India

Part I: what can be enforced?

1. What counts as an arbitral “award” that can be enforced?

Under the Arbitration and Conciliation Act 1996 (the Act), an “arbitral award” is defined broadly in s2(1)(c). It states: “‘Arbitral award’ includes an interim award.”

This definition might seem circular, but it essentially encompasses any decision or determination made by an arbitral tribunal on the merits of the dispute submitted to arbitration.

Section 2(7) states that an award passed under Part I of the Act is a domestic award. Under Section 2(2) of the Act, Part I is applicable only to those arbitrations, the seat of which is in India (to the exception of Sections 9, 27 and 37(1)(a) and 37(2), which is applicable to foreign seated arbitrations too). Hence, by the interpretation of section 2(7) read with Section 2(2), all awards passed in arbitration proceedings where the seat of arbitration is in India are domestic awards.

On the other hand, Foreign Awards have been defined in Section 44 of the Act as awards passed in such arbitrations arising out of contracts or contractual relationships, in pursuance of arbitration agreements to which the New York Convention applies. Section 44(b) is significant here as this section specifies that only such awards which have been passed in territories which the Government of India declares by notification to be a territory to which the New York Convention applies, shall fall within the definition of ‘foreign award’ under Section 44 of the Act. To prerequisite to this declaration is a reciprocal clause which the territory must have with India. As of today, the New York Convention has 24 signatories and 172 parties. Out of these, only 48 states have been recognized by India.

Section 31 of the Act outlines the form and contents of an arbitral award, specifying that it must be in writing and signed by the members of the arbitral tribunal. Additionally, the award must include the reasons upon which it is based unless the parties have agreed that no reasons are to be given or the award is an award on agreed terms under s30.

Furthermore, s36 of the Act deals with the enforcement of arbitral awards. It states that where the time for making an application to set aside the arbitral award under s34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure 1908 (CPC) in the same manner as if it were a decree of the court.

In ONGC Ltd v Saw Pipes Ltd, the Supreme Court of India held that an arbitral award can be set aside only if it falls within the grounds specified under s34 of the Act, which include issues such as incapacity of the parties, procedural irregularities, and conflict with public policy.

In Bharat Aluminium Co Ltd v Kaiser Aluminium Technical Services, Inc, the Supreme Court of India clarified that the public policy ground for setting aside an arbitral award under s34 is narrow and would only apply in cases where the award is contrary to the fundamental policy of Indian law, the interests of justice, or morality.

2. Formal requirements that an award needs to conform with to be enforceable

Under the Act, an arbitral award must meet specific formal requirements to be enforceable:

• The award must be in writing (s31(1)) to ensure a clear record of the decision and its reasons.
• It must be signed by the arbitrator (s31(1)), authenticating the award, In case there is more than one arbitrator, the award may be signed by the majority of all the members.
• Unless otherwise agreed by the parties, the award must state the reasons for the decision (s31(3)), thus ensuring transparency. However, if the award records a settlement between the Parties or if the Parties have agreed that no reason ought to be given, then the award may not specify the reasons.
• The award must state its date and the place of arbitration, deemed to be made at that place (s31(4)).
• Once the award is made, the signed copy shall be delivered to the parties (s 31(5). The Supreme Court in the case of Benarsi Krishna Committee v. Karmyogi Shelters, clarified that delivery of an award to the advocate of the parties does not constitute a proper service under Section 31(5) and that the award must be delivered to the parties.
• The costs must be fixed by the tribunal as per s31A (s31(7)(a)).
• Subject to ss34 and 36, the award is final and binding on the parties (s35).

In ONGC Ltd v Saw Pipes Ltd, the Supreme Court of India emphasised that failure to meet these formal requirements can be grounds for challenging the award under s34.

3. Orders on interim measures: enforceability

a. Domestic awards/Orders

Under the Act, interim measures are enforceable for both domestic and international commercial arbitration awards. Section 2(1)(c) defines an “arbitral award” to include interim awards, making them enforceable under s36 (domestic) and s47 (foreign). For enforcement, the interim award must finally determine the issues it covers (NTPC v Siemens Aktiengesellschaft). On this subject, the Supreme Court, in M/s IFFCO v. M/s Bhadra Products also observed that since the arbitrators are empowered to pass interim awards on any matter with respect to which a final award is to be made, an arbitral tribunal must while passing an interim award ascertain whether several issues should be determined on a piecemeal basis or not, as the same can delay arbitration proceedings, thereby rendering the purpose of arbitration meaningless.

Section 17 allows arbitral tribunals to grant interim orders during proceedings or after an award but before enforcement. These measures can include interim injunctions and property preservation. Once granted, such interim measures are enforceable under the CPC, in the same manner as if it were a Court order, treating the tribunal’s order as a court order enforceable under the CPC. Orders passed under Section 17 can be challenged in appeal under Section 37(2)(b) of the Act.

b. International commercial arbitration awards

Section 17(1) of the Act allows arbitral tribunals to grant interim measures before or during international commercial arbitration proceedings. Pursuant to the 2015 Amendments, Section 9 enables Indian courts to provide interim measures in support of arbitration, even before the proceedings start, to preserve property, secure disputed amounts, or prevent prejudice to the arbitration process.

