Arbitral Award Not Decree At Challenge Stage, No Need For Separate Plea On Claims and Counterclaims: Delhi HC

The Delhi High Court has recently held that parties can challenge arbitral awards covering both claims and counterclaims through a composite petition under Section 34 of the Arbitration and Conciliation Act, rejecting an objection that separate petitions were required as they amounted to distinct “decrees”.

Emphasising that Section 36(1), which states that an arbitral award “shall be enforced as if it were a decree of the court,” is confined to the stage of enforcement, the Court observed: "In the present context, the fiction operates only to enable the enforcement and execution of an arbitral award by borrowing the procedural machinery of the CPC. It does not equate an arbitral award to a decree for all purposes, nor does it import the entire procedural regime of the CPC into arbitral proceedings. Significantly, it does not govern or alter the manner in which an arbitral award may be challenged, which remains exclusively regulated by Sections 34 and 37 of the A&C Act".

Rejecting the preliminary objection raised by the award-holder, Justice Harish Vaidyanathan Shankar held that while an arbitral award may be enforced like a decree, it does not assume the status of a decree at the stage of challenge under Section 34.

The Court noted that the impugned awards arose from a single arbitral reference, were based on the same set of pleadings, evidence and documents, and were rendered on the same day on the basis of an identical factual matrix.

In such circumstances, requiring separate challenges would be “artificial, unwarranted, and unduly cumbersome” for both the parties and the Court, it said.

The dispute arose out of a business arrangement between Splendor Landbase Limited and NTT Data Global Delivery Services Private Limited, which culminated in a batch of amended arbitral awards dated July 5, 2025, passed by a Sole Arbitrator, dealing with claims and counterclaims arising from interconnected issues.

Aggrieved, Splendor Landbase approached the High Court under Section 34 seeking to set aside the awards.

At the outset, NTT Data raised a preliminary objection to the maintainability of the petitions. Relying on Section 36 and precedents under the Code of Civil Procedure, 1908, it argued that awards on claims and counterclaims should be treated as separate decrees requiring independent challenges.

It further contended that if such challenges were split, the valuation of at least one would fall below Rs. 2 crore, thereby taking it outside the pecuniary jurisdiction of the High Court.

In response, Splendor Landbase argued that principles from the Code of Civil Procedure cannot be applied mechanically to arbitration proceedings and that an arbitral award arising out of a single reference must be challenged in its entirety.

The Court agreed. It underscored that the Arbitration and Conciliation Act is a self-contained framework designed to ensure finality of arbitral awards while limiting court interference. In that scheme, an arbitral award does not take on the character of a decree at the stage when it is being challenged.

The judge also drew a clear distinction between the scope of a Section 34 challenge and an appeal against a civil decree. Unlike civil appeals, courts do not revisit the merits of the dispute in arbitration matters, and their review is confined to specific statutory grounds.

“Although at a superficial level, certain procedural aspects of the CPC and the A&C Act may appear analogous, the two statutory regimes are neither coextensive nor interchangeable. The nature and scope of a challenge to a civil decree are fundamentally different from those applicable to an arbitral award,” the Court said.

A first appeal under the CPC entails a comprehensive rehearing on facts as well as law, enabling the appellate court to reappreciate evidence and arrive at its own conclusions. Even a second appeal, though narrower, permits interference on substantial questions of law," the court held.

Accordingly, the High Court dismissed the preliminary objection and held that the petitions were maintainable in their present form.

The court directed that the respondent's delayed reply be taken on record if delay was the only impediment and granted time to the petitioner to file its rejoinder. The matter has been listed for further hearing on August 12, 2026.

For Petitioner (Splendor Landbase Limited): Advocates Praveen Kumar, Sarthak Gupta, Suman Raj.

For Respondent ( NTT Data Global Delivery Services Private Limited): Advocates Vikas Tomar, Nimish Mishra.