Foreign award status in arbitration depends on Indian supervisory jurisdiction, not merely the seat of arbitration abroad.

The arbitration clause was construed to permit a first arbitration in India followed by a further proceeding in London, but the later process was not treated as a true appeal and did not nullify the earlier award. The Court held that successive awards could coexist, so the first nil award remained effective against enforcement of the London award. On foreign-award status, the decisive question was whether Indian courts retained supervisory jurisdiction and a Section 34 challenge was available under the governing Indian law. Because that supervisory link existed, the London award was not a foreign award for Part II enforcement and could not be executed while the conflicting Indian award stood.

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Issues: (i) Whether successive arbitrations under the arbitration clause were legally permissible and whether the second award displaced the first award; (ii) Whether the London award was a foreign award enforceable under Part II of the Arbitration and Conciliation Act, 1996, or an Indian award enforceable only under Part I.

Issue (i): Whether successive arbitrations under the arbitration clause were legally permissible and whether the second award displaced the first award.

Analysis: The clause contemplated a first arbitration in India followed by a second arbitration in London if either party disagreed with the Indian result. The Court construed the clause by its plain language and held that the use of the word "appeal" did not, by itself, make the second proceeding a true appellate process. The second arbitrator did not set aside, modify, or overrule the first award, but proceeded independently and afresh. On that construction, the two awards co-existed, and the first nil award remained effective to the extent it resisted enforcement of the later award.

Conclusion: Successive arbitrations were permissible, but the second award did not automatically wipe out the first award.

Issue (ii): Whether the London award was a foreign award enforceable under Part II of the Arbitration and Conciliation Act, 1996, or an Indian award enforceable only under Part I.

Analysis: The governing law of the contract was Indian law, and Indian courts retained supervisory jurisdiction over the arbitration. The Court held that the decisive test was not merely the foreign seat of arbitration, but whether an Indian court could entertain a challenge to the award under Section 34. Since the award was capable of being treated as subject to Indian supervisory jurisdiction, it was not a foreign award for Part II purposes. In any event, enforcement was resisted by reason of the earlier conflicting nil award, and the foreign-award enforcement provisions did not compel execution.

Conclusion: The London award was not a foreign award for enforcement purposes and was not executable under Part II; it was, at best, governed by Part I and could not be enforced while the Indian nil award stood.

Final Conclusion: The order directing execution of the London award was set aside, and enforcement of that award was refused because the earlier Indian nil award continued to operate.

Ratio Decidendi: In determining whether an arbitral award is foreign in India, the decisive consideration is whether Indian courts retain supervisory jurisdiction to challenge the award under the governing law of the arbitration agreement; if they do, the award is not a foreign award merely because it was made abroad.

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