Execution Court May Realise Quantified Costs Supported by Arbitral Records Even if Not Explicitly Aggregated in Award

The Decree Holder (DH) filed an execution petition under Section 36 of the Arbitration and Conciliation Act, 1996, to enforce an Arbitral Award dated 01.05.2025

While the principal awarded amount and interest were paid, the Judgement Debtor (JD) failed to pay the costs of the arbitration proceedings awarded under Paragraph 15(iv) of the Award

The DH originally claimed ₹16,33,800 but subsequently restricted the claim to ₹9,28,300, representing costs strictly incurred during the arbitral proceedings, supported by invoices and memos already part of the arbitral record

The JD resisted the execution, arguing that the costs were unquantified in the Award and therefore unenforceable

1. Whether the costs of the arbitral proceedings, though not explicitly summed up in the final Award, are executable when the supporting quantification and invoices were part of the arbitral record

2. Whether the JD can rely on the precedent of H.P. Cotton Textile Mills Ltd. to deny payment of costs in the present factual matrix

The court primarily applied Section 36 of the Arbitration and Conciliation Act, 1996, regarding the enforcement of arbitral awards as if they were decrees of the court

It considered the principle established in H.P. Cotton Textile Mills Ltd. v. The Oriental Insurance Company Ltd., which holds that an execution court cannot "go behind the award" to quantify costs if the parties failed to furnish proof of such costs during the arbitration

However, the court distinguished this by applying the principle that if costs were formally taken on record during proceedings and awarded categorically, they are deemed quantified

The Court distinguished the present case from the JD’s cited precedent, H.P. Cotton Textile Mills Ltd. In that case, costs were rejected because no invoices or proof of payment were placed before the Tribunal or the execution court

Conversely, in the present matter, the DH had submitted a tabulated statement and invoices which the Arbitrator formally took on record via an order dated 15.01.2024

The Court reasoned that since the Arbitrator rendered a categorical award for costs and the DH’s computation was never contested during the arbitration, those costs must be regarded as the "costs awarded" by the Tribunal

The Court further noted that the DH correctly excluded costs related to High Court and Supreme Court litigation to confine the claim to the arbitral stage

The Court directed the Judgement Debtors to ensure payment of ₹9,28,300 within four weeks from the date of the order. The execution petition was disposed of accordingly