The Supreme Court on Wednesday requested the Law Commission of India to examine the framework governing the enforcement of arbitral awards and suggest reforms to ensure timely execution, Bar and Bench reported in the case Royal Construction Company v. National Projects Construction Corporation.

Source: Bar and Bench

A Bench of Justices Vikram Nath, Sandeep Mehta and Aparesh Kumar Singh observed: "The efficacy of an arbitral regime cannot be measured merely by the expedition with which an award is rendered or the circumscribed grounds upon which it may be challenged. It must equally be assessed by the ability of the successful party to realise the fruits of the award within a reasonable time."

Source: Bar and Bench

LiveLaw reported the same direction, noting the Court asked the Commission to identify practical impediments to timely recovery, examine other jurisdictions, and consider whether domestic and foreign awards require distinct procedures or a common framework with appropriate safeguards.

Source: LiveLaw

A 24-year wait behind the direction

The judgment arose from an international commercial arbitration between Royal Construction Company and National Projects Construction Corporation. The award was rendered on August 10, 2002, in Iraqi Dinars, yet more than 24 years later the parties were still litigating over its enforcement, LiveLaw reported.

LawChakra, reporting the same judgment, said the Registry was directed to send a copy of the judgment to the Chairman of the Law Commission, and that the Court flagged asset identification and disclosure, modes of execution, and repetitive or dilatory objections for scrutiny.

Source: LawChakra

Section 36 of the Arbitration and Conciliation Act, 1996 provides for enforcement of awards in the same manner as court decrees, relying on the ordinary execution machinery under the Code of Civil Procedure, 1908 — a route the Court said can turn into another protracted round of litigation.