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Applicability of Article 137 of Limitation Act, 1963 Act on Enforcement of Foreign Awards.

#EnforcementofForeignAwards

For more than a decade, there were differing views emerging by various High Courts about the scope of applicability of The Limitation Act, 1963 to the enforcement of foreign awards. Bombay High Court consecutively ruled in the cases of Noy Vallesina Engineering Spa v Jindal Drugs Limited (2006) and Louis Dreyfous Commodities Suisse v Sakuma Exports Limited (2015) that the enforcement of a foreign award must take place in two stages. Firstly, enforceability of the award would be determined by Article 137 of the 1963 Act and when the award has been declared enforceable, as per Section 49 of the 1996 Act such award would become a deemed decree of the court and then Article 136 of the 1996 Act would be applicable. However, the Delhi High Court in the case of Cairn India v. Union of India observed that Article 136 of the 1963 Act would be applicable for enforcement of foreign awards.


But recently, the Apex Court put an end to this issue in the judgment of Government of India v. Vedanta Ltd. (2020), where it ruled that with respect to enforcement of foreign awards, the residuary provision Article 137 would be applicable. In doing so, the Apex Court highlighted the legislative intent of the 1963 Act stating that the statute is exclusively made for suits instituted, applications filed and appeals preferred in Indian Courts and since the foreign award is not a decree of the Indian Courts, Article 136 would not be applicable. Thus, as far as enforcement of foreign awards is concerned, Article 137 would be applicable.


Written By: Mr. Harshit Gupta, Fifth Year Law Student, Symbiosis Law School, NOIDA, Law Intern at S.Bhambri & Associates(Advocates), Delhi.


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