INDIA Law and Practice Contributed by: Anuradha Mukherjee, Omar Ahmad, Vikram Shah and Soumya Dasgupta, Cyril Amarchand Mangaldas
• disputes pertaining to inalienable sovereign and public interest functions of the state (eg, violations of criminal law, matrimonial disputes); and • disputes arising under particular statutes that mandate disputes arising thereunder as being non-arbitrable (disputes arising under the Recovery of Debts and Bankruptcy Act, 1993, rent control legislation, etc). Disputes involving fraud were previously held to be non-arbitrable. However, cases involving non-serious allegations of fraud that do not affect the making of the contract, and that are not criminal in nature or have no implication in the public domain, can be referred to arbitration. 13.3 Circumstances to Challenge an Arbitral Award While hearing a challenge to an arbitral award, the court seized of such challenge can exercise limited jurisdiction and does not sit in appeal over the award. It can only set aside or uphold the award, or remand the award to the arbitrator for a fresh decision on cer- tain matters, and only if such an application is made by the parties under Section 34 (4) of the Arbitration Act. The courts have no power to modify an arbitral award. Under the Arbitration Act, a domestic arbitral award can be challenged on the following narrow grounds: • a party was under some incapacity; • the agreement is void; • the award contains decisions on matters beyond the scope of the arbitration agreement; • the composition of the arbitral authority or the arbitral procedure was not in accordance with the arbitration agreement; • the award has been set aside or suspended by a competent authority of the country in which it was made; • the subject matter of dispute cannot be settled by arbitration under Indian law; or • the enforcement of the award would be contrary to Indian public policy. Furthermore, a domestic award shall be construed to be in conflict with the public policy of India if:
• the making of the award was induced or affected by fraud or in violation of confidentiality provisions of the Act or provisions relating to the admissibility of evidence of conciliation proceedings; • the award is in contravention of the fundamental policy of Indian law; or • the award is in conflict with the basic notions of morality and justice. An application for setting aside a domestic award shall be made within three months of the receipt of the arbi- tral award, unless sufficient cause is shown by the applicant for an extension of this period by a further period of 30 days. 13.4 Procedure for Enforcing Domestic and Foreign Arbitration Domestic Arbitral Award The enforcement of domestic arbitral awards is pro- vided for under Section 36 of the Arbitration Act, and an award has to be enforced in accordance with the provisions of the CPC, in the same manner as a decree of the court. An arbitral award can be enforced once the time provided for challenging the award has expired. However, appropriate stamp duty has to be paid for the enforcement of a domestic arbitral award. The mere filing of a challenge to the award will not stay the operation of the award and render it unen- forceable; a separate application seeking stay has to be made. Subject to such conditions as it may deem fit, a court may grant stay of operation of the arbitral award for reasons recorded in writing. Foreign Arbitral Award The enforcement of foreign awards is provided for in Part II of the Arbitration Act. A foreign award that would be enforceable under the Arbitration Act would be binding on the parties and can be relied upon by them in any legal proceedings in India. Once a court is satisfied that a foreign award is enforceable, such award will be deemed to be a decree of that court as per Section 49 of the Arbitration Act. A petition seeking the enforcement of a foreign award has to be made within three years from the date when the right to apply accrues.
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