𝐁𝐀𝐂𝐊𝐆𝐑𝐎𝐔𝐍𝐃 𝐎𝐅 𝐓𝐇𝐄 𝐃𝐈𝐒𝐏𝐔𝐓𝐄

The Supreme Court of India, in M/s Royal Construction Company Pvt. Ltd. v. M/s National Projects Construction Corporation, considered the limits of its jurisdiction after answering a substantial question of law referred to it under Article 134-A read with Article 133(1)(a) of the Constitution. The principal issue was whether the Supreme Court could be approached again, under the guise of seeking clarification, to address factual disputes arising in the execution of an arbitral award.

The dispute arose from an international arbitration in which an award dated 10 August 2002 was made in favour of Royal Construction Company, the award-holder. The amounts under the award were expressed in Iraqi Dinars. National Projects Construction Corporation was the award-debtor.

The award had been challenged before Indian courts. By its judgment dated 24 February 2015, the Supreme Court restored the directions contained in the arbitral award. In doing so, it reiterated that judicial interference with an arbitral award is limited to the statutory grounds recognised under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996.

During execution proceedings, the Delhi High Court, by an order dated 26 July 2017, permitted the award-debtor to discharge its liability in Indian currency by applying the exchange rate prevailing on 26 September 1982.

The award-holder challenged this order before the Division Bench. On 17 December 2019, the Division Bench set aside the Single Judge's order and certified a substantial question of law under Articles 134-A and 133(1)(a) of the Constitution for consideration by the Supreme Court.

By judgment dated 10 October 2023, the Supreme Court held that there was no occasion to determine or fix a date for conversion of the amount into Indian rupees.

Execution proceedings nevertheless continued before the Delhi High Court. In those proceedings, the award-debtor contended that the principal amount had already been paid in Indian rupees in 2009. By an interim order dated 16 February 2026, the Division Bench permitted the parties to seek clarification from the Supreme Court regarding the alleged payment.

𝐒𝐂𝐎𝐏𝐄 𝐎𝐅 𝐓𝐇𝐄 𝐄𝐀𝐑𝐋𝐈𝐄𝐑 𝐏𝐑𝐎𝐂𝐄𝐄𝐃𝐈𝐍𝐆𝐒 𝐁𝐄𝐅𝐎𝐑𝐄 𝐓𝐇𝐄 𝐒𝐔𝐏𝐑𝐄𝐌𝐄 𝐂𝐎𝐔𝐑𝐓

The Supreme Court examined the nature and limits of the question that had been referred to it in the earlier appeal.

It found that the earlier proceedings were confined to answering the substantial question of law certified by the Delhi High Court. The Court had not been asked to investigate the factual position concerning deposits made by the award-debtor, the amounts allegedly withdrawn by the award-holder, or the accounting of payments during execution.

The Court clarified that its earlier decision on the currency-conversion issue did not amount to an adjudication of those separate factual matters.

The Supreme Court therefore held that the Division Bench of the Delhi High Court had misunderstood the scope of the earlier adjudication.

𝐂𝐋𝐀𝐑𝐈𝐅𝐈𝐂𝐀𝐓𝐈𝐎𝐍 𝐏𝐑𝐎𝐂𝐄𝐄𝐃𝐈𝐍𝐆𝐒 𝐂𝐀𝐍𝐍𝐎𝐓 𝐁𝐄𝐂𝐎𝐌𝐄 𝐀 𝐒𝐔𝐁𝐒𝐓𝐈𝐓𝐔𝐓𝐄 𝐅𝐎𝐑 𝐄𝐗𝐄𝐂𝐔𝐓𝐈𝐎𝐍 𝐀𝐃𝐉𝐔𝐃𝐈𝐂𝐀𝐓𝐈𝐎𝐍

The Court emphasised that a clarification application cannot be used to confer upon the Supreme Court a continuing supervisory role over execution proceedings pending before another court.

Nor can such an application be used to obtain decisions on every factual or legal question that may arise while an arbitral award is being enforced.

Questions concerning whether payments were made, whether deposits were withdrawn, and whether any amount is liable to be adjusted or set off are matters for the court dealing with execution. Any challenge to an order passed by that court must be pursued before the appropriate appellate forum in accordance with law.

The Court further explained that once the substantial question of law referred to it had been answered, the scope of that appellate proceeding stood exhausted. A party cannot use a later clarification request to introduce questions that are separate from and unconnected with the issue previously decided.

𝐒𝐔𝐏𝐑𝐄𝐌𝐄 𝐂𝐎𝐔𝐑𝐓'𝐒 𝐎𝐁𝐒𝐄𝐑𝐕𝐀𝐓𝐈𝐎𝐍𝐒 𝐎𝐍 𝐃𝐄𝐋𝐀𝐘 𝐈𝐍 𝐄𝐍𝐅𝐎𝐑𝐂𝐄𝐌𝐄𝐍𝐓 𝐎𝐅 𝐀𝐑𝐁𝐈𝐓𝐑𝐀𝐋 𝐀𝐖𝐀𝐑𝐃𝐒

The Supreme Court also expressed concern about the prolonged enforcement proceedings. The arbitration had been invoked when the Arbitration Act, 1940 was in force, and the award itself had been made in 2002. Despite the passage of more than twenty-four years, the parties were still litigating over its enforcement.

