This blog has been written by Vivasvan Roy, 5th year student at the National University of Juridical Sciences (NUJS) 

In Electrosteel Steel Limited v. Ispat Carrier Private Limited (2025 INSC 525), the SC held that an arbitral award adjudicating a claim already extinguished by an approved insolvency resolution plan is a nullity and cannot be executed. Ispat Carrier, an MSME, had obtained an award of about Rs. 1.59 crore from the West Bengal MSME Facilitation Council; but by the time it was passed, a resolution plan approved under Section 31 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) had dealt with out-of-plan operational claims at nil. The debtor neither challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996 (“1996 Act”) nor appealed the plan’s approval; it raised the extinguishment only when execution was sought. The Court (Oka and Bhuyan JJ.) held that, on approval under Section 31(1), claims outside the plan stand extinguished (Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta, (2020) 8 SCC 531; Ghanshyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., (2021) 9 SCC 657); reinforced by Section 238 of the IBC. The Council therefore had nothing to arbitrate, and the award could be resisted as a nullity under Section 47 of the Code of Civil Procedure, 1908 (“CPC”), independently of any Section 34 challenge.

Once the claim stands extinguished under Sections 31 and 238 of the IBC, the arbitral tribunal lacks any surviving subject matter to adjudicate. If an objection is raised under Section 47, a broader question arises: does the decision permit a collateral challenge to an arbitral award outside the challenge architecture of the 1996 Act?

I.           Sections 34, 36 and 47

The three provisions are most effective together. Section 34 only permits a party to challenge an award on limited grounds and within a very short time frame (3 months, extendable by 30 days with no further extensions).  That the grounds are “narrow” has never guaranteed they stay so. The grounds for public policy, which were given a broad interpretation in ONGC Ltd. v. Saw Pipes Ltd. ((2003) 5 SCC 705), moved close to a merits review until the enactment of the 2015 Amendments. However, the Ssangyong Engineering & Construction Co. Ltd. v. NHAI case ((2019) 15 SCC 131) drew back the expansive interpretation.

Section 36 relates to enforcement of awards. After the Section 34 timeframe expires, the award is to be enforced “in accordance with the provisions of the Code of Civil Procedure, 1908” in the same way as a decree of a court. This is a deeming provision, meaning that when an award is enforced as if it were a decree, it does not actually become one. (See Paramjeet Singh Patheja v. ICDS Ltd., ((2006) 13 SCC 322.)  The enforcement court borrows the Code’s execution machinery without inheriting the supervisory apparatus that attaches to a civil decree.

Section 47 is part of that machinery. While the executing court cannot ordinarily go behind the decree, the provision permits it to decide certain questions arising in the course of execution. The exception is narrow and old. A decree passed without jurisdiction is a nullity whose invalidity “could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings” (Kiran Singh & Ors. v. Chaman Paswan, (AIR 1954 SC 340). But the same line fixes the limit.

In Vasudev Dhanjibhai Modi v. Rajabhai Abdul Rehman ((1970) 1 SCC 670) (the authority Electrosteel invokes) the Court held that such an objection may be entertained only where the want of inherent jurisdiction appears on the face of the record. Where it depends on investigating contested fact or law, the executing court must stay its hand. On that ground Vasudev Modi itself reversed a court that had treated a decree as a nullity after weighing evidence.

The real issue, then, is not whether Section 47 can ever be invoked against an arbitral award. It is whether Electrosteel recognises a narrow exception for awards rendered without adjudicatory authority, or a broader collateral-challenge mechanism operating alongside Section 34. The first is unobjectionable, and indeed unavoidable; the second would unsettle the Act’s enforcement scheme.

II.         A self-contained code, and the incentive to recast

The case for the narrow reading begins with structure. Section 5 of the 1996 Act provides that, “notwithstanding anything contained in any other law,” no judicial authority shall intervene “except where so provided” in Part I. The Court has described the Act as “a self-contained and exhaustive code” (Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333), excluding even appellate avenues the Act does not preserve. A reading of Electrosteel that permitted jurisdictional objections to be raised in execution irrespective of Section 34 would sit awkwardly with that scheme, for it would let a party bypass the Act’s sequencing: fixed window, closed grounds, designated court – simply by waiting for the Section 34 period to lapse.

