Interim restraint on enforcement continued despite sealed-cover opening of arbitral award against IL&FS group entities.

An NCLAT clarification on an IL&FS-related arbitral award held that the order dated 26.05.2022 was limited to opening the sealed cover and communicating the award, and did not lift the earlier restraint on enforcement. The pre-existing interim order of 15.10.2018 had stayed institution or continuation of proceedings against IL&FS group entities, and that restraint continued because the later order expressly left all contentions and future remedies open under law. The clarification therefore confirmed that the 26.05.2022 order did not authorise enforcement of the award or vary the earlier injunction.

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Issues: Whether the order dated 26.05.2022 merely permitted opening of the sealed cover containing the arbitral award or also lifted the existing restraint against enforcement of the award against IL&FS group entities.

Analysis: The existing restraint order of 15.10.2018 had stayed institution or continuation of proceedings against IL&FS and its group companies. The later order dated 26.05.2022 was confined to opening the sealed cover and communication of the award, and expressly left all contentions and future courses of action open to be taken in accordance with law. It did not adjudicate the enforceability of the award, nor did it vary the earlier interim injunction.

Conclusion: The clarification was issued in favour of the applicants to declare that the order dated 26.05.2022 did not authorize enforcement of the award, and the restraint under the earlier interim order continued to operate.

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