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Delhi High Court
Anglo-American Metallurgical Coal … vs Mmtc Ltd on 9 May, 2025
Author: Jasmeet Singh
Bench: Jasmeet Singh
$~J
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment pronounced on: 09.05.2025
+ OMP (ENF.) (COMM.) 19/2018 &E.X.APPL.(OS) 1806/2024
ANGLO-AMERICAN METALLURGICAL COAL PVT. LTD.
.........Decree Holder
Through: Mr. Jayant K Mehta, Sr. Adv. with
Mr. Sumeet Kachwaha, Mr. Samar
Kachwaha, Ms. Ankit K, Ms. Akanksha
Mohan and Ms. Ananya Saluja, Advs.
versus
MMTC LTD
...........Judgment Debtor
Through: 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.
CORAM:
HON'BLE MR. JUSTICE JASMEET SINGH
JUDGMENT
: JASMEET SINGH, J
1. Even though the judgment in the main enforcement petition was
reserved on 28.10.2024, however, in view of the application being
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E.X.APPL.(OS) 1806/2024 filed thereafter, the judgement was not
pronounced till the conclusion of hearing in the said application.
Hearing in the said application concluded on 07.05.2025.
2. This is a petition filed under section 36 of Arbitration and Conciliation
Act, 1996 (“1996 Act”) seeking enforcement of Award dated 12th
May, 2014 passed by the learned Arbitral Tribunal (“AT”) by a
majority of 2:1 regarding the disputes between the parties herein.
FACTUAL BACKGROUND
3. On 07.03.2007, the decree holder and the judgment debtor entered
into a Long Term Agreement (“LTA”) for the sale and purchase of
coking coal from decree holder on FOB (trimmed) basis from DBCT
Gladstone in Australia. Under the LTA, the decree holder was the
Seller and the judgment debtor was the Purchaser of a quantity of
coking coal.
4. The LTA encompassed three delivery periods one year each
commencing on 1st July, 2004 and ending on 30th June, 2007 and by
virtue of Clause 1.3 of LTA, the judgment debtor was given an option
to extend the LTA for two more Delivery Periods which was later
exercised by the judgment debtor and it was decided that the
purchases and deliveries were also to be made in the Fourth Delivery
Period (1st July, 2007 to 30th June, 2008) and a Fifth Delivery Period
(1st July, 2008 to 30th June, 2009). In these two additional Delivery
Periods, it was provided that the judgment debtors would purchase
466,000 MT of coking coal during each Delivery Period (Clause
1.1.1). It is to be noted that till Fourth Delivery Periods, there was no
dispute between the parties.
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5. The dispute between the parties arises out of the Fifth Delivery Period.
As noted above, the Fifth Delivery Period was set to expire on 30th
June, 2009, however, the decree holder‟s letter to the judgment debtor
dated 14th August 2008 extended the Fifth Delivery Period till 30th
September 2009. The coking coal to be supplied was of two types:
Isaac Coking Coal blend and Dawson Valley blend. The agreed price
for each for the Fifth Delivery Period was US$ 300 per MT. This price
was agreed by the parties in accordance with the LTA, and was
confirmed by letter from the judgment debtor to the decree holder
dated the 20thNovember 2008.
6. During the Fifth Delivery Period, the judgment debtor lifted two
shipments @ US$ 300 per MT. The first was on 30th October, 2008 for
a quantity of 2,366 MT and the second was on 5thAugust, 2009 for a
quantity of 9,600 MT. The first of these shipments was via the
“Furness Hartlepool” and was part of a larger shipment under which
48,655 MT was lifted in respect of balance quantities under the Fourth
Delivery Period (at the agreed rate for that period of US$ 96.40 per
MT). The Fifth Delivery Period component of this delivery was 2,366
MT and this was transacted at the agreed price of US$ 300 per MT.
7. The second of these shipments was an ad hoc agreement made in a
meeting held on 15th July 2009 and confirmed in writing by the
judgment debtor on 22ndJuly 2009. That Ad-Hoc Agreement was for
50,000 MT of coal under which 9,600 MT was to be purchased at the
contractual price of US$ 300 per MT, but the balance 40,400 MT was
to be sold at an ad hoc price of US$ 128.25 per MT.
8. The total quantity lifted in respect of the Fifth Delivery Period was
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11,966 MT (2,366 + 9,600MT) as compared to the contracted quantity
of 466,000 MT. Accordingly, the quantity not lifted by the judgment
debtor amounted to 454,034 MT.
9. The LTA contained an arbitration clause at Paragraph 20 which reads
as under:-
“PARA 20: ARBITRATION:
20.1 All disputes arising in connection with the present
Agreement shall be finally settled under the Rules of
Arbitration of the International Chamber of Commerce,
Paris by one or more Arbitrators appointed in accordance
with the said Rules and the Award made in pursuance
thereof shall be binding on the parties. The Arbitrator shall
give a reasoned award. The venue of arbitration shall be
New Delhi, India.”
Proceedings before the AT
10. The decree holder‟s claim before the AT was that the judgment debtor
did not lift the contracted coal other than a small quantity of 11,966
MT during the Fifth Delivery Period. Accordingly, the judgment
debtor failed in lifting the remaining quantity i.e. 454,034 MT.
11. The crux of the case setup by the decree holder is crystallized in the
statement of witness namely Mr Wilcox, (decree holder‟s Head of
Sales).Relevant part is extracted below:-
“Soon after MMTC signed the Addendum dated
20thNovember 2008 (Addendum No. 2 to the Long Term
Agreement dated 7th March 2007), it made clear its
reluctance to lift any material under the Long TermDigitally Signed
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Contract.
MMTC’s letter in this regard dated 20thNovember 2008 is
already on record (Annexure C-5). At all relevant times
efforts were made by the Claimant to convince MMTC to
start lifting at least some quantities under the Long Term
Agreement. Besides telephonic discussions, my personal
visits to meet MMTC’s officials in this regard were on 6th
January 2009, 24th February 2009, 21st April 2009 (along
with our Mr. Rod H. Elliott, General Manager, Marketing),
12th May 2009 and 15th June 2009.
My visit of 24th February 2009 was followed up by a letter
dated 11th March 2009 (Annexure C-6) from Mr. Rod H.
Elliott to Mr. H.S. Mann, MMTC’s Director Marketing in
which we expressed our concern that deliveries under the
Fifth Delivery Period remained unperformed and that
MMTC had not intimated arrangements for performance of
obligations arising under the Agreement. We requested
MMTC to propose a Delivery Schedule. The said letter
(Annexure C-6) was additionally forwarded by me to Mr.
Suresh Babu the very next day i.e. on 12th March 2009 and
my letter in this regard is at Annexure C-22. During the
subsistence of the Fifth Delivery Period and indeed even
thereafter, Anglo continued to push MMTC to honour its
contractual commitments but to no avail.”
12. Relying on the letter dated 4thMarch 2010, the decree holder claims
that the judgment debtor had breached the terms of the LTA and
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claimed the difference between the contract price (US$ 300) and the
market price. The market price as on the date of breach (30th
September 2009) was said by the decree holder to be US$ 128.25 per
MT for Isaac hard coking coal and US$ 125 per MT for Dawson
Valley blend. On the basis of the average price (US$ 126.62) damages
amounting to US$ 78,720,414.92 were claimed. Further, the decree
holder also sought interest at 12% per annum from 30th September
2009 to the date of payment.
