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This article has been written by Prateek Giri Goswami, pursuing a Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution from LawSikho.


Rapid globalization has led to multifarious activities (contracts, corporate agreements) among individuals from different countries and has transcended the barriers to trade that were faced in older times. However, the conventional method of resolving disputes through courts has proven to be unsettling and caused reluctance among the international trade fraternity. Therefore, arbitration as a dispute resolution method has evidently proven to be a panacea for the international trade regime, hence, it has been a preferred choice of the parties. However, as prevalent as this practice of International Arbitration for resolving disputes is among the international traders, the parties face certain impediments, the most prominent of which is the enforcement of a Foreign Arbitral Award. This article will aim at discussing the relevant provisions of Indian Laws that deal with Foreign Arbitration and the challenges one faces while seeking the implementation of a Foreign Arbitral Award with the help of few case studies.

What are foreign arbitration and foreign arbitral award?

When two parties from different countries enter into any sort of contractual agreement, it is a common practice to insert an arbitration clause in the event a dispute arises between them with respect to the terms and conditions of the said contract, since both the parties are from different countries, in the clause itself it is pre-determined as to what will seat (arbitration laws and jurisdiction of courts) and venue (the place to conduct the arbitration) of the arbitration, it can either be the country of one party or some recognized international arbitration institutions either way for one party or both parties the seat and venue will be a foreign country, this kind of arbitration is called foreign arbitration and any award passed by such arbitration tribunal is called foreign arbitration, the definition of a foreign arbitration award is defined under section. It is pertinent to mention that the two countries by entering into a bilateral treaty can also provide the scope for international arbitration between the governments or their subjects. For example, India and UK signed the UK-India Bilateral Investment Treaty and by virtue of it, cairn energy filed arbitration proceedings against the Indian government before the permanent court of arbitration (as agreed in the treaty). Some other recognized international arbitration institutions are the International Chamber of Commerce (ICC), American Arbitration Association ICDR (AAA), Arbitration Institute of the Stockholm Chamber of Commerce (SCC), Australian Centre for International Commercial Arbitration (ACICA), Beijing Arbitration Commission (BAC), Cairo Regional Centre for International Commercial Arbitration (CRCICA), etc.

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Legal provisions and Supreme Court’s interpretation related to foreign arbitration and foreign arbitral award

India is a signatory to various international treaties related to trade and arbitration such as United Nations Conference on International Trade Law (UNCITRAL), the New York Convention 1959, Geneva Convention 1927, and other bilateral and multilateral treaties, which provides ample scope for international arbitration for the Indian government and its subjects, furthermore, to effectively adapt such treaties, the provisions of UNCITRAL, New York Convention and Geneva Convention are incorporated under the Arbitration and Conciliation Act 1996. Some salient features are: –

  1.  Part II of the Arbitration and Conciliation act 1996 deals with the Enforcement of Foreign Awards.
  2. Section 44 of the Arbitration and Conciliation Act 1996 provides the definition for foreign arbitration award, the Supreme Court in ASL Wind Solutions Private Limited v. GE Power Conversion India Private Limited stated that Section 44 is modeled on Articles I and II of the New York Convention, which states that “Article I-This Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought, arising out of differences between persons, whether physical or legal. It shall also apply to arbitral awards not considered as domestic awards in the State where their recognition and enforcement are sought.”

And in the said case to further clearly define what would be construed as foreign awards the Supreme Court cited the UNCTAD Commentary on International Commercial Arbitration, which states:

“1.4.1 Foreign arbitration and international arbitration are not the same An arbitration that takes place in State A is a foreign arbitration in State B. It does not matter whether the arbitration is commercial or non-commercial or whether the parties are from the same country, from different countries or that one or all are from State A. Since even a domestic arbitration in State A is a foreign arbitration in State B, the courts of State B would be called upon to apply the New York Convention to enforcement of a clause calling for arbitration in State A and to the enforcement of any award that would result.”

