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        2017 (3) TMI 1927 - HC - Indian Laws

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        Patent jurisdictional defect in arbitral award can be raised in execution when liability is sought against non-parties to arbitration agreement. An objection that an arbitral award is without jurisdiction may be raised in execution under Section 47 CPC when the defect is patent on the record and no ...
                      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.

                            Patent jurisdictional defect in arbitral award can be raised in execution when liability is sought against non-parties to arbitration agreement.

                            An objection that an arbitral award is without jurisdiction may be raised in execution under Section 47 CPC when the defect is patent on the record and no fresh factual inquiry is needed. Because Section 36(1) of the Arbitration and Conciliation Act, 1996 treats the award as enforceable like a decree, execution proceeds under the CPC, and the restriction on late jurisdictional objections in Section 34 does not bar such a challenge. On the facts, the arbitration clause and reference applied only to the company, with no agreement or basis to fasten liability on the directors; the objection succeeded and execution against them was dismissed.




                            Issues: Whether an objection that an arbitral award is without jurisdiction, because the judgment debtors were not parties to the arbitration agreement and no reference was made against them, can be raised in execution proceedings under Section 47 of the Code of Civil Procedure, 1908.

                            Analysis: The objection of want of jurisdiction in execution is maintainable where the defect is apparent from the face of the record and does not require fresh determination of disputed facts. Section 36(1) of the Arbitration and Conciliation Act, 1996 makes an arbitral award enforceable in the same manner as a decree of the court, so execution proceeds under the Code of Civil Procedure, 1908. The restriction on belated jurisdictional objections in Section 34 proceedings does not exclude objections available in execution when the award is sought to be enforced as a decree. On the facts, the arbitration clause was contained in invoices raised only on the company, the reference to arbitration was sought only against the company, and there was no agreement or basis shown for fastening liability on the directors.

                            Conclusion: The objection was maintainable and succeeded; the arbitral award, insofar as it fastened liability on the directors, was held to be without jurisdiction and the execution against them was dismissed.

                            Ratio Decidendi: An arbitral award enforced as a decree may be challenged in execution under Section 47 of the Code of Civil Procedure, 1908 if the lack of jurisdiction is patent on the record and does not depend on factual inquiry; the limitation on jurisdictional objections in Section 34 proceedings does not bar such an execution objection.


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                            ActsIncome Tax
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