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Arbitration

Writ Petition Is Not Maintainable To Enforce The Arbitral Award: Madras High Court

Ausaf Ayyub
16 April 2022 10:10 AM GMT
Writ Petition Is Not Maintainable To Enforce The Arbitral Award: Madras High Court
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The High Court of Madras observed that a writ petition cannot be filed to enforce an arbitral award when an alternative remedy is available under S. 36 of the A&C Act. The Single Bench of Justice G.K. Ilanthiraiyan observed that the A&C Act is a complete code in itself and envisages minimum judicial intervention. If further observed that if the Courts are allowed to...

The High Court of Madras observed that a writ petition cannot be filed to enforce an arbitral award when an alternative remedy is available under S. 36 of the A&C Act.

The Single Bench of Justice G.K. Ilanthiraiyan observed that the A&C Act is a complete code in itself and envisages minimum judicial intervention. If further observed that if the Courts are allowed to interfere beyond the permissible lines, then the efficacy of arbitration as an expeditious method of dispute resolution would be diminished.

Facts

The Respondent NHAI acquired the lands of the petitioners for the purpose of constructing a by-pass on the National Highway under the provisions of the National Highways Act, 1956. Feeling aggrieved by the amount of compensation, the petitioners filed a reference before the arbitrator for enhancement of the amount of compensation. Accordingly, the arbitrator enhanced the compensation amount.

The petitioners approached the respondent for the disbursement of the arbitral award but received no response from them. Therefore, the petitioners filed the writ petition for a direction to the respondent to pay the arbitral award.

Contention Of The Parties

The petitioners invoked the writ jurisdiction of the Court on the following counts:

  • The respondent has failed to pay compensation determined by the arbitrator even after one year from the arbitral award.
  • The petition to challenge the arbitral award is filed after the expiry of the period of limitation.
  • The challenge petition is filed without compliance with the requirement of issuing a notice to the other party as provided under S. 34(5) of the A&C Act.
  • It has been a year since the award was passed, however, the respondent has failed to make the payments to the petitioners thus depriving them of benefits of the award, therefore, the writ is maintainable.

The respondent contended that the writ petition is not maintainable on the following grounds:

  • Since the petitioners have an option of filing for enforcement of the award in terms of S. 36 of the A&C Act, therefore, the writ jurisdiction asking for enforcement is not maintainable either in fact or in law.

Analysis By The Court

At the outset, the Court observed that there is no absolute bar against filing a writ petition in matters arising out of arbitration, however, the same will be entertained only in exceptional circumstances.

The Court observed that the petitioners have essentially filed the petition for the enforcement of the arbitral award on the ground that one year has passed by and they still have not been paid their compensation. However, instead of filing an enforcement application, they have filed a writ petition.

The High Court observed that a writ petition cannot be filed for enforcement of an arbitral award when an alternative remedy is available under S. 36 of the A&C Act. The petitioners should have filed an enforcement petition.

The Court further observed that the A&C Act is a complete code in itself and envisages minimum judicial intervention. If further observed that if the Courts are allowed to interfere beyond the permissible lines, then the efficacy of arbitration as an expeditious method of dispute resolution would be diminished.

However, the Court observed that S. 3H(5)&(6) of the National Highways Act provides for the deposit of the enhanced compensation before taking possession of the land, therefore, the Court directed the respondent to deposit the enhanced amount with interest with the competent authority. The Court further directed the competent authority to disburse the amount to the petitioners if the respondents fail to obtain interim relief against the award within four weeks from the receipt of the order.

Case Title: D. Nagarathinammal v. The Project Director, National Highways Authority of India and Anr. W.P. No. 14766 of 2021.

Counsel for the Petitioner: Mr. N. Chandrasekaran

Counsel for the Respondents: Mr. Su. Srinivasan, Central Government Standing Counsel and Mr. Yogesh Kannadasan, Special Government Pleader.

Citation: 2022 LiveLaw (Mad) 161

Click Here To Read/Download order

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