- A Foreign Arbitral award can be enforced in India in the following three ways:
- Award can be enforced as per the provisions of S 47 to S 48 of the (Indian) Arbitration & Conciliation Act, 1996 (Indian Arbitration Act).
- If the Award is made a Rule of Court in the country where it is pronounced, it can be enforced in accordance with S 44A of the (Indian) Civil Procedure Code, 1908 (CPC). This is permissible if the award has become enforceable by an order of the English High Court and has therefore been entered as judgment and became a decree, in accordance with S 66 of the English Arbitration Act, 1996.
- Award / Decree being treated as evidence and Suit filed on that basis.
Enforcement of Arbitration Award which has not been entered as Judgment and became decree, in accordance with S 66 of English Arbitration Act, 1996
- If an Arbitration award was made at London, it is a “Foreign Award” (New York Convention Award), in accordance with S 44 of the Arbitration and Conciliation Act, 1996. Under Indian law, where the court is satisfied that the Foreign Award is enforceable under Chapter I of Part II of the Indian Arbitration Act, the Award shall be deemed to be a decree of the Court. The Arbitration Petition for enforcement of foreign award will have to be filed in High Court which has jurisdiction over the questions forming the subject-matter of the Arbitral Award, if the same had been the subject matter of a suit on its original civil jurisdiction. The party applying for the enforcement of a foreign award shall produce before the High Court, the original award or a duly authenticated copy thereof, the original agreement for arbitration or a duly certified copy thereof, and other documents, as may necessary to prove that it is a New York Convention Award.
- Therefore, Arbitral Awards pronounced in London can be enforced in India, by filing an Arbitration Petition for the enforcement of the Award in a High Court which has jurisdiction over the questions forming subject matter of the arbitral award.
Execution as decree of Foreign Court, in accordance with S 44A of CPC
- It is to be noted that there is difference between a Foreign Award, which is deemed to be a decree, in accordance with S 49 of the Arbitration and Conciliation Act, 1996 and a Foreign Award which is entered as a judgment and became a decree of a foreign court in a reciprocating territory such as United Kingdom. Where an Arbitral Award is entered as Judgment and became decree, as per S 66 of English Arbitration Act, 1996, it was held by the Hon’ble High Court of Gujarat in M.V. Cape Climber V. Glory Wealth Shipping Pvt. Ltd. (2015 SCC OnLine Gujarat 956) that the Award can be enforced as a decree of a Foreign Court, in accordance with S 44A of CPC in accordance with the decision of Supreme Court in M.V. Al Quamar V. Tsavilris salvage International (2000(8) SCC 278) and M.V. Elisabeth & Ors. V. Harvan Investment & Trading Pvt. Ltd., 1993 Supp (2) Supreme court Cases 433.
Whether Arrest / Detention of Ship is permissible in India to Enforce Award
- The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, (Admiralty Act, 2017) which came into force on 01 April 2018 is silent on enforcement of Arbitral award, by arrest of vessel by High Court exercising its Admiralty jurisdiction. Be that as it may, the Admiralty Act is also silent on arrest of vessel to secure an Award, in a pending or future Arbitral proceeding. However, it has been held by Courts in India even in cases filed after the coming into force of the Admiralty Act, 2017 that, the principle enunciated in the M.V.Elisabeth judgment is still applicable even after the enactment and coming into force of Admiralty Act, 2017, to wit: where Statutes are silent, the remedy has to be sought by reference to the basic principle; that it is the duty of the court to devise procedural rules by analogy and expedience. It was held by Bombay high Court that procedure can be devised to permit a party who has agreed to submit disputes to arbitration to secure its claim in arbitration, provided there is no explicit legislation barring the same.
- In Ecohidrotechnika LLC V. Black Sea and Azov Sea Production & Operating Administration of Shipping & Anr. (2010 SCC OnLine Bom 277), an Arbitration Petition was filed by the Petitioner for the enforcement of a foreign arbitral award, before the Bombay High Court. However, since the Foreign Award had not attained finality and/or become an executable decree, no execution application to enforce the Foreign Award as a decree of the Court was filed. The Petitioner prayed for and the Court passed an injunction order prior to determination of the enforceability of the Foreign Award in India. The parties, however, pending the proceedings itself, arrived at settlement and filed consent terms. The order of detention was passed against Respondents in personam, but it had resulted in detention of ship. In this Arbitration Petition, there were prayers for ad interim reliefs, pending enforcement of Award, for order of arrest of vessel, an order and injunction to restrain the owner from sailing / removing vessel from Mumbai Port, an order to restrain owners from selling, encumbering, alienating, parting with possession, creating third party rights, title or interest in the said vessel. The Petition also included prayers for other suitable ad interim reliefs, such as appointment of a Court Receiver.
- It has been held by the full Bench of Bombay high Court in Ocean Line LLC, Bur Dubai (UAE) V. M.V. Golden Progress & Anr. (2007 SCC OnLine Bom 69) that in rem jurisdiction cannot be read into Section 9 of the Arbitration Act, which provides for interim measures of protection before, during or any time after the making of the award, but before it is enforced. However, in Ecohidrotecnika (supra) the Arbitral Award was already pronounced and, indirectly, by order of injunction, the Petitioner was able to detain the ship, though the order was against the owner of ship.
- While the statutes are also silent on arrest of vessel for enforcing an Arbitration award, there are also no explicit legislation barring an arrest to enforce an award. The Supreme Court had upheld the arrest of vessel by the High Court of Andhra Pradesh in execution of decree of the High Court of England, in its Admiralty Jurisdiction in M.V. Al Quamar (supra), which judgment was delivered before the coming into force of Admiralty Act, 2017. In this case, Admiralty jurisdiction was assumed by Andhra Pradesh High Court, and an order of arrest was passed against the vessel M.V. Al Quamar, in Execution of a judgment and decree of High Court of Justice, in England, exercising its Admiralty jurisdiction.
