1. Parties dispute the enforcement and execution of an arbitral award following prior appellate proceedings concerning the conversion of foreign currency payments into national currency. (Para 4 )
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2026 Supreme(SC) 1299
SUPREME COURT OF INDIA
VIKRAM NATH, SANDEEP MEHTA, APARESH KUMAR SINGH, JJ.
M/s Royal Construction Company Pvt. Ltd. – Appellants
Versus
M/S National Projects Construction Corporation – Respondents
Civil Appeal No(s). 13977 of 2026 (Arising out of SLP(C) NO. 14005 of 2026) And Miscellaneous Application @ Diary No. 48152 of 2026 In Civil Appeal No. 1991 of 2019
Decided On : 28-10-2026
Important Points
The Supreme Court's jurisdiction to answer a certified substantial question of law is limited to that specific question; it cannot be expanded under the guise of 'clarification' to adjudicate factual disputes in execution proceedings, which remain the exclusive domain of the executing court.
Subject
Civil Law - Arbitration and Conciliation
Act Referred
Headnote
(A) Arbitration and Conciliation Act, 1996 - Section 36 - Enforcement of Arbitral Awards - Scope of judicial clarification - Once a substantial question of law certified under Articles 133(1)(a) and 134-A of the Constitution is answered, the appellate jurisdiction of the highest court is exhausted - The court cannot be called upon, in the guise of seeking clarification, to assume a supervisory role over continuing execution proceedings or to adjudicate upon factual questions regarding amounts deposited or withdrawn - It is for the competent executing court and the appellate court exercising jurisdiction over its orders to determine such questions in accordance with law. (Paras 7, 8, 9 and 10)
(B) Arbitration and Conciliation Act, 1996 - Execution of Awards - Efficacy of Arbitral Regime - The efficacy of an arbitral regime is measured not only by the speed of rendering an award or limited grounds for challenge but also by the ability of the successful party to realize the fruits of the award within a reasonable time - Protracted litigation for enforcement defeats the core objective of arbitration as an effective alternative to conventional civil litigation - Statutory and procedural frameworks governing the execution of awards require scrutiny to identify practical impediments to timely recovery. (Paras 11, 12 and 13)
Facts of the case:
An award-holder initiated execution proceedings for an internationally seated arbitral award denominated in foreign currency. A dispute arose regarding the relevant date for conversion of the awarded sum into local currency. A substantial question of law was certified and referred to the Supreme Court, which held that no occasion arose for fixing a conversion date and that the terms of the award should be maintained. During subsequent execution proceedings, the award-debtor contended that the principal amount had already been paid in 2009. The High Court then granted the parties liberty to seek clarification from the Supreme Court as to why this fact had not been brought to its notice during the earlier appellate proceedings.
Findings of Court:
The court found that the High Court erred in appreciating the scope of the previous adjudication. The Supreme Court's jurisdiction was confined to answering the certified substantial question of law and did not extend to an examination of factual matters, such as the deposition or withdrawal of funds, which are matters for the executing court.
Issues: Whether the Supreme Court can be requested to provide clarification on factual matters related to the payment of an award during execution proceedings after the specific legal question referred to it has already been answered.
Ratio Decidendi: The jurisdiction of the highest court, when answering a certified substantial question of law, is strictly confined to that question. This scope cannot be enlarged to encompass factual disputes arising during execution, nor can the court assume a supervisory role over the executing court. The executing court is the proper forum to determine the adjustment or set-off of amounts in accordance with law.
Result: Appeal disposed of and Miscellaneous Application dismissed.
(B) Arbitration and Conciliation Act, 1996 - Execution of Awards - Efficacy of Arbitral Regime - The efficacy of an arbitral regime is measured not only by the speed of rendering an award or limited grounds for challenge but also by the ability of the successful party to realize the fruits of the award within a reasonable time - Protracted litigation for enforcement defeats the core objective of arbitration as an effective alternative to conventional civil litigation - Statutory and procedural frameworks governing the execution of awards require scrutiny to identify practical impediments to timely recovery. (Paras 11, 12 and 13)
Facts of the case:
An award-holder initiated execution proceedings for an internationally seated arbitral award denominated in foreign currency. A dispute arose regarding the relevant date for conversion of the awarded sum into local currency. A substantial question of law was certified and referred to the Supreme Court, which held that no occasion arose for fixing a conversion date and that the terms of the award should be maintained. During subsequent execution proceedings, the award-debtor contended that the principal amount had already been paid in 2009. The High Court then granted the parties liberty to seek clarification from the Supreme Court as to why this fact had not been brought to its notice during the earlier appellate proceedings.
Findings of Court:
The court found that the High Court erred in appreciating the scope of the previous adjudication. The Supreme Court's jurisdiction was confined to answering the certified substantial question of law and did not extend to an examination of factual matters, such as the deposition or withdrawal of funds, which are matters for the executing court.
Issues: Whether the Supreme Court can be requested to provide clarification on factual matters related to the payment of an award during execution proceedings after the specific legal question referred to it has already been answered.
Ratio Decidendi: The jurisdiction of the highest court, when answering a certified substantial question of law, is strictly confined to that question. This scope cannot be enlarged to encompass factual disputes arising during execution, nor can the court assume a supervisory role over the executing court. The executing court is the proper forum to determine the adjustment or set-off of amounts in accordance with law.
Result: Appeal disposed of and Miscellaneous Application dismissed.
Legal Category Hierarchy
Advocates appeared:
For the Petitioner(s): Mr. Himanshu Sharma- 2801, AOR Mr. Rishabh Sancheti, Adv. Mr. Sarvam Ritam Khare- 2110, AOR Mr. Nishant Kumar, Adv. Ms. Shweta Chaurasia, Adv. Mr. Kushagra Sharma, Adv. Mr. Anuj Agarwal, Adv. Mr. Saransh Maheshwari, Adv.
