Indian Courts continue with the pro-enforcement approach

INTRODUCTION

1. On June 18, 2021, the Delhi High Court, in proceedings seeking enforcement of arbitral awards against foreign states, has reiterated the principle of restrictive immunity and upheld the basic tenets of International Commercial Arbitration – flexibility, stability, efficiency, and its legally binding nature. The Court held that prior consent of the Central Government under Section 86 of the Code of Civil Procedure, 1908 (“Code”), is not required for enforcement of arbitral awards against a foreign state. Importantly, it also held that foreign state cannot claim sovereign immunity for the purpose of stalling enforcement of an arbitral award rendered against it, and which arises out of a commercial transaction.


Continue Reading Indian Courts continue with the pro-enforcement approach: Delhi HC reiterates principle of restrictive immunity in enforcement of arbitral awards against foreign states

Supreme court reiterates that courts DO not sit in appeal over an award passed by an arbitrator

INTRODUCTION:

Recently, in NTPC v. M/s Deconar Services Pvt. Ltd.[1], a three judge bench of the Supreme Court has, in line with the settled principle of minimum interference in arbitral awards, inter alia reiterated that in order to succeed in a challenge against an arbitral award, the party challenging the award must show that the arbitrator’s award suffered from perversity; or an error of law; or that the arbitrator had otherwise misconducted himself. The Court highlighted that merely showing that there is another reasonable interpretation or possible view on the basis of the material on record is insufficient to allow interference by the Court.
Continue Reading Supreme Court Reiterates that Courts Do Not Sit in Appeal over an Award passed by an Arbitrator

Anti-Arbitration Injunctions - Judicial trends and finding the middle path

An Anti-Arbitration Injunction (“AAI”) is an injunction granted by courts to restrain parties or an arbitral tribunal from either commencing or continuing with arbitration proceedings.[1]  An AAI is generally sought before an arbitration commences or in the course of the arbitration hearing or after the conclusion of substantive hearing but before the

The Final Word on the Limitation Period for Enforcement of Foreign Awards

The Supreme Court has, in its recent judgment of Government of India v. Vedanta Limited & Ors.[1], settled the law relating to limitation for filing petitions for enforcement and execution of foreign awards in India. The Court held that petitions seeking enforcement/execution of foreign awards are required to be filed within three years from the date when the right to apply accrues and in the event there is any delay in filing such petitions, the same can be condoned under Section 5 of the Limitation Act, 1963 (“Limitation Act”).
Continue Reading The Final Word on the Limitation Period for Enforcement of Foreign Awards

Section 34 of the Arbitration and Conciliation Act, 1996 (Act) sets out the grounds on which arbitral awards passed in domestic arbitrations and international commercial arbitrations seated in India can be set aside.  As regards foreign awards (i.e. arbitral awards passed in foreign seated arbitrations), whilst the same cannot be challenged in India, the enforcement of the same in India can be validly objected to by the award debtor on grounds that are set out in Section 48 of the Act. The grounds for setting aside arbitral awards passed in domestic arbitrations and international commercial arbitrations seated in India under Section 34 of the Act and the grounds for refusing enforcement of foreign awards in India under Section 48 of the Act are substantially identical. One such ground is if the arbitral award is found to be contrary to the “public policy of India”.


Continue Reading Supreme Court’s judgment in Vijay Karia v. Prysmian Cavi e Sistemi S.r.l.: Impact on challenges to awards passed in International Commercial Arbitrations conducted in India

Another One Bites the Dust – domestic award set aside as being perverse

In what one hopes is not a bull run, one more arbitral award has been set aside by the Supreme Court. In SEAMEC v. Oil India Ltd., a domestic award was set aside on the basis that the contractual interpretation by the Arbitral Tribunal was perverse and completely defeated the explicit wordings and purpose of the contract.

In our last blog ‘Enforcement of Foreign Awards in India – Have the brakes been applied?’, we had discussed the Supreme Court judgment in NAFED v. Alimenta S.A.[1] In that case, the Supreme Court refused to enforce a foreign award on the basis that the transaction contemplated (export of HPS groundnuts) would have violated Indian law and was therefore contrary to the public policy of India. We had noted that in the face of a plethora of judicial decisions, the Apex Court had waded into an examination of the merits of the case and the terms of the relevant contract, something which Indian courts have repeatedly held are purely within the purview of the arbitrator’s power.
Continue Reading Another One Bites the Dust – Domestic Award Set Aside as Being Perverse

Supreme Court denounces speculative litigation seeking to resist enforcement of foreign awards

Introduction

Over the years, Indian Courts have increasingly limited their interference with arbitral awards. This approach of non-interference is more so when it comes to enforcement of foreign awards under Section 48 of the Arbitration and Conciliation Act, 1996 (“Act”) as has been reaffirmed in a recent judgment of the Supreme Court in Vijay Karia (“Appellants”) and Ors. v. Prysmain Cavi E Sistemi SRL & Ors[1] (“Respondents”).

In this case, the Supreme Court had occasion to consider an appeal against the order of a single judge of the Bombay High Court, allowing enforcement of a London seated foreign award (“Foreign Award’). In doing so, the Supreme Court dismissed the appeal and came down heavily on the Appellants for engaging in speculative litigation and attempting to invoke the limited powers of the Supreme Court under Article 136[2] only to resist enforcement of the Foreign Award.
Continue Reading Supreme Court denounces speculative litigation seeking to resist enforcement of foreign awards

Conditional or unconditional stay, that is the question – The fate of arbitral awards in India, pending challenge

Background

Ever since the enactment of the Arbitration and Conciliation Act, 1996 (the “Arbitration Act”), arbitral awards have been statutorily granted the same status as a decree of a civil court by way of a deeming fiction under Section 36 of the Arbitration Act. Up until the amendment of the Arbitration Act in 2015, the filing of an application challenging an arbitral award had the effect of an automatic stay on the enforcement of the award. The Arbitration and Conciliation (Amendment) Act, 2015 (the “2015 Amendment Act”) changed this, by mandating a separate application to be filed seeking stay of the award, which may (or may not) be granted by the court, subject to such conditions as it may deem fit.
Continue Reading Conditional or Unconditional Stay, That is the Question – The Fate of Arbitral Awards in India, Pending Challenge