# Abha Gupta v. Shri Colonizers And Developers Pvt. Ltd. & Anr

- **Citation:** (2025) 10 ILRA 191
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-10-09
- **Case number:** Execution Case No. 1 of 2025
- **Bench:** Pankaj Bhatia
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/abha-gupta-v-shri-colonizers-and-developers-pvt-ltd-anr-52639
- **Pages:** 14

## Headnote

'foreign award' amenable to Part II of the Act or
an award amenable to Part I of the Act.
Whether the execution would continue before
this Court or before the Commercial Court in
terms of the definition of the Court conferred by
virtue of Section 2(1)(e) of the Act

Head Notes
The Code of Civil Procedure-1908-Sections
47 & 151, The Arbitration & Conciliation
Act, 1996-Sections 2(1) (f), 2 (1) (e), 44-
The arbitration would fall clearly within
the definition of Section 2(1) (f) of the Act
and
is
an
'international
commercial
arbitration'- Merely because it is an
international commercial arbitration, the
same would not render the award to be a
'foreign award' as defined under Section
192 INDIAN LAW REPORTS ALLAHABAD SERIES
44 - Section 2(1)(e)(ii) clearly prescribes
that in case of international commercial
arbitration it is the High Court having
jurisdiction to hear appeals from decrees
of Courts subordinate to that High Court,
would be the appropriate Court for
execution of the award in the State of
U.P.- Section 2(1)(e)(ii) does not use the
phrase 'foreign award' for conferring the
jurisdiction on the commercial division of
the High Court as established under the
Commercial Courts Act and duly notified in
the State of U.P. (E-15)

Held - (1) The provisions of the Act and the
mandate of Section 2(2) and Section 2(7) of the
Act, the argument of the respondents, that the
award in question is a 'foreign award' deserves
to be rejected and is accordingly rejected.
(2) In the present case the arbitration would
fall clearly within the definition of Section 2(1)
(f) of the Act and is an 'international commercial
arbitration' merely because it is an international
commercial arbitration, the same would not
render the award to be a 'foreign award' that in
case of international commercial arbitration it is
the High Court having jurisdiction to hear
appeals from decrees of Courts subordinate to
that High Court, would be the appropriate Court
for execution of the award in the State of U.P.;
Section 2(1)(e)(ii) does not use the phrase
'foreign award' for conferring the jurisdiction on
the commercial division of the High Court as
established under the Commercial Courts Act
and duly notified in the State of U.P., thus, the
second argument also deserves to be rejected.
(Para 16, 18 & 20)

Case Law Cited
Bharat Aluminium Company v. Kaiser Aluminium
Technical Services Inc (2012) 9 SCC 552;Pasl
Wind Solutions Private Limited v. GE Power
Conversion India Private Limited (2021) 7 SCC
1;Kandla Container Terminal Pvt. Ltd. v. Doosan
Heavy Industries and Construction Company
Limited 2018 SCC OnLine Guj 4051

List of Acts
The Code of Civil Procedure, 1908; The
Arbitration & Conciliation Act, 1996

List of Keywords
Sec
2(1)(e)(ii),
Sec
2(1)(f);
international
commercial arbitration'; same would not render
the award to be a 'foreign award'

Case Arising From
Application being I.A. No.1 of 2025 has been
filed by the opposite party/respondent seeking
dismissal of the execution application filed by
the applicant seeking execution of an award
passed in favour of the applicant/decree holder
on 06.04.2018 at Delhi.
Application being I.A. No.2 of 2025 has been
filed seeking rejection of the application for
dismissal of execution case being I.A. No.1 of

## Text

_Characters 0–39,902 of 46,115. This is a partial read: ask again with offset=39902 for what follows._

10 All. Abha Gupta Vs. Shri Colonizers And Developers Pvt. Ltd. & Anr.
191
case it refuses to grant the benefit to the
petitioner under the scheme. In case, the
authority has passed the order rejecting the
premature
release
application
without
following the scheme, then High Court may
examine the same in the context of
parameter of scheme and reach the
conclusion whether the order rejecting the
premature release prayer was justified or
not and if no justified reason for declining
the release is found then the Court may
direct the authority to give the benefit of
the scheme to the prisoner.

19. It is apparent that the competent
authority
has
not
recorded
reasons
regarding the conduct of the prisoner in
prison as per Section 2 of the Act, 1938,
therefore, the impugned order warrants of
interference.

20. Accordingly, the writ petition is
allowed.
The
order
impugned
dated
24.02.2025, a copy of which is Annexure-
1 to the writ petition, is quashed.

21. The competent authority shall
proceed to pass a fresh order on the
application of petitioner in accordance with
law, rules and policies applicable, keeping
in view the law laid down by the Hon'ble
Supreme Court in case of 'Rashidul Jafar
@ Chota (supra) The order shall be passed
within four weeks from the date the
petitioner surrenders.

