Arbitration Promise Fails If Awards Take Decades to Enforce, Rules Supreme Court

Arbitration Promise Fails If Awards Take Decades to Enforce, Rules Supreme Court in M/s Royal Construction Company Pvt. Ltd. v. M/s National Projects Construction Corporation

Case: M/s Royal Construction Company Pvt. Ltd. v. M/s National Projects Construction Corporation
Date of Judgment: 28 October 2026
Court: Supreme Court of India
Coram: Vikram Nath, Sandeep Mehta and Aparesh Kumar Singh

Court Observation

“The promise of arbitration remains unfulfilled if a party, having traversed the arbitral process, is compelled to embark upon another protracted course of litigation to secure the benefit of the award.”

Summary

The Supreme Court was hearing an appeal arising from an international commercial arbitration between Iraq-based Royal Construction Company Pvt. Ltd. and National Projects Construction Corporation, concerning the enforcement of an arbitral award rendered in 2002. More than 24 years after the award, the parties were still litigating over its enforcement.

The Court observed that the efficacy of an arbitral regime cannot be measured merely by the speed with which an award is rendered or the limited grounds on which it may be challenged. It must equally be assessed by whether the successful party can realise the fruits of the award within a reasonable time.

Key Holdings

  • The promise of arbitration remains unfulfilled if a successful party is compelled to embark upon another protracted course of litigation merely to secure the benefit of the award.
  • The enforcement and execution framework for arbitral awards needs a focused study to identify the practical impediments to timely recovery.
  • It must be considered whether domestic and foreign awards require distinct enforcement procedures or a common framework with appropriate safeguards, while preserving the legitimate procedural protections available to judgment-debtors.

Directions Issued

  • The Law Commission of India was requested to undertake a focused study of the statutory and procedural framework governing the enforcement and execution of arbitral awards, including the experience of other jurisdictions, and to make such legislative or procedural recommendations as it considers necessary.
  • The Registry was directed to forward a copy of the judgment to the Chairman of the Law Commission of India.

Background

The dispute arose from an internationally seated arbitration that culminated in an award dated 10 August 2002 in favour of Royal Construction Company, with the awarded amounts denominated in Iraqi Dinars. The award was challenged before Indian courts, and on 24 February 2015 the Supreme Court restored the directions contained in the award. Even so, more than two decades later, the parties were still in court over its enforcement.

Related Articles

Disclaimer: This is a summary prepared for informational purposes only and does not constitute legal advice. Readers should refer to the official judgment for the authoritative text.

Tags: , ,