LawFarm- Advice & Lawyers Online

Share on facebook
Share on linkedin

Grounds for resisting foreign awards under Part II of Arbitration and Conciliation Act of 1996

Part II of the Arbitration and Conciliation Act of 1996 deals with Foreign Awards based on the New York and Geneva Conventions. An arbitral award will be recognized to be a foreign award if it bears some foreign elements in it or has one or more of the following factors:

  • The award must be made in a foreign country
  • The subject matter of the arbitration agreement should involve an international transaction, which means it should be related to global trade, commerce, investment, etc.
  • The minimum one of the parties to the arbitration agreement has to be a foreign national.
  • The award must be made in accordance with foreign law.

In order to attain and enforce a foreign arbitral award, section 47 of the Arbitration and Conciliation Act makes it mandatory to produce before the authorized Court the required documents. Such as the original award or a duly authenticated copy along with the original agreement in accordance with the country of origin where it is made. The evidence is also essential to prove the award is a foreign award.

When two parties come into a dispute, and the judiciary transfers the case to the tribunal, the parties tend to appear before the arbitral tribunal, and the decision that the tribunal announces is called the“award.” But there are specific grounds that are enforceable for resisting the foreign awards, which are mentioned under the part II of this Act. 

Incapacity Of Parties: If the parties of the contract become incompetent to come to an agreement, then on that basis, the awards can be resisted. 

Arbitration Agreement: If the arbitration agreement comes out to be an invalid agreement, then the awards become suitable for rejection.

Dispute: In certain situations, the disputes which arise between the competent parties go beyond the scope of the Arbitral Tribunal, which means when it does not come under the Arbitration Law, the award gets rejected.

Justice:  If the tribunal does not follow the Principles of Natural Justice, then it would amount to a violation of the rights of the parties, and thus awards will be terminated. On the other hand, if there exists any mischief in forming the constitution of the arbitration, then it will get turned down. So, these are the grounds for resisting the Foreign Awards under part II of the Arbitration and Conciliation Act of 1996.

The period of limitations for setting aside the award:

  • 3 months from the date of receipt of the award.
  • However, this period can be extended for a further period of 30 days on sufficient cause.

By Esha Nath