ArbitrationDelhi courts
Execution of an Arbitral Award under Section 36
Manuja Law Partners enforces domestic arbitral awards for businesses in Delhi and the NCR, and resists or seeks conditional stays when an award is challenged under Section 34 of the Arbitration and Conciliation Act.
In short
A domestic arbitral award can be enforced under Section 36 of the Arbitration and Conciliation Act, 1996 in the same way as a decree of a civil court, once the three-month period for challenging it under Section 34 has expired, or earlier if a challenge has been filed but no stay granted. Since the 2015 amendment, filing a Section 34 petition does not by itself stop enforcement: the losing party must apply separately for a stay, and for a money award the court will ordinarily stay it only on a deposit or security for the amount, applying the Code of Civil Procedure rules for stays of money decrees. The award-holder files an execution petition before the court that would have jurisdiction over the debtor's assets, and can use attachment, garnishee orders and asset disclosure to recover.
From award to recovery
An arbitral award is final and binding on the parties under Section 35 of the Arbitration and Conciliation Act, but it does not pay itself. If the losing party does not comply, the award-holder must go to court and enforce it under Section 36, which treats the award as if it were a decree of the court. The procedure for execution then follows Order XXI of the Code of Civil Procedure.
This page deals with awards in arbitrations seated in India. Foreign awards are enforced under Part II of the Act after the court is satisfied that they meet its conditions; our note on enforcing a foreign judgment or award explains that process.
The Section 34 window and the stay
The losing party has three months from receiving the award, extendable by thirty days for sufficient cause, to apply to set it aside under Section 34. Before 2015, filing that application automatically suspended the award. The 2015 amendment changed this, and the Supreme Court confirmed in BCCI v. Kochi Cricket (2018) and Hindustan Construction Company v. Union of India (2019) that there is no automatic stay.
Under the present Section 36:
- the award-debtor must make a separate application for a stay;
- the court may grant it on conditions, recording its reasons;
- for an award for payment of money, the court must have due regard to the provisions of the Code of Civil Procedure on staying money decrees, which in practice means a deposit of the awarded amount or security for it;
- under the proviso added in 2021, the court must grant an unconditional stay if it is satisfied prima facie that the arbitration agreement, the contract or the making of the award was induced or effected by fraud or corruption.
For an award-holder, the stay application is the most important hearing after the award. A well-argued opposition usually results in a deposit that can later be withdrawn, often on furnishing security, which is frequently the quickest route to money.
Filing the execution petition
The award-holder files an execution petition with a certified copy of the award, before the court where the debtor’s assets are. Sundaram Finance v. Abdul Samad (2018) removed the need to obtain a transfer of the decree first. In Delhi, which court hears the petition depends on the value of the award, on whether the underlying dispute was commercial and on where the assets are, and we confirm the forum before filing so that the petition is not returned. Where assets are spread across Delhi and the NCR, separate petitions can run in parallel.
Finding and attaching assets
The tools under Order XXI include:
- Asset disclosure. An affidavit from the debtor listing its assets, following the directions in Rahul S. Shah v. Jinendra Kumar Gandhi (2021).
- Attachment of bank accounts. Orders to banks to freeze and remit balances.
- Garnishee orders. Directions to the debtor’s customers or other debtors to pay the award-holder instead.
- Attachment and sale of property. Immovable property, shares, receivables and movable assets.
- Examination of officers. Questioning the debtor’s officers about its assets and transfers.
Where the debtor has moved assets after the award, the court can be asked to set the transfer aside or to direct the officers responsible to explain it.
For the award-debtor
A company that has lost an award and has genuine grounds under Section 34 should apply for a stay at once, with an offer of security that the court can accept. Ignoring the award, or opposing execution without a stay, risks attachment of bank accounts and receivables. The grounds for setting aside are narrow, and our arbitration practice advises on whether a challenge is worth bringing at all.
