Date: 19th Sept, 2020
by Harsh Vasu Gupta, UILS, Panjab University
"Foreign Award" is defined under Section 44 of the Arbitration and Conciliation Act, 1996 as an arbitral award on differences between persons that generally arise out of legal relationships, either contractual or not, and are considered as commercial under the law that is in force in India, that is made on or after the 11th day of October, 1960 in pursuance of an agreement in writing for arbitration to which the Convention i.e. New York Convention set forth in the First Schedule.
PERIOD OF LIMITATION
• The Supreme Court in its recent judgement of Government of India v. Vedanta Limited SLP (Civil) No.7172 of 2020) has held that period of limitation to file a petition for the execution of a foreign award that has been provided under Sections 47 and 49 of Arbitration and Conciliation Act, 1996 would be governed by Article 137 of the Limitation Act, 1963 which gives for a period of three years from when the right to apply accrues.
• Further, the bench comprising Justice Abdul Nazeer, Justice Indu Malhotra, Justice Aniruddha Bose made an observation that an application may be filed by a party under Section 5 to condone the delay in filing the petition for enforcing foreign awards.
• The bar contained excludes any application that is filed under Order XXI, Code of Civil Procedure i.e. Execution of order and decrees would not apply to a substantive petition filed under the Arbitration and Conciliation Act, 1996.
• A foreign award is not considered as a decree by itself, which is executable under Section 49 of the Act. The enforcement of the foreign award happens only after the court is completely satisfied that the foreign award is enforceable under Chapter 1 in Part II of The Arbitration and Conciliation Act, 1996.
• After the stages of Sections 47 and 48 are completed, the award becomes enforceable as a deemed decree, as provided by Section 49. The term "that court" is meant to refer to the Indian court which has adjudicated on the petition filed under Section 47, and the application under Section 48.
• Also, the Court deliberated on the issue and very clearly held that foreign award was not against the public policy as it was not contrary to any fundamental policy of Indian law or any interests of India as a nation.
The case was decided in favour of the respondents as the petition for enforcement was well within three months from the date when the right to apply accrued. Further, the foreign award was held not to be against the public policy as there was no proof of it being against the public policy.