The Court observed that the effectiveness of arbitration cannot be assessed only by considering how quickly an award is made or how narrowly the award can be challenged. It is equally important that the successful party should be able to obtain the actual benefit of the award within a reasonable period.

The Court noted that Section 36 of the Arbitration and Conciliation Act, 1996 provides for enforcement of an arbitral award in the same manner as a decree of a court, thereby relying on the ordinary execution procedure under the Code of Civil Procedure, 1908.

It identified several matters requiring closer examination, including disclosure of the award-debtor's assets, coordination between different methods of execution, repeated or delaying objections, and the time required to complete execution.

𝐑𝐄𝐐𝐔𝐄𝐒𝐓 𝐓𝐎 𝐓𝐇𝐄 𝐋𝐀𝐖 𝐂𝐎𝐌𝐌𝐈𝐒𝐒𝐈𝐎𝐍 𝐎𝐅 𝐈𝐍𝐃𝐈𝐀

In view of the difficulties highlighted by the case, the Supreme Court requested the Law Commission of India to undertake a focused study of the statutory and procedural framework governing enforcement and execution of arbitral awards.

The proposed study may examine practical obstacles to timely recovery, consider the experience of other jurisdictions, and assess whether domestic and foreign arbitral awards should be governed by separate enforcement procedures or by a common framework containing appropriate safeguards.

The Commission may make legislative or procedural recommendations that it considers necessary to improve the execution regime.

The Registry was directed to forward a copy of the judgment to the Chairman of the Law Commission of India.

𝐌𝐈𝐒𝐂𝐄𝐋𝐋𝐀𝐍𝐄𝐎𝐔𝐒 𝐀𝐏𝐏𝐋𝐈𝐂𝐀𝐓𝐈𝐎𝐍 𝐒𝐄𝐄𝐊𝐈𝐍𝐆 𝐌𝐎𝐃𝐈𝐅𝐈𝐂𝐀𝐓𝐈𝐎𝐍 𝐎𝐅 𝐓𝐇𝐄 𝐄𝐀𝐑𝐋𝐈𝐄𝐑 𝐉𝐔𝐃𝐆𝐌𝐄𝐍𝐓

The Supreme Court also considered a miscellaneous application filed in the previously disposed-of Civil Appeal No. 1991 of 2019.

The applicant sought modification of the judgment dated 10 October 2023, contending that the amounts deposited in Indian rupees pursuant to the High Court's order had already been withdrawn by the award-holder in 2009.

The Court rejected the application. It reiterated that the earlier appeal had been confined to the certified substantial question of law and that the Court had not adjudicated factual questions concerning the deposits or their subsequent withdrawal.

Importantly, the Court clarified that the applicant remained free to raise all objections and contentions relating to adjustment or set-off of the amounts before the executing court, in accordance with law.

The Supreme Court did not itself decide whether the alleged payment or withdrawal had taken place or whether any adjustment was due.

𝐑𝐄𝐋𝐄𝐕𝐀𝐍𝐓 𝐄𝐗𝐓𝐑𝐀𝐂𝐓 𝐅𝐑𝐎𝐌 𝐓𝐇𝐄 𝐉𝐔𝐃𝐆𝐌𝐄𝐍𝐓

The following passage from paragraph 9 of the judgment directly states the limit on the Supreme Court's role in execution-related disputes:

“This Court cannot be called upon, in the guise of seeking clarification, to assume a supervisory role over the continuing execution proceedings or to adjudicate upon every issue that may arise therein. It is for the competent court seized of the execution proceedings, and the appellate court exercising jurisdiction over its orders, to determine the questions arising in accordance with law.”

— M/s Royal Construction Company Pvt. Ltd. v. M/s National Projects Construction Corporation, Supreme Court of India, judgment dated 28 October 2026, paragraph 9.

This extract establishes that execution-related disputes must be decided by the court having jurisdiction over the execution proceedings and, where appropriate, by the appellate court. A clarification application cannot be used to transfer those matters to the Supreme Court after the specific legal question referred to it has already been decided.

𝐃𝐄𝐂𝐈𝐒𝐈𝐎𝐍

The Supreme Court disposed of the civil appeal challenging the Delhi High Court's interim order and held that the earlier appellate proceedings could not be enlarged through a clarification request to include factual disputes concerning payment and withdrawal of amounts.

It dismissed the miscellaneous application seeking modification of the 2023 judgment. At the same time, it preserved the applicant's liberty to raise objections concerning adjustment or set-off before the executing court in accordance with law.

The judgment reiterates the importance of respecting the limits of the question referred to an appellate court and confirms that disputes arising during execution of an arbitral award must ordinarily be resolved within the execution and appellate framework. It also draws attention to the need for an effective enforcement mechanism so that parties who obtain arbitral awards can realise their benefits without undue delay.

𝐂𝐀𝐒𝐄 𝐃𝐄𝐓𝐀𝐈𝐋𝐒

Case: M/s Royal Construction Company Pvt. Ltd. v. M/s National Projects Construction Corporation

Court: Supreme Court of India

Date of Decision: 28 October 2026

Bench: Justice Vikram Nath, Justice Sandeep Mehta and Justice Aparesh Kumar Singh

Neutral Citation: 2026 INSC 1167