22. Further, considering the order
dated 17.12.2024 passed by Hon'ble
Supreme Court in case of Surendra @
Sunda (supra), copy of which is annexed
as Annexure No.7 to the short counter
affidavit filed on behalf of respondent no.3,
more
particularly
paragraph-4
which
clearly
provides
that
order
dated
13.11.2024 shall remain in operation until
further orders or subject to the orders
passed
by
the
authorities
regarding
allowing/rejection of the representation of
petitioner
and
the
representation
of
remission having been rejected, as such the
petitioner shall surrender within three
weeks from today.
----------
(2025) 10 ILRA 191
APPELLATE JURISDICTION
CRIMINAL SIDE
DATED: LUCKNOW 09.10.2025

BEFORE

THE HON'BLE PANKAJ BHATIA, J.

Execution Case No. 1 of 2025

Abha Gupta ...Petitioner
Versus
Shri Colonizers And Developers Pvt. Ltd. &
Anr. ...Respondents

Counsel for the Petitioner:
Anuj Kudesia, Anurag Tyagi

Counsel for the Respondents:
Pritish Kumar, Amal Rastogi, Rajeev Sharan

Issue for Consideration
Whether the award in question would be a
'foreign award' amenable to Part II of the Act or
an award amenable to Part I of the Act.
Whether the execution would continue before
this Court or before the Commercial Court in
terms of the definition of the Court conferred by
virtue of Section 2(1)(e) of the Act

Head Notes
The Code of Civil Procedure-1908-Sections
47 & 151, The Arbitration & Conciliation
Act, 1996-Sections 2(1) (f), 2 (1) (e), 44-
The arbitration would fall clearly within
the definition of Section 2(1) (f) of the Act
and
is
an
'international
commercial
arbitration'- Merely because it is an
international commercial arbitration, the
same would not render the award to be a
'foreign award' as defined under Section
192 INDIAN LAW REPORTS ALLAHABAD SERIES
44 - Section 2(1)(e)(ii) clearly prescribes
that in case of international commercial
arbitration it is the High Court having
jurisdiction to hear appeals from decrees
of Courts subordinate to that High Court,
would be the appropriate Court for
execution of the award in the State of
U.P.- Section 2(1)(e)(ii) does not use the
phrase 'foreign award' for conferring the
jurisdiction on the commercial division of
the High Court as established under the
Commercial Courts Act and duly notified in
the State of U.P. (E-15)

Held - (1) The provisions of the Act and the
mandate of Section 2(2) and Section 2(7) of the
Act, the argument of the respondents, that the
award in question is a 'foreign award' deserves
to be rejected and is accordingly rejected.
(2) In the present case the arbitration would
fall clearly within the definition of Section 2(1)
(f) of the Act and is an 'international commercial
arbitration' merely because it is an international
commercial arbitration, the same would not
render the award to be a 'foreign award' that in
case of international commercial arbitration it is
the High Court having jurisdiction to hear
appeals from decrees of Courts subordinate to
that High Court, would be the appropriate Court
for execution of the award in the State of U.P.;
Section 2(1)(e)(ii) does not use the phrase
'foreign award' for conferring the jurisdiction on
the commercial division of the High Court as
established under the Commercial Courts Act
and duly notified in the State of U.P., thus, the
second argument also deserves to be rejected.
(Para 16, 18 & 20)

Case Law Cited
Bharat Aluminium Company v. Kaiser Aluminium
Technical Services Inc (2012) 9 SCC 552;Pasl
Wind Solutions Private Limited v. GE Power
Conversion India Private Limited (2021) 7 SCC
1;Kandla Container Terminal Pvt. Ltd. v. Doosan
Heavy Industries and Construction Company
Limited 2018 SCC OnLine Guj 4051

List of Acts
The Code of Civil Procedure, 1908; The
Arbitration & Conciliation Act, 1996

List of Keywords
Sec
2(1)(e)(ii),
Sec
2(1)(f);
international
commercial arbitration'; same would not render
the award to be a 'foreign award'

Case Arising From
Application being I.A. No.1 of 2025 has been
filed by the opposite party/respondent seeking
dismissal of the execution application filed by
the applicant seeking execution of an award
passed in favour of the applicant/decree holder
on 06.04.2018 at Delhi.
Application being I.A. No.2 of 2025 has been
filed seeking rejection of the application for
dismissal of execution case being I.A. No.1 of
2025.

Appearances for Parties
Counsel for Petitioner(s) : Anuj Kudesia, Anurag
Tyagi
Counsel for Respondent(s) : Pritish Kumar, Amal
Rastogi, Rajeev Sharan

(Delivered by Hon'ble Pankaj Bhatia, J.)

I.A. No.1 of 2025 : Application for
dismissal of execution case :

I.A. No.2 of 2025 : Application for
rejecting the application for dismissal of
execution case :

1. Application being I.A. No.1 of 2025
has
been
filed
by
the
opposite
party/respondent seeking dismissal of the
execution application filed by the applicant
seeking execution of an award passed in
favour of the applicant/decree holder on
06.04.2018 at Delhi.

Application being I.A. No.2 of
2025 has been filed seeking rejection of the
application for dismissal of execution case
being I.A. No.1 of 2025.

