Bombay HC: Arbitral Award can be executed by the court which passed it or by the Court to which it is sent for execution

Conclusion:

26. In the light of aforesaid discussion, we find that after an award attains finality and the stage as contemplated by provisions of Section 34 of the Act of 1996 has been crossed, the final arbitral award under Part-I of the Act of 1996 has to be enforced in accordance with the provisions of the Code in the same manner as if it were a decree of the Court. The legal fiction under Section 36 is only for the limited purpose of enforcement of an award as a decree. At that stage, the provisions of Sections 38 and 39 of the Code would come into operation. These provisions permit a decree to be executed either by the Court which passed it [the Court as defined by Section 2(1)(e)(i) of the Act of 1996] or by the Court to which it is sent for execution. The Court which passed the decree can also transfer it for execution to any subordinate Court of competent jurisdiction. Proceedings for execution of an arbitral award are beyond the purview of Section 42 of the Act of 1996, inasmuch as such proceedings are not in the nature of any application under Part-I of the Act of 1996. The view as taken by the Division Bench in Akola Janta Commercial Co-operative Bank Ltd. [supra] that a decree holder must apply for execution of an award to the Court of District Judge who may thereafter execute the award as a decree himself or send it for execution to another Court including a subordinate Court of competent jurisdiction commends itself and we respectfully concur with the same. The modality prescribed therein that all applications for execution of awards be first placed before the District Judge who may then execute the same himself or send it to subordinate Courts under Section 38 read with Section 39(2) of the Code is found appropriate in these circumstances.

27. We are, therefore, in respectful disagreement with the views expressed in the order of Reference in Gemini Bay Transcription Pvt. Ltd. [supra] that a Court subordinate to the Court of District Judge [here the Court of Principal District Judge] cannot be recognized as a Court of competent jurisdiction for the purposes of enforcement of awards under the Act of 1996. The view taken by learned Single Judge in Arunkumar Deedwania [supra] stands affirmed and the view taken in Sanjay Suryakant Mhaske & others [supra] with respect stands overruled.

30. The Reference accordingly stands answered as follows:-

An Award made under Part-I of the Arbitration and Conciliation Act, 1996 can be executed not only by the Court as defined by Section 2(1)(e)(i) but also by the Court to which it is sent for execution under Sections 38 and 39 of the Code of Civil Procedure, 1908.

 IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Writ Petition Nos. 6066 and 4682 of 2012

Decided On: 16.02.2018

Gemini Bay Transcription Private Ltd. and Ors. Vs. Integrated Sales Service Ltd. and Ors.

Hon'ble Judges/Coram:

R.K. Deshpande, A.S. Chandurkar and M.G. Giratkar, JJ.

Author: A.S. Chandurkar, J.

Citation:  MANU/MH/0265/2018, AIR 2018 BOMBAY 89, (2018) 2 MAH LJ 329.

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Supreme Court: Arbitral Award Can Straightaway Be Executed In The Court Where Assets Are Located, Without Obtaining Transfer Of decree

The Madras High Court in Kotak Mahindra Bank Ltd. v.
Sivakama Sundari & Ors.13referred to Section 46 of the said
Code, which spoke of precepts but stopped at that. In the context
of the Code, thus, the view adopted is that the decree of a civil
court is liable to be executed primarily by the Court, which
passes the decree where an execution application has to be filed
at the first instance. An award under Section 36 of the said Act,
is equated to a decree of the Court for the purposes of execution
and only for that purpose. Thus, it was rightly observed that
while an award passed by the arbitral tribunal is deemed to be a
decree under Section 36 of the said Act, there was no deeming
fiction anywhere to hold that the Court within whose jurisdiction
the arbitral award was passed should be taken to be the Court,
which passed the decree. The said Act actually transcends all
territorial barriers.
Conclusion:
22.We are, thus, unhesitatingly of the view that the enforcement of an award through its execution can be filed anywhere in the
country where such decree can be executed and there is no
requirement for obtaining a transfer of the decree from the Court, which would have jurisdiction over the arbitral proceedings.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.1650 of 2018

SUNDARAM FINANCE LIMITED  Vs ABDUL SAMAD & ANR. 

Dated: February 15, 2018.

