ITL Module 3
ITL Module 3
ITL Module 3
There have been amendments in the Arbitration and Conciliation Act. Till 1996, there were three
statutes on arbitration in India i.e., the Arbitration (Protocol and Convention) Act, 1937, the Indian
Arbitration Act, 1940 and the Foreign Awards (Recognition and Enforcement) Act, 1961. The
Arbitration Act, 1940 dealt only with arbitration that took place in India. There arose a need for
reforming the Arbitration Act, 1940 and amend the law relating to domestic arbitration,
international commercial arbitration and enforcement of foreign arbitral awards as also to define
the law relating to conciliation and for matters connected therewith or incidental thereto 1 and thus
the Arbitration and Conciliation Act of 1996 came into place. The Arbitration and Conciliation
Act, 1996 is a long leap in the direction of alternate dispute resolution systems. It is based on
UNCITRAL (United Nations Commission on International Trade Law) Model.
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The Arbitration and Conciliation Act of 1996 has divided itself into two parts. The First part deals
with Arbitration that is conducted in India and its enforcement. The Second part provides for
arbitration conducted in a Foreign Country and enforcement of such foreign awards.
The resolution of disputes through Arbitration is the most expeditious, cheap and flexible means
of dispute resolution. Parties prefer this Statute for the resolution of their disputes for the reason
that they can decide as to whether to refer their dispute to a specific arbitrator or a panel of
arbitrators with a developed expertise in the subject matter in dispute; control on the timetable as
opposed to leaving this to the court administrators; confidentiality; etc.
To this extent arbitration is the only expandable resource available to the traditional court system.
It can and does have a streamlining effect on the flow of litigation generally. During last few
months, the Indian judiciary has made considerable and much required action in establishing India
as an (international) arbitration-friendly judicial system.
The courts in India first considered the applicability of Part I of the act to arbitration taking place
outside India in Bhatia International v Bulk Trading. The Supreme Court held that Part I would
apply to all arbitrations and to all proceedings relating thereto, where such arbitration is held in
India. For international commercial arbitration, it was held that Part I would still apply unless the
parties by agreement, whether express or implied, had excluded all or any of the provisions
included therein.
The Supreme Court subsequently reiterated its decision in Bhatia International in Venture Global
Engineering v Satyam Computers Services. This case dealt with an arbitration award made in
England through an arbitral process conducted by the London Court of International Arbitration.
The Supreme Court held that Part I would apply to such an arbitral award. Consequently, the courts
in India would have jurisdiction under both Section 9 and Section 34 of the act. Hence, an Indian
court could entertain a challenge to the validity of such an arbitral award. Since the judgments
in Bhatia International and Venture Global, the Indian courts have had to apply the rationale
detailed therein in various other cases. However, it increasingly became accepted that the judgment
in Bhatia International was interventionist in nature and not aligned with the spirit of party
autonomy that is core to the arbitral process.
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In September 2012 in Bharat Aluminium Company (BALCO) v Kaiser Aluminium Technical
Services Inc. the Supreme Court reconsidered its earlier controversial ruling in Bhatia
International concerning applicability of Part I to arbitrations that are held outside India. The court
held that the rationale laid down in Bhatia International, and followed in Venture Global, was not
in line with the act. Accordingly, it overruled these earlier judgments and held that Part I would
not apply to arbitrations held outside India.
The Supreme Court stated that Part I applies to only those arbitrations that are held within India –
the crucial test for determining whether Part I is applicable is whether the seat of arbitration is in
India. Accordingly, it was held that Indian courts will have no jurisdiction to make Part I of the act
applicable to an arbitral award made outside India. The Supreme Court rejected the argument that
the courts of the country that is the seat of arbitration and those of the country whose law is chosen
by the parties will have concurrent jurisdiction over any court proceedings in relation to such
arbitral process. It was held that the courts of only the country in which the seat of arbitration is
located have jurisdiction to entertain any matter relating to the arbitration. Only in the absence of
a choice of seat of arbitration will the country whose law is chosen by the parties have jurisdiction
to entertain arbitration proceedings.
It was also clarified that since Part I of the act does not apply to arbitrations held outside India,
provisions such as those for interim relief under Section 9 would also not apply to arbitrations held
outside India. Consequently, if the seat of arbitration is located outside India, the parties would not
be free to institute civil suits in India for obtaining interim relief. The argument that in such a
scenario the parties would be left without a remedy for interim measures was rejected by the
Supreme Court, as the parties were free to seek appropriate remedies in their chosen jurisdiction.
BALCO the Supreme Court clarified that the decision would apply only prospectively to arbitration
agreements – all proceedings arising from arbitration agreements dated before 6 September 2012
would therefore be subject to the law as it stood before the judgment. However, a recent judgment
of the Bombay High Court in Konkola Copper Mines v Stewarts & Lloyds of India, while
discussing the prospective application of the rationale in BALCO, observed that the Supreme Court
had made observations on various aspects of arbitration law in India. Accordingly, it would not be
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proper to hold that the reasons contained in the Supreme Court judgment would only operate
prospectively. The Bombay High Court further observed that the Supreme Court judgment was
declaratory with regard to various established propositions of law. Even if there were judgments
before BALCO that had held that the place of arbitration would not be relevant for determining the
jurisdiction of a court, the same did not lay down the correct position of law and hence could not
be relied on. The Bombay High Court judgment is significant, since it makes it clear that the
reasoning adopted by the Supreme Court in BALCO would not apply only prospectively, but would
also apply to disputes arising from arbitration agreements entered into before September 6, 2012.
Lal Mahal decision: In addition to restricting the scope of judicial interference in arbitrations
awards passed outside India, the Indian courts have also ensured that even at the enforcement stage
of such foreign awards in India, the grounds for setting aside an award are fairly limited. A recent
Supreme Court judgment in Shri Lal Mahal Ltd v Progetto Granpo Spa overruled an earlier
judgment in Phulchand Exports Limited v Patriot to hold that the expression ‘public policy of
India’, when used in the context of Section 48(2)(b) of the act (which sets out the grounds on which
the enforcement of foreign awards may be refused), cannot be given a wider meaning to include
patent illegality in an arbitral award, as is done in context of the same expression used in Section
34 of the act relating to enforcement of domestic awards. Therefore, the scope for challenging a
foreign award with respect to a domestic award has been restricted.