13. The judgment debtor disputed the claims of the decree holder on
various ground inter alia, non-availability of contracted goods, crash
of Lehman Brothers causing drastic fall in prices. However, it is
important to mention that the plea of Addendum dated 20.11.2008
read with LTA being vitiated by fraud and collusion between the
officials of the judgment debtor and the decree holder has neither been
taken nor adjudicated upon by any of Courts.
14. The AT, after evidence led by both the parties and hearing arguments,
passed the Award dated 12.05.2014 by a majority of 2:1. Relevant
paragraphs of the said Award read as under:-
“Summary
180. Having read heard and considered the evidence and
submissions of the parties and for the reasons given above
the Tribunal finds, and holds, unanimously save where
indicated, as follows:
(a) The Respondent committed a breach of contract by not
lifting 454,034 MT of coking coal within the Fifth Delivery
Period, which expired on 30th September2009.
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(b) The Claimant was not in breach of contract in failing to
supply goods to the Respondent during the Fifth Delivery
Period.
(c) The Claimant was, at all material times in a position to
perform its obligations under the Agreement by supplying
the requisite quantities in a timely manner in accordance
with the Agreement.
(d) The Claimant’s claims are not barred by limitation.
Dispositive Section
181. For the above reasons the Tribunal Orders and Directs
that:
(1) By a majority, the Claimant is entitled to damages from
the Respondent in the sum of US$ 78,720,414.92.
(2) By a majority the Tribunal concludes that the Claimant
is entitled to simple interest on such damages in the sum of
US$27,239,420.29 in respect of interest up to the date of
this Award, and at a rate of 15% p.a. on the principal sum
from the date of this Award until payment.
(3) The Claimant is entitled to its costs of the arbitration
which, by a majority we assess in the amount of US$
977,395.00.
(4) The sums set out above as being due to the Claimant are
due as at the date of this Award and are to be paid by the
Respondent.
(5) This Award is final as to the matters in dispute between
the parties and referred to arbitration before us. All otherDigitally Signed
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requests and claims by the parties are dismissed.”
Proceedings post passing of the Award before the HC and SC
15. The said Award was assailed by the judgment debtor by way of filing
a petition under section 34 of 1996 Act being O.M.P. 790 of 2014
which was dismissed by a co-ordinate bench of this Court vide
judgment 10.07.2015.
16. The said judgment was further assailed by the judgment debtor by
way of filing a petition under section 37 of 1996 Act being FAO (OS)
532 of 2015.The Division Bench of this Court vide judgment dated
02.03.2020 set aside the above judgment dated 10.07.2015 and the
Award passed by the learned AT.
17. The judgment passed by the Division Bench was challenged by the
decree holder before the Hon‟ble Supreme Court by way of filing SLP
(C) No. 11431 of 2020. The said petition was decided in Anglo
American Metallurgical Coal Pty. Ltd. v. MMTC Ltd., (2021) 3 SCC
308 and the Hon‟ble Supreme Court set aside the judgment dated
02.03.2020 passed by the Division Bench and restored the Award
passed by the learned AT. Relevant portion of the judgment dated
17.12.2020 reads as under:-
“23. However, Shri Rohatgi invited us to look at the
unequivocal language contained in the three emails relied
upon by the Division Bench, namely, the emails dated 2-7-
2007, 22-7-2009 and 7-9-2009, which stated that not only
were no stems available for August/September 2009, but
that also there was no coal left for the remainder of the
year, making it clear that this was an admission on the partDigitally Signed
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of the appellant that it was unable to supply the contracted
quantity of coal during the remainder of the fifth delivery
period. However, what is missed by Shri Rohatgi is the
crucial fact that no price for the coal to be lifted was stated
in any of the emails or letters exchanged during this period.
This is in fact what the majority award adverts to and fills
up by having recourse to the evidence given by Mr Wilcox,
stating that the ambiguity qua price was resolved by the fact
that no coal was available for lifting at a price lower than
the contractual price. The majority award found, relying
upon Mr Wilcox’s evidence, that the supplies that were
sought to be made in August and September 2009 were
therefore, also in the nature of “mixed” supplies i.e. coal at
the contractual price, as well as coal at a much lower price.
This is a finding of fact that cannot be characterised as
perverse, as it is clear from the evidence led, the factual
matrix of the setting of there being a slump in the market, in
which the performance of the contract took place, as well as
the ambiguity as to whether the correspondence referred to
contractual price or “mixed” price, and thus, is a possible
view to take.
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42. Shri Rohatgi’s argument in support of the impugned
judgment of the Division Bench that there is no evidence to
demonstrate proof of damage suffered as on the date of
breach, is also factually incorrect. It is well established thatDigitally Signed
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the Arbitral Tribunal is the final judge of the quality, as well
as the quantity of evidence before it (see Sudarsan Trading
Co. v. State of Kerala [Sudarsan Trading Co. v. State of
Kerala, (1989) 2 SCC 38] , SCC in para 29, at pp. 53-54).
As was correctly pointed out by Shri Sibal, the majority
award has taken into account Mr Wilcox’s affidavit dated
10-7-2013 and additional affidavit dated 3-9-2013 detailing
the prices at which sales of coal were made to Chinese
purchasers during the fifth delivery period, which ended on
30-9-2009, being the date of breach as found by the
majority award. In addition, contemporaneous
correspondence, including letters dated 27-11-2009 and 3-
12-2009 were also relied upon to show that the respondent
was itself seeking coal at roughly the price of US $128 per
metric tonne, at around the same time. Hence, the difference
between the contractual price and market price was arrived
at as US $173.383 per metric tonne, in accordance with the
law laid down by this Court………
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54. All the aforesaid judgments are judgments which, on
their facts, have been decided in a particular way after
applying the tests laid down in Associate Builders
[Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2
SCC (Civ) 204] and its progeny. All these judgments turn on
their own facts. None of them can have any application to
the case before us, as it has been found by us that in the factDigitally Signed
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situation which arises in the present case, the majority
award is certainly a possible view of the case, given the
entirety of the correspondence between the parties and thus,
cannot in any manner, be characterized as perverse.
55. Accordingly, the appeal stands allowed. The judgment
of the Division Bench dated 2-3-2020 [MMTC Ltd. v. Anglo
American Metallurgical Coal Pty. Ltd., 2020 SCC OnLine
Del 1659] is set aside, thereby restoring the majority award
dated 12-5-2014 and the Single Judge’s judgment dated 10-
7-2015 [MMTC Ltd. v. Anglo American Metallurgical Coal
Pty. Ltd., 2015 SCC OnLine Del 10250 : (2015) 221 DLT
421] dismissing the application made under Section 34 of
the Arbitration Act by the respondent.”
18. With this background, the Award passed by the learned AT was
upheld by the Hon‟ble Supreme Court.
19. During the pendency of the present enforcement petition, the
judgment debtor moved objections under section 47 of Code of Civil
Procedure, 1908 (“CPC“) to urge that the Award dated 12.05.2014
passed by the learned AT is not executable on the ground of “fraud”
as Mr. Suresh Babu, the then GM (Coking Coal) acted in collusion
with the decree holder to provide advantage to them. This conspiracy
led to wrongful gain to the decree holder and wrongful loss to the
judgment debtor. Relevant paragraphs of the objections are extracted
below:-
“8. In a note dated 03.06.2008, Shri. Suresh Babu, the then
GM (Coking Coal) proposed for finalization of price forDigitally Signed
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long term agreement for the 5th delivery period at the rate of
US$ 300 per Metric Ton (FOB). Shri Suresh Babu also
mentioned in the said note that since the 2007-08 contract
cargo was to be delivered till 30.09.2008 (typographical
error of 30.09.2009 in the Note), the Decree Holder had
suggested that the quantity for 01.07.2008 to 30.06.2009 be
proportionately reduced, considering the nine months’ time
left for supply of coal under the 5th delivery period.
