Allahabad High Court Dismisses NHAI Petition Over Execution Jurisdiction of Arbitration Award

In a significant judgment, the Allahabad High Court, under Justice Neeraj Tiwari, dismissed a petition filed by the National Highways Authority of India (NHAI) challenging the execution jurisdiction of an arbitral award. The petition stemmed from a land acquisition dispute concerning the widening of National Highway No. 2 at Etawah, Uttar Pradesh.

Background of the Case:

The case revolved around the acquisition of land owned by respondents Jagpal Singh and another party. The compensation for the land acquisition had been determined under Section 3G(2) of the National Highways Act, 1956. Dissatisfied with the compensation, NHAI approached arbitration under Section 3G(5) of the Act. An arbitral award was passed on August 5, 2019, following which NHAI’s attempts to seek further legal remedies were unsuccessful.

Subsequently, the respondents sought the execution of the arbitral award before the District Judge in Etawah. NHAI objected, arguing that the jurisdiction for execution lay with Kanpur, where their office was located and where arbitration proceedings had occurred. This objection was rejected by the Additional District Judge, Etawah, prompting the present petition under Article 227 of the Indian Constitution.

Key Arguments and Court Findings:

NHAI’s counsel contended that jurisdiction for execution should align with the location of the arbitration proceedings and relied on precedents to bolster their claim. However, the respondents countered that the property in question was situated in Etawah, granting jurisdiction to the courts there.

Justice Tiwari observed that execution of arbitral awards does not require a transfer decree from the court of arbitration under the Arbitration and Conciliation Act, 1996. Referring to landmark judgments, including Sundaram Finance Limited v. Abdul Samad (2018) and Cheran Properties Limited v. Kasturi and Sons Limited (2018), the court reiterated that an arbitral award could be executed in any jurisdiction where the decree could be enforced.

The court further highlighted Section 36 of the Arbitration Act, which treats arbitral awards as enforceable decrees. It clarified that arbitral proceedings terminate with the award's pronouncement, and subsequent execution is governed by the Code of Civil Procedure, 1908. Justice Tiwari concluded that the property’s location in Etawah vested jurisdiction with the courts there, rendering NHAI’s objections invalid.

Waiver of Objection:

The court also addressed the doctrine of acquiescence under Section 4 of the Arbitration Act, 1996. NHAI’s decision to file an appeal under Section 34 before the District Judge in Etawah constituted a tacit acceptance of that court’s jurisdiction. Thus, NHAI was barred from raising jurisdictional objections at the execution stage.

Significance of the Judgment:

This decision reinforces the Supreme Court’s stance on the territorial flexibility of arbitral award executions. It underscores that jurisdictional challenges must align with legal interpretations to avoid obstructing enforcement mechanisms.

Conclusion:

Dismissing NHAI’s petition, the High Court upheld the respondents' right to execute the award in Etawah. The judgment is likely to have far-reaching implications for arbitration jurisprudence, ensuring a streamlined approach to the execution of arbitral awards across jurisdictions.

Order Summary:

The court declared the petition “lacking merit” and affirmed the legality of the impugned order dated August 5, 2024, which allowed execution proceedings in Etawah. The case marks a decisive moment in balancing legal frameworks with practical realities in arbitration enforcement.