Introduction

Section 51 of the arbitration and conciliation act states that an award made on an arbitration agreement governed by the law of India, though rendered outside India, is attracted by the saving clause in the section of the act and is therefore, not treated in India as a foreign award.

Section 51 and Section 52 of the arbitration and conciliation act, 1996

Saving

Nothing in this Chapter shall prejudice any rights which any person would have had of
enforcing in India of any award or of availing himself in India of any award if this Chapter had not been
enacted.

Chapter II not to apply

Chapter II of this Part shall not apply in relation to foreign awards to which this Chapter applies.

Landmark Judgements

National Thermal Power Corp vs The Singer Co, 1993

Where the parties have not stated in the arbitration agreement as to the law which would govern the award, then the judge has to determine the proper law for the parties in such circumstances by putting himself in the place of a “reasonable man”. He has to determine the intention of the parties by asking himself “how a just and reasonable person would have regarded the problem”. For this purpose, the place where the contract was made, the form and object of the contract, the place of performance, the place of residence or business of the parties, reference to the courts having jurisdiction and such other links have to be examined by the courts to determine the system of law with which the transaction has its closest and most real connection.

Conclusion

The above mentioned section states that the in the absence of any indication to the contrary, the governing law of contract being Indian law, it is that system of law which must necessarily govern matters concerning arbitration.