Supreme Court Refuses Clarification in 24-Year Award Fight, Turns to Law Commission
NEW DELHI: The Supreme Court of India on 28 October 2026 declined to clarify its own 2023 judgment in a dispute over an arbitral award that is now twenty-four years old, and instead asked the Law Commission of India to study why enforcing arbitral awards takes so long.
A Bench of Justice Vikram Nath, Justice Sandeep Mehta and Justice Aparesh Kumar Singh set aside the Delhi High Court's interim order of 16 February 2026, which had let the parties return to the Supreme Court for clarification. The Court also dismissed a miscellaneous application seeking modification of its 2023 ruling, while leaving the award-debtor free to press its set-off objections before the executing court.
Case at a Glance
Case Title: M/s Royal Construction Company Pvt. Ltd. v. M/s National Projects Construction Corporation
Case No.: Civil Appeal arising out of SLP (C) No. 14005 of 2026, with Miscellaneous Application at Diary No. 48152 of 2026 in Civil Appeal No. 1991 of 2019
Citation: 2026 INSC 1167
Bench: Justice Vikram Nath (author), Justice Sandeep Mehta and Justice Aparesh Kumar Singh
Date of Judgment: 28 October 2026
Challenged: Interim order dated 16 February 2026 of the Delhi High Court in Execution First Appeal (Original Side) No. 17 of 2018
Outcome: Appeal disposed of, miscellaneous application dismissed, Law Commission requested to study enforcement of arbitral awards
The Question Behind the Headline
Why would the Supreme Court refuse to clarify its own judgment? Because, in the Court's view, there was nothing left to clarify. In 2023 the Court answered one certified question of law, namely the date for converting an award from foreign currency into Indian rupees. It held that no occasion arose to fix any such date. Whether the principal amount had already been paid in 2009, and whether deposits made in rupees were later withdrawn, were factual questions that the Court never decided.
So why turn to the Law Commission? The Bench used its closing remarks to say that the real problem was not this one application. It was the time taken to enforce an award after the arbitration is over. More than twenty-four years after the award, the parties were still litigating over how to collect it.
Background of the Dispute
An International Award in Iraqi Dinars
The appellant is the award-holder and the respondent is the award-debtor. An internationally seated arbitration produced an award dated 10 August 2002 in favour of the appellant. The amounts awarded were denominated in Iraqi Dinars.
The Long Road Through the Courts
On 24 February 2015, the Supreme Court stressed minimal judicial intervention in arbitral awards and restored the directions in the award of 10 August 2002.
In execution proceedings, the Delhi High Court on 26 July 2017 allowed the award-debtor to pay in Indian currency, converting at the exchange rate prevailing on the date of the agreement, 26 September 1982.
On 17 December 2019, the Division Bench set that order aside and certified a substantial question of law under Articles 134-A and 133(1)(a) of the Constitution.
On 10 October 2023, the Supreme Court answered that question in the negative, holding that no occasion arose for fixing a conversion date, and cautioned that the agreement, the award and its 2015 directions should not be disturbed.
The 2009 Payment Claim
While execution was pending, the award-debtor contended that the principal amount had already been paid in Indian rupees in 2009 under orders of the High Court. On 16 February 2026, the High Court granted the parties liberty to seek clarification from the Supreme Court as to why this fact had not been brought to its notice earlier. The award-holder challenged that order, which led to the present appeal.
What the Supreme Court Held
The Division Bench Misread the Scope of the Earlier Judgment
The Bench held that the High Court had erred in appreciating the controversy previously adjudicated. In 2023 the Supreme Court was exercising appellate jurisdiction to answer the certified question, so its consideration was confined to that question, without examining factual matters beyond its ambit.
Having held that no occasion arose for determining or fixing a date for conversion of the amount into Indian Rupees and that payment was to be made in foreign currency, this Court had no occasion to issue any further clarification on factual questions concerning the amounts deposited or their subsequent withdrawal.
No Supervisory Role Over Continuing Execution
The Court refused to let a request for clarification become a back door to supervise the execution. It held that the Supreme Court cannot be called upon, in the guise of seeking clarification, to assume a supervisory role over continuing execution proceedings or to adjudicate every issue that may arise in them. Those questions belong to the court seized of the execution and to the appellate court exercising jurisdiction over its orders.
The Appeal Stood Exhausted Once the Question Was Answered
Once the question referred to the Supreme Court was answered, the scope of the earlier appellate proceedings was exhausted. Enlarging that adjudication to cover distinct questions unconnected with the dispute already decided was held to be impermissible.
