Parties to a dispute who have received an award but aren’t based in India are often faced with the question: Which Indian court should they go to have that decision enforced?
According to the clarification provided by India’s Supreme Court, any court in India can enforce a foreign arbitral award as long as the subject matter of the arbitration has a certain monetary value. The Court emphasized that commercial courts established under the 2015 Law may also enforce foreign arbitral awards in India.
So, let’s take a closer look at how the settling of disputes through arbitration in India is done & what it takes to enforce foreign arbitral awards in this country.
India: Enforcing Arbitral Awards
To have a fairly accurate idea of how arbitral awards are enforced, let’s analyze a dispute involving Hindustan Zinc LTD (Defendant) & Glencore Intl. AG (Plaintiff).
The dispute centered around two supply contracts whereby a shipment of food products had to be delivered from Australia to India. Defendant referred to an arbitration clause & wanted to settle the dispute through arbitration in London, and more specifically, at LCIA. Because the subject of the dispute related to two separate contracts concluded between the parties, the Court rendered two awards relating to the coverage of costs & interest on costs.
Defendant contested the awards with Rajasthan’s High Court, but their appeal was rejected. They appealed the decision with another court, and while their appeal was being reviewed, they applied to the High Court of Delhi to enforce decisions on costs & interest on legal costs.
Defendant contested the verdict on the ground that the High Court of Delhi had no territorial right to adjudicate. They also claimed that their assets were in Rajasthan, but not in Delhi, which is why the only property falling under the jurisdiction of the High Court of Delhi was the property leased out to them. Defendant referred to the 1996 Arbitration Act whereby only one court could review a challenge. And because their challenge was being reviewed by the High Court of Rajasthan at the time, the High Court of Delhi shouldn’t be reviewing applications for execution of awards.
Plaintiff argued that if the subject of the foreign arbitral award were money, then a request for enforcement should have been made at a site where assets were located. Plaintiff noted that Defendant's administrative office & movable property (e.g.vehicles, bank accounts, furniture, etc,) were located in the city of Delhi. Therefore, the Delhi High Court had the necessary powers when it came to resolving a dispute by arbitration in India.
Enforcing an arbitral award in India is a complicated process, requiring parties to know all the peculiarities of this or that law. If you want to spare yourself the trouble of having to go through this ordeal, you can let IQ Decision UK do it for you. Our legal experts will be happy to advise you on the execution of foreign arbitration awards in India & lend you a helping hand with any other legal issues you might be facing in that regard.