EXECUTION OF ARBITRAL AWARD
Section 36 of the Arbitration and Conciliation Act talks about the execution or enforcement of arbitral awards. Once an award is made, the award holder has to wait for a period of 90 days to apply to the appropriate forum for its execution. In this period of 90 days, the award might be challenged under Section 34 for the award to be set aside.
The Court has the authority to enforce an award concerning a sum of money, attachment of property, damages, specific performance, etc. There have been instances where a party has also asked the Court for a declaration that the award is binding. The Court is also capable to grant an anti-suit injunction to prevent the award from being challenged in a court other than the court of the seat of arbitration.
There has been an important amendment with respect to this section in 2015. After the amendment, a section 34 application does not anymore provide for an automatic stay to the execution proceedings. The execution proceedings may still continue even after an S. 34 application has been made. The party wanting to set aside the award under S. 34 shall have to approach the court with a separate application asking for a stay on enforcement of the award.
The Court may direct the party objecting to the enforcement to deposit the amount of the award in an escrow account or as a security deposit in the court.
The 246th Law Commission Report had emphasized seeking this amendment denying an automatic stay on execution applications. It had become increasingly difficult to enforce domestic awards in India before the amendment, because of the automatic stay on it. The importance of Arbitration as an Alternative Dispute Resolution mechanism was reduced to nil because of the same.
An award, as soon as it is made, can be considered to be a decree of the court and is enforceable at a court of law. The provisions of the Civil Procedure Code apply for the enforcement of an award like it was for the enforcement of a decree. Order XXI prescribes the procedure by which a decree will be executed and the same provisions are to be applied for the enforcement of an arbitral award.
Once an arbitral award has been made, it has to be executed according to the provisions of CPC and Section 36 of the Arbitration Act. The provisions under Indian law do not provide authority to the court to deny enforcement of a decree or an award, except in cases where either the court remits the award back to the arbitrator for reconsideration or sets it aside under a separate S. 34 application.
S. 35 of the Act states that an award is final and binding. Hence, it becomes immediately enforceable unless it is challenged under an S. 34 application. If the award is not challenged in its entirety under S. 34 and only a part of the award is applied to set aside, then the unchallenged part becomes final and is enforceable under Section 36 irrespective of the pendency of the application under Section 34.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.