Que 1 

- Discuss in detail the procedure of appointment of Arbitrator and

recourse against arbitral award.
ANSWER:- Section 11 of the Arbitration and Conciliation Act, 1996 deals with the appointment
of arbitrators. A person of any nationality may be appointed arbitrator unless the contrary
intention is expressed by the parties. The parties are free to agree on a procedure for appointment
of arbitrator or arbitrators. Where parties fail to appoint three arbitrators, each party shall
appoint one arbitrator and the two arbitrators shall appoint the third arbitrator. Hence, appointing
three arbitrators is mandatory, with the third one being the presiding arbitrator.

Where a party fails to appoint an arbitrator in accordance with the third arbitrator with the within
thirty days from the date of receipts of a request to do so from the other party or two appointed
arbitrators fail to agree on the third arbitrator within 30 days from the date of their appointment,
the appointment shall be made, upon a request of a party, by the Chief Justice of the High Court
or any person or institution designated by him. In the absence of any procedure to appoint a sole
arbitrator, if the parties fail to agree on the arbitrator within 30 days from receipt on a request by
one party from the other party to so agree, the appointment shall be made upon request of a
party, by the Chief Justice of the High Court or any person or institution designated by him.

Where under an appointment procedure agreed upon by the parties –

a)  a party fails to act as required under that procedure; or,

b) the parties or two appointed arbitrators fail to reach an agreement as required under that
procedure, or

c) a person including an institution fails to perform any function as required under that
procedure, a party may request the Chief Justice of the High Court or any person or institution
designated by him to take the necessary measures in absence of an agreement for other means of
securing the appointment.

The decision of the Chief Justice of the High Court or the person or the institution designated by
him in appointing an arbitrator shall be final. In such appointment, two considerations are to be
made –

a) Required qualifications of the arbitrator as provided in the agreement of the parties, and

b) independent and impartial person as an arbitrator.

These are the circumstances under which the Chief Justice of a High Court can make an
appointment.

In case of appointment of a sole or third arbitrator in international commercial arbitration, the

appointing authority is the Chief Justice of India or a person or institution designated by him.

Recourse against Arbitral Award

The arbitration may be a method of dispute resolution between the parties through an arbitral
tribunal appointed by parties to the dispute or by the Court at the request of a party. there's no
provision for appeal against an arbitrational award and it's final and binding between the parties.
However, an aggrieved party could take recourse to a law court for setting aside the arbitration
award on bound grounds per Section 34 of the Arbitration and Conciliation Act, 1996.
Setting Aside arbitrational Award
The parties cannot appeal against an arbitral award on its merits and also the court cannot
interfere on its merits. The Supreme Court has determined “an arbitrator may be a judge
appointed by the parties and in and of itself passed by him isn't to be lightly interfered with.”
However, this doesn't mean that there's no check on the arbitrator’s conduct. so as to assure
correct conduct of the continuing, the law permits certain remedies against an award.
Under the repealed 1940 Act remedies were obtainable against an award- modification,
remission and set aside. These remedies are put under the 1996 Act into 2 teams. To the extent
that the remedy was for rectification of errors, it's been handed over to the parties and also
the tribunal. The remedy for setting aside has been moulded with returning back the award to the
court for removal of defects.
Section 34 provides that an arbitral award is also put aside by a court on bound grounds such as
that. These grounds are:

1. Incapacity of a party
2. Arbitration agreement not being valid
3. Party not given correct notice of proceedings
4. Nature of dispute not falling at intervals the terms of submission to arbitration
5. The arbitral procedure not being in accordance with the agreement

Section thirty-four of the Act relies on Article thirty-four of the UNCITRAL Model Law and
also the scope of the provisions for setting aside the award is much but it had been below the
Sections thirty or thirty-three of the 1940 Act. In Municipal corp. of greater Mumbai v.
Prestress products (India), the court command that the new Act was brought into being with
the categorical Parliamentary objective of curtailing judicial intervention. Section thirty-four
considerably reduces the extent of the attainable challenge to an award.
An award that is set aside isn't any longer remains enforceable by law. The parties are improved
to their former position on their claims within the dispute. Setting aside an award means it's
rejected as invalid. The award is avoided and also the matter becomes open for the call once
more. The parties become unengaged to return to arbitration or to own the matter set through
court.
The arbitration may be a method of dispute resolution between the parties through an arbitral
tribunal appointed by parties to the dispute or by the Court at the request of a party.

 The parties cannot appeal against an arbitral award on its merits and also the court cannot
interfere on its merits.
 The Supreme Court has determined “an arbitrator may be a judge appointed by the parties
and in and of itself passed by him isn't to be lightly interfered with.
Que 2 - Define and discuss Foreign Award and its relevance in New York Convention State
the conditions under which recognition and enforcement of foreign award can be refused.

ANSWER-
Under the Arbitration and Conciliation (Amendment) Act, 2015. There are two avenues available for the enforcement
of foreign awards in India, viz., the New York Convention and the Geneva Convention, as the case may be.

A. Enforcement under the New York Convention

Sections 44 to 52 of the Arbitration and Conciliation (Amendment) Act, 2015 deals with foreign awards passed under
the New York Convention.

