Whether The Remedy Of Execution And Contempt Can Run Parallel In Arbitration Proceedings'?"Decides Bombay High Court

The present dispute is regarding if the remedy of execution and contempt can run parallely in Arbitration proceedings.

It arises out of an arbitration dated 31st July, 2017 in the ongoing arbitration proceedings between both parties. The contemnors were Respondents in the Arbitration proceedings wherein they were directed to deposit a bank guarantee Rs.50,00,000 (Rupees Fifty Lakhs) in favour of the Claimant/Petitioner & their failure to abide by the same had prompted the Petitioners to file the present petition.

Simultaneously an execution petition for the same order was also filed in the Hon'ble Bombay High court.

The Petitioners were represented by Solicis Lex's Counsel's Abhishek Sawant, Ameet Mehta & Vaishali Sanghavi.

The Respondents sole defence was that the Petitioner can pursue the remedy of execution and that contempt proceedings are not tenable.

Counsel Abhishek Sawant placed reliance on judgements of the Hon'ble Supreme court namely, Alka Chandewar vs Samshul Ishrar Khan, Rama Narang vs Ramesh Narang and a few others.

He further brought the courts attention to section 17(2) of the Arbitration and Conciliation Act,1996 which says that even if execution proceedings are filed, it does not mean that the contemnors would not comply with the directions of the Ld. Arbitrator.

Therefore, the purpose of the aforesaid provision is to make the Code of Civil procedure applicable in regard to the enforceability of the interim order passed by Arbitral tribunal as if the same was passed by the court.

The Hon'ble court was satisfied by Counsel Sawant's arguments and pleased to pass an order in favour of Petitioner wherein notice is issued to the contemnors asking why an action of contempt which was committed and hence why no action should be taken against them.

This Order can be potentially published or cited as a precedent since its laid down a guiding principle for a legal remedy that Contempt and Execution can be simultaneously filed as well as heard as both serve a separate purpose per say.

While speaking to Live Law, Adv Ameet Mehta, Managing Partner & Adv Vaishali Sanghavi. Senior Partner stated that this Order of Hon'ble High Court will set a new legal precedent in many such non-compliances by parties in Arbitration proceedings.