Section 48 of the Arbitration and Conciliation Act, 1996 governs the enforcement of foreign arbitral awards in India. This provision aligns with India's commitment to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958. It enumerates specific grounds on which the enforcement of a foreign arbitral award can be refused. Over the years, Indian courts have interpreted these grounds to balance India's pro-arbitration stance with its public policy and sovereignty considerations.

Legislative Framework
Section 48 is part of Part II, Chapter I of the Act, which deals with the enforcement of foreign awards under the New York Convention. For a foreign award to be enforceable under this provision:

• The country where the award was made must be a signatory to the New York Convention.
• The award must be rendered in a territory that is notified by India as a reciprocating territory.

Text of Section 48

The section provides the following grounds to refuse enforcement:

• Party-Initiated Grounds (Subsection 1):
  • Incapacity of Parties (48(1)(a)): If parties to the arbitration agreement were under some incapacity or the agreement is invalid under the applicable law.
  • Lack of Proper Notice or Inability to Present the Case (48(1)(b)): If a party was not given proper notice of the appointment of the arbitrator or arbitral proceedings, or was unable to present its case.
  • Excess of Jurisdiction (48(1)(c)): If the award deals with disputes not contemplated or falling outside the scope of arbitration or contains decisions on matters beyond the arbitration agreement.
  • Improper Composition of Tribunal (48(1)(d)): If the composition of the arbitral tribunal or the procedure was not in accordance with the agreement of the parties or the applicable law.
  • Award Not Yet Binding or Set Aside (48(1)(e)): If the award is not binding on the parties or has been set aside or suspended by a competent authority in the country of origin.
     
• Court-Initiated Grounds (Subsection 2):
  • Public Policy (48(2)(a)): Enforcement can be refused if it is contrary to the public policy of India. Post the 2015 Amendment, public policy grounds are limited to:
    • Fraud or corruption in the award.
    • Violation of fundamental policy of Indian law.
    • Breach of basic notions of morality or justice (explained further in judgments like Renusagar Power Co. Ltd. v. General Electric Co.).
       
  • Non-Arbitrability (48(2)(b)): If the subject matter of the dispute is not capable of settlement by arbitration under Indian law.

Procedural Aspect of Enforcement

• The party resisting enforcement bears the burden of proof to establish grounds under Section 48.
• Courts have discretion to enforce the award even if some grounds are proven unless public policy is involved.
• If enforcement is refused, it does not render the award invalid; it merely restricts its enforcement in India.

Key Judicial Interpretations

• Public Policy Narrowed Post-2015 Amendment: In Ssangyong Engineering & Construction Co. Ltd. v. NHAI (2019), the Supreme Court emphasized that the scope of "public policy" should not be used to reopen the merits of the case. It restricted interference to serious issues like fraud or violation of fundamental policy.
   
• Non-Arbitrability in Focus: In Vidya Drolia v. Durga Trading Corporation (2020), the Court clarified the test of arbitrability, holding that disputes involving rights in rem (affecting third-party rights) are generally non-arbitrable.
   
• Incapacity and Notice: The Delhi High Court in Glencore International AG v. Indian Potash Ltd. (2021) emphasized that procedural irregularities like improper notice could render an award unenforceable if they substantially affect a party's ability to present its case.
   
• Excess of Jurisdiction: In Centrotrade Minerals and Metals Inc. v. Hindustan Copper Ltd. (2020), the Supreme Court reaffirmed that issues not covered under the arbitration agreement cannot form part of the award.
   
• Binding Nature of Foreign Awards: In NTPC v. Singer Co. (1992), the Court clarified that a foreign award must attain finality as per the laws of the seat of arbitration.

Comparative Perspective

India's approach to enforcement under Section 48 aligns broadly with global standards under the New York Convention. However, countries like Singapore and the UK have narrower grounds for refusal, emphasizing India's evolving jurisprudence towards a pro-enforcement bias.

Challenges and Criticisms

• Over-reliance on Public Policy: Despite a narrowed scope, public policy remains subjective and open to interpretation.
• Time Delays: Indian courts' involvement often prolongs enforcement timelines, deterring foreign investors.
• Judicial Intervention: Excessive scrutiny of foreign awards on procedural grounds sometimes undermines India's pro-arbitration regime.

Conclusion
Section 48 of the Arbitration and Conciliation Act, 1996, is a cornerstone in India's arbitration framework. While it ensures procedural and substantive fairness, judicial interpretations have sought to maintain a fine balance between India's international obligations and domestic considerations. Continuous reforms and pro-enforcement judgments signal India's commitment to becoming a robust arbitration-friendly jurisdiction.