Supreme Court Allows Adani To Enforce Coal Mining Contract Awards Against UPRVUNL If UCM Assets Fall Short

The Supreme Court has refused to interfere with a ruling permitting Adani Enterprises Ltd to pursue execution proceedings against Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd and other constituent entities of UCM Coal Company Ltd.

It clarified, however, that Adani's claim must first be satisfied through UCM Coal Company's assets. Execution against the other entities can proceed only if any amount remains unpaid.

A bench comprising Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana upheld the Allahabad High Court's April 9, 2026, judgment.

The court found that the High Court's findings were supported by the pleadings and documents on record. It nevertheless clarified the order in which the award could be enforced.

The court observed, "In light of the categorical findings returned by the High Court in Paragraph 62 of the Impugned Judgment, which are duly supported by the averments made in the pleadings and the documents on record, we are satisfied that the impugned judgment calls for no interference. However, we deem it appropriate to make it clear that the claim of the decree-holder will firstly be satisfied through the assets of the judgment debtor, namely UCM Coal Company Limited, and it is only if the claim remains unsatisfied that the execution proceedings against the petitioner(s) shall proceed."

The dispute concerns arbitral awards arising from a mining arrangement involving the Chendipada-I and Chendipada-II coal blocks in Odisha. UCM Coal Company was set up as a special purpose vehicle, or SPV, by Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd and two other constituent companies for the coal project.

UCM Coal Company entered into a mining agreement with Adani Enterprises in 2011. The agreement concerned the development and operation of the coal blocks. The arrangement could no longer be performed after the Supreme Court cancelled the coal-block allocations in 2014.

Adani then pursued arbitration under the agreement. It obtained an interim award of about ₹74 crore in 2017. A final award followed in 2018.

Adani later initiated proceedings to enforce the awards. It sought to proceed not only against UCM Coal Company but also against its three constituent companies. Those companies had not been parties to the arbitration proceedings.

The three companies challenged the Commercial Court's orders before the Allahabad High Court. They argued that arbitral awards passed against UCM Coal Company could not be enforced against them.

The High Court rejected the challenge. It examined the relationship between the SPV and the three companies. The court found that their officers had been involved from the stage of the SPV's creation.

It also noted that the SPV had been created for the benefit of the three companies. According to the High Court, it drew its funds from them. Their officers had also participated in its affairs, including during the arbitral proceedings.

Under the Arbitration and Conciliation Act, an arbitral award is binding on the parties to the arbitration. It can also bind persons claiming under those parties. In simple terms, this can include a person or entity whose position or capacity is derived from a party to the arbitration.

The High Court held that the three companies fell within this category on the facts of the case. It therefore refused to interfere with the execution orders challenged by them. The executing court was directed to proceed with the matter expeditiously.

The top court found no reason to disturb those findings. It disposed of the challenge with a clarification and modification. Adani Enterprises must first seek satisfaction of its claim through UCM Coal Company's assets.

Only if the claim remains unsatisfied can execution proceedings proceed against Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd and the other petitioning constituent companies.

For Petitioner: K.M. Nataraj, A.S.G., Sharath Narayan Nambiar, AOR, Vatsal Joshi, Vinayak Sharma, Sarthak Srivastava, Suvin R. Menon, Gurusimran Singh Narula

For Respondent: Shyam Divan, Vikram Nankani, Sr. Advocates, Advocates Mahesh Agarwal, Arshit Anand, Geetika Sharma, Shaishir Divatia, E. C. Agrawala, AOR

Click Here To Read/Download Allahabad HC Order