The dispute in the said case arose in relation to a supply agreement of particular type wheat
between an Indian seller (Shri Lal Mahal Limited i.e. party successor in title) and foreign buyer
(Progetto Grano Spa i.e. party successor in title) for the supply of wheat. The agreement provided
that the said wheat was to be certified by a named authority which was certified to the effect by
the Indian seller from that name authority. However, the foreign buyer also got the wheat certified
again in his country and stated that it did not matched the sample and initiated arbitration
proceeding under the Grain and Feed trade Association (GAFTA) which passed an award in favour
of the buyer. The seller appealed against this award before the Board of Appeal of GAFTA but
lost his case and thereafter buyer sought enforcement of the award in India in Delhi High Court
where the seller also challenged the enforcement of the foreign arbitral award on the ground of it
violating public policy and on the ground of it being patently illegal wherein the seller submitted
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that the foreign award was passed against and in ignorance of the contractual terms of the
agreement. The Delhi High Court rejected the plea of the seller and thereafter the seller appealed
against this order in Supreme Court of India challenging the enforcement of the foreign arbitral
award by placing reliance on the Phulechand case and ONGC Vs. Saw pipes judgments of the apex
court wherein the apex court had held that parties to an arbitration proceedings can challenge the
enforcement of a arbitral award on the ground of it being patently illegal as this patent illegality of
a arbitral award violates the public policy of India and thereby entitles the Indian courts to relook
into the merits of the award in appropriate cases even at the stage of enforcement proceedings.
The buyers in this dispute resisted these contentions and by placing reliance upon the Renusagar
Power Co. Ltd. v. General Electric company 1994 Supp (1) 644 and submitted that foreign arbitral
award cannot be challenged on the ground of it being patently illegal and submitted that foreign
arbitral awards can be challenged in enforcement proceedings only on the ground of public policy
of India which includes Fundamental policy of Indian law, interest of India and justice and
morality. The buyers also submitted that there was a distinction between the applications of
meaning provided to the expression of public policy of India in case of domestic awards and
foreign arbitral awards as noted and held in the Renusagar case by the Apex Court.
The Apex Court rejected all the contentions of the Indian seller and observed that for the purpose
of section 48 (2) (d) of the Arbitration act, the expression public policy must be given a narrow
meaning in contradistinction to the meaning provided in case of setting aside of the award under
Section 34 of the arbitration act. The Court said that though the expressions used under both section
of 34 and 48 refers to public policy of India but meanings provided to the same expressions differs
on account of the scope of review provided under the Sections. The Court said that section 34
pertains to the stage of arbitration where the award has not become final and could be set aside
under the grounds provided thereby jurisdiction of the court being much more wider in dealing
with the domestic arbitral award that is not yet final and not yet executable and this indicates
towards adoption of a wider meaning that is to be given to the expression of public policy of India
as elucidated in ONGC vs. Saw Pipes. The Court also said that enforcement stage for an arbitral
award is a stage arising at the time when the award has attained finality and the award only seeks
enforcement which therefore means that court has limited jurisdiction to interfere with the award
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and therefore requires adoption of narrow meaning to the expression of public policy of India.
The court also noted the fact that jurisdiction of the court under section 48 (2) (d) is limited and it
does not exercise appellate jurisdiction over the foreign arbitral award and only in case where it is
contrary to the fundamental policy of law or contrary to interest of India or justice or morality that
the enforcement of the foreign arbitral award can be refused. The Apex Court also categorically
held that the stand taken by it in Phulchand case was not correct position of law and public policy
used in section 48 (2) (d) cannot be given wider meaning and enforcement of a foreign arbitral
award cannot be challenged on the ground it being patently illegal.
This judgment therefore provides limited grounds for the challenge to the enforcement of foreign
arbitral awards and provides India‘s stand on arbitration in sync with the decision of BALCO and
international arbitration scenario.
Renusagar Power Plant Co Ltd v General Electric Co, while construing the term ‘public policy’,
the Supreme Court applied the principles of private international law and held that an award would
be contrary to public policy if its enforcement went against:
fundamental policies of Indian law;
the interests of India; or
Justice or morality.
It was also held in the judgment that an award cannot be set aside on its merits.
However, the expression ‘public policy’ became a cause of concern when it was interpreted by the
Supreme Court in ONGC v SAW Pipes Ltd. the court’s judgment in this case expanded the concept
to add that the award would be contrary to public policy if it was patently illegal. The Supreme
Court distinguished between Saw Pipes and Renusagar on the grounds that the latter was in the
context of a foreign award, while the rationale of the former was confined to domestic awards
only.
Thereafter, in Phulchand Exports the Supreme Court held that the meaning given in Saw Pipes to
the expression ‘public policy of India’ in Section 34 of the act (concerning domestic awards) must
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be applied to the same expression occurring in Section 48(2)(b) of the act (concerning foreign
awards). Therefore, if a foreign arbitral award was patently illegal, it would be deemed to be
against public policy and therefore serve as a ground on which an Indian court could refuse to
enforce the award.
In Lal Mahal the Supreme Court analyzed the earlier law and held that the enforcement of a
foreign award would be refused on the ground that it is contrary to public policy of India only if it
is covered by one of the three categories enumerated in Renusagar. Although the same expression
(i.e., ‘public policy of India’) is used in the context of challenging both a domestic award (Section
34(2) (b) (ii)) and a foreign award (Section 48(2) (b)), and the concept of the term is the same in
nature in both sections, its application would differ in degree. The term’s application for the
purposes of Section 48(2) (b) is more limited than its application in respect of Section 34(2) (b)(ii).
The court further affirmed that Section 48 of the act does not give the court and opportunity to
have a second look at a foreign award at the enforcement stage; neither does the scope of inquiry
under Section 48 permit review of foreign award on its merits. Procedural defects taking into
consideration inadmissible evidence, or ignoring or rejecting evidence that may be of binding
nature in the course of foreign arbitration will not necessarily lead the court to refuse enforcement
of an arbitral award on the ground of public policy.
Therefore, the Supreme Court affirmed that while considering the enforceability of foreign awards,
the court did not exercise appellate jurisdiction over the foreign arbitral award; nor could it enquire
as to whether, while rendering the foreign award, an error was committed.
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procedural statutes like the Code of Civil Procedure and the Evidence Act, Torts, no strict
applicability to arbitration proceedings.
