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by Admin
16 December 2025 8:39 AM
“Foreign arbitral award can only be set aside by the court of the country in which, or under the law of which, that award was made. Indian courts lack jurisdiction to annul such awards,” ruled Justice Pavan Kumar Dwivedi, rejecting objections to enforcement under Section 48 of the Arbitration Act.
Madhya Pradesh High Court in ARBITRATION CASE No. 60 of 2024 upheld the enforceability of a foreign arbitral award passed under the Society of Maritime Arbitrators (SMA) Rules in New York, despite objections based on limitation, lack of confirmation under Texas law, and a conflicting decree from a domestic Commercial Court. The Court emphasized the narrow scope of judicial review under Section 48 of the Arbitration and Conciliation Act, 1996, reaffirming India’s pro-enforcement stance in foreign arbitration matters.
"Award Passed Under Foreign Law Cannot Be Set Aside by Indian Court"
The case arose out of a contract dated 20.08.2014 between Tricon Energy UK Ltd. and Kriti Industries (India) Ltd. for the sale of PVC. The dispute was referred to arbitration under Clause 14 of the contract, which stipulated resolution through arbitration under SMA Rules in New York, governed by the laws of Texas. When Kriti defaulted, Tricon invoked arbitration, which culminated in a foreign award dated 21.09.2015, later corrected on 31.05.2017 to reflect the correct party details.
Kriti resisted enforcement on three primary grounds:
The enforcement petition was barred by limitation.
A Commercial Court decree (dated 31.01.2024) declared that no concluded contract or arbitration agreement existed, thereby rendering the award null and void.
The award was allegedly unenforceable under Section 48(1)(e) due to lack of judicial confirmation under Texas law, as required under Section 171.087 of the Texas Civil Practice and Remedies Code.
"Limitation Begins from Vedanta Judgment and COVID Period Must Be Excluded"
The Court first addressed the limitation issue. It held that the legal position on applicable limitation to foreign award enforcement was clarified only on 16.09.2020 in Government of India v. Vedanta Ltd., (2020) 10 SCC 1, where the Supreme Court held that Article 137 of the Limitation Act, 1963 (three years) applies. Hence, the High Court adopted a pragmatic approach, holding:
“The period of limitation of three years will commence from 16.09.2020, when the Hon’ble Apex Court held that Article 137 of the Limitation Act would apply to proceedings for enforcement of a foreign award.” [Para 15]
Furthermore, the COVID-19 pandemic period (15.03.2020 to 28.02.2022) was excluded as per the Supreme Court’s order in In Re: Cognizance for Extension of Limitation, Suo Motu W.P. (C) No. 3/2020, rendering the enforcement petition filed on 16.05.2024 within time.
"Indian Courts Have No Jurisdiction to Declare Foreign Award Null and Void"
Kriti’s strongest objection came from a decree passed by a Commercial Court in Indore (COMMS No.51/2020) which declared that no valid contract existed and the foreign award was null and void. This decree was passed on 31.01.2024 and is currently under challenge before the Division Bench in F.A. No. 604/2024.
Rejecting the objection under Section 48(2)(a) (subject matter not capable of arbitration under Indian law), the Court observed:
“Even if a Court in India has declared the award null, the same cannot affect its enforceability... The arbitral award can only be set aside by a Court of the country in which, or under the law of which, the award was made.” [Para 17.4]
The Court emphasized that the award was passed under the SMA Rules in New York and governed by Texas law, meaning only courts in the U.S. had the authority to annul it. Consequently, the Indian court’s decree could not affect enforceability.
The judgment cited the Supreme Court’s caution against judicial interference in foreign award enforcement, reiterating that only the limited grounds under Section 48 could bar enforcement—not a collateral declaration by a domestic court:
“The validity of the award can only be tested within the four corners of Section 48 of the Arbitration and Conciliation Act, 1996.” [Para 17.3]
"Confirmation Not Mandatory under Texas Law for Enforcement in India"
Kriti also argued that Texas law requires judicial confirmation of awards for them to become binding. Citing Section 171.087 of the Texas Civil Practice and Remedies Code, they claimed the absence of such confirmation made the award unenforceable under Section 48(1)(e) of the Indian Act.
Justice Dwivedi rejected this, noting: “There is no provision in the Texas law stating that, in the absence of confirmation, the award cannot be enforced. Section 171.087 merely provides that the Court shall confirm the award if no objection is raised.” [Para 19.1]
The Court held that the contractual arbitration clause expressly stipulated that the decision of the arbitrators would be “final and binding”, and that the agreement could be made a rule of Court for enforcement, establishing sufficient binding force under Indian law.
Thus, the Court ruled: “The absence of confirmation by the Court in Texas cannot be held to affect its finality or binding nature... The contention that the award has not become binding in absence of confirmation is untenable.” [Para 19.2–19.3]
"Registry Directed to Consolidate Appeals to Avoid Conflicting Rulings"
Acknowledging that the Commercial Court’s judgment is under appeal before a Division Bench in F.A. No. 604/2024, the Court took a prudent procedural step to avoid conflicting judgments. It directed:
“Registry is directed to place both A.C. No. 60/2024 and F.A. No. 604/2024 before the Hon’ble Chief Justice for assignment to a single Bench.” [Para 22]
Rejecting the objections raised under Sections 48(1)(e) and 48(2)(a) of the Arbitration and Conciliation Act, 1996, the Madhya Pradesh High Court reinforced India's pro-enforcement stance in international arbitration, refusing to allow domestic decrees or foreign procedural nuances to derail a valid New York-seated award governed by Texas law. The judgment serves as a strong reaffirmation of the principle of minimal judicial interference, comity of courts, and the finality of foreign arbitral awards under the New York Convention framework.
Date of Decision: December 10, 2025
