Winding-up on an arbitral award must await final disposal of a pending challenge to enforceability.

A winding-up petition founded on an arbitral award should be kept in abeyance while a timely Section 34 challenge remains pending, because the award is not finally enforceable under Section 36 until that challenge is resolved. Where the award debtor has already sought to set aside the award, the creditor's claim is still under adjudication and the basis for alleging inability to pay debts is not conclusively established. Given that winding up is an extreme remedy, the Court should exercise caution and not proceed on an unsettled award. The petition was therefore adjourned until the challenge to the award was finally decided.

---

---

Issues: Whether a winding-up petition based on an arbitral award should be kept in abeyance until the application to set aside the award is finally decided, and whether the award can be treated as enforceable before such final disposal.

Analysis: The award's executability was held to depend on the expiry of the time for challenging it under Section 34 of the Arbitration and Conciliation Act, 1996, and, where a challenge had already been filed, on the Court refusing to set aside the award. Since the respondent had already moved to set aside the award, the award could not yet be treated as finally enforceable under Section 36 of the Arbitration and Conciliation Act, 1996. In a winding-up proceeding founded on alleged inability to pay debts, the basis of the petition remained contingent upon the fate of the pending challenge to the award. The Court emphasized that winding up is an extreme remedy and that discretion should be exercised cautiously where the very foundation of the creditor's claim was still under adjudication.

Conclusion: The winding-up petition was not to proceed until the petition to set aside the award was finally decided, and the petition was adjourned accordingly.

Ratio Decidendi: A winding-up petition founded on an arbitral award should not be pursued while a timely challenge to that award under Section 34 of the Arbitration and Conciliation Act, 1996 remains pending, because enforceability under Section 36 and the creditor's underlying claim are not finally established until that challenge is resolved.

---