SANJAY KISHAN KAUL, J.
Citation: 2018(2) MHLJ 301,(2018) 3 SCC 622,2018(6) MHLJ 808

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Whether award debtor should obtain stay to execution of award if arbitration proceeding commenced prior to coming in to force of Amendment Act 2015?

In State of Bombay (in both the appeals) v. 1. Supreme General Films Exchange Ltd. and 2. Arati Cotton Mills Ltd. reported in MANU/SC/0007/1960 : AIR 1960 SC 980 cited by Mr. Mitra. Mr. Justice Das pronouncing the judgment of the Supreme Court pronounced the dictum that interference with the right of appeal by inserting a new condition or a more onerous condition was not a matter of procedure only. It impaired or interfered with a substantive right. Such an enactment could not be retrospective unless expressly stated to be so.

23. In the case of Videocon International Ltd. v. Securities and Exchange Board of India reported in MANU/SC/0023/2015 : (2015) 4 SCC 33, also cited by Mr. Mitra, Mr. Justice Khehar after discussing a large number of authorities laid down the following propositions which included quotations from the authorities discussed by his lordship on the subject:

"26********* (ii) Law relating to forum and limitation is procedural in nature, whereas law relating to right of action and right of appeal, even though remedial, is substantive in nature.

(iii) Every litigant has a vested right in substantive law, but no such right exists in procedural law.

28.**********We are, therefore, of the view that where a repeal of provisions of an enactment is followed by fresh legislation by an amending Act, such legislation is prospective in operation and does not affect substantive or vested rights of the parties unless made retrospective either expressly or by necessary intendment. We are further of the view that there is a presumption against the retrospective operation of a statute and further a statute is not to be construed to have a greater retrospective operation than its language renders necessary, but an amending act which affects the procedure is presumed to be retrospective, unless amending act provides otherwise. We have carefully looked into the new substituted Section 15 brought in the parent Act by the Amendment Act, 1995 but do not find it either expressly or by necessary implication retrospective in operation which may affect the rights of the parties on the date of adjudication of suit and same is required to be taken into consideration by the appellate court."

24. Therefore, to put it shortly changing the forum of appeal or the location of the appellate court is a procedural matter. But a new Act or amending Act changing the right of appeal or the conditions under which an appeal can be filed deals with a substantive right of a person. A vested substantive right of this nature is usually not disturbed by a new or amending Act. If such a right is sought to be extinguished there has to be an express or implied provision. This court relying on numerous decisions has held in Saraf Agencies Pvt. Ltd. and Ors. v. Federal Agencies for State Property Management and Ors. that an application to set aside the award is to be treated like an appeal and that all substantive rights accrue at the time of commencement of arbitral proceedings.

25. By amendment of Section 36 of the Arbitration and Conciliation Act, a party challenging an award has to deposit with the registry of the court the awarded amount or secure it to the satisfaction of the court, as a condition precedent to obtain stay thereof, pending the setting aside application, which condition was absent prior to the amendment. This is certainly an alteration of the conditions under which such an application was heard prior to the amendment, when stay was automatic on filing of a valid setting aside application. Thus the substantive rights of an award debtor have been affected.

26. The Special bench judgment of our court in the case of Union of India v. Amitava Paul along with the connected matter reported in MANU/WB/0371/2015 : AIR 2015 89 (FB) has only held that Order 41 Rule 1(3) was directory in nature. It made no comment as to whether the provision was to be taken as procedural or substantive law.

27. I do note that this court's view in Saraf Agencies Pvt. Ltd. and Ors. v. Federal Agencies for State Property Management and Ors. has been endorsed in the later case of Braithwaite Burn & Jessop Construction Co. Ltd. v. Indo Wagon Engineering Ltd. by Mr. Justice Soumen Sen.

28. Hence, the law prevailing at the time of commencement of the arbitration will apply till the disposal of the setting aside application at the highest level. The amending Act of 2015 did not alter any vested substantive right. Therefore, the right of the petitioner in arbitration which commenced before the coming into force of the amending Act, to challenge the award without any condition is preserved by the amendment Act.

IN THE HIGH COURT OF CALCUTTA

G.A. No. 3750 of 2015 and A.P. No. 1709 of 2015

Decided On: 17.07.2017

 West Bengal Power Development Corporation Ltd. Vs. Dongfang Electric Corporation

Hon'ble Judges/Coram:

I.P. Mukerji, J.

Citation: AIR 2017 Cal 297

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