If Court, even suo moto, upon prima facie observing that the making of an arbitral award has been induced or effected by fraud or corruption can grant an unconditional stay on the arbitral award – Union of India and anr. Vs. Rashmi Metaliks Ltd. – Calcutta High Court
Hon’ble High Court of Calcutta held that:
(i) For grant of stay in the case of an arbitral award for payment of money, the Court is required to consider the merits of the Section 34 challenge but at the same time the Court need not undertake a thorough analysis of the arbitral award. However, the said limitation cannot be said to be applicable when the Court is seized of the fact that the making of the award itself may be tainted with fraud and/or corruption.
(ii) It must be noted that the Parliament in its wisdom has deemed it appropriate for this Court to exercise discretion to grant stay on an arbitral award when such an award is either induced or effected by fraud or corruption. The only prerequisite in exercise of such discretion is the Court must be satisfied that a prima facie case is being made out.
(iii) Grants an unconditional stay on the operation of the Arbitral Award.
(iv) Directs the Ministry of Finance, Union of India to immediately constitute a multi-member high-level enquiry committee headed by a Secretary to the Government of India level rank officer to holistically inquire into the shocking conduct of the Railways and its officials (both serving and retired) and the other stakeholders in the aforementioned matter.
(v) Every action and step that a public servant takes, he should do so while keeping in mind the Constitution as his guide and the citizens as his motivation. This Court would not have spoken today if it was not an absolute necessity, but such actions disturb the very fabric of citizen’s trust in public entities, and it is a duty that this Court owes to the citizens to act where needed.
