THE AUTHORS:
Sudhir Saruparia, Advocate, Rajasthan High Court
Kshitij Saruparia, Advocate, Rajasthan High Court
When does an arbitral award become “binding” for the purposes of the New York Convention? Article V(1)(e) lets an enforcing court refuse recognition where the award “has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.” The Convention does not define “binding”. Practice has broadly settled that an award is binding once it is no longer open to ordinary recourse on the merits at the seat. A February 2026 ruling of the Supreme Court of India introduces an award that answers to none of the familiar descriptions, and the gap it opens for cross-border enforcement has not been examined.
In C. Velusamy v. K. Indhera (Supreme Court of India, 3 February 2026), the Court answered a narrow domestic question: may a court extend an arbitrator’s mandate under Section 29A(5) of the Arbitration and Conciliation Act 1996 even after the award has already been rendered, past the eighteen-month limit? It held that it may. In doing so, it characterised the award in unusually layered terms. Such an award, the Court said, is “non est”; “a better expression would be to hold that such an award would be unenforceable under Section 36”; it is “ineffective and unenforceable”; and, pointedly, it “need not be challenged under Section 34.” Yet it is not a nullity: the court’s power to extend the mandate “is not impaired by such an indiscretion of the arbitrator,” and once extended, the tribunal “will pick up the thread from where it was left.”
Set aside the domestic debate about limitation and the route of challenge. The consequential question is how such award should be characterised for the purposes of international enforcement. It has been rendered. It is not void. It is, on the apex court’s own description, not presently enforceable. It has not been set aside, and need not be challenged under Section 34 to remain unenforceable; that is its default condition until a court acts. That is a category the Convention’s drafters did not contemplate.
A Necessary Scoping Point
Section 29A’s mandatory timeline does not apply to international commercial arbitrations seated in India. Section 29A(1), reproduced in the judgment itself, requires the award “in matters other than international commercial arbitration” to be made within twelve months, while an ICA award “may be made as expeditiously as possible.” The arbitration in Velusamy was domestic. The analysis that follows, therefore, bites on domestic Indian awards taken abroad for enforcement, and on arbitrations where parties have contractually imported a Section 29A-type timeline. A purely contractual missed deadline in an ICA to which Section 29A does not apply is a different matter: it typically generates a jurisdictional defect challengeable under Article V(1)(c) or (d), not the statutory limbo Velusamy describes, and falls outside the scope of this analysis. For domestic Indian awards, the class of affected cases is neither marginal nor hypothetical: such awards are routinely enforced against debtors with assets in Singapore, the DIFC, the United Kingdom, and the United States.
The Article V(1)(e) Problem
A creditor holding such an award and pursuing assets abroad faces a defence that did not exist before. The debtor can tell the enforcing court: under the law of the country where this award was made, this award is, by that country’s own apex court’s characterisation, not presently enforceable and has not become binding; recognition should be refused, or at least adjourned. None of Article V(1)(e)’s three limbs maps cleanly. The award has not been “set aside” – Velusamy is explicit that Section 34 is not the route. Whether it has “become binding” turns on a concept the Convention deliberately left autonomous, precisely so that enforcing courts would not be captive to idiosyncratic seat-law labels. And whether it has been “suspended” is, on this judgment’s own materials, a live question rather than a closed one.
That last point deserves precision. The Court grounds its reasoning in the 176th Law Commission Report, which it quotes at length. The Report describes the mechanism in these terms: once the time limit lapses, “the arbitration proceedings will nearly stand suspended and will get revived as soon as any party… files an application in the Court for extension of time.” A debtor resisting enforcement abroad will reach for that language, and not without some descriptive justification. But the “suspended” limb of Article V(1)(e) conventionally requires a positive act of a competent authority staying a valid, existing award; a condition of statutory ineffectiveness from the moment of rendering is a different thing. The stronger Convention argument runs under “not yet become binding”: an award that the seat’s own apex court calls “ineffective and unenforceable” pending judicial action has not yet achieved the status the Convention presupposes when it speaks of a binding award. The Law Commission quote supports rather than displaces this reading – it confirms that the award cannot be treated as operative until a court acts.
