From Jurisdiction To Enforcement: India's Approach To Cross-Border Arbitration

Cross-border arbitration involving Indian parties has long been shaped by recurring jurisdictional contestation rather than settled doctrine. Despite India's legislative alignment with international arbitration norms and repeated affirmation of a seat-centric framework, questions concerning the role of Indian courts persist, particularly where parties seek court assistance in foreign seated arbitrations or resist enforcement of foreign awards. The tension between territorial restraint and judicial intervention becomes most visible when Indian courts are invited to grant interim relief, appoint arbitrators or adjudicate objections at the enforcement stage. Recent jurisprudence has sought to bring greater clarity to this landscape with respect to the scope of Indian courts' jurisdiction in foreign seated arbitrations and the enforcement regime under Part II of the Arbitration and Conciliation Act, 1996 ("Act").

Statutory Architecture

The Act adopts a bifurcated structure. Part I governs arbitrators seated in India while Part II deals with enforcement of foreign awards. This territorial distinction lies at the heart of India's arbitration framework and determines the extent to which Indian courts may exercise jurisdiction over arbitral proceedings. Section 2(2) of the Act provides that Part I applies where the place of arbitration is in India. This provision when read literally excludes application of Part I to foreign seated arbitrations. However, the judicial interpretation of this provision has undergone significant evolution particularly in relation to interim relief and court assistance. Part II comprising of Sections 44 to 60 governs the recognition and enforcement of foreign awards. Indian courts' role under Part II is intentionally limited reflecting India's obligations under the New York Convention to minimise judicial interference at the enforcement stage. The tension between these two Parts has historically generated uncertainty specially where parties to a foreign-seated arbitration seek recourse to Indian courts during the pendency of proceedings or at the enforcement stage.

From Expansive Jurisdiction to Territorial Restraint

The early judicial approach expanded the reach of Indian courts over foreign seated arbitrations. In Bhatia International v. Bulk Trading S.A.¹, the Supreme Court held that Part I and Part II of the Act would apply even to foreign seated arbitrations unless expressly excluded by the parties. This interpretation enabled Indian courts to grant interim relief and exercise supervisory jurisdiction over arbitrations seated outside India.

While Bhatia International's case was driven by concerns over providing effective interim protection to parties, it created significant uncertainty and was widely criticised for undermining the territorial principle that underpins international arbitration.

This approach was decisively overturned in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. ("BALCO")² where a Constitution Bench held that Part I applies only to arbitrations seated in India. The Court reaffirmed the seat centric theory and clarified that Indian courts lack supervisory jurisdiction over foreign seated arbitrations. However, the Court applied its ruling prospectively and preserved the validity of agreements executed prior to the judgement. BALCO marked a doctrinal reset, restoring predictability and aligning Indian law with international arbitration norms.

Reintroduction of Limited Court Support

While BALCO curtailed expansive jurisdiction, it also exposed a practical gap. Parties to foreign seated arbitrations with assets or parties in India lacked access to interim relief from Indian courts. To address this, the Act introduced a proviso to Section 2(2) permitting parties to foreign seated arbitrations to seek interim measures under Section 9, assistance in evidence under Section 27 and certain appeals unless expressly excluded by agreement. This amendment carefully recalibrated the balance. Indian courts were granted a supportive, non-supervisory role enabling interim protection without encroaching upon the jurisdiction of the seat court or the arbitral tribunal. Subsequent decisions including Raffles Design International India Private Limited v. Educomp Professional Education Ltd.³ affirmed that the proviso to Section 2(2) reflects legislative intent to facilitate cross-border arbitration rather than control it. The amendment thus restored practical utility while respecting the territorial principle.

Appointment of Arbitrators

One of the recurring jurisdictional questions in cross-border arbitration concerns the appointment of arbitrators. Section 11 of the Act empowers Indian courts to appoint arbitrators where parties fail to do so. However, this power is confined to arbitrations seated in India. In Antrix Corporation Limited v. Devas Multimedia Private Limited⁴, the Supreme Court held that Indian courts lack jurisdiction to appoint arbitrators for foreign-seated arbitrations even where one of the parties is Indian. The Court reaffirmed that appointment and supervisory functions vest exclusively in the courts of the seat. This position was further reinforced in PASL Wind Solutions Private Limited v. GE Power Conversion India Private Limited⁵ where the Supreme Court upheld party autonomy in choosing a foreign seat even in an arbitration between two Indian parties. The decision confirmed that once a foreign seat is chosen Indian courts cannot assume supervisory jurisdiction under Part I including appointment powers under Section 11.

Enforcement of Foreign Awards under Part II

The enforcement regime under Part II of the Act is deliberately narrow. Section 48 sets out limited grounds on which enforcement of a foreign award may be refused closely mirroring Article V of the New York Convention. Indian courts have consistently emphasised that enforcement proceedings are not an opportunity to re-examine the merits of the dispute. In Shri Lal Mahal Limited v. Progetto Grano Spa⁶, the Supreme Court clarified that public policy defence under Section 48 is narrower than under Section 34 and excludes review on merits. More recently, courts have reinforced the principle that objections to enforcement must be construed strictly. In Vijay Karia v. Prysmian Cavi E Sistemi SRL⁷, the Supreme Court described enforcement courts as having a minimalist role and cautioned against expansive interpretation of refusal grounds.

Public Policy and Indian Sovereign Interests

Despite its pro-arbitration stance, Indian courts have shown sensitivity where enforcement may implicate fundamental sovereign or public interest concerns. The public policy exception though narrowly construed continues to be invoked in cases involving allegations of fraud, corruption or violation of basic legal principles. However, recent jurisprudence indicates that courts are increasingly unwilling to expand this exception. The trend reflects judicial awareness that excessive invocation of public policy undermines India's credibility as an arbitration-friendly jurisdiction. The balance struck is one of restraint rather than free adjudication. Indian courts retain the power to refuse enforcement in exceptional cases but exercise that power sparingly.

The current position offers relative clarity. Parties choosing a foreign seat can expect Indian courts to respect that choice, limit intervention to statutorily permitted supportive measures and enforce foreign awards with minimal scrutiny. At the same time parties must carefully draft arbitration clauses particularly with respect to seat, governing law and exclusion or inclusion of interim relief under Section 9. Ambiguities in drafting can potentially reopen jurisdictional questions and delay enforcement.

Conclusion

Indian arbitration law has travelled a considerable distance from the expansive jurisdictional approach to the seat-centric enforcement-friendly framework that now governs cross-border arbitration. Through judicial course correction and legislative intervention India has sought to harmonise jurisdictional restraint with practical support and robust enforcement. While challenges remain, particularly in ensuring consistency across courts, the trajectory is unmistakably pro-arbitration. For parties engaging in cross-border transactions involving India, the legal framework now offers a greater degree of certainty, predictability, and alignment with international arbitration standards.

Footnotes

1. (2002) 4 SCC 105

2. (2012) 9 SCC 552

3. (2016) 6 SCC 348

4. (2014) 11 SCC 560

5. (2021) 7 SCC 1

6. (2014) 2 SCC 433

7. (2020) 11 SCC 1

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