Supreme Court of India: Maintainability of Letters Patent Appeals against orders in execution of an Arbitral Award under the Indian Arbitration Act
In Bharat Kantilal Dalal (Dead) through LRs v. Chetan Surendra Dalal & Ors., 2025 INSC 1334, the Supreme Court of India dealt with the issue of whether Letters Patent Appeals are maintainable against orders passed by a Single Judge in execution proceedings under the Indian Arbitration and Conciliation Act, 1996, and whether legal representatives of a deceased judgment debtor can resist execution of an arbitral award. Letters Patent Appeals are intra-court appeals in High court filed under the Letters Patent issued during the colonial era, allowing a party to challenge a judgment of a Single Judge before a Division Bench of the same High Court. Thus, the case involved the interplay between the Arbitration Act’s finality principle, execution provisions under the Code of Civil Procedure of India, and the maintainability of intra-court appeals.
Factual Matrix
The appellant, Bharat Kantilal Dalal, is the son of late Kantilal Dalal and nephew of late Girdharilal Dalal. A family dispute arose over accounting and distribution of joint family assets, leading the appellant to initiate arbitration against his father. A sole arbitrator passed an award in favor of the appellant. Though the father indicated his intent to challenge the award, no petition to that effect was filed.
The appellant sought execution of the award in Dubai and Singapore, where it was recognized, but remained unsatisfied. After the father’s death in March 2013, the appellant pursued execution in India against the uncle, who was a substantial beneficiary under the father’s Will. The uncle resisted, claiming he was not bound by the award and filed a civil suit seeking a declaration that the award was a nullity.
Meanwhile, the appellant filed execution proceedings in the Bombay High Court, where the Single Judge ordered issuance of notice under Order 21 Rule 22 Code of Civil Procedure, 1908 of India (‘CPC’) and directed that no third-party rights be created in the father’s properties. Order 21 Rule 22 of CPC, mandates that before executing a decree after two years or against legal representatives of a deceased judgment debtor, the court must issue a notice to show cause why execution should not proceed.
In the execution proceedings, the uncle’s objections were dismissed as premature. The uncle challenged the decision of Single Judge before the Division Bench wherein these orders were stayed by the Division Bench in Letters Patent Appeals, leading to the present challenge before the Supreme Court of India.
Parties Contentions
The appellant argued that the Division Bench of the Bombay High Court erred in entertaining Letters Patent Appeals against orders passed in execution proceedings under the Indian Arbitration and Conciliation Act, 1996, (‘Indian Arbitration Act’) as the said Act is a complete code and excludes such appeals.
It was contended that the orders passed by the Single Judge were passed in the course of execution of an arbitral award and are traceable to the Indian Arbitration Act, not the CPC, making the appeals non-maintainable. The appellant emphasized that the respondents had already filed a civil suit challenging the award and that the chamber summons seeking to declare the award a nullity was premature.
Further, the appellant submitted that the Division Bench admitted the appeals and stayed execution without assigning reasons, thereby frustrating the legislative intent of speedy enforcement of arbitral awards.
Per contra, the respondents contended that they were strangers to the arbitration proceedings and the arbitral award and therefore had locus to challenge its execution. They argued that the award affected properties in which they had ownership or substantial interest, and the Single Judge’s observations prejudiced their rights.
It was submitted that the Letters Patent Appeals were maintainable because the orders under challenge were judicial orders passed in execution proceedings. The respondents also pointed out that the Single Judge had held the award was not without jurisdiction, not tainted by fraud, not barred by limitation, and not against public policy, which they claimed was beyond the scope of deciding chamber summons. They urged that the appeals should be allowed to protect their proprietary interests.
Issues
The central issue before the Supreme Court was whether Letters Patent Appeals were maintainable against orders passed by a Single Judge in execution proceedings under the Indian Arbitration Act. This raised questions on the scope of judicial interference in arbitral award enforcement and whether the Act, being a self-contained code, excludes such appeals.
Another key issue was whether the respondents, who were legal representatives of the deceased judgment debtor and beneficiaries under his Will, could resist execution by claiming they were strangers to the arbitration proceedings.
The Court also examined the procedural requirement under Order 21 Rule 22 CPC for issuing notice before executing a decree against legal representatives and whether observations made by the Single Judge in chamber summons could prejudice the respondents’ statutory right to object under Order 21 Rule 23 CPC.
Conclusion by the Supreme Court
The Supreme Court held that the Letters Patent Appeals filed by the respondents were not maintainable, as
- The Indian Arbitration Act is a self-contained code that restricts judicial interference and does not permit intra-court appeals against orders passed in execution of arbitral awards.
- The Court emphasized that execution proceedings were traceable to the Indian Arbitration Act and not to the CPC, and respondents, being legal representatives under the Will of the judgment debtor, could not claim to be strangers to the award.
- It further directed that the execution process must comply with Order 21 Rule 22 CPC, requiring notice to legal representatives before proceeding, and clarified that respondents have the right to raise objections under Order 21 Rule 23 CPC after receiving such notice.
- The Court quashed the Division Bench’s orders, dismissed the Letters Patent Appeals, and restored the execution proceedings with directions to issue notice and consider objections on merits without being influenced by prior observations.
- The Court clarified that LPAs are not maintainable in arbitration-related execution proceedings. Yet, notice under Order 21 Rule 22 CPC is compulsory, preserving natural justice for legal representatives.
In view thereof, it can be inferred that while the Indian Arbitration Act excludes Letters Patent Appeals, the CPC’s notice requirement still applies in execution of arbitral award.