Interim measures granted in international commercial arbitration are enforceable under s36, treating them as court orders. The Supreme Court of India in Videocon Industries Ltd v Union of India emphasised the enforcement of such interim orders as court orders under s17(2).

4. Emergency awards: enforceability

Under the Act, emergency awards are treated as interim awards, and are enforceable in the same way as interim awards in India. Under the Act, both domestic and international commercial arbitration awards are enforceable in India. The emergency awards can be passed by the emergency arbitrators as per s17(1) of the Act and as per Section 17(2) the same is enforceable under the CPC, in the same manner as if it were a Court order. In Amazon.Com NV Investment Holdings LLC v Future Retail Limited & others, the Supreme Court of India held that emergency awards are interim orders and enforceable by Indian Courts in the manner stated in s17(2).

a. Domestic awards

• Enforcement: s36 states that domestic awards are enforced like a court decree. The award creditor applies to the appropriate court as per the CPC.
• Grounds for refusal: s34 allows refusal only on limited grounds such as incapacity, invalidity of the arbitration agreement, breach of natural justice, and public policy. The Supreme Court of India in Associate Builders v. Delhi Development Authority observed that the arbitral award can be interfered with on limited grounds and further clarified the scope of ‘Public Policy’. The Hon’ble Court relied on its landmark judgment, Renusagar Power Co Ltd v General Electric Co, and laid out four specific sub-categories under public policy (i) fundamental policy of Indian law (ii) interest of India (iii) award against justice or morality, and (iv) patent illegality.

b. International commercial arbitration awards

• Enforcement: s48 allows foreign awards to be enforced like a decree of the Indian court. The award creditor applies to the appropriate court.
• Grounds for refusal: similar to domestic awards, s48 permits refusal on grounds like incapacity, invalidity of the arbitration agreement, breach of natural justice, and public policy. The Supreme Court of India in ONGC Ltd v Saw Pipes Ltd reiterated minimal judicial intervention except in cases of grave error or patent illegality.
• In ONGC Ltd v Saw Pipes Ltd, the Supreme Court of India held that there ought to be minimal judicial intervention except in cases of grave error or patent illegality.
• In Vijay Karia v Prysmian Cavi E Sistemi Srl, it reiterated that the enforcement of the foreign award should be denied only when the enforcement of the award violates the basic notion of morality and justice, any public policy defence should be interpreted narrowly.

Part II: resisting enforcement

5 a. How are awards set aside?

Section 34 of the Act sets out an exhaustive list of grounds on which an award passed in a domestic arbitration or an international commercial arbitration seated in India can be challenged before the appropriate court in India. Bhaven Construction v Sardar Sarovar Narmada Nigam Ltd highlighted that the opening phrase of s34 reads as: “Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).” The court emphasised that the use of the term “only” within the provision served two purposes of (i) making the enactment a complete code; and (ii) laying down the procedure. The grounds may be the following:

• incapacity of a party;
• invalidity of the arbitration agreement;
• absence of proper notice of the appointment of an arbitrator or of arbitral proceedings;
• inability of a party to present their case or a violation of natural justice;
• awards dealing with disputes not falling within the terms of submission to arbitration;
• issues in relation to the composition of the arbitral tribunal or where the procedure adopted is not in accordance with the arbitration agreement or Part I of the Act.

Section 34 underwent amendments in 2015, and the explanation to Section 34(2(b)(ii) has been amended to add two explanations in order to clarify when the arbitral award is in conflict with public policy in India. Further, a new sub-section 2A has also been included. Section 2A provides that a court may set aside an award (other than an award passed in an international commercial arbitration) if the same is vitiated by patent illegality appearing on the face of the award. Sub-sections (5) and (6) have also been inserted. Sub-section (5) requires the applicant to give prior notice to the other party before filing the application, whereas under sub-section (6) the court must dispose of the application under this section expeditiously within a period of 1 year from the date of service of notice under sub-section (5).

The party seeking to set aside an award must file an application to that effect in the court specified by the Act, usually the appropriate High Court or the district court. The court will then examine the grounds presented and may set aside the award if it finds merit in the application. In Sundaram Finance Ltd v NEPC India Ltd, the Supreme Court of India held that a court can set aside an arbitral award if the arbitrator has failed to apply their mind or has acted arbitrarily. However, mere errors of law or fact are not sufficient grounds for setting aside an award.

In National Highway Authority of India (NHAI) v M/s ProgressiveMVR (JV) the Supreme court confirmed that no grounds outside Section 34 could justify setting aside an arbitral award, further underscoring the Act’s intention of minimal judicial intervention.

Very recently, in the case of OPG Power Generation Pvt. Ltd. v. Enexio Power Cooling Solutions India Pvt Ltd. & Anr. the Supreme Court once again reconfirmed the law that under Section 34 the Court does not sit as an appellate court and that interference with the arbitral award can only lie under the limited grounds set out in Section 34 of the Act.

b. Can enforcement be resisted if the respondent has not formally applied to set aside the award?

