Setting Aside and Enforcement of an Award Compared

Two proceedings may follow an award, and they run in opposite directions. The losing party applies under Section 34 to have the award set aside; the winning party applies under Section 36 to have it executed. Before 2015 the first automatically suspended the second, which meant that a successful claimant recovered nothing for years. That link has been broken: filing a challenge no longer stays the award, and a separate application for stay must be made and may be granted only on conditions.

The two proceedings side by side, and how they now interact

1. The Two Proceedings

An application under Section 34 invokes a supervisory jurisdiction. The court examines the award against the grounds stated in the section and, if one is made out, may set it aside wholly or in part, remit the matter under Section 34(4), or correct it within the narrow limits recognised in 2025. An application under Section 36 invokes no jurisdiction over the award at all. The execution court does not reopen the award or examine its correctness; its function is to realise what the award directs, using the machinery of the Code of Civil Procedure, 1908.

2. The Comparison

Basis	Setting aside, Section 34	Enforcement, Section 36
Who applies	The party against whom the award was made	The party in whose favour it was made
What the court does	Examines the award against the statutory grounds	Executes the award as if it were a decree; it does not examine the merits
Forum	The court defined in Section 2(1)(e), fixed by Section 42	Any court within whose jurisdiction the assets are situated; no transfer of the decree is needed
Time	Three months from receipt of the award, and a further thirty days on sufficient cause, but not thereafter	Three years, on the ordinary principles governing an application for execution
Outcome	Dismissal, setting aside wholly or in part, remission, or narrow correction	Attachment and sale, appointment of a receiver, or the mode appropriate to the relief awarded
Effect of success	The award ceases to exist; the claim may be re-arbitrated, with Section 43(4) excluding the time spent	The award is realised
Appeal	Section 37(1)(c), against the order setting aside or refusing to set aside	No appeal against enforcement as such; objections in execution are governed by the Code

3. How the Two Interact

No automatic stay. Section 36(2), substituted in 2015, provides that the filing of an application under Section 34 shall not by itself render the award unenforceable unless the court grants a stay on a separate application made for that purpose.
A conditional stay. Section 36(3) permits the court to grant a stay for reasons recorded in writing and subject to such conditions as it thinks fit. In practice the court applies the principles governing the stay of a money decree and commonly requires a deposit or security; the Government enjoys no exemption.
An unconditional stay for fraud. The proviso inserted in 2021, operating retrospectively from 23 October 2015, requires the court to stay the award unconditionally where it is satisfied that a prima facie case is made out that the arbitration agreement, the contract or the making of the award was induced by fraud or corruption.
Protection of the award meanwhile. Section 9 remains available after the award and until it is enforced, which is how a successful party secures assets while the challenge is pending.

⚠ The two proceedings need not be in the same court

Section 42 fixes exclusive jurisdiction over applications arising out of the arbitration, including one under Section 34, in the court where the first such application was made. Execution is different: an award may be filed for execution before any court within whose jurisdiction the assets are situated, because the deeming provision in Section 36 operates only for the purpose of enforcement and the award is not a decree of any particular court. A challenge in Delhi and an execution in Chennai may therefore run at the same time.

4. The Position before 2015, and Why It Changed

As originally enacted, Section 36 provided that an award would be enforced where the time for an application under Section 34 had expired or such an application had been refused, and the courts read this as an automatic stay on filing. The result was that the mischief the Act of 1996 had set out to cure, namely the delay built into the Act of 1940, reappeared at the enforcement stage. The Law Commission recommended the change in its 246th Report, and the amendment of 2015 gave effect to it. The position was then settled by two decisions: Board of Control for Cricket in India v. Kochi Cricket (P) Ltd., (2018) 6 SCC 287, holding the amended Section 36 applicable to challenges pending on 23 October 2015, and Hindustan Construction Co. Ltd. v. Union of India, (2020) 17 SCC 324, striking down Section 87 which had sought to restore the old position.

5. Related Topics and Provisions

Topic or provision	Connection
Challenge to the Arbitral Award: Section 34	The grounds, limitation and outcomes
Finality and Enforcement: Sections 35 and 36	Execution and the stay regime in detail
Amendments of 2015, 2019 and 2021	The removal of the automatic stay and its retrospective reach
Interim Relief in Arbitration: Sections 9 and 17	Protecting the award between the award and enforcement
Sections 37(1)(c), 42 and 43(4), A&C Act, 1996	Appeal, exclusive jurisdiction and exclusion of time