Synopsis

This judgment by the Bombay High Court dismisses a writ petition filed under Article 227 of the Constitution challenging an order passed by the District Court under Section 36 of the Arbitration and Conciliation Act, 1996. The petitioners, who were award-debtors, had challenged a majority arbitral award directing them to pay approximately Rs. 7.81 crores with interest. In their application to set aside the award under Section 34, they also sought a stay on the award's enforcement under Section 36. The District Court granted a conditional stay, requiring the petitioners to deposit the entire award amount with accrued interest. The High Court upheld this order, holding that the petitioners failed to make out an "exceptional case" warranting an unconditional stay, as required by the settled legal principles from Lifestyle Equities and Popular Caterers.

1. Heading for the judgment

Citation: M/s. Gagan Ace Developers & Anr. v. M/s. Choice & Ors., Writ Petition No. 1298 of 2026, decided on 18.03.2026 (Bombay High Court)
Coram: Hon'ble Mr. Justice N.J. Jamadar (Single Judge)
Core Law: Arbitration and Conciliation Act, 1996 (Sections 34 and 36); Code of Civil Procedure, 1908 (Order XLI Rule 5).

Bombay High Court upholds conditional stay on arbitral award requiring 100% deposit, holds that award-debtor must make out an "exceptional case" for unconditional stay under Section 36 of the Arbitration Act.

2. Legal framework

This judgment provides a detailed exposition of the principles governing the grant of a stay on the enforcement of an arbitral award pending a challenge under Section 34 of the Act.

• Arbitration and Conciliation Act, 1996:
  Section 34: Provides for the grounds on which an arbitral award may be set aside.
  Section 36: Deals with the enforcement of arbitral awards. The court analyzed sub-sections (2) and (3) in detail.
  Section 36(2): Clarifies that filing a Section 34 application does not automatically stay the aw

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