Geneva Convention Awards: The Older Scheme, and Why It Still Sits in the Act
Chapter Fifty
Syllabus topic 3.1, "Enforcement of Certain Foreign Awards"
Pages 253 to 258 of 377
In one line
The Geneva scheme is the older way of enforcing a foreign award, and it is harder for the winner: the award must be final where it was made, and the applicant must prove the conditions rather than the loser proving the objections.
In exam wording: Chapter II of Part II of the Arbitration and Conciliation Act 1996, sections 53 to 60, gives effect to the Geneva Protocol on Arbitration Clauses 1923 and the Geneva Convention on the Execution of Foreign Arbitral Awards 1927, set out in the Second and Third Schedules.
How to study this chapter
Do not learn Chapter II as a separate scheme to be memorised. Learn it as the contrast with Chapter I, because that is how it is examined and because the contrast is what makes the New York Convention's achievement visible.
Every section here has a counterpart in Chapter I, and in each case the Geneva version asks more of the winner.
Section 53: the definition, recalled
Chapter 500 works it through. A foreign award under this Chapter is an award on commercial differences under Indian law, made after 28 July 1924, in pursuance of an agreement to which the Geneva Protocol of 1923 applies, between persons of whom one is subject to the jurisdiction of one declared Power and the other to the jurisdiction of another, and in a territory declared by the Central Government.
Note again the extra requirement about the persons, which section 44 does not have.
Section 54: reference to arbitration
Notwithstanding anything contained in Part I or in the Code of Civil Procedure 1908, a judicial authority, on being seized of a dispute regarding a contract made between persons to whom section 53 applies and including an arbitration agreement, whether referring to present or future differences, which is valid under that section and capable of being carried into effect, shall refer the parties on the application of either of them or any person claiming through or under him to the decision of the arbitrators; and such reference shall not prejudice the competence of the judicial authority in case the agreement or the arbitration cannot proceed or becomes inoperative.
Two differences from section 45. The agreement must be valid and capable of being carried into effect, put as a positive requirement rather than as an exception. And the closing words expressly preserve the court's competence if the arbitration cannot proceed or becomes inoperative, so the reference is not a final surrender of jurisdiction.
Section 55: when binding
Word for word the same as section 46. An award which would be enforceable under the Chapter is binding for all purposes between the persons as between whom it was made, may be relied on by way of defence, set off or otherwise, and references to enforcing include references to relying on the award.
Geneva Convention Awards: The Older Scheme, and Why It Still Sits in the Act
Section 56: the evidence, and here the difference starts to bite
Section 56(1): the applicant shall, at the time of application, produce before the Court:
- (a) the original award or a copy duly authenticated in the manner required by the law of the country in which it was made;
- (b) evidence proving that the award has become final; and
- (c) such evidence as may be necessary to prove that the conditions in section 57(1)(a) and (c) are satisfied.
Clause (b) is double exequatur. The applicant must prove the award has become final in the country where it was made, which chapter 500 identifies as the defect the New York Convention was written to cure. Compare section 47(1), where the applicant produces the award, the agreement and evidence that it is a foreign award, and nothing about finality.
Section 56(2) is the same translation requirement as section 47(2), and the Explanation defines "Court" in the same words: a High Court.
Section 57: the conditions, and who must satisfy them
Section 57(1): in order that a foreign award may be enforceable under this Chapter, it shall be necessary that:
- (a) the award has been made in pursuance of a submission to arbitration which is valid under the law applicable thereto;
- (b) the subject matter of the award is capable of settlement by arbitration under the law of India;
- (c) the award has been made by the arbitral tribunal provided for in the submission, or constituted in the manner agreed upon by the parties and in conformity with the law governing the arbitration procedure;
- (d) the award has become final in the country in which it has been made, in the sense that it will not be considered as such if it is open to opposition or appeal, or if it is proved that any proceedings for the purpose of contesting the validity of the award are pending; and
- (e) the enforcement of the award is not contrary to the public policy or the law of India.
