Objections U/S 47 CPC Can't Be Entertained In Enforcement Of Arbitral Awards U/S 36 Of A&C Act: Orissa High Court

The Orissa High Court has recently held that objections under Section 47 of the Code of Civil Procedure ('CPC') cannot be allowed to be raised in the enforcement proceeding of an arbitral award, as enunciated under the provision of Section 36 of the Arbitration and Conciliation Act, 1996 ('A & C Act').While bringing clarity as to applicability of Section 47 of CPC to arbitral proceedings, a Bench of Dr. Justice Sanjeeb Kumar Panigrahi held –“Allowing objections under Section 47 of the CPC, 1908 to be raised against arbitral awards would undermine the finality and binding nature of arbitration awards. It would subject arbitral awards to same procedural complexities and delays associated with court proceedings, defeating the purpose of choosing arbitration as an alternative dispute resolution mechanism.”Briefly put, the Court was dealing with a challenge posed to the orders passed by the Civil Judge (Senior Division) -cum- Commercial Court, Bhubaneswar in certain interim applications arising out of an execution case involving an arbitral award passed by the Facilitation Council under the Micro, Small and Medium Enterprises Development Act, 2006 ('MSMED Act'). The Civil Judge dismissed the objections and supplementary objections filed by the petitioner under Section 47 of CPC through the impugned orders.The prime question which arose before the High Court was whether the orders passed by the executing Court in dismissing objections filed by the petitioner under Section 47 of CPC warrant any interference by the Court.Section 36 of the A & C Act provides for enforcement of arbitral awards after expiry of limitation period to challenge the same. It says, “Where the time for making an application to set aside the arbitral award under section 34 has expired, then, subject to the provisions of sub-section (2), such award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were a decree of the court.”The phrase "as if it were", the Court said, conveys the idea of treating an arbitral award in an analogous manner with that of a court decree, notwithstanding the fact that it is not really a decree issued by a court. “Essentially, it means that once the time limit for challenging the arbitral award has expired, the award is to be enforced through the same procedures and mechanisms as a court decree under the CPC, 1908. This includes the execution of the award through the court's enforcement powers, such as attachment of property, or other coercive measures,” it added.Even though Section 36 authorises the executing forum to deem the arbitral award as a decree, the question for determination was whether such assumption would enable the executing Court to even entertain objections envisaged under Section 47 of the CPC.To answer this question, Justice Panigrahi relied upon the judgment of the Allahabad High Court in India Oil Corporation Ltd. and Anr. v. Commercial Court and Anr. (2023) which categorically held that arbitral award is not a decree under Section 2(2) of CPC and therefore, objection filed under Section 47 of CPC is not maintainable in enforcement proceedings under Section 36 of the A & C Act.Hence, the Court turned down the argument on behalf of the petitioner that in view of assumption under Section 36, there would be no difficulty in entertaining objections under Section 47, CPC. It cemented the position of law by opining that the award is required to be construed as a decree only for the purpose of 'enforcement' of the same and not for raising objections under Section 47 of the CPC before the executing Court.Accordingly, the Bench held that allowing objections in execution of awards holds the potential to complicate and unnecessarily lengthen the arbitration proceedings which, in turn, shall defeat the purpose of alternative dispute resolution.However, since the very award by the Facilitation Council under the MSMED Act was found to be bad for want for jurisdiction, the execution proceeding held to be infructuous thereby rendering the question of maintainability of objections under Section 47 of CPC in arbitral enforcement proceedings purely academic. Case Title: Indian Oil Corporation Ltd. v. Adarsh Nobel Corporation Ltd.Case No: W.P.(C) No. 20210 of 2025Date of Judgment: October 10, 2025Counsel for the Petitioner: Mr. Sunil J. Mathews, AdvocateCounsel for the Opposite Party: Mr. S.S. Padhy, AdvocateCitation: 2025 LiveLaw (Ori) 132Click Here To Read/Download Order

Objections U/S 47 CPC Can't Be Entertained In Enforcement Of Arbitral Awards U/S 36 Of A&C Act: Orissa High Court

Jyoti Prakash Dutta

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