The court ruled that a full deposit of the arbitral award amount is mandatory before granting a stay under Section 36 of the Arbitration and Conciliation Act, 1996.

JUDGMENT

Meenakshi Madan Rai, ACJ. - Learned Counsel for the parties were heard on the Application for Stay being I.A. No.01 of 2020 in Arbitration Appeal No.01 of 2020, filed by the Petitioners/Appellants.

(ii) Relevantly, it may be mentioned that the Appeal in which the instant I.A. has been filed, impugns the Judgment, dated 26.12.2019, passed by the Learned Judge, Commercial Court, East Sikkim at Gangtok in Arbitration Case No.05 of 2017 [(Sikkim Power Development Corporation Ltd.(SPDCL) and Another v. Amalgamated Transpower (India) Ltd.(ATPIL)], wherein the Arbitral Award, dated 30.09.2017, was partly upheld. The Appellants, under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, the “Arbitration Act”) had challenged the Arbitral Award, dated 30.09.2017, before the Learned Commercial Court, East Sikkim at Gangtok, passed by the sole Arbitrator.

(iii) It is pertinent to mention here that in Arbitration Appeal No.01 of 2021, the Respondent herein also assails the same Judgment being aggrieved by the setting aside of the Arbitral Award with respect to Issues No.9, 11 and 20.

(iv) On 22.06.2020, I.A. No.01 of 2020, dated 06.03.2020, was heard and an ex parte ad interim Order of Stay was granted and Notice issued to the Respondent. The Respondent entered appearance on 17.09.2020 and sought eight weeks” time to file response to the Stay Petition and the Appeal. Reply to the Stay Petition was filed by the Respondent on 22.03.2021, a year after the said I.A. was filed. The ex parte ad interim Order of Stay was extended vide Order, dated 24.03.2021. On 17.08.2021, the matter came to be listed before the Division Bench. This Appeal (Arbitration Appeal No.01 of 2020) was ordered to be listed for admission/final disposal along with Arbitration Appeal No.01 of 2021. On 24.09.2021, the matter was part heard and listed for further hearing on 28.09.2021. On 28.09.2021, considering that the ex parte ad interim Order of Stay had been granted on 22.06.2020, this Court deemed it fit to first hear the Stay Application.

2. Learned Counsel for the Appellants advancing his arguments contended that the Learned Commercial Court, East District, had vide the impugned Judgment, dated 26.12.2019, erroneously partly dismissed the Petition filed by the Appellants under Section 34 of the Arbitration Act challenging the impugned Arbitral Award, dated 30.09.2017. That, the I.A. consequently sought Stay of the operation of the impugned Judgment to the extent that it rejects the objections raised by the Appellants against the impugned Award, dated 30.09.2017, passed by the sole Arbitrator. It was further contended that a prima facie case, in fact, exists in favour of the Appellants and against the Respondent as the Learned Commercial Court failed to appreciate that under the peculiar facts and circumstances of the case, the Respondent neither factually nor legally, were entitled to an Award of Decree of Specific Performance against the Appellants. That, the balance of convenience and inconvenience lies in favour of the Appellants and the documents on record clearly prove that the Respondent was not willing to perform its part of the obligation and was therefore not entitled to the Award of Decree of Specific Performance in its favour. Besides, should the impugned Judgment not be stayed, the Appellants would suffer irreparable loss and injury. Moreover, the amount awarded is a large amount and should this Court ultimately arrive at a finding that the Arbitral Tribunal and the Learned Commercial Court have erroneously reached at their respective findings, it would serve no purpose for the Appellants to deposit any amount at this stage.

3.(i) Learned Counsel for the Respondent, while vehemently repelling the submissions of Learned Counsel for the Appellants, conten