Being A Government Authority No Ground To Avoid Deposit For Stay Of Arbitral Award: Orissa High Court

The Orissa High Court has recently observed that a government authority cannot seek exemption from depositing an arbitral award amount merely on the ground of its status while seeking a stay.

Justice B.P. Routray upheld a Commercial Court order directing the Chief Engineer (Roads-1), Government of Odisha, to deposit the entire award of about Rs. 26.97 crore in a dispute with NKC Projects Pvt. Ltd.

The court held, "It cannot be contended on the part of the Petitioner that he being a Government authority is not required to be directed to deposit the award amount as a condition to stay enforcement of arbitration award in terms of Section 36(2) of the Act.”

The award, dated May 8, 2024, directed the Chief Engineer (Roads-1) to pay ₹26,97,43,880 to the contractor.

The state authority had challenged the award and sought a stay on its enforcement. The Commercial Court granted the stay on July 8, 2025, but made it subject to the deposit of the entire amount.

Before the High Court, the Chief Engineer relied on protections under the Civil Procedure Code, including Order 27 Rule 8-A. It also pointed to the absence of budgetary allocation for the financial year 2025–26.

The court noted that the petitioner is not insolvent. At the same time, its own pleadings indicated inability to deposit the amount due to lack of budgetary provision.

That, the court held, could not justify exemption. It observed, “it is seen that nothing has been mentioned in the writ petition in this regard leading exemption of the petitioner from depositing the award amount as per the direction of learned Court.”

Referring to Supreme Court decisions in Pam Developers Pvt. Ltd. v. State of West Bengal and Hindustan Construction Co. v. Union of India, the Court reiterated that the scheme of the Arbitration Act does not permit differential treatment and that procedural protections under the Civil Procedure Code do not override it.

The court also reiterated that filing a challenge does not by itself stay enforcement of an arbitral award and that courts may impose conditions, including deposit.

Finding no exceptional case for waiver, the Court dismissed the writ petition and upheld the direction to deposit the full award amount as a condition for continuation of the stay.

For Petitioner (Chief Engineer (Roads-1), Government of Odisha): Additional Government Advocate U.R. Jena

For Respondent (M/s NKC Projects Pvt. Ltd.): Advocate S.D. Dwibedi.