Part 2 - Enforcement Of Certain Foreign Awards MCQ Quiz - Objective Question with Answer for Part 2 - Enforcement Of Certain Foreign Awards - Download Free PDF

All are correct as per Arbitration and Conciliation Act, 1996. Unless otherwise agreed by the parties, the conciliator shall not act as an arbitrator. Unless otherwise agreed by the parties, the conciliator shall not act as a representative or counsel of a party in any arbitral or judicial proceeding in respect of a dispute that is the subject of the conciliation proceedings

Unless otherwise agreed by the parties, the conciliator shall not be presented by the parties as a witness in any arbitral or judicial proceedings

correct answer is option 2

Key PointsExplanation : Section 61.Application and scope
(1) Save as otherwise provided by any law for the time being in force and unless the parties have otherwise agreed, this Part shall apply to conciliation of disputes arising out of legal relationship, whether contractual or not and to all proceedings relating thereto.
(2) This Part shall not apply where by virtue of any law for the time being in force certain disputes may not be submitted to conciliation.

Section 85 of Arbitration and Conciliation Act. Repeal and savings,-(1) The Arbitration (Protocol and Convention) Act, 1937 (6 of 1937), the Arbitration Act, 1940 (10 of 1940) and the Foreign Awards (Recognition and Enforcement) Act, 1961 (45 of 1961) are hereby repealed.

The correct answer is Option 2

Key PointsSection 48. Conditions for enforcement of foreign awards.—(1) Enforcement of a foreign award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the court proof that—

(a) the parties to the agreement referred to in section 44 were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or

(b) the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

(c) the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be enforced; or

(d) the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or

(e) the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

(2) Enforcement of an arbitral award may also be refused if the Court finds that—

(a) the subject-matter of the difference is not capable of settlement by arbitration under the law of India; or (b) the enforcement of the award would be contrary to the public policy of India.

Explanation 1.—For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,—

(i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or

(ii) it is in contravention with the fundamental policy of Indian law; or

(iii) it is in conflict with the most basic notions of morality or justice.

Explanation 2.—For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.

(3) If an application for the setting aside or suspension of the award has been made to a competent authority referred to in clause (e) of sub-section (1) the Court may, if it considers it proper, adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable security

The correct answer is Option 3

Key Points

• Cox and Kings Limited v. SAP India Private Limited Arbitration Petition (Civil) No. 38 of 2020, held that non-signatories to an arbitration agreement can be bound by the arbitration agreement based on mutual intention. Consequently, the Supreme Court upheld the ‘group of companies’ doctrine
• The Supreme Court emphasized the principles of party autonomy and mutual consent in arbitration agreements. It noted that a party's signature on the agreement is the clearest expression of their consent to submit to the jurisdiction of an arbitral tribunal. However, the Court also pointed out that the assumption that only signatories are bound by an arbitration agreement is not always accurate.
• The Court held that the consent to be bound by an arbitration agreement can also be inferred from the acts or conduct of the parties, as outlined in the Indian Contract Act, 1872. Even though arbitration agreements are contractual in nature, the consent to be bound by them may not necessarily require a formal signature.
• Regarding non-signatories, the Supreme Court made the following conclusions:
• Arbitration agreements can arise from legal relationships between persons or entities, whether contractual or otherwise.
• Non-signatories can be bound by arbitration agreements if their actions or conduct show intent to be bound, even without signing the agreement.
• The requirement of a written arbitration agreement does not exclude the possibility of non-signatories being bound, provided there is a defined legal relationship between signatories and non-signatories.
• Once the validity of the arbitration agreement is established, the court or tribunal can determine which parties are bound by the agreement, including non-signatories.
• The Court further held that a non-signatory party could be considered part of the arbitration agreement if their role in the negotiation, performance, or termination of the underlying contract indicates their intent to be bound by the agreement.

The correct answer is Option 3

Key Points

• Cox and Kings Limited v. SAP India Private Limited Arbitration Petition (Civil) No. 38 of 2020, held that non-signatories to an arbitration agreement can be bound by the arbitration agreement based on mutual intention. Consequently, the Supreme Court upheld the ‘group of companies’ doctrine
• The Supreme Court emphasized the principles of party autonomy and mutual consent in arbitration agreements. It noted that a party's signature on the agreement is the clearest expression of their consent to submit to the jurisdiction of an arbitral tribunal. However, the Court also pointed out that the assumption that only signatories are bound by an arbitration agreement is not always accurate.
• The Court held that the consent to be bound by an arbitration agreement can also be inferred from the acts or conduct of the parties, as outlined in the Indian Contract Act, 1872. Even though arbitration agreements are contractual in nature, the consent to be bound by them may not necessarily require a formal signature.
• Regarding non-signatories, the Supreme Court made the following conclusions:
• Arbitration agreements can arise from legal relationships between persons or entities, whether contractual or otherwise.
• Non-signatories can be bound by arbitration agreements if their actions or conduct show intent to be bound, even without signing the agreement.
• The requirement of a written arbitration agreement does not exclude the possibility of non-signatories being bound, provided there is a defined legal relationship between signatories and non-signatories.
• Once the validity of the arbitration agreement is established, the court or tribunal can determine which parties are bound by the agreement, including non-signatories.
• The Court further held that a non-signatory party could be considered part of the arbitration agreement if their role in the negotiation, performance, or termination of the underlying contract indicates their intent to be bound by the agreement.