Read the opening words: "it shall be necessary that". These are conditions the applicant must establish, not objections for the resister to prove. That is the second great difference from Chapter I, where section 48(1) requires the party against whom the award is invoked to furnish proof.
Clause (e) is wider than section 48(2)(b): "contrary to the public policy or the law of India". Contrast Renusagar, chapter 520, which held that in the enforcement context something more than a violation of the law of India is needed. The Geneva provision on its face includes the law of India as well as public policy.
Geneva Convention Awards: The Older Scheme, and Why It Still Sits in the Act
Explanations 1 and 2 were inserted in 2015 in the same words as in sections 34 and 48: public policy means only fraud or corruption or a violation of sections 75 or 81, contravention of the fundamental policy of Indian law, or conflict with the most basic notions of morality or justice; and the fundamental policy test does not entail a review on the merits.
Section 57(2): even if the conditions in sub-section (1) are fulfilled, enforcement shall be refused if the Court is satisfied that:
- (a) the award has been annulled in the country in which it was made;
- (b) the party against whom it is sought to use the award was not given notice of the arbitration proceedings in sufficient time to enable him to present his case, or, being under a legal incapacity, he was not properly represented; or
- (c) the award does not deal with the differences contemplated by or falling within the terms of the submission, or contains decisions on matters beyond the scope of the submission.
So the structure is two-tier: the applicant must satisfy sub-section (1), and even then the award falls if the court is satisfied of a sub-section (2) matter. Compare that with section 48's single tier of objections.
Sections 58, 59 and 60
Section 58: where the Court is satisfied that the foreign award is enforceable under this Chapter, the award shall be deemed to be a decree of the Court. The same deeming as section 49.
Section 59: an appeal lies from an order refusing to refer under section 54 or refusing to enforce under section 57, with no second appeal and the right of appeal to the Supreme Court preserved. The same structure as section 50.
Section 60: a saving in the same terms as section 51, preserving rights a person would have had of enforcing or availing himself of an award if the Chapter had not been enacted.
Chapter I and Chapter II side by side
This is the table to learn. It answers most questions on topic 3.1 directly.
| Chapter I, New York | Chapter II, Geneva | |
|---|---|---|
| Definition | s.44 | s.53, with the extra requirement about the persons |
| Awards from | 11 October 1960 | after 28 July 1924 |
| Reference | s.45: refer unless prima facie null and void, inoperative or incapable of being performed | s.54: refer where the agreement is valid and capable of being carried into effect; the court's competence is preserved if the arbitration cannot proceed |
| Binding | s.46 | s.55, identical wording |
| Evidence | s.47: award, agreement, proof it is a foreign award | s.56: award, proof it has become final, proof of s.57(1)(a) and (c) |
| Who bears the burden | The resisting party, s.48(1) | The applicant, s.57(1), with further refusals in s.57(2) |
| Finality | Not required as such; s.48(1)(e) is an objection | Required, s.56(1)(b) and s.57(1)(d): double exequatur |
| Public policy | s.48(2)(b), with Explanations | s.57(1)(e), "public policy or the law of India", with the same Explanations |
| Enforcement | s.49, deemed a decree | s.58, deemed a decree |
| Appeals | s.50 | s.59 |
| Saving | s.51 | s.60 |
| Overlap | s.52: Chapter II does not apply where Chapter I does |
Geneva Convention Awards: The Older Scheme, and Why It Still Sits in the Act
A worked example
An award is made in a State that is party to the Geneva Protocol and Convention but not to the New York Convention, and which the Central Government has declared under section 53. The Indian respondent has appealed against the award in that State, and the appeal is pending.
Which chapter applies? Chapter II. Section 52 keeps Chapter I and Chapter II apart, and Chapter I cannot apply because the award is not one to which the New York Convention applies.
What must the applicant produce? Under section 56(1), the original award or a duly authenticated copy; evidence proving that the award has become final; and evidence proving the conditions in section 57(1)(a) and (c).
