The court emphasized that allegations of fraud affecting an arbitral award mandate an unconditional stay pending challenge proceedings, requiring careful judicial evaluation of procedural adherence.

Judgment :

Sanjeeb K Panigrahi, J.

1. The present Writ Petition has been filed under Articles 226 and 227 of the Constitution of India calling in question the order dated 02.09.2025 passed by the learned Senior Civil Judge (Commercial Court), Bhubaneswar, in Arbitration Petition No.9 of 2024. By the impugned order, the learned Commercial Court disposed of the Petitioner’s application filed under Section 36 of the Arbitration and Conciliation Act, 1996, and while granting a stay of operation of the arbitral award dated 08.11.2023, made the same conditional upon deposit of 100% of the awarded amount. The Petitioner assails the said order to the extent it imposes such onerous and unconditional pre-deposit as a prerequisite for stay, contending that the condition is excessive, disproportionate, and not in consonance with the settled principles governing exercise of discretion under Section 36 of the Act

I. FACTUAL MATRIX OF THE CASE

2. The record discloses that, in terms of the Railway Board letter dated 12.03.2007, Rashmi Metalliks Limited was accorded approval to procure 305 BOXN-HS wagons, constituting five rakes, under the Wagon Investment Scheme, 2005. The permission was granted subject to the applicable railway tariff and the conditions governing private sidings, with the notified and exclusive loading point specified as Nayagarh Private Siding for operational purposes. Pursuant thereto, a Wagon Investment Scheme Agreement dated 30.5.2007 was executed between East Coast Railway and Rashmi Metallicks Limited. Under the said agreement, the Railways were to supply six guaranteed rakes per month per invested rake, subject to placement of indent, with 10% freight rebate, for a contractual period of ten years, and ownership of wagons was to transfer to Railways after expiry of ten years from induction. The loading and unloading points were specified within East Coast Railway jurisdiction. The agreement contemplated construction of Nayagarh Private Siding as the approved loading point.

3. The agreement dated 30.05.2007 constitutes the foundational contractual instrument between the parties, from which all subsequent arrangements, understandings, and transactions emanated, as is evident from the pleadings, affidavits, annexures, and comparative statements forming part of the present record.

4. It is an admitted position in the pleadings that the Nayagarh Private Siding was never constructed by Rashmi Metaliks Limited, which was the approved loading point under the Agreement dated 30.5.2007. Despite non-construction, the five rakes were inducted into Indian Railways’ operational fleet on 5.8.2008, 6.8.2008, 9.5.2009, and 16.6.2010.

5. Three rakes were delivered to East Coast Railway on 5.8.2008, 6.8.2008, and 9.5.2009, and the remaining two rakes were delivered on 16.6.2010. During this period, limited temporary permissions were granted to operate from Nayagarh Goods Shed, and only 16 rakes were loaded in 2009.

6. As the approved private siding was not available for operational use, the Opposite Party so