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Section 46 of the Arbitration and Conciliation Act, 1996: When a Foreign Award Is Binding

Section 46 explains the legal effect of a foreign award that is enforceable under Chapter I of Part II of the Arbitration and Conciliation Act, 1996. Once the award satisfies the statutory enforcement framework, it is treated as binding between the persons as between whom it was made and may also be relied on in Indian legal proceedings.

Updated for current law: September 7, 2026.

Key point: Section 46 does more than recognize enforcement by execution. It expressly allows an enforceable foreign award to be relied on by way of defence, set-off or otherwise in legal proceedings in India.

Section 46: When Foreign Award Binding

Any foreign award which would be enforceable under this Chapter shall be treated as binding for all purposes on the persons as between whom it was made, and may accordingly be relied on by any of those persons by way of defence, set off or otherwise in any legal proceedings in India and any references in this Chapter to enforcing a foreign award shall be construed as including references to relying on an award.

Official statute: India Code - Central Acts.

Meaning and effect of Section 46

Section 46 applies to a foreign award that would be enforceable under Chapter I of Part II. The provision gives such an award binding legal effect between the relevant persons and confirms that the award can be used affirmatively or defensively in Indian proceedings.

The phrase "for all purposes" emphasizes the legal finality attached to an enforceable foreign award between the persons as between whom it was made. However, Section 46 must be read together with the statutory requirements for recognition and enforcement under the rest of the Chapter.

Who is bound by a foreign award under Section 46?

The statutory language makes the award binding on the persons as between whom it was made. Questions about whether a particular person is properly bound may therefore require examination of the arbitration agreement, the arbitral proceedings, the award and the principles applicable under Part II.

Important: Section 46 should not be read as making every person connected with a dispute automatically liable under a foreign award. The identity and legal status of the persons against whom the award is sought to be relied on can remain a material enforcement issue.

Foreign award as defence, set-off or otherwise

Section 46 expressly permits an enforceable foreign award to be relied on by way of defence, set-off or otherwise in legal proceedings in India. Therefore, a person need not always invoke the award only through a separate enforcement action.

For example, where one party brings legal proceedings in India and the opposing party has the benefit of an enforceable foreign award arising between them, the award may be relied on defensively or as a set-off where legally appropriate.

The final words of Section 46 clarify that references in Chapter I to "enforcing" a foreign award include references to "relying on" such an award.

How Sections 47, 48 and 49 affect Section 46

The binding effect under Section 46 is linked to whether the foreign award would be enforceable under the Chapter. The enforcement framework is principally contained in the following provisions:

  • Section 47 specifies the evidence and documents to be produced for enforcement.
  • Section 48 sets out the limited grounds on which enforcement of a New York Convention award may be refused.
  • Section 49 provides that once the Court is satisfied that the foreign award is enforceable, it is deemed to be a decree of that Court.

Section 46 therefore concerns binding effect and reliance on the award, while Sections 47 to 49 provide the procedural and substantive framework through which enforceability is tested and given effect in India.

Relationship between Section 44 and Section 46

Before Section 46 can apply, the award must fall within the statutory concept of a foreign award under Section 44. Section 44 identifies the New York Convention awards covered by Chapter I of Part II.

Accordingly, Section 44 answers the threshold question of whether the award is a qualifying foreign award, while Section 46 describes the binding effect of such an award where it would be enforceable under the Chapter.

Supreme Court interpretation of Section 46

The Supreme Court has examined Section 46 in the context of foreign-award enforcement and questions concerning the persons against whom an award may be enforced. The Court has recognized that the statutory scheme requires attention to the arbitration agreement, the award and the identity of the persons said to be bound, while preserving the pro-enforcement structure of Part II.

Official judgment: Supreme Court of India - foreign award enforcement judgment dated August 10, 2021.

Section 46 in simple terms

If a foreign award qualifies under the New York Convention chapter and is enforceable under Indian law, Section 46 treats it as binding between the persons as between whom it was made. The award can then be used not only for formal enforcement, but also as a defence, set-off or other legally permissible basis of reliance in Indian proceedings.