LexINTERNATIONAL SEAPORT DREDGING PVT LTD versus KAMARAJAR PORT LIMITED
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[2024] 10 S.C.R. 1503 : 2024 INSC 827 International Seaport Dredging Pvt Ltd v. Kamarajar Port Limited (Civil Appeal No. 12097 of 2024) 24 October 2024 [Dr Dhananjaya Y Chandrachud,* CJI, J.B. Pardiwala and Manoj Misra, JJ.] Issue for Consideration Matter pertains to the correctness of the order passed by the High Court granting stay on the execution of the award conditional on the respondent furnishing a bank guarantee. Headnotes† Arbitration and Conciliation Act 1996 – ss.36, 34 – Arbitral award – Stay on enforcement – Dispute between parties – Invocation of arbitration agreement – Arbitral award passed directing the respondent to pay the appellant certain sum with 9% interest which would be increased to 12% p.a. if not paid within three months and certain amount as costs – Applications u/s.33 for correction of the award by both the parties – Arbitral tribunal dismissed the application filed by the respondent, however allowed the application filed by the appellant – Respondent challenged the arbitral award u/s.34 and moved an application for stay of execution – High Court granted a stay on the execution of the award conditional on the respondent furnishing a bank guarantee – Correctness: Held: Law qua arbitration proceedings, cannot be any different merely because of the status of the respondent as a statutory undertaking – High Court ought not to have based its decision on the condition for the grant of stay on the status of the respondent as a statutory authority – Arbitration Act is a self-contained code, it does not distinguish between governmental and private entities – Hence, the decision of the Court cannot be influenced by the position of the party before it and whether it is a fly-by-night operator – In the absence of any provision of law, it would be inappropriate for courts to apply this standard while adjudicating * Author 1504 [2024] 10 S.C.R. Digital Supreme Court Reports the conditions upon which a stay of an award may be granted – Similarly, the form of security required to be furnished should not depend on whether a party is a statutory or other governmental body or a private entity – Governmental entities must be treated in a similar fashion to private parties insofar as proceedings under the Arbitration Act are concerned, except where otherwise indicated by law – Parties have entered into commercial transactions with full awareness of the implications of compliance and non-compliance with the concerned contracts and the consequences which would visit them in law – Thus, the submission that the High Court was correct in directing the respondent to furnish bank guarantees in relation to the amount awarded because it is a statutory body, rejected – Under Ord. XLI r.5 CPC, the Court has the power to direct full or part deposit and/or the furnishing of security in respect of the decretal amount–Thus, order of the High Court to be modified – Respondent to deposit an amount quantified at 75% of the decretal amount, inclusive of interest, on or before the stipulated date before the High Court – Conditional on the deposit of the said amount, there shall be a stay on the enforcement of the arbitral award. [Paras 12, 15, 17] Case Law Cited Pam Developments Private Limited v. State of West Bengal [2019] 9 SCR 252 : (2019) 8 SCC 112; Toyo Engineering Corpn. v. Indian Oil Corpn. Ltd., 2021 SCC OnLine SC 3455 – referred to. List of Acts Arbitration and Conciliation Act 1996; Arbitration and Conciliation (Amendment) Act, 2015; Builidng and other Construction Worker’s Welfare Cess Act 1996; Code of Civil Procedure, 1908. List of Keywords Stay on execution of award; Bank guarantee; Arbitral award; Stay on enforcement; Arbitration agreement; Correction of the award; Arbitration proceedings; Statutory undertaking; Grant of stay; Statutory authority; Arbitration Act, a self-contained code; Fly-by-night operator; Governmental body; Private entity; Governmental entities; Commercial transactions; Statutory body; Full or partial deposit; Furnishing of security in respect of decretal amount. [2024] 10 S.C.R. 1505 International Seaport Dredging Pvt Ltd v. Kamarajar Port Limited Case Arising From CIVIL APPELLATE JURISDICTION: Civil Appeal No. 12097 of 2024 From the Judgment and Order dated 09.09.2024 of the High Court of Judicature at Madras in AN No. 4236 of 2024 Appearances for Parties Shyam Divan, Sr. Adv., Ms. Shally Bhasin, Chaitanya Safaya, Prateek Yadav,
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