Under the Act, if an arbitral award has been made and is binding on the parties, enforcement can be challenged only through a formal application under Section 34 of the Act. Under Section 34(3) the Party has to file this application within 3 months from the date of receipt of the award and in case a request has been made under Section 33 then from the date the request has been disposed of. The Court may, if it deems fit, entertain this application beyond the period of 3 months but shall not entertain the same beyond a further period of 30 days.

Section 34 of the Act provides the grounds on which a party may challenge the enforcement of an arbitral award. These grounds include:

• The party lacks capacity to enter into the arbitration agreement.
• The arbitration agreement is invalid.
• There has been lack of proper notice of the appointment of the arbitrator or of the arbitral proceedings.
• The award deals with disputes not contemplated by or not falling within the terms of the submission to arbitration.
• The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties.
• The award conflicts with the public policy of India.

Failure to apply to set aside the award within the specified time frame or on the grounds permitted by the Act may result in the enforcement of the award by the courts.

In Sundaram Finance Ltd v NEPC India Ltd, the Supreme Court of India clarified that the grounds for setting aside an arbitral award under s34 are exhaustive, and no other ground outside s34 can be entertained for setting aside an award.

c. Can non-parties seek annulment?

Under the Act, non-parties generally cannot annul an arbitral award under s34. However, certain exceptions exist:

• Assignment or transfer of rights: a non-party may challenge an award if they have acquired rights or obligations under a contract through assignment or transfer.
• Third-party beneficiaries: contracts that explicitly grant rights or benefits to third-party beneficiaries may allow these beneficiaries to challenge the award.
• Privity of contract: typically, only parties to the arbitration agreement can challenge awards, but in some cases non-signatories closely related to the transaction may have standing.

In Cheran Properties Ltd. v Kasturi and Sons Ltd. the Court held that a non-signatory can be bound by an arbitral award under exceptional circumstances, particularly if it forms a part of a single economic unit or has a role closely connected to the transaction. The Supreme Court in this case upheld that a non-signatory can be subjected to arbitration if its conduct indicates an intention to be part of the arbitration proceedings.

In Vimal Kishor Shah v Jayesh Dinesh Shah and others, the Supreme Court of India reiterated the principle that a non-signatory can be bound by an arbitration agreement if it is found that the conduct of the non-signatory is so intrinsically linked with the agreement that it would be inequitable to allow the non-signatory to escape the arbitration clause.

d. Grounds to seek setting aside

Under the Act, an arbitral award can be set aside under specific circumstances:

• Public policy of India (s34(2)(b)(ii)): an award can be annulled if it conflicts with India’s public policy, including issues like fraud, corruption, or violation of natural justice principles. The Supreme Court of India in the case of Govt. of India v Vedanta Ltd. reinforced the narrow interpretation of public policy, emphasizing that awards should only be set aside if they fundamentality violate the Indian law, interest, or justice principles, ensuring the finality of foreign arbitral awards.
• Procedural impropriety (s34(2)(a)(iii)): awards can be set aside if the arbitral procedure deviated from the parties’ agreement or the Act. In Associate Builders v DDA, the Supreme Court of India ruled that arbitrator misconduct could justify annulment.
• Incompetence of the arbitral tribunal (s34(2)(a)(iv)): if an arbitrator is unable to perform their functions, the award may be annulled. In Hindustan Zinc Ltd v Friends Coal Carbonisation, non-disclosure of relationships by an arbitrator was deemed a valid ground.
• Confidentiality of arbitration proceedings: breach of confidentiality agreements can be grounds for setting aside an award. In Venture Global Engg v Satyam Computer Services Ltd, the Supreme Court of India emphasised strict adherence to confidentiality.

The grounds for annulment are limited, with courts generally reluctant to interfere in arbitration.

e. Timelines to seek setting aside

Section 34(3) of the Act provides that an application for setting aside an arbitral award must be made within three months of the date of receipt of the arbitral award by the applicant or of the date on which a request for correction or interpretation of the award or an additional award under s33 of the Act has been disposed of by the tribunal, if such requests have been made. If the court is satisfied that the applicant was prevented by sufficient cause from making the application within the given period of three months, it may entertain the application within a further period of 30 days but not thereafter.

In Bhimashankar Sahakari Sakkare Karkhane Niyamita v Walchandnagar Industries Ltd, the Supreme Court of India effectively reiterated that even if the extended period for filing a challenge against an arbitral award falls within a designated court vacation, there exists no opportunity to file immediately on the reopening of the court. The said judgment operates as a stark reminder that timelines for filing a challenge to an arbitral award are sacrosanct and even days on which the courts are closed will not be permitted to be excluded in counting the timelines.

A foreign award cannot be set aside by an enforcement court in India. The court can only refuse to recognise or enforce the award in India under grounds specified under s48 of the Act. Accordingly, an award debtor can only file its objections to the enforceability of an award under s48 of the Act once the award holder files for enforcement of the award. Although the Act does not provide a timeline within which the objections are to be filed by the award debtor, the courts typically grant between two and four weeks to file the objections (subject to further extensions granted by the court).

f. Grounds to resist enforcement

Section 34 of the Act lists the grounds for setting aside a domestic arbitral award, whereas s48 lists the exceptions for refusing enforcement of a foreign arbitral award.

