Section 57 of the Arbitration and Conciliation Act, 1996 - Conditions for Enforcement of Foreign Awards

Section 57 forms part of Part II, Chapter II of the Arbitration and Conciliation Act, 1996, which deals with Geneva Convention Awards. It sets out the statutory conditions that must be satisfied before a foreign award can be enforced in India, the circumstances in which enforcement must be refused, and the additional power of the Court where a party establishes another ground for contesting the award under the law governing the arbitration procedure.

Text of Section 57 - Conditions for enforcement of foreign awards

Amendment note: The present public-policy Explanations were substituted by the Arbitration and Conciliation (Amendment) Act, 2015, enacted as Act 3 of 2016, with effect from 23 October 2015.

Five conditions for enforcement under Section 57(1)

Section 57(1) requires all of the stated statutory conditions to be satisfied before a Geneva Convention foreign award can be enforced under Chapter II.

1. Valid submission to arbitration

The award must have been made pursuant to a submission to arbitration that is valid under the law applicable to that submission.

2. Arbitrability under Indian law

The subject-matter of the award must be capable of settlement by arbitration under the law of India. A matter that Indian law treats as non-arbitrable cannot satisfy Section 57(1)(b).

3. Proper constitution of the arbitral tribunal and procedure

The award must have been made by the arbitral tribunal provided for in the submission to arbitration, or by a tribunal constituted in the manner agreed by the parties, and the arbitration procedure must conform to the law governing that procedure.

4. Finality in the country where the award was made

The award must have become final in the country in which it was made. Section 57 states that an award is not treated as final if it remains open to opposition or appeal or if proceedings contesting its validity are pending.

5. Enforcement must not be contrary to Indian public policy or law

Section 57(1)(e) requires that enforcement of the award must not be contrary to the public policy or the law of India. The statute then defines the public-policy test through Explanations 1 and 2.

Public policy of India under Section 57

Explanation 1 states that an award is in conflict with the public policy of India only if one of the specified statutory situations exists:

• the making of the award was induced or affected by fraud or corruption;
• the making of the award violated Section 75 or Section 81;
• the award is contrary to the fundamental policy of Indian law; or
• the award conflicts with the most basic notions of morality or justice.

Explanation 2 further limits the fundamental-policy inquiry by providing that it must not become a review of the merits of the underlying dispute.

When must enforcement be refused under Section 57(2)?

Even where the conditions in Section 57(1) are satisfied, Section 57(2) requires refusal of enforcement if the Court is satisfied about any of the specified defects.

Award annulled in the country of origin

Enforcement must be refused where the award has been annulled in the country in which it was made.

Insufficient notice or improper representation

Enforcement must also be refused where the party against whom the award is invoked did not receive sufficient notice of the arbitration proceedings to present its case, or where a party under legal incapacity was not properly represented.

Award beyond the scope of the submission to arbitration

Enforcement must be refused where the award does not deal with differences contemplated by, or falling within, the terms of the submission to arbitration, or contains decisions on matters beyond that submission.

The proviso gives the Court flexibility where the award has not covered all differences submitted to the tribunal. The Court may postpone enforcement or grant enforcement subject to such guarantee as it considers appropriate.

Court power under Section 57(3)

Section 57(3) addresses an additional situation. If the party resisting enforcement proves that the law governing the arbitration procedure provides another ground entitling that party to contest the validity of the award, outside the grounds specifically identified in Section 57(1)(a), Section 57(1)(c), Section 57(2)(b), and Section 57(2)(c), the Court has a discretion.

The Court may either refuse enforcement or adjourn consideration of enforcement and give the resisting party a reasonable time to seek annulment of the award before the competent tribunal.

2015 amendment to the public-policy test

The Arbitration and Conciliation (Amendment) Act, 2015 substituted the earlier Explanation to Section 57 with the present Explanations 1 and 2, with effect from 23 October 2015. The amended wording expressly identifies the limited public-policy categories and states that the fundamental-policy inquiry must not involve a review on the merits.

Relationship with Sections 53, 56 and 58

Section 53 defines a Geneva Convention foreign award for Chapter II. Section 56 specifies the evidence that must accompany an enforcement application and expressly requires evidence relating to Section 57(1)(a) and (c). Section 58 deals with enforcement once the Court is satisfied that the foreign award is enforceable under Chapter II.

Related provisions

Section 57 should be read with Section 53 - Interpretation, Section 54 - Referral to arbitration, Section 55 - Foreign awards when binding, Section 56 - Evidence, Section 58 - Enforcement, Section 59 - Appealable orders, and Section 60 - Savings.