Section 34 and Section 48 Compared

The two provisions look alike and do different things. Section 34 gives an Indian court supervisory jurisdiction over an award made at a seat in India: if a ground is made out, the award is set aside and ceases to exist. Section 48 gives an Indian court an enforcement jurisdiction over a foreign award: if a ground is made out, enforcement in India is refused, and the award survives to be enforced elsewhere. The grounds overlap in wording, but the burden, the reach and the consequences all differ.

The two jurisdictions set against each other, and the one ground they share

1. Supervision and Enforcement

Only the courts of the seat may annul an award. That is why Section 34 applies to an award made in an arbitration seated in India, and why Section 48(1)(e) permits enforcement to be refused where the award has been set aside or suspended by a competent authority of the country in which, or under the law of which, it was made. An Indian court asked to enforce a foreign award takes notice of what the courts of the seat have done; it does not sit in judgment over the award itself.

2. The Comparison

Basis	Section 34	Section 48
Applies to	An award made in an arbitration seated in India	A foreign award within Section 44
Nature of the jurisdiction	Supervisory; the award may be destroyed	Enforcement; enforcement may be refused, but the award cannot be set aside
Who must prove	The applicant, for the grounds in Section 34(2)(a)	The party resisting, for every ground in Section 48(1)
Grounds found by the court	Non-arbitrability and public policy, Section 34(2)(b)	The same two, Section 48(2)
Patent illegality	Available for a purely domestic award, Section 34(2A)	No counterpart; not a ground
Validity of the agreement	Tested by the law the parties chose or the law in force in India	Tested by the law the parties chose or the law of the country where the award was made
Discretion	The court sets aside once a ground is established	The court may refuse; a residual discretion to enforce survives where no prejudice is shown
Consequence of success	The award is destroyed; the claim may be re-arbitrated, Section 43(4) excluding the time spent	Enforcement in India is refused; the award may still be enforced in another country
Limitation	Three months and a further thirty days, with Section 5 excluded	Three years under Article 137, with delay condonable
Appeal	Section 37(1)(c)	Section 50(1)(b), and only from a refusal to enforce

3. Public Policy in the Two Sections

The Explanations added in 2015 use identical words in both provisions: an award conflicts with the public policy of India only if its making was induced by fraud or corruption, or it contravenes the fundamental policy of Indian law, or it conflicts with the most basic notions of morality or justice; and the test of contravention of the fundamental policy does not entail a review on the merits. The construction nevertheless differs.

📖 Shri Lal Mahal Ltd. v. Progetto Grano SpA, (2014) 2 SCC 433

Held: The expression public policy of India in Section 48(2)(b) is narrower than the same expression in Section 34. At the enforcement stage the court has no power to review the award on the merits, and an error of fact or law is not a ground for refusal.

📖 Vijay Karia v. Prysmian Cavi E Sistemi SRL, (2020) 11 SCC 1

Held: The grounds in Section 48 are construed narrowly and the burden lies on the party resisting. A breach of a statute such as the foreign exchange legislation does not by itself contravene the fundamental policy of Indian law; the breach must go to the core of Indian public policy. The court retains a residual discretion to enforce where a ground is made out but no prejudice has been caused, and appeals under Article 136 against orders enforcing foreign awards should be entertained only rarely.

Significance: Read with Ssangyong on Section 34, the pair shows that the same statutory words are applied with a stronger pro-enforcement bias in Part II.

4. Two Consequences That Follow

An award set aside in India is gone; a foreign award refused enforcement is not. The successful party in the foreign arbitration may take the award to another country where the debtor has assets, and the Indian refusal does not bind that court.
Patent illegality cannot be smuggled into Part II. A complaint that the tribunal misapplied the law or ignored the contract must be brought, if at all, within one of the three cases in Explanation 1, and in practice within the most basic notions of justice, which requires the award to shock the conscience of the court.

⚠ What if the award is set aside at the seat

Section 48(1)(e) makes annulment at the seat a ground for refusing enforcement, but the section says that enforcement may be refused. In practice an award set aside where it was made will not be enforced in India, and Section 48(3) permits the court to adjourn and order security where such an application is pending abroad. The point to hold on to is that the Indian court never annuls a foreign award; it only declines to lend its execution machinery.

5. Related Topics and Provisions

Topic or provision	Connection
Challenge to the Arbitral Award: Section 34	The domestic challenge in detail
Grounds for Refusing Enforcement: Section 48	The Convention grounds in detail
Patent Illegality and Public Policy Compared	Why one ground has no counterpart in Part II
Seat and Venue Compared	Why only the courts of the seat may annul
Sections 37(1)(c), 43(4) and 50, A&C Act, 1996	Appeals, exclusion of time and the Part II appeal