9. It is apposite to refer to a global event of which judicial
notice can be taken of. On 15.09.2008, crash of Lehman
Brothers introduced worldwide economic recession and
volatility thereby also crashing/reduction of prices of
commodities including coal. This event was also taken note
of by the Hon’ble Arbitral Tribunal.
xxxxxxxxxx
12. However, in the Agenda Note dated 29.09.2008 of
1103rd meeting of SPCoD (i.e. Sale/Purchase Committee of
Directors) prepared by Shri Suresh Babu and placed before
the SPCoD, he neither proposed to reduce the quantity nor
defer the finalization of price of coal at USD 300 PMT up to
March 2009 (as NINL was having sufficient coal stock to
meet the requirement up to March, 2009) despite being duty
bound to place the entire material, including the noting of
the Director (Mktg), MMTC in the Agenda Note.
13. Further, on perusal of the Minutes of 1103 rd Sale
Purchase Committee of Directors (SPCoD), meeting held onDigitally Signed
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06.10.2008, it is evident that dealing officials were aware of
the deadlock issues (like MMTC not be able to lift the entire
quantity of Anglo Coal under agreement for the 4th delivery
period i.e. 2007-08 period by 30.6.2008, spot price of hard
coking coal reaching to US$ 400/MT FOB, high demurrage
rates offered by Anglo and BHP Mitsubishi Alliance (BMA)
for Indian importers etc.) with M/s. Anglo Coal, and also
the recent fall in prices of Pig Iron and Steel products
(coking coal being raw material for producing LAM coke
which is used in production of pig iron at NINL) during the
relevant point of time.
14. Despite such adverse market conditions prevailing and
without adequate assessment of viability of high-priced raw
material for NINL’s production, the dealing officials
proposed and SPCoD approved the proposal to purchase
4,66,000 MTs, at price US$ 300PMT FOB basis, valuing
Rs. 615 Crores approx. (@Rs. 44/$) for the fifth delivery
period from the Decree Holder.
xxxxxxxxxx
16. That therefore, this shows that the the dealing officials
who proposed and SPCoD approved the proposal to obtain
pecuniary advantage for the Decree Holder by abusing their
offices.
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19. That it is indeed shocking that the officials of the
Judgment Debtor, despite being fully aware that the price ofDigitally Signed
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Coking Coal had drastically fallen, proceeded to execute the
Addendum No.2 dated20.11.2008. It is important to note
that on 20.11.2008 i.e: date of signing of the Addendum,
MMTC officials knew about the drastic fall in price, which
is evident from the letter of Shri Ved Prakash above.
20. That any attempt to justify the fixation of price at US$
300 per MT under the subterfuge of the
contracts/agreements entered by Steel Authority of India
Limited (SAIL)/Rashtriya Ispat Nigam Limited(RINL) shall
be a gross misrepresentation of the gamut of facts, which
also deserves to be clarified. SAIL had executed the contract
with the Decree Holder on 30.07.2008 at a price which was
close to the then prevailing market price i.e. US$ 300 per
metric tonne. However, in the month of September, 2008,
there was a massive crash in the price of coal, steel and
other such products due to the collapse of the Lehman
Brothers leading to a financial crisis in the United States of
America, which later on spread to the rest of the world.
Despite the fact that the then erring officials of the
Judgment Debtor had an option not to execute the Second
Addendum, it indeed shocks one’s conscience that the said
erring officials chose to execute the Second Addendum at a
price of US$ 300 per Metric Tonne on 20.11.2008, which
was more than the prevailing market price in the month of
September to November, 2008. This prima-facie shows
fraudulent conduct on the part of the then erring officials,Digitally Signed
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which has caused wrongful pecuniary advantage to the
Decree Holder at the expense of the Judgment Debtor.
Further investigation qua the collusion between the officials
of the Judgment Debtor and the Decree Holder is pending
with the CBI.”
20. On perusal, despite knowing the change in market and the fall in coal
prices, in the September 2008 SPCoD meeting, Shri. Suresh Babu
intentionally did not propose a reduction in quantity or defer the price
finalization at US$ 300 per MT, even though Neelanchal Ispat Nigam
Limited (“NINL”) had sufficient coal stock until March 2009. The
officials did not mention the Director‟s note in the meeting. Shri.
Suresh Babu continued to approve a deal at an inflated price,
benefiting the decree holder.
SUBMISSIONS ADVANCED BY THE PARTIES
(On behalf of the Judgment Debtor)
21. On maintainability of the objections, Mr. Sharma, learned ASG and
Mr. Kumar, learned senior counsel appearing for the judgment debtor
submits that the Award passed by the learned AT, as per section 36 of
1996 Act, is to be enforced in accordance with the provisions of the
CPC in the same manner as if it were a decree of the Court. Thus, the
Award rendered by the AT is in effect a decree and it is enforceable as
a “Decree” in terms of the CPC. Reliance is placed on Union of India
v. Jagat Ram Trehan & Sons, 1996 SCC OnLine Del 20. Further, in
Bijendra Kumar v. Pradeep Kumar, 2014 SCC OnLine Del 2042,
this Court observed that an Award, which is a nullity, being against
public policy, can always be challenged, even at the stage of
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execution. Hence, the provisions of CPC are squarely applicable in
execution proceedings.
22. In light of the same, learned senior counsels placed reliance on section
47 of CPC to inter-alia, contend that all questions relating to
execution, discharge or satisfaction of a decree and arising between
the parties to the suit in which a decree is passed, shall be determined
in the execution proceedings. Reliance is also placed on Jini
Dhanrajgir v. Shibu Mathew, 2023 SCC OnLine SC 643.
23. Learned senior counsels further submit that once a plea of fraud has
been set up by the judgment debtor before the Executing Court and
credible evidence in support of such plea has also been placed, it is
imperative for the Executing Court to examine the issue of fraud on
merits. In this regard, reliance is placed on Kishan Lal Barwa v.
Sharda Saharan, 2015 SCC OnLine All 4980. The said judgment is
upheld by the Hon‟ble Supreme Court vide orders dated 12.10.2015
and 06.01.2017 in SLP (C) No. 23823 of 2015. Relying on the
aforementioned judgments, learned senior counsels urge that the
present objections are maintainable.
24. Merits of the Objections, learned senior counsels draw my attention to
various clauses of LTA to urge that with respect to Fourth and Fifth
delivery periods, discretion was reserved with the judgment debtor,
whether to place firm orders on the decree holder for purchase of
coking coal but there was no such firm agreement binding for the
Fourth and Fifth delivery periods. The quantity of coal and fixation of
price were to be discussed and mutually settled between the parties.
25. Shri. Suresh Babu, the then GM (Coking Coal) of the judgment debtor
Digitally Signed
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in a Note dated 03.06.2008 proposed for finalization of price for LTA
for the Fifth delivery period at the rate of US$ 300 per MT. The said
note also recorded that the supplies against the fourth delivery period
from 01.07.2007 to 30.6.2008 had not been completed and had been
extended till 30.09.2008. Hence, the judgment debtor ought not to
have been in a hurry to enter into a binding agreement with respect to
the Fifth Delivery Period from 01.07.2008 to 30.06.2009, but still the
note was nevertheless prepared for obtaining sanction of
Sale/Purchase Committee of Directors (“SPCoD”) for entering into a
binding contract for the period 01.07.2008 to 30.06.2009. There was
however, no mention in the said note, of the quality of coking coal to
be transacted during the said Fifth delivery period. Shri H.S. Mann,
the then Director (Marketing) of the judgment debtor on 04.06.2008
endorsed thereon that the judgment debtor “should try to avoid/defer
US$ 300 price coal to be finalized for 2008-2009”, till March, 2009.
