Part II
Part II of the Act (Sections 44–60) deals with the Enforcement of Foreign Awards. While Part I is for awards made in India, Part II is for awards made in a foreign territory that has a reciprocal arrangement with India.
In 2025 and 2026, the law has moved toward an even stricter “Pro-Enforcement” stance, making it very difficult for Indian companies to block foreign awards on technical grounds.
1. Section 44: Definition of “Foreign Award”
For an award to be a “foreign award” under Part II, it must satisfy two conditions:
- New York/Geneva Convention: It must be from a country that is a signatory to these conventions.
- Reciprocating Territory: It must be a territory notified by the Indian Government in the Official Gazette.
- Disortho S.A.S. v. Meril Life Sciences (SC, 2025):
- The Rule: Once a “Foreign Seat” is designated, Part I is excluded.
- The Decision: The Supreme Court held that if parties agree to a seat in a foreign country (e.g., Bogota, Colombia), Indian courts cannot appoint an arbitrator under Section 11. The entire “Part I” (except Sections 9, 27, 37(1)(a) and 37(3) in specific cases) is shut off.
2. Section 47 & 49: The Two-Stage Process
Enforcement is a “Deemed Decree” process.
- Section 47: You produce the original award and the agreement.
- Section 49: Once the court is satisfied the award is enforceable, it automatically becomes a Decree of the High Court.
- Government of India v. Vedanta Ltd (Reaffirmed 2025/26):
- The Rule: A foreign award is not a decree by itself.
- The Decision: It only becomes a decree after it passes the Section 48 “objection” test. However, the court confirmed that the limitation period to file for enforcement is 3 years (under the Limitation Act), but once recognized, you have 12 years to execute it as a decree.
3. Section 48: Refusing Enforcement (The “Safety Valve”)
This is where the award-debtor tries to stop the award. In 2026, the grounds are interpreted very narrowly.
A. Public Policy (The Narrow Lens)
- Olam International Ltd. v. Manickavel Edible Oils (Madras HC, Nov 2025):
- The Rule: No Agreement = No Enforcement.
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The Decision: The court refused to enforce a foreign award because there was no “concluded contract.” The parties had 89 previous signed contracts, but for the 90th, they only had WhatsApp messages that were vague. The court held that enforcing an award based on “surmises” of a contract violates the Fundamental Policy of Indian Law.
- Vijay Karia v. Prysmian Cavi (Reaffirmed Trends 2026):
- The Rule: Violation of FEMA (Foreign Exchange Management Act) is not a violation of Public Policy.
- The Logic: A mere breach of a technical Indian law (like foreign exchange rules) isn’t enough to shock the “justice and morality” of the court. You might have to pay a fine to the RBI later, but you still have to pay the award-holder.
B. No “Patent Illegality” for Foreign Awards
- The Rule: The ground of “Patent Illegality” (Section 34(2A)) is not available under Section 48.
- Why it matters: You cannot challenge a foreign award just because the arbitrator made a mistake in law or interpreted the contract poorly. You can only challenge it if it’s a “Fundamental Policy” violation (e.g., corruption, lack of notice, or total lack of jurisdiction).
4. Part II Summary: Reciprocating vs. Non-Reciprocating
2026 Practical Tip: The “Asset Search”
In 2026, enforcement is usually sought in the High Court where the assets of the losing party are located. If the losing party has bank accounts in Mumbai, you file in the Bombay High Court, even if the company is headquartered in Delhi.