Arbitration and Conciliation Act 1996

Lecture 27
–
Enforcement, Execution and Implementation
of Award
Arbitral Award
• Partial Award
• Interim Award
• Final Award
Till Now we have studied ….

AWARD
Regulation and Execution of Decree –

* through CPC Or. XXI

Regulation and Execution of Award –

* through A & C Act 1996 AND CPC

Same way as Indian Court Decree – the Domestic &

International Awards

difference depending on the seat of arbitration

Seated Award (Domestic Award) Foreign Seated Award

SECTION 36 PART I (International Award)
PART II

New York Convention Geneva Convention

Chapter I of Part II Chapter II of Part II
Little go back - CPC
• Suit Jurisdiction – Sec 15 to 21
• Decree Execution Jurisdiction – Either by Court which passed or
court which exercises jurisdiction over the person – Or XXI or
Section 36 to 74 CPC
• Transfer of Decree – Sec 39 to 45
As per rules, for compliance and execution, an award recipient would have to wait 90
days after receiving the award.

Award may be questioned during the transitional period in compliance with Section 34
of the Act

AFTER THIS TIME - authenticity of the arbitral award cannot be questioned any
further

IF Section 34 Application

YES NO

then demand a Stay Execution as Decree

LIMITATION
Limitation Act 1963 Applies

M/S Umesh Goyal v. Himachal Pradesh

Cooperative Group Housing Society (2016) 11
SCC 313 – Awards deemed as Decree

execution of a foreign award - limitation period

(12 years) is likely to apply
DIFFERENT FROM ARBITRATION ACT 1940

Section 14 to 17

* Award was to be make as Rule of Court

* Objections from the parties were invited. Where no objection was filed or
was sustainable, the court would pass a judgment in terms of the award and it was
then converted into a decree for enforcement.

A court executing the award will exercise all powers under the CPC which are available
to a court at the stage of execution of a decree

Leela Hotels Ltd v Housing & Urban Developing Corpn. Ltd (2012) 1 SCC 302)

This power is not limited by any other provision in the 1996 Act. For instance, though
section 33 enables a party to correct typographical/clerical errors, it does not take away
the power of the executing court under sections 152 and 153 of the CPC to make similar
amendments.

Manmohan Exims Pvt Ltd v Sarju International, 2005 (Suppl) Arb LR 206 relying on Hemanta Kumar
Ghosh v Rajendra Mondal, AIR 1935 Cal 619.
SECTION 31

Section 31(7)(b) –

* unless the award otherwise directs,

* interest at 18% is applicable (from the date of award to the date of payment ) –
substituted 2015 to 2% higher than the rate

* Executing court in such a situation is not modifying the award, or going

behind such award

* The executing court cannot however award interest, where this has been
rejected by the arbitrator. Coal Linker v Coal India Ltd (2009) 9 SCC 491

* The date upto which interest would accrue would be the date when the
amount was available for release to the decree holder.

N.K. Garg & Co v UOI, 2009 (3) Arb LR 454 (Del)

* Award is Not required to be registered.

* The enforcement of an award is complete only when it has been enforced

under CPC in the same manner as if it were a decree of the courParadise Hotel v
Restraurant v Airport Authority of India, (2002) 4 RAJ 670 (Gau)
COMPROMISE AFTER THE AWARD –

• The 1940 Act does not disable the parties from terminating their dispute in a way
different from the award.

• May supersede the arbitration and leave the parties to work out their submission in
accordance with the law outside the Arbitration Act.

Allahabad High Court - distinguished earlier authorities - held that under the 1996 Act,
the parties cannot modify or vary the terms of the award by agreement. A and A Restaurant
and Hotel Pvt Ltd v Dwarikajeet Restaurant Pvt Ltd, (2005) 1 Arb LR 526

The court faced before it objections to an award on account of a subsequent agreement

entered into by the parties. In a detailed judgment, Prakash Krishna J. held that
precedents under the 1940 Act permitting compromise subsequent to an award, were
based on and restricted to the scheme of that Act alone, which envisaged varying the
terms of an award after it is rendered. However, under the 1996 Act, like the 1899 Act
which preceded the 1940 Act, the award itself is enforceable as a decree. There is also
no express power conferred on courts to modify the award. The court therefore revived
the principle laid down by the Privy Council in Jnanendra Mohan Bhaduri as being
applicable to the situation under the 1996 Act.
AMENDMENT OF 2015 AND ITS EFFECT :-

to ensure that the mere filing of an application under section 34 does not operate
as an automatic stay on the enforcement of the award.

Henceforth a separate application for stay of operation of the award would have to be
filed. The stay application would be decided keeping with the principles laid down in
the Code of Civil Procedure.

BACKGROUND –

Prior to the amendment to section 36

filing of a petition under section 34 for setting aside an arbitral award

rendered the award unenforceable till the disposal of the petition.

position of law was explained thus in National Aluminium Co. Ltd v Pressteel &
Fabrications Pvt Ltd (NALCO Case) - (2004) 1 SCC 540

Supreme Court in NALCO itself recommended that section 36 be amended.

 Suggested Readings :
1. InduMalhotra, “Res Judicata in Arbitration”, 5(1) NyayaDeep 109 (2004).

2. R Knutson, “The Interpretation of Arbitral Awards — When is a Final Award Not Final?” 11 (2) J
Intl Arbn. 99 (1994).

3. Hanotiau “The Res Judicata effect of Arbitral Awards”, ICC International Court of Arbitration
Bulletin, Complex Arbitrations, Special Supplement, pp. 43-51 (2003).

4. Section 36 Arbitration and Conciliation Act 1996

5. National Aluminium Co. Ltd v Pressteel & Fabrications Pvt Ltd (NALCO Case) - (2004) 1 SCC 540

6. Law Commission recommendation on Suggestive amendment in Sec 36

7. K. Srinivasan, “Enforcement of Arbitral Awards”, 40 CLA (Mag.) 145 (2001)

8. D.R. Dhanuka, “Award under Arbitration and Conciliation Act, 1996 and Insolvency Law”, 2007
(1) MLJ 1

9. Ashutosh Salil, “Role of Courts in the Enforcement of a Domestic Arbitral Award”, (2005) 3 Arb LR
12

10. Pavit Singh & Preeti Bishnoi, “Problems with Enforcing Arbitration Awards”, 2006 (6) Kar LJ 33

11. Sarita Woolhouse, “India: Appeal from a Domestic Arbitration Award to an International
Arbitration Tribunal — Two Conflicting Awards”, 10(1) Int. ALR 8 (2007)