Thus, he was of the opinion that considering the international markets,
judgment debtors should not commit to the price of USD 300 per MT
in advance, before the need for coal arise.
26. On 15.09.2008, there was a sudden turmoil in the international
markets, owing to a global financial crisis due to Lehman Brothers
crash. This aspect was known to the decree holder as there was a press
release note by the judgment debtor dated 20.02.2009. Despite
knowing fully well, the erring officials of the judgment debtor
collusively and fraudulently with the decree holder executed the
Addendum-2 dated 20.11.2008 for 300 USD per MT which was more
than 3 times the price fixed for the Fourth Delivery Period i.e. 96.40
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USD per MT and caused a massive loss to the public exchequer.
27. However, in the Agenda Note dated 29.09.2008 of 1103rd meeting of
SPCoD prepared by Shri Suresh Babu and placed before the SPCoD,
Shri Suresh Babu neither proposed to reduce the quantity nor defer the
finalization of price of coal at USD 300 per MT up to March 2009
despite NINL was having sufficient coal stock to meet the requirement
up to March, 2009 and despite being duty bound to place the entire
material, including the noting of the Director (Mktg), MMTC in the
Agenda Note.
28. Learned senior counsels drawing my attention to Minutes of 1103rd
SPCoD meeting held on 06.10.2008urge that despite such adverse
market conditions prevailing and without adequate assessment of
viability of high-priced raw material for NINL‟s production, the erring
officials of judgment debtor, approved the proposal to purchase 4,66,000
MTs, at price US$ 300 per MT, valuing Rs. 615 Crores approx. (@
Rs.44/$) for the Fifth delivery period from the decree holder.
29. On 14.10.2008, NINL sent a letter to Mr. Suresh Babu wherein a
special request was made with respect to cooking coal restricted to
12.66 lakh MT. Another letter was addressed by NINL on 16.10.2008,
drawing to the notice of Mr. Suresh Babu specifically that they need
coal around 9 lakh MT only and requiring the judgment debtor to get
only 2.2 lakh MT so far as Anglo-American Coal is concerned. The
Addendum to the LTA for the Fifth Delivery Period was signed on
20.11.2008. Thus, on the signing and execution of the Second
Addendum to the LTA, the decree holder and the judgment debtor
agreed to the price and quantity of coking coal for the Fifth Delivery
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Period. On the same day, a communication was issued by Shri Ved
Prakash, the then CGM, MMTC to the decree holder seeking
reduction in price of coal.
30. Learned Senior counsels urge that it is indeed shocking that the
officials of judgment debtor, despite being fully aware that the price of
coking coal had drastically fallen, proceeded to execute the
Addendum No.2 dated20.11.2008. Further, officials of the judgment
debtor on the date of signing the Addendum, knew about the drastic
fall in price, which is evident from the letter of Shri Ved Prakash
above.
31. In light of this, learned senior counsels submit that there was neither
any plausible reason nor justification for procurement of 4.46 lakh MT
and that too at a price of US$ 300 per MT. Since the execution of the
Addendum-2 on 20.11.2008 was the result of fraud, collusion,
conspiracy and corruption, fraud is clearly visible on the face of
record. Therefore, this reveals that the dealing officials of the
judgment debtor who proposed the price @ US$ 300 per MT for
4,66,000 MT of coking coal, did so by deliberately ignoring market
realities for the sole purpose of providing pecuniary advantage to
themselves and to the decree holder by abusing their official position.
If a non-executable award is permitted to be executed, it will lead to a
massive expenditure of public funds to a humongous extent, in the
name of import of coal, which was never shipped by the decree
holder. In other words, the Award was obtained by playing fraud on
the learned AT. The same is a nullity, inexecutable and non est in the
eyes of law.
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32. Reliance is also placed to an Order dated 15.02.2023 passed by this
Court wherein it was held that huge public money is involved and
serious charges of fraud and corruption are being investigated by the
CBI. It has been argued that the said order has not been challenged or
taken to the Supreme Court.
(On behalf of the Decree Holder)
33. Refuting the above submissions, Mr Mehta, learned senior counsel
appearing for the decree holder at the outset, submits that the
judgment debtor‟s challenge is barred by section 5 of 1996 Act. The
Arbitration Act is a complete code. By a “non-obstante” provision,
judicial intervention is barred, unless specifically provided for by the
1996 Act itself. The 1996 Act does not contemplate any challenge to
an Award being raised post conclusion of section 34 of 1996 Act
stage. The Enforcement Court under section 36 has not been conferred
with any jurisdiction to adjudicate on any such challenge or question
the Award. Judgment debtor‟s challenge is thus legally barred, by
section 5 of 1996 Act.
34. The judgments cited by the judgment debtor to justify their objections
only provide that an Executing Court can refuse to execute a decree, if
on the face of it, the same is a „nullity‟, i.e. where there is an inherent
lack of jurisdiction, or ex-facie, it can be shown that fraud was played
on the Court itself.
35. He further submits that the objections set up by the judgment debtor
ae of an alleged fraud on itself, as opposed to a fraud on the Court.
The submissions advanced by the judgment debtor that its officers
should not have signed the Addendum for the Fifth delivery period
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and should not have agreed to the price of US$ 300 per MT. The said
contentions clearly amount to a fact-based challenge to the formation
and validity of the underlying Agreement, on its merits. Such a
challenge could have only been raised before the AT. Admittedly, no
such challenge was raised by the judgment debtor in the decade long
litigation, and is dishonestly sought to be raised at the final stage of
execution, only to frustrate the Award.
36. Further, the judgment debtor‟s challenge is also barred by limitation.
Judgment debtor seeks to challenge a 2007 Agreement, after 15 years
of its execution, and 8 years after an Award has been rendered. The
Limitation Act, vide Section 17 and Articles 58/59 bars any such
challenge. MMTC has not put forth any proper explanation as to why
it could not have, with ordinary diligence, discovered the alleged fraud
earlier, especially when it was well represented in all legal forums
right upto the Hon‟ble Supreme Court and all relevant facts now urged
were known to it.
37. He vehemently urges that judgment debtor‟s objections are an abuse
of process. If such objections are held to be maintainable, no Award
(despite attaining finality) will ever be executed. Such a course would
be unjust and unknown to arbitration jurisprudence and is in fact not
countenanced even in the much less rigorous civil jurisprudence.
ANALYSIS AND FINDINGS
38. I have heard the rival submissions advanced by the learned senior
counsel for the parties.
39. The question which falls for my consideration is whether the judgment
debtor is entitled to move objections under section 47 of CPC against
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the execution of the Award under section 36 of 1996 Act.
40. The 1996 Act is a self-contained code meaning thereby an exhaustive
legislation to establish a robust arbitral mechanism for which purpose
it is enacted. It gives a complete set of procedures to deal with the
purpose sought to be achieve by the statute. Further, its dependence on
the general law is either minimal or absent. Therefore, unless
specifically stated in any sections of 1996 Act, the aid and use of
general laws is not permissible and must be excluded.
