Q: What is enforceability of foreign award using New York Convention and Geneva Convention ?

Ans:  The Arbitration Act, 1940, did not deal with enforcement of foreign awards and therefore, a separate law. Foreign Awards (Recognition and Enforcement) Act, 1961 was enacted for the enforcement of awards under the Geneva Convention, 1927 and New York Conventions to which India was a signatory and only those countries that were designated by India can render foreign award.

However, the working of this legislation was also found to be unsatisfactory due to judicial intervention. In 1977, the functioning of the 1940 Act was questioned and examined by the Law Commission of India on grounds of delay and hardship caused due to clogs that affect smooth arbitral proceedings.


Ans:  In 1940, the Arbitration Act, 1940 was enacted by consolidating all the provisions related to arbitration, which remained enforceable till 1996. This act was only provisioned in relation to domestic arbitration and there was no provision for settlement of international disputes by arbitration under Arbitration Act,  1940. Growing international trade had given rise to many disputes, so there was a requirement for a law in which international arbitration as well as foreign awards would be recognized internationally. In 1927, the Geneva Convention was held and on its recommendation,  the Arbitration (Protocol and Convention) Act, 1937 was passed which was later changed into Arbitration Act, 1940. The New York Convention was concluded in 1958, on its recommendation,  the Foreign Award (Recognition and Enforcement) Act, 1961 was passed. There has been a lot of progress in international trade in the last years, so the requirement to implement economic reforms effectively was realised . For this, the emphasis was laid on amending the Arbitration Act, 1940 so that domestic disputes as well as international commercial disputes could be easily settled. In 1978, the Law Commission of India in its 76th Report recommended amendments in the Arbitration Act, 1940 in conformity with the present system. In view of the demand of the time and the changing circumstances, the legal experts and business organizations also emphasized on the need to bring changes in this act. There was no place for conciliation in this act whereas conciliation had got legal recognition in many countries. Finally in 1996 the Arbitration and Conciliation Act, 1996 was passed which came into effect from 25th January, 1996. This Act is applicable to the whole of India and also in Jammu and Kashmir reorganisation act, 2019. This act is a step towards alternative dispute relief system, a method that promotes speedy settlement of disputes. This act is based on the Model Law (United Nations Commission on International Trade Law - UNCITRAL). The United Nations Commission on International Trade Law adopted the Model Law on International Commercial Arbitration in 1985. It was recommended by the General Assembly of the United Nations to all the countries that they should enact the law which was related to arbitration by making this model law as the basis. After the Arbitration and Conciliation Act was passed in 1996, the Indian Arbitration Act, 1940, the Arbitration (Protocols and Conventions) Act, 1937 and the Foreign Awards (Recognition and Enforcement) Act, 1961 were repealed.

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