Hong Kong Arbitration Awards Made Enforceable in India
25 April 2012
On 19 March 2012 the Indian government declared that the People's Republic of China is to be recognised as a territory to which the benefits of the New York Convention are to be granted in India. The effect of this is that arbitration awards published in the PRC, including Hong Kong, are now enforceable in India in the same way as domestic Indian judgments.
India's position on the New York Convention has long been considered anomalous. Under the Indian Arbitration and Conciliation Act 1996, a list of the territories which are considered to provide reciprocity is set out in the official Gazette. At present, less than one third of signatories to the New York Convention are contained on this list. It is questionable whether an award published in a state which is not a gazetted state would be enforced, despite the accession of India and the state concerned to the New York Convention.
Hong Kong was previously a notable absence from India's official list owing to its importance as an international arbitration centre and the similarities between the Hong Kong and Indian legal systems.
The recognition by India of arbitral awards granted in the PRC is therefore welcome news in Hong Kong. Its effect is likely to be significant given Hong Kong's importance as an arbitral seat and the rapidly increasing levels of bilateral trade between the PRC and India. Further, Hong Kong can now be seen as a viable alternative to Singapore as a neutral venue for arbitration of agreements involving an Indian party.