3. The Supreme Court of India in Sasan Power Limited v. North American Coal Corporation India Private Limited held that two Indian companies can arbitrate outside of India and the same will also be tantamount to foreign arbitration. 

Process for implementation of a foreign arbitration award and the corresponding challenges

  1. Section 10 of the Commercial Courts Act, 2015 states that all applications or appeals filed with respect to international commercial arbitration through the provisions of the Arbitration and Conciliation act shall be filed before the commercial divisions of the High Courts. This provision is in consonance with the proviso of Section 47 of the A&C Act.
  2. Section 47 of the A&C Act elucidates the procedure to be followed for the implementation of a foreign award:-

“47 (1) The party applying for the enforcement of a foreign award shall, at the time of the application, produce before the Court

(a) the original award or a copy thereof, duly authenticated in the manner required by the law of the country in which it was made;

(b) the original agreement for arbitration or a duly certified copy thereof; and

(c) such evidence as may be necessary to prove that the award is a foreign award.

47(2) If the award or agreement to be produced under sub-section (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”

3. Section 49 of the A&C Act states that foreign award shall be deemed to be a decree of that Court. Therefore, to execute the award the party can file an application under Order 21 of the Civil Procedure Code to implement the foreign award.

4. For the enforcement proceedings under section 47, the winning party generally files the application before the Court which has the jurisdiction over the assets of the award debtor, so that the assets of such party can be attached to effectuate the award. 

