Report No. 176
2.8. Whether Sections 35 and 36 of the Indian Act should also be made applicable to international arbitrations outside India (other than those covered the New York convention 1958 and the Geneva convention 1924 in Part - II )?
International arbitrations are covered under the 1996 Act in Part -II. So far as "enforcement" is concerned, Chapter - I of Part -II deals with New York Convention 1958 awards.
Section 44 in Part-II refers to New York convention award and defines 'foreign award' as an award made on differences arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India, made on or after 11-10-1960, in pursuance of an agreement in writing for arbitration to which the Convention set forth in the First Schedule applies.
Similarly Section 53 which applies to Geneva convention awards defines a 'foreign award' as an arbitral award in regard to differences relating to matters considered as commercial under the law in force in India made after the 28-7-1924, in pursuance of an agreement for arbitration to which the Protocol set forth in the Second schedule applies.
The First schedule refers to New York convention on the recognition and enforcement of foreign arbitral awards. The Second schedule refers to the Geneva Convention and the Protocol. The Third schedule refers to Geneva Convention. on the execution of foreign arbitral awards.
If the recognition and the execution of the New York convention awards and Geneva convention awards is covered by Part -II of the Indian Act of 1996 and would cover such international awards passed outside India, what is the position of other international awards passed outside India which are not covered by the New York convention or the Geneva Convention, in regard to their recognition and enforcement?
As stated earlier in para 2.6 while dealing with Sec.2(2) and Sec.8, there may be arbitrations with a seat outside India and not covered by Part - II of the 1996 Act such as where the international arbitration agreement is not a commercial agreement or where the agreement is not in writing or where one of the parties belongs to a country which is not a signatory to the New York and Geneva Conventions.
Would it not then be necessary to apply Sec.35 and 36 of Part -I Of the Indian Act which deal respectively with binding nature and enforcement of awards if such international awards are made outside India and not covered by the New York and Geneva conventions?
Is it not for this reason that several countries apply not only Sec.8 and 9 of the Model law but also Art.35 and 36 of the Model law to international arbitration with seat outside the country, to such arbitration agreements. Should it therefore be clarified in Sec.2(2) of the Indian Act that Sec.8 and 9 and also Sections 35 and 36 shall apply to international arbitrations outside India?
Most of the statutes of the countries stated earlier also apply Art.8,9,35 and 36 of the Model law to arbitrations with seat outside their country as also where the seat of arbitration is not yet determined or agreed to. It is therefore necessary to amend Sec.2(2) to cover such situations also.
The English Act 1996 makes provisions in a more detailed fashion not only applying provision corresponding to Art.8,9,35 and 36 of the Model law (i.e., Sec.9 to 11 and 66) but also Secs.43 and 44 of the English Act which respectively deal with 'securing the attendance of witnesses' (corresponding to Sec.27 of the Indian Act) and 'the courts power exercisable in support of arbitration proceedings'.) It contains other important provisions.
For convenience we shall set out sub-clauses 1 to 4 of sec.2 of the English Act "Sec.2(1) The provisions of this part apply where the seat of the arbitration is in England and Wales or Northern Ireland.
(2) The following sections apply even if the seat of the arbitration is outside, England and Wales or Northern Ireland or no seat has been designated or determined -
a) Sections 9 to 11 (stay of legal proceedings etc) and b) Section 66 (enforcement of aribtral awards)
(3) The powers conferred by the following sections apply even if the seat of the arbitration is outside England and Wales or Northern Ireland or no seat has been designated or determined -
a) Section 43 (securing the attendance of witnesses), and
b) Section 44 (Court powers exercisable in support of arbitral proceedings) but the court may refuse to exercise any such power if, in the opinion of the court, the fact that the seat of the arbitration is outside England and Wales or Northern Ireland or that when designated or determined, the seat is likely to be outside England and Wales or Northern Ireland makes it inappropriate to do so.
(4) The court may exercise the power conferred by any provision of this part not mentioned in Subsection (2) or (3) for the purpose of supporting the arbitral process where -
a) no seat of the arbitration has been designated or determined, and b) by reason of a connection with England and Wales or Northern Ireland, the court is satisfied, it is appropriate to do so.
(5) Section 7 (Separability of arbitration agreement) and section 8 (Death of a party) apply where the law applicable to the arbitration agreement is the law of England and Wales or Northern Ireland even if the seat of the arbitration is outside England and Wales or Northern Ireland or has not been designated or determined."
Question is whether the above provision should also be brought into Sec.2(2). The English Act further contains a provision defining the 'seat of arbitration'.
Question is whether such a provision should be introduced in the Indian Act so as to avoid disputes as to the seat of arbitration? Section 3 of the English Act reads as follows:
"Section 3 In this part the 'seat of the arbitration' means the juridical seat of the arbitration designated -
a) by the parties to the arbitration agreement or
b) by any arbitral or other institution or person vested by the parties with powers in that regard or
c) by the arbitral tribunal if so authorised by the parties, or determined, in the absence of any such designation, having regard to the parties agreement and all the relevant circumstances.