top of page
Search

Is Arbitration Enforceable In Court?

  • Writer: leadindia400
    leadindia400
  • Aug 26, 2024
  • 3 min read

Worldwide, Arbitration Has Become The Go-To Alternative Dispute Resolution Method As It Offers Parties A More Effective And Adaptable Means Of Resolving Conflicts Outside Of The Conventional Legal System. Since The 1996 Introduction Of The Arbitration And Conciliation Act, India's Legal Environment For Arbitration Has Undergone Significant Change. The Enforcement Of Arbitral Awards In Court Is One Of The Most Important Components Of Any Arbitration Procedure.

Legal Framework Governing Arbitration In India

  • The Arbitration And Conciliation Act, 1996, Is The Primary Legislation Governing Arbitration In India. The Act Provides A Comprehensive Legal Framework For The Conduct Of Arbitral Proceedings, Recognition, And Enforcement Of Foreign Arbitral Awards, Among Other Things. Section 34 Of The Act Deals With The Setting Aside Of Arbitral Awards, While Section 36 Focuses On The Enforcement Of Arbitral Awards.


Enforcement Of Arbitration Awards

  • In The Context Of Domestic Arbitration Awards, Section 36 Of The Arbitration And Conciliation Act, 1996, Outlines The Procedure For Enforcement. According To This Provision, Once An Arbitral Award Is Made, It Shall Be Deemed To Be A Decree Of The Court. The Party In Whose Favour The Award Is Made May Apply To The Court For Its Enforcement, And The Court, Upon Being Satisfied, Shall Pass A Decree In Terms Of The Award.

  • However, There Are Certain Grounds On Which A Court May Refuse To Enforce A Domestic Arbitral Award Under Section 34 Of The Act. These Grounds Include Issues Such As The Incapacity Of A Party, The Invalidity Of The Arbitration Agreement, A Lack Of Proper Notice, Or If The Subject Matter Of The Arbitration Cannot Be Used To Settle A Dispute Under Indian Law.


Public Policy Exception

  • The Concept Of Public Policy Has Been A Crucial Factor In Determining The Enforceability Of Arbitral Awards In India. Section 34 And Section 48 Of The Arbitration And Conciliation Act Explicitly Allow A Court To Set Aside Or Refuse The Enforcement Of An Award If It Is Found To Be In Opposition To Indian Governmental Policy.

  • The Term "Public Policy" Has Been Broadly Interpreted By Indian Courts, Encompassing Not Only The Principles Of Natural Justice But Also Any Decision That Is Patently Illegal Or One That Violates The Fundamental Principles Of Justice And Morality. However, Indian Courts Have Adopted A Pro-Enforcement Approach, Emphasizing That The Public Policy Exception Should Be Applied Narrowly To Avoid Interference With The Arbitral Process.


Judicial Approach To Enforceability

Over The Years, Indian Courts Have Played A Crucial Role In Shaping The Jurisprudence Surrounding The Enforceability Of Arbitral Awards. The Supreme Court Of India, In Various Landmark Judgments, Has Consistently Emphasized The Need For A Minimal Interference Approach In Matters Of Arbitration.

  • In The Case Of Ongc Ltd. V. Saw Pipes Ltd. (2003), The Supreme Court Held That The Courts Should Not Intervene In The Merits Of An Arbitral Award, And The Public Policy Exception Should Be Narrowly Construed. The Court Emphasized That As Long As An Award Is Not In Violation Of The Fundamental Policy Of Indian Law, It Should Be Enforced.

  • In The Case Of Bharat Aluminium Co. V. Kaiser Aluminium Technical Services Inc. (2012), Commonly Known As The Balco Case, The Supreme Court Reiterated The Limited Scope Of Judicial Intervention And Emphasized The Autonomy Of Parties In Choosing Arbitration As A Means Of Dispute Resolution. The Court Held That The Public Policy Of India Would Be Violated Only If An Award Is Patently Illegal Or If It Is Contrary To The Fundamental Policy Of Indian Law.


An Essential Component Of The Arbitration Process That Guarantees The Effectiveness And Legitimacy Of The Alternative Dispute Resolution Mechanism Is The Enforceability Of Arbitration Rulings In Indian Courts. The Arbitration And Conciliation Act Of 1996 Has Developed A Strong Legal Framework That Facilitates The Recognition And Execution Of Arbitral Rulings, Both Domestically And Internationally.


The Validity Of Arbitration Rulings In Indian Courts Is A Demonstration Of India's Dedication To Offering A Proficient And Successful Conflict Resolution Method, In Addition To Being A Legislative Requirement. The Increasing Prevalence Of Arbitration As A Favoured Dispute Resolution Mechanism Is Expected To Be Bolstered By The Judicial Decisions' Uniformity And Clarity Surrounding Enforceability, Which Will Reassure Businesses And Individuals That Arbitration Is A Dependable Option For Resolving Their Disputes.


One Can Talk To A Lawyer From Lead India For Any Kind Of Legal Support. In India, Free Legal Advice Online Can Be Obtained At Lead India. Along With Receiving Free Legal Advice Online, One Can Also Ask Questions To The Experts Online Free Through Lead India.


Visit Us: — www.leadindia.law

Call Us: +91–8800788535

 
 
 

Comments

bottom of page