Arbitral award execution stayed pending section 34 objections; proceedings transferred to Delhi High Court for effective adjudication.

An arbitral award should not be executed while objections under section 34 remain pending and the stay application has not been decided. In these circumstances, the Supreme Court directed transfer of the section 34 proceedings to the Delhi High Court to secure effective adjudication and avoid inequitable execution across multiple jurisdictions. The award was kept in abeyance until the Delhi High Court decided the stay application, and the award-holder was permitted to seek deposit of the awarded amount or part of it before that court.

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Issues: Whether the application under section 34 of the Arbitration and Conciliation Act, 1996 should be transferred to the Delhi High Court and whether the award could be kept in abeyance pending decision on the stay application.

Analysis: The matter concerned the forum in which the objections under section 34 were to be heard, in a setting where execution of the award was sought in multiple jurisdictions. The Court held that it would be inequitable to permit execution of the award while the objections to the award remained pending and while the stay application under section 34 had not been decided. It therefore directed transfer of the section 34 proceedings to the Delhi High Court, kept the final award in abeyance until the Delhi High Court decided the stay application, and permitted the party in whose favour the award stood to seek deposit of the awarded amount or part thereof before the Delhi High Court.

Conclusion: The application was allowed, the section 34 proceedings were transferred to the Delhi High Court, and the award was directed to remain in abeyance pending decision on the stay application.

Ratio Decidendi: An award should not be permitted to be executed while objections to it under section 34 remain pending and undecided, and the forum for hearing such objections may be shifted to secure effective adjudication.

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