Very Sorry State of Affairs: Supreme Court On Pendency Of Execution Proceedings In Arbitration Matters For More Than 20 Years In Executing Courts In UP

The Supreme Court on Friday expressed concerns at the pendency of execution proceedings for executing the award in Arbitration Matters before subordinate courts/executing courts in the State of Uttar Pradesh. 

The Court observed that if the Award, under the Arbitration Act, is not executed at the earliest, it will frustrate the purpose and object of the Arbitration Act as well as the Commercial Courts Act.

"This is a very sorry state of affairs that even the execution proceedings to execute the Award passed under the Arbitration Act are pending for more than 20 years. If the Award, under the Arbitration Act, is not executed at the earliest, it will frustrate the purpose and object of the Arbitration Act as well as the Commercial Court's Act," the bench of Justices MR Shah and BV Nagarathna observed.

Referring to the time limit within which a commercial dispute was required to be decided and disposed under the Commercial Court's Act, the bench said, "There must be number of such proceedings pending in the courts under the jurisdiction of the High Court of Judicature at Allahabad."

Accordingly, the Top Court asked the Registrar General of the High Court of Judicature at Allahabad and the Lucknow Bench to place on record (i) how many execution petitions to execute the Award both under the Arbitration Act, 1940 and under the Arbitration and Conciliation Act, 1996 are pending in the subordinate courts/executing courts in the entire State; (ii) how many Section 34 applications are pending in the entire State and from which year and (iii) how many Section 37 applications are pending before the High Court and from which year.

The bench rendered this observation and issued directions while considering a SLP assailing Allahabad High Court's order dated December 10, 2021.

In the impugned order, the High Court had declined to direct court of Additional Judge Small Causes / Civil Judge (Senior Division), Allahabad to expeditiously decide the Execution Case.

"The Court is not inclined to issue directions in a matter such as the present merely because a party has moved this Court under Article 227 of the Constitution to direct the concerned Court to decide the pending suit overriding several cases which are equally pressing and are pending, by granting priority to a particular case. The fact that a particular case requires urgent disposal is to be considered by the concerned Court itself," the High Court had observed.

In the instant case termed by the Top Court as "glaring example of frustrating the arbitration proceedings under the Arbitration Act", the Award was passed in the year 1992 and the execution petition is of the year 2003, which was still reported to be pending.

"It is very unfortunate that even after a period of 30 years, the party in whose favour the Award is passed is not in a position to enjoy the fruit of the litigation/Award. Even the execution petition is also pending for more than 19 years," the Court observed.

Accordingly the bench with regards to the instant case, directed the the executing court to finally decide and dispose of the execution petition within a period of four weeks from the date of receipt of the present order.

Case Title: M/S CHOPRA FABRICATORS AND MANUFACTURERS PVT. LTD. v BHARAT PUMPS AND COMPRESSORS LTD. & ANR.

Counsel for Petitioner: Advocates Aarti Upadhyay Mishra, Rakesh U. Upadhyay and Rishabh Pandey 

Click Here To Read/Download High Court's Order

Click Here To Read/Download Supreme Court's Order