Section 34 lays down the grounds for setting aside a domestic arbitral award. They are:

• Either party was under some incapacity.
• The arbitration agreement was invalid under the law applicable.
• Procedural infirmities like the party against whom the award is invoked not being given proper notice of the arbitration proceedings or lacking a fair chance to present their case.
• The award contains decisions falling outside the scope of the submission to arbitration or the terms of the agreement.
• The composition of the arbitral authority was not as per the parties’ agreement or as per the law of the seat.
• The subject matter of the dispute is not arbitrable.
• The award conflicts with India’s public policy.

Under s48 of the Act, the grounds for refusing enforcement of a foreign award are listed. The grounds are the same, except for clause (e), which states that the enforcement may be refused if the award is not yet binding on the parties or has been set aside in a country where or under the law of which it was made.

The Supreme Court of India in Shri Lal Mahal Ltd v Progetto Grano SpA held that a foreign award cannot be refused enforcement based on the patent illegality exception.

In the case of Vijay Karia & Ors v. Prysmian Cavi E Sistemi SRL & Ors; the Supreme Court clarified that the public policy defense should be construed narrowly. Enforcement of foreign arbitral awards may only be denied where the Court is of the opinion that the enforcement would violate the forum state’s most basic notions of morality and justice.

g. Which court to go to for setting aside?

Section 2(1)(e)(i) of the Act stipulates that applications to set aside an arbitral award (other than in international commercial arbitration) must be filed either in a district court (principal civil court of original jurisdiction) or a High Court with ordinary original civil jurisdiction, depending on which court has jurisdiction over the subject matter of the arbitration.

According to Commercial Courts Act 2015 s10, if the principal court of original jurisdiction is a district court, arbitration-related applications or appeals are heard by the commercial court. If the High Court has original pecuniary jurisdiction, such matters are handled by the commercial division of the High Court.

For international commercial arbitrations, applications to set aside awards must be filed in the High Court with ordinary civil jurisdiction over the subject matter or the High Court with appellate jurisdiction over subordinate courts. Under the Commercial Courts Act 2015, these applications are dealt with by the commercial division of the High Court.

Furthermore, once an application under Part I of the Act is filed in a particular court, all subsequent applications, including those to set aside an award under s34, must be filed in the same court.

h. Formal requirements before court can grant setting aside

An application for setting aside an award is typically accompanied by the original copy of the impugned award with some courts holding that filing at least a copy of the impugned award is sine qua non to filing the setting-aside application and the arbitral record, ie, pleadings, evidence, etc, presented to the tribunal. Courts in India have held that if the original award is not filed in court, a certified copy may be filed with an endorsement regarding whether the original award is duly stamped, stating the value of the stamp duty paid and specifying whether the original award is duly registered (Union of India v M/S Gala Constructions). The High Courts have different requirements regarding the number of copies required by the court.

Although courts in India will not usually go beyond the award and the record before the arbitrator in deciding the setting-aside application, in Emkay Global Financial Services Limited v Girdhar Sondhi, the Supreme Court of India clarified that documents that do not form part of the arbitral record, but are relevant to the determination of issues, may be brought to the notice of the court by way of affidavits filed by parties.

i. Do courts grant stay on enforcement as an interim measure?

Yes. If the agreement contains an arbitration clause, then interim measures of protection may be sought by a party under ss9 and 17 of the Act, in respect of any of the following matters:

• preservation, interim custody, or sale of any goods that are the subject matter of the arbitration agreement;
• securement of the amount in dispute;
• detention, preservation, or inspection of any property or thing that is the subject matter of the dispute;
• an interim injunction or the appointment of a receiver;
• another interim measure of protection that the court deems to be just and convenient.

These orders can be enforced in accordance with the CPC. The following are relevant while considering an application for interim relief – existence of a prima facie case, balance of convenience, and whether irreparable harm will be caused to the applicant if interim measures are not allowed.

Interim measures at the post-award stage may be granted either before or after the filing of an application for recognition and enforcement of the award. The reliefs in a post-award application under s9 of the Act are limited to the preservation of the subject matter of the arbitration agreement or securing the amount in dispute; they do not extend to the execution of the award pending the objections against the award (Afcons Infrastructure Ltd v Board of Trustees of Port of Mumbai).

The courts in India have held that a court granting interim measures is not duty-bound to strictly observe the provisions of the CPC but is guided by the principles governing injunctions on the alienation of the amount of the award deposit (Essar House Private Limited v Arcellor Mittal Nippon Steel India Limited).

In other cases, a party’s declining financial position and evidence of mala fide conduct about alienation of assets have also been grounds for granting interim relief ((Felguera) and Mahyco Monsanto Biotech (India) Pvt Ltd v Nuziveedu Seeds Ltd). A party seeking interim measures must demonstrate that there is a real and imminent risk of harm, and the measures sought are necessary to protect its interests.

j. What is the appellate mechanism against the decision of the court of first instance?