The correct answer is Option 3

Key Points

• Cox and Kings Limited v. SAP India Private Limited Arbitration Petition (Civil) No. 38 of 2020, held that non-signatories to an arbitration agreement can be bound by the arbitration agreement based on mutual intention. Consequently, the Supreme Court upheld the ‘group of companies’ doctrine
• The Supreme Court emphasized the principles of party autonomy and mutual consent in arbitration agreements. It noted that a party's signature on the agreement is the clearest expression of their consent to submit to the jurisdiction of an arbitral tribunal. However, the Court also pointed out that the assumption that only signatories are bound by an arbitration agreement is not always accurate.
• The Court held that the consent to be bound by an arbitration agreement can also be inferred from the acts or conduct of the parties, as outlined in the Indian Contract Act, 1872. Even though arbitration agreements are contractual in nature, the consent to be bound by them may not necessarily require a formal signature.
• Regarding non-signatories, the Supreme Court made the following conclusions:
• Arbitration agreements can arise from legal relationships between persons or entities, whether contractual or otherwise.
• Non-signatories can be bound by arbitration agreements if their actions or conduct show intent to be bound, even without signing the agreement.
• The requirement of a written arbitration agreement does not exclude the possibility of non-signatories being bound, provided there is a defined legal relationship between signatories and non-signatories.
• Once the validity of the arbitration agreement is established, the court or tribunal can determine which parties are bound by the agreement, including non-signatories.
• The Court further held that a non-signatory party could be considered part of the arbitration agreement if their role in the negotiation, performance, or termination of the underlying contract indicates their intent to be bound by the agreement.

All are correct as per Arbitration and Conciliation Act, 1996. Unless otherwise agreed by the parties, the conciliator shall not act as an arbitrator. Unless otherwise agreed by the parties, the conciliator shall not act as a representative or counsel of a party in any arbitral or judicial proceeding in respect of a dispute that is the subject of the conciliation proceedings

Unless otherwise agreed by the parties, the conciliator shall not be presented by the parties as a witness in any arbitral or judicial proceedings

correct answer is option 2

Key PointsExplanation : Section 61.Application and scope
(1) Save as otherwise provided by any law for the time being in force and unless the parties have otherwise agreed, this Part shall apply to conciliation of disputes arising out of legal relationship, whether contractual or not and to all proceedings relating thereto.
(2) This Part shall not apply where by virtue of any law for the time being in force certain disputes may not be submitted to conciliation.

Section 85 of Arbitration and Conciliation Act. Repeal and savings,-(1) The Arbitration (Protocol and Convention) Act, 1937 (6 of 1937), the Arbitration Act, 1940 (10 of 1940) and the Foreign Awards (Recognition and Enforcement) Act, 1961 (45 of 1961) are hereby repealed.

The correct answer is Option 2

Key PointsSection 48. Conditions for enforcement of foreign awards.—(1) Enforcement of a foreign award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the court proof that—

(a) the parties to the agreement referred to in section 44 were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or

(b) the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

(c) the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be enforced; or

(d) the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or

(e) the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

(2) Enforcement of an arbitral award may also be refused if the Court finds that—

(a) the subject-matter of the difference is not capable of settlement by arbitration under the law of India; or (b) the enforcement of the award would be contrary to the public policy of India.

Explanation 1.—For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,—

(i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or

(ii) it is in contravention with the fundamental policy of Indian law; or

(iii) it is in conflict with the most basic notions of morality or justice.

Explanation 2.—For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.

(3) If an application for the setting aside or suspension of the award has been made to a competent authority referred to in clause (e) of sub-section (1) the Court may, if it considers it proper, adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable security

Section 85 of Arbitration and Conciliation Act. Repeal and savings, The Arbitration (Protocol and Convention) Act, 1937 (6 of 1937), the Arbitration Act, 1940 (10 of 1940) and the Foreign Awards (Recognition and Enforcement) Act, 1961 (45 of 1961) are hereby repealed

The correct answer is Option 2.

Key Points

• The foreign award is an arbitration settling disputes between those parties arising out of the legal relationship, whether contractual or not, to be considered as commercial under law. 
• Chapter I of Part II of the Arbitration and Conciliation Act, 1996 deals with the enforcement of New York Convention Awards. From Sections 44 to 52, this chapter essentially outlines the conditions under which a foreign award is recognized and enforced in accordance with the New York Convention.
• In the case of Fuerst Day Lawson Ltd. v. Jindal Exports Ltd. (2011), it was held by the Supreme Court that once a foreign award is deemed enforceable, there is no requirement to make the foreign arbitral  awards a rule of the court.