What Is The Role Of Indian Courts In International Arbitration?

Indian courts play a crucial supportive and supervisory role in international arbitration involving Indian parties or conducted in India. While arbitration is designed to be an independent dispute resolution mechanism, courts ensure that the process is effective, fair, and enforceable, stepping in primarily to assist and intervene only when necessary.

Role of Indian Courts in International Arbitration

1. Supporting Arbitration Proceedings

• Courts assist in the appointment of arbitrators if parties fail to agree, under Section 11 of the Arbitration and Conciliation Act, 1996.
• They may grant interim reliefs to protect the interests of parties pending arbitration, under Section 9 (e.g., injunctions, preservation of assets).
• Courts ensure the arbitration agreement is enforced, referring parties from court proceedings to arbitration under Section 8.

2. Supervision and Jurisdictional Control

• Courts can examine their own jurisdiction and the validity of arbitration agreements to decide whether disputes should be arbitrated.
• They maintain limited supervisory jurisdiction but avoid interfering with arbitral proceedings or decisions unless statutory grounds exist.

3. Enforcement of Arbitral Awards

• Indian courts are responsible for the enforcement of domestic and foreign arbitral awards under Sections 36 and 48 respectively.
• They may refuse enforcement only on specific grounds such as public policy violations or procedural irregularities.

4. Setting Aside or Challenging Arbitral Awards

• Courts can entertain challenges to arbitral awards under Section 34 on limited grounds like fraud, bias, or violation of public policy.
• The judiciary ensures that arbitration does not become a tool for injustice.

5. Preventing Abuse of Arbitration Process

• Courts may issue anti-suit injunctions to restrain parties from pursuing parallel or conflicting court proceedings that undermine arbitration.
• They help prevent delay tactics or attempts to circumvent arbitration clauses.

6. Facilitating Recognition of Foreign Awards

• Indian courts act under the New York Convention framework to recognize and enforce foreign arbitral awards, providing India’s commitment to international arbitration norms.

Example

Scenario:

Two companies, one Indian and one foreign, enter into a contract with an arbitration clause. The Indian party files a suit in an Indian court instead of arbitration. The foreign party requests enforcement of an interim injunction from the court.

Outcome:

• The Indian court, under Section 8, refers the dispute to arbitration and stays the suit.
• The court grants interim relief under Section 9 to protect the foreign party’s interests during arbitration.
• After arbitration, the Indian court enforces the arbitral award unless valid grounds for challenge exist.

Key Takeaway:

Indian courts facilitate and safeguard international arbitration by providing necessary judicial support without encroaching upon the autonomy of arbitral proceedings.