41. The principle of limited court interference, inter alia, is one of the
fundamental feature of 1996 Act as it ensures that the arbitration
process remains an efficient and autonomous mechanism for resolving
disputes without unnecessary interference by the Courts.The Hon‟ble
Supreme Court in Vidya Drolia v. Durga Trading Corpn., (2021) 2
SCC 1 has held that the principle of party autonomy goes hand in
hand with the principle of limited court intervention, this being the
fundamental principle underlying modern arbitration law. For the sake
of perusal, relevant portion is extracted below:-
“72. ………..By putting party autonomy on a high pedestal,
the Act mandates that the parties to a valid arbitration
agreement must abide by the consensual and agreed mode
of dispute resolution. The courts must show due respect to
arbitration agreements particularly in commercial settings
by staying the court proceedings, unless the legislative
language is to the contrary. The principle of party autonomy
goes hand in hand with the principle of limited court
intervention, this being the fundamental principleDigitally Signed
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underlying modern arbitration law……..”
42. In 1996 Act, section 5 deals with limited court interference. The said
section is extracted below:-
“5. Extent of judicial intervention.–Notwithstanding
anything contained in any other law for the time being in
force, in matters governed by this Part, no judicial authority
shall intervene except where so provided in this Part.”
(Emphasis added)
43. On perusal, the said section begins with the non-obstante clause and
by using the phrase “no judicial authority shall intervene” restrains the
interference of judicial authority to the extent provided under Part I.
The Hon‟ble Supreme Court in Interplay Between Arbitration
Agreements under Arbitration, 1996 & Stamp Act, 1899, In re,
(2024) 6 SCC 1 has extensively dealt with inter alia, section 5 and
observed as under:-
“81. One of the main objectives of the Arbitration Act is to
minimise the supervisory role of Courts in the arbitral
process. Party autonomy and settlement of disputes by an
Arbitral Tribunal are the hallmarks of arbitration law.
Section 5 gives effect to the true intention of the parties to
have their disputes resolved through arbitration in a quick,
efficient and effective manner by minimising judicial
interference in the arbitral proceedings. [Food Corpn. of
India v. Indian Council of Arbitration, (2003) 6 SCC 564.]
Parliament enacted Section 5 to minimise the supervisory
role of Courts in the arbitral process to the bare minimum,Digitally Signed
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and only to the extent “so provided” under the Part I of the
Arbitration Act. In doing so, the legislature did not
altogether exclude the role of Courts or judicial authorities
in arbitral proceedings, but limited it to circumstances
where the support of judicial authorities is required for the
successful implementation and enforcement of the arbitral
process………
82. ……… It is of a wide amplitude and sets forth the
legislative intent of limiting judicial intervention during the
arbitral process. In the context of Section 5, this means that
the provisions contained in Part I of the Arbitration Act
ought to be given full effect and operation irrespective of
any other law for the time being in force. It is now an
established proposition of law that the legislature uses non
obstante clauses to remove all obstructions which might
arise out of the provisions of any other law, which stand in
the way of the operation of the legislation which
incorporates the non obstante clause. [State of Bihar v.
Bihar Rajya M.S.E.S.K.K. Mahasangh, (2005) 9 SCC 129 :
2005 SCC (L&S) 460]
xxxxxxxxx
88. One of the main objectives behind the enactment of the
Arbitration Act was to minimise the supervisory role of
Courts in the arbitral process by confining it only to the
circumstances stipulated by the legislature. For instance,
Section 16 of the Arbitration Act provides that the ArbitralDigitally Signed
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Tribunal may rule on its own jurisdiction “including ruling
on any objection with respect to the existence or validity of
the arbitration agreement”. The effect of Section 16,
bearing in view the principle of minimum judicial
interference, is that judicial authorities cannot intervene in
matters dealing with the jurisdiction of the Arbitral
Tribunal. Although Sections 8 and 11 allow Courts to refer
parties to arbitration or appoint arbitrators, Section 5 limits
the Courts from dealing with substantive objections
pertaining to the existence and validity of arbitration
agreements at the referral or appointment stage. A Referral
Court at Section 8 or Section 11 stage can only enter into a
prima facie determination. The legislative mandate of prima
facie determination ensures that the Referral Courts do not
trammel the Arbitral Tribunal’s authority to rule on its own
jurisdiction.
89. ……… Section 5 contains a general rule of judicial non-
interference. Therefore, every provision of the Arbitration
Act ought to be construed in view of Section 5 to give true
effect to the legislative intention of minimal judicial
intervention.”
44. Section 5 of 1996 Act aims to minimize the interference/supervisory
role of court in arbitration process. The provisions of Part I of 1996
Act ought to be construed in consonance with section 5 to give its true
effect. Furthermore, it is important to note that section 5 is mentioned
under Part I which also includes section 36 which reads as under:-
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“36. Enforcement.–(1) Where the time for making an
application to set aside the arbitral award under section 34
has expired, then, subject to the provisions of sub-section
(2), such award shall be enforced in accordance with the
provisions of the Code of Civil Procedure, 1908 (5 of 1908),
in the same manner as if it were a decree of the court.”
(Emphasis added)
45. On plain reading, when the period for challenging an Award under
section 34 has expired and/or challenge made under section 34 has
failed, then such an Award is enforceable. Further, an Award shall be
enforced in accordance with the provisions of the CPC in the same
manner “as if it were a decree of the court”. The legislature has clearly
indicated that an Award intends to be a deemed decree only for the
purposes of enforcement. Once the limitation period for challenging
an Award under section 34 has expired and/or challenge under section
34 has failed, then the Award has to be enforced.
46. The judgment debtor has argued that the legislature by using the
phrase “as if it were a decree of the court” gives liberty to the
judgment debtor to file an objection under section 47 of CPC against
the enforcement of an Award like a decree passed by a Civil Court.
47. For ease of reference, section 47 of CPC is extracted below:-
“47. Questions to be determined by the Court executing
decree.–(1) All questions arising between the parties to the
suit in which the decree was passed, or their
representatives, and relating to the execution, discharge or
satisfaction of the decree, shall be determined by the CourtDigitally Signed
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executing the decree and not by a separate suit.”
48. The Executing Court while executing a decree passed in a suit can
determine all the questions relating to the parties to the suit, or their
representatives, or relating to the execution, discharge, or satisfaction
of the decree.
49. Section 2(2) of CPC defines „decree‟ which reads as under:-
“(2) “decree” means the formal expression of an
adjudication which, so far as regards the court expressing
it, conclusively determines the rights of the parties with
regard to all or any of the matters in controversy in the suit
and may be either preliminary or final. It shall be deemed to
include the rejection of a plaint and the determination of
any question within Section 144, but shall not include–
(a) any adjudication from which an appeal lies as an appeal
from an order, or
(b) any order of dismissal for default.
Explanation.–A decree is preliminary when further
proceedings have to be taken before the suit can be
completely disposed of. It is final when such adjudication
completely disposes of the suit. It may be partly preliminary
and partly final;”
50. A decree is passed by a Court after adjudicating the rights of the
parties with regard to all or any of the matters in controversy arising in
the suit. In Paramjeet Singh Patheja v. ICDS Ltd., (2006) 13 SCC
322, the Hon‟ble Supreme Court has observed as under:-
21. The words “court”, “adjudication” and “suit”
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conclusively show that only a court can pass a decree and
that too only in a suit commenced by a plaint and after
adjudication of a dispute by a judgment pronounced by the
court. It is obvious that an arbitrator is not a court, an
arbitration is not an adjudication and, therefore, an award
is not a decree.
