Arbitral award enforcement and partial purchase rights were adjusted to preserve court control, finality, and trustees' remaining rights.

An arbitral award made under an agreement requiring the arbitrators to report it to court could not operate as immediately enforceable merely on delivery; its implementation remained subject to court orders and the award's time stipulation did not override that control. The court accepted the Umpire's valuation, corrected an admitted clerical error, and rejected payment by instalments. To bring finality, it modified the award to allow the Government to purchase selected items at the item-wise valuation fixed in the schedule, with lump-sum payment by the court-fixed date and interest from the award date. The trustees retained the right to deal with jewellery not acquired, including sale and export, subject to law.

---

---

Issues: (i) Whether the arbitral award could be treated as enforceable and its time stipulation as operative before this Court made appropriate orders on the award; (ii) whether the Central Government had lost its option to purchase the jewellery in view of the lapse of time and, if not, on what terms the award should be accepted or modified; (iii) whether the trustees could deal with the unsold jewellery, including export, if the Government did not acquire the whole lot.

Issue (i): Whether the arbitral award could be treated as enforceable and its time stipulation as operative before this Court made appropriate orders on the award.

Analysis: The award was made under an agreement that expressly required the arbitrators to report it to the Court for appropriate orders and for adjudication of disputes relating to the award under the Arbitration Act, 1940. In that setting, the award could not become capable of implementation merely upon delivery. Its enforceability remained dependent on this Court's orders on the pending applications challenging the award. The time-limit in the award had to be read subject to that agreement. The pendency of the applications kept the award from operating as an immediately enforceable instrument.

Conclusion: The award was not enforceable merely by efflux of the stipulated period, and the time clause did not operate automatically to the exclusion of the Court's control.

Issue (ii): Whether the Central Government had lost its option to purchase the jewellery in view of the lapse of time and, if not, on what terms the award should be accepted or modified.

Analysis: The Court found the Umpire's valuation to be well-reasoned and accepted it, subject to correction of the admitted clerical error of Rs. 45 crores. It further held that the Government's proposal to pay in instalments could not be accepted because the award contemplated payment of the price as fixed. At the same time, the Court considered that limiting the Government to a whole-lot purchase would prolong the dispute and frustrate finality. To bring the controversy to an end, the Court modified the award and preserved the Government's right to purchase selected items at the item-wise valuation fixed in the schedule, with payment in lump sum by the date fixed by the Court and with interest from the date of the award. The modified award was directed to be made a rule of the Court.

Conclusion: The Central Government did not lose the right to purchase, but the award was modified to permit partial purchase on the Court-fixed terms and valuation, with interest.

Issue (iii): Whether the trustees could deal with the jewellery not acquired by the Central Government, including sale and export, if the Government did not acquire the whole lot.

Analysis: Once the Government exercised only a partial option, the remaining items had to be left with the trustees. The Court held that the trustees would be free to sell the items not acquired and, if necessary, export them, subject to existing law. The Court also clarified that if the Government did not purchase the items under the modified award, the trustees' rights in those items would crystallise, enabling them to deal with them in accordance with law.

Conclusion: The trustees retained the right to sell, and if necessary export, the items not acquired by the Government, subject to the law.

Final Conclusion: The Court substantially accepted the arbitral award with modifications to secure finality, allowed partial Government purchase on revised terms, preserved the trustees' rights over the balance items, and directed the modified award to form the rule of the Court.

---