FOREIGN AWARD
Foreign Award:
Part II of the Act deals with foreign awards based on New York and Geneva conventions.
An arbitral award is said to be a foreign award if it has a foreign element in it or has one or more of
the following factors:
If the award is made in a foreign country.
If the subject matter of the arbitration agreement involves international transaction that it is
related to international trade, commerce, investment, etc.
Where at least one of the parties to arbitration agreement is a foreign national
If the award is made in accordance with the foreign law.
Meaning:-
A foreign arbitration is an arbitration conducted in a place outside India, and the resulting award is
sought to be enforced as a foreign award.
Ad hoc arbitration is arbitration agreed to and arranged by the parties themselves without recourse
to any institution.
Section 44 Arbitration and Conciliation Act,1996 defines "foreign award" as 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.
purpose of international arbitration
The use of international arbitration has evolved to allow parties from different legal, linguistic and
cultural backgrounds to resolve their disputes in a final and binding manner, typically without the
formalities of the procedural rules of their own legal systems.
Requirements of a Foreign Award
1. The arbitral award must be based on the disagreements between the parties resulting from their
legal connection, whether or not that relationship is contractual.
2. The arbitral award must be made under a written contract.
3. The arbitral award must be made in accordance with a contract to which the Geneva Convention or
New York Convention apply.
4. The prize must be presented in a nation designated by the Central Government as a “convention
country.”
Enforcement of Foreign Award:
In order to enforce a foreign arbitral award, section 47 of the Act mandates that the following
documents to be produced before the appropriate court:
Original award or a duly authenticated copy required by the country where it is made.
Original agreement or duly certified copy.
Evidence necessary to prove the award is a foreign award, wherever applicable.
New York Convention:
The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done in New York,
10 June 1958 (the New York Convention), It having more than 160 nations.
Sections 44 to 52 of the Arbitration and Conciliation (Amendment) Act, 2015 deals with foreign
awards passed under the New York Convention.
The provision upholds the principle of party autonomy by requiring national courts to refer the
parties to arbitration,
It incorporates a system of recognition of foreign arbitral awards in States bound by the Convention
subject to limited exceptions.
The Convention also establishes a minimum legal framework, but it permits national courts to
enforce arbitral awards under higher standards than those included in its provisions.
Two pre-requisites for enforcement of foreign awards under the New York Convention.
These are:
1. The country must be a signatory to the New York Convention.
2. The award shall be made in the territory of another contracting state which is a reciprocating
territory and notified as such by the Central Government.
Geneva Convention:
Sections 53-60 of the Arbitration and Conciliation (Amendment) Act, 2015 contains provisions
relating to foreign awards passed under the Geneva Convention.
The conditions for enforcement of foreign awards under the Geneva Convention are provided
under Section 57 of the Arbitration and Conciliation Act, 1996.
The conditions are-
the award has been made in pursuance of a submission to arbitration which is valid under the law
applicable thereto;
the subject-matter of the award is capable of settlement by arbitration under the law of India.
the award has been made by the arbitral tribunal provided for in the submission to arbitration or
constituted in the manner agreed upon by the parties and with the law governing the arbitration
procedure;
the enforcement of the award is not contrary to the public policy or the law of India.
Convention Award:
Convention awards may be described as that category of foreign awards to which either of the two
New York or Geneva Convention apply.
Under the Arbitration and Conciliation (Amendment) Act, 2015. There are two avenues available for
the enforcement of foreign awards in India,i.e., the New York Convention and the Geneva
Convention.
The New York Convention defines “foreign award” as 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.
As per the Geneva Convention, “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.
Foreign Awards When Binding:
According to section 46 of the Act, “Any foreign award which would be enforceable under Chapter I
of Part II shall be treated as binding for all purposes on the persons as between whom it was made.
It can be relied on the persons by way of defence, set off or otherwise in any legal proceedings in
India.
Article III of the New York Convention enjoins upon each contracting State to recognize arbitral
award as binding and enforce them in accordance with the rules of procedure of the territory
where the award is relied upon.
