The first part of this post covered the entry of a Singapore award (the Award) in India along with particulars of the recognition, fora and modes of its enforcement. This part covers the sequel and spin-offs; including grounds for challenge, expenses, and issues arising while seeking enforcement of emergency awards in India.

Facing the Challenge

When the award-holder files an application seeking enforcement of the Award, the award-debtor may resist enforcement on any of the following broad grounds under Section 48 of the Arbitration and Conciliation Act, 1996:

• the parties to the arbitration agreement were, under Singapore law, under some incapacity, or the arbitration agreement is not valid under Singapore law;
• 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 her case; or
• 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. However, if the decisions on matters submitted to arbitration can be severed from those not submitted, that part of the award which contains decisions on matters submitted to arbitration can be enforced; or
• 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 Singapore; or
• the award has not yet become binding on the parties or has been set aside or suspended by a competent authority in Singapore.

Additionally, Courts may refuse enforcement of the Award if the subject-matter of the difference in the Award is not arbitrable in India[1] or the enforcement of the award would be contrary to the public policy of India.

In 2015, the Arbitration Act was amended to narrow and streamline the scope of ‘public policy of India’ in the context of a challenge to a foreign award. It was clarified that an award will be deemed to be in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of section 75[2] or section 81[3] of the Arbitration Act; or the Award is in conflict with the most basic notions of morality or justice.

A foreign award can also be set aside if it is found to be in contravention of India’s fundamental public policy. That said, it is also clarified that deciding the question of fundamental policy cannot entail a reappraisal of the merits of the dispute.

Appeals

An award-holder can prefer an appeal under Section 50 of the Arbitration Act against a refusal of enforcement of the Award; but no appeal lies against an order allowing such enforcement. While there is no scope for any further appeal under the statute, parties can approach the Supreme Court to challenge the appellate decision after seeking special leave under Article 136 of the Constitution of India.

Limitation

A foreign award can be enforced in India at any time within 12 years from the date it becomes enforceable, i.e. the same period prescribed under the Limitation Act, 1963 for a decree of a court[4]. In Compania Naveira ‘SODNOC v. Bharat Refineries (2007), the Madras High Court decided that “the foreign award is already stamped as a decree and the party, having a foreign award can straight away apply for enforcement of it and in such circumstances, the party having a foreign award has got 12 years time like that of a decree holder”.

If the Award directs any payment of money or the delivery of any property to be made at a certain date or at recurring periods, the period of limitation is deemed to commence when there is a default in making the payment or delivery in respect of which enforcement is sought. However, if an Award grants a perpetual injunction, then there is no period of limitation for making an application for enforcement of the Award.

Registration, Stamp Duty and Court Fees

Indian law does not require an award-holder to obtain registration or pay any stamp duty on a foreign award[5]; primarily because a foreign award is deemed to be a decree of an Indian Court and intended to be enforced accordingly. That said, an award-holder will be required to pay court fees in accordance with the Court Fees Act, 1870 or the rules/statute applicable to the execution/enforcement proceedings before the relevant High Court.

For instance, if the Award is sought to be executed in Mumbai, the award holder will be required to pay court fees of INR 20[6] for filing an application for execution in the Bombay High Court. An additional fee of INR 20 would be payable for filing an application for seeking interim/provisional measures in the execution proceedings as outlined in the first part of this post. The quantum of court fees payable will vary depending on the applicable rules in this regard in each Indian State.

Emergency Awards

The Law Commission in its 246^th Report had categorically recommended[7] the inclusion of ‘emergency arbitrator’ within the scope of the definition of an arbitral tribunal under Section 2(d) of the Arbitration Act. This proposed amendment was intended to ensure that rules of arbitral institutions which provide for an emergency arbitrator – such as the SIAC Rules – are given statutory recognition in India. Alas, the 2015 Amendment did not incorporate this recommendation.

