No Appeals Through the Back Door: Supreme Court Bars Letters Patent Appeals in Execution of Arbitral Awards

In a ruling that reinforces the autonomy and finality of arbitration proceedings, the Supreme Court of India has held that Letters Patent Appeals (LPAs) do not lie against orders passed during the execution of arbitral awards. Declaring that the Arbitration and Conciliation Act, 1996 is a self-contained code, the Court observed that “no appeal shall lie unless expressly provided within the Act itself.”

The judgment came in the matter of Bharat Kantilal Dalal (Dead) through LR v. Chetan Surendra Dalal & Others, where the appellant sought to execute a foreign arbitral award against the estate of his deceased father. The respondents—legal heirs and executors under a Will—challenged the execution, filing LPAs against Single Judge orders of the Bombay High Court. The Division Bench not only admitted the LPAs but also stayed the execution process.

Calling out this deviation, the Supreme Court minced no words in declaring the LPAs “not maintainable.” The Bench comprising Justice Sanjay Kumar and Justice Alok Aradhe made it clear that orders passed during the execution of arbitral awards are governed solely by the Arbitration Act, not by the Code of Civil Procedure (CPC). “The Act restricts judicial interference and embodies the principles of party autonomy and finality,” the Court emphasized.

At the heart of the matter was the question of whether legal representatives—against whom the arbitral award was sought to be executed—could raise objections. The Court held that since the execution was initiated against them in their capacity as legal representatives under the Will of the deceased judgment debtor, they are entitled to procedural safeguards under the CPC. “The use of the word ‘shall’ in Order 21 Rule 22 is not ornamental—it is mandatory. Notice to legal representatives is not a courtesy but a jurisdictional requirement,” the Court held, drawing strength from the Privy Council’s ruling in Raghunath Das v. Sundardas Khetri.

The apex court took exception to the fact that the Bombay High Court had proceeded with observations on the validity of the arbitral award—describing it as not fraudulent, not against public policy, and not a nullity—even before issuing statutory notice to the legal heirs. These observations, the Court said, “may have the potential to prejudice the respondents in raising lawful objections once the notice is actually served.”

In a firm rebuke, the Court set aside the Division Bench’s orders admitting the LPAs and restoring the execution proceedings back to their proper legal course. It directed that the executing court must first issue notice under Order 21 Rule 22 of the CPC. “Only upon receipt of this notice can the legal heirs raise objections under Rule 23(2), which must be considered independently, uninfluenced by earlier findings,” it ruled.

The Court concluded that “a person’s estate cannot be burdened with execution unless the law allows him the opportunity to defend it.” It also reminded courts to avoid premature conclusions in execution proceedings that may prejudice a fair hearing.

This judgment draws a clear line in the sand: arbitration awards must be executed swiftly, but not at the cost of due process. And while arbitral finality is respected, so too is the right of legal heirs to contest liability—not by invoking appeal routes that don’t exist, but by following the process the law mandates.

The message is unequivocal: execution under the Arbitration Act must follow the law, not shortcuts.