Institutional Arbitrations: Institutional arbitration has been defined as arbitration conducted by
an arbitral institution in accordance with prescribed rules of the institution. The Indian Council of
Arbitration is the sole Indian body providing facilities for institutional commercial dispute
resolution. The Rules of Arbitration of the Indian Council of Arbitration are very comprehensive,
setting out matters without conflict; use wide supervisory powers and all communication between
the parties and the arbitrators through the Council’s Registrar. The Council is empowered to reject
requests for arbitration without giving any reason, and can also determine any challenge to an
arbitrator’s eligibility. Arbitration under the Council is low administrative costs and arbitrators’
fees payable, low costs and fees are limited in that the established and reputed arbitrators avoid
participating in Arbitrations under the Council.
International Arbitration outside India International: Arbitration outside India can be held
either under the auspices of institutions likes the London Court of International Arbitration
(LCIA), International Court of Arbitration, which is a part of International Chamber of
Commerce (ICC), the American Arbitration Association (AAA), the World Intellectual Property
Organization (WIPO), the Stockholm Chamber of Commerce and the International Council for
Settlement of Investment Disputes (ICSID). Arbitration outside of India can also be heard under
an arbitral tribunal constituted under stand-alone procedures like the UNCITRAL Rules. The
arbitration institutions provide procedural rules and fix arbitration costs according to the scales,
arrange for various support services required for the arbitration, including video and
teleconferencing, translations and transcripts of proceedings.
Arbitral institutes like the LCIA, International Court of Arbitration of ICC and AAA’s popularity
is largely restricted to the US, attracting little interest for arbitration from Asian or European
parties. Arbitration under the AAA is compliance with a detailed discovery process, which can
take up to 6-8 months.
London Court of International Arbitration: The LCIA is one of the first major international
institutions established for commercial dispute resolution; it has developed a number of rules to
increase the efficiency of arbitration proceedings. LCIA Rules is requires parties to waive the right
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of appeal before national courts and other judicial bodies, thereby ensuring the finality of the
arbitration award. The features of the LCIA include:
Tribunal empowered to pass interim orders and interim reliefs, security for claims
and costs.
ICC International Court of Arbitration: The present ICC Rules of Arbitration came into effect
on 1 January 1998 and mark the first revision of the Rules in over 20 years, enhanced power of
supervision the Court and entire arbitral process conduct of proceedings and adherence to rules of
procedure, an arbitration agreement before commencement of proceedings, challenges to
arbitrators, scrutinizing the final award in a court. Guidelines for the conduct of arbitration of small
imposed the cost and claim. For example: Submit pleadings and petitions electronically; use a
single arbitrator; limit the use of experts and; a cost-effective place.
Deposits parties are not required to pay for the whole arbitration in advance.
Interest on deposits made to the LCIA is credited to respective party’s account.
Fast-track option for conduct of proceedings.
Delays and counteracting delaying avoids.
Confidentiality direct communication between the parties and arbitrators is encouraged of
proceedings.
Strictly time-bound proceedings.
Expert arbitrators available to choose from, parties are free to select an arbitrator who is
either in panel or not on the panel.
Institutional support for settlement of disputes during arbitral proceedings before final
hearing.
The other important features of Arbitration under the ICC Rules are:
Tribunal empowered to make interim awards to secure the interests of the parties.
Costs and fees to be determined as per the ICC Rules of Arbitration.
Small claims deals with separately to minimize costs.
Strictly time-bound proceedings.
Mandates Terms of Reference setting out all issues and facilitating agreement procedural
aspects.
Time efficient
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Institutional support for the settlement of disputes arbitral proceedings, but before a final
hearing.
Ad hoc Arbitration under UNCITRAL Rules: The parties can choose arbitrators known to lawyers
and Arbitration on ad hoc basis under the UNCITRAL Rules, effective arbitration laws in various
countries and the parties can agree upon of procedural matters based on preference the parties and
their lawyers need to arrange the support services required for arbitrations, the costs involved
arbitrations discretion of the arbitral tribunals.
Policy in India: UNCITRAL Rules, the Arbitration and Conciliation Act, 1996 under Section 34
also states that an award can be set aside by a Court, include the dispute falling outside the
arbitration agreement or procedural issues, arbitral tribunal or bias. Arbitration statutes related
further situations where the arbitral award is in conflict public policy of India always been a ground
of challenge the New York Convention. The Supreme Court of India had interpreted this in a
narrow manner. Indeed, it has settled law that awards would not be set aside even if the Court was
of the view that the award had not interpreted Indian law correctly.
The Supreme Court of India, in a recent decision, held that as far as domestic awards are concerned,
any incorrect interpretation of Indian law would fall under this category and the Courts would be
required to set aside domestic arbitration awards if there was a wrong interpretation of Indian law.
In a contorted interpretation, it held that if the award was a foreign award and even though Indian
law was the substantive law of the Arbitration, then a wrong interpretation of Indian law in a
foreign award would not amount to a violation of the public policy of India. This is another strong
reason why more and more foreign and Indian companies prefer International Arbitration to avoid
challenges to the award.
The award made by an arbitral tribunal outside India under the New York Convention is classified
as a foreign award under the 1996 Act. Part II of the 1996 Act provides the enforcement of foreign
awards. There are conflicts in judgments regarding whether the foreign award, to which Indian
law is applicable, can be challenged under Section 34 of the 1996 Act. The Bombay High Court
has held that foreign awards cannot be challenged under Section 34 of the 1996 Act. On the other
hand, the Gujarat High Court has taken a view that if foreign awards are made according to Indian
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laws then they can be challenged under Section 34 of the 1996 Act. However, the parties can, by
mutual agreement, exclude the applicability of Part I of the 1996 Act and thereby avoid the
mischief of Section 34.
Enforcement of Foreign Awards in India: Enforcement of the award is important, if not more
than, a favorable award. Arbitration awards less value unless it can be speedy and effectively
enforced and another scene of enforceability of foreign awards in India.
The 1996 Act provides a summary mechanism for the enforcement of awards classified as foreign
awards. It must be noted that only awards made under the New York Convention of 1960 or the
Geneva Convention of 1927 can be classified as foreign awards.
A foreign award has been defined under the 1996 Act as an arbitral award on differences between
persons arising out of legal relationships, whether contractual or not. Such an award must also be
considered as commercial under the law in force in India, made on or after 11 October 1960. A
foreign award can also be one -
in pursuance of an agreement in writing for arbitration to which the Convention set forth in the
First Schedule applies, or
in territories where the Central Government is satisfied that reciprocal provisions have been made
public by notification in the official gazette.