2. The facts, in brief, are that a
Memorandum of Understanding (MoU)
was executed in between the parties - the
10 All. Abha Gupta Vs. Shri Colonizers And Developers Pvt. Ltd. & Anr.
193
applicant as well as the respondents. As the
applicant before this Court is a resident of
USA and respondent is a company
incorporated in India, on an application
filed under Section 11 of The Arbitration
and Conciliation Act (hereinafter referred
to as 'the Act'), the Hon'ble Supreme Court
appointed Justice Mr. A.P. Shah (Retd.) as
a sole arbitrator. The sole arbitrator passed
an award in favour of the applicant/decree
holder
on
06.04.2018
at
Delhi.
Subsequently, the judgment debtor filed an
objection/application under Section 34 of
the Act against the award dated 06.04.2018
before the High Court of Delhi and the
same is said to be pending. The applicant
seeking to execute the award filed an
execution case at Lucknow before the
Commercial Court, Court No.2, Lucknow.
In the said execution case, objections were
filed by the respondents under Section 47
read with Section 151 CPC mainly on the
ground that the execution has to be filed
before the Court having jurisdiction as
prescribed under Section 2(1)(e)(i) & (ii) of
the Act, as, as per the respondents, it was
'international commercial arbitration' in
terms of Section 2(1)(f) of the Act. In view
of the said objections and to avoid any
further delay, the applicant herein withdrew
the execution petition with liberty to
approach this Court which was allowed on
11.04.2025 and in terms of the said liberty,
present execution application has been
filed.

3. In the present case, orders were
passed by this Court on 11.07.2025
directing respondent nos.1 & 2 to disclose
their assets in the form of an affidavit
including movable and immovable assets
and also to file the audited balance sheets
of the last two financial years. The
respondents have not complied with the
said order and instead filed an application
being I.A. No.1 of 2025 seeking dismissal
of the execution application. In the said
application it has been stated that the award
dated 06.04.2018 sought to be executed is a
'foreign award' passed by the sole
arbitrator Justice Shri A.P. Shah (Retd.) in
an international commercial arbitration
proceedings in between the parties and
thus, it would not be governed under Part I
of the Act but would be governed by Part II
of the Act, as such, the application for
execution was not maintainable and was
liable to be dismissed.

4. The said application has been
opposed by filing objections mainly on the
ground that the award in question was
passed at Delhi. It is further refuted that the
award in question is a foreign award and
does not fall within the definition of
'foreign award' as defined under Section
44 of the Act. It is further argued that this
issue with regard to the nature of the award
sought to be executed has been considered
extensively by the Supreme Court in the
case of Bharat Aluminium Company v.
Kaiser Aluminium Technical Services
Inc.1, wherein the distinction in between
'domestic award' and 'foreign award' in
the context of the provisions of the Act was
extensively dealt with.

5. Reliance is also placed upon the
judgment of the Supreme Court in the case
of Pasl Wind Solutions Private Limited v.
GE Power Conversion India Private
Limited2, wherein the Supreme Court
placing reliance on the earlier judgment in
the case of Bharat Aluminium Company
(supra) reiterated the principles to hold that
the award rendered in India, even if it is an
international commercial arbitration as
defined under Section 2(1)(f) of the Act,
would not render it as a 'foreign award'.
194 INDIAN LAW REPORTS ALLAHABAD SERIES

6. It is further argued that the
respondents
themselves
have
filed
objection/application under Section 34 of
the Act before the High Court of Delhi and
thus,
having
availed
the
remedies
prescribed under Part I of the Act, they
cannot take ground that Part I of the Act
was not applicable. It is argued that the
parties cannot be permitted to approbate
and reprobate simultaneously.

7. In the light of the said, it is argued
that the objections filed by the judgment
debtor is liable to be dismissed.

8. In rejoinder, Shri Pritish Kumar,
learned counsel for the respondents argues
that in the alternative and in the event it is
held that the award in question is not a
foreign award as is being canvassed by the
applicant, this Court would have no
jurisdiction and it is only the Commercial
Court which would have jurisdiction in the
matter.

9. Shri Pritish Kumar also refers to the
judgment of the Supreme Court in the case
of Pasl Wind Solutions Private Limited
(supra). Reliance is also placed upon the
judgment of the Gujarat High Court in the
case of Kandla Container Terminal Pvt.
Ltd. v. Doosan Heavy Industries and
Construction Company Limited3 with
emphasis on Para 32 which reads as under:

