In a recent order, the Madras High Court announced a scheme to help those who had secured arbitration awards to get them executed through courts.
While hearing a civil revision petition from Kotak Mahindra Bank Ltd, Mumbai, Mr Justice V. Ramasubramanian set aside an order of an executing court, which held that according to a judgment of the Karnataka High Court, an arbitral award was a decree and that the orders of transmission were necessary.
There had been a great deal of confusion about transmission of such arbitral awards, the judge noted. It was learnt that hundreds of execution petitions were pending in various courts in Tamil Nadu with prayer for transferring them to other courts for execution.
The petitioner-bank had issued a credit card to respondent Sivakama Sundari S. Narayana SB Murthy, Chennai. On the ground that the amounts were due from the respondent, the petitioner raised a dispute, and it was referred to arbitration at Mumbai. An award was passed on January 29, 2010 by the arbitrator. The judge observed that the practice of filing execution petitions in courts had caught on with lawyers and there was a misconception that the court within in whose jurisdiction arbitral award proceedings took place was the court which passed the decree. There was no basis in law for such presumption.
Section 38 of the Code of Civil Procedure said that a decree might be executed either by the court which passed it or by the court to which it was sent for execution. According to the Arbitration & Conciliation Act, awards of arbitral tribunal were liable to be enforced u/s 36 as if it was a decree of court in terms of the code. The judge ruled that no court to which an application for execution was presented could insist on filing of execution to another court to transmit the copy of decree.
The judge said it was not proper to import provisions of Order XXI, Rules 5 & 6 and demand order for transmission. This principle shall apply not only to the case on hand where the Assistant Judge, City Civil Court, Chennai, had made such a demand, but would also apply to every other court, he held.
Allowing the petition and setting aside the impugned order, the judge directed the petitioner to re-present the execution petition to the City Civil Court, Chennai.