Recognition and Enforcement of a Foreign Award Compared

A foreign award may be used in India in two ways. It may be relied on defensively, as an answer to a claim already decided abroad, which is recognition. Or it may be used offensively, to realise the money or obtain the relief it awards, which is enforcement. Section 46 provides for the first and Sections 47 to 49 for the second, with Sections 55 to 58 performing the same functions for a Geneva Convention award. The distinction matters because recognition requires no proceeding at all, while enforcement requires a petition, documents and a finding by the court.

The award as a shield and as a sword, and the single set of grounds that serves both

1. Recognition

Section 46, Arbitration and Conciliation Act, 1996

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.

Three features of the provision deserve notice. The award is binding for all purposes from the moment it satisfies the conditions of the Chapter, without any order of an Indian court. It binds the persons between whom it was made, so it operates between those parties in the same way that a judgment would. And the closing words treat reliance as a species of enforcement for the purposes of the Chapter, which is why a party resisting reliance must bring itself within Section 48 just as it would if execution were sought.

⚠ What recognition is used for

The commonest use is as a defence. A party sued in India on a claim already decided abroad produces the award and says that the matter is concluded between the parties. The next commonest is set off, where the award is relied on to extinguish or reduce the claim made against the award holder. It may also be relied on to establish a fact found by the tribunal, or to resist an inconsistent claim. In none of these does the party ask the court for execution, so no petition under Section 47 is filed and no question of limitation for enforcement arises.

2. Enforcement

Enforcement is a proceeding. The party seeking it files a petition before the High Court having jurisdiction, produces the documents required by Section 47, namely the authenticated award, the arbitration agreement and evidence that the award is a foreign award, and meets such objections as the other side raises under Section 48. If the court is satisfied that the award is enforceable, Section 49 provides that it shall be deemed to be a decree of that court, and execution follows in the same proceeding under the Code of Civil Procedure, 1908. The period of limitation is three years under Article 137 of the Limitation Act, 1963, with delay condonable.

3. The Comparison

Basis	Recognition	Enforcement
Provision	Section 46 for a New York Convention award; Section 55 for a Geneva Convention award	Sections 47 to 49; Sections 56 to 58
Use	Defensive: as a defence, a set off, or otherwise	Offensive: to realise the award
Proceeding required	None; the award is produced in the proceeding already on foot	A petition before the High Court having jurisdiction
Documents	The award, produced as evidence	The authenticated award, the agreement and proof that it is a foreign award, with translations
Order of the court	None needed; the award is binding of itself	A finding under Section 49 that the award is enforceable, whereupon it is deemed a decree
Limitation	None applies to relying on it as a defence	Three years under Article 137, with delay condonable
Objections available	Those in Section 48; reliance is treated as enforcement by Section 46	Those in Section 48
Appeal	Governed by the proceeding in which the award is relied on	Section 50(1)(b), only from a refusal to enforce

4. The Position for a Domestic Award

The same division exists for an award made in India, though the vocabulary differs. Section 35 makes the award final and binding on the parties and persons claiming under them, which is the recognition limb: a party may rely on the award as a defence or a set off without seeking execution, and the claim decided by it cannot be raised again. Section 36 is the enforcement limb, providing that the award is enforced in accordance with the Code in the same manner as if it were a decree. The distinction is less often drawn for a domestic award because there is no separate chapter and no question of a foreign origin, but it is the same distinction.

5. Practical Points

Do not file a petition where a defence will do. If the object is simply to defeat a claim brought in India, the award may be produced in that proceeding under Section 46 without any enforcement petition.
Watch limitation for enforcement. The three-year period runs from when the right to apply accrues, and a party that relies on the award defensively for years may find enforcement time-barred if it later needs execution.
Expect the same objections either way. Because Section 46 treats reliance as enforcement, the party resisting may raise the grounds in Section 48 in either situation.
Remember that refusal is local. A refusal to enforce in India leaves the award intact; the holder may enforce it wherever else the debtor has assets.

6. Related Topics and Provisions

Topic or provision	Connection
New York Convention Awards: Sections 44 to 52	The Chapter as a whole
Enforcement of a Foreign Award: Sections 47 to 49	The petition, the documents and the deemed decree
Grounds for Refusing Enforcement: Section 48	The objections available against either use
Geneva Convention Awards: Sections 53 to 60	Sections 55 to 58, which perform the same functions
Sections 35 and 36, A&C Act, 1996	The same division for an award made in India