Domestic arbitration in India -- where both parties and the seat of arbitration are in India -- is governed by Part I of the Arbitration and Conciliation Act, 1996. An arbitral award can be challenged only on limited grounds under Section 34 within three months of receiving it, and once that window closes (or a challenge fails), the award is enforced like a civil court decree under Section 36.
What makes an arbitration “domestic” under Indian law
An arbitration is domestic when the arbitration agreement, the parties, and the seat of arbitration are
all within India, and the dispute does not otherwise qualify as an “international commercial arbitration”
under Section 2(1)(f) of the Act. Domestic arbitrations are governed by Part I of the Arbitration and
Conciliation Act, 1996, which sets out the arbitration agreement requirements, the tribunal's constitution
and powers, and the process for challenging or enforcing the resulting award.
Challenging an award -- Section 34's limited grounds
A party unhappy with a domestic award cannot simply re-argue the merits in court. Section 34 allows a
challenge only on specific grounds -- incapacity, invalid arbitration agreement, lack of proper notice,
the award exceeding the arbitration's scope, improper tribunal composition, or the award conflicting with
India's public policy (a ground narrowed by the 2015 and 2021 amendments to prevent it being used as a
backdoor merits appeal). The application must generally be filed within three months of receiving the
award, extendable by 30 days on sufficient cause shown.
Enforcing the award once the challenge window closes
Under Section 36, once the time to challenge an award has passed, or a Section 34 challenge has been
dismissed, the award is enforceable in the same manner as a decree of a civil court -- there is no separate
execution proceeding needed to first “convert” the award into a decree. The 2015 amendment also clarified
that merely filing a Section 34 challenge does not automatically stay enforcement; a separate stay
application with conditions (often including a deposit) is required. NRIs who are party to a domestic
arbitration -- for example, in a family business or property dispute where the counterparty and the seat of
arbitration are both in India -- can generally participate in hearings remotely with tribunal permission, and
can appoint an India-based advocate to handle both the arbitration itself and any subsequent Section 34 or
Section 36 court proceedings without needing to be physically present throughout.
Can an arbitral award be challenged on the ground that the tribunal got the law wrong?
Generally no -- Section 34's grounds are narrow and procedural/public-policy based, not a general right of
appeal on the merits. Courts have repeatedly held that an error of law or fact within the tribunal's
jurisdiction is not, by itself, a ground to set aside a domestic award.
Does filing a Section 34 petition automatically stop the award from being enforced?
No -- since the 2015 amendment, filing a challenge does not automatically stay enforcement. The
party must separately apply for a stay, and courts can impose conditions (such as depositing the award
amount) before granting one.
What is the time limit to challenge a domestic arbitral award?
Three months from the date the party received the award, with a possible 30-day extension if the court is
satisfied there was sufficient cause for the delay -- beyond that, the award becomes final and
enforceable.
