Case Note & Summary
The applicant, M/s Angerlehner Structural and Civil Engineering Company, a foreign entity, filed an execution application to enforce an arbitral award dated 23rd June 2014 passed in its favor against the Municipal Corporation of Greater Bombay (MCGM). The award was challenged by MCGM under Section 34 of the Arbitration and Conciliation Act, 1996, but the challenge was dismissed by a single judge on 27th February 2019. An appeal under Section 37 was dismissed by a Division Bench on 8th September 2021, and a subsequent SLP was dismissed by the Supreme Court on 22nd November 2021, with time granted to MCGM to pay up to 31st March 2022. The execution application was moved on 9th March 2022. The applicant, being a foreign entity, did not have a bank account in India, making electronic transfer difficult. The court considered the issue of payment mode and directed MCGM to pay the awarded amount by cheque or demand draft drawn on a bank in Mumbai within four weeks. If payment was not made within that time, the amount would carry interest at 18% per annum from the date of the award until realization. The court also noted that the applicant's advocate had instructions to receive the cheque or demand draft.
Headnote
A) Arbitration - Execution of Award - Payment Mode - Foreign Entity Without Indian Bank Account - Arbitration and Conciliation Act, 1996, Section 36 - The applicant, a foreign company, sought execution of an arbitral award but had no bank account in India. The court held that the judgment debtor must pay by cheque or demand draft drawn on a bank in Mumbai, as electronic transfer was not feasible. (Paras 1-5)
B) Arbitration - Execution of Award - Time for Payment - Interest - Arbitration and Conciliation Act, 1996, Section 36 - The court directed payment within four weeks, failing which the amount would carry interest at 18% per annum from the date of the award until realization. (Para 5)
Issue of Consideration
Whether a foreign entity without a bank account in India can enforce an arbitral award and receive payment by cheque or demand draft instead of electronic transfer.
Final Decision
The court directed the respondent to pay the awarded amount by cheque or demand draft drawn on a bank in Mumbai within four weeks. If payment is not made within that time, the amount shall carry interest at 18% per annum from the date of the award until realization.
Law Points
- Execution of arbitral award
- foreign entity without Indian bank account
- payment by cheque or demand draft
- Section 36 Arbitration and Conciliation Act
- 1996
- Section 51 CPC
Case Details
2022 LawText (BOM) (06) 44
Commercial Execution Application No.54 of 2016
Firoz Andhyarujina, Senior Counsel a/w Javed Gaya, Manek Andhyarujina, Vidya Chaudhari, Mona Malvade i/b Chamber of Javed Gaya for the Applicant; A. Y. Sakhare, Senior Counsel a/w Jitendra Mishra, Pooja Yadav for MCGM
M/s Angerlehner Structural and Civil Engineering Company
Municipal Corporation of Greater Bombay
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Nature of Litigation
Execution of an arbitral award under the Arbitration and Conciliation Act, 1996.
Remedy Sought
The applicant sought execution of the arbitral award dated 23rd June 2014 and payment of the awarded amount.
Filing Reason
The respondent failed to pay the awarded amount despite the award being upheld up to the Supreme Court.
Previous Decisions
The arbitral award was challenged under Section 34 (dismissed on 27th February 2019), Section 37 appeal (dismissed on 8th September 2021), and SLP (dismissed on 22nd November 2021 with time to pay up to 31st March 2022).
Issues
Whether the applicant, a foreign entity without a bank account in India, can enforce the arbitral award and receive payment by cheque or demand draft.
Submissions/Arguments
The applicant submitted that it does not have a bank account in India, making electronic transfer difficult, and sought payment by cheque or demand draft. The respondent did not object to the mode of payment.
Ratio Decidendi
A foreign entity without a bank account in India can enforce an arbitral award and receive payment by cheque or demand draft, as electronic transfer is not feasible. The court has discretion to order a suitable mode of payment under Section 36 of the Arbitration and Conciliation Act, 1996.
Judgment Excerpts
The above Execution Application is filed for executing the Arbitral Award dated 23rd June 2014 passed in favour of the Applicant and against the Municipal Corporation of Greater Mumbai.
In light of the above factual position, this Execution Application was moved before me on 9th March 2022. On the said date, it was pointed out to the Court that the Applicant, being a foreign entity, does not have a bank account in India.
Procedural History
The arbitral award was passed on 23rd June 2014. MCGM challenged it under Section 34, which was dismissed on 27th February 2019. An appeal under Section 37 was dismissed on 8th September 2021. An SLP was dismissed on 22nd November 2021 with time to pay up to 31st March 2022. The execution application was filed and moved on 9th March 2022.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 34, Section 36, Section 37
