Jurisdiction of Foreign Awards under part II of the Arbitration and Conciliation Act, 1996 by Mayurakshi Sarkar at Lexcliq
When it comes to resolving commercial disputes, arbitration is often accepted as the most effective approach, especially when the parties are from different countries. The Arbitration and Conciliation Act, 1996 governs arbitration in India. Members of the New York Convention are covered by Part II of the Act, which deals with international awards. If parties to an arbitration agreement do not have an office or other place of business, how can a foreign arbitrator's award be enforced in nations where neither party has a presence? Section 44 of the Act defines a "foreign award" as an arbitral award on differences between individuals originating from legal ties, whether contractual or not, that are deemed commercial under Indian law.
Recognition of foreign award
The enforcement of such a right in a third country is possible following the completion of the Arbitral Award in that location. A foreign award becomes binding on the parties if and when Section 46 of the Act is met. Any foreign award that is enforceable will be treated as binding for all purposes on the parties involved, and may be relied on by any of those parties in any may be recognised without being enforced, but it must be recognised if it is.
Section 47 of the Act provides the requirement as to the evidence, which are required for enforcement of the Arbitral Award. Section 47 of the Act reads as under
The party applying for the enforcement of a foreign award shall, at the time of the application, produce before the court –
the original award or a copy thereof, duly authenticated in the manner required by the law of the country in which it was made;
the original agreement for arbitration or a duly certified thereof; and
Such evidence as may he necessary to prove that the award is a foreign award
2) If the award or agreement to be produced under subsection (1) is in a foreign language, the party seeking to enforce the award shall produce a translation into English certified as correct by a diplomatic or consular agent of the country to which that party belongs or certified as correct in such other manner as may be sufficient according to the law in force in India.
Explanation - The term "Court" refers to the district's primary civil court, which includes the High Court in the exercise of its ordinary original civil jurisdiction, which would have had jurisdiction over the award's subject matter if it were the subject of a suit. It excludes, however, any civil court of a grade below that of the district's primary civil court or any Court of Small Causes.
The extent and scope of jurisdiction
When deciding whether or not to enforce an award, the Bombay High Court ruled that the subject matter of the award would be a determining element in the case of Tata International Ltd. vs. Trisuns Chemical Industry Ltd. This is rational and logical. A specific contract, a specific property, etc., may be the topic of the arbitration. The place where the contract was signed, or where part or all of the respondent's assets are, would determine the court's geographical jurisdiction. After the arbitration is completed and enforced, the arbitration award's subject matter must be examined. An award of money or some other form of relief with respect to a contract or property would fall under this category. The award would have to be filed in a court that could enforce the award before it could be implemented. The filing of this action would be pointless if the respondent had no ties to the jurisdiction in question. The same is true if you file it in a location where the respondent lives or conducts business. Respondent must have moveable or immovable property that can be attached and sold in execution of the judgement in order to launch this action.
The Bombay High Court declared in Wireless Developers Inc vs. India Games Limited that a party can seek to enforce a foreign award in any area of the country where money is available or a suit for money recovery can be brought. Parties may not have assets in the jurisdiction of the arbitration. So the award cannot be enforced there. Instead, the award must be enforced in the country where the judgement debtor has property. Thus, foreign awards must be recognised and enforced internationally, and the location of enforcement is determined by the facts of each case.
Thus, territorial jurisdiction for enforcing a Foreign Award is understood to be the place where the right given by the Award arises. The Court's territorial jurisdiction relates to the rights granted by a foreign arbitral award, and the test is whether enforcing the right requires enforcing the foreign arbitral award.