India has been striving to create a more conducive environment for international commercial arbitration in recent years. The country has been working on streamlining its arbitration laws to encourage foreign investors to opt for arbitration in India. The validity of a foreign arbitral award in India is an important issue that has been extensively discussed and debated in the Indian legal system. In this article, we will discuss the validity of foreign arbitral awards in India through Supreme Court of India judgments.
The Indian Arbitration and Conciliation Act, 1996 (“the Act”) provides the legal framework for domestic and international arbitration in India. Under the Act, a foreign arbitral award is treated as a domestic award and can be enforced in India. However, there are certain conditions that must be satisfied for a foreign arbitral award to be valid in India.
The validity of foreign arbitral awards in India has been examined by the Supreme Court of India in several cases. One of the landmark judgments on this issue is the Bhatia International vs Bulk Trading S.A. case. In this case, the Supreme Court held that Part I of the Act applies to foreign-seated arbitrations unless the parties have expressly or impliedly excluded its applicability. The court held that foreign awards could be set aside by Indian courts under Section 34 of the Act.
However, this judgment was overruled by the Supreme Court in the case of Bharat Aluminium Co. vs Kaiser Aluminium Technical Services Inc. In this case, the court held that Part I of the Act would not apply to foreign-seated arbitrations, and Indian courts would have jurisdiction to set aside foreign awards only under the limited grounds mentioned in Section 48 of the Act. The court held that foreign awards could not be set aside under Section 34 of the Act.
The Supreme Court has also clarified that a foreign award would be considered to be in conflict with the public policy of India if it violates basic principles of justice and morality. The public policy exception to the enforcement of foreign awards is narrow and must be construed narrowly.
In the case of Vijay Karia & Ors vs Prysmian Cavi E Sistemi SRL & Ors, the Supreme Court held that the enforcement of a foreign award could be refused if it was found to be in violation of the basic principles of justice, including the right to a fair hearing and due process. The court also clarified that the term “public policy” must be interpreted narrowly, and it should not be used as a ground to review the merits of a foreign award.
The Supreme Court has also held that the party seeking to enforce a foreign award in India must provide a certified copy of the award and the arbitration agreement, duly authenticated by the competent authority in the country where the award was made. The party must also provide a translation of the award and the agreement into English, if it is not in English.
In conclusion, the validity of foreign arbitral awards in India has been examined by the Supreme Court in several cases. The court has clarified that foreign awards can be enforced in India subject to certain conditions. The public policy exception to the enforcement of foreign awards is narrow and must be construed narrowly. The Supreme Court has also laid down the procedure for enforcing a foreign award in India. These judgments have provided clarity on the validity of foreign arbitral awards in India and have contributed to making India a more arbitration-friendly destination.