The Miscellaneous Application Is Dismissed
The miscellaneous application in Civil Appeal No. 1991 of 2019 sought modification of the 2023 judgment on the ground that rupee amounts deposited by the award-debtor under a High Court order had already been withdrawn by the award-holder in 2009. The Court dismissed it, noting that the earlier appeal was confined to the interpretation of the question of law. It added that the applicant remains at liberty to raise all objections on adjustment or set-off of those amounts before the executing court, in accordance with law.
The Epilogue: A Message to the Law Commission
Twenty-Four Years After the Award
Under the heading Epilogue, the Bench expressed concern at the protracted course of the proceedings. The arbitration was invoked when the Arbitration Act, 1940 held the field, and the country is now approaching three decades under the Arbitration and Conciliation Act, 1996, which was enacted in furtherance of the UNCITRAL Model Law to secure expeditious resolution through minimal judicial intervention.
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.
Execution Under Section 36
The Court noted that the statute has tried to address delays in arbitral proceedings, challenges to awards and stays on enforcement, but that actual execution deserves equally serious consideration. Section 36 of the Arbitration and Conciliation Act, 1996 enforces an award in the same manner as a decree of the Court, which draws on the ordinary execution machinery of the Code of Civil Procedure, 1908. The Bench said cases such as this one call for a closer look at whether that framework serves the objectives of arbitration.
What the Law Commission Is Asked to Study
Identification and disclosure of the award-debtor's assets.
Coordination of different modes of execution.
Disposal of repetitive or dilatory objections.
The time taken to conclude execution proceedings.
Insights from comparative legal systems, while preserving legitimate procedural safeguards for judgment-debtors.
Whether domestic and foreign arbitral awards warrant distinct enforcement procedures or a common framework with appropriate safeguards.
Directions to the Registry
The Court requested the Law Commission of India to undertake a focused study of the statutory and procedural framework governing enforcement and execution of arbitral awards 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.
What This Means Going Forward
A reference by a High Court to the Supreme Court on a certified question does not hand the Supreme Court a continuing supervisory role over execution.
Factual disputes such as prior payment, deposit, withdrawal and set-off must be argued before the executing court and its appellate forum.
Award-holders and award-debtors should place payment records before the executing court at the earliest stage.
A possible reform of the enforcement regime for arbitral awards is now on the Law Commission's agenda.
Learn Arbitration and Execution Drafting With Into Legal World
Disputes like this one often turn on how an agreement and a payment history were drafted years earlier. Sharpen those skills with the Advanced Legal Drafting Certificate Course from Into Legal World, and follow our updates on the Into Legal World WhatsApp Channel.
Frequently Asked Questions
What did the Supreme Court decide in this case?
The Court disposed of the appeal against the Delhi High Court's interim order of 16 February 2026, dismissed the miscellaneous application seeking modification of its 2023 judgment, and held that it cannot supervise continuing execution proceedings.
Why did the Court refuse to clarify its 2023 judgment?
The 2023 judgment answered only the certified question on the date of conversion into rupees. Factual questions about the 2009 payment and later withdrawal were never before the Court, so there was nothing to clarify.
Can the award-debtor still claim that the principal was already paid?
Yes. The Court left the applicant at liberty to raise all objections and contentions on adjustment or set-off of the amounts before the executing court, in accordance with law.
What has the Supreme Court asked the Law Commission to do?
It has requested a focused study of the legal and procedural framework for enforcing and executing arbitral awards, including practical impediments, other jurisdictions and whether domestic and foreign awards need different enforcement procedures.
Which provision governs enforcement of an arbitral award in India?
Section 36 of the Arbitration and Conciliation Act, 1996 provides that an award is enforced in the same manner as a decree of the Court under the Code of Civil Procedure, 1908.
Keywords
Execution of arbitral awards, Section 36 Arbitration and Conciliation Act, Law Commission of India, 2026 INSC 1167, Royal Construction Company, National Projects Construction Corporation, Justice Vikram Nath, award enforcement delay, substantial question of law, Article 133(1)(a).
Case Title: M/s Royal Construction Company Pvt. Ltd. v. M/s National Projects Construction Corporation
Case No.: Civil Appeal arising out of SLP (C) No. 14005 of 2026, with M.A. Diary No. 48152 of 2026 in Civil Appeal No. 1991 of 2019
Citation: 2026 INSC 1167
Bench: Justice Vikram Nath, Justice Sandeep Mehta and Justice Aparesh Kumar Singh
Comments