The Supreme Court’s decision in MMTC Ltd. v. Anglo American settles a simple but significant point: Section 47 CPC cannot be used to reopen an arbitral award that has already survived the full challenge process. MMTC tried to resist enforcement by alleging internal fraud in the pricing of coal, but the Court made it clear that such claims do not make an award void or stop its execution. The ruling strengthens the finality of arbitration and limits delay tactics at the enforcement stage.

Legal Issue

Whether objections under Section 47 of the Code of Civil Procedure, 1908, can be entertained to challenge the executability of an arbitral award that has attained finality under the Arbitration and Conciliation Act, 1996, on the ground of fraud allegedly committed by the corporation’s own officers.

Brief Facts

The dispute arose from a Long Term Agreement dated 7 March 2007 between MMTC Limited and Anglo American Metallurgical Coal Pvt. Ltd. for the supply of coking coal. When MMTC failed to lift the contracted quantity, Anglo invoked arbitration in 2012. A majority of the arbitral tribunal awarded Anglo USD 78.72 million on 12 May 2014. MMTC challenged the award under Section 34 of the Arbitration and Conciliation Act, but the Delhi High Court rejected the challenge, and the Supreme Court eventually upheld the award on 17 December 2020, modifying only the interest component in 2021.

During execution, MMTC tried to resist enforcement by filing objections under Section 47 CPC. It alleged that its own officers had colluded with Anglo officials in fixing an inflated price of USD 300 per metric tonne for the fifth delivery period, and claimed that this fraud came to light only after the Supreme Court’s 2020 decision. The Delhi High Court dismissed these objections and refused to stay execution, prompting MMTC to appeal before the Supreme Court.

Court’s Reasoning

The Supreme Court began by clarifying the narrow scope of Section 47 CPC. A decree can be questioned at the execution stage only if it is a nullity, typically due to lack of jurisdiction. Errors of fact or law, or issues already determined in earlier proceedings, cannot be reopened. The Court relied heavily on Electrosteel Steel Ltd. v. Ispat Carrier Pvt. Ltd. and the long-standing principle from Vasudev Dhanjibhai Modi v. Rajabhai Abdul Rehman that an executing court cannot go behind the decree except where the decree itself is void.

Turning to MMTC’s fraud allegations, the Court found that the accusations were directed at MMTC’s own internal officers, not at the arbitral tribunal or the contracting party, Anglo. The price of USD 300 PMT was linked to what the Empowered Joint Committee had fixed for SAIL and RINL, and MMTC’s board had approved the pricing and quantity as part of its regular commercial judgment. The Court emphasised that commercial decisions must be understood in their contemporary context, not with the benefit of hindsight. There was nothing to suggest that the decisions taken by MMTC’s directors fell outside the range of reasonable business judgment.

The Court effectively held that MMTC was trying to use Section 47 CPC as a backdoor to reopen the award, which had already been scrutinised and upheld through every stage of the arbitral challenge process. Allegations of internal mismanagement or poor decision-making, even if assumed to be true, do not make the award itself void or render it inexecutable.

Judgment

The Supreme Court dismissed MMTC’s appeal and affirmed the Delhi High Court’s order. It held that Section 47 CPC cannot be invoked to relitigate an arbitral award that has already achieved finality unless the award itself suffers from jurisdictional nullity. Since no such defect existed, and no fraud upon the arbitral tribunal or the judicial process was established, MMTC’s objections had to fail. The Court reiterated that internal issues within a corporation, including alleged misconduct by its officers, do not vitiate the enforceability of an arbitral award duly upheld by the highest court.

Subsequent Development

This judgment reinforces finality in arbitration and restricts the misuse of Section 47 CPC to delay enforcement. It also underscores the application of the “business judgment rule” in assessing the conduct of corporate directors, marking a crucial precedent in execution jurisprudence under the Arbitration and Conciliation Act, 1996.

Read the full judgement here

Case Title

MMTC Limited v. Anglo American Metallurgical Coal Pvt. Ltd.

Neutral Citation: 2025 INSC 1279 Court Supreme Court of India

Bench: Justice K.V. Viswanathan

Date of Decision: 3 November 2025