Under Section 44, an arbitral award is a foreign award only if it is made in pursuance of an
agreement to which the New York Convention applies, or if it is made in a territory to which the
New York Convention applies. International commercial arbitration, on the other hand, applies
only to agreements to which any other international or bilateral treaty would apply.
The emphasis on location, in regard to foreign awards, relates to territory rather than country. The
Supreme Court in this case has lain down that an award made in Ukraine after the dissolution of
the USSR would be valid, even though Ukraine has not been separately notified as a reciprocating
territory under the 1996 Act.
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The Supreme Court of India has held that the party holding a foreign award can apply for
enforcement of it. Before taking further steps, however, the court in charge of execution of the
award has to proceed in accordance with sections 47 to 49. The Party seeking enforcement of the
foreign awards can enforce the same by filing only one proceeding in the court. The court in the
first stage may have to decide about enforceability of the Award having regard to the requirement
of the 1996 Act. Once the court decides that the foreign award is enforceable, it can take further
effective steps for execution of the same. The Supreme Court has further held that it is clear from
statement of object and reasons, and sections 47 to 49 of the Act that every final Arbitral award is
to be enforced as if it were a decree of the Court
The five most preferred and widely used seats for international commercial arbitration are London,
Paris, Hong Kong, Singapore, and Geneva. For instance, out of all disputes submitted to SIAC,
one of the highest number of filings were generated from India. Despite an increasing number of
Indian parties opting for arbitration to resolve their disputes, the number of such international
arbitrations with seat in India has not increased significantly. The laws applicable to ICA when
seat of arbitration is India are discussed in detail below:
Notice of Arbitration: Arbitration is said to have commenced when the notice of arbitration
requires the other party to take steps in connection with the arbitration or do something on his part
in the matter of arbitration. Under Section 21 of the Act, a notice of arbitration has to be served to
the other party, requesting that the dispute be referred to arbitration. The day on which the
respondent receives the notice, arbitral proceedings commences under the Act. In a Notice of
Arbitration, a party communicates: a) an intention to refer the dispute to arbitration; and b) the
requirement that other party should do something on his part in that regard. This will generally
suffice to define the commencement of arbitration under the Act.
Referral to Arbitration: Under Part I, the courts can refer the parties to arbitration if the subject
matter of the dispute is governed by the arbitration agreement. Section 8 of the Act provides that
if an action is brought before a judicial authority, which is subject-matter of an arbitration, upon
an application by a party, the judicial authority is bound to refer the dispute to arbitration. It is
important to note that the above application must be made by the party either before or at the time
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of making his first statement on the substance of the dispute and the application shall be
accompanied by a duly certified or original copy of the arbitration agreement.
Interim Relief: Under the Act, the parties can seek interim relief from courts and arbitral tribunals
under Section 9 and 17 respectively. A party may, before, or during arbitral proceedings or at any
time after the making of the Arbitral Award but before it is enforced, apply to a court for seeking
interim measures and protections including interim injunctions under Section 9 of the Act. The
Arbitral Tribunal in accordance with Section 17 can also provide interim measures of protection
or ask a party to provide appropriate security in connection with the matter of dispute, as is found
appropriate during the course of the arbitral proceedings. However the powers of the Arbitral
Tribunal were narrow compared to the powers of the court under Section 9 of the Act.
Interim reliefs under Section 9
a. If an arbitral tribunal has been constituted, an application for interim protection under Section 9
of the Act will not be entertained by the court unless the court finds that circumstances exist which
may not render the remedy provided under Section 17 inefficacious.
b. Post the grant of interim protection under Section 9 of the Act, the arbitral proceedings must
commence within a period of 90 (ninety) days from the date of the interim protection order or
within such time as the court may determine.
Interim reliefs under Section 17: Section 17 has been amended to provide the Arbitral Tribunal
the same powers as a ‘civil court’ in relation to the grant of interim measures. Notably, the Arbitral
Tribunal would have powers to grant interim relief post award but prior to its execution. Further,
the order passed by an Arbitral Tribunal in arbitrations seated in India will be deemed to be an
order of the court and will be enforceable under the Code of Civil Procedure, 1908 (“CPC”) as if
it were an order of the court, which provides clarity on its enforceability. The intention appears to
be vest significant powers with the Arbitral Tribunal and reduce the burden and backlog before
the courts. There has been extensive confusion on the extent and scope of arbitrator’s powers to
grant interim relief, and enforceability of such orders has proven difficult. This issue has been
aptly addressed by making the enforceability of orders issued under Section 9 and 17 of the Act
identical in case of domestic and international commercial arbitrations seated in India. However,
in certain situations, a party will be required to obtain an order of interim relief from a court only
(e.g. injunctive relief against encashment of a bank guarantee).
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Appointment of Arbitrators: The parties are free to agree on a procedure for appointing the
arbitrator(s). The agreement can provide for a tribunal consisting of three arbitrators and each party
will appoint one arbitrator and the two appointed arbitrators will appoint the third arbitrator who
will act as a presiding arbitrator. If one of the parties does not appoint an Arbitrator within 30 days,
or if two appointed Arbitrators do not appoint third Arbitrator within 30 days, the party can request
Chief Justice of India (“CJI”) to appoint an Arbitrator in case of international commercial
arbitrations. The CJI can authorize any person or institution to appoint an Arbitrator. Some High
Courts have authorized District Judge to appoint an Arbitrator. In case of domestic arbitrations,
application has to be made to Chief Justice of respective High Court within whose jurisdiction the
parties are situated.
Challenge to appointment of Arbitrator: An arbitrator is expected to be independent and impartial.
If there are circumstances due to which his independence or impartiality can be challenged, he
must disclose the circumstances before his appointment. Appointment of an arbitrator can be
challenged only if –
a. Circumstances exist that give rise to justifiable doubts as to his independence or
impartiality; or,
b. b. He does not possess the qualifications agreed upon by the parties.
The challenge to appointment has to be decided by the arbitrator himself. If he does not accept the
challenge, the proceedings can continue and the arbitrator can make the arbitral award. However,
in such cases, application for setting aside the arbitral award can be made to the court under Section
34 of the Act. If the court agrees to the challenge, the arbitral award can be set aside. Thus, even
if the arbitrator does not accept the challenge to his appointment, the other party cannot stall further
arbitration proceedings by rushing to the court. The arbitration can continue and challenge can be
made in court only after the arbitral award is made.
