Delay in Execution of an award under Arbitration Act 1996 (Failure of Arbitration)

The essence of Arbitration and Concilliation Act of 1996 was to have an Alternative Dispute Resolution(ADR) which is faster and acceptable to all.The act is based on UNCITRAL model and was enacted to get a uniform or common code for resolving international commercial disputes. Many countries including India has adopted this code into their domestic Arbitration. Its almost 14 years from the passing of this act in 1996 and since then different views, judgments etc have evolved in the process,which are being addressed and in near future there would be amendments to this act in order make it successful being an atlternative Dispute Resolution mode.

REASON FOR DELAY IN EXECUTION OF AN AWARD.

There might be number of reasons responsible for delay in the process of execution. For instance as of now if an Application under section 34 is filed by the judgment debtor, it is an automatic stay of operation under section 36. The judgment debtor in almost all the cases files section 34 and that results in stay of the execution proceeding of the award. In some instance filing of section 34 is dragged on for many years without any substancial substance in the application and due to this at times the interest is more than the sum awarded by the Arbitrator. Normally this kind of situation can be seen in cases where goverment is the judgment Debtor. This act tends to frustrate the concept or essence of Arbitration and in result its an harrasment to the claimiant and in some matters the claimiant does not get his legal dues during his life time. Such tactis is used deliberately for harrasing and to linger the matter for years and it tends to wastage of public money in form of interest. Courts should follow the principle as in Appeal matters in DRAT for depositing certain percentage or may be the princple amount in toto in order to lessen the burden of interest.

In some cases where section 34 has been clearly filed after the prescribed time period under section 34 which is 3 months and 30 days. The goverment in these kind of cases has dragged it for many years despite knowing the fact that their Application is barred by limitation and for sure it would be dismissed in limine. Being aware of the fate of their application the goverment goes on an Appeal to high court and after that files an SLP before the Apex court where it is finally dismissed. such a practise by the goverment has to be discouraged which results in wastage of public money,the valuable time of the court and harassment faced by the Claimaint. Therefore there has been a proposal to amend this section by giving power to the courts to hear an application of stay which can be granted after filing of section 34 and if  the same is not granted then execution can be proceeded with out any hinderances.

There has been instances where the Judgment Debtor(generally goverment) has used other form of dialatric tactis to dealy the process of execution that is to file section 34 Application in the wrong forum. Being aware of the time constraint to file objection to an award under section 34 and being aware of the limited applicability of the limitation act under this provision, the judgment debtor files the application knowinglyin the wrong forum which again result in dealy of execution of the award.There has been instances where the judgment debtor wasted almost a decade  and ultimately filing the application under section 34 in the correct forum. Such an act totally frustarates the essence of arbitration as these judgment debtor are aware that section 14 of limitation act would come in handy. The legislature and the courts should take stern steps to curb such kind of practise. For instance after the verdict of the Court of first instance(being a wrong forum) where the filing was done, the judgment debtor should file it in that court rather than going for Appeal. For example in a case Where the judgment debtor files his application in court -A and claimaint files execution in court-B. Court B passes an order saying that it has jurisdiction to hear the execution case and proceeds and in mean while court-A dismiss the application for want of jurisdiction and also directs the judgment debtor to file it in court-B as it is the correct forum. Despite being aware by both court orders the Judgement debtor prefers an Appeal which is later dismissed with the same direction and then files an SLP which is ultimately dismissed with a direction to file it in court-B. In such cases the judgment Debtor should not get the benifit of section 14 of limitation act as time and again they were aware that court-B is the correct forum.That in these kind of cases the benefit of section 14 of limitation Act should not be allowed as the essence of section 14 of limitation Act is not justified which is filing an Application/Appeal etc in the wrong forum with due dilligence and bonafidel