Supreme Court Clarifies Scope of Section 47 CPC in Arbitration Enforcement—Fraud Must Go to Court’s Jurisdiction, Not Contractual Disputes

Case Name: MMTC Ltd. v. Anglo American Metallurgical Coal Pty. Ltd. & Anr.
Citation: Civil Appeal arising out of SLP (C) No. 11476 of 2023; 2025 INSC 1249
Date of Judgment/Order: 03 November 2025
Bench: Hon’ble Ms. Justice Hima Kohli & Hon’ble Mr. Justice Ahsanuddin Amanullah

Held: The Supreme Court held that MMTC’s objections under Section 47 CPC to resist execution of the arbitral award were untenable because the allegations of fraud pertained only to the underlying commercial contract and intra-corporate conduct, not to the arbitral tribunal’s jurisdiction or the court’s competency to enforce the award. The Court clarified that fraud capable of defeating execution must be of a kind that renders the decree a nullity—such as fraud on the court or jurisdictional fraud. Since MMTC’s claims were conclusively rejected in Section 34 and Section 37 proceedings, and the tribunal’s jurisdiction stood affirmed, the execution court could not reopen the dispute under the guise of Section 47 CPC.

Summary: The dispute arose from a long-running international coal supply agreement between Anglo American and MMTC. An arbitral award dated 28.07.2017 directed MMTC to make payments, which MMTC challenged unsuccessfully under Sections 34 and 37 of the Arbitration and Conciliation Act. After the award attained finality, Anglo American initiated execution. MMTC filed objections under Section 47 CPC alleging that the award was vitiated by fraud, claiming internal collusion, manipulation of contractual communications, and misconduct by its own officers. The execution court dismissed the objections, holding that such allegations were already raised—or capable of being raised—in the arbitration challenge proceedings. The High Court affirmed. Before the Supreme Court, MMTC argued that fraud vitiates all judicial acts and that execution of a fraud-tainted award is impermissible. The Court, analysing S.P. Chengalvaraya Naidu, A.V. Papayya Sastry, N. Yeshoda, and Devas Multimedia, drew a clear line between (i) fraud that undermines jurisdiction or the integrity of the adjudicatory process, and (ii) fraud that pertains to contractual performance or internal management. Only the former can defeat execution. The Court held that MMTC’s allegations did not meet this threshold and amounted only to an impermissible collateral attack on an award that had already survived statutory scrutiny.

Decision: The Supreme Court dismissed the appeal, holding that MMTC’s objections under Section 47 CPC were barred because the arbitral award had already obtained finality after dismissal of the Section 34 and Section 37 challenges, and the fraud alleged did not relate to jurisdictional nullity or fraud on the court. The Court affirmed the High Court’s view that Section 47 cannot be invoked to reopen merits or revive allegations previously rejected during arbitral challenge proceedings. Execution of the award was permitted to proceed, with all pending applications disposed of.