"32.
Therefore,
the
learned
Judge, Commercial Court, Rajkot, has
unnecessarily distinguished the decision of
this Court in the case of M/s. OCI
Corporation-I (supra) and thereby has
erred in not following the said binding
decision of this Court. The decision of this
Court in M/s. OCI Corporation-I (supra)
which is reported to be confirmed by the
Hon'ble Supreme Court, specifically lays
down that if the award is in connection
with
the
international
arbitration,
execution petition shall be maintainable
before the Commercial Division of the
High Court alone. At this stage, it is
required to be noted that as such, the
applicability of the Commercial Courts Act,
2015 and/or applicability of the Arbitration
and Conciliation (Amendment) Act, 2015,
cannot be disputed as the respondent
herein - original applicant itself has
preferred the execution petition before the
Commercial Court under the Commercial
Courts Act, 2015. In the aforesaid decision
in M/s. OCI Corporation - I (supra) after
considering the Scheme of the Commercial
Courts Act, 2015, and the object and
purpose
of
the
enactment
of
the
Commercial Courts Act, 2015, and the
Scheme of the Arbitration and Conciliation
(Amendment) Act, 2015, it is specifically
observed and held that against any
decision and/or order where the subjectmatter of an arbitration is a commercial
dispute of a specified value and if such
arbitration is international commercial
arbitration, all the applications or appeals
arising out of such arbitration under the
provisions
of/the
Arbitration
and
Conciliation Act, 1996, shall be heard,
decided and disposed of by the Commercial
Division where such Commercial Division
has been constituted in the High Court i.e.
in the present case High Court of Gujarat.
It is not in dispute that in the present case,
the subject-matter of arbitration is a
commercial dispute of a specified value
and the arbitration is an international
commercial arbitration. Even when the
award is a domestic award as the venue
might have been in India, the arbitration
would still be an international commercial
arbitration. Under the circumstances, the
impugned order passed by the learned
Judge,
Commercial
Court,
Rajkot,
10 All. Abha Gupta Vs. Shri Colonizers And Developers Pvt. Ltd. & Anr.
195
overruling/setting aside the objections
raised by the appellant herein on the
jurisdiction of the Commercial Court,
Rajkot, to entertain and adjudicate the
execution petition with respect to the
international commercial arbitration and
the
order
passed
by
the
learned
Commercial Court that the said execution
petition shall be maintainable before the
Commercial Court, Rajkot, cannot be
sustained and the same deserves to be
quashed and set aside. It is, accordingly
quashed and set aside. The Commercial
Court, Rajkot, is hereby directed to return
the said execution petition to the original
applicant - original claimant to present it
before the Commercial Division of this
Court immediately and thereafter, the
original claimant - original applicant to
file the execution petition before the
Commercial Division of this Court and if
filed within a period of four weeks from the
return of the execution petition to present it
before the Commercial Division of this
Court,
the
same
be
considered
in
accordance with law and on merits at the
earliest."

10. In the light of the arguments
advanced, it is essential to notice certain
provisions of the Act which itself is
contained in two parts: Part I provides for
provisions of arbitration and Part II which
is confined to enforcement of certain
foreign awards.

11. It is essential to refer to the
definition of 'Court' as contained in
Section 2(1)(e) which is quoted herein
below:

"2. Definitions.-(1) In this Part,
unless the context otherwise requires, -...

(e) "Court" means-

(i) in the case of an arbitration
other
than
international
commercial
arbitration, the principal Civil Court of
original jurisdiction in a district, and
includes the High Court in exercise of its
ordinary original civil jurisdiction, having
jurisdiction to decide the questions forming
the subject-matter of the arbitration if the
same had been the subject-matter of a suit,
but does not include any Civil Court of a
grade inferior to such principal Civil
Court, or any Court of Small Causes;

(ii) in the case of international
commercial arbitration, the High Court in
exercise of its ordinary original civil
jurisdiction, having jurisdiction to decide
the questions forming the subject-matter of
the arbitration if the same had been the
subject-matter of a suit, and in other cases,
a High Court having jurisdiction to hear
appeals from decrees of courts subordinate
to that High Court;"

It is also essential to notice the
definition of 'international commercial
arbitration' as defined under Section 2(1)(f)
of the Act which reads as under:

"(f) "international commercial
arbitration" means an arbitration relating
to
disputes
arising
out
of
legal
relationships, whether contractual or not,
considered as commercial under the law in
force in India and where at least one of the
parties is-

(i) an individual who is a national
of, or habitually resident in, any country
other than India; or

(ii) a body corporate which is
incorporated in any country other than
India; or
196 INDIAN LAW REPORTS ALLAHABAD SERIES

(iii) an association or a body of
individuals whose central management and
control is exercised in any country other
than India; or

(iv) the Government of a foreign
country;

It is also essential to notice the
provisions of Section 2(2) and 2(7) of the
Act which are quoted hereinbelow:

"(2) This Part shall apply where
the place of arbitration is in India:

Provided that subject to an
agreement to the contrary, the provisions of
sections 9, 27 and clause (a) of sub-section
(1) and sub-section (3) of section37 shall
also apply to international commercial
arbitration, even if the place of arbitration
is outside India, and an arbitral award
made or to be made in such place is
enforceable and recognised under the
provisions of Part II of this Act.

