The main legal point established in the judgment is that the court may require the judgment debtor to deposit the awarded amount to ensure enforcement, and the financial health of the judgment debtor is a crucial factor in determining the need for such deposit.

JUDGMENT

Rekha Palli, J. - This is an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') preferred by SEPCO Electric Power Construction Corporation against the judgment passed by the learned Single Judge on 17.02.2020 in OMP(I)(Comm) 523/2017, which was the Section 9 petition moved by the respondent/Power Mech to secure the entire amount granted in its favour by the three-member arbitral Tribunal by way of the award dated 17.10.2017. The impugned judgment only decided whether SEPCO was required to deposit the awarded amount before this Court, as a pre-condition for having its challenge to the award under Section 34 of the Act heard. For the sake of convenience, throughout this decision the appellant and the respondent shall be referred to as SEPCO and Power Mech respectively.

2. The facts relevant to decide this petition may be briefly noted at the outset. To begin with, SEPCO is a Chinese construction company specialising in thermal power plant projects and is a Chinese Central Government owned entity, registered in the Shandong Province, People's Republic of china. It has been engaged in the construction of several thermal power plants in India; the dispute between the parties arises out of the Talwandi Sabo thermal power plant project based in Mansa, Punjab bearing a total power generation capacity of 1980 MW, comprising of three units with a generating capacity of 660 MW each. SEPCO was the EPC contractor engaged for the Talwandi project, wherein Power Mech was the subcontractor engaged by it, for Erection works of the Boiler, TG and other BOP systems. Disputes arose between SEPCO and Power Mech regarding the delays occasioned in the execution of these works. Consequently, their dispute was referred for arbitration to a three-member Tribunal before which Power Mech raised eight claims amounting to INR 227,68,34,427/-. The learned Tribunal passed an award on 17.10.2017 in favour of Power Mech by holding SEPCO liable for the delays occasioned, and awarded a sum of INR 142,41,14,499/- in favour of Power Mech.

3. A challenge to the award on merits has been raised by SEPCO under Section 34 of the Act vide OMP(Comm) 432/2017 which is presently pending adjudication, whereas Power Mech preferred a petition under Section 9 of the Act being OMP(I)(Comm) 523/2017; as noted above, the judgment impugned herein was passed in the latter petition. Since Power Mech, by way of the Section 9 petition, was seeking to secure the entire principal amount awarded in its favour on 17.10.2017, several directions for deposit of amount were passed in those proceedings in the period between 2017 and 2020. The deposits made/security created by SEPCO, in the form of deposits and bank guarantees under orders of the Court may be summarised as under:

a) A sum of INR 1,63,68,589/- deposited on 01.09.2018

b) A sum of INR 50,50,113/- deposited on 24.12.2018

c) A sum of INR 60,00,000/- deposited on 25.03.2019

d) A bank guarantee for a sum of INR 30,00,00,000/- issued by the Industrial and Commercial Bank of China, Mumbai Branch on 22.03.2019 which is currently a subject of dispute being considered by this Court in separate proceedings being FAO(OS)(Comm) 136/2019.

4. As noted hereinabove, the limited controversy decided by the learned Judge in the impugned judgment was whether SEPCO's challenge to the award under Section 34 of the Act could be considered on merits at all, without it securing the complete awarded amount. SEPCO, of course, vehemently opposed any direction for deposit of 100% of the awarded amount as pre-deposit on the following four broad grounds (i) there is no statutory provision within the Act which explicitly bars the consideration of a Section 34 petition without securing the awarded amount, (ii) there have been several instances in the past where the Court has directed deposit of 50% of the awarded amount, rather than 100% of it, (iii) SEPCO is solvent and, thus, fully capable of satisfyin