I.
Section 35 of the Arbitration and Conciliation Act, 1996 provides that subject to Part-I of the Act an arbitral award shall be final and binding on the parties and persons claiming under them respectively.
With the making of the arbitral award, the arbitral proceedings terminates and the arbitral tribunal become functus officio. A final arbitral award, subject to the provisions of Part-I of the Act, and particularly sections 28 to 37, is binding on the parties and persons claiming under them. If a party refuses to comply with the award, enforcement proceedings may be commenced to secure compliance. As between the parties, a valid award is conclusive evidence of the law and facts found by it. In K.V. George v. Secretary to Government, Water and Power Department, Trivandrum, MANU/SC/0253/1989 : (1989) 4 SCC 595, it was held that the principle res judicata is based on the principles that there shall be no multiplicity of proceedings and there shall be finality of proceedings. Thus, the principle of res judicata or for that matter the principle of constructive res judicata applies to arbitration proceedings. Thus, if one of the parties to an arbitration proceedings brings a court action against the other in relation to the subject-matter of the arbitration, based on the same cause of action, the court would dismiss the action on the ground that the issues have been disposed of and are res judicata, thus giving rise to issue of estoppel. In Uttam Singh Duggal and Co. v. Union of India, Civil App No. 162 of 1962 which was cited with approval in Satish Kumar v. Surinder Kumar, MANU/SC/0264/1968 : AIR 1970 SC 833, it was held that it is well-settled that as a general rule, all claims which are the subject-matter of a reference to arbitration merge in the award which is pronounced in the proceedings before the arbitrator and that after an award has been pronounced, the rights and liabilities of the parties in respect to the said claims can be determined only on the basis of the said award. After an award in pronounced, no action can be started on the original claim which has been the subject-matter of the reference.
In Hope Plantations Ltd. v. Taluk Land Board, Peermade, MANU/SC/0686/1998 : (1999) 5 SCC 590, it was held that it is settled law that the principles of estoppel and res judicata are based on public policy and justice. Rule of res judicata prevents the parties to a judicial determination from litigating the same question over again even though the determination may even be demonstrably wrong. When the proceedings have attained finality, parties are bound by the judgment and are estopped from questioning it. They cannot litigate again on the same cause of action nor can they litigate any issue which was necessary for decision in the earlier litigation. In Sheoparsan Singh v. Ramnandan Prasad Narayan Singh, AIR 1916 PC 78 [which if followed by the Supreme Court in Iftikhar Ahmed
v. Syed Meharban Ali, MANU/SC/0009/1974 : (1974) 2 SCC 151, it was held that in applying the rule of res judicata to arbitration proceedings, the court should be influenced not by technical considerations of form, but by matters of substance within the limits allowed by law.
II.
Section 36 of the Arbitration and Conciliation Act, 1996 provides that where the time for making an application to set aside the arbitral award under section 34 has expired, or such application having been made it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 in the same manner as if it were a decree of the court. In S. Kumar v. Delhi Development Authority, 2003 (2) RAJ 161 (Del), it was held that in terms of the provisions of section 36, the award becomes enforceable in two eventualities; firstly, where the time for making an application to set aside the award under section 34 has expired and secondly if such application having been made, is refused. When an arbitral award becomes final and binding, it can be enforced in accordance with the provision of section 141 and order 21 of the Code of Civil Procedure, 1908. Section 141 of the Code of Civil Procedure, 1908 provides that the procedure provided in this Code in regard to suit shall be followed, as far as it can be made applicable, in all proceedings in any court of civil jurisdiction. Order 21 of the Code lays down in detail the procedure for execution of decrees and orders. In M. Banerjee and Sons v. M.N. Bhagbati, 2002 (3) Arb LR 131 (Gau), it was held that for the purpose of execution, the award is to be treated as a decree of the court. Thus, when an arbitral award becomes final and binding upon the person or persons claiming under and bound by the award, the award is impressed with the character of a decree and can be enforced under the Code of Civil Procedure, 1908 in the same manner as if it were a decree of the court. In I.C.D.S. Ltd.v. Mangala Builders Pvt Ltd., MANU/KA/0627/2001 : AIR 2001 Kant 364, it was held that a right to enforce the award arises only after the period for setting aside the arbitral award under section 34 has expired or such an application having been made is rejected. That is to say, the court exacting the decree has to satisfy itself, before entertaining the application for execution, that the period for setting aside the award has expired or such as application having been made has been refused.
In Union of India v. M/s Kamal Construction, Mehdauli, MANU/BH/1304/2010 : AIR 2011 Pat 38 no steps were taken by Railways to challenge award within 3 months. Instead it sought clarification of award which was totally irrelevant. The period spent in seeking clarification as was held could not be excluded and the award would become executable.
In I.C.D.S. Ltd. v. Mangala Builders Pvt. Ltd., MANU/KA/0627/2001 : AIR 2001 Kant 364, it was held that the court that can exercise the power under section 34 of the Arbitration and Conciliation Act, 1996 can alone entertain the steps to enforce the arbitral award. It means that the 'court' as understood in section 34 of the Act has alone the jurisdiction to entertain the enforcement of the arbitral award.
It is well-settled that an existing court cannot go beyond the decree and question its legality or correctness. In R.K. Textiles Mumbai v. Sulabh Textiles Pvt Ltd., 2003 (2) RAJ 236 (Bom), it was held that the executing court is not expected nor warranted to enter into an investigation of the facts whether there is absence of arbitration agreement or not; and if not, whether the alleged incorporation of the terms in the bills amount to a valid arbitration agreement or not, etc. These questions clearly fall out of the jurisdiction of the executing court which need not and cannot record its findings on these factual aspects. If the executing court goes beyond its limits and takes upon itself to examine the validity of the decree or factual details, then it ceases to an executing court and usurps the jurisdiction or assumes the role of an appellate court. Therefore, the plea that there was not an arbitration agreement or that it was not within the ambit of section 7 cannot be entertained in the execution proceedings.
However, there is an exception to the rule that the executing court cannot go behind the decree. If the award is a nullity for lack of inherent jurisdiction of the tribunal making it, the validity of the award can be set up in execution proceedings. In Sunder Das v. Ram Parkash, MANU/SC/0368/1977 : (1977) 2 SCC 662, it was held that the executing court can entertain an objection that the decree is a nullity and can refuse to execute the decree. By doing so, the executing court would not incur the reproach that it is going beyond the decree, because the decree being null and void, there would really be no decree at all. In Khaleel Ahmed Dakhani v. The Hatti Gold Mines Co. Ltd., AIR 2000 SC 1925, it was held that entertainment of execution application for the enforcement of the award, when application to set aside that award was still pending in another competent court, is not proper vide section 36 of the Act.
© Universal law Publishing Co.