Arbitration In IndiaArbitral Award cannot be challenged through Civil Suit

MMTC Limited v. Anglo-American Metallurgical PTY Limited and Ors.

Court – Delhi High Court

Citation – CS(COMM) 959/2024

Date – 29.07.2025

The Hon’ble Delhi High Court has held that an Arbitral Award cannot be challenged through Civil Suit as it is not allowed under Section 34 read with Section 5 of the Act.

The Court held,

“79. On perusal, the said section clearly states that the civil courts shall try all suits except the suits which are expressly and impliedly barred. Section 5 read with section 34 of 1996 Act constitutes such a bar to challenge an Arbitral Award by way of filing a suit which is supposed to be done in the present case. The non-obstante clause of section 5 of 1996 Act makes it amply clear that the civil court cannot entertain suits relating to matters governed by the 1996 Act unless specifically permitted. The plaintiff in the present plaint by cleverly and eschewedly is seeking to nullify and set aside an Arbitral Award which squarely falls within the ambit of Order VII Rule 11(d) of CPC which mandates rejection of a plaint where the suit is barred by law.

81. As noted above, the Courts have to be vigilant and strike down the clever drafting which seeks to circumvent statutory restrictions. If such suits are permitted, then it would open a floodgate of litigation, undermining the core objectives of the 1996 Act which are finality and efficiency. Arbitration, chosen by consent, cannot be overridden by post-facto civil suits on allegedly rediscovered facts otherwise arbitration will turn into a never-ending cycle of challenges.

82. To my mind, challenging an Award, which has already been upheld by the Hon’ble Supreme Court, in the present suit is not only an abuse of the process of law but will be a travesty of justice if the said challenge is allowed by way of filing of the present suit and would render the 1996 Act nugatory, and undermine public confidence in Arbitration. The Court is bound to give full effect to the legislative scheme and uphold the sanctity of finality.”

Team AMLEGALS.

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