Execution Of Arbitration Awards;Section 47 Of CPC Not Applicable : Tripura High Court

The bench of Justice S.G. Chattopadhyay held that the executing court, exercising power under Section 36 of the Act, cannot entertain any objections against the award and a party can only challenge the award in terms of Section 34 of the A&C and no objection can be raised under Section 36 of the Act.

Facts

The parties entered into two agreements dated 05.08.2013 and 11.12.2019. Disputes arising out of both agreements were referred to separate arbitrations. The arbitrator in both the arbitrations passed an award in favour of the respondent.

The petitioner did not challenge both award under Section 34 of the Act. Accordingly, the respondent put the awards to execution under Section 36 of the Act. In both execution petitions, the petitioner moved an application under Section 47 of CPC and raised certain objections to the execution petitions.

The commercial court dismissed both applications filed under Section 47 of CPC on the ground that an award can only be challenged under Section 34 and no other objections against it can be entertained by the executing Court and that provisions of Section 47 of CPC do not apply to . Aggrieved with the dismissal of its applications, the petitioner filed the civil revision petition before the High Court.

Grounds of Challenge

The petitioner challenged the order of the commercial court on the following counts:

• The court failed to consider that an award is to be enforced in accordance with the provisions of CPC, therefore, the Court ought to have entertained the objections raised by the petitioner under Section 47 therein.
• An arbitration award is deemed to be a decree, therefore, its execution must also happen in the same manner as if it were a decree of the Court

The respondent raised the following arguments against the petition:

• A party aggrieved by an award has to necessarily challenge it under Section 34 of the Act for setting aside the award.
• The petitioner has not challenged the award under Section 34, therefore, it has become final and binding.
• The execution of the award can only be stayed if the executing court is satisfied that the making of the award was induced or affected by fraud or corruption apart from no other kind of objection can be decided under Section 36 including the objection or questions that are to be decided under Section 47 of CPC.
• Section 5 of the Act provides for minimum judicial interference and it should be kept in mind while exercising powers under Section 36 of the Act.

Analysis by the Court

The Court noted that the petitioner did not challenge both the award under Section 34 of the Act but raised certain objections, under Section 47 of CPC, only after the awards were put to execution under Section 36 of the A&C Act.

The Court upheld that order of the commercial court that held that the words 'in accordance with CPC' employed under Section 36 cannot be read out of context or inconsistent with the rest of the Sections of Arbitration Act. The application of Section 47 of the CPC in a proceeding for enforcement of arbitral award would leave Section 34 of the Arbitration Act redundant and it will be inconsistent with the scheme of Arbitration Act.

The Court held that A&C is a self-contained code and provisions of CPC only applies in so far as they are required and are not inconsistent with the provisions of the Act. Arbitration Act comprehensively covers all the aspects and does not envisage the application of whole gamut of CPC.

The Court held that Section 5 of the A&C Act provides for minimum judicial interference in matters governed by part 1 of the Act and that the only remedy available to a party aggrieved by the award is to challenge it under Section 34 of the Act and any party that failed to take that recourse cannot take shelter under Section 47 of CPC to resist the execution of the Award as it does not apply to execution of arbitration awards.

Accordingly, the Court dismissed the revision petitions.

Case Title: State of Tripura v. Ashes Deb, CRP 85 of 2022

Date: 21.12.2022

Counsel for the Petitioner: Mr. D. Bhattacharya and Mr. K. De

Counsel for the Respondent: Mr. Somik Deb, Sr. Advocate and Mr. S. Majumder

Citation: 2022 LiveLaw (Tri) 41 

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