New York Convention Awards: Definition, Reference to Arbitration, and When an Award Binds

In one line

A court asked to try a dispute covered by a foreign arbitration agreement must send the parties to arbitration, and a party who then wants to enforce the award produces three things to a High Court.

In exam wording: section 45 requires a judicial authority seized of an action in a matter covered by a section 44 agreement to refer the parties to arbitration, section 46 makes a foreign award binding for all purposes, and section 47 prescribes the evidence to be produced on an application for enforcement.

Section 45: the foreign-award counterpart of section 8

Notwithstanding anything contained in Part I or in the Code of Civil Procedure 1908, a judicial authority, when seized of an action in a matter in respect of which the parties have made an agreement referred to in section 44, shall, at the request of one of the parties or any person claiming through or under him, refer the parties to arbitration, unless it prima facie finds that the said agreement is null and void, inoperative or incapable of being performed.

Compare it with section 8, chapter 240, because the differences are examinable.

Three points.

The three-fold formula is taken straight from article II(3) of the New York Convention, printed in the First Schedule. Null and void means invalid from the start. Inoperative means it was valid but has ceased to operate, for instance because the parties abandoned it. Incapable of being performed means something makes it impossible to carry out, such as the death of a named sole arbitrator with no replacement mechanism.

The words "unless it prima facie finds" were substituted by the 2019 amendment. Before that the section read "unless it finds". The change aligns section 45 with the reference-stage philosophy that chapters 240 and 270 describe: a shallow look, with the tribunal deciding the rest.

There is no express deadline corresponding to section 8's "first statement on the substance", although a party who takes part in the action without objecting may face difficulties of a different kind.

Section 46: when a foreign award binds

Any foreign award which would be enforceable under this Chapter shall be treated as binding for all purposes on the persons as between whom it was made, and may accordingly be relied on by any of those persons by way of defence, set off or otherwise in any legal proceedings in India, and any references in this Chapter to enforcing a foreign award shall be construed as including references to relying on an award.