2020 (11) TMI 983 - SC - Indian Laws

Arbitral Award - whether the award can be allowed to be executed without hearing the application under section 34? - HELD THAT - The pending decision in the present special leave petition it would be highly iniquitous to permit the petitioner - Devas Multimedia Private Limited to obtain the fruits of the Award by execution under any law or convention after obtaining a stay from this Court restraining the respondent - Antrix Corporation Limited from pursuing its objections under section 34 of the Act against the Award. The application filed by the respondent under Section 34 of the Act stands transferred to the Delhi High Court - The petitioner - Devas Multimedia Private Limited will be entitled to seek a deposit of the sum awarded or a part thereof before the Delhi High Court. Application allowed.

Summary

Issues:
1. Jurisdictional issue - Whether the application under section 34 of the Arbitration and Conciliation Act should be heard by the court at Delhi or the court at Bangalore.

Analysis:
The case involved a dispute between Antrix Corporation Limited and Devas Multimedia Private Limited regarding an award of $562.5 million with a total liability of around $1.2 billion. Antrix Corporation Limited filed an application under section 9 of the Arbitration and Conciliation Act before the City Civil Court, Bangalore, while Devas Multimedia Private Limited filed a similar application before the Delhi High Court. A Single Judge of the Delhi High Court initially ruled in favor of Devas Multimedia Private Limited, but the Division Bench overturned this decision, allowing the proceedings to continue in Bangalore. The Supreme Court intervened by staying the proceedings under sections 9 and 34 of the Act in Bangalore. The key issue before the Supreme Court was to determine which court - Delhi or Bangalore - should hear the application under section 34 of the Act.

The Supreme Court emphasized the importance of hearing objections under section 34 of the Act before allowing the execution of an award. It noted that the US Court had confirmed the award in favor of Devas Multimedia Private Limited but stayed the execution proceedings for settlement discussions. Despite suggesting mediation to the parties, the Attorney General for India denied the possibility due to alleged fraud in the transactions leading to the disputes. The Court, considering the circumstances, restrained Devas Multimedia Private Limited from executing the award until the Delhi High Court decided on the application under section 34. The application under section 34 was transferred to the Delhi High Court for a decision on its merits, and the final award was to be kept in abeyance until then. Devas Multimedia Private Limited was allowed to seek a deposit of the awarded sum or a part thereof before the Delhi High Court. The interlocutory application for direction was allowed, and the main special leave petition was listed for final disposal on a specified date.