Isabella Mariam

The High Court of Delhi, Single Bench of Justice Jasmeet Singh, dismissed the objections raised by MMTC Ltd. against the enforcement of an arbitral award, citing that the Arbitration and Conciliation Act, 1996 does not permit challenges under Section 47 of the CPC at the execution stage. The Court held that the award, which had already attained finality through the Hon’ble Supreme Court, must be executed without further delay.

The case arises from a long-term agreement (LTA) dated 7 March 2007, executed between Anglo-American Metallurgical Coal Pvt. Ltd. (Decree Holder) and MMTC Ltd. (Judgment Debtor), for the sale and purchase of coking coal. The agreement covered three delivery periods starting from 1 July 2004 to 30 June 2007. MMTC exercised the option to extend the agreement for a Fourth and Fifth Delivery Period.

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During the Fifth Delivery Period, disputes arose regarding MMTC’s failure to lift the agreed quantity of coal. The arbitral tribunal awarded damages of USD 78,720,414.92 and interest to the decree holder on 12 May 2014. The award was challenged under Section 34 of the Arbitration Act, but the petition was dismissed. The Division Bench initially set aside the award, but the Hon’ble Supreme Court reinstated it in Anglo American Metallurgical Coal Pty. Ltd. v. MMTC Ltd., (2021) 3 SCC 308.

MMTC raised objections under Section 47 CPC, alleging fraud and collusion by its own officers and the decree holder in fixing an inflated price of USD 300 per metric tonne for the Fifth Delivery Period, despite a crash in market prices after the global financial crisis triggered by Lehman Brothers' collapse. MMTC argued that the agreement and subsequent award were tainted by fraud, rendering the award non-executable.

Justice Jasmeet Singh held that the Arbitration and Conciliation Act, 1996 is a complete code, and any challenge to an award must be made strictly under the provisions of the Act.

The Court recorded: "Section 36 of the Arbitration and Conciliation Act, 1996 creates a statutory fiction for the limited purpose of enforcement of a domestic award as a decree of the Court, even though it is otherwise an award in an arbitral proceeding."

The Court further observed that the provisions of the CPC apply only to the extent of enforcement mechanisms, such as attachment, sale, and arrest, and cannot be used to challenge the validity of the award. It relied upon the decision in Paramjeet Singh Patheja v. ICDS Ltd., (2006) 13 SCC 322, which held that an award is not a decree but is enforceable as if it were one.

On the allegation of fraud, the Court stated: "The acts of the officers of the Corporation bind the Corporation. Corporation is a separate legal entity and only functions through its officers."

Regarding the pending CBI inquiry, the Court noted: "As of today, CBI has only registered a Preliminary Enquiry and there is no finding of fraud, cheating, or collusion against the then officers of the Judgment Debtor with the officers of the Decree Holder."

On the maintainability of the application under Order XXI Rule 29 CPC for staying the execution, the Court held that such provisions are not applicable in execution of arbitral awards under the Arbitration and Conciliation Act.

For the foregoing reasons, the objections filed by the judgment debtor are dismissed. The application under Order XXI Rule 29 of CPC is also dismissed. Consequently, the present petition is allowed, and the Award dated 12th May, 2014 passed by the learned Arbitral Tribunal is directed to be enforced.

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The judgment debtor has already deposited the awarded amount by virtue of orders dated 28.09.2021, 06.05.2022, and 07.07.2022 passed by this Court.

It is directed that the decree holder shall be entitled to withdraw the said amount along with up-to-date accrued interest after the expiry of two weeks from today.

The petition is disposed of along with pending applications, if any.

Advocates Representing the Parties

For the Decree Holder: Mr. Jayant K. Mehta, Senior Advocate with Mr. Sumeet Kachwaha, Mr. Samar Kachwaha, Ms. Ankit K, Ms. Akanksha Mohan, and Ms. Ananya Saluja, Advocates.

For the Judgment Debtor: Mr. Chetan Sharma, Additional Solicitor General with Mr. Sanat Kumar, Senior Advocate, Mr. Akhil Sachar, Ms. Sunanda Tulsyan, Mr. R.V. Prabhat, Mr. Amit Gupta, Ms. Kashish Maheshwari, Ms. Shweta Pattnaik, Mr. Vinay Yadav, Mr. Saurabh Tripathi, Mr. Vikramaditya Singh, and Mr. Shubham Sharma, Advocates.

Case Title: Anglo-American Metallurgical Coal Pvt. Ltd. v. MMTC Ltd.

Neutral Citation: 2025: DHC:3495

Case Number: OMP (ENF.) (COMM.) 19/2018 & E.X.APPL.(OS) 1806/2024

Bench: Justice Jasmeet Singh

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