The first recourse available to a party against a domestic arbitral award would be to file an application for setting aside the award under s34 of the Act. Thereafter, and as a second recourse, an appeal may lie under s37 of the Act from an order setting aside or refusing to set aside an arbitral award under s34. Konkan Railway Corporation Ltd v Mehul Construction Co clarified that an appeal under s37 lies only against those orders specified under the section, and not against every order passed by the court during arbitral proceedings.

Significantly, no second appeal lies from an order passed in appeal under s37. However, nothing prevents a party from approaching the Supreme Court of India by way of a special leave petition under Article 136 of the Constitution.

Fiza Developers & Inter-trade Pvt Ltd v AMCI (India) Pvt Ltd discusses the scope of s37 and emphasises that an appeal lies only against those orders which finally determine the rights of the parties.

Part III: enforcing foreign awards

6. New York Convention applicability

The New York Convention, formally known as the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958), is an international treaty aimed at facilitating the recognition and enforcement of arbitral awards across different jurisdictions. India is a signatory to the New York Convention, having acceded to it on 10 July 1959.

The New York Convention is given effect in Part II of the Act. Part II deals specifically with the recognition and enforcement of foreign arbitral awards.

Sections 44 to 52 of the Act (which are under Part II of the Act) essentially outline the conditions under which a foreign award is recognised and enforced in accordance with the New York Convention. Section 44 of the Act defines “foreign award” to mean 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 11 October 1960.

7. Timelines for enforcement

The Act does not specify a time limit for applying for recognition and enforcement of a foreign award. However, the Supreme Court of India in Govt of India v Vedanta Limited, placing reliance on Article 137 of the Schedule to the Limitation Act 1963, clarified that an application seeking enforcement and recognition of a foreign award will have to be filed within three years of when the right to apply accrues.

In the recent case of PEC Limited v Austbulk Shipping, the court said that the term “shall” in s47(1) of the Act should be replaced with “may”, indicating a pro-arbitration stance. It reflects that the court has the power to refuse the enforcement under specific circumstances, ensuring that once satisfied, a foreign award is deemed a decree of the domestic court.

8. Which court to go to? Relation with location of assets?

The high court with original jurisdiction over the subject matter of a foreign arbitral award has the authority to enforce it under ss47 and 49 of the Act. Per Commercial Courts Act 2015 s10, applications for recognition and enforcement in international commercial arbitration are handled by the commercial division of the High Court if constituted.

An award holder must file for enforcement of an arbitral award (foreign or domestic) in the court where the award debtor’s assets are located (Executive Engineer v Atlanta Limited; Tata International Ltd v Trisuns Chemical Industry Ltd). If assets are in multiple jurisdictions, execution petitions can be filed in all competent courts simultaneously (Bulk Trading SA v Dalmia Cement (Bharat) Limited).

The enforcement petition should include a list of the debtor’s assets or reasons for believing the assets are within the court’s jurisdiction. If unable to identify the assets, the award holder can request the court to order disclosure of the debtor’s assets, similar to Order XXI r41 of the CPC.

For a foreign award to be enforceable, the applicant must produce: (i) the original or authenticated copy of the award; (ii) the original or certified copy of the arbitration agreement; and (iii) evidence proving the award is foreign. If the documents are in a foreign language, a certified English translation must be provided.

9. Can non-parties resist enforcement?

There are two scenarios, one is when the non-signatory to the agreement is made a party to the arbitral proceeding, and the other is when the award is sought to be enforced against the non-signatories at the enforcement stage.

Under both scenarios, the non-signatories can request non-enforcement or resist enforcement of the award under s48 of the Act:

• When the parties to the agreement were under some incapacity, or the said agreement is invalid under the law of the country where the award was made.
• The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or the arbitral proceedings.
• The award has not yet become binding on the parties or has been set aside by a competent authority of the country by which the law was made.
• The enforcement of the award would be contrary to the public policy of India.
• The award was induced by fraud or corruption.
• The award is in contravention of the fundamental policy of Indian law.
• The award is in conflict with basic notions of morality or justice.

The non-signatory must prove the conditions mentioned in s48 of the Act. If the party fails to prove the same, the court shall proceed to enforce the award under s49 of the Act.

However, in Gemini Bay Transcription Pvt Ltd v Integrated Sales Service Ltd, the Supreme Court of India held that the foreign award is binding on the non-signatories unlike a domestic award, and there is no burden of proof on the award holder to prove that the award is binding on the non-signatory at the enforcement stage. The award holder has to prove that it is a foreign award as per s47 of the Act. The court observed that a non-signatory cannot resist the enforcement of the award on the ground that it is not a signatory to the award, since it does not fall under any of the grounds under s48 of the Act.

10. Compelling disclosure of local assets? How to identify assets available for enforcement?

Since an arbitral award is enforced as a court decree, the CPC applies during enforcement. Under CPC Order XXI r41(2), if a money decree remains unpaid for 30 days, the court may order the judgment debtor’s officers to disclose assets via an affidavit. The decree holder must apply for this in execution proceedings, after which the court may issue prohibitory orders. Prior court authorisation is required before attaching the judgment debtor’s assets, and attachment proceedings are not ex parte unless the debtor fails to appear after proper service.

