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Umesh Khanna (CEO)     25 August 2012

Arbtiration ordered by high court


I had filed a winding up petition against my debtors in 2006 and a liquidator was appointed in 2011, to avoid liquidation, a bank guarantee of the due amount has since been furnished in high court in favour of registrar Delhi High court. However the debtor has contested the claim of amount, the high court ordered us to go for arbitration as per the clause in my invoices/contract and my amount stands secured, it was agreed , as per order of high cout ,between the parties that the we shall invoke the arbitration as per the arbitration clause contained in the contract by filing claims within two weeks. that company proceedings were pending all this while, it is also agreed the other party that claim being adjudicated on merits and will not take the plea of limitation. The bank guarantee shall remain alive till the publication of the award by the tribunal. In case the award is given in favour of me,i, shall be entitled to invoke the bank guarnatee to the extent of amount awarded.

The arbitration was invoked within the time frame and later claim duly filed and the arbitrator was appointed later .

My query is whether the award can be challenged by the other party in high court and on what grounds? Do i have to file another case for conversion of award to decree in case of my winning the award and what happens if the other party doesnot keep the guarntee alive then?

Regards & Thanks


 2 Replies

Yogesh Anand (Head- Legal AVP)     27 August 2012

the award passed by the arbitrator can be challenged under sec. 34 of Arbitration & Conciliation Act 1996 but the grounds of challenge are very limited.   on final decision of the challenge made by the other party or on the expiry of four months from the date of the award, if it is not challenged, it becomes decree automatically, no need to get it converted into decree from the court.  if the bank guarantee is not extended by the other party before expiry then either you can invoke it or get a direction frm the arbitrator to keep it alive till final disposal of the case.

Umesh Khanna (CEO)     28 August 2012




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