Problems faced while implementing a foreign arbitration award

  • An award can be challenged before the domestic courts.
  • Section 48 of the A&C Act provides ample scope to domestic Courts to dismiss the application implementation of the foreign award they are:-
  1. The Parties were under some kind of incapacity, or the agreement is not valid as per the laws of the country where the award is supposed to be implemented.
  2. The party was not informed by serving notice so as to appoint an arbitrator and prepare the case effectively.
  3. The subject matter of the dispute was beyond the scope of the Arbitration or the subject matter not capable of being adjudicated through arbitration. 
  4. The award is contrary to the public policy of India.
  • Vodafone case
  1. The Vodafone Company invoked arbitration proceedings against the Indian Government before the Permanent Court of Arbitration, Hague asserting that the retrospective effect of the tax laws amended by the Indian government is violative of a bilateral investment treaty between India-Netherland and the principles of international Laws.
  2. However, during the pendency of the case before the PCA, the Indian Government filed an application before Delhi High Court seeking to stay on the Arbitration proceedings stating that the PCA has no jurisdiction on the subject matter, during the beginning of the hearing of the stay application on  22-8-2017 the High Court granted a stay on arbitration proceedings, however, in the final judgment on 07.05.2018, the High Court removed the stay and allowed the matter to be resolved through arbitration.
  3. Later on, the PCA ruled in favor of Vodafone Company and pronounced the award, however, the Indian Government challenged the said award before the High Court at Singapore on the ground that the Indian Government has the sovereign right of taxation, and private individuals cannot decide on that.
  4. Regardless of the decision in such an appeal by the Indian Government, the captioned matter will certainly consume a lot of time and indicates a big problem towards the enforcement process of the foreign arbitral award.
  • Cairn energy case: The facts are similar to that of the Vodafone case:-
  1. Cairn had challenged the Indian government seeking taxes over an internal business reorganization using the 2012 retrospective tax law, under the UK-India Bilateral Investment Treaty before the permanent Court of Arbitration,
  2. The award came in favor of Cairn energy and the Indian Government is director compensate Cairn Energy in the amount of 1.2 Billion Dollars, and the same is likely to be challenged by the Indian Government. 
  3. Whereas, in order to preclude any delay, Cairn energy has adopted the bold move by filing applications courts in the US, UK, Canada, France, Singapore, the Netherlands, and three other countries to attach any property owned by the Indian government or its undertakings to set off the amount Indian government is liable to pay by the virtue of the arbitration award rendered by PCA. 
  4. However, such actions by Cairn Energy has created further hostility between the Company and the Indian Government, as the Indian Government official has branded such tactic as “illegal Enforcement” and have stated that the Indian Government not only challenge the award rendered by the PCA but also challenge any application filed in different Countries to seize the assets of Indian Government,
  5. Hence, the move by Cairn Energy to expedite the enforcement process created another rigmarole of litigation and now the captioned matter has entered into the phase of ‘multiplicity of suits’, which certainly is loathsome for any corporate.
  • Amazon vs Future retail- case study:-
  1. This case is a peculiar one, as it deals with the enforceability of an award delivered by an Emergency Arbitrator, 
  2. The facts of the case are that Amazon invested in Future Groups and under the agreement both the parties decided to resolve the dispute through Singapore International Arbitration Centre (SIAC).
  3. In August a deal was signed for Future Retail to sell its retail, wholesale, logistics, and warehousing units to Reliance Retail and Fashion style.
  4. Since time was of essence the Amazon invoked Arbitration and requested for the appointment of an Emergency Arbitrator (provision provided under SIAC) to stay the said deal.
  5. According to Schedule I of SIAC, when an imminent relief is sought by the party and there is not enough time to follow the procedure for the appointment of arbitrators by each party, the aggrieved party in such haste can apply for the appointment of an emergency arbitrator.
  6. The said Emergency Arbitrator ruled in favor of Amazon and awarded a stay on the said deal between reliance and Future Retail. There is no provision for appeal of an award or order by Emergency Arbitrator, the only recourse for Future Retail was to wait for the formulation of the Tribunal.
  7.  Subsequent to getting an award in its favor the Amazon with the aim to enforce the same intimated SEBI and CCI about the decision of Emergency Arbitration and requested to stay the ongoing transaction between Future Retail and Reliance.
  8. Simultaneously, Future Retail filed an Application before the High Court of Delhi stating that the emergency arbitrator’s award was persuasive and not binding, as there is no scope or provision present in current legislations of India related to enforcing the award passed by an emergency arbitration.
  9. On March 18, Delhi High Court ruled in favor of Amazon restraining FRL from going ahead with its assets sale deal with Reliance and Future  Retail and further issued a ‘Show Cause Notice’ as to why the future retail party shall not be detained in civil prison for violating the order of the Emergency and imposed INR 20 Lakh Fine.
  10. However, a few days later, a division bench of Delhi High Court stayed the previous above-said order, and therefore, the parties are back to square one.
  11. Since the subject matter provides the interpretation of current laws, it is possible that the captioned matter will end up in the Supreme Court of India, therefore, it probable that this conjecture will again take time before any party gets the desired results.


  • Interim stay by the Courts on the execution of Foreign Awards till the adjudication of the captioned matter by the Court defeats the very purpose of expediency of Arbitration Proceedings.
  • Wide Scope (Like Public Policy, Patent illegality, etc) given to the Courts to entertain a petition challenging the Foreign Arbitration award.
  • Absence of any guidelines for fast-track disposal of the petition for the execution of foreign Arbitral Awards.
  • Lack of enforceability of Bilateral and Multilateral Treaties.


  • Establishment of tribunals for fast-track disposal of execution petition of Foreign Arbitral Award.
  • The limited scope of interim reliefs.


Although we have explicit provisions for enforcement of a foreign arbitral award, there is ample scope for the other party to prolong the implementation of such award and such dilatory tactics cannot be negated absolutely as the enabling provisions are also necessary to challenge and stay on such awards, however, the scope of such protracting methods can be mitigated through adopting modern jurisprudence on international Arbitration. The more conducive environment we provide to the foreign investors the more likely they will prefer to invest in India rather than choosing China, Korea, Singapore, etc, moreover, with the recent development by  G7 Leaders Agreeing on a 15% Minimum Global Tax Rate is going to elicit massive investment changes by the international corporate fraternity, Therefore, it’s extremely pivotal for India to accentuate maximum investors by providing a promising and conducive environment instead of adamantly pursuing prolonging litigation against big corporations.



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