The court determined that a Central Government authority is not required to deposit the total arbitral award amount for stay of execution pending appeal under exceptional circumstances.

JUDGMENT :

B.P. Routray, J.

1. Heard Mr. B.Maharana, learned Senior Panel Counsel for the Petitioner and Mr. A.Sanganeria, learned counsel for Opposite Party.

2. Present writ petition is directed against order dated 6^th September 2025 at Annexure-1 passed by the learned Commercial Court, Bhubaneswar in ARBP No.37 of 2021.

3. The Petitioner who is the Central PWD under the Ministry of Housing and Urban Development has preferred an application under Section 34 of the Arbitration and Conciliation Act, 1996 challenging the arbitral award dated 22^nd June 2021, wherein the Petitioner was directed to pay certain amount towards the interest @18% per annum along with Rs.18,76,397/- towards the cost of deviation work. All total an amount of Rs.1,11,31,771/- was directed to be paid by the Petitioner to the Opposite Party.

4. The learned Commercial Court while admitting the application under Section 34 of the Arbitration and Conciliation Act directed for deposit of 100% of the award amount by the Petitioner within such period. This is the subject of grievance of the Petitioner that such direction to deposit 100% of the award amount for stay of the execution of the award amount during pendency of the 34 application is not necessary to be deposited by the Petitioner being the Central Government authority.

5. Mr. Maharana, learned counsel for the Petitioner submits that when the Petitioner is the Central PWD and it has challenged the award of the arbitrator which is based mainly on the interest component, and the Applicant has already received the entire work contract amount, such award of the arbitrator to grant interest @18% is not permissible. As grant of interest at such rate on the contract amount is permissible or not, is the subject matter before the Commercial Court as per the challenge under Section 34 of the Act, where the Petitioner has been granted only 18,00,000/- and odd towards the cost of work, it is not required on the part of the Petitioner to deposit the entire award amount.

6. Mr. Maharana, learned counsel for the Petitioner further takes the provisions contained in Rule 8-A of Order 27 of the Code of Civil Procedure to contend that no such amount as security in terms of Rule 5 and 6 of Order 41 is required to be deposit from the Government.

7. Mr. Sanganeria, learned counsel for the Opposite Party on the other hand submits that, it is now well-settled that the compliance of Section 36(3) along with Order 41(5) of the CPC is applicable to everyone either as a private person or a Government authority.

8. Sub-section 3 of Section 36 prescribes that upon filing of an application for stay of operation of the arbitral award in terms of Sub-section 2 of Section 36 corresponding to the challenge made under Section 34 , the Court may subject to such conditions as it may deem fit grant stay of operation of such award, provided that the Court have due regard to the provisions for grant of stay of a money decree under the provisions as per Order 41 of the CIVIL PROCEDURE CODE , except where the prima facie case is made out to the specification of the Court that the arbitration agreement or the making of the award was induced or effective by fraud or corruption.

9. The Hon’ble Supreme Court in Lifestyle Equities C.V. and Another vs. Amazon Technologies Inc. , 2025 SCC OnLine SC 2153 by taking note of various earlier decisions have held as follows:-

“134. We summarize our final conclusion on the grant of benefit of stay of execution of a decree by an appellate court in term of Order XLI as under:—

(I) Order XLI Rule 5 contains the provision for the grant or refusal of stay of execution of the decree by the appellate court under the CPC. It cat