28. It is settled by decisions of this Court that the words “as
if” in fact show the distinction between two things and such
words are used for a limited purpose. They further show
that a legal fiction must be limited to the purpose for which
it was created.
29. ………
In fact, Section 36 goes further than Section 15 of the 1899
Act and makes it clear beyond doubt that enforceability is
only to be under CPC. It rules out any argument that
enforceability as a decree can be sought under any other
law or that initiating insolvency proceeding is a manner of
enforcing a decree under CPC. Therefore the contention of
the respondents that, an award rendered under the
Arbitration and Conciliation Act, 1996 if not challenged
within the requisite period, the same becomes final and
binding as provided under Section 35 and the same can be
enforced as a decree as it is as binding and conclusive as
provided under Section 36 and that there is no distinction
between an award and a decree, does not hold water.
42. The words “as if” demonstrate that award and decree
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or order are two different things. The legal fiction created is
for the limited purpose of enforcement as a decree. The
fiction is not intended to make it a decree for all purposes
under all statutes, whether State or Central.
43. For the foregoing discussion we hold:
………..
(iv) An arbitration award is neither a decree nor an order
for payment within the meaning of Section 9(2). The
expression “decree” in the Court Fees Act, 1870 is liable to
be construed with reference to its definition in CPC and
hold that there are essential conditions for a “decree”:
(a) that the adjudication must be given in a suit,
(b) that the suit must start with a plaint and culminate in a
decree, and
(c) that the adjudication must be formal and final and must
be given by a civil or Revenue Court.
An award does not satisfy any of the requirements of a
decree. It is not rendered in a suit nor is an arbitral
proceeding commenced by the institution of a plaint.
(v) A legal fiction ought not to be extended beyond its
legitimate field. As such, an award rendered under the
provisions of the Arbitration and Conciliation Act, 1996
cannot be construed to be a “decree” for the purpose of
Section 9(2) of the Insolvency Act.”
51. The Hon‟ble Supreme Court in Union of India v. Vedanta Ltd.,
(2020) 10 SCC 1 and more particularly in paragraphs 69 and 70 has
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held as under:-
“69. Section 36 of the Arbitration Act, 1996 creates a
statutory fiction for the limited purpose of enforcement of a
“domestic award” as a decree of the court, even though it is
otherwise an award in an arbitral proceeding [Umesh
Goel v. H.P. Coop. Group Housing Society Ltd., (2016) 11
SCC 313 : (2016) 3 SCC (Civ) 795] . By this deeming
fiction, a domestic award is deemed to be a decree of the
court [Sundaram Finance Ltd. v. Abdul Samad, (2018) 3
SCC 622 : (2018) 2 SCC (Civ) 593] , even though it is as
such not a decree passed by a civil court. The Arbitral
Tribunal cannot be considered to be a “court”, and the
arbitral proceedings are not civil proceedings. The deeming
fiction is restricted to treat the award as a decree of the
court for the purposes of execution, even though it is, as a
matter of fact, only an award in an arbitral proceeding.
In Paramjeet Singh Patheja v. ICDS Ltd. [Paramjeet Singh
Patheja v. ICDS Ltd., (2006) 13 SCC 322] , this Court in the
context of a domestic award, held that the fiction is not
intended to make an award a decree for all purposes, or
under all statutes, whether State or Central. It is a legal
fiction which must be limited to the purpose for which it was
created.
70. A Constitution Bench of this Court in BengalImmunity
Co. Ltd. V. State of Bihar [Bengal Immunity Co.Ltd. V. State
of Bihar, (1955) 2 SCR 603 : AIR 1955 SC661] , held thatDigitally Signed
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legal fictions are created only for somedefinite purpose. A
legal fiction is to be limited to the purpose for which it was
created, and it would not be legitimate to travel beyond the
scope of that purpose, and read into the provision, any other
purpose how so attractive it may be. ……….”
52. What transpires from the above is that the legal fiction created under
section 36 of 1996 Act is to be read in such a manner and for the
limited purpose, for which it is created. It should not be read in
manner that other provisions of the statute are rendered otiose. Section
36 of 1996 Act has to be interpreted in view of the other provisions of
1996 Act such as section 5, 34 and 35. It is evident from Paramjeet
Singh Patheja (supra) that an Award cannot be termed as a decree as
the same is passed only in a suit commenced by a plaint and after
adjudication of a dispute by a Court. Furthermore, the AT is not a
“Court”, and the arbitral proceedings are not civil proceedings. An
Award does not fulfill any conditions of section 2(2) which defines
„decree‟. The words “as if” used in section 36 of 1996 Act itself
denotes that an “Award” and “decree” are two different things. By
virtue of using this phrase “as if it were a decree of the Court” does
not render an Award akin to a decree but only permits the Court to
execute an Award in the same manner as it was a decree passed by a
Civil Court. It only means that all the powers of the Executing Court
will be available to a Court towards “enforcing” an Award and
nothing more.
53. The legislature by using the phrase “such award shall be enforced in
accordance with the provisions of the Code of Civil Procedure” only
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intends to “enforce” an Award in the same manner and procedure as
contemplated in CPC without altering the nature and character of an
Award. The provisions of CPC are only applicable to the extent of
“enforcement” of an Award such as attachment, sale, auction,
detention, etc. which are reflected in Order XXI of CPC. The
legislature did not intend to permit a challenge to an Award during
enforcement proceedings again on merits as this would be contrary to
the objectives of the 1996 Act which aim to ensure finality and limited
judicial interference. The challenge to an Award is only to be made
under section 34 of 1996 Act. Once the Award passes the scrutiny
under section 34 or the period to challenge an Award under section 34
lapses, the Award becomes final and binding to the parties therein by
virtue of section 35 of 1996 Act.
54. If the objections under section 47 of CPC are allowed to be
entertained during the enforcement proceedings of an Award, it would
effectively open a second round for challenging the Award which the
legislature did not intend to do as the same would undermine the
provision of section 34 i.e. challenge to Award on limited grounds
available as mentioned therein and render the finality granted by
section 35, meaningless. Further, if such interpretation is allowed, the
same would defeat the purpose of 1996 Act which is to streamline
arbitration and reduce the prolonged litigation. In addition, allowing
objections would not only delay the finality of disputes but would also
nullify the basic contours of 1996 Act. Any particular provision of a
statute has to be harmoniously construed so as not to render any other
provisions of the statue otiose/inconsistent with the other provisions.
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55. A Co-ordinate bench of this Court in Hindustan Zinc Ltd. v. National
Research Development Corporation, 2023 SCC OnLine Del 330
dealing with the same issue in controversy, has observed as under:-
“20. ……….. It would be pertinent to note that the Act
envisages a challenge to an arbitral award being mounted
solely within the contours of Section 34. Section 34 not only
constructs the forum but also creates the right to question
an arbitral award on grounds specified in that provision
itself. This is manifest from the use of the expression “only
if….” as occurring in Section 34(2). Accepting the
contention of learned counsel for the objector that a
challenge to the award on merits would also be permissible
in proceedings referable to Section 36 would clearly amount
to recognizing the same being an avenue available to be
invoked in addition to the limited right which stands
conferred by Section 34. Bearing in mind the principal
objectives of the Act as well as the legislative policy
underlying Sections 34 and 36, the Court finds itself unable
to countenance the submission as addressed at the behest of
the objector.
