Lalit Modi’s challenge dismissed; Delhi High Court holds consent arbitral awards can still be examined under Section 34 of the Arbitration Act

The parties had entered into an Agreement to Sell dated 24 June 2014 concerning property bearing No. 32, Paschimi Marg, Vasant Vihar, New Delhi.

Disputes arose regarding performance of the agreement, and both parties jointly appointed Naresh Gupta, Advocate, as sole arbitrator on 5 October 2016.

During the arbitration, the parties informed the arbitrator on 14 November 2016 that they had amicably settled their disputes. Their statements and the settlement terms were recorded and signed by both parties and the arbitrator.

The arbitrator thereafter made an award dated 21 November 2016, granting specific performance, directing execution and registration of the sale deed, and requiring the petitioner to vacate and hand over possession by 31 March 2017.

The award was signed and accepted by both parties, who also executed a separate “Acceptance” undertaking not to challenge it.

For registration purposes, the award was subsequently engrossed on non-judicial stamp paper on 12 January 2017.

The petitioner challenged the engrossed award under Section 34 of the Arbitration and Conciliation Act, 1996 (“A&C Act”), alleging, inter alia, post-award alteration, lack of jurisdiction, fraud, procedural irregularity, and non-disclosure of the arbitrator’s prior professional relationship with the respondent.

The respondent filed EX.P. 69/2017 seeking enforcement of both awards.

1. Whether an arbitral award on agreed terms or a consent award is maintainable and challengeable under Section 34 of the A&C Act?

2. Whether the subsequent engrossment of the award on stamp paper and its transmission for registration invalidated, modified, or substituted the original award dated 21 November 2016?

3. Whether the alleged failure of the arbitrator to make disclosures under Section 12(1) of the A&C Act, and his prior professional association with the respondent, rendered him ineligible or gave rise to justifiable doubts regarding his independence or impartiality?

4. Whether the respondent was entitled to proceed with execution of the arbitral award?

The Court applied Sections 30 and 31 of the A&C Act, holding that an award on agreed terms has the same status and effect as any other arbitral award and is required to comply with Section 31, although reasons are unnecessary under Section 31(3)(b).

Section 34 provides a uniform remedy against “an arbitral award” and does not exclude consent awards, though judicial scrutiny of such awards is ordinarily narrower and focuses on validity of consent, fraud, coercion, statutory compliance, jurisdiction, natural justice, public policy, and patent illegality.

Relying on OPG Power Generation (P) Ltd. v. Enexio Power Cooling Solutions (India) (P) Ltd., (2025) 2 SCC 417, the Court reiterated that Section 34 review is limited; patent illegality must go to the root of the matter and the Court cannot reappreciate evidence.

Under Sections 12(1)–(5), 13 and 14, disclosure is mandatory, but non-disclosure is not by itself an automatic ground of invalidity; the underlying circumstance must either create justifiable doubts under Section 12(3) read with the Fifth Schedule or attract statutory ineligibility under Section 12(5) read with the Seventh Schedule.

The Court relied on HRD Corpn. v. GAIL (India) Ltd., (2018) 12 SCC 471, Manish Anand v. Fiitjee Ltd., 2018 SCC OnLine Del 7587, and W.B. Housing Board v. Abhisek Construction, 2023 SCC OnLine Cal 827 for the distinction between Fifth Schedule doubts and Seventh Schedule ineligibility, and for the requirement that challenges be raised through the statutory procedure without undue delay.

The Court also applied Section 4 concerning waiver of objections.

The Court held that the award dated 21 November 2016 was a valid award on agreed terms because the parties had jointly settled the dispute, their statements were recorded and signed, and the award expressly embodied their consent and was signed by both parties.

The subsequent alteration to the concluding paragraph did not affect the substantive rights or obligations under the award.

Since the parties had jointly requested registration, the engrossment on stamp paper and communication to the Sub-Registrar were treated as consequential and ministerial acts, not as the making of a fresh or substituted award.

Although the Court rejected the respondent’s absolute argument that a consent award could never be challenged under Section 34, it found no statutory ground for setting aside the award.

The petitioner did not establish that the arbitrator’s past professional services for the respondent fell within any Seventh Schedule category or otherwise created objectively justifiable doubts under Section 12(3).

The alleged engagements occurred between 2008 and 2012, whereas the arbitration commenced in 2016; the relevant Fifth Schedule entries contemplated professional relationships within the preceding three years.

The typed copy of the arbitrator’s alleged reply dated 8 March 2018 was also disregarded because its authenticity and authorship were not proved.

Accordingly, the allegations of bias, non-disclosure, fraud, and procedural illegality were insufficient to displace the finality of the consent award.

The Court held that the award dated 21 November 2016 was a valid and final arbitral award on agreed terms; the later engrossment for registration neither invalidated nor substituted it; and the petitioner failed to prove arbitrator ineligibility, bias, justifiable doubts, fraud, patent illegality, or any other ground under Section 34.

Consequently, EX.P. 69/2017 was permitted to proceed for enforcement and execution of the award in accordance with law, and the matter was directed to be listed before the Roster Bench on 28 October 2026.

No order as to costs was made.