CASE-LAW COMPILATION Supporting Extension of Stay of the Arbitral Award under Section 36(3)

 

CASE-LAW COMPILATION

Supporting Extension of Stay of the Arbitral Award under Section 36(3) A&C Act 1996

 

1. Hindustan Construction Company Ltd. v. Union of India (2020) 17 SCC 324

 

Proposition:

The Supreme Court held that execution of an arbitral award can be stayed when a challenge under Section 34 is pending, and courts have wide discretion under Section 36(3) to protect the award-debtor from coercive action.

 

Relevance:

Supports the proposition that continuance/extension of the stay is justified when adjudication under Section 34 is pending.

 

2. Pam Developments Pvt. Ltd. v. State of West Bengal (2019) 8 SCC 112

 

Proposition:

The Supreme Court clarified that Section 36(3) empowers courts to stay the award in entirety, including monetary awards, and the CPC’s rigours do not automatically apply.

 

Relevance:

Confirms that the Court has sufficient discretion to extend an existing stay even for money awards, without mandatory deposit conditions in all cases.

 

3. Board of Control for Cricket in India v. Kochi Cricket Pvt. Ltd. (2018) 6 SCC 287

 

Proposition:

The amended Section 36 (post-2015) is purely procedural, and courts can grant or continue stay pending Section 34 proceedings.

 

Relevance:

Establishes that extension of stay is permissible as long as the Section 34 challenge remains pending.

 

4. National Highways Authority of India v. M. Hakeem (2021) 9 SCC 1

 

Proposition:

Supreme Court reaffirmed that courts have supervisory jurisdiction over arbitral awards to a limited extent, but may intervene to prevent prejudice during the pendency of Section 34 proceedings.

 

Relevance:

Supports the argument that allowing execution during pendency of Section 34 proceedings would defeat the challenge and cause grave prejudice.

 

5. IFFCO v. Bhadra Products (2018) 2 SCC 534

 

Proposition:

The Court emphasised that Section 34 petitions raise serious questions of legality, which must be adjudicated before the award becomes enforceable.

Relevance:

Reinforces that stay should continue if substantial issues under Section 34 remain undecided.

 

6. NHAI v. Gwalior-Jhansi Expressway Ltd. (2018) 15 SCC 719

 

Proposition:

The Supreme Court upheld continuation of interim relief in arbitration-related proceedings when the main matter is pending.

 

Relevance:

Directly supports extension of interim stay when the Section 34 petition has not been disposed of.

 

7. SREI Infrastructure Finance Ltd. v. Candor Gurgaon Two Developers 2018 SCC OnLine Del 10109 (Delhi HC)

 

Proposition:

The Delhi High Court held that stay already granted on an arbitral award must be extended if the Section 34 challenge has not been heard or disposed of.

 

Relevance:

Highly relevant — the judgment directly deals with extension of stay of an arbitral award.

 

8. Union of India v. NRG Engineering Pvt. Ltd. (2019) SCC OnLine Del 11671)

 

Proposition:

The court held that execution of an award cannot proceed during pendency of a Section 34 petition when the stay was earlier granted and compliance was made.

 

Relevance:

In line with your facts — you complied with the Court’s directions; so the stay must be continued.

 

9. Bharat Broadband Network Ltd. v. United Telecoms Ltd. (2019) 5 SCC 755

 

Proposition:

Courts must intervene to prevent injustice and irreparable harm during pendency of the Section 34 challenge.

 

Relevance:

Demonstrates that irreparable prejudice is a valid ground for extension of stay.

 

10. Nivi Trading Ltd. v. Omni Excel Exports Pvt. Ltd. 2020 SCC OnLine Bom 402

 

Proposition:

Bombay High Court held that stay of award must be extended where Section 34 petition is pending and balance of convenience lies with the award-debtor.

 

Relevance:

Supports the argument of balance of convenience and continuation of stay.

 

 

SUMMARY OF LEGAL PRINCIPLES;

 

1. Courts have broad discretionary power under Section 36(3) to grant or continue stay of arbitral awards.
2. Stay must continue if the Section 34 petition is pending and raises substantial issues.
3. Execution of the award, if allowed before adjudication of Section 34, would cause irreparable harm and render the challenge infructuous.
4. Compliance with earlier orders (as you have done) strengthens the prayer for continuation of stay.
5. Courts must prevent miscarriage of justice and maintain status quo until final adjudication.