An arbitration qualifies as 'international commercial arbitration' under Section 2(1)(f) of the Arbitration and Conciliation Act, 1996 when at least one party is a foreign national, foreign company, or foreign-government-controlled entity, even if the arbitration is seated in India. Where the seat is outside India, Indian courts generally have only a narrow supervisory role, mainly limited to interim relief and enforcement.
When a dispute counts as “international commercial arbitration”
Section 2(1)(f) defines international commercial arbitration by reference to the parties, not the seat --
a dispute qualifies if it arises from a commercial relationship and at least one party is a foreign
individual, a company incorporated abroad, or a foreign-government-controlled body. This matters because an
international commercial arbitration seated in India still falls under Part I of the Act, but with certain
provisions (like the public-policy ground for challenge) applied more narrowly than for purely domestic
awards.
Foreign-seated arbitrations -- Part II and the limited role of Indian courts
Where the arbitration is seated outside India, Part II of the Act (implementing the New York Convention
and, less commonly now, the Geneva Convention) governs recognition and enforcement of the resulting award
in India. Following the Supreme Court's ruling in Bharat Aluminium Co. v. Kaiser Aluminium Technical
Services (BALCO), Part I generally does not apply to foreign-seated arbitrations (subject to any
contrary agreement for interim relief), meaning Indian courts do not have supervisory jurisdiction to set
aside a foreign award -- they can only refuse enforcement on the limited grounds set out in Section 48.
Enforcing a foreign award in India
Section 48 lists the grounds on which enforcement of a foreign award can be refused -- incapacity,
invalid arbitration agreement, improper notice, the award exceeding scope, improper composition, the award
not yet binding or having been set aside at the seat, or conflict with India's public policy. Indian courts
have taken an enforcement-friendly approach post-BALCO and post-2015 amendments, construing these grounds
narrowly to support India's standing as an arbitration-friendly jurisdiction. For NRIs entering commercial
contracts with Indian counterparties -- joint ventures, supply agreements, or investment arrangements -- the
choice of a well-established foreign seat such as Singapore, London, or Dubai, paired with a clearly drafted
arbitration clause, can meaningfully simplify both the arbitration process itself and the subsequent path to
enforcing any resulting award against India-based assets.
Can Indian courts set aside an arbitral award seated in London or Singapore?
Generally no -- following the BALCO ruling, Indian courts do not have jurisdiction to set aside a
foreign-seated award. Their role is limited to deciding whether to recognize and enforce it in India under
Section 48's narrow grounds.
Does an NRI party automatically make a contract “international commercial arbitration”?
It depends on the specific facts under Section 2(1)(f) -- an NRI who remains an Indian national generally
does not, by itself, make the arbitration international; the test looks at nationality/incorporation/control,
not residency status alone.
Is public policy a broad ground to refuse enforcing a foreign award in India?
No -- post-2015 amendments and Supreme Court precedent have narrowed this ground specifically to prevent
it from being used as a backdoor merits review; it is reserved for genuinely fundamental issues like fraud
or a violation of India's most basic notions of justice.
