LI Network
Published on: February 13, 2024 at 12:28 IST
The Karnataka High Court, through Justice MG Uma, clarified that when a Civil Court refers parties to arbitration and appoints an arbitrator without invoking Section 11 of the Arbitration and Conciliation Act, 1996, the resulting award integrates with the decree accepted by the Court. As a consequence, the award doesn’t necessitate registration or issuance on a stamp paper.
The case stemmed from a suit initiated by H R Satyanarayana, seeking partition and separate possession of his share in scheduled properties.
The suit was decreed in 1986, and during subsequent appeals and jurisdictional changes, the dispute was referred to arbitration by the Appellate Court.
The parties reached a settlement, and the court accepted it as a decree. The petitioner filed an execution application, which was dismissed, leading to a writ petition contesting the dismissal.
The High Court noted that the respondents did not invoke arbitration provisions during the appeal, and the reference to arbitration was a decision by the Appellate Court for amicable settlement.
The Court distinguished this case from the precedent of Lachhman Dass Vs Ram Lal, emphasizing that the intent of the parties was not arbitration but an amicable resolution outside the court.
The High Court underscored that the arbitrator’s appointment occurred without invoking Section 11 of the Arbitration Act, and the resulting award merged with the decree accepted by the Appellate Court.
Consequently, the Court held that the arbitrator’s award did not require separate registration and stamping.
The Court criticized the Executing Court for exceeding its jurisdiction by treating the decree as an arbitral award, reiterating that the Executing Court’s role is limited to executing the decree in line with procedural law.
Case Title: H R Satyanarayana vs H C Suresha and Others