(7) An arbitral award made
under this Part shall be considered as a
domestic award."

as well as the definition of
'foreign award' as defined under Section
44 of the Act which is contained in Part II,
which also reads as under:

"44.
Definition.
-In
this
Chapter, unless the context otherwise
requires,
'foreign
award'
means
an
arbitral award on differences between
persons arising out of legal relationships,
whether contractual or not, considered as
commercial under the law in force in India,
made on or after the 11th day of October,
1960-

(a) in pursuance of an agreement
in writing for arbitration to which the
Convention set forth in the First Schedule
applies, and

(b) in one of such territories as
the Central Government, being satisfied
that reciprocal provisions have been made
may, by notification in the Official Gazette,
declare to be territories to which the said
Convention applies."

12. In the present case, it is the
admitted case in between the parties that
the decree holder is a resident at USA and
the respondent/company is a company
incorporated in India, thus, the arbitration
relating to disputes arising out of legal
relationship in between the parties would
clearly be an 'international commercial
arbitration' as defined under Section 2(f) of
the Act.

13. It is also essential to notice that it
is agreed in between the parties that the
arbitrator in the present case was appointed
by the Hon'ble Supreme Court in exercise
of powers under Section 11(6) of the Act. It
is also not disputed in between the parties
that the award was rendered at Delhi by
Justice Mr. A.P. Shah (Retd.), thus, in view
of the provisions contained and recorded
above, what is to be decided is whether the
award in question would be a 'foreign
award' amenable to Part II of the Act or an
award amenable to Part I of the Act ?

14. The argument of Shri Pritish
Kumar that as one of the parties to the
agreement is a foreign national, it would be
an international commercial arbitration and
thus, also a foreign award, deserves to be
rejected
as
merely
because
its
an
international commercial arbitration, the
same would not ipso facto lead to a
10 All. Abha Gupta Vs. Shri Colonizers And Developers Pvt. Ltd. & Anr.
197
conclusion that it is a foreign award as is
proposed to be argued, particularly, in view
of the mandate of Section 2(2) of the Act
and Section 2(7) of the Act, extracted
above.
This
position
came
up
for
consideration before the Supreme Court in
the case of Bharat Aluminium Company
(supra) wherein interpreting Section 2(7),
the Supreme Court held as under:

"88.
Having
considered
the
aforesaid submissions, we are of the
opinion that the views expressed by the
learned counsel for the appellants are not
supported
by
the
provisions of
the
Arbitration Act, 1996. Section 2(7) of the
Arbitration Act, 1996 reads thus:

"2. (7) An arbitral award made
under this Part shall be considered as a
domestic award."

In our opinion, the aforesaid
provision does not, in any manner, relax
the territorial principle adopted by the
Arbitration Act, 1996. It certainly does not
introduce the concept of a delocalised
arbitration into the Arbitration Act, 1996.
It must be remembered that Part I of the
Arbitration Act, 1996 applies not only to
purely domestic arbitrations i.e. where
none of the parties are in any way
"foreign" but also to "international
commercial arbitrations" covered within
Section 2(1)(f) held in India. The term
"domestic award" can be used in two
senses:
one
to
distinguish
it
from
"international award", and the other to
distinguish it from a "foreign award". It
must also be remembered that "foreign
award" may well be a domestic award in
the country in which it is rendered. As the
whole of the Arbitration Act, 1996 is
designed to give different treatments to the
awards made in India and those made
outside India, the distinction is necessarily
to be made between the terms "domestic
awards" and "foreign awards". The
scheme of the Arbitration Act, 1996
provides that Part I shall apply to both
"international arbitrations" which take
place in India as well as "domestic
arbitrations" which would normally take
place in India. This is clear from a number
of provisions contained in the Arbitration
Act, 1996 viz. the Preamble of the said Act,
proviso and the explanation to Section 1(2),
Sections 2(1)(f), 11(9), 11(12), 28(1)(a)
and 28(1)(b). All the aforesaid provisions,
which
incorporate
the
term
"international",
deal
with
pre-award
situation. The term "international award"
does not occur in Part I at all. Therefore, it
would appear that the term "domestic
award" means an award made in India
whether in a purely domestic context i.e.
domestically rendered award in a domestic
arbitration or in the international context
i.e. domestically rendered award in an
international arbitration. Both the types of
awards are liable to be challenged under
Section 34 and are enforceable under
Section 36 of the Arbitration Act, 1996.
Therefore, it seems clear that the object of
Section 2(7) is to distinguish the domestic
award covered under Part I of the
Arbitration Act, 1996 from the "foreign
award" covered under Part II of the
aforesaid Act; and not to distinguish the
"domestic award" from an "international
award" rendered in India. In other words,
the provision highlights, if anything, a
clear distinction between Part I and Part II
as being applicable in completely different
fields and with no overlapping provisions.

