SC Deals with Limitation and Enforcement of Foreign Arbitration Award in India

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Sep 30, 2020

SC Deals with Limitation and Enforcement of Foreign Arbitration Award in India

In Government of India v. Vedanta Ltd.^[1] the SC enforced a Malaysian seated foreign award under Section 47 of the Arbitration Act passed in favour of Vedanta Ltd. & Ors and against the Government of India. The SC inter alia held:

i. The period of limitation for filing a petition for enforcement of a foreign award in India would be governed by Article 137 of the Limitation Act, which prescribed a period of 3 years from when the right to apply accrues. In case of delay, a party may file an application under Section 5 of the Limitation Act, 1963, for condonation.

ii. Section 48 of the Act which was amended in 2015, would not have retrospective operation since the amendments were substantial in nature.

iii. The merits of an arbitral award are not open to review by the enforcement Court, which lies within the domain of the Courts where the arbitration was seated. Accordingly, errors in a judgment are not a sufficient ground for refusing enforcement of a foreign award. The enforcement Court exercising jurisdiction under Section 48, cannot refuse enforcement of a foreign award by applying a different interpretation of the terms of the contract.

[1]Civil Appeal No. 3185 of 2020.

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