Why Retroactive Revival Does Not Dissolve the Problem
The intuitive answer is that the creditor simply obtains the Section 29A extension, the award is retrospectively sustained, and the difficulty evaporates. That is too quick, for two reasons. First, timing: between rendering and revival, there is a window in which the award is, on India’s own account, ineffective and unenforceable; enforcement sought, or resisted, in that window engages Article V(1)(e) on its face. Second, and more fundamentally, it is not settled that a domestic retroactive revival relates back for Convention purposes. “Binding” under Article V(1)(e) carries an autonomous Convention meaning; it is widely understood not to be simply whatever the seat court declares at a later date. A subsequent Indian order reviving the award answers the award’s status in Indian execution proceedings; it does not automatically answer whether, at the date enforcement was sought abroad, the award had “become binding” within the Convention. An enforcing court may treat the seat-law revival as decisive, or it may not. There is no authority either way, because the situation is new.
The Flux Compounds It
A foreign court applying Article V(1)(e) usually resolves the “binding” question by reference to the law of the seat – a move that assumes the seat’s law gives a stable answer. On Section 29A, it does not. Velusamy itself strings together a sequence of recent Supreme Court decisions – Rohan Builders, Lancor Holdings, and Jagdeep Chowgule to deliver a ten-point restatement of what Section 29A now means, including an express rejection of the High Court line treating a late award as a “nullity.” The doctrine is being actively rebuilt. An enforcing court cannot defer to a settled Indian answer on when a late award is binding, because there is no settled answer; there is a moving one.
What This Means in Practice
For award-creditors: a domestic Indian award rendered against the clock now carries a latent cross-border vulnerability that did not previously exist. The cure is that a Section 29A extension is best obtained before, not alongside, enforcement abroad. Where a Section 29A application is pending in India at the time enforcement is pursued in a Convention jurisdiction, Article VI of the Convention gives the enforcing court explicit discretion to adjourn enforcement proceedings and order security pending the Indian court’s decision; a debtor aware of that pending application will invoke Article VI immediately, and is entitled to do so. For award-debtors with assets abroad: Velusamy has handed them an Article V(1)(e) argument that is novel, untested, and therefore worth raising in any jurisdiction that interprets “binding” with reference to the seat’s law. Jurisdictions taking a more autonomous approach to the seat’s label as some civilian systems do under Article VII’s more-favourable-right provision – may reach a different answer, but that latitude is unlikely to extend to Singapore, the UK, or the US. For everyone advising on India-seated arbitration with a statutory or contractual deadline: the space between an award that is “not void” and an award that is “binding” is no longer academic. It is a place an award can now occupy, and the Convention does not yet know what to do with an award in that position. Velusamy resolved an Indian procedural question and, without intending to, created an international one it had no occasion to see.
ABOUT THE AUTHORS
Sudhir Saruparia is an advocate practicing before the Rajasthan High Court at Jodhpur with close to three decades of experience in constitutional, civil, criminal, and writ litigation. Over the course of his practice, he has appeared in a broad spectrum of appellate and original proceedings before single and division benches, representing individuals, corporations, and institutional litigants in complex disputes involving statutory interpretation and public law questions. Based in Jodhpur, Rajasthan, his practice is marked by extensive courtroom advocacy, long-standing engagement with High Court litigation, and a nuanced understanding of procedural and strategic aspects of Indian dispute resolution.
Kshitij Saruparia is an advocate practicing before the Rajasthan High Court and a graduate of NALSAR University of Law with a focus on arbitration, commercial litigation, and constitutional law. He has represented his university at leading international mediation & negotiation competitions and multiple national moot court competitions, including the ICC International Commercial Mediation Competition in Paris, NUJS-HSF Moot Court Competition etc. His interests lie in commercial law, strategic dispute resolution and constitutional law.
*The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.
