Foreign awards are unenforceable under Part II absent a valid written arbitration agreement between the parties.

The Respondent initiated arbitral proceedings against the Petitioners before a three-member Tribunal in Sweden (SCC Arbitration V2020/199) seeking damages of USD 25.2 million based on a Shareholders Agreement

The Petitioners resisted the claims, primarily contending that no valid arbitration agreement existed

The Tribunal accepted this contention, concluding it lacked jurisdiction as no valid agreement had come into existence

However, acting under Sections 37 and 42 of the Swedish Arbitration Act, the Tribunal rendered a "cost-only" award, directing the Respondent to pay the Petitioners approximately Rs. 10.51 Crores in legal and arbitration costs

The Petitioners sought to execute this foreign award in India under Part II, Chapter I of the Arbitration and Conciliation Act, 1996 ("the Act")

The Respondent objected, citing the non-production of the original agreement at the time of filing and the unenforceability of an award predicated on a finding of "no agreement"

The court primarily applied Section 44 of the Act, which defines a "foreign award" as one made in pursuance of an "agreement in writing" for arbitration

It relied on Section 47 regarding the evidence required for enforcement, interpreting the word "shall" as "may" (directory) based on PEC Limited v. Austbulk Shipping SDN BHD (2019) 11 SCC 620

The court also applied Section 48, which specifies grounds for refusal of enforcement, including the invalidity of the agreement [S. 48(1)(a)], the subject matter not being capable of settlement by arbitration [S. 48(2)(a)], and conflict with the public policy of India [S. 48(2)(b)]

Precedents like Gemini Bay Transcription Pvt. Ltd. v. Integrated Sales Service Ltd. (2022) 1 SCC 753 and Pasl Wind Solutions (P) Ltd. v. GE Power Conversion (India) (P) Ltd. (2021) 7 SCC 1 were cited to establish the essential ingredients of a foreign award

The court first resolved the procedural objection under Section 47, holding that the subsequent production of the agreement was sufficient compliance, as the requirement to file it "at the time of application" is directory and not a ground for dismissal if the document's legitimacy is undisputed

On the merits of enforceability, the court noted that the Petitioners themselves had successfully argued in Sweden that no arbitration agreement existed

The court held that under Section 44(a), a "foreign award" must arise from an "agreement in writing"

Since the Tribunal explicitly found that no such agreement existed, the resulting award failed to meet the statutory definition of a "foreign award" under Indian law

Furthermore, under Section 48(2)(a), the court determined that Indian law does not recognize "agreement-less" arbitration; thus, the dispute was not "capable of settlement by arbitration" in India

Lastly, the court noted that the Petitioners were estopped from seeking enforcement because they had previously pleaded before the Tribunal that such a cost award would be unenforceable in India for lack of a signed agreement

It held that an award rendered by a foreign tribunal which simultaneously finds that no valid arbitration agreement exists cannot be enforced in India under Part II of the Act

Such an award does not satisfy the definition of a "foreign award" under Section 44 and its enforcement is prohibited under Section 48(1)(a) (invalid agreement), Section 48(2)(a) (non-arbitrable subject matter), and Section 48(2)(b) (conflict with the public policy of India)

The court concluded that a valid, written arbitration agreement is a non-negotiable jurisdictional baseline for enforcement in India