Mandate of the Arbitrator: An encouraging position of Indian arbitration law is the
jurisprudence relating to the mandate of an arbitrator. The Supreme Court in its decision in NBCC
Ltd. v. J.G. Engineering Pvt. Ltd. has laid down that the mandate of the arbitrator expires in case
an award is not delivered within the time limit stipulated by the parties in the arbitration agreement.
Challenge to Jurisdiction: Under Section 16 of the Act, an Arbitral Tribunal has competence to
rule on its own jurisdiction, which includes ruling on any objections with respect to the existence
or validity of the arbitration agreement. In S.B.P. and Co. v. Patel Engineering Ltd. and Anr., the
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Supreme Court has held that where the Arbitral Tribunal was constituted by the parties without
judicial intervention, the Arbitral Tribunal could determine all jurisdictional issues by exercising
its powers of competence-competence under Section 16 of the Act.
Conduct of arbitral proceedings:
Flexibility in Respect of Procedure, Place and Language: The Arbitral Tribunal should treat the
parties equally and each party should be given full opportunity to present its case. The Arbitral
Tribunal is not bound by the CPC or The Indian Evidence Act, 1872. The parties to arbitration are
free to agree on the procedure to be followed by the Arbitral Tribunal. If the parties do not agree
to the procedure, the procedure will be as determined by the Arbitral Tribunal. The Arbitral
Tribunal has complete powers to decide the procedure to be followed, unless parties have
otherwise agreed upon the procedure to be followed. The Arbitral Tribunal also has powers to
determine the admissibility, relevance, materiality and weight of any evidence. Place of arbitration
will be decided by mutual agreement. However, if the parties do not agree to the place, the same
will be decided by the tribunal. Similarly, the language to be used in arbitral proceedings can be
mutually agreed. Otherwise, the Arbitral Tribunal can decide on the same.
Submission of Statement of Claim and Defense: The Claimant should submit the statement of
claims, points of issue and the relief or remedy sought. The Respondent should state his defense
in respect of these particulars. All relevant documents must be submitted. Such claim or defense
can be amended or supplemented at any time.
Hearings and Written Proceedings: After submission of pleadings, unless the parties agree
otherwise, the Arbitral Tribunal can decide whether there will be an oral hearing or whether
proceedings can be conducted on the basis of documents and other materials. However, if one of
the parties requests the Arbitral Tribunal for a hearing, sufficient advance notice of hearing should
be given to both the parties. Thus, unless one party requests, oral hearing is not mandatory.
Fast track procedure: The Amendment Act has inserted new provisions to facilitate an expedited
settlement of disputes based solely on documents subject to the agreement of the parties. The
tribunal for this purpose consists only of a sole arbitrator who shall be chosen by the parties. For
the stated purpose the time limit for making an award under this section has been capped at 6
months from the date the Arbitral Tribunal enters upon the reference.48 Parties can before
constitution of the Arbitral Tribunal, agree in writing to conduct arbitration under a fast track
procedure.49 Under the fast track procedure, unless the parties otherwise make a request for oral
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hearing or if the arbitral tribunal considers it necessary to have oral hearing, the Arbitral Tribunal
shall decide the dispute on the basis of written pleadings, documents and submissions filed by the
parties without any oral hearing.
Settlement during arbitration: It is permissible for parties to arrive at a mutual settlement even
when the arbitration proceedings are going on. In fact, even the tribunal can make efforts to
encourage mutual settlement. If parties settle the dispute by mutual agreement, the arbitration shall
be terminated. However, if both parties and the Arbitral Tribunal agree, the settlement can be
recorded in the form of an arbitral award on agreed terms, which is called consent award. Such
arbitral award shall have the same force as any other arbitral award. Under Section 30 of the Act,
even in the absence of any provision in the arbitration agreement, the Arbitral Tribunal can, with
the express consent of the parties, mediate or conciliate with the parties, to resolve the disputes
referred for arbitration.
Law of limitation applicable: The Limitation Act, 1963 is applicable to arbitrations under Part
I. For this purpose, date on which the aggrieved party requests other party to refer the matter to
arbitration shall be considered. If on that date, the claim is barred under Limitation Act, the
arbitration cannot continue. If arbitration award is set aside by court, time spent in arbitration will
be excluded for the purposes of Limitation Act. This enables a party to initiate a fresh action in
court or fresh arbitration without being barred by limitation.
Arbitral award: A decision of an Arbitral Tribunal is termed as ‘Arbitral Award’. An arbitral
award includes interim awards. But it does not include interim orders passed by arbitral tribunals
under Section 17. Arbitrator can decide the dispute “injustice and in good faith” only if both the
parties expressly authorize him to do so. The decision of Arbitral Tribunal will be by majority.
The Arbitral Award shall be in writing and signed by all the members of the tribunal. It must state
the reasons for the award unless the parties have agreed that no reason for the award is to be
given.56 The Award should be dated and the place where it is made should be mentioned (i.e. the
seat of arbitration). A copy of the award should be given to each party. Arbitral Tribunals can also
make interim awards.
Interest and cost of arbitration: The interest rate payable on damages and costs awarded, unless
the arbitral award otherwise directs, shall be 18 percent per annum, calculated from the date of the
award to the date of payment.
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Challenge to an award: Section 34 provides for the manner and grounds for challenge of the
arbitral award. The time period for the challenge is before the expiry of 3 months from the date of
receipt of the arbitral award (and a further period of 30 days on sufficient cause being shown for
condonation of delay). If that period expires, the award holder can apply for execution of the
arbitral award as a decree of the court. But as long as this period has not elapsed, enforcement is
not possible. Under Section 34 of the Act, a party can challenge the arbitral award on the following
grounds:-
1. If the parties to the agreement are under some incapacity;
2. The agreement is void;
3. The award contains decisions on matters beyond the scope of the arbitration agreement;
4. The composition of the arbitral authority or the arbitral procedure was not in accordance
with the arbitration agreement;
5. The award has been set aside or suspended by a competent authority of the country in which
it was made;
6. The subject matter of dispute cannot be settled by arbitration under Indian law; or
7. The enforcement of the award would be contrary to Indian public policy.
Appeals: Only in exceptional circumstances, a court can be approached under the Act. The
aggrieved party can approach the court only after arbitral award is made or in case of an order
passed under Section 17 of the Act, after the order is passed. Appeal to court is now permissible
only on certain restricted grounds. An appeal lies from the following orders and from no others to
the court authorized by law to hear appeals from original decrees of the court passing the order:
1. Granting or refusing to grant any measure under Section
2. Setting aside or refusing to set aside an Arbitral Award under Section
However, a three judge Bench of the Supreme Court has recently held in Centro trade Minerals &
Metal v. Hindustan Copper that parties may provide for an appeal to lie from the award to an
appellate arbitral tribunal. Such a clause was held not to be contrary to the laws of the country and
thus enforceable. It appears that the scope of appeal in such cases is far wider than an appeal to a
court.