89. That Part I and Part II are
exclusive of each other is evident also from
the definitions section in Part I and Part II.
The definitions contained in Sections
198 INDIAN LAW REPORTS ALLAHABAD SERIES
2(1)(a) to (h) are limited to Part I. The
opening line which provides "In this Part,
unless the context otherwise requires"......,
makes this perfectly clear. Similarly,
Section 44 gives the definition of a foreign
award for the purposes of Part II
(Enforcement of Certain Foreign Awards);
Chapter I (New York Convention Awards).
Further, Section 53 gives the interpretation
of a foreign award for the purposes of Part
II
(Enforcement
of
Certain
Foreign
Awards); Chapter II (Geneva Convention
Awards). From the aforesaid, the intention
of Parliament is clear that there shall be no
overlapping between Part I and Part II of
the Arbitration Act, 1996. The two parts
are mutually exclusive of each other. To
accept the submissions made by the learned
counsel for the appellants would be to
convert the "foreign award" which falls
within Section 44, into a domestic award by
virtue of the provisions contained under
Section 2(7) even if the arbitration takes
place outside India or is a foreign seated
arbitration, if the law governing the
arbitration agreement is by choice of the
parties stated to be the Arbitration Act,
1996. This, in our opinion, was not the
intention of Parliament. The territoriality
principle of the Arbitration Act, 1996,
precludes Part I from being applicable to a
foreign seated arbitration, even if the
agreement purports to provide that the
arbitration proceedings will be governed
by the Arbitration Act, 1996.

*

*

*

92. We agree with Mr Salve that
Part I only applies when the seat of
arbitration is in India, irrespective of the
kind of arbitration. Section 2(7) does not
indicate that Part I is applicable to
arbitrations held outside India.

93. We are, therefore, of the
opinion that Section 2(7) does not alter the
proposition that Part I applies only where
the "seat" or "place" of the arbitration is
in India."

The conclusion recorded in the
said case is as under:

"194. In view of the above
discussion, we are of the considered
opinion that the Arbitration Act, 1996 has
accepted the territoriality principle which
has been adopted in the Uncitral Model
Law. Section 2(2) makes a declaration that
Part I of the Arbitration Act, 1996 shall
apply to all arbitrations which take place
within India. We are of the considered
opinion that Part I of the Arbitration Act,
1996 would have no application to
international commercial arbitration held
outside India. Therefore, such awards
would only be subject to the jurisdiction of
the Indian courts when the same are sought
to be enforced in India in accordance with
the provisions contained in Part II of the
Arbitration Act, 1996. In our opinion, the
provisions contained in the Arbitration Act,
1996 make it crystal clear that there can be
no overlapping or intermingling of the
provisions contained in Part I with the
provisions contained in Part II of the
Arbitration Act, 1996."

15. The said decision was followed
and explained by the Supreme Court in the
case of Pasl Wind Solutions Private
Limited (supra) in the following manner:

"34. The Arbitration Act is in
four parts. Part I deals with arbitrations
where the seat is in India and has no
application to a foreign-seated arbitration.
It is, therefore, a complete code in dealing
with
appointment
of
arbitrators,
10 All. Abha Gupta Vs. Shri Colonizers And Developers Pvt. Ltd. & Anr.
199
commencement of arbitration, making of an
award and challenges to the aforesaid
award as well as execution of such awards.
On the other hand, Part II is not concerned
with the arbitral proceedings at all. It is
concerned only with the enforcement of a
foreign award, as defined, in India. Section
45 alone deals with referring the parties to
arbitration in the circumstances mentioned
therein. Barring this exception, in any case,
Part II does not apply to arbitral
proceedings once commenced in a country
outside India.

35. Even before the Arbitration
Act of 1996, India, being one of the earliest
signatories to the New York Convention,
legislated in accordance therewith and
enacted the Foreign Awards Act in 1961.
Under this Act, Section 2, which is pari
materia to Section 44 of the Arbitration
Act, laid down:

"2. Definition.- In this Act,
unless the context otherwise requires,
"foreign award" means an award on
differences between persons arising out of
legal relationships, whether contractual or
not, considered as commercial under the
law in force in India, made on or after the
11th day of October, 1960-

(a) in pursuance of an agreement
in writing for arbitration to which the
Convention set forth in the Schedule
applies; and

(b) in one of such territories as
the Central Government being satisfied that
reciprocal provisions have been made,
may, by notification in the Official Gazette,
declare to be territories to which the said
Convention applies."

36. Under Section 6 of the
Foreign Awards Act, where the court is
satisfied
that
the
foreign
award
is
enforceable, the court shall order the
award to be filed and shall proceed to
pronounce judgment according to the
award. This provision has since been done
away with by the Arbitration Act, 1996 as
Section 49 of the Arbitration Act expressly
provides that the award shall be deemed to
be a decree of the court. Thereafter,
Section 7 of the Foreign Awards Act
enumerates grounds on which such foreign
award may be refused to be enforced.
Obviously, under the earlier regime, there
was no overlap between the Arbitration
Act, 1940, which dealt only with domestic
awards, and the Foreign Awards Act. This
situation
continues
in
the
current
Arbitration Act, Part I and Part II of which
have been held to be mutually exclusive.
Thus, in Balco [Balco v. Kaiser Aluminium
Technical Services Inc., (2012) 9 SCC 552
: (2012) 4 SCC (Civ) 810] , this Court held
: (SCC pp. 584-86, 602-603 & 620-22,
paras 37, 44, 88-89, 120-21 & 124)

