In absence of application under Sec. 36(2) of Arbitration Act, there cannot be automatic stay of the operation of arbitral award and execution application can be filed | Remedy available under Section 36 and not invoking extraordinary jurisdiction of High Court under Article 226 and 227 – Rajkot Municipal Corporation Vs. Jay Hind Project Ltd. – Gujarat High Court
Hon’ble High Court of Gujarat holds that:
(i) Sub-section (2) of Section 36 of the Arbitration and Conciliation Act, 1996 provides that where an application to set aside the arbitral award has been filed, filing of such an application shall not by itself render that award unenforceable, unless the Court grants an order of stay of the operation of the said arbitral award in accordance with the provisions of sub-section (3), on a separate application made for that purpose. Sub-section (2) of Section 36 envisages filing of separate application for stay of the operation of the arbitral award.
(ii) Sub-section (3) provides that once an application is filed for stay of the operation of the arbitral award, the Court may, subject to such conditions as it may deem fit, grant stay of the operation of such award for reasons to be recorded in writing. Discretion, has been left to the Court to decide the application for stay of the operation of the arbitral award subject to conditions as it may deem fit.
(iii) In the present case, as stated herein above, there was no such application and in absence of any application, there cannot be automatic stay of the operation of the award dated 02.12.2014. In absence of any stay granted, the respondent was at liberty to file an execution application. If at all the petitioner Corporation was desirous of seeking stay of the execution and enforcement of the award, it ought to have filed an application as envisaged under sub-section (2) of Section 36 of the Act of 1996.
