Case Note & Summary
The case involves chamber summonses taken out by the award debtors (Swarup Group of Industries & Anr.) seeking to stay the execution of an interim consent award passed on 3rd December 2008 in favour of the judgment creditor (National Agricultural Cooperative Marketing Federation of India Limited). The interim award was passed by consent of parties and was not challenged within the statutory period. Execution proceedings were initiated on 16th July 2009. Subsequently, a final award was passed on 31st December 2013, which was challenged by the award debtors on 31st March 2014 under Section 34 of the Arbitration and Conciliation Act, 1996. The challenge purported to also cover the interim consent award passed 6 years earlier. The court examined whether the interim consent award could be challenged after such delay and whether execution could be stayed. The court held that a consent award is not amenable to challenge under Section 34 as it is essentially a contract between parties. Moreover, the challenge to the interim award was barred by limitation under Section 34(3) as it was filed beyond the prescribed period. The court also noted that no stay of execution had been granted under Section 36 of the Act, and therefore execution must proceed. The chamber summonses were dismissed.
Headnote
A) Arbitration Law - Challenge to Consent Award - Section 34 Arbitration and Conciliation Act, 1996 - A consent award passed by the arbitral tribunal with the agreement of parties cannot be challenged under Section 34 of the Act as it is not a 'determination' but a contract between parties. The court held that the challenge to the interim consent award after 6 years is barred by limitation under Section 34(3) and also on merits as consent awards are not amenable to challenge under Section 34. (Paras 1-10) B) Arbitration Law - Execution of Award - Stay of Execution - Section 36 Arbitration and Conciliation Act, 1996 - The court held that mere filing of a petition under Section 34 against the final award does not automatically stay execution of the interim consent award. The award debtor must seek and obtain a specific order of stay from the court under Section 36. Since no such stay was granted, execution must proceed. (Paras 1-10)
Issue of Consideration
Whether the interim consent award passed on 3rd December 2008 can be challenged under Section 34 of the Arbitration and Conciliation Act, 1996 after a period of 6 years, and whether execution of such award can be stayed pending challenge to the final award.
Final Decision
The court dismissed the chamber summonses, holding that the challenge to the interim consent award is barred by limitation and on merits, and that execution must proceed as no stay has been granted under Section 36.
Law Points
- Consent award cannot be challenged under Section 34 of Arbitration and Conciliation Act
- 1996
- Challenge to interim award after 6 years is barred by limitation under Section 34(3)
- Execution of consent award cannot be stayed merely because final award is challenged
