Dispute Review Board’s Recommendations Are Arbitral Awards, Enforceable U/S 36 Of A&C Act: Delhi High Court
The Delhi High Court bench of Justice Vibhu Bakhru and Justice Tejas Karia has held that the recommendations of the Dispute Review Board (DRB) rendered under a contract constitute an arbitral award which is enforceable as a decree under Section 36 of the Arbitration and Conciliation Act, 1996. The court further held that the limitation for enforcement begins from the date of the award, not from the date of the judgment declaring it as an ‘award’.
Brief Facts:
The appellant, Jaiprakash Hyundai Consortium (JHC), entered into an agreement dated 24.06.1993 with SJVN Limited for the execution of civil works for the Nathpa Jhakri Hydro Electric Project. A dispute arose regarding reimbursement of extra costs incurred by JHC for generating power through DG sets. This dispute was referred to a Dispute Review Board (DRB) as per the modified Clause 67 of the General Conditions of Contract, which categorically provided that the decision of DRB for claims below ₹5 crores would be final and binding.
The DRB rendered its recommendations in favour of JHC and held SJVN (Respondent) liable to pay ₹1.83 crore with 10% interest. SJVN refused to implement the award. JHC filed a petition under Section 36 of the Arbitration and Conciliation Act, 1996 for enforcement of the DRB’s recommendations, treating them as an arbitral award. The Single Judge dismissed the petition on the ground of limitation, since the petition was filed more than 12 years after the DRB award.
Observations:
The Court observed that the DRB’s recommendation constituted an arbitral award within the meaning of Section 2(1)(c) of the Arbitration and Conciliation Act, 1996, and was enforceable under Section 36 as a decree. The Court relied on the case of Satluj Jal Vidyut Nigam Limited v. M/s Nathpa Jhakri Joint Venture where the Himachal Pradesh High Court held that a decision rendered by the DRB in respect of disputes of a value less than ₹5 crores is required to be construed as an arbitral award under the A&C Act and the same cannot be challenged by an aggrieved party by filing a suit. The only remedy available to such a party would be to file an application under Section 34 of the A&C Act to set aside the award.
The Court held that there was no impediment to JHC seeking enforcement of the DRB’s award from the date of its rendering. It observed that:
“There is no provision in the A&C Act, which precludes a party to arbitration from instituting proceedings for enforcement of the award unless the same is recognized as an arbitral award in any other proceedings. In terms of Section 36 of the A&C Act, the arbitral award is required to be enforced as a decree.”
The Court found that the execution petition was filed in 2021 i.e. 12 years after the award, and was barred by limitation. It thus dismissed the appeal.
Case Title: M/S. Jaiprakash Hyundai Consortium v. M/S. SJVN Limited
Case Number: EFA(OS)(COMM) 15/2024, CM Nos. 14977/2025 & 33334/2025
Date of Judgment: 27.05.2025
