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        Companies Law

        2003 (2) TMI 354 - HC - Companies Law

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        Arbitral award objections cannot be raised in execution when they should have been challenged under the statutory scheme. Objections to an arbitral tribunal's competence or jurisdiction had to be pursued under the statutory challenge mechanism and could not be raised for the ...
                          Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                            Provisions expressly mentioned in the judgment/order text.

                                Arbitral award objections cannot be raised in execution when they should have been challenged under the statutory scheme.

                                Objections to an arbitral tribunal's competence or jurisdiction had to be pursued under the statutory challenge mechanism and could not be raised for the first time in execution to resist enforcement of the award. The executing court was not entitled to permit a bypass of the challenge provisions by re-agitating such grounds, and the jurisdictional objection was therefore not maintainable. Allegations that the interim award was unstamped, insufficiently stamped, or not in the prescribed form did not by themselves invalidate execution; however, where copies of the award showed inconsistency as to signatures, the original award had to be examined before further action.




                                Issues: (i) Whether objections to the competence and jurisdiction of the arbitral tribunal could be raised in execution proceedings when no application to set aside the interim award had been filed under the Arbitration and Conciliation Act, 1996. (ii) Whether the interim award could be treated as invalid in execution on the grounds that it was unstamped, insufficiently stamped, or not signed by all arbitrators.

                                Issue (i): Whether objections to the competence and jurisdiction of the arbitral tribunal could be raised in execution proceedings when no application to set aside the interim award had been filed under the Arbitration and Conciliation Act, 1996.

                                Analysis: Section 16 of the Arbitration and Conciliation Act, 1996 requires objections as to the tribunal's competence and jurisdiction to be decided by the tribunal itself. Section 34 provides specific statutory grounds for setting aside an award, and section 36 makes an award enforceable in the same manner as a decree once the time for challenge has expired. The principles governing execution under section 47 of the Code of Civil Procedure apply, but an executing court cannot permit a party to bypass section 34 by re-agitating grounds that properly belong to a challenge against the award. A jurisdictional objection of this nature, not having been raised by an application under section 34, could not be entertained to resist execution.

                                Conclusion: The jurisdictional objection was not maintainable in execution and the point was decided in favour of the petitioner.

                                Issue (ii): Whether the interim award could be treated as invalid in execution on the grounds that it was unstamped, insufficiently stamped, or not signed by all arbitrators.

                                Analysis: Section 31 of the Arbitration and Conciliation Act, 1996 does not prescribe any rigid form for an award. An award is not invalid merely because it does not follow a particular format, and lack of proper stamping is at best a curable irregularity. On the signature issue, the record showed inconsistent copies of the award, one bearing signatures of all arbitrators and the other bearing only the principal arbitrator's signature. In those circumstances, the proper course was to call for the original award before proceeding further.

                                Conclusion: The objections based on stamping and form did not justify outright rejection of execution, but the question of signatures required verification from the original award.

                                Final Conclusion: The execution court's order could not stand insofar as it entertained a jurisdictional objection that ought to have been raised under the arbitral challenge mechanism, and the matter was sent back for fresh orders after production of the original award.

                                Ratio Decidendi: Objections falling within the statutory challenge grounds to an arbitral award cannot be raised for the first time to resist execution, and an executing court must confine itself to matters legally open on the face of the record while verifying the original award where the authenticity of copies is in doubt.


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