Insolvency and other routes
If the award-debtor is a company with an unpaid award above the insolvency threshold, an application under the Insolvency and Bankruptcy Code may be an alternative to execution; our NCLT team advises on that choice. For awards arising from supply and service contracts, our commercial disputes practice handles related recovery proceedings.
Speaking to us
Send the award, the date you received it, any Section 34 petition and stay application, and what you know about the debtor’s bank accounts, customers and property. We tell you whether to enforce now, what security to press for, and where to file. Call or WhatsApp 99115 44811, or email manujalawyers@gmail.com.
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Why instruct this chamber
Acting for you in Delhi
Enforcement as its own discipline
Winning an award is half the work. We plan enforcement from the day the award is made: where the assets are, what security to ask for, and how to answer a stay application.
Both sides of the stay
We act for award-holders resisting unconditional stays and for award-debtors seeking stays on fair terms, so our advice on deposits reflects how courts actually decide them.
Asset tracing
We use asset-disclosure affidavits, bank and company records and garnishee orders to find what the debtor owns, rather than waiting for voluntary payment.
Honest timelines
Execution can be quick or slow depending on the debtor's assets and conduct. No lawyer can promise full recovery by a date, and we give realistic ranges.
Common questions
Arbitration questions — Delhi
When does a domestic arbitral award become enforceable?
When the time for applying to set it aside under Section 34 has expired, which is three months from receipt of the award, extendable by up to thirty days for sufficient cause. If a Section 34 petition is filed, the award can still be enforced unless the court grants a stay on a separate application under Section 36(2).
Does a Section 34 challenge filed before 2015 still stop enforcement automatically?
No. In BCCI v. Kochi Cricket (2018) the Supreme Court held that the amended Section 36 applies to Section 34 petitions pending on 23 October 2015, and in Hindustan Construction Company v. Union of India (2019) it struck down Section 87, which would have restored the automatic stay.
Can an award-debtor get an unconditional stay of a money award?
Only in narrow cases. The proviso added to Section 36(3) in 2021 requires an unconditional stay where the court is satisfied prima facie that the arbitration agreement, the contract or the making of the award was induced or effected by fraud or corruption. Otherwise, a deposit or security is the norm.
Where should an arbitral award be executed?
Wherever the debtor's assets are. In Sundaram Finance v. Abdul Samad (2018) the Supreme Court held that an award can be filed for execution in any court in India where it can be enforced, without first obtaining a transfer of the decree from the court with jurisdiction over the arbitration.
Is there a time limit for executing a domestic arbitral award?
Yes; execution of a decree is governed by Article 136 of the Limitation Act, which allows twelve years from when the decree becomes enforceable, and courts apply this to domestic awards from when the award becomes enforceable. Delay makes assets harder to find, so an award-holder should not wait.
Does a government department have to deposit money to stay an award?
Generally yes. The Supreme Court in Pam Developers v. State of West Bengal (2024) held that a government is not exempt from the deposit or security that a court ordinarily requires before staying a money award, and that the Code of Civil Procedure gives it no special treatment on that question.
Can the award-debtor be asked to disclose its assets?
Yes. In Rahul S. Shah v. Jinendra Kumar Gandhi (2021) the Supreme Court directed executing courts to require judgment-debtors to file affidavits disclosing their assets and to dispose of execution petitions within six months. Delhi courts apply these directions in award execution.
Does the award carry interest until it is paid?
Yes. Under Section 31(7)(b), a sum directed to be paid by an award carries interest from the date of the award until payment, at the rate the award specifies or, if it is silent, at two percent above the current rate of interest prevailing on the date of the award.
Can an award be executed against a company's directors personally?
Ordinarily not. An award against a company is enforced against the company's assets. Directors become liable only if they were parties to the arbitration, gave personal undertakings, or the court lifts the corporate veil on proof of fraud, which is rare.
What if the award-debtor is in insolvency?
Execution stops. Once a company is admitted into insolvency, the moratorium under Section 14 of the Insolvency and Bankruptcy Code bars execution of awards against it, and the award-holder files its claim with the resolution professional instead.
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