IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
ASHUTOSH SHASTRI, J. C. DOSHI, JJ.
Man Industries (India) Limited – Petitioner
Versus
Gujarat Water Supply And Sewerage Board – Respondent
R/Special Civil Application No. 4305 Of 2023 With R/Special Civil Application No. 4180 Of 2023 With R/Special Civil Application No. 4361 Of 2023
Decided On : 05-05-2023
Arbitration and Conciliation Act - Execution of Award - Section 36, Section 34 - The court discussed the retrospective effect of the amendment in section 36 of the Arbitration and Conciliation Act, the impact of the amendment in 2019 introducing section 87, and the validity of section 87. The court emphasized that an arbitral award under challenge by way of section 34, pre or post amendment, is always maintainable until it has been stayed by the concerned Court hearing the challenge.
Fact of the Case:
The petitioner, Man Industries, sought the issuance of a warrant under Order 21 Rule 30 of CPC for the execution of an arbitral award. The respondent, Gujarat Water Supply and Sewerage Board (GWSSB), challenged the award under section 34 of the Arbitration and Conciliation Act before the District Court, Gandhinagar, which was pending for more than 10 years.
Finding of the Court:
The court refrained from passing any order with regard to the issuance of the warrant, permitting the petitioner to request the concerned District Court to decide the challenge made under section 34 of the Arbitration and Conciliation Act in an expeditious manner.
Issues: The main issue was whether the arbitral award under challenge by way of section 34, pre or post amendment, is maintainable until it has been stayed by the concerned Court hearing the challenge.
Ratio Decidendi: The court held that an arbitral award under challenge by way of section 34, pre or post amendment, is always maintainable until it has been stayed by the concerned Court hearing the challenge.
Final Decision: The court disposed of the petitions, emphasizing that the order shall not be treated as precedent in a routine manner and that the court has not expressed any opinion on the merits of the case.
JUDGMENT :
(J. C. DOSHI, J.)
1. By way of present Special Civil Applications under Article 227 of the Constitution of India read with Order 21 Rule 43 of CPC, the petitioner Challenges the orders below Exh. 9 in Commercial Execution Petition No.86 of 2022, Commercial Execution Petition No.85 of 2022 and Commercial Execution Petition No.87 of 2022 passed by the learned Principal Senior Civil Judge, Gandhinagar, whereupon the prayer made by the petitioner for issuance of warrant under Order 21 Rule 30 is denied.
2. Since all these petitions involve similar issues based on similar facts between the similar parties, with the consent of learned advocates for the respective parties, they are decided by this common order. It is further agreed by both the learned advocates for the parties to take up the facts from Special Civil Application No.4305 of 2023.
3. Case Background.
3.1 Pursuant to earthquake in the State of Gujarat, Government of India received loan from Asian Development Bank to meet with the cost of “Gujarat Earthquake Reconstruction and Rehabilitation Project” and with a intent to accomplish said object, Gujarat Water Supply and Sewerage Board (for short ‘GWSSB’), designated for implementation of Rural Water Supply Project invited bid for the said project. The petitioner – Man Industries was successful bidder. In a contract having arbitration clause in the general condition of contract and special condition, on arising dispute between the parties and as no consensus was reached between the parties, the petitioner approached this Court for appointment of Arbitrator under section 11 of the Arbitration and Conciliation Act to adjudicate the dispute. Arbitrator was appointed by this Court and thereafter, learned Arbitral Tribunal was constituted to resolve the dispute between the parties. After filing necessary evidence, etc. and considering the arguments, learned Arbitrator passed award on 28.11.2009 and modified the same on 07.05.2010. Being aggrieved by the award passed by the learned Arbitrator and duly modified later on, Gujarat Water Supply and Sewerage Board challenged the same by way of recourse under section 34 of the Arbitration and Conciliation Act before the District Court, Gandhinagar. This recourse is pending for hearing and final adjudication.
3.2 Meanwhile as Commercial Court Act, 2015 came into force, recourse was referred to Commercial Court, Gandhinagar for adjudication. Since there was no stay operating on execution of award, the petitioner - Man Industries filed application for execution of award by way of Commercial Execution Petition before the Court of learned Principal Senior Civil Judge, Gandhinagar and subsequently filed application under Order 21 Rule 30 seeking issuance of Jangam Warrant against Gujarat Water Supply and Sewerage Board.
3.3 Learned Principal Senior Civil Judge, Gandhinagar on the finding that since challenge to the validity of the award passed by the Arbitrator is pending before the higher forum i.e. Commercial Court, he cannot decide the validity of the said award and consequently cannot issue warrant under Order 21 Rule 30 of CPC, therefore rejected the applications and hence, this petitions.
4. Heard learned advocate Ms. Shaksi Raheja for the petitioner and learned advocate Mr. Krunal Vyas for Gandhi Law Associates for the respondent – GWSSB.
5. Learned advocate for the petitioner having taken us through entire facts stated herein above mainly argued that challenge to the arbitral award by way of recourse under section 34 of the Arbitration and Conciliation Act is pending for adjudication since 12 years before the District Court, Gandhinagar whereby GSWSSB who is applicant has not prayed for stay nor has obtained stay on the execution and implementation of the award and therefore, present petitioner has filed execution petition before the learned Principal Senior Civil Judge, Gandhinagar, more particularly, after amendment in section 36 of the Arbitration and Conciliation Act wh
India v/s. Kochi Cricket Private Limited and Ors. reported in (2018) 6 SCC 287
National Aluminum Company Ltd. v/s. Presteel and Fabrications Pvt. Ltd. Reported in (2004) 1 SCC 540
Execution of an arbitral award requires compliance with the 90-day limitation under Section 34; execution petitions filed before this period are impermissible.
Execution of arbitral awards must occur in the court where the original arbitration application was filed, as per Section 42 of the Arbitration and Conciliation Act.
The Commercial Courts Act, 2015 grants jurisdiction to Commercial Courts for executing arbitral awards related to commercial disputes, emphasizing expedited resolution.
Scope to stay execution proceeding by Executing Court is limited – It is only an interim arrangement enabling the party to obtain stay order from appropriate Court, including Appellate Court.
Commercial Courts are empowered to execute arbitral awards under the Arbitration and Conciliation Act, reaffirming the intent of the Commercial Courts Act for speedy resolution of commercial disputes....
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