The Sundaram Finance test: execute any arbitral award where debtor or property lies.

An award in Mumbai, a debtor in Narsinghpur, and a jurisdictional wall that crumbled

Mahindra & Mahindra Financial Services Limited had won an arbitration award in Mumbai. The debtor, Neelambar Singh Patel, lived in Narsinghpur district, Madhya Pradesh. The company’s property—the asset it wanted to recover—was also there. So it did what any prudent decree-holder would do: it filed an execution application before the District Judge, Narsinghpur. That was in 2011. The District Judge dismissed it in 2012, holding that the court lacked territorial jurisdiction. The company spent the next twelve years in civil revision before the High Court of Madhya Pradesh at Jabalpur. By the time Justice Dwarka Dhish Bansal heard the matter on 5 August 2024, the legal landscape had shifted entirely. The Supreme Court had already overruled the very precedent that had killed the execution application. The High Court set aside the dismissal order and sent the case back. The stakes were simple: if the District Judge’s view stood, every arbitral award creditor in India would have to chase the debtor to the seat of arbitration, no matter where the debtor or the property was.

What the District Judge actually said

The execution application was filed under Section 36 of the Arbitration and Conciliation Act, 1996, read with Order 21 Rule 11 of the Code of Civil Procedure, 1908. The District Judge, Narsinghpur, dismissed it on 5 May 2012 in MJC No. 4/2011. The sole reason: lack of territorial jurisdiction. The judge relied on a Division Bench judgment of the Madhya Pradesh High Court itself—Computer Sciences Corporation India Pvt. Ltd. v. Harishchandra Lodwal and Anr., reported as AIR 2006 MP 34. That judgment had held that an arbitral award could only be executed before the court that would have had jurisdiction over the arbitral proceedings. If the award was passed in Mumbai, the execution had to be filed in Mumbai. To execute it elsewhere, the decree-holder would need to obtain a transfer of the decree from the court at the seat of arbitration. The District Judge applied that rule mechanically. The execution application was dead on arrival.

The twelve-year wait for a correction

Mahindra & Mahindra Financial Services Limited challenged the dismissal order by filing Civil Revision No. 240 of 2012 before the High Court of Madhya Pradesh at Jabalpur. The revision was admitted and kept pending. While it was pending, the Supreme Court delivered a judgment that changed everything. In Sundaram Finance Limited v. Abdul Samad, reported as 2018(1) MPLJ 640 (SC), the Supreme Court directly addressed the question of territorial jurisdiction for execution of arbitral awards. It held that an arbitral award, once it becomes enforceable under Section 36 of the Arbitration and Conciliation Act, 1996, is treated as a decree of a civil court. And a decree can be executed before any court in the country where the decree is capable of being executed. There is no requirement to obtain a transfer of the decree from the court that had jurisdiction over the seat of arbitration. The Supreme Court expressly declared that the view taken by the Madhya Pradesh High Court in Computer Sciences Corporation—and a similar view by the Himachal Pradesh High Court—was not good law.

What the High Court did

Justice Dwarka Dhish Bansal, hearing the civil revision on 5 August 2024, had a straightforward task. The impugned order of the District Judge, Narsinghpur, dated 5 May 2012, was based entirely on Computer Sciences Corporation. That precedent had been overruled by the Supreme Court in Sundaram Finance. The High Court held that the impugned order was unsustainable in light of the Supreme Court’s decision. It set aside the order and directed the Executing Court to restore the execution application to its original number and decide it afresh. The civil revision was allowed and disposed of. The High Court did not examine whether the District Judge, Narsinghpur, had jurisdiction on any other ground. It did not examine the merits of the execution application. Both questions were left entirely open for the Executing Court to decide afresh.

The rule that changed everything

The ratio decidendi of this judgment is narrow but powerful. An arbitral award can be executed before any court in the country where the decree is capable of being executed. The decree-holder does not need to first obtain a transfer of the decree from the court that had jurisdiction over the seat of arbitration. The contrary view, which had been followed by the Madhya Pradesh High Court for over a decade, is no longer good law. This is not a new principle. It is the logical consequence of treating an arbitral award as a decree under Section 36 of the Arbitration and Conciliation Act, 1996. A decree of a civil court can be executed anywhere in India where the judgment-debtor resides or carries on business or where the property is located. The same rule applies to arbitral awards. The seat of arbitration is irrelevant for execution purposes.

THE PLAY: If you hold an arbitral award and the debtor or the property is in a different city from the seat of arbitration, file the execution application directly before the court having jurisdiction over the debtor or the property. Do not waste time seeking a transfer of the decree from the court at the seat of arbitration. The Supreme Court has made that step unnecessary.

Why this matters for practitioners

For advocates handling arbitration enforcement, this judgment is a procedural shortcut. The old practice, following Computer Sciences Corporation, required a two-step process: first, file the execution application before the court at the seat of arbitration; second, obtain a transfer of the decree to the court where the debtor or property is located. That process added months, sometimes years, to the enforcement timeline. The Supreme Court in Sundaram Finance eliminated the first step. The decree-holder can go directly to the court where the decree can be executed. The Madhya Pradesh High Court has now confirmed that this rule applies retrospectively. Even if the execution application was filed before Sundaram Finance was decided, and even if it was dismissed based on the old precedent, the dismissal order can be set aside and the application restored.

For CFOs and founders, the takeaway is equally practical. If your company has an arbitration clause in its contracts, and if you win an award, do not assume that you must enforce it only in the city where the arbitration was held. If your debtor is in a different city, or if the asset you want to recover is in a different city, you can file the execution application there. The cost and delay of enforcement are reduced. The award becomes a more effective tool for recovery.

The one question the High Court did not answer

The High Court’s judgment is careful. It does not decide whether the District Judge, Narsinghpur, actually has jurisdiction over the execution application. It only holds that the dismissal order based on Computer Sciences Corporation was wrong. The Executing Court must now decide the question of jurisdiction afresh, applying the correct legal position. It must also decide the merits of the execution application. The remand leaves both issues open. The decree-holder will have to prove that the debtor resides or carries on business within the territorial jurisdiction of the District Judge, Narsinghpur, or that the property sought to be attached is located there. That is a factual question. The High Court has given no opinion on it.

The bottom line

If you hold an arbitral award and the debtor or the property is in a different city from the seat of arbitration, file the execution application directly before the court having jurisdiction over the debtor or the property. The Supreme Court has confirmed that this is permissible. The Madhya Pradesh High Court has now applied that rule to set aside a decade-old dismissal order. The procedural barrier is gone. The award is now as enforceable as any civil court decree.