The incentive to do so is plain. Once Section 34 is time-barred, A Section 47 nullity claim will be the only remaining way to oppose an unfavourable award. As such, “jurisdiction” is a flexible label. For instance, A) An improperly constituted tribunal, B) a marginal excess of mandate, C) an asserted conflict with an overriding statute; each can be recast as a defect going to the root of authority rather than an error within it. The litigant’s object is not to win on the merits but to persuade the court that there are no merits to decide. Unrestricted enforcement-stage jurisdictional objections would dilute the finality secured by Sections 5, 34 and 36, allowing execution proceedings to become a backdoor challenge mechanism.

In MMTC Ltd. v. Anglo American Metallurgical Coal Pvt. Ltd. (2025 INSC 1279), a debtor whose Section 34 challenge had failed up to the Supreme Court sought to resist enforcement under Section 47 on allegations of fraud by its own officers. It relied on Electrosteel to argue that the objection was maintainable. The Court agreed that such an objection could be raised at the enforcement stage. However, applying Vasudev Modi, it held that the alleged fraud did not render the award a nullity and could not reopen issues that had already attained finality. The objection therefore failed. The incentive identified above is therefore no longer hypothetical: a judgment debtor has already sought to recast a merits grievance –  alleged fraud – as a jurisdictional nullity in order to reopen an award sustained to the highest court. The Court refused, treating fraud internal to the corporation as an error within the award rather than a defect in the tribunal’s authority to make it. Whether the same result could have been a narrower reading of S.36 is beyond the scope of this note. The point is simply that Electrosteel should not be read as creating a separate route for challenging arbitral awards.

III.       The strongest objection

If an award is a nullity, it is not really an award at all. Refusing to enforce it is therefore not a second look at a valid award. On this view, Electrosteel does not create a new route to challenge an award, and there is no need for limiting principles.

There is some force in this argument. It draws support from Kiran Singh. An award based on a claim that stood extinguished under Sections 31 and 238 of the IBC could be seen in the same light, since there was no surviving dispute left for the tribunal to decide. It proves less than it claims, because its force rests entirely on the word “genuinely.” That a true nullity does not require a statutory challenge is beyond dispute. The real question is whether a particular award is a nullity. The principle explains the consequence of an award being void; it does not explain how that conclusion is reached. The need for limiting principles arises at that stage. They are what determine when an award can genuinely be treated as a nullity.

IV.        Confining the doctrine

Those principles already exist. The defect must go to inherent jurisdiction: the authority to adjudicate at all, and not to error within jurisdiction; and, following Vasudev Modi, it must appear on the face of the record rather than depend on investigation into contested fact or law. So understood, the test admits Electrosteel, since statutory extinguishment is incapable of waiver and is apparent from the approved plan and the Code, while excluding the contrived jurisdictional plea, which almost always requires the inquiry Vasudev Modi forbids. A more durable answer would codify the objections available at enforcement under Section 36, on the model of Section 48 and disciplined by an express bar on review of the merits; a structure that has held in the cognate context of foreign-award enforcement (Vijay Karia v. Prysmian Cavi E Sistemi SRL, ((2020) 11 SCC 1), but the immediate task is interpretive, not legislative.

V.          Conclusion

Electrosteel is correctly decided. An award adjudicating a claim that statute has extinguished is not a flawed award but an exercise of authority that does not exist, and Courts should not be obliged to enforce it merely because a limitation period has passed. The risk is in how the decision is read. Confined to awards rendered without adjudicatory authority; the defect apparent on the record and incapable of cure by waiver or delay – it states a narrow and orthodox proposition. A more expansive interpretation – as a general licence to raise objections regarding jurisdiction at execution after the close of Section 34 will effectively reopen the very litigation barred by the Act. Electrosteel should therefore be understood not as an additional challenge mechanism under the 1996 Act, but as a narrow application of the settled nullity doctrine recognised in Kiran Singh and disciplined by Vasudev Modi.