Enforcement and execution of the award: In India, the enforcement and execution of arbitral
awards both domestic and foreign are governed by the Act read with the CPC. While the former
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lays down the substantive law governing enforceability and execution of an award, the latter deals
with the procedures required to be followed when seeking execution of an award. According to
Section 35 of the Act, an arbitral award shall be final and binding on the parties and persons
claiming under them. Thus an arbitral award becomes immediately enforceable unless challenged
under Section 34 of the Act. When the period for filing objections has expired or objections have
been rejected, the award can be enforced under the CPC in the same manner as if it were a decree
passed by a court of law. An ex parte award passed by an Arbitral Tribunal under Section 28 of
the Act is also enforceable under Section 36. Even a settlement reached by the parties under
Section 30 of the Act can be enforced under Section 36 of the Act as if it were a decree of the
court.
Institution of Execution Petition: For execution of an arbitral award the procedure as laid down
in Order XXI of the CPC has to be followed. Order XXI of the CPC lays down the detailed
procedure for enforcement of decrees. It is pertinent to note that Order XXI of the CPC is the
longest order in the schedule to the CPC consisting of 106 Rules. Where an enforcement of an
arbitral award is sought under Order XXI CPC by a decree- holder, the legal position as to
objections to it is clear. At the stage of execution of the arbitral award, there can be no challenge
as to its validity. The court executing the decree cannot go beyond the decree and between the
parties or their representatives. It ought to take the decree according to its tenor and cannot
entertain any objection that the decree was incorrect in law or in facts. All proceedings in execution
are commenced by an application for execution. The execution of a decree against property of the
judgment debtor can be effected in two ways:
1. Attachment of property; and
2. Sale of property of the judgment debtor
The courts have been granted discretion to impose conditions prior to granting a stay, including a
direction for deposit. The amended section also states that where the time for making an application
under section 34 has expired, then subject to the provisions of the CPC, the award can be enforced.
Also, the mere fact that an application for setting aside an arbitral award has been filed in the court
does not itself render the award unenforceable unless the court grants a stay in accordance with
the provisions of sub-section 3, in a separate application. It is the discretion of the court to impose
such conditions as it deems fit while deciding the stay application.
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Attachment of Property: ‘Attachable property’ belonging to a judgment debtor may be divided
into two classes: (i) moveable property and (ii) immoveable property
If the property is immoveable, the attachment is to be made by an order prohibiting the judgment
debt or from transferring or charging the property in any way and prohibiting all other persons
from taking any benefit from such a transfer or charge. The order must be proclaimed at some
place on or adjacent to the property and a copy of the order is to be affixed on a conspicuous part
of the property and upon a conspicuous part of the courthouse. Where an attachment has been
made, any private transfer of property attached, whether it be movable or immovable, is void as
against all claims enforceable under the attachment. If during the pendency of the attachment, the
judgment debtor satisfies the decree through the court the attachment will be deemed to be
withdrawn. Otherwise the court will order the property to be sold.
Sale of attached property: Order XXI lays down a detailed procedure for sale of attached
property whether movable or immovable. If the property attached is a move- able property, which
is subject to speedy and natural decay, it may be sold at once under Rule 43. Every sale in execution
of a decree should be con- ducted by an officer of the court except where the property to be sold
is a negotiable instrument or a share in a corporation which the court may order to be sold through
a broker.
Thus, under the Arbitration and Conciliation (Amendment) Act, 2015. There are two avenues
available for the enforcement of foreign awards in India, viz., the New York Convention and the
Geneva Convention, as the case may be.
Sections 44 to 52 of the Arbitration and Conciliation (Amendment) Act, 2015 deals with foreign
awards passed under the New York 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-
a. In pursuance of an agreement in writing for arbitration to which the Convention set forth
in the First Schedule applies, and
b. In one of such territories as the Central Government, being satisfied that reciprocal
provisions have been made may, by notification in the Official Gazette, declare to be
territories to which the said Convention applies. 1
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From the abovementioned conditions, it is clear that there are two pre-requisites for enforcement
of foreign awards under the New York Convention. These are:
Section 47 provides that the party applying for the enforcement of a foreign award shall, at the
time of the application, produce before the court (a) original award or a duly authenticated copy
thereof; (b) original arbitration agreement or a duly certified copy thereof; and (c) any evidence
required to establish that the award is a foreign award. As per the new Act, the application for
enforcement of a foreign award will now only lie to High Court.
Once an application for enforcement of a foreign award is made, the other party has the opportunity
to file an objection against enforcement on the grounds recognized under Section 48 of the Act.
These grounds include:
a. the parties to the agreement referred to in section 44 were, under the law applicable to
them, under some incapacity, or the said agreement is not valid under the law to which the
parties have subjected it or, failing any indication thereon, under the law of the country
where the award was made; or
b. the party against whom the award is invoked was not given proper notice of the
appointment of the arbitrator or of the arbitral proceedings or was otherwise unable to
present his case; or
c. the award deals with a difference not contemplated by or not falling within the terms of the
submission to arbitration, or it contains decisions on matters beyond the scope of the
submission to arbitration: Provided that, if the decisions on matters submitted to arbitration
can be separated from those not so submitted, that part of the award which contains
decisions on matters submitted to arbitration may be enforced; or
d. the composition of the arbitral authority or the arbitral procedure was not in accordance
with the agreement of the parties, or, failing such agreement, was not in accordance with
the law of the country where the arbitration took place; or
e. the award has not yet become binding on the parties, or has been set aside or suspended by
a competent authority of the country in which, or under the law of which, that award was
made.
f. the subject-matter of the difference is not capable of settlement by arbitration under the
law of India; or
g. the enforcement of the award would be contrary to the public policy of India.
The Amendment Act has restricted the ambit of violation of public policy for international
commercial arbitration to only include those awards that are: (i) affected by fraud or corruption,
(ii) in contravention with the fundamental policy of Indian law, or (iii) conflict with the notions of
morality or justice.