21. It would be pertinent to note that Order XXI of the Code
compendiously deals with the subject relating to execution
of decrees. Those provisions extend from attachment of
properties to sale and auction thereof. It also envisages the
trial of questions that may arise in the course of execution
as would be evident from the various provisions containedDigitally Signed
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in that chapter such as Order XXI Rule 46C as well as Rules
58 to 63 and 101. As this Court reads those provisions, they
clearly appear to be restricted to questions that would be
indelibly connected with actions and steps that may be taken
by a court in the course of execution of a decree. Even those
provisions cannot possibly be construed as extending to a
challenge to the validity or correctness of the original
judgment and decree that may be rendered. While it may be
open the Court to draw sustenance and guidance from the
principles underlying the provisions contained in Order XXI
in the course of enforcement of an arbitral award, it would
be wholly incorrect to understand or interpret Section 36 as
envisaging the adoption of its various provisions. The
principles which inform the various provisions of Order XXI
can at best only act as a guide for the trial of various
questions that may arise in the span of enforcement of an
arbitral award.
22. In summation, it must be held that a challenge to an
award on the ground that it is a “nullity” or is otherwise
illegal can be addressed only in proceedings that may be
initiated in accordance with Section 34 of the Act. The
grounds on which an award can possibly be assailed are
comprehensively set out in Section 34(2). A challenge
mounted on those lines in proceedings duly instituted under
Section 34 alone can be recognised to be the remedy
available to a judgment debtor. The Act neither envisagesDigitally Signed
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nor sanctions a dual or independent challenge to an award
based on the various facets of nullity as legally recognised
being laid in enforcement proceedings. The conclusion of
the Court in this respect stands fortified from a conjoint
reading of Sections 5, 35 and 36 of the Act as well as the
precedents noticed hereinabove. The aforesaid statement of
the law would necessarily be subject to the caveat which is
liable to be entered in respect of foreign awards and which
are governed by Part II of the Act. Insofar as enforcement
proceedings are concerned, while the Court would be
obliged to deal with all questions that may relate to or arise
out of steps that may be taken in the course of execution, it
would be wholly incorrect to understand the scope of those
proceedings as extending to the trial of questions touching
upon the merits of the award.
23. Accordingly, and for all the aforesaid reasons, the Court
comes to conclude that the challenge to the award on merits
as is sought to be raised by learned counsel for the objector
cannot be countenanced in these enforcement proceedings
in light of the observations as made hereinabove. The
objection to the enforcement of the arbitral award on that
score is consequently negated.”
56. A similar view has also been taken by various other High Courts in
Bellary Nirmithi Kendra v. Capital Metal Industries; 2024 SCC
OnLine Kar 51 (Karnataka HC), State of U.P. v. Raj Veer Singh;
2024 SCC OnLine All 1094 (Allahabad HC).
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57. Reliance placed on Jini Dhanrajgir (supra) and Kishan Lal Barwa
(supra) are misplaced as both the judgments are not under the 1996
Act. Reliance placed on Bijendra Kumar (supra) is also misplaced as
the Court therein was of the view that section 34 petition was
dismissed on the ground of being time barred but not on merits.
Hence, the Executing Court therein was right in not enforcing the
Award. However, in the present case, section 34 petition was decided
on merits and the judgment passed in section 34 petition was upheld
by the Hon‟ble Supreme Court.
58. Even on merits, the acts of the officers of the Corporation bind the
Corporation. Corporation is a separate legal entity and only functions
through its officers. As of today, CBI has only registered a
Preliminary Enquiry bearing No. PE2l72023A0001 and there is no
finding of fraud, cheating, collusion against the then officers of the
judgment debtor with the officers of the decree holder.
59. Learned senior counsels for the judgment debtor placed reliance on
the order dated 15.02.2023 passed in this present petition to urge that
huge public money is involved and serious charges of fraud and
corruption are being investigated by the CBI. I am of the view that
said observations were only made on an application and will not have
a bearing on the final adjudication on merits of the present petition.
E.X.APPL.(OS) 1806/2024
60. After the judgment was reserved in the main enforcement petition, the
present application has been filed by the judgment debtor on
11.11.2024 under Order XXI Rule 29 of CPC seeking stay of the
present enforcement proceedings during the pendency of the Suit i.e.
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CS (Comm) No. 959 of 2024 titled as “MMTC Limited v. Anglo
American Metallurgical Coal Ptv. Ltd.”.
61. Mr Salve, learned senior counsel for the judgment debtor submits that
the decree holder has been secured as the awarded amount has already
been deposited with this Court. The decree holder has no assets in this
Country and if the pending suit is decreed in favour of the judgment
debtor (Plaintiff in the Suit) then the awarded amount may not be
payable. Reliance is placed on Shaukat Hussain v. Bhuneshwari
Devi, (1972) 2 SCC 731.
62. He further states that the suit being CS (Comm) No. 959 of 2024 has
been filed seeking following reliefs:-
“a) To pass a decree of declaration in favour of the Plaintiff
and against the Defendants to declare and hold that the
Addendum No. 2 dated 20.11.2008 executed between the
Plaintiff and the Defendants is vitiated by fraud and tainted
by corruption and is thus void ab initio;
b) Pass a decree of declaration to declare that the Award
dated 12.05.2014 passed by the International Chamber of
Commerce, International Court of Arbitration in ICC
Arbitration Reference 18968/CYK titled as Anglo-American
Coal Metallurgical Coal Pty Limited versus MMTC Limited
is obtained/tainted by fraud as it is based on the Addendum
No.2 dated 20.11.2008, which itself is void ab initio and
thus the Award dated 12.05.2014 itself is void and
unenforceable and is liable to be set aside;
c) Pass a decree of declaration to declare and set aside the
Digitally Signed
By:DEEPANSHU MALASI
OMP (ENF.) (COMM.) 19/2018 Page 37 of 44
Signing Date:09.05.2025
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Award dated 12.05.2014 and all/any consequential orders
based on the said Award on the ground that the Award is
obtained/tainted by fraud and/or was vitiated by the acts of
corruption of the Defendants in securing the Plaintiff’s
consent to enter into the Addendum No.2 dated 20.11 .2008;
d) To pass a decree in favour of the Plaintiff and against the
Defendants, jointly and severally, for recovery of a sum of
Rs. 8,95,29,612/- (Rupees Eight Crores Ninety-Five Lakhs
Twenty-Nine Thousand Six Hundred and Twelve Only)
along with interest@ 18% per annum calculated from the
date of commencement of cause of action i.e. 16.08.2022 till
the date of its realization;
e) To pass a decree of Permanent injunction in favour of the
Plaintiff and against the Defendants, its legal heirs,
successors, legal representatives, administrators, executors,
nominees and assigns or anybody acting on their behalf,
thereby restraining the Defendants from acting/ relying
upon the Addendum No.2 dated 20.11.2008 and the Award
dated 12.05.2014 in any manner whatsoever;
f) Pass any other such order as this Hon’ble Court may
deem fit in the facts and circumstances of the present case.”
63. In this regard, he urges that if the suit of the judgment debtor was to
be decreed then the Award itself will be set aside and no amount
would be due and payable by the judgment debtor. Hence, till the suit
is pending, no judgment should be pronounced in the enforcement
petition.
Digitally Signed
By:DEEPANSHU MALASI
OMP (ENF.) (COMM.) 19/2018 Page 38 of 44
Signing Date:09.05.2025
14:23:08
64. Per contra, Mr. Mehta, learned senior counsel for the decree holder
has urged the following submissions:-
A. Order XXI Rule 29 of CPC is applicable where a Court has
passed a decree and in the same Court, a suit is also pending.