Section 60 of the CPC allows attachment of all saleable property, movable or immovable, including land, buildings, money, negotiable instruments, securities, debts, or shares. Assets may belong to or be controlled by the judgment debtor, even if held in another’s name for their benefit.

The proviso to s60 exempts certain properties from attachment, such as tools and implements needed for livelihood, the right to sue for damages, rights of personal service, life insurance money, and legally exempt allowances.

11. Are third-party funded awards enforceable?

A third party may be bound by an arbitral award only if it has been compelled to arbitrate and is a party to the arbitration proceedings. An award cannot be enforced against a third-party funder, who is neither a signatory to the arbitration agreement nor a party to the arbitral award, merely because it funded a party to the arbitration.

In the recent case of Tomorrow Sales Agency (P) Ltd v SBS Holdings Inc, a Division Bench of the Delhi High Court refused to hold a third-party funder liable for an adverse award. The court ruled that a third-party funder which was not a party to an arbitration agreement, or the arbitral proceedings, or a party to the resultant arbitral award, could not be “mulcted with liability, which they have neither undertaken nor are aware of”. The court rejected this argument and held that “third party funding is essential to ensure access to justice”. It held that in the absence of third-party funding, a person without necessary means would be unable to pursue legitimate claims. However, the court emphasised that it is important to ensure that third-party funding is transparent and not exploitative.

12. What interim reliefs are available pending enforcement of awards? Which of those reliefs are granted ex parte?

Sections 9 and 17 of the Act confer wide-ranging powers on the court to order interim measures of protection which may be necessary for preserving the assets from being frittered away during the pendency of arbitral proceedings in respect of any of the following matters:

• preservation, interim custody, or sale of any goods that are the subject matter of the arbitration agreement;
• securement of the amount in dispute;
• detention, preservation, or inspection of any property or thing that is the subject matter of the dispute;
• an interim injunction or the appointment of a receiver;
• another interim measure of protection that the court deems to be just and convenient.

The following are relevant while considering an application for interim relief – existence of a prima facie case, balance of convenience, and whether irreparable harm will be caused to the applicant if interim measures are not allowed.

In NN Ojha v Prem Mehra, the Supreme Court of India held that the general rules which govern the grant of interim injunctions are attracted while dealing with an application under s9 of the Act. It is a well-recognised principle that when power is conferred under a special statute on an ordinary court of the land, without laying down any special condition for exercise of that power, the general rules of procedure of that court would apply.

In certain situations it may be necessary for the court to grant an interim measure ex parte, prior to the issuance of notice. However, it must be followed by an inter partes order in compliance with the requirement of due process.

13. Formal requirements for enforcement application: what documents need to be filed in court?

An application to enforce a foreign award is admissible under s47 of the Act if it includes: (i) the original or authenticated copy of the award; (ii) the original or certified copy of the arbitration agreement; and (iii) evidence proving the award is foreign. If these documents are in a foreign language, an English translation certified as correct by a diplomatic or consular agent of the country to which that party belongs or certified as correct, must be provided .

In Hugo Neu Corporation v Lloyds Steel Industries, the court allowed flexibility with these requirements, ruling that the non-production of documents at the initial stage should not dismiss the application. Instead, the party may submit the necessary evidence during proceedings to aid the court’s decision. The court emphasised a pragmatic approach over excessive formalism in enforcing foreign awards.

14. Enforcing awards that have been annulled/set aside at other courts. Enforcing when an annulment application is pending at a foreign court

Under s48(1)(e) of the Act, a foreign award may be refused enforcement if it has been set aside or suspended by the competent authority in the country where it was made. The enforcement court does not review or overturn the findings of the seat court; instead, it independently determines the award’s enforceability based on s48. The enforcement court can defer its decision until the outcome of any setting-aside or suspension proceedings in the seat court (Union of India v Vedanta Ltd).

15. Once application for enforcement is allowed, how does the actual enforcement against assets work? What are the remedies available for tracing assets during enforcement proceedings including for assets disposed of by fraud?

Once an award is recognised as enforceable under s49 of the Act, it is treated as a court decree and can be executed as such under the CPC. Enforcement proceedings are not automatically stayed; the court may grant a stay at its discretion if a setting-aside application has been filed, and it may require security from the opposing party. Only parties to the award can object to its enforcement; third parties cannot. Objections can be raised under s48 only on specific grounds: fraud or corruption; violation of fundamental Indian law principles; or conflict with basic notions of morality or justice. Section 48(2) clarifies that the court does not review the merits of the dispute (Union of India v Vedanta Ltd).

16. What is the procedure for repatriation of sums awarded after obtaining an order for enforcement?

According to s49 of the Act, a foreign award which is enforceable under s48 of the Act would be deemed to be a decree of that court for the limited purpose of enforcement. But payments involving remitting foreign currency require compliance with the Foreign Exchange Management Act 1999 (FEMA) and the approval of the Reserve Bank of India (RBI) (GPE (India) Limited v Twarit Consultancy Services Private Limited (note: this case is pending consideration before the Supreme Court of India)).

