- 15-Oct-2025
- public international law
While arbitral awards are generally binding and enforceable, the losing party in an arbitration may seek to delay the enforcement of the award by raising certain legal challenges. In India, the enforcement of an arbitral award is governed by the Arbitration and Conciliation Act, 1996. The losing party has several mechanisms at their disposal, like filing an application for setting aside the award, requesting a stay of enforcement, or appealing to a higher court.
Understanding the legal provisions that allow the losing party to delay enforcement, and the countermeasures available to the winning party, is crucial for navigating the arbitration process effectively.
One of the most common methods to delay the enforcement of an arbitral award in India is for the losing party to file an application under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the award.
The losing party can seek to set aside the award on limited grounds, such as:
If an application is filed under Section 34, the court has the discretion to stay the enforcement of the award until the challenge is resolved.
The losing party can request the court to stay enforcement while the challenge under Section 34 is pending.
The application must be filed within 3 months of receiving the award, and the court will usually take some time to review the challenge before deciding whether to stay the enforcement.
If a party believes that the arbitral tribunal’s decision was made without jurisdiction or was biased, they can file a Section 34 petition to set aside the award, potentially delaying enforcement.
Under Section 36 of the Arbitration and Conciliation Act, 1996, once an application to set aside the award is filed under Section 34, the losing party can also request a stay of enforcement.
A court may grant a stay if it finds that the losing party is likely to succeed in having the award set aside, especially on the grounds of public policy or procedural flaws.
If the losing party demonstrates that the tribunal made an error in interpreting the contract, they can request a stay of enforcement while their application under Section 34 is being heard.
While an arbitral award is generally final and binding, it is subject to limited judicial review. The losing party may seek to appeal the award to a higher court, but appeals against arbitral awards are rare and difficult. In India, an appeal may be filed under Section 37 of the Arbitration and Conciliation Act, 1996.
Appeals can be filed to the High Court only on limited grounds, such as:
Filing an appeal to the High Court can delay the enforcement of the award, as the court may suspend enforcement until the appeal is decided. However, the losing party must prove that the appeal has reasonable prospects of success to get a stay.
A party may appeal to the High Court if they believe the arbitral award was made on an error of law or was in contravention of public policy. The appeal process can take several months, delaying enforcement.
A losing party may seek to delay enforcement on the grounds that the award is contrary to public policy. Under Indian law, an award can be set aside if it contravenes public policy, which includes the violation of Indian laws, the violation of basic notions of justice, or if the award is tainted by fraud or corruption.
The losing party may argue that the award violates public policy by being unjust or causing harm to the public good. If the court accepts this argument, it may stay or refuse to enforce the award.
If the losing party believes that the award goes against Indian laws (such as contracts that violate Indian law), they can challenge the award under public policy grounds, which could delay enforcement.
If the losing party can establish that the award was procured through fraud, corruption, or misconduct of the arbitrators, they may be able to delay enforcement.
The losing party must present convincing evidence to prove such allegations.
If it is proven that an arbitrator was bribed or that there was misconduct during the arbitration hearing, the losing party can request the court to stay enforcement or set aside the award.
While a losing party can seek to delay enforcement, it is important to note that:
If a losing party fails to successfully challenge the award, they may ultimately face the enforcement of the award, which could involve asset attachment, garnishment of wages, or seizure of property to satisfy the debt.
Indian courts generally follow a pro-enforcement approach to arbitral awards, given India's commitment to supporting arbitration as a dispute resolution mechanism. However, they will carefully consider valid legal challenges raised by the losing party, especially those based on procedural fairness or public policy violations.
Case: Builder Pvt. Ltd. (Claimant) wins an arbitration award of ₹5,00,000 against Contractor Ltd. (Respondent). Contractor Ltd. files an application under Section 34 to set aside the award, arguing that the tribunal was biased and failed to consider critical evidence.
The enforcement is delayed by several months while the court hears and decides the petition.
Yes, a losing party can delay the enforcement of an arbitral award in India through various legal mechanisms, primarily by challenging the award under Section 34 of the Arbitration and Conciliation Act, 1996, requesting a stay of enforcement under Section 36, or filing an appeal. The process can take several months to over a year, depending on the complexity of the case and the court’s workload. However, Indian courts are generally pro-enforcement of arbitral awards, and delays are only possible if the challenge is based on valid grounds such as jurisdictional issues, public policy violations, or procedural irregularities.
Answer By Law4u Team
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