Writ Petition Not A Remedy For Execution Of Arbitration Award: Andhra Pradesh High Court

The Andhra Pradesh High Court division bench comprising Chief Justice Dhiraj Singh Thakur and Justice R. Raghunandan Rao held that that it lacks the authority in writ petition to enforce an award issued by an arbitrator when it is already challenged under Section 34 of the Arbitration and Conciliation Act, 1996. Brief Facts: M/s. Vijayanagaram Hatcheries Pvt. Ltd. (“Respondent”) filed a writ petition in the Andhra Pradesh High Court (“High Court”) for the enforcement of the arbitration award. It asserted before the single Judge that despite the National Highways Authority of India (“Appellant”) acquiring its land of one acre twenty-one cents and two acres and twenty-four cents and determining compensation through an arbitration award, the payment had not been released in its favor. The Respondent contended that Appellant had challenged the award before the arbitrator (the District Collector) under Section 3G(5) of the National Highways Act, 1956, and the challenge was dismissed on 05.04.2022. According to the Respondent, since the Award had been upheld and attained finality, withholding the compensation payment was unjustified and illegal on part of the Appellant. In response to these claims, the single Judge, in the judgment and order under challenge, found that there was no challenge to the award. Considering the finality of the award, the Judge directed the Appellant to the deposit the compensation amount payable to the Respondent in accordance with the award. Feeling aggrieved, the Appellant filed a writ appeal under Clause 15 of the Letters Patent against the decision of the single judge in the Delhi High Court. The Appellant argued that the Respondent did not inform the single judge that the Arbitrator's (District Collector's) order was under challenge under Section 34 of the Arbitration and Conciliation Act, 1996, and was pending adjudication. Observations by the High Court: The High Court referred to the decision of the Supreme Court in the case of National Highways Authority of India Vs. Sheetal Jaidev Vade & Others, [2022 LiveLaw (SC) 705] and highlighted the Supreme Court's disapproval of entertaining writ petitions under Article 226 of the Constitution of India for the execution of awards passed by arbitral tribunals or courts. The Supreme Court, in the cases, expressed its disapproval of a judgment and order passed under Article 226, directing the NHAI to deposit the entire compensation amount awarded by the arbitrator and allowing the original landowners to withdraw the said amount. The High Court referred to the observations of the Supreme Court noted in paragraph 12 of its judgment that the High Court should not have entertained the writ petition under Article 226 for execution purposes, as it essentially transformed itself into an executing court. Drawing parallels to the facts of the present case, the High Court found them similar to those considered by the SC. It held that the Appellant (NHAI) had initiated proceedings under Section 34 the Arbitration Act, before the learned District Judge, and these proceedings were still pending. The High Court recognized that this crucial information could not be brought to the notice of the single judge during the initial proceedings, as the Appellant was not represented on the date when the judgment and order were passed. Consequently, the High Court held that the judgment and order of the single judge was unsustainable. Consequently, the High Court set aside the judgment and order of the single judge. Case Title: The Project Director, National Highways Authority of India vs M/s. Vijayanagaram Hatcheries Pvt. Ltd. Case Number: WRIT APPEAL No.1170 of 2023 Advocate for the Appellant: Padma Rao G. S. Lakkaraju Advocate for the Respondent: G. Ramesh Babu, Jupudi V. K. Yagnadutt, Deputy Solicitor General of India and SS Varma. Click Here To Read/Download Order

Writ Petition Not A Remedy For Execution Of Arbitration Award: Andhra Pradesh High Court

Rajesh Kumar

Tags