Can it prove finality? No. Section 57(1)(d) says an award will not be considered final if it is open to opposition or appeal, or if it is proved that proceedings contesting its validity are pending. An appeal is pending, so the condition fails and the award is not presently enforceable.
Would the position be different under Chapter I? Materially, yes. There is no finality condition for the applicant to prove; the pendency of a challenge is dealt with by section 48(1)(e), which the resisting party must prove, and by section 48(3), under which the court may adjourn and order security. The winner is therefore in a much better position under the New York scheme, which is exactly why it was written.
Suppose finality is later established and the respondent then says it had only four days' notice of the hearing. Under section 57(2)(b), enforcement shall be refused if the Court is satisfied that the party was not given notice of the arbitration proceedings in sufficient time to enable him to present his case.
And if the court is satisfied the award is enforceable? Section 58: the award is deemed to be a decree of the Court.
What beginners get wrong
The burden is on the applicant under Chapter II. Section 57(1) states conditions that "it shall be necessary" to satisfy, not objections for the resister.
Geneva Convention Awards: The Older Scheme, and Why It Still Sits in the Act
Finality is a condition here. Sections 56(1)(b) and 57(1)(d), which is double exequatur in the Act.
Section 57(1)(e) refers to the public policy or the law of India, wider on its face than section 48(2)(b), although the 2015 Explanations now confine the public policy limb in the same way.
Chapter II is not repealed. It is disapplied by section 52 only where Chapter I applies.
Section 57(2) applies even if sub-section (1) is satisfied, so the scheme is two-tier.
Quick revision
- 53: definition, requiring the persons to be subject to the jurisdiction of different declared Powers.
- 54: refer where the agreement is valid and capable of being carried into effect; the court's competence survives if the arbitration cannot proceed or becomes inoperative.
- 55: binding for all purposes, identical to section 46.
- 56: produce the award, evidence that it has become final, and evidence of section 57(1)(a) and (c); certified translation; "Court" means a High Court.
- 57(1): conditions the applicant must satisfy: valid submission; arbitrable under the law of India; tribunal as agreed and in conformity with the law governing the procedure; award final and not open to opposition or appeal; and enforcement not contrary to the public policy or the law of India, with the 2015 Explanations.
- 57(2): refusal even so where the award was annulled where made; insufficient notice or a party under legal incapacity not properly represented; or the award goes beyond the submission.
- 58 deemed a decree; 59 appeals only from refusals, no second appeal, Supreme Court preserved; 60 saving.
Test yourself
1. What is the single biggest practical difference between Chapter I and Chapter II? Who bears the burden. Under section 48(1) the party resisting a New York Convention award must furnish proof of a ground of refusal; under section 57(1) the applicant must satisfy the stated conditions before a Geneva Convention award is enforceable at all.
2. What is double exequatur, and where is it in the Act? The requirement that the award be shown to have become final in the country where it was made, so that the winner must in substance obtain a decision there and another here. It appears in section 56(1)(b) and section 57(1)(d).
3. When is an award not final for the purposes of section 57(1)(d)? Where it is open to opposition or appeal, or where it is proved that any proceedings for the purpose of contesting the validity of the award are pending.
4. Does satisfying section 57(1) guarantee enforcement? No. Section 57(2) provides that even if those conditions are fulfilled, enforcement shall be refused if the Court is satisfied that the award has been annulled where it was made, that the party against whom it is used had insufficient notice or, being under legal incapacity, was not properly represented, or that the award goes beyond the submission.
Geneva Convention Awards: The Older Scheme, and Why It Still Sits in the Act
5. Why does the Act keep Chapter II at all? Because a treaty binds only its parties. An award from a territory party to the Geneva instruments but not to the New York Convention falls outside Chapter I, and section 52 disapplies Chapter II only where Chapter I applies.
The rest of this subject
These notes are cut from the University's printed syllabus. Open the syllabus itself for the same subject.