17. Do courts grant orders for security for costs?

Under the Act s48, a court may order the award debtor to give suitable security. While considering directing an award debtor to post security, the courts must satisfy themselves that the deposit of security by the award debtor is essential and adequate to safeguard the interests of the award holder (Steel Authority of India Limited v AMCI PTY Limited). Factors such as the financial condition of the award debtor and the likelihood of the award debtor disposing of assets prior to payment of the award may be relevant considerations in this regard (CV Rao v Strategic Port Investment).

The courts may direct the award debtor either to deposit a sum equivalent to the sum awarded to the award holder in court, or to furnish a bank guarantee of an equivalent amount and keep the same alive until the execution proceedings are pending before the court.

18. Exchange control regulations: do they affect payments to foreign award holders?

Exchange control regulations impact payments to foreign award holders under the Act. While s48 allows enforcement of foreign awards in India, actual payments involve remitting foreign currency, which must comply with the FEMA. The RBI regulates these transactions, and prior approval may be needed for remittances. This was highlighted in IDBI Trusteeship Services Limited v Hubtown Limited, where it was noted that repatriation of excess funds might require RBI permission.

But to make things easier for the foreign parties, it was observed by the Supreme Court of India in Vijay Karia v Prysmian Cavi E Sistemi SRL that when a foreign party has to purchase shares from an Indian party at discounted value, violating the Foreign Exchange Management (Non-debt Instruments) Rules 2019, then it would not make the award unenforceable.

The Supreme Court of India further held in Vijay Karia v Prysmian Cavi E Sistemi SRL: “If a particular act violates any provision of FEMA or the Rules framed thereunder, permission of Reserve Bank of India may be obtained post facto if such violation can be condoned. Neither the award, nor the agreement being enforced by the award, can, therefore, be held to be of no effect in law. This being the case, a rectifiable breach under FEMA can never be held to be a violation of the fundamental policy of Indian law.”

19. Enforcing awards from non-New York Convention places

India ratified the Geneva Convention on 28 July 1924, and enforcement of foreign awards is covered in Chapter II, Part II of the Act, spanning ss53–60.

• Section 53: defines a “foreign award” as one made under an arbitral agreement covered by the Geneva Protocol on Arbitration Clauses 1923 and to which the Geneva Convention applies.
• Section 55: allows enforcement of foreign awards in India under Part II.
• Section 56: requires the original award or an authenticated copy and the original arbitration agreement or a certified copy to be presented for enforcement.
• Section 57: lists grounds for refusing enforcement, including issues with the arbitration agreement, notice, scope of the award, or if the award has been set aside or suspended.
• Section 58: states that once conditions are met, a foreign award is enforced as a court decree.

When a party receives an award from a country that is not a signatory to either the New York Convention or the Geneva Convention, in that case CPC s13 would apply. The award will be recognised and enforced as a foreign judgment. A foreign judgment can be executed under CPC s44A in the case of reciprocating territories. If the judgment is not from a reciprocating territory, then it can be enforced by instituting a civil suit on the judgment.

20. Enforcing against sovereigns

There are no specific rules governing recognition and enforcement of arbitral awards against sovereign states. Although CPC s86, which governs the issue of foreign state immunity, contemplates prior consent of the central government before instituting a suit in any court of law against a foreign state, such enforcement proceedings are not barred.

In relation to the execution of an arbitral award, the courts have given the word “suit” a narrow interpretation and have held that passing a “judgment and decree on an arbitration award” does not commence with a plaint or a petition in the nature of a plaint (Nawab Usmanali Khan v Sagarmal). Therefore, the execution proceedings in respect of an arbitral award cannot be regarded as a suit for the purposes of CPC s86. In Ethiopian Airlines v Ganesh Narain Saboo, the Supreme Court of India held that sovereign immunity to a foreign state cannot apply to commercial transactions and that the contracting party should be held liable for its contractual and commercial activities and obligations.

21. Appellate mechanism available?

An appeal may lie under the Act s37 from an order setting aside or refusing to set aside an arbitral award under s34. Significantly, no second appeal lies from an order passed in appeal under s37. However, nothing prevents a party from approaching the Supreme Court of India by way of a special leave petition under Article 136 of the Constitution of India.

Under the Act s50, an appeal lies against a decision refusing to recognise or enforce a foreign award to the High Court concerned. No second appeal lies from an order passed under s50. The aforementioned provisions do not take away the right of the parties to prefer a special leave petition to the Supreme Court of India under Article 136 of the Constitution, and the same would be maintainable.

Part IV: enforcing domestic awards

22. Timelines for enforcement

Under s36(1) of the Act, domestic awards are enforced as court decrees under the CPC after the period for setting aside the award under s34 expires. Filing an application to set aside does not automatically stay enforcement unless the court specifically grants a stay under s36(3).

23. Which court to go to? Relation with location of assets?

• For domestic awards not involving international commercial arbitration, the principal civil court or High Court with ordinary civil jurisdiction handles enforcement (ss36 and 2(1)(e)(i) of the Act).
• For domestic awards from international commercial arbitration, the High Court’s commercial division (if established) or the commercial court in a district handles enforcement (ss36 and 2(1)(e)(ii) of the Act; Commercial Courts Act 2015 s10).

