IN THE HIGH COURT OF KERALA AT ERNAKULAM
SUSHRUT ARVIND DHARMADHIKARI, P. V. BALAKRISHNAN, JJ.
Cheraman Financial Services Limited – Appellant
versus
Reserve Bank Of India – Respondent
WA NO. 2915 OF 2025
Decided on : 10-12-2025
| Table of Content |
|---|
| 1. the nature of the financial service dispute and arbitration process. (Para 2 , 3) |
| 2. arguments regarding the enforceability of the arbitrator's order. (Para 4 , 5 , 6) |
| 3. court's conclusion that enforcement authority lies with the courts. (Para 7) |
JUDGMENT :
P.V.BALAKRISHNAN, J.
1. This intra court appeal is filed by the petitioner in W.P.(C) No.20337/2025 challenging the judgment dated 18.7.2025 dismissing the writ petition.
2. The appellant/writ petitioner is a company promoted by the Kerala State Industries Development Corporation and it is involved in the business of providing financial services, carrying out equipment leasing and hire purchase finance activities. When the “Hirer” and 'Guarantors' committed default in payment of hire purchase rentals, a dispute arose between the appellant and the “Hirer” and “Guarantors”. Accordingly, as per the Arbitration Clause in the agreement, the appellant filed an Arbitration Request as AR No.227 of 2023 before this Court seeking appointment of an Arbitrator for determining the dispute. The said Arbitration Request was allowed as per Ext.P1 judgment dated 21.2.2024. Consequently, the arbitration proceedings, as AC No.227/2023, commenced before the Arbitrator and the appellant filed a claim petition. During the course of the arbitration proceedings, the appellant also filed an application under Section 17 of the Arbitration and Conciliation Act (hereinafter referred to as 'the Act 'for short) for attachment of the Bank Accounts of the “Hirer” and “Guarantors” maintained with the 2nd and 3rd respondent banks, in order to secure the amount in dispute. As per Ext.P2 order dated 12.11.2024, the learned Arbitrator allowed the application. Consequently, Ext.P2 order was also communicated to 2nd and 3rd respondent Banks for compliance. But, 2nd and 3rd respondent did not comply with the order. Hence, the appellant approached this Court by filing the afore writ petition and seeking the following reliefs:
“a) Issue a writ of mandamus or any other appropriate writ, order, or direction directing the Respondent Nos. 2 and 3 to comply with Exhibit P2 interim attachment order passed by the Arbitrator appointed by this Hon'ble Court.
b) Issue a writ of mandamus or any other appropriate writ, order or direction directing the Respondent No.1 to issue a common direction/circular to all Banks operating under its License to adhere to and comply with the orders issued by Arbitrators appointed by Court of Law.”
3. The learned Single Judge, after considering the materials on record and hearing both sides, dismissed the writ petition.
4. Heard Adv.Joy Thattil Ittoop, the learned counsel appearing for the appellant on admission.
5. The learned Counsel for the appellant contended that after the amendment of the Arbitration and Conciliation Act , in 2015, as per Section 17 (2), the orders passed under (1) by the Arbitral Tribunal can be enforced by the Arbitral Tribunal itself, as per the provisions of the CPC, since the order thus passed is deemed to be an order passed by the civil court. He also submitted that the amendment was effected on the basis of the recommendations of the Law Commission of India to provide teeth to the interim orders passed by the Arbitral Tribunal and relied on the decision of the Apex Court in Alka Chandewar v. Shamshul Ishrar Khan [ (2017) 16 SCC 119 )] to support his contentions.
6. In the instant case, at the outset itself it is to be taken note that, even though the first prayer in the writ petition is for a direction to respondents 2 and 3 to comply with Ext.P2 interim attachment order passed by the Arbitrator, it is to be seen that the appellant has not arrayed the parties, against whom Ext.P2 order has been passed, in the writ petition. They, being necessary parties to the writ petition, we are of the view that non impleading them is fatal to the writ petition.
7. That apart, it is to be seen that even though, the learned counsel for the appellant would contend that as
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The court determined that an arbitral tribunal cannot enforce its own orders; enforcement lies solely with the courts.
Arbitral orders must be enforced through civil courts, as per the Arbitration and Conciliation Act, 1996.
The arbitral tribunal cannot enforce its own orders; enforcement must be through a civil court, ensuring the protection of third-party rights.
Arbitral Tribunal orders require civil court intervention for enforcement, and unlawful endorsements must be rectified.
The executing court for arbitral orders operates ministerially, adhering strictly to the order's enforceability without reviewing the arbitral decision's merits, ensuring minimal judicial interferenc....
Arbitration – Interim Award - when the dispute is a commercial dispute as defined under the Commercial Court Act, the Civil Court competent to enforce the interim order is the Commercial Court.
Point of law: No power vested with the Arbitrator to act as a Civil Court and enforce the order. This is quite clear from sub section (2) of Section 17 which specifies that the order so passed by the....
The enforcement of an Arbitral Tribunal's interim order cannot be pursued through writ jurisdiction; the appropriate recourse is an appeal before the Appellate Court.
The interim order of an Arbitral Tribunal is enforceable as a court order, and the District Court cannot require a separate application for its enforcement.
Arbitral tribunals lack authority to directly enforce attachment orders without civil court involvement.
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