CHAKARDHARI SUREKA Vs. PREM LATA SUREKA THROUGH SPA & ORS.
Dispute between Chakardhari Sureka and Prem Lata Sureka (through SPA), raised a critical question of Law, i.e., whether the executing Court should defer the proceedings qua execution of the arbitration award only because an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (“Act”), is pending against rejection of an application under Section 34 of the Act.
The facts of the case were that an objection under Section 34 of the Arbitration Act was preferred against the arbitral award. However, the same was rejected by the court. Thereafter, an appeal under Section 37 of the Act was filed by aggrieved party. However, the court did not pass any order regarding the stay on the implementation and operations of the award.
The Hon’ble Supreme Court, after hearing all the parties, held that no interim stay was operating against the award, hence, the execution court cannot adjourn proceedings merely because an appeal is pending against the order passed under S. 34 of the Act. Furthermore, the Hon’be Court also held that the Executing Court shall be free to proceed with the execution of the award in accordance with the law.
The significance of this case lies in clarifying the scope of powers of the Execution Court under the Arbitration and Conciliation Act, 1996, while upholding the rule of law and judicial efficiency. The judgment provides legal certainty that the pendency of an appeal under S. 37, in the absence of an interim stay, does not bar the execution of an arbitral award. The judgment ensures that arbitral awards are not frustrated by undue delays and reinforces the principle that judicial remedies must not be misused to stall enforcement, thereby maintaining the integrity and efficacy of the arbitral process.