Section 57 of ACA : Section 57: Conditions For Enforcement Of Foreign Awards

Explanation using Example

Imagine a scenario where an Indian company, SpiceTech, entered into a contract with a German company, AutoInnov, for the supply of specialized machinery. The contract included an arbitration clause specifying that any disputes would be resolved through arbitration in Germany, in accordance with German law.

Disagreement arose over the performance of the machinery, and AutoInnov initiated arbitration proceedings in Germany. The arbitral tribunal found in favor of AutoInnov and made an award for damages against SpiceTech.

AutoInnov now wants to enforce this award in India, where SpiceTech has substantial assets. To enforce the award under Section 57 of The Arbitration and Conciliation Act, 1996, the following conditions need to be met:

• The award was made following a valid arbitration agreement under German law (Section 57(1)(a)).
• The dispute between SpiceTech and AutoInnov is one that can be settled by arbitration in India (Section 57(1)(b)).
• The arbitral tribunal was appointed according to the agreement and followed German arbitration procedure (Section 57(1)(c)).
• The award is final in Germany, meaning there are no pending appeals or proceedings challenging it (Section 57(1)(d)).
• Enforcing the award in India would not go against Indian public policy or law (Section 57(1)(e)).

If all these conditions are satisfied, the Indian courts will likely enforce the award unless:

• The award has been nullified in Germany (Section 57(2)(a)).
• SpiceTech was not properly notified about the arbitration proceedings or could not present its case (Section 57(2)(b)).
• The award addresses issues not submitted to arbitration or goes beyond the scope of the arbitration agreement (Section 57(2)(c)).

SpiceTech could attempt to block enforcement by proving any of these points, or by showing another valid reason under German law for challenging the award (Section 57(3)).