"37. In 1953 the International
Chamber of Commerce promoted a new
treaty to govern international commercial
arbitration. The proposals of ICC were
taken up by the United Nations Economic
and Social Council. This in turn led to the
adoption of the Convention on the
Recognition and Enforcement of Foreign
Arbitral Awards at New York in 1958
(popularly known as "the New York
Convention"). The New York Convention is
an improvement on the Geneva Convention
of 1927. It provides for a much more simple
and effective method of recognition and
enforcement of foreign arbitral awards. It
gives much wider effect to the validity of
arbitration agreement. This Convention
came into force on 7-6-1959. India became
200 INDIAN LAW REPORTS ALLAHABAD SERIES
a State signatory to this Convention on 137-1960. The Foreign Awards (Recognition
and Enforcement) Act, 1961 was enacted to
give effect to the New York Convention.

*

*

*

44. In the 1961 Act, there is no
provision for challenging the foreign award
on merits similar or identical to the
provisions contained in Sections 16 and 30
of the 1940 Act, which gave power to remit
the award to the arbitrators or umpire for
reconsideration under Section 30 which
provided the grounds for setting aside an
award. In other words, the 1961 Act dealt
only with the enforcement of foreign
awards. The Indian law has remained as
such from 1961 onwards. There was no
intermingling of matters covered under the
1940 Act, with the matters covered by the
1961 Act.

*

*

*

88. ... Section 2(7) of the
Arbitration Act, 1996 reads thus:

'2. (7) An arbitral award made
under this Part shall be considered as a
domestic award.'

In our opinion, the aforesaid
provision does not, in any manner, relax
the territorial principle adopted by the
Arbitration Act, 1996. It certainly does not
introduce the concept of a delocalised
arbitration into the Arbitration Act, 1996.
It must be remembered that Part I of the
Arbitration Act, 1996 applies not only to
purely domestic arbitrations i.e. where
none of the parties are in any way
"foreign" but also to "international
commercial arbitrations" covered within
Section 2(1)(f) held in India. The term
"domestic award" can be used in two
senses : one to distinguish it from
"international award", and the other to
distinguish it from a "foreign award". It
must also be remembered that "foreign
award" may well be a domestic award in
the country in which it is rendered. As the
whole of the Arbitration Act, 1996 is
designed to give different treatments to the
awards made in India and those made
outside India, the distinction is necessarily
to be made between the terms "domestic
awards" and "foreign awards". The
scheme of the Arbitration Act, 1996
provides that Part I shall apply to both
"international arbitrations" which take
place in India as well as "domestic
arbitrations" which would normally take
place in India. This is clear from a number
of provisions contained in the Arbitration
Act, 1996 viz. the Preamble of the said Act,
proviso and the Explanation to Section
1(2), Sections 2(1)(f), 11(9), 11(12),
28(1)(a) and 28(1)(b). All the aforesaid
provisions, which incorporate the term
"international",
deal
with
pre-award
situation. The term "international award"
does not occur in Part I at all. Therefore, it
would appear that the term "domestic
award" means an award made in India
whether in a purely domestic context i.e.
domestically rendered award in a domestic
arbitration or in the international context
i.e. domestically rendered award in an
international arbitration. Both the types of
awards are liable to be challenged under
Section 34 and are enforceable under
Section 36 of the Arbitration Act, 1996.
Therefore, it seems clear that the object of
Section 2(7) is to distinguish the domestic
award covered under Part I of the
Arbitration Act, 1996 from the "foreign
award" covered under Part II of the
aforesaid Act; and not to distinguish the
"domestic award" from an "international
10 All. Abha Gupta Vs. Shri Colonizers And Developers Pvt. Ltd. & Anr.
201
award" rendered in India. In other words,
the provision highlights, if anything, a
clear distinction between Part I and Part II
as being applicable in completely different
fields and with no overlapping provisions.

89. That Part I and Part II are
exclusive of each other is evident also from
the definitions section in Part I and Part II.
The definitions contained in Sections
2(1)(a) to (h) are limited to Part I. The
opening line which provides "In this Part,
unless the context otherwise requires....",
makes this perfectly clear. Similarly,
Section 44 gives the definition of a foreign
award for the purposes of Part II
(Enforcement of Certain Foreign Awards);
Chapter I (New York Convention Awards).
Further, Section 53 gives the interpretation
of a foreign award for the purposes of Part
II
(Enforcement
of
Certain
Foreign
Awards); Chapter II (Geneva Convention
Awards). From the aforesaid, the intention
of Parliament is clear that there shall be no
overlapping between Part I and Part II of
the Arbitration Act, 1996. The two parts
are mutually exclusive of each other. To
accept the submissions made by the learned
counsel for the appellants would be to
convert the "foreign award" which falls
within Section 44, into a domestic award by
virtue of the provisions contained under
Section 2(7) even if the arbitration takes
place outside India or is a foreign seated
arbitration, if the law governing the
arbitration agreement is by choice of the
parties stated to be the Arbitration Act,
1996. This, in our opinion, was not the
intention of Parliament. The territoriality
principle of the Arbitration Act, 1996,
precludes Part I from being applicable to a
foreign seated arbitration, even if the
agreement purports to provide that the
arbitration proceedings will be governed
by the Arbitration Act, 1996.

