Section 48: The Grounds for Refusing a Foreign Award, and the Narrow Public Policy Test

In one line

A foreign award is refused enforcement only on a short list of grounds, most of which the resisting party must prove, and the public policy ground is narrower here than it is for an Indian award.

In exam wording: section 48 of the Arbitration and Conciliation Act 1996 sets out the conditions for enforcement of foreign awards, sub-section (1) listing five grounds which the party against whom the award is invoked must prove and sub-section (2) two grounds which the Court may find.

The structure, which mirrors section 34 and is not identical to it

Section 48 has the same shape as section 34: grounds the resisting party must prove, and grounds the court may find of its own motion. That is not a coincidence; both derive from article V of the New York Convention, and section 34 was drafted from the same model.

But the two are not the same, and the differences are where the marks are. Set them out at the end of the chapter and the whole topic falls into place.

Section 48(1): the five grounds the resisting party must prove

Enforcement may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the court proof that:

• (a) the parties to the section 44 agreement were, under the law applicable to them, under some incapacity, or the agreement is not valid under the law to which the parties have subjected it or, failing any indication, under the law of the country where the award was made;
• (b) 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 his case;
• (c) the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission, with a proviso that if the decisions on matters submitted can be separated from those not submitted, that part which contains decisions on matters submitted may be enforced;
• (d) 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 the country where the arbitration took place; or
• (e) the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

Three observations that carry marks.

"Only if that party furnishes proof." The burden is on the resister and the grounds are exhaustive. This is the New York Convention's central achievement, chapter 500.