Enforcement As A Backdoor Challenge: India's Arbitration Finality Dilemma

India's Enforcement ConundrumAn arbitral award (“award”) attains finality once it withstands scrutiny under Section 34 of the Arbitration and Conciliation Act, 1996 (“Act”), which prescribes the limited grounds on which an award may be set aside. After attaining such finality, the award is meant to be enforced under Section 36 of the Act. However, this provision, though intended to streamline enforcement, has instead created uncertainty over whether it allows fresh challenges to an award that has already become final. Section 36(1) states that an award “shall be enforced in accordance with the Code of Civil Procedure, 1908 (“Code”),” but it remains unclear whether this refers only to Order XXI of the Code, which governs execution, or also to Section 47 of the Code, which permits objections to executability. If Section 47 is held to apply, an arbitral award becomes susceptible to challenge even after attaining finality under Section 35 of the Act. This uncertainty is further compounded by the conflicting judicial interpretations rendered by various courts, as discussed herein.Divergent Judicial Approaches on the AmbiguityAddressing the issue, the Supreme Court, recently, in Electrosteel Steel Limited v. Ispat Carrier Private Limited (“Electrosteel”, 2025 INSC 525), inter alia, held that an award is accorded the status of a civil court decree and must be enforced in the same manner, thereby allowing the applicability of Section 47 in the enforcement proceedings initiated under Section 36. The said ruling returned by the Court is in line with its previous Judgement rendered in Punjab State Civil Supplies Corporation Ltd. v. M/s Atwal Rice and General Mills (2017 INSC 606).In contrast to the Supreme Court's expansive approach, the High Courts have leaned in favour of excluding the applicability of Section 47 from the enforcement proceedings. For instance, the Delhi High Court (“Delhi HC”), in Anglo American Metallurgical Coal Pvt. Ltd. v. MMTC Ltd. (“Anglo American”, 2025 DHC 3495) relying upon its prior ruling (2023/DHC/000475) as well as rulings of other High Court(s), adopted a more restrictive approach to rule that Section 36(1) was intended only to import the execution machinery under Order XXI, not to permit fresh objections under Section 47. This is because, once an award has survived scrutiny under Section 34, or the time to challenge has expired, it attains finality under Section 35, and reopening it at the enforcement stage would undermine the Act's objective of finality and limited judicial intervention. A similar position was taken by the Orissa High Court in Birat Chandra Dagra v. Orissa Manganese & Minerals Ltd., (C.M.P. NO. 1062 of 2019, Orrisa High Court)which the Supreme Court later left undisturbed by dismissing the appeal on merits (“Birat Chandra Dagra”, 2020).The Pitfalls of Both ApproachesProblems with ElectrosteelTo begin with, the Supreme Court in Electrosteel decided the issue without engaging with the conflicting judgment of a co-ordinate bench in Birat Chandra Dagra or the divergent views expressed by various High Courts. This omission has significantly diluted the precedential strength of the ruling and, in turn, deepened the uncertainty surrounding the issue, leaving High Courts free to align with either line of reasoning and thereby undermining consistency in the application of the law.Secondly, Electrosteel overlooks the nuanced interplay between Section 34 and Section 47. Although both provisions serve distinct purposes, their scope may at times overlap. The Calcutta High Court in Srs Investments Bengal Tiger Ltd v. Rahul Todi and Others (“Srs Investments”) clarified that such overlap does not preclude the executing court from considering objections under Section 47, even if similar issues were adjudicated under Section 34. In line with this reasoning, several High Courts have entertained objections under Section 47 where an award was per se illegal (Chief Engineer and Others v. Prakash Constructions; 2019 SCC OnLine Mad 39370) and ex facie against public policy (2014 DHC 5378) - grounds that largely mirror those under Section 34, thereby rendering the finality under Section 35 redundant. Conversely, some judgments sought to preserve the sanctity of Section 35 by restricting Section 47, holding that grounds available under Section 34 could not be reopened at the enforcement stage. However, Electrosteel, by permitting even unraised Section 34 grounds to be invoked during enforcement, has diluted this settled position, blurred the distinction between challenge and enforcement proceedings, and reintroduced uncertainty into the arbitral enforcement framework.Problems with Anglo AmericanThe Delhi HC's decision in Anglo American and the other similar rulings are commendable in its effort to safeguard the statutory mandate of Section 35. Yet its interpretation of Section 36(1) is problematic. This is because, the legislature has deliberately used two different...

Enforcement As A Backdoor Challenge: India's Arbitration Finality Dilemma

Mohd. Aamir Siraj & Rajvansh Singh

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