This Supreme Court judgment reaffirms that objections to the execution of an arbitral award under Section 47 of the CPC are maintainable only within a very narrow compass, limited to grounds of jurisdictional infirmity or voidness. The Court emphasized that allegations of fraud or breach of fiduciary duty by a party’s own officers, raised after the award has attained finality, do not constitute such grounds unless they render the award a nullity. The business judgment rule protects decisions that fall within a range of reasonableness.
Facts Of The Case:
The dispute arose from a Long Term Agreement (LTA) dated 07.03.2007 between MMTC Limited and Anglo American Metallurgical Coal Pvt. Limited for the supply of coking coal. The agreement included an option for MMTC to extend the contract for two more delivery periods, which it exercised via a Memorandum of Understanding on 30.01.2007. For the Fifth Delivery Period (01.07.2008 to 30.06.2009), the contract price, linked to prices set for SAIL and RINL by an Empowered Joint Committee, was fixed at US$ 300 per metric tonne. Following a market downturn after the Lehman Brothers collapse in September 2008, MMTC failed to lift the majority of the contracted coal. Arbitration ensued, resulting in an award in favour of Anglo in 2014, which was eventually upheld by the Supreme Court in December 2020. During enforcement proceedings, MMTC filed objections under Section 47 of the CPC, alleging the award was inexecutable due to fraud and collusion between its own officials and Anglo in fixing the price. MMTC also filed a criminal complaint, leading to an FIR by the CBI in July 2025. The executing court and, subsequently, the Supreme Court dismissed these objections, concluding that the allegations did not demonstrate a prima facie case of fraud rendering the award a nullity.
Procedural History:
The arbitral award was rendered on 12.05.2014 in favour of Anglo. MMTC’s challenge under Section 34 of the Arbitration Act was dismissed by a Single Judge of the Delhi High Court on 10.07.2015. However, a Division Bench allowed MMTC’s appeal under Section 37 on 02.03.2020 and set aside the award. The Supreme Court, on 17.12.2020, allowed Anglo’s appeal, restoring the Single Judge’s order and the arbitral award. Subsequently, MMTC’s review petition led to a modification of the interest rate. During execution proceedings, MMTC filed objections under Section 47 CPC and an application for stay, which were dismissed by the Delhi High Court on 09.05.2025. MMTC’s appeal against this dismissal culminated in the present Supreme Court judgment of 03.11.2025, which upheld the High Court’s decision.
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