- In M.V. Al Quamar (supra), an Execution Petition was filed before the High Court of Andhra Pradesh, in terms of Section 15 of the Admiralty Courts Act, 1861 and Section 44-A, read with Order 21, Rule 10 of the (Indian) Code of Civil Procedure, 1908 (CPC); for executing the decree of the English High Court, awarding damages for repudiation of an LOF Salvage Contract. This in personam judgment of the English High Court was against the shipowner who had no connection with India. From the judgment, it appears that the Execution petition was also filed in High Court of Andhra Pradesh, against this ship owner. It was argued by the counsel, who appeared for the Appellant Master of Vessel M.V. Al Quamar in Supreme Court that the court cannot entertain an action against a foreigner resident outside the country or a foreigner not carrying on business within country unless he submits to the jurisdiction of Court in India.
- The Supreme Court upheld the judgment of division Bench of High Court of Andhra Pradesh, which judgment had rejected the above contention, based on judgment of the Supreme Court in M.V. Elisabeth case, to wit: – where statutes are silent the remedy has to be sought by reference to basic principle. It is the duty of the court to devise procedural rule by analogy and expedience. The Division bench of the High Court also held that, after reading the judgment in M.V. Elisabeth, they are of the considered view that the vessel is a juridical person, a maritime claim can be enforced against the vessel; there is no substantive distinction between the Admiralty Court’s jurisdiction and the jurisdiction under the common law for execution of a decree of a foreign origin in view of the provisions of S 44-A of CPC. Apart from this, the High Court has jurisdiction being a repository of the power to reach its arm to do justice. According to the AP High Court, by reading the M.V. Elisabeth judgment, they are unable to agree with the contention that Supreme Court has laid down any law that a ship can be arrested only for securing a maritime claim and not in execution of satisfaction of a judgment, especially in view of S 44A of CPC.
- In M.V. Cape Climber V. Glory Wealth Shipping Pvt. Ltd. (2015 SCC OnLine Guj 956), there was a dispute in respect of the charter of vessel Mineral Capeasis owned by the Plaintiff and chartered to one Industrial carriers Inc. (ICI). The Plaintiffs received a London Arbitration award in their favour and there was also a judgment and decree of English High Court in terms of award. The Plaintiffs filed an Admiralty Suit against the vessel M.V.Cape Climber, while she was lying at the port of Mundra, Gujarat for enforcement of the Arbitration Award which also became a decree by a judgment entered by High Court of England in terms of the Award. The judgments of the Supreme court in M.V. Elisabeth and M.V. Al Quamar were relied upon by Plaintiffs to contend that it was a maritime claim. The Plaintiffs successfully obtained an order of arrest of the vessel M.V. Cape Climber, owned by Freight Bulk Pvt. Ltd., allegedly an alter ego of ICI, owners of Mineral Capeasis, by the Gujarat High Court.
- It could be persuasively argued that, even after the coming into force of Admiralty Act, 2017, similar relief should be available to enforce an Arbitral Award, which is considered a decree and can be enforced in accordance with S 44-A read with Order 21 Rule 10 of the Code of Civil Procedure, 1908 (CPC), by devising a procedural rule, by analogy and expedience, where statutes are silent. Admiralty Act 2017 is silent on arrest of a vessel, in execution of a decree of a foreign court or in enforcement of an Arbitral Award. There are no explicit provisions in Admiralty Act, 2017, barring such remedy.
- If the Arbitral award has become enforceable by any order of the English High Court and has therefore been entered as judgment and became a decree, in accordance with English Arbitration Act, 1996, it can be enforced as a decree of Foreign Court, in accordance with S 44A of CPC. If not, it will have to be enforced as a Foreign Award in accordance with Chapter I, Part II of Indian Arbitration & Conciliation Act, 1996. In view of the judgments in M.V. Al Quamar and M.V. Cape Climber, there is more certainty in the matter of arrest of vessel, if the Award is entered as a judgment of the English High Court, in accordance with S 66 of the English Arbitration Act, 1996 and subsequently executed as a decree, in accordance with S 44A of CPC.
- Whether a vessel can indeed be arrested in Execution of a decree or in enforcement of an arbitral award will depend on how the Courts will interpret the judgments in M.V. Al Quamar and M.V. Cape Climber, after the coming into force of Admiralty Act, 2017. The judgment of the Division Bench of Bombay High Court in Altus Uber V. Siem Offshore Redri AS (2019 SCC OnLine Bom 1327) upholding arrest of m.v. Altus Uber, based on the M.V. Elisabeth judgment, to the effect that where statutes are silent the remedy has to be sought by reference to basic principle and that it is the duty of the court to devise procedural rule by analogy and expedience, is definitely a positive development. However, it is understood that this judgment is under appeal before the hon’ble Supreme Court, by way of a Special Leave Petition.
- While there are no statutory provisions clearly stipulating the procedure for arrest of a vessel in enforcement of a Foreign Award, I have based my advice mainly on decided case laws. Further, all the cases that I have quoted on execution and/or enforcement were filed and decided prior to the coming into force of the Admiralty Act, 2017. Accordingly, it appears to me that it is quite possible to enforce foreign awards against a vessel whilst in India on the basis of the prevailing development of Indian law.
The above article is a guest article by Mr. M. S. Vinod Kumar LLM, an Indian advocate and English solicitor and whose further details can be viewed here.