In international commerce there’s always the issue of disputes arising in international business contracts as well as business deals. To avoid such issues parties usually employ arbitration to settle the disputes. When arbitration is carried out in nations other than India the arbitration awards are regarded as foreign award. Recognition and acceptance by India are crucial because it provides a clear international trade and investment security, as well as legal certainty for companies operating in various countries.
What exactly is Foreign Award?
A foreign award is a ruling made by an arbitral tribunal during the course of a procedure conducted outside of India, India. In Section 44, the Arbitration and Conciliation Act, 1996 defines. To qualify as an international Award the Award must be based on the context of business, be granted to Arbitrators (not court officials) and be financed by a country which is a signatory of the New York Convention, 1958 or has a bilateral arrangement with India.
Fundamental elements of an Foreign Award
The most important feature aspects, that distinguish foreign awards are:
- As a rule, arbitrators observe it. It is the decision of an arbitral tribunals and not of a court.
- Made in other countries than India. The place of arbitration should be in a foreign country.
- Commercial Basis Commercial Relationships have resulted in disputes such in the form of contracts, investments or trade agreement.
- Reciprocity Principle-Reciprocity in the New York Convention/Reciprocity in the Geneva Convention to ensure enforceability in India is necessary.
Indian Enforcement
The procedure of India in relation to execution of international judgments is governed by Section II of the Arbitration and Conciliation Act 1996. The principals outlined in the structure are:
- Recognizing Civil Societies are of the opinion that a foreign award is binding for parties when it is acknowledged under section 46.
- Execution pursuant to the terms of an Decree – A foreign judgment that is legally binding can be executed pursuant to Section 49, just like a decree issued by the Indian court.
- A few grounds for refusal are the grounds which enforcement can be denied as stated in st.48.
Foreign Awards in India
The legal structure that governs foreign prizes is crucial in many ways:
- Facilitate trade and Investment Businesses can be assured of trust in cross-border contracts.
- International Alignment – India is in compliance with international conventions on arbitration in the New York Convention.
- Effective Dispute Settlement – Avoid the lengthy process of court litigation with the application direct of arbitral judgements.
- Investor Confidence – Positively affects how India is situated to be arbitration-friendly.
Foreign Awards Vs Domestic Market
| Aspect | Foreign Award | Domestic Award |
| Arbitration Centre | Outside India | Within India |
| The law that governs Law | Part II, Act of 1996 | Part I, Act of 1996 |
| Enforcement Requirements | Reciprocity and Conventions | Directly enforced directly enforceable India |
FAQs
Q1. What is the effect of making be the case for every Award that is issued abroad be that is enforceable in India an arbitral decision.
Ans: No. Only awards issued by nations that have reciprocal arrangements can be enforced in India.
Q2. Can foreign prizes be assessed as subject to evaluation of their merits by India?
No. The courts only look into a small amount of the reasons under Section 48. They cannot reconsider the merits of the case.
Q3. Does it matter about awards from abroad that are given to businesses?
Analyses: They are sources of legal certainty and reduce the cost of litigation and make investments across borders less risky.
Q4. What if a foreign judgment is like an Indian court ruling India?
Answer:Once it becomes capable of being executed, it may be treated as a decision of a judge regarding section 49, and consequently can be executed directly as a local judgement.
