Enforcement of Foreign Arbitral Award in Pakistan

Abstract

A foreign arbitral award may be enforced against whom the award has been made in any on the three ways. A foreign arbitral award may be enforced: first, by filing a suit on the foreign award in the country in which the party has obtained and obtain judgment thereafter to enforce the foreign judgment against the judgment debtor; secondly, it may be enforced at common law as done in England; thirdly, under the provisions of Multilateral Conventions or Trade Treaties or Arbitration Service Agreements.

The enforcement of foreign arbitral awards poses several difficulties and it is the successful enforcement of a foreign arbitral award only which brings to fruition the endeavors of a party in regard to it. Therefore, a foreign arbitral award as a mean of settlement of commercial disputes through arbitration depends upon its successful enforcement. It is clear that local laws of different countries make adequate provisions regarding the enforcement of arbitral award made in pursuance of arbitration agreement which are rendered within the country.

As commerce and trade developed after the First World War, there was growing need felt for settlement of international commercial disputes and the Geneva Protocol on Arbitral Clauses of 1923 and the Geneva Convention on the Execution of Foreign Arbitral Awards of 1927 were concluded under the auspices of the League of Nations. Protocol means only a memorandum signed by negotiating parties which ultimately assumes the form of a Convention. The Geneva Convention of 1927 dealt with two aspects of arbitration. The first is in regard to the Recognition of Arbitral Clauses and the second is in regard to the execution of Foreign Arbitral awards. India ratified the Geneva Convention of 1927 in the year 1937. In consequence, India enacted the Arbitration (Protocol and Convention) Act of 1937, which came into operation on the 4th day of March, 1937 and continued to be enforced in Pakistan till 2005.

After the Geneva Convention of 1927, the major International Convention on Commercial Arbitration was adopted in June 10, 1958, at New York. It is a multilateral agreement on the Recognition and Enforcement of foreign arbitral awards. Pakistan being signatory to the New York Convention could not rectify it till 2005 when it brought in municipal legislation in the shape of Ordinance for the application of the Convention in the country under the concept of dualism. This Ordinance, which lapses after four months, is being re-promulgated till 2010.