It is further provided that if an application for the setting aside or suspension of the award has been
made to a competent authority, the Court may, if it considers it proper, adjourn the decision on the
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enforcement of the award and may also, on the application of the party claiming enforcement of
the award, order the other party to give suitable security.
Section 49 provides that where the Court is satisfied that the foreign award is enforceable under
this Chapter, the award shall be deemed to be a decree of that Court.
Sections 53-60 of the Arbitration and Conciliation (Amendment) Act, 2015 contains provisions
relating to foreign awards passed under the Geneva Convention.
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,-
a. in pursuance of an agreement for arbitration to which the Protocol set forth in the Second
Schedule applies, and
b. between persons of whom one is subject to the jurisdiction of some one of such Powers as
the Central Government, being satisfied that reciprocal provisions have been made, may,
by notification in the Official Gazette, declare to be parties to the Convention set forth in
the Third Schedule, and of whom the other is subject to the jurisdiction of some other of
the Powers aforesaid, and
c. in one of such territories as the Central Government, being satisfied that reciprocal
provisions have been made, by like notification, declare to be territories to which the said
Convention applies, and for the purposes of this Chapter, an award shall not be deemed to
be final if any proceedings for the purpose of contesting the validity of the award are
pending in any country in which it was made. 2
Section 56 provides that the party applying for the enforcement of a foreign award shall, at the
time of the application, produce before the court (a) original award or a duly authenticated copy
thereof; (b) evidence proving that the award has become final and (c) evidence to prove that the
award has been made in pursuance of a submission to arbitration which is valid under the law
applicable thereto and that 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 in conformity
with the law governing the arbitration procedure. As per the new Act, the application for
enforcement of a foreign award will now only lie to High Court.
The conditions for enforcement of foreign awards under the Geneva Convention are provided
under Section 57 of the Arbitration and Conciliation Act, 1996. These are as follows:
a. the award has been made in pursuance of a submission to arbitration which is valid under
the law applicable thereto;
b. the subject-matter of the award is capable of settlement by arbitration under the law of
India;
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c. 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 in conformity with
the law governing the arbitration procedure;
d. the award has become final in the country in which it has been made, in the sense that it
will not be considered as such if it is open to opposition or appeal or if it is proved that any
proceedings for the purpose of contesting the validity of the award are pending;
e. the enforcement of the award is not contrary to the public policy or the law of India.
The Amendment Act has restricted the ambit of violation of public policy for international
commercial arbitration to only include those awards that are: (i) affected by fraud or corruption,
(ii) in contravention with the fundamental policy of Indian law, or (iii) conflict with the notions of
morality or justice.
However, the said section lays down that even if the aforesaid conditions are fulfilled, enforcement
of the award shall be refused if the Court is satisfied that—
a. the award has been annulled in the country in which it was made;
b. the party against whom it is sought to use the award was not given notice of the arbitration
proceedings in sufficient time to enable him to present his case; or that, being under a legal
incapacity, he was not properly represented;
c. the award does not deal with the differences contemplated by or falling within the terms of
the submission to arbitration or that it contains decisions on matters beyond the scope of
the submission to arbitration: Provided that if the award has not covered all the differences
submitted to the arbitral tribunal, the Court may, if it thinks fit, postpone such enforcement
or grant it subject to such guarantee as the Court may decide.
Furthermore, if the party against whom the award has been made proves that under the law
governing the arbitration procedure there is any other ground, entitling him to contest the validity
of the award, the Court may, if it thinks fit, either refuse enforcement of the award or adjourn the
consideration thereof, giving such party a reasonable time within which to have the award annulled
by the competent tribunal.
Section 58 provides that where the Court is satisfied that the foreign award is enforceable under
this Chapter, the award shall be deemed to be a decree of the Court.
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delivered under the Geneva Convention. A foreign award under Part II is defined as (i) an arbitral
award (ii) on differences between per- sons arising out of legal relationships, whether contractual
or not, (iii) considered as commercial under the law in force in India, (iv) made on or after 11th
day of October, 1960 (v) in pursuance of an agreement in writing for arbitration to which the
convention set forth in the first schedule applies; and (vi) in one of such territories as the Central
Government, being satisfied that reciprocal provisions made may, by notification in the Official
Gazette, declare to be territories to which the said convention applies.
Thus, even if a country is a signatory to the New York Convention, it does not ipso facto mean
that an award passed in such country would be enforceable in India. There has to be further
notification by the Central Government declaring that country to be a territory to which the New
York Convention applies. In the case of Bhatia International v Bulk Trading, (“Bhatia
International”) the Supreme Court expressly clarified that an arbitration award not made in a
convention country will not be considered a foreign award. About 48 countries have been notified
by the Indian government so far. They are:- Australia; Austria; Belgium; Botswana; Bulgaria;
Central African Republic; Chile; China (including Hong Kong and Macau) Cuba; Czechoslovak
Socialist Republic; Denmark; Ecuador; Federal Republic of Germany; Finland; France; German;
Democratic Republic; Ghana; Greece; Hungary; Italy; Japan; Kuwait; Malagasy Republic;
Malaysia; Mauritius, Mexico; Morocco; Nigeria; Norway; Philippines; Poland; Republic of Korea;
Romania; Russia; San Marino; Singapore; Spain; Sweden; Switzerland; Syrian Arab Republic;
Thailand; The Arab Republic of Egypt; The Netherlands; Trinidad and Tobago; Tunisia; United
Kingdom; United Republic of Tanzania and United States of America.
Thus, to reach the conclusion that a particular award is a foreign award, the following conditions
must be satisfied –
1. The award passed should be an arbitral award
2. It should be arising out of differences between the parties
3. The difference should be arising out of a legal relationship
4. The legal relationship should be considered as commercial
5. It should be in pursuance of a written agreement to which the New York Convention
applies
6. The foreign award should be made in one of the aforementioned countries.
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Referring parties to Arbitration: A judicial authority under Section 45 of the Act has been
authorized to refer those parties to arbitration, who under Section 44 of the Act have entered in an
arbitration agreement. The Section is based on Article II (3) of New York Convention and with an
in-depth reading of the Section 45 of the Act, it can be clearly understood that it is mandatory for
the judicial authority to refer parties to the arbitration. Section 45 of the Act starts with a non
obstante clause, giving it an overriding effect to the provision and making it prevail over anything
contrary contained in Part I or the CPC. It gives the power to the Indian judicial authorities to
specifically enforce the arbitration agreement between the parties. But as an essential pre-condition
to specifically enforcing the arbitration agreement, the court has to be satisfied that the agreement
is valid, operative and capable of being performed. A party may not be entitled to a stay of legal
proceedings in contravention to the arbitration agreement under Section 45 in the absence of a
review by the court to determine the validity of the arbitral agreement. The review is to be on a
prima facie basis.
