Delhi High Court: In a petition filed by the decree holder under Section 36 of the Arbitration and Conciliation Act, 1996 (‘A&C Act’) seeking enforcement of award dated 12-5-2014, passed by the Arbitral Tribunal (‘AT’), Jasmeet Singh, J.*, stated that if the objections under Section 47 of Civil Procedure Code, 1908 (‘CPC’), were allowed to be entertained during the enforcement proceedings of an award, it would effectively open a second round for challenging the award which the legislature did not intend to do, as allowing the same would undermine the provision of Section 34 of A&C Act.
Consequently, the Court allowed the present petition and stated that the award dated 12-5-2014 passed by the AT was to be enforced.
Background
On 7-3-2007, the decree holder and the judgment debtor entered into a Long-Term Agreement (‘LTA’) for the sale and purchase of coking coal from decree holder from DBCT Gladstone in Australia. Under the LTA, the decree holder was the seller, and the judgment debtor was the purchaser of a quantity of coking coal.
Due to certain disputes between them, the matter was referred to arbitration. The AT, after evidence led by both the parties and hearing arguments, passed the award dated 12-5-2014 by a majority of 2:1. The said award was assailed by the judgment debtor by filing a petition under section 34 of A&C Act, which was dismissed by a co-ordinate bench of the present Court.
Subsequently, the said judgment was further assailed by the judgment debtor by filing a petition under section 37 of A&C Act. The Division Bench of this Court set aside the judgment of co-ordinate bench, and the award passed by the AT. Thereafter, the judgment passed by the Division Bench was challenged by the decree holder before the Supreme Court, whereby the award passed by the AT was restored.
The judgment-debtor contended that the award passed by the AT, as per Section 36 of A&C Act, was to be enforced as per provisions of the CPC, in the same manner as if it were a decree of the Court. However, the decree holder submitted that the judgment debtor’s challenge was barred by Section 5 of A&C Act. The A&C Act did not contemplate any challenge to an award being raised post conclusion of Section 34 of A&C Act stage. The Enforcement Court under Section 36 of A&C Act, had not been conferred with any jurisdiction to adjudicate on any such challenge or question the award.
The decree holder submitted that the judgment debtor’s objections were an abuse of process. If such objections were held to be maintainable, no award (despite attaining finality) would ever be executed. Such a course would be unjust and unknown to arbitration jurisprudence and was in fact not countenanced even in the much less rigorous civil jurisprudence.
The question that arose for consideration was whether the judgment debtor was entitled to move objections under Section 47 of the Civil Procedure Code, 1908 (‘CPC’) against the execution of the award under Section 36 of A&C Act.
Analysis, Law, and Decision
The Court stated that the A&C Act was a self-contained code. It gives a complete set of procedures to deal with the purpose sought to be achieved by the statute. Its dependence on the general law is either minimal or absent. Therefore, unless specifically stated in any sections of A&C Act, the aid and use of general laws is not permissible and must be excluded.
The Court stated that on plain reading of Section 36 of A&C Act, when the period for challenging an award under Section 34 of A&C Act had expired then such an award is enforceable. Further, an award shall be enforced in accordance with the provisions of the CPC in the same manner “as if it were a decree of the court”. The Court stated that the legislature had clearly indicated that an award intended to be a deemed decree only for the purposes of enforcement. Once the limitation period for challenging an award under Section 34 of A&C Act had expired and/or challenge under Section 34 had failed, then the award had to be enforced.
The Court stated that Section 5 of A&C Act aimed limited judicial interference, and the legal fiction created under Section 36 of A&C Act, had to be read in such a manner, and for the limited purpose for which it was created. It should not be read in manner that other provisions of the statute are rendered otiose. Arbitral proceedings are distinct from civil suits/proceedings. The Court stated that the use of CPC provisions was confined to enforcement mechanisms under Order 21, and did not allow a re-challenge to the award on merits, which is exclusively governed by section 34 of A&C Act.
The Court stated that the legislature by using the phrase “such award shall be enforced in accordance with the provisions of the Code of Civil Procedure” only intended to “enforce” an award in the same manner and procedure as contemplated in CPC without altering the nature and character of an award. The Court stated that provisions of CPC are only applicable to the extent of “enforcement” of an award such as attachment, sale, auction, detention, etc. The legislature did not intend to permit a challenge to an award during enforcement proceedings again on merits as this would be contrary to the objectives of the A&C Act, which aim to ensure finality and limited judicial interference.
The Court stated that if the objections under Section 47 of CPC, were allowed to be entertained during the enforcement proceedings of an award, it would effectively open a second round for challenging the award, which the legislature did not intend to do as the same would undermine Section 34 of A&C Act. The Court stated that additionally, allowing objections would not only delay the finality of disputes but would also nullify the basic contours of A&C Act. Any particular provision of a statute had to be harmoniously construed so as not to render any other provisions of the statue otiose or inconsistent with the other provisions.
Consequently, the Court allowed the present petition and stated that the award dated 12-5-2014 passed by the AT was to be enforced.
[Anglo-American Metallurgical Coal (P) Ltd. v. MMTC Ltd., OMP (ENF.) (COMM.) 19 of 2018, decided on 9-5-2025]
*Judgment authored by- Justice Jasmeet Singh
Advocates who appeared in this case :
For the Decree-holder: Jayant K Mehta, Senior Advocate with Sumeet Kachwaha, Samar Kachwaha, Ankit K, Akanksha Mohan and Ananya Saluja, Advocates.
For the Judgment-Debtor: Chetan Sharma, Ld. ASG with Sanat Kumar, Senior Advocate with Akhil Sachar, Sunanda Tulsyan, R.V. Prabhat, Amit Gupta, Kashish Maheshwari, Shweta Pattnaik, Vinay Yadav, Saurabh Tripathi, Vikramaditya Singh and Shubham Sharma, Advocates.
Buy Arbitration and Conciliation Act, 1996 HERE