*

*

*

120. We are unable to agree with
the submission of the learned Senior
Counsel that there is any overlapping of the
provisions in Part I and Part II; nor are the
provisions in Part II supplementary to Part
I. Rather there is complete segregation
between the two parts.

121.
Generally
speaking,
regulation of arbitration consists of four
steps:

(a)
the
commencement
of
arbitration;

(b) the conduct of arbitration;

(c) the challenge to the award;
and

(d)
the
recognition
or
enforcement of the award.

In our opinion, the aforesaid
delineation is self-evident in Part I and
Part II of the Arbitration Act, 1996. Part I
of the Arbitration Act, 1996 regulates
arbitrations at all the four stages. Part II,
however, regulates arbitration only in
respect of commencement and recognition
or enforcement of the award.

*

*

*

124.
Having
accepted
the
principle of territoriality, it is evident that
the intention of Parliament was to
segregate Part I and Part II. Therefore, any
of the provisions contained in Part I cannot
be made applicable to foreign awards, as
defined under Sections 44 and 53 i.e. the
New York Convention and the Geneva
awards. This would be a distortion of the
202 INDIAN LAW REPORTS ALLAHABAD SERIES
scheme of the Act. It is, therefore, not
possible to accept the submission of Mr
Subramanium that provisions contained in
Part II are supplementary to the provision
contained in Part I. Parliament has clearly
segregated the two parts."

(emphasis in original)

37. This being the case, it is a
little difficult to accede to any argument
that would breach the wall between Parts I
and II. Mr Himani's argument that the
proviso to Section 2(2) of the Arbitration
Act is a bridge which connects the two
parts must, thus, be rejected. As a matter of
fact, Section 2(2) specifically states that
Part I applies only where the place of
arbitration is in India. It is settled law that
a proviso cannot travel beyond the main
enacting provision - see Union of India v.
Dileep Kumar Singh [Union of India v.
Dileep Kumar Singh, (2015) 4 SCC 421 :
(2015) 2 SCC (L&S) 1] (at para 20),
DMRC v. Tarun Pal Singh [DMRC v.
Tarun Pal Singh, (2018) 14 SCC 161 :
(2018) 4 SCC (Civ) 488] (at para 21),
Kandla Export Corpn. v. OCI Corpn.
[Kandla Export Corpn. v. OCI Corpn.,
(2018) 14 SCC 715 : (2018) 4 SCC (Civ)
664] (at para 13), and Mavilayi Service
Coop. Bank Ltd. v. CIT [Mavilayi Service
Coop. Bank Ltd. v. CIT, (2021) 7 SCC 90]
(at para 44).

38. As a matter of fact, the reason
for the insertion of the proviso to Section
2(2) by the Arbitration and Conciliation
(Amendment) Act, 2015 was because the
judgment in Bhatia International v. Bulk
Trading S.A. [Bhatia International v. Bulk
Trading
S.A.,
(2002)
4
SCC
105]
["Bhatia"] had muddied the waters by
holding that Section 9 would apply to
arbitrations which take place outside India
without any express provision to that effect.
The
judgment
in
Bhatia
[Bhatia
International v. Bulk Trading S.A., (2002) 4
SCC 105] has been expressly overruled by
a five-Judge Bench in Balco [Balco v.
Kaiser Aluminium Technical Services Inc.,
(2012) 9 SCC 552 : (2012) 4 SCC (Civ)
810] . Pursuant thereto, a proviso has now
been inserted to Section 2(2) which only
makes it clear that where, in an arbitration
which takes place outside India, assets of
one of the parties are situated in India and
interim orders are required qua such
assets, including preservation thereof, the
courts in India may pass such orders. It is
important to note that the expression
"international commercial arbitration" is
specifically spoken of in the context of a
place of arbitration being outside India, the
consequence of which is an arbitral award
to be made in such place, but which is
enforced
and
recognised
under
the
provisions of Part II of the Arbitration Act.
The context of this expression is, therefore,
different from the context of the definition
of "international commercial arbitration"
contained in Section 2(1)(f), which is in the
context of such arbitration taking place in
India, which only applies "unless the
context otherwise requires". The four subclauses contained in Section 2(1)(f) would
make it clear that the definition of the
expression
"international
commercial
arbitration" contained therein is partycentric in the sense that at least one of the
parties to the arbitration agreement should,
inter alia, be a person who is a national of
or habitually resident in any country other
than India. On the other hand, when
"international commercial arbitration" is
spoken of in the context of taking place
outside India, it is place-centric as is
provided by Section 44 of the Arbitration
Act. This expression, therefore, only means
10 All. Abha Gupta Vs. Shri Colonizers And Developers Pvt. Ltd.