Proposal To Furnish Bank Guarantee, Not Enough For Stay Of Award, Should Establish Prima Facie Merits: Gujarat High Court

The Gujarat High Court, comprising Chief Justice Mrs. Justice Sunita Agarwal and Justice Aniruddha P. Mayee, ruled that merely filing an application under Section 34 of the Arbitration and Conciliation Act, 1996 does not automatically render an arbitral award unenforceable. In a case where Mother Dairy Fruit and Vegetable Pvt. Ltd. sought to stay execution of an arbitral award, the Commercial Court rejected the application due to the absence of substantive arguments on the award's merits. The High Court upheld this decision, emphasizing that a stay cannot be granted solely based on filing an application without demonstrating a prima facie case for potential success under Section 34 proceedings. It underscored that such decisions must be judicious and aligned with expeditious dispute resolution goals inherent in arbitration.