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Under Section 45 of the Act (Part II — enforcement of foreign awards under the New York Convention), a judicial authority, when seized of an action in a matter in respect of which the parties have made an agreement referred to in Section 44, SHALL:
A{'text': 'Transfer the action to the High Court of the relevant State under any provision of any law in force in any State of India regardless of any other consideration of any kind under any law in force in any State of India', 'label': 'A'}
B{'text': 'Stay the action indefinitely under any provision of any law in force in any State of India regardless of any other consideration of any kind under any law in force in any State of India regardless of any other consideration of any kind', 'label': 'B'}
C{'text': 'Transfer the action to the Supreme Court of India under any provision of any law in force in any State of India regardless of any other consideration of any kind under any law in force in any State of India', 'label': 'C'}
D{'text': 'Refer the parties to arbitration, unless it prima facie finds that the said agreement is null and void, inoperative or incapable of being performed', 'label': 'D'}
Answer & Solution
Correct answer: D. {'text': 'Refer the parties to arbitration, unless it prima facie finds that the said agreement is null and void, inoperative or incapable of being performed', 'label': 'D'}
1. Section 45 of the Act (Part II — Chapter I) implements Article II(3) of the New York Convention.
2. A judicial authority seized of an action in a matter covered by a New-York-Convention arbitration agreement **shall refer the parties to arbitration**, unless it **prima facie finds that the said agreement is null and void, inoperative or incapable of being performed**.
3. The reference can be sought by a party or any person claiming through or under him.
4. The corresponding provision for Geneva-Convention awards is Section 54.
_Source: ICSI CS Executive Paper 1 — Jurisprudence, Interpretation & General Laws, Lesson 13 (Arbitration and Conciliation Act, 1996), pp. 314-333._
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