For the Respondent(s): Mr. Himanshu Sharma- 2801, AOR
For the Petitioner(s): Mr. Himanshu Sharma- 2801, AOR Mr. Rishabh Sancheti, Adv. Mr. Sarvam Ritam Khare- 2110, AOR Mr. Nishant Kumar, Adv. Ms. Shweta Chaurasia, Adv. Mr. Kushagra Sharma, Adv. Mr. Anuj Agarwal, Adv. Mr. Saransh Maheshwari, Adv.
For the Respondent(s): Mr. Himanshu Sharma- 2801, AOR
Table of Contents
2. The appellant seeks enforcement, whereas the respondent disputes the outstanding liability, asserting prior satisfaction of the principal amount in execution proceedings. (Para 4 )
3. The High Court erred in expanding the scope of previous appellate adjudication to address factual disputes regarding payment satisfaction; the court's prior jurisdiction was limited to the specific question referred. (Para 7 , 8 , 9 , 20 )
4. An appellate court exercising jurisdiction over a specific substantial question of law cannot assume a supervisory role over ongoing execution proceedings to adjudicate unconnected factual issues. (Para 9 , 10 , 20 )
5. The appeal and application for modification of judgment are dismissed, while the parties remain at liberty to raise payment adjustment contentions before the executing court. (Para 15 , 21 , 22 )
6. Can an appellate court adjudicate factual issues in execution proceedings while answering a substantial question of law?
No. The jurisdiction of the court in such instances is strictly confined to the substantial question of law framed and referred. It cannot assume a general supervisory role or adjudicate factual matters that were not part of the original appellate lis. (Para 7 , 9 , 10 , 20 )
7. Is an applicant permitted to seek modification of a judgment to include factual claims regarding payment discharge after the appeal is decided?
No. When an appellate proceeding concluded by answering a referred question of law, it is impermissible to enlarge the scope of that adjudication to resolve subsequent factual disputes or execution issues, such as claims of partial or complete payment. (Para 10 , 19 , 20 , 21 )
8. Does a party have the right to contest set-offs or payment adjustments in execution proceedings despite an failed appellate challenge?
Yes. Parties retain the liberty to raise all legitimate objections and contentions concerning the adjustment or set-off of payments before the executing court, which is the competent forum for determining such questions in accordance with law. (Para 9 , 22 )
JUDGMENT
VIKRAM NATH, J.
Civil Appeal @ SLP (C) No. 14005 of 2026
1. Leave granted.
2. Heard Mr. Rishabh Sancheti, learned counsel appearing for the appellant, and Mr. Vikramjit Banerjee, learned Additional Solicitor General appearing for the respondent.
3. The present appeal assails the interim order dated 16th February, 2026, passed by the High Court of Delhi at New Delhi [Hereinafter, referred to as “High Court”.] in Execution First Appeal (Original Side) No. 17 of 2018, whereby the parties were granted liberty to seek clarification from this Court as to why the fact that the principal amount had already been paid in Indian Rupees in 2009, pursuant to the orders passed by the High Court, had not been brought to its notice on an earlier occasion when this Court had the opportunity to consider and answer the substantial question of law framed by the High Court under Article 134-A read with Article 133(1)(a) of the Constitution of India.
4. The brief facts relevant to the disposal of the present appeal are as follows:
4.1. The appellant is the award-holder, while the respondent is the award-debtor. Pursuant to an internationally seated arbitration, an arbitral award dated 10th August, 2002, was rendered in favour of the appellant, with the amounts awarded denominated in Iraqi Dinars.
4.2. The award was challenged before the Indian courts, culminating in proceedings before this Court. By judgment dated 24th February, 2015, this Court underscored the principle of minimal judicial intervention in arbitral awards, holding that the courts ought not to substitute their own subjective satisfaction for that of the arbitral tribunal unless the statutory grounds for interference under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996, are made out. Accordingly, this Court restored the directions contained in the award dated 10th August, 2002.
4.3. Thereafter, the appellant initiated execution proceedings before the High Court. By order dated 26th July, 2017, the High Court directed that the award-debtor could discharge its liability in Indian currency, with the conversion to be made at the exchange rate prevailing on the date of the underlying agreement, i.e., 26th September, 1982.
4.4. Aggrieved by the aforesaid order, the appellant preferred an appeal before the Division Bench of the High Court. By order dated 17th December, 2019, the Division Bench set aside the order passed by the Single Judge and certified a substantial question of law of general importance under Articles 134-A and 133(1)(a) of the Constitution of India for consideration by this Court. The question, being germane to the controversy, is reproduced hereinbelow: -
- “In terms of the agreement dated 29th June, 1982, between the parties and in light of the judgment dated 24th February, 2015 of the Supreme Court of India in Civil Appeal Nos. 2543-44/2015, what should be the relevant date for conversion of awarded sum from USD to Indian rupees?”
4.5. By judgment dated 10th October, 2023, this Court answered the aforesaid question in the negative, holding that no occasion arose for determining or fixing a date for conversion of US Dollars into Indian Rupees (INR). This Court further cautioned that the terms of the agreement, the arbitral award, and the directions contained in its judgment dated 24th February, 2015, ought not to be disturbed.
4.6. Thereafter, the appellant continued to pursue the execution proceedings before the High Court. While those proceedings were pending, the respondent contended that the principal amount had already been paid in 2009 pursuant to the orders passed by the High Court. By an interim order dated 16th February, 2026, the High Court granted liberty to the parties to seek clarification from this Court in that regard.
5. Hence, the appellant is before us.
6. We have perused the material on record and considered the submissions advanced on behalf of the parties.
7. In our considered opinion, the Division Bench has fallen into error in appreciati
