Award can be enforced where assets are located: SC

The Supreme Court of India recently clarified that the enforcement of an arbitration award through its execution can be filed anywhere in the country where the assets of the judgment debtor are located.

“The enforcement of an award through its execution can be filed anywhere in the country where such decree can be executed and there is no requirement for obtaining a transfer of the decree from the Court, which would have jurisdiction over the arbitral proceedings”, a Division Bench of the Court said.

Rejecting the view taken by the Madhya Pradesh High Court and the Himachal Pradesh High Court and approving the views of Delhi High Court, Kerala High Court, Madras High Court, Rajasthan High Court, Allahabad High Court, Punjab & Haryana High Court and Karnataka High Court, the Court said that when an award is already made, of which execution is sought, the arbitral proceedings already stand terminated on the making of the final award. Thus, it is not appreciated how Section 42 of the said [Arbitration] Act, which deals with the jurisdiction issue in respect of arbitral proceedings, would have any relevance.

The Court clarified that an award is to be enforced in accordance with the provisions of the Civil Procedure Code (“Code”) in the same manner as if it were a decree. It is, thus, the enforcement mechanism, which is akin to the enforcement of a decree but the award itself is not a decree of the civil court as no decree whatsoever is passed by the civil court. It is the arbitral tribunal, which renders an award and the tribunal does not have the power of execution of a decree. For the purposes of execution of a decree the award is to be enforced in the same manner as if it was a decree under the said Code.

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