24. Compelling disclosure of local assets? How to identify assets available for enforcement?

Filing for enforcement

• The application must be filed in the court where the award debtor’s assets are located (Wireless Developers Inc v India Games Limited). If assets are spread across multiple jurisdictions, multiple petitions may be filed (Cholamandalam Investment and Finance Co Ltd v CEC Ltd and another).
• The award holder may request asset disclosure if unable to identify assets, akin to CPC Order XXI r41.

Attachment of assets

• Under the CPC, the court may order asset disclosure if a money decree is not fulfilled within 30 days. Attachment of assets requires court authorisation and is not ex parte unless the debtor fails to appear (Order XXI r41(2)).
• CPC s60: saleable properties, including movable and immovable assets, can be attached. However, certain properties are exempt, such as tools for livelihood, rights to sue for damages, and exempted insurance payouts.

25. Are third-party funded awards enforceable?

A third party can only be bound by an arbitral award if it is a party to the arbitration proceedings. In Tomorrow Sales Agency (P) Ltd v SBS Holdings Inc, the Delhi High Court ruled that a third-party funder, not involved in the arbitration agreement or proceedings, cannot be held liable for the award. The court recognised the importance of third-party funding for access to justice but emphasised the need for transparency and fairness in such funding arrangements.

26. What interim reliefs are available pending enforcement of awards? Which of those reliefs are granted ex parte?

Sections 9 and 17 of the Act empower courts to order various interim measures to protect assets during arbitration. These measures include:

• preservation, custody, or sale of goods subject to arbitration;
• securing the disputed amount;
• detention, preservation, or inspection of disputed property;
• interim injunctions or appointment of a receiver;
• other measures deemed just and convenient.

When considering interim relief, courts evaluate the existence of a prima facie case, balance of convenience, and potential irreparable harm. In NN Ojha v Prem Mehra, the Supreme Court of India confirmed that general rules for granting interim injunctions apply under s9. Interim measures may be granted ex parte but must be followed by an inter partes order to ensure due process.

27. Formal requirements for enforcement application: what documents need to be filed in court?

As far as a domestic award is concerned, the original copy of the award must be filed in court. Indian courts have held that in the case of a domestic award, if the original award is not filed in court, a certified copy may be filed with an endorsement regarding whether the original award is duly stamped, stating the value of the stamp duty paid, and specifying whether the original award is duly registered (Union of India v M/S Gala Constructions).

28. Filing for enforcement when application for annulment is pending

The procedure to enforce a domestic award under s36 of the Act is as follows:

• Filing: after the time to annul the award expires, the award creditor files for enforcement in the competent court, including:

• key facts and tribunal determinations

• specific relief granted

• original or authenticated copy of the award, adequately stamped.

• No automatic stay: enforcement is not automatically stayed by filing for annulment unless the court orders it.
• Time limits: the enforcement application must be filed within 12 years of the award date, or within three years for a mandatory injunction. Indian law does not specify a time limit for completing the enforcement proceedings.

29. Once application for enforcement is allowed, how does the actual enforcement against assets work? What are the remedies available for tracing assets during enforcement proceedings including for assets disposed of by fraud?

Once an application for enforcement is allowed under s36 of the Act, the award can be enforced as a court decree after the time for setting aside the award under s34 has expired. Filing to set aside the award does not automatically stay enforcement unless the court orders a stay under s36(3).

The 2021 amendment to s36 mandates an unconditional stay if the court finds a prima facie case of fraud or corruption related to the arbitration agreement or award.

Remedies against an award

• Section 34: file an application to set aside the award.
• Section 37: appeal an order setting aside or refusing to set aside the award (no second appeal allowed, but a special leave petition to the Supreme Court of India is possible).

A court may set aside an award if it:

• involves non-arbitrable subject matter
• conflicts with public policy in India, including fraud, corruption, fundamental policy contravention, or basic notions of morality or justice. Section 34(2) clarifies that this does not entail a review on the merits of the dispute.

30. Do courts grant orders for security for costs?

Section 31A of the Act allows courts or arbitral tribunals to order security for costs, although for domestic arbitration awards, this power usually rests with the courts under different provisions.

Section 31A(2) suggests that ordering payment of costs is discretionary for the court or tribunal, which conflicts with the intent of the new cost regime as noted by the Law Commission.

In Larsen and Toubro Limited Scomi Engineering BHD v Mumbai Metropolitan Region Development Authority, the Supreme Court of India dismissed a petition for constituting a tribunal, without addressing costs, on the basis that it was not an international commercial arbitration. Internationally, it is common practice for tribunals and courts to award reasonable costs to the winning party.

31. Appellate mechanism available?

Once an award is set aside by Indian courts, it is no longer enforceable. A party can first file an application to set aside a domestic arbitral award under s34 of the Act. An appeal can then be made under s37 against an order setting aside or refusing to set aside the award. No second appeal is allowed under s37, but a party can approach the Supreme Court of India via a special leave petition under Article 136 of the Constitution.