Unconditional Stay Only In Exceptional Cases: Supreme Court Clarifies Section 36(3)

Introduction

The Supreme Court of India, in its earlier decision revisited the principles governing the grant of stay on arbitral awards particularly when the award directs payment of money. In Popular Caterers v. Ameet Mehta & Ors.¹, the Court set aside a Bombay High Court order that had granted an unconditional stay on the execution of a ₹4-crore arbitral award. Emphasising that such stays are permissible only in narrow, exceptional situations, the Court clarified the proper application of Section 36(3) of the Arbitration and Conciliation Act, 1996, and reaffirmed that courts must avoid entering into a detailed merits review at the interim stage. This judgment further strengthens India's pro-enforcement arbitration framework and highlights the limited circumstances under which monetary awards may be stayed without security.