Enforcement & Execution of Foreign Award: Enforcement and execution of foreign awards
when a party seeking enforcement of a New York Convention award under the provisions of the
Act, must make an application to the Court of competent jurisdiction with the following documents
1. The original/duly authenticated copy of the award;
2. The original/duly authenticated copy of the agreement; and
3. Such evidence as may be necessary to prove that the award is a foreign award. There are
several requirements for a foreign arbitral award to be enforceable under the Act –
Commercial transaction: The award must be given in a convention country to resolve
commercial disputes arising out of a legal relationship. In the case of R.M. Investment & Trading
v. Boeing, the Supreme Court observed that the term “commercial” should be liberally construed
as having regard to manifold activities which are an integral part of international trade.
Written agreement: The Geneva Convention and the New York Convention provide that a
foreign arbitral agreement must be made in writing, although it does not have to be worded
formally or be in accordance with a particular format.
Agreement must be valid: The foreign award must be valid and arise from an enforceable
commercial agreement. In the case of Khardah Company v. Raymon & Co. (India), the Supreme
Court held that an arbitration clause cannot be enforceable when the agreement of which it forms
an integral part is declared illegal. Recently, the Delhi High Court in Virgoz Oils and Fats Pte.
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Ltd. v National Agricultural Marketing Federation of India has held that a contract containing an
arbitration agreement must be signed by all parties to the contract, in order to make the arbitration
agreement valid and binding upon the parties.
Award must be unambiguous: In the case of Koch Navigation v. Hindustan Petroleum Corp.,
the Supreme Court held that courts must give effect to an award that is clear, unambiguous and
capable of resolution under Indian law. Under Section 48 of the Act, in case of a New York
Convention award, an Indian court can refuse to enforce a foreign arbitral award if it falls within
the scope of the following statutory defenses –
1. The parties to the agreement are under some incapacity;
2. The agreement is void;
3. The award contains decisions on matters beyond the scope of the arbitration agreement;
4. The composition of the arbitral authority or the arbitral procedure was not in accordance
with the arbitration agreement;
5. The award has been set aside or suspended by a competent authority of the country in which
it was made;
6. The subject matter of dispute cannot be settled by arbitration under Indian law;
7. The enforcement of the award would be contrary to Indian public policy.
The term “public policy” as mentioned under Section 48 (2) (b) is one of the conditions to be
satisfied before enforcing a foreign award. The Supreme Court in Renusagar Power Co. Ltd. v.
General Electric Co., (“Renusagar”) held that the enforcement of foreign award would be refused
on the ground that it is contrary to public policy if such enforcement would be contrary to –
1. Fundamental policy of India; or
2. The interest of India; or
3. Justice or morality.
Thus by the above decisions, the courts in India have laid down certain threshold which defines
“public policy” for enforcing foreign awards in India. The courts, after the land mark judgment,
have further narrowed down the meaning of the words “public policy” in order to give effect to
the Act. In Penn Racquet Sport v. Mayor International Ltd., the petitioner, a company based in
Arizona, sought to enforce in India an International Chamber of Commerce (“ICC”) award passed
in its favor. The respondent, an Indian company, challenged the execution of the award on grounds,
inter alia, that the award was contrary to the public policy of India. In a well-reasoned decision,
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the Delhi High Court, rejected the objections raised by the Indian company and held that the
foreign award passed in favor of the American company was enforceable in India. It held that
because the award went against the interest of an Indian company was not enough to qualify as
working against the “public policy of India”. However, in Shri Lal Mahal Ltd. v. Progetto Grano
Spa (“Lal Mahal case”), it was held that enforcement of foreign award would be refused under
Section 48(2) (b) only if such enforcement would be contrary to –
1. Fundamental policy of Indian law; or
2. The interests of India; or
3. Justice or morality.
The wider meaning given to the expression “public policy of India” occurring in Section
34(2)(b)(ii) in Saw Pipes is not applicable where objection is raised to the enforcement of the
foreign award under Section 48(2)(b). The Supreme Court further discussed Phulchand Exports
Limited v. Patriot (“Phulchand case”), wherein it was accepted that the meaning given to the
expression “public policy of India” in Section 34 in Saw Pipes, must be applied to the same
expression occurring in Section 48(2)(b) of the 1996 Act. The Supreme Court concluded that
“public policy of India used in Section 48(2) (b) has to be given a wider meaning and the award
could be set aside, if it is patently illegal” does not lay down correct law, and has hence overruled
the earlier decisions on this point. On fulfilling the statutory conditions mentioned above, a foreign
award will be deemed a decree of the Indian court enforcing the award and thereafter will be
binding for all purposes on the parties subject to the award. The Supreme Court has held that no
separate application needed be filed for execution of the award. A single application for
enforcement of award would undergo a two-stage process. In the first stage, the enforceability of
the award, having regard to the requirements of the Act (New York Convention grounds) would
be determined. Foreign arbitration awards, if valid, are treated on par with a decree passed by an
Indian civil court and they are enforceable by Indian courts having jurisdiction as if the decree had
been passed by such courts. Once the court decides that the foreign award is enforceable, it shall
proceed to take further steps for execution of the same, the process of which is identical to the
process of execution of a domestic award.
Appealable orders: Under Section 50 of the Act, an appeal can be filed by a party against those
orders passed under Section 45 and Section 48 of the Act. However, no second appeal can be filed
against the order passed under this Section. These orders are only appealable under Article 136 of
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the Constitution of India (“Constitution”) and such an appeal is filed before the Supreme Court.
An order under Section 45 is only appealable under Article 136 of the Constitution. (A second
appeal is barred by Section 50, appeal under Article 136 of the Constitution of India to the Supreme
Court has not been taken away. However, Article 136 does not provide a party a right to an appeal;
it is a discretion which the Supreme Court may choose to exercise. Thus, where there existed an
alternative remedy in the form of a revision under Section 115 of the Civil Procedure Code or
under Article 227 of the Constitution before the High Court, the Supreme Court refused to hear an
appeal under Article 136 even though special leave had initially been granted).
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