Therefore, at present, India does not have a mechanism for enforcement of an emergency award. That said, parties even in foreign seated arbitrations are entitled to seek similar interim reliefs from Indian courts in accordance with the provisions of Section 9 of the Arbitration Act only if the aforesaid provision is not expressly excluded from being applicable[8].

In Raffles Design International v. Educomp (2016), the Delhi High Court was required to decide whether it had the power under Section 9 of the Arbitration Act to ensure enforcement of reliefs granted in an emergency award passed by a SIAC appointed arbitrator. This request was resisted mainly on grounds that Section 9 is deemed to have been implicitly excluded by the parties since they chose Singapore as the seat and the SIAC Rules as the rules of the arbitration.

Given that Rule 26.3 of the SIAC Rules clearly allow parties to seek interim reliefs from Courts even after the constitution of the tribunal – albeit in exceptional circumstances – it was held that parties cannot be said to have expressly excluded Section 9 of the Arbitration Act. A party cannot be barred on this ground from invoking an Indian Court’s jurisdiction under Section 9 of the Arbitration Act. That said, it was also observed that the Arbitration Act has no mechanism for recognition/enforcement of foreign interim orders/emergency awards unlike Article 17H of the UNCITRAL Model Law on International Commercial Arbitration, which applies directly to Singapore seated arbitrations.

Conclusion

India has been making consistent efforts over the last few years to increase the ease of doing business. While overall progress in this regard may still be questionable, India’s arbitral landscape is certainly improving with the advent of progressive statutory amendments/ordinances and judicial pronouncements, a few of which are discussed here on this Blog.

That said, Indian lawmakers, judiciary and practitioners have much to learn, adapt to and tremendous scope to actively help develop India’s arbitration regime. Perhaps we can start with preparing rules to govern the recognition and enforcement of foreign interim arbitral orders and emergency awards; especially when Section 9 is expressly excluded by parties.

[The author would like to sincerely thank Mr. Kingshuk Banerjee for his insights on and editorial contributions to this post. Mr. Banerjee is a Partner at Wadia Ghandy & Co., Mumbai]

[1] For instance, issues involving serious fraud and crime cannot be arbitrated in India. See for discussion on arbitrability of disputes in India, Booz-Allen & Hamilton Inc vs SBI Home Finance Ltd. (2011)

[2] Section 75. Confidentiality.—Notwithstanding anything contained in any other law for the time being in force, the conciliator and the parties shall keep confidential all matters relating to the conciliation proceedings. Confidentiality shall extend also to the settlement agreement, except where its disclosure is necessary for purposes of implementation and enforcement.

[3] Section 81. Admissibility of evidence in other proceedings.—The parties shall not rely on or introduce as evidence in arbitral or judicial proceedings, whether or not such proceedings relate to the dispute that is the subject of the conciliation proceedings,-

(a) views expressed or suggestions made by the other party in respect of a possible settlement of the dispute;

(b) admissions made by the other party in the course of the conciliation proceedings;

(c) proposals made by the conciliator;

(d) the fact that the other party had indicated his willingness to accept a proposal for settlement made by the conciliator.

[4] See, Entry 136, Third Division – Applications, Part I – Applications in Specified Cases, Schedule to the Limitation Act

For the execution of any decree (other than a decree granting a mandatory injunction) or order of any civil court

[5] Naval Gent Maritime Limited v Shivnath Rai Hamarain Limited (2009) SCC Online Del 2961;

Vitol SA v Bhatia International Limited (2014) SCC Online Bom 1058

[6] See, Clause 1(f)(iii) of Schedule II of the Maharashtra Court Fees Act, 1959

[7] See, paragraph 7 of Chapter II and the Amendment of Section 2 at Chapter III of the Report.

[8] Scope of Part I of the Arbitration Act:

(2) This Part shall apply where the place of arbitration is in India.

Provided that subject to an agreement to the contrary, the provisions of sections 9 … shall also apply to international commercial arbitration, even if the place of arbitration is outside India, and an arbitral award made or to be made in such place is enforceable and recognised under the provisions of Part II of this Act. (emphasis supplied)