The requirement for a petitioner to furnish a bank guarantee for the awarded amount to obtain a stay of operation of an arbitral award under the provisions of the Arbitration & Conciliation Act, 1996.

In this application under Section 34 of the Arbitration & Conciliation Act, 1996 (in short, "the Act of 1996"), the petitioner insurance company has challenged the award dated March 30, 2018 made by the sole Arbitrator directing it to pay Rs.1,77,68,434/- along with interest at the rate of 7% per annum from January 5, 2009 till March 31, 2018. The petitioner has also prayed for stay of operation of the said award made by the learned Arbitrator. In the present case, though the arbitral proceeding commenced before October 23, 2015 but in view of the decision of the Supreme Court in the case of Board of Control for Cricket in India versus Kochi Cricket Pvt. Ltd. reported in (2018) 6 SCC 287, the provisions incorporated by sub-sections (3) and (4) of Section 36 of the Act of 1996 in order to obtain stay of operation of the award passed by the learned sole Arbitrator, the petitioner is required to furnish security for the amount awarded against it. The petitioner is an insurance company wholly owned by the Government of India. Accordingly, the petitioner is directed to furnish a bank guarantee of the principal awarded amount of Rs.1,77,68,434/- to the Registrar, Original Side of this Court within August 17, 2018 initially for a period of one year and to keep the same renewed from time to time until disposal of this application.

2. There shall be an unconditional stay of operation of the impugned award passed by the learned Arbitrator till August 20, 2018.

3. It is, however, made clear that in the event of any default on the part of the petitioner to furnish the above bank guarantee to the Registrar, Original Side within the time stipulated above, the respondent will be free to execute the arbitral award.

4. Let the application, AP No.442 of 2018 appear, under the heading ‘Arbitration Motion (Adjourned) Section 34’, in the monthly list of September 2018. In the meantime, the parties will be free to file informal paper books disclosing records of the arbitral proceeding.

5. Urgent certified website copies of this order, if applied for, be made available to the parties subject to compliance with all requisite formalities.