Saturday, August 27, 2011

ENFORCEMENT OF FOREIGN JUDGEMENTS / AWARDS IN INDIA


A.      Provisions under Code of Civil Procedure in respect enforceability of foreign Judgements in India: Foreign Judgment can be enforced in India provided it is of conclusive nature, i.e. shall have been pronounced by a Court of competent jurisdiction, given on merits of the case, correct view recognizing laws of India, by following principles of natural justice, not obtained by fraud or without any breach of any law in India.

A decree of a foreign court even if passed exparte will be deemed conclusive if it satisfies the above conditions under the Civil Procedure Code.

If the foreign judgment satisfies conditions stipulated under Section 13 of Code of Civil Procedure, it can be executed in India in the Court of appropriate jurisdiction.

B.      Provisions under Arbitration & Conciliation Act on enforcement of foreign awards in India.

Conditions for enforcement of foreign awards – A foreign award may be enforced in India if the award does not suffer from any one of the following inadequacies:

(i)             incapacity of persons or
(ii)            invalidity of the agreement; or
(iii)           proper notice not given regarding appointment of arbitrator or arbitration proceedings or
(iv)          party was otherwise unable to present his case; or
(v)           the matters beyond the scope of the agreement
(vi)          composition of arbitral authority not in accordance with the law of the country
(vii)         award has not yet become binding on the parties or has been set aside or suspended by a competent authority
(viii)        Enforcement of award will be contrary to public policy

There should not be unjust enrichment in award, where it would be unjust to allow one person to retain benefit received at the expense of another.

Effect of Foreign Awards – A foreign award complete in all respects shall be enforceable in India as if it was an award made on a matter referred to arbitration in India.

Filing of foreign awards in court – Any person interested in a foreign award may apply to any Court having jurisdiction over the subject matter of the award that the award be filed in Court.

Time limit - Various High Courts in India have held that the period of limitation would be governed by the residual provision under the Limitation Act i.e. the period would be three years from the date when the right to apply for enforcement accrues. The High Court of Bombay held that the right to apply would accrue when the award is received by the applicant.

Enforcement of foreign award – Where the Court is satisfied that the foreign award is enforceable under this Act, the court shall order the award to be filed and shall proceed to pronounce judgment according to the award.

Evidence –  If the award or agreement requiring to be produced is in a foreign language, the party seeking to enforce the award shall produce a translation of the award into English certified as correct by a diplomatic or consular agent of the country to which the party belongs to.

To conclude, a foreign award is enforceable in India, if it does not attract any of the provisions of Section 7 of the Foreign Awards (Recognition and Enforcement) Act, 1961. A Foreign Award can also be filed before a Court of competent jurisdiction for obtaining Decree and further execution proceedings.

CASES:-
In recent case of Dozco India Pvt. Ltd. ("Applicant") –Vs- Doosan Infracore Co. Ltd. ("Respondent") - 1998 (1) SCC 305,  quoting from the judgment of Sumitomo Heavy Industries Case (Supra) & Mustill and Boyd (the Law and Practice of Commercial Arbitration in England, 2nd Edition) &
with reference to judgment of Naviera Amozonica Peruana S.A. v. Compania Internationacional De Seguros Del Peru (supra) the Supreme Court quoted that:

"All contracts which provide for arbitration and contain a foreign element may involve three potentially relevant systems of law: (a) the law governing the substantive contract; (2) the law governing the agreement to arbitrate and the performance of that agreement; (3) the law governing the conduct of the arbitration. In the majority of the cases all three will be the same, but (1) will often be different from (2) and (3) and occasionally, but rarely, (2) may also differ from (3)"
It was then observed that the language of Article 23.1 suggested that all the three laws are the laws of the Republic of Korea with the seat of the arbitration in Seoul, Korea and the arbitration to be conducted in accordance with the rules of International Chamber of Commerce. Supreme Court agreed with the contentions of the Respondent and the distinction between the legal seat and the geographically convenient location as highlighted by the Respondent. It was held that the bracketed portion could not restrict the application of the main clause and that the same was only inserted as a provision for the convenience of the arbitral tribunal to hold its proceedings.

The Supreme Court held that the seat of arbitration to be Seoul and therefore the laws that would govern the reference i.e. the curial law are laws of Korea. The Supreme Court held that it was clear from Article 22 and Article 23 of the Agreement that the parties had agreed to exclude the application of Part I of the Act and hence the Supreme Court did not have jurisdiction to entertain an Application under Section 11(6) of the Act.

Therefore, the Supreme Court held that the present petition under Section 11(6) of the Act was not maintainable as the application of Part I of the Act has been impliedly excluded by the Agreement.

ARBITRATION IN CONTRACT: I would prefer to have below mentioned Arbitration clause in the Contract between Indian Company and Company beyond the jurisdiciton of India for resolution of Disputes, in accordance with rules of International Commercial Arbitration.
Any dispute or difference regarding the interpretation of the provisions of this Agreement shall be resolved amicably between the parties. If the dispute is not resolved through mutual discussions within a period of 15 days from the commencement of such discussions, either party may refer the dispute to arbitration in accordance with the Arbitration & Conciliation Act 1996 of India as amended from time to time. The arbitration proceedings shall be conducted under the aegis of the Bombay Chamber of Commerce, Mumbai ("BCC") by a Sole Arbitrator to be appointed by the BCC as per its prevailing rules and procedures, applicable for International Commercial Arbitration. The venue of arbitration shall be Mumbai, India; arbitration proceedings shall be English. The cost of Arbitration shall be borne by the Parties equally unless otherwise determined by the Arbitrator and subject to the outcome of the Arbitration.

 
© Santosh Mane: published on 27th August 2011, India, Mumbai

View my articles & blogs @:.

Stay Connected @:

Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)