Sundaram Finance Ltd. v T. Thankam (Abdul Samad)

Facts

• An arbitral award was made in favour of the respondent
• The appellant (award-debtor) filed a S.34 application and sought stay of enforcement under S.36(3)
• The court granted an unconditional stay without requiring any deposit or security
• The award-holder challenged the unconditional stay

Issue

1. Whether courts granting stay of enforcement pending S.34 should impose conditions to protect the award-holder.

Held

• Courts should not grant unconditional stay as a matter of course.
• Conditions should ordinarily be imposed (deposit of awarded amount, bank guarantee, or other security).
• The purpose of conditions is to protect the award-holder from being prejudiced by delay in enforcement.
• Unconditional stay effectively restores the pre-2015 position (automatic stay), defeating the amendment's purpose.
• Each case must be assessed on its facts; blanket unconditional stays are impermissible.

Ratio Decidendi

Post-2015 Amendment, the losing party must separately apply for stay and bear conditions. Unconditional stays defeat the legislative purpose of removing automatic stays. Courts must balance the award-debtor's right to challenge against the award-holder's right to expeditious enforcement.