The same is not in the present case.
B. An Arbitral Award is not a decree of any Court.
C. Order XXI Rule 29 of CPC can only be resorted to where the
suit has been filed prior in time, to the execution petition.
D. The bar under section 5 read with section 34 of 1996 Act makes
Order XXI Rule 29 of CPC inapplicable.
65. I have heard learned senior counsels for the parties.
66. In the present case, admittedly, the Award dated 12.05.2014 passed by
the learned AT in favour of the decree holder has been upheld till the
Hon‟ble Supreme Court. During the pendency of the enforcement
proceedings, the judgment debtor has filed a suit against the decree
holder which is pending before this Court and whether summons are
to be issued or not is to be adjudicated upon its own merits in the suit.
The fact before me today is whether the present application under
Order XXI Rule 29 of CPC will lie once the suit being CS (Comm)
No. 959 of 2024 is pending in this Court.
67. To my mind, the present application is without any merit.
68. For sake of perusal, Order XXI Rule 29 of CPC is extracted below:-
“29. Stay of execution pending suit between decree-holder
and judgment-debtors.–Where a suit is pending in any
Court against the holder of a decree of such Court [or of a
decree which is being executed by such Court, on the part ofDigitally Signed
By:DEEPANSHU MALASI
OMP (ENF.) (COMM.) 19/2018 Page 39 of 44
Signing Date:09.05.2025
14:23:08
the person against whom the decree was passed, the Court
may, on such terms as to security or otherwise, as it thinks
fit, stay execution of the decree until the pending suit has
been decided:
[Provided that if the decree is one for payment of money,
the Court shall, if it grants stay without requiring security,
record its reasons for so doing.]”
69. The said Rule has been interpreted by the Hon‟ble Supreme Court in
Shaukat Hussain (supra) and observed as under:-
“6. …………….
It is obvious from a mere perusal of the rule that there
should be simultaneously two proceedings in one court. One
is the proceeding in execution at the instance of the decree-
holder against the judgment-debtor and the other a suit at
the instance of the judgment-debtor against the decree-
holder. That is a condition under which the court in which
the suit is pending may stay the execution before it. If that
was the only condition, MrChagla would be right in his
contention, because admittedly there was a proceeding in
execution by the decree-holder against the judgment-debtor
in the Court of Munsif 1st, Gaya and there was also a suit at
the instance of the judgment-debtor against the decree-
holder in that court. But there is a snag in that rule. It is not
enough that there is a suit pending by the judgment-debtor,
it is further necessary that the suit must be against the
holder of a decree of such court. The words “such court”
Digitally Signed
By:DEEPANSHU MALASI
OMP (ENF.) (COMM.) 19/2018 Page 40 of 44
Signing Date:09.05.2025
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are important. “Such court” means in the context of that
rule the court in which the suit is pending. In other words,
the suit must be one not only pending in that court but also
one against the holder of a decree of that court. That
appears to be the plain meaning of the rule.”
70. As observed above, I have already held that section 5 of 1996 Act
aims limited judicial interference. The legal fiction created by section
36 of 1996 Act, allowing an Award to be enforced “as if it were a
decree,” is limited solely to its “enforcement” and does not equate an
Award with a decree in substance. Further, the arbitral proceedings are
distinct from civil suits/proceedings. The use of CPC provisions is
confined to enforcement mechanisms under Order XXI, and does not
allow a re-challenge to the Award on merits, which is exclusively
governed by section 34 of 1996 Act. In this backdrop, the Award
cannot be termed as a decree as the same is not passed by a Court.
Also, the AT is not a “Court” and an Award does not satisfy any
conditions of section 2(2) of CPC which defines a „decree‟. For the
said reasons and relying on the observations of Shaukat Hussain
(supra), it is clear that the Award which is sought to be enforced as a
decree and is not a “decree” passed by this Court where the suit is
pending.Hence, on this ground, Order XXI Rule 29 of CPC is not
applicable.
71. The present enforcement proceedings pending in this Court arises
from the Arbitral Award passed by the learned AT and not from a
decree passed by any Civil Court. The Award is passed under the
1996 Act which is a special act and a self-contained code. All the
Digitally Signed
By:DEEPANSHU MALASI
OMP (ENF.) (COMM.) 19/2018 Page 41 of 44
Signing Date:09.05.2025
14:23:08
challenge procedures and mechanism are exhaustively provided for
within the 1996 Act itself and have duly been exhausted by the
judgment debtor. If the enforcement of the Award is stayed due to
filing of a suit by the judgment debtor against the decree holder, then
the very purpose of passing of an Award under 1996 Act would be
defeated and no Award passed by the AT would ever be executed. The
said interpretation cannot be accepted by this Court.
72. Further, the 1996 Act provides for stay of enforcement of an Award
under section 36(2) of 1996 Act. Relevant part of section 36 is
extracted below:-
“(2) Where an application to set aside the arbitral award
has been filed in the Court under section 34, the filing of
such an application shall not by itself render that award
unenforceable, unless the Court grants an order of stay of
the operation of the said arbitral award in accordance with
the provisions of sub-section (3), on a separate application
made for that purpose.
(3) Upon filing of an application under sub-section (2) for
stay of the operation of the arbitral award, the Court may,
subject to such conditions as it may deem fit, grant stay of
the operation of such award for reasons to be recorded in
writing:
Provided that the Court shall, while considering the
application for grant of stay in the case of an arbitral award
for payment of money, have due regard to the provisions for
grant of stay of a money decree under the provisions of theDigitally Signed
By:DEEPANSHU MALASI
OMP (ENF.) (COMM.) 19/2018 Page 42 of 44
Signing Date:09.05.2025
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Code of Civil Procedure, 1908 (5 of 1908).]
[Provided further that where the Court is satisfied that a
Prima facie case is made out that,–
(a) the arbitration agreement or contract which is the basis
of the award; or
(b) the making of the award,
was induced or effected by fraud or corruption, it shall stay
the award unconditionally pending disposal of the challenge
under section 34 to the award.”
73. When the statute itself provides the said relief as prayed in the present
application then the provisions of other statute cannot be taken into
consideration. In the present case, the judgment debtor has availed all
the opportunities to challenge the Award on merits and the Award has
been upheld by the Hon‟ble Supreme Court. Hence, the Order XXI
Rule 29 of CPC cannot be relied upon.
CONCLUSION
74. For the foregoing reasons, the objections filed by the judgment debtor
are dismissed, the application under Order XXI Rule 29 of CPC is
also dismissed. Consequently, the present petition is allowed and the
Award dated 12th May, 2014 passed by the learned AT is to be
enforced.
75. The judgment debtor has already deposited the awarded amount by
virtue of Order dated 28.09.2021, 06.05.2022 and 07.07.2022 passed
by this Court.
76. It is directed that the decree holder shall be entitled to withdraw the
said amount along with up-to-date accrued interest after the expiry of
Digitally Signed
By:DEEPANSHU MALASI
OMP (ENF.) (COMM.) 19/2018 Page 43 of 44
Signing Date:09.05.2025
14:23:08
two weeks from today.
77. The petition is disposed of alongwith pending applications, if any.
JASMEET SINGH, J
th
MAY 09 , 2025 / (MSQ)
Digitally Signed
By:DEEPANSHU MALASI
OMP (ENF.) (COMM.) 19/2018 Page 44 of 44
Signing Date:09.05.2025
14:23:08
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