The respondents in the instant matter filed an application under section 36(3) of the Arbitration Act and Order XLI Rule 5 read with section 151 of the Code of Civil Procedure, seeking modification of an order passed by the Delhi High Court on 9th August 2019. The respondents contend that the Arbitration and Conciliation (Amendment) Act, 2019 received assent on 9th September 2019 i.e., the same date on which the impugned was passed, ordering the petitioner to make only a partial deposit of the award amount (roughly only about twenty percent).

The respondents contend that following the decision in Hindustan Construction Company Limited & Anr. v. Union of India & Ors., the award holder should not be deprived of the fruits of arbitration and therefore, the petitioner should be directed to deposit the full quantum of the award which along with interest amounts to Rs. 695 Crores as of 27th January 2020. The respondents further relied upon the case of Mathur & Kapre Associates Private Limited v. ESIC, and other orders to contend that directions for the deposit of the entire award amount have been issued by Courts. The respondents, therefore, argued that the order dated 9th August 2019 should be modified to bring it in line with the recent decisions that direct deposit of entire award amounts, and a sum of Rs. 695 Crores should be deposited by the petitioner.

The petitioner argued that there was an attempt to create a wrong impression that the impugned order was passed at a point in time when the law allowed an automatic stay of the arbitral award, during the pendency of proceedings under section 34 of the Arbitration Act. However, the petitioner contends that the legal position on 9th August 2019 was such that there would be no such automatic stay of the arbitral awards. The petitioner further alleged that the applicant is seeking rehearing of an issue which was otherwise already argued extensively on 9th August 2019, and already decided upon by the Court. Therefore, the present dispute arises in relation to the order passed on 9th August 2019 and the quantum of the deposit to be made by the petitioner.

Issues

The issue in the present case was whether the Court can exercise the discretion once again and modify the order despite the fact that there has been no change in the circumstances.

Judgment 

The Court considered that there have been instances in the recent past, wherein the Apex Court and the Delhi High Court have passed various orders directing the objector to deposit seventy-five or even a hundred percent of the award amount before the enforcement of the award has stayed. However, the appropriate stage of acknowledging the amount which the petitioner must deposit on the enforcement of the award was on 9th August 2019, when the Court heard the parties on the stay application. Where a Court has already heard the parties at length and exercised its discretion to direct a deposit of Rs. One hundred and Twenty-Five Crores.

The Court here, therefore, held that since the respondents failed to plead any change of circumstances in the application and there was no such argument even during the hearing of the application, there was no merit in the application.