The Delhi High Court, under the bench of Justice Jasmeet Singh, recently delivered a crucial judgment on the execution of arbitration awards. The case centers around whether a judgment debtor can raise objections under Section 47 of the Civil Procedure Code (CPC) against the execution of an arbitral award under Section 36 of the Arbitration and Conciliation Act (ACA), 1996.
In this case, Anglo American Metallurgical Coal Pvt. Ltd. ("Decree Holder") and MMTC Ltd. ("Judgment Debtor") entered into a long-term agreement for the sale and purchase of coking coal in 2007. Disputes arose between the parties during the 2009 delivery, leading to the formation of an arbitral tribunal. The tribunal delivered its award on May 12, 2014, which was challenged by the Judgment Debtor but upheld by the Supreme Court in 2020.
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However, while the enforcement petition under Section 36 of the ACA was pending, the Judgment Debtor filed objections under Section 47 of CPC, alleging that the award was not executable due to "fraud" involving the decree holder's collusion with a GM to cause wrongful gain to the Decree Holder.
The Judgment Debtor's counsel argued that the provisions of CPC should apply to execution proceedings, and fraud could be raised as a defense. They contended that the executing court should examine the fraud on its merits, provided credible evidence was presented.
Contrarily, the Decree Holder’s counsel highlighted that ACA does not permit challenges to the award after a Section 34 challenge is dismissed. It was further argued that the objections of fraud should not be considered at this stage, as the issue was not raised earlier and was merely a tactic to delay enforcement.
The court’s key observation was that once the limitation period for challenging the award under Section 34 of the ACA has passed, the award must be enforced. The court stated:
“The words 'as if' used in Section 36, ACA itself denotes that an 'award' and 'decree of the Court' are two different things.”
It further clarified that the CPC provisions only apply for the enforcement process, such as attachment or auction, but not to challenge the merits of the award during enforcement proceedings.
The court concluded that if objections under Section 47 CPC were allowed in this case, it would allow a second round of challenging the award, undermining the limited grounds for appeal under Section 34. Therefore, the court ruled that the enforcement petition would proceed, and the award dated May 12, 2014, would be executed.
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This judgment reinforces the principle that once an arbitral award has been affirmed and the limitation period for challenging it has expired, the award must be enforced without further scrutiny.
Case Title – Anglo American Metallurgical Coal Pvt Ltd. v. MMTC Ltd.
Case No. – OMP (ENF.) (COMM.) 19/2018 &E.X.APPL.(OS) 1806/2024
Appearance-
For Decree Holder - Mr. Jayant K Mehta, Sr. Adv. with Mr. Sumeet Kachwaha, Mr. Samar Kachwaha, Ms. Ankit K, Ms. Akanksha Mohan and Ms. Ananya Saluja, Advs.
For Respondent - Mr Chetan Sharma, Ld. ASG with Mr Sanat Kumar, Sr. Adv. with Mr. Akhil Sachar, Ms. Sunanda Tulsyan, Mr R.V. Prabhat, Mr. Amit Gupta, Ms. Kashish Maheshwari, Ms. Shweta Pattnaik, Mr. Vinay Yadav, Mr. Saurabh Tripathi, Mr. Vikramaditya Singh and Mr. Shubham Sharma, Advs.
Date – 09.05.2025
