Arbitral tribunals lack authority to directly enforce attachment orders without civil court involvement.

JUDGMENT

(Dated this the 8^th day of December, 2025)

The petitioners had availed a vehicle loan by hypothecation-

cum-loan agreement from the 3^rd respondent company to purchase a vehicle. Upon default in repayment of the loan, the 3^rd respondent had instituted Arbitration Proceedings as Arbitration Claim Petition No SRT/SJ/29 of 2021 before the Sole Arbitrator. Along with the arbitration claim petition, the 3^rd respondent had filed I.A.No SRT/SJ/29-A/2022, for attachment of property belonging to the 2^nd petitioner having an extent of 1.01 ares in Old-Survey No 63/5, Survey No 35, Thandaper No 9689 of Eloor Village, Alangadu S.R.O., Emakulam District as per the Gift Deed No 3549/2000 of S.R.O. Alangadu dated 09.06.2000. The Arbitrator allowed the interim relief by Ext.P1 order, resulting in the attachment being recorded in the Encumbrance Certificate as F177/2022 on 26.07.2022. Subsequently, the parties amicably settled the dispute, and the entire claim of the 3^rd respondent was cleared. Ext.P3 is the letter of intimation of settlement of loan and Non-Liability issued by the 3^rd respondent to the 1^st petitioner.

2. Thereafter, the 3^rd respondent filed I.A. No.

SRT/SJ/29-2/2025 before the Arbitrator for lifting the attachment, which the Arbitrator allowed, and the attachment order was cancelled.

However, when this cancellation was communicated to Respondents 1 and 2, they refused to remove the attachment entry, insisting that an order from a competent court be produced. Aggrieved by the same, present writ petition is filed by the petitioner seeking a writ of mandamus or any other appropriate writ, order, or direction to the respondents 1 and 2 to remove the entry of attachment made pursuant to Ext.P1 order in I.A.No SRT/SJ/29-A/2022 in Arbitration Claim Petition No SRT/ SJ/29 of 2021 passed by the Sole Arbitrator dated 14.07.2022 in the registration and revenue records of the 2^nd petitioner.

3. The learned counsel for the petitioner relies on a judgment of a Division Bench of this Court in M/s.Shriram Transport Finance Co. Ltd. v. Saneesha M.S and Ors. [2024 SCC online Ker 5233]

wherein, it was held as follows:

“10. The question is what is the remedy then available for a third party who is aggrieved by an order of attachment. So long as the order is not enforced, the same is not self workable. If it is enforced through a civil court, necessarily, the third party, who is aggrieved can raise his objection against the enforcement or even after the enforcement, the third party can very well raise an objection as against the enforcement by claiming that the property belongs to him. The Code of Civil Procedure provides necessary mechanism for the third party to raise a claim or title over the property. We are of the view that the writ petitioner -Saneesha M S, is not deprived of any remedy as the Code of Civil Procedure safeguard such interest of the third parties. The law is very clear that the tribunal cannot exercise sovereign function of enforcement and such power is vested with civil court. Therefore, writ petitioner - Saneesha M S can very well resist the enforcement or can raise a claim before the civil court when an order is sought to be enforced. So long as it is not enforced, no right of the writ petitioner - Saneesha M S is deprived of to enjoy the property in accordance with law, if the writ petitioner - Saneesha M S is the real owner of the property. As we noted earlier, we have not decided the maintainability of such challenge in appeal before civil court under Section 37 of the Arbitration and Conciliation Act . That will have to be worked out independently as it is not for us to observe whether such appeal is maintainable or not in this proceedings.

11. On conclusion, we are of the view that the arbitral tribunal usurped the power of civil court by directly intimating the order of attachment to the Sub Reg