New Delhi: More than 43,000 petitions seeking execution of arbitration awards are pending in various courts of Uttar Pradesh’s subordinate judiciary, an affidavit filed before the Supreme Court Thursday has shown.
Prepared by the Allahabad High Court (HC), the affidavit provides a district- and year-wise pendency of arbitration execution cases in UP as of 31 March 2022. The total number of execution petitions — under the old as well as the amended arbitration law — pending in regular courts stands at 43,521. Another 13,367 are pending in special commercial courts.
Among the oldest pending petitions is one filed in Rae Bareli in 1981. While 2,513 are pending since 2015, 721 such pleas are a decade old. Lucknow tops the list of districts with the highest number of pending execution petitions.
The Arbitration and Conciliation Act, first notified in 1940 and later amended in 1996, entails an alternative dispute redressal mechanism for speedy disposal of commercial disputes. Another objective of this legal framework is to unclog the already overburdened judicial system.
But in certain conditions, the law allows for judicial interference, the execution petition being one of them. Execution petitions are filed when the party against whom the award (final decision in an arbitration) is passed does not honour the arbitral tribunal’s decree. In such a scenario, the party that wins the case approaches the district court concerned for execution of the arbitration award.
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SC’s concern
The apex court Thursday expressed concern over the affidavit, which was submitted in response to its 2 April direction issued over an 83-year-old Lucknow resident’s arbitration execution petition, which is pending in a trial court for 20 years.
“What is the purpose of arbitration (law)? Arbitration is a substitute to suit (civil cases). Now with arbitration also, the same delay. Where will people go?” the bench of Justices M.R. Shah and B.V. Nagarathna remarked.
Justices Shah and Nagarathna acknowledged that the arbitration law had failed to achieve its objective of serving as an alternative dispute resolution mechanism. The subsequent legislation of the Commercial Courts Act, 2015 — put in place to facilitate speedy disposal of commercial disputes — also did not produce the desired results, they noted.
The bench requested the chief justice of the Allahabad HC to constitute a committee of judges to devise a roadmap to tackle the arrears in arbitration cases. It will next hear the matter on 18 May.
Advocate Arti U. Mishra, who argued the 83-year-old Lucknow resident’s case, told ThePrint that the SC has, in her client’s matter, issued instructions to the trial court in Lucknow to expedite the hearing and decide it within four weeks.
“However, the court is now looking at the larger question of whether the arbitration law has been able to actually speeden up commercial disputes, or have they also gotten trapped as criminal cases and ordinary civil matters,” Mishra added.
Lucknow has maximum pending pleas
The affidavit was sought by the SC on 2 April, when it took cognisance of the 83-year-old Lucknow resident’s matter. The bench had asked the Allahabad HC’s registrar general to address certain queries, one of which was about how many arbitration execution petitions are pending in UP.
Year-wise break-up of the data shows that majority pending execution petitions were filed from 2015 onwards.
Lucknow has the maximum number of pending execution petitions at 5,140, followed by Agra (4,272), and Gautam Budh Nagar (3,459). The oldest case pending in Agra was filed almost 30 years ago, in 1992.
The bench had also asked the HC to provide information on how many applications under sections 34 and 37 of the Arbitration and Conciliation Act, 1996, are pending in that state.
Applications are filed under section 34 of the Act when one of the two parties wants to set aside the arbitral award.
In UP, 11,645 such petitions are pending, of which 10,436 are before regular courts and 1,209 before commercial courts. Most of them were filed in or after 2015.
Data also indicates that 591 decade-old cases under section 34 still have not been decided. The maximum number of these are in Ghaziabad district (1,770).
As for applications under section 37 — which is invoked when any of the litigating parties wants to appeal against the arbitrator’s order — there are 253 pending in the state.
(Edited by Gitanjali Das)
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