Execution Of Foreign Arbitral Award, Singapore Being Reciprocating Country , Enforceable: Karnataka High Court

The Bench, consisting of Chief Justice Ritu Raj Awasthi and Justice Suraj Govindaraj, held that India being a signatory to the New York Convention was required to enable execution of a foreign arbitral award rendered in a reciprocating country, if the property against which the arbitral award was sought to be enforced was situated within the jurisdiction of India.

The Petitioner CTI Future Corporation filed a petition before the Karnataka High Court for enforcement of a foreign arbitral award rendered in Singapore. The Arbitration award was registered with the Singapore International Arbitration Centre.

The Counsel for the Petitioner CTI Future Corporation submitted before the High Court that the Central Government by its notification dated 06.07.1999 has declared that an arbitral award rendered in the Republic of Singapore can be enforced in India. The Counsel averred that in view of the said notification, an arbitral award rendered in Singapore could be enforced in India in a Court having territorial jurisdiction to pass the orders for execution. Since the property belonging to the Respondent against which the interim orders were being sought was likely to dock within the territorial jurisdiction of the Bangalore High Court, he contended that the Court had jurisdiction to pass the order.

The Court observed that both the Petitioner and the Respondent, against whom the award was sought to be enforced, were body corporates incorporated outside India who had no connection with India.

The Court held that Part II of the Arbitration and Conciliation Act, 1996 which deals with enforcement of certain foreign arbitral awards provides under Section 44 that for an award to be recognised as a foreign award it must be with respect to a commercial relationship as per the laws in India. Also, the Court ruled that the award must be rendered in a territory where the New York Convention has been made applicable through a notification issued by the Central Government.

The Court noted that the Central Government vide notification dated 06.07.1999 has declared the Republic of Singapore to be a territory to which the New York Convention would apply for the purpose of enforcement of foreign arbitral awards rendered in the territory of Singapore.

The Court observed that it was not disputed that the arbitral award rendered was an international commercial arbitral award and that in view of the Central Government notification dated 06.07.1999 the arbitral award rendered in Singapore could be enforced in India.

The Court ruled that a foreign arbitral award under New York Convention has been given a special status. The Court added that India being a signatory to the New York Convention, India is required to enable execution of a foreign arbitral award rendered in a reciprocating country in the event of a property being situated within the jurisdiction of India against which the arbitral award was sought to be enforced.

The Court held that considering the application filed by the Petitioner CTI Future Corporation under Part II of the Arbitration and Conciliation Act and the obligation of India under Article 51(c) of the Constitution of India, the High Court could exercise jurisdiction to enforce a foreign arbitral award rendered between parties having no connection with India, if the property against which the enforcement is sought for is situated within the territorial limits of the Court.

The Court therefore took the Petition filed by the Petitioner on record and issued notice to the Respondent.

Case Title: CTI Future Corporation versus Ducgiang Chemical and Detergent Powder Joint Stock Company

Citation: 2022 LiveLaw (Kar) 107

Dated: 18.02.2022 (Karnataka High Court)

Counsel for the Petitioner: Shreyas Jayasimha

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