The New York Convention defines "foreign award" as an arbitral award on differences between persons arising out
of legal relationships, whether contractual or not, considered as commercial under the law in force in India, made on
or after the 11th day of October, 1960-

a. In pursuance of an agreement in writing for arbitration to which the Convention set forth in the First Schedule
applies, and
b. In one of such territories as the Central Government, being satisfied that reciprocal provisions have been
made may, by notification in the Official Gazette, declare to be territories to which the said Convention
applies.[1]

From the abovementioned conditions, it is clear that there are two pre-requisites for enforcement of foreign awards
under the New York Convention. These are:

a. The country must be a signatory to the New York Convention.

b. The award shall be made in the territory of another contracting state which is a reciprocating territory and
notified as such by the Central Government.

Section 47 provides that the party applying for the enforcement of a foreign award shall, at the time of the application,
produce before the court (a) original award or a duly authenticated copy thereof; (b) original arbitration agreement or
a duly certified copy thereof; and (c) any evidence required to establish that the award is a foreign award. As per the
new Act, the application for enforcement of a foreign award will now only lie to High Court.

Once an application for enforcement of a foreign award is made, the other party has the opportunity to file an
objection against enforcement on the grounds recognized under Section 48 of the Act. These grounds include:

a. the parties to the agreement referred to in section 44 were, under the law applicable to them, under some
incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing
any indication thereon, under the law of the country where the award was made; or
b. the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator
or of the arbitral proceedings or was otherwise unable to present his case; or
c. the award deals with a difference not contemplated by or not falling within the terms of the submission to
arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration: Provided
that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that
part of the award which contains decisions on matters submitted to arbitration may be enforced; or
d. the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement
of the parties, or, failing such agreement, was not in accordance with the law of the country where the
arbitration took place; or
e. the award has not yet become binding on the parties, or has been set aside or suspended by a competent
authority of the country in which, or under the law of which, that award was made.
f. the subject-matter of the difference is not capable of settlement by arbitration under the law of India; or
g. the enforcement of the award would be contrary to the public policy of India.

The Amendment Act has restricted the ambit of violation of public policy for international commercial arbitration to
only include those awards that are: (i) affected by fraud or corruption, (ii) in contravention with the fundamental policy
of Indian law, or (iii) conflict with the notions of morality or justice.
It is further provided that if an application for the setting aside or suspension of the award has been made to a
competent authority, the Court may, if it considers it proper, adjourn the decision on the enforcement of the award
and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable
security.

Section 49 provides that where the Court is satisfied that the foreign award is enforceable under this Chapter, the
award shall be deemed to be a decree of that Court.

CONDITIONS WHEN FOREIGN AWARDS ARE NOT ENFORCEABLE

Sub section (2) of Section 48 empowers the court to refuse enforcement on two grounds
a) The subject matter of difference is not capable of settlement by arbitration under law in India.
b) Contrary to public policy.

In the Renusagar case, which dealt with the principles governing the ambit of the term “public
policy of India’ under Section 7(1)(b)(ii) in its application to foreign awards, ‘public policy’ was
defined as follows –

1. Fundamental policy of Indian law

2. The interests of India, and

3. Justice and morality.

Thus, the scope of challenge to a foreign award on the grounds of public policy was substantially
narrow. The case of Saw Pipes can be said to have no application to the enforcement of foreign
awards since it is a case under Section 34 of the 1996 Act. Thus, the expanded scope of ‘public
policy of India’ laid down in that case has no bearing on the enforcement of foreign awards
under Section 48(2)(b) of the 1996 Act. In Phulchand Exports Ltd. v OOO Patriot, the court,
however, considered the scope of the term ‘public policy’ in the Saw Pipes case and saw fit to
give the expression ‘public policy of India’ as found in Section 34(2)(b)(ii) and its application to
the recognition and enforcement of foreign awards, a wider ambit.

However, later in Shri Lal Mahal Ltd. v Progetto Grano SPA, the Supreme Court once again had
the opportunity to consider the scope of ‘public policy’ as it applied to foreign awards. The
appellant argued that in light to the two decisions in Saw Pipes and Phulchand , the court may
refuse to enforce a foreign award if it is contrary to the contract between the parties or if it is
patently illegal. It was argued that the scope of ‘public policy’ in Section 48(2)(b) of the 1996
Act is of wider import than the expression ‘public policy’ in Section 7(1)(b)(ii) of the 1961 Act
(repealed). The expansive construction given to the terms ‘public policy’ of India in Saw
Pipes must also be applied to the recognition and enforcement of foreign awards as opposed to
the narrower definition of the term in Renusagar case. The court disagreed and held that the
narrower interpretation in the Renusagar case must apply and the wider import of the Saw
Pipes judgment cannot be applied to foreign awards. When the holding in the Phulchand case
was pointing out, the court expressly overruled the finding contained therein. The court
concluded that in respect of foreign awards the scope of the term ‘public policy of India’ under
Section 48(2)(b) must be read narrowly as it used to be under Section 7(I)(b)(ii) of the 1961 Act
and cannot be given a broader understanding by applying the Saw Pipes judgment.