Supreme Court disapproves to entertain writ petition for execution of Arbitration awards passed against NHAI

Supreme Court disapproves to entertain writ petition for execution of Arbitration awards passed against NHAI

The Supreme Court in its recent order has disapproved to entertain writ petitions which sought the execution of Arbitration awards passed against the National Highways Authority of India.

"If the High Courts convert itself to the Executing Court and entertain the writ petitions under Article 226 of the Constitution of India to execute the award passed by the Arbitral Tribunal/Court, the High Courts would be flooded with the writ petitions to execute awards passed by the learned Arbitrator/Arbitral Tribunal/Arbitral Court.", the bench comprising Justices MR Shah and BV Nagarathna observed.

Whilst adjudicating an appeal against a Bombay High Court judgment which had allowed writ petition filed by original land owners and directed the NHAI to deposit the entire compensation amount as awarded by the Arbitrator and thereafter permitting the original land owners to withdraw the amount.

The NHAI contended before the Apex Court that as the award passed by the Arbitrator was executable before the concerned Executing Court and therefore when the original writ petitioners had a statutory remedy available to execute the award by initiating the execution proceedings before the concerned Executing Court, the High Court ought not to have entertained the writ petitions under Article 226 of 5 the Constitution of India to execute the award passed by the Arbitrator.

Rebutting the above, the land owners contended that as there is no stay of the award passed by the learned Arbitral Tribunal/Court in a proceeding under Section 34 of the Arbitration Act and that NHAI took possession of the land without paying any compensation, the High Court has not committed any error in passing the impugned order.

The bench observed that, by passing the impugned order/directions the High Court has virtually converted itself into Executing Court.

"Therefore, once the original writ petitioner was having an efficacious, alternative remedy to execute the award passed by the learned Arbitral Tribunal/Court, by initiating an appropriate execution proceeding before the competent Executing Court, the High Court ought to have relegated the original writ petitioners to avail the said remedy instead of entertaining the writ petition under Article 226 of the Constitution of India which was filed to execute the award passed by the Arbitral Tribunal/Court. If the High Courts convert itself to the Executing Court and entertain the writ petitions under Article 226 of the Constitution of India to execute the award passed by the Arbitral Tribunal/Court, the High Courts would be flooded with the writ petitions to execute awards passed by the learned Arbitrator/Arbitral Tribunal/Arbitral Court.. We disapprove the entertaining of such writ petitions under Article 226 of the Constitution of India to execute the award passed by the learned Arbitral Tribunal/Court, without relegating the judgment creditor in whose favour the award is passed to file an execution proceeding before the competent Executing Court."

The appeal was however disposed of by the bench by issuing certain directions. Additionally, the NHAI was directed to deposit 50% of the compensation amount (as awarded by the Arbitral Court) with the Executing Court with four weeks, which will subsequently be released to the land owners unconditionally.