to the conciliation proceedings. Confidentiality shall extend
also to the settlement agreement, except where its disclosure is necessary
for purposes of implementation and enforcement.

SEC 76. Termination of conciliation proceedings. -

The conciliation proceedings shall be terminated--
(a) By the signing of the settlement agreement by the parties on the
date of the agreement; or
(b) By a written declaration of the conciliator, after consultation
with the parties, to the effect that further efforts at conciliation are no
longer justified, on the date of the declaration; or
(c) By a written declaration of the parties addressed to the
conciliator to the effect that the conciliation proceedings are terminated,
on the date of the declaration; or
(d) By a written declaration of a party to the other party and the
conciliator, if appointed, to the effect that the conciliation proceedings are
terminated, on the date of the declaration.

SEC 77. Resort to arbitral or judicial proceedings. -

The parties shall not initiate, during the conciliation proceedings, any
arbitral or judicial proceedings in respect of a dispute that is the
subject-matter of the conciliation proceedings except that a
party may initiate arbitral or judicial proceedings where, in his opinion,
such proceedings are necessary for preserving his rights.

SEC 78. Costs. –

(1) Upon termination of the conciliation proceedings, the conciliator
shall fix the costs of the conciliation and give written notice thereof to the
parties.

(2) For the purpose of sub-section (1), “costs” means reasonable costs
relating to-
(a) The fee and expenses of the conciliator and witnesses requested
by the conciliator with the consent of the parties;
(b) Any expert advice requested by the conciliator with the consent
of the parties;
(c) Any assistance provided pursuant to clause (b) of sub-section (2)
of section 64 and section 68;
(d) Any other expenses incurred in connection with the conciliation
proceedings and the settlement agreement.
(3) The costs shall be home equally by the parties unless the settlement
agreement provides for a different apportionment. All other expenses
incurred by a party shall be home by that party.

SEC 79. Deposits. -

(1) The conciliator may direct each party to deposit an equal amount as
an advance for the costs referred to in sub-section (2) of section 78 which
he expects will be incurred.
(2) During the course of the conciliation proceedings, the conciliator may
direct supplementary deposits in an equal amount from each party.
(3) If the required deposits under sub-sections (1) and (2) are not paid in
full by both parties within thirty days, the conciliator may suspend the
proceedings or may make a written declaration of termination of the
proceedings to the parties, effective on the date of that declaration.
(4) Upon termination of the conciliation proceedings, the conciliator shall
render an accounting to the parties of the deposits received and shall
return any unexpended balance to the parties.

SEC 80. Role of conciliator in other proceedings. -

Unless otherwise agreed by the parties, -
(a) The conciliator shall not act as an arbitrator or as a representative or
counsel of a party in any arbitral or judicial proceeding in respect of a
dispute that is the subject of the conciliation proceedings;
(b) The conciliator shall not be presented by the parties as a witness in
any arbitral or judicial proceedings.

SEC 81. Admissibility of evidence in other proceedings. -

The parties shall not rely on or introduce as evidence in arbitral or
judicial proceedings, whether or not such proceedings relate to the
dispute that is the subject of the conciliation proceedings, -
(a) Views expressed or suggestions made by the other party in respect
of a possible settlement of the dispute;
(b) Admissions made by the other party in the course of the
conciliation proceedings;
(c) Proposals made by the conciliator;
(d) The fact that the other party had indicated his willingness to
accept a proposal for settlement made by the conciliator.