Time and again in India, it has been ruled that invocation of writ
jurisdiction against an order of Arbitral Tribunal is not generally permissible.
The scheme of Arbitration and Conciliation Act, 1996 (the Act) stems from the
principle that there has to be minimal judicial intervention following the lines
of UNCITRAL Model Law on Commercial Arbitration, 1985. In the arbitration
process, Arbitral Tribunal plays a significant role as it sets the procedure of
the proceedings, and passes an award/decree on the subject matter of dispute.
must be appreciated that the Supreme Court as well as various High Courts have
expressed reluctance to interfere in the arbitration proceedings by exercising
writ jurisdiction over non-appealable orders of the Arbitral Tribunal.
In one of the recent developments a three-judge Constitutional Bench of Apex
Court in Bhaven Construction v. Executive Engineer Sardar Sarovar Narmada Nigam
Limited & Anr., has observed that the High Court's power of interference
under Articles 226 and 227 of the Constitution of India, in the context of
arbitral proceedings, may be exercised only in "exceptional rarity"
the Gujarat High Court in GTPL Hathway Limited v. Strategic Marketing Private
, dismissed a writ petition challenging an interim order passed by the
arbitrator. It was held, "15. In view of aforesaid settled legal proposition,
considering the policy, object and the provisions of the Act,1996, an order
passed during arbitration proceedings by the Arbitration Tribunal cannot be
challenged under Articles 226 and 227 of the Constitution of India as the
Act,1996 is a special act and a selfcontained code dealing with arbitration.
Therefore, the impugned order of the Arbitration Tribunal deciding the
preliminary objection raised by the petitioner cannot be challenged under
Article 226 or 227 of the Constitution of India."
One of the most relevant seven-judge Constitutional Bench's judgments laid down
the settling principles in S.B.P & Company v. Patel Engineering Limited &
., the Apex Court has ruled in golden words that, "45. It is seen that
some High Courts have proceeded on the basis that any order passed by an
arbitral tribunal during arbitration, would be capable of being challenged under
Article 226 or 227 of the Constitution of India. We see no warrant for such an
Section 37 makes certain orders of the arbitral tribunal appealable.
Under Section 34, the aggrieved party has an avenue for ventilating his
grievances against the award including any in-between orders that might have
been passed by the arbitral tribunal acting under Section 16 of the Act. The
party aggrieved by any order of the arbitral tribunal, unless has a right of
appeal under Section 37 of the Act. …It will still be a forum chosen by the
parties by agreement.
We, therefore, disapprove of the stand adopted by some of the High Courts that
any order passed by the arbitral tribunal is capable of being corrected by the
High Court under Article 226 or 227 of the Constitution of India. Such an
intervention by the High Courts is not permissible."
46. The object of minimizing judicial intervention while the matter is
in the process of being arbitrated upon, will certainly be defeated if the High
Court could be approached under Article 227 of the Constitution of India or
under Article 226 of the Constitution of India against every order made by the
arbitral tribunal. therefore, it is necessary to indicate that once the
arbitration has commenced in the arbitral tribunal, parties have to wait until
the award is pronounced unless, of course, a right of appeal is available to
them under Section 37 of the Act even at an earlier stage."
Similar provisions were laid in SAIL v. Indian Council of Arbitration & Ors.,
wherein it was observed that, "13. Considering the view taken by the Apex Court
in SBP & Company (supra) as well as the view taken by this Court in Cadre Estate
Pvt. Ltd. (supra). This Court, therefore, must necessarily hold that a writ
petition does not lie against a non-appealable order passed by the Arbitrator
during the course of arbitral proceedings.
14. In any case, even if it is held that a writ petition against a non-appealable
order of the Arbitrator is maintainable, considering the legislative intent, as
expressed in Section 5 of the Act, which provides that no judicial authority
shall intervene in matters governed by Part-I except to the extent provided in
the said Part and acknowledging that interference with the arbitral proceedings,
in exercise of writ jurisdiction of the Court, is bound to delay the conclusion
of such proceedings, thereby defeating one of the main objectives behind
preferring arbitration over litigation, the Court would be well advised in not
interfering with such an order in exercise of its writ jurisdiction."
It is imperative to note that despite the dicta laid down by Apex Court, certain
judgments have taken a nuanced differentiation of the decision laid down in SBP
Co. (supra). For instance, in Raj International v. Tripura Jute Mills
, it has
been observed that:
34. Even if this Court considered the case of Patel
Engineering (supra) as relied upon by the learned Counsel of the respondents,
then also it can be easily said that their lordship in paragraph 46 held that
each and every order made by the Tribunal should not be allowed to challenge
under Article 227 or 226 of the Constitution for defeating the purpose of
arbitration proceeding meaning thereby that in an extra ordinary situation, the
Court can exercise the power under Articles 227 and 226 of the Constitution
against the order made by the Arbitral Tribunal or Arbitrator, particularly when
there is no provisions either for revision or for any appeal and it would not be
proper for a Court to force the party in an arbitral proceeding like the present
petitioner to appear before the arbitral tribunal/arbitrator, till the
completion of whole proceeding and passing of award though prima facie it
appears that the arbitrator did not act in accordance with the mandate of the
provisions of the Act and acted as a purported agent of the appointing
authority, herein the Commissioner, (I&C), Government of Tripura while
respondent is a Government undertaking.
35. In view of the aforesaid observation and discussion, this Court has
no hesitation to hold that this is a fit case where the Court should exercise
its power under Article 227 of the Constitution and accordingly, the impugned
order is set aside and the matter is remitted back to the Arbitrator to decide
the plea of jurisdiction raised before him by the petitioner and then proceed
with the matter of arbitration in accordance with law."
Another such instance of dismissal of a writ petition is in the judgment
delivered by Karnataka High Court in Tejaejavathamma v. M. Nataraj & Ors.,
wherein the principles of S.B.P (supra) were reiterated.
Similarly in Dowell Leasing & Finance Ltd. v. Radheshyam B. Khandelwal &
, it was observed that, "10. It would be clear from a reading of the
paragraph as also the directions, the Hon'ble Supreme Court has held that the
High Courts ought not to invoke its extra-ordinary jurisdiction under Articles
226 and 227 in respect of orders passed in pending arbitral proceedings. This is
more so in respect of proceedings in respect of which a remedy is available
under the Act. The judgment has not taken a view that no writ can go to an
Arbitral Tribunal or that Arbitral Tribunal is not a person to whom a writ
cannot be issued."
The Bombay High Court also in M/s Sanwal Coal Carriers v. Western Coalfields
. also affirmed the dicta laid in Dowell Leasing (supra) judgment.
However, the Supreme Court slightly changed its decisions in the judgments
delivered later on. In Deep Industries Ltd. v. ONGC
, it has been held
that, "13. This being the case, there is no doubt whatsoever that if petitions
were to be filed Under Articles 226/227 of the Constitution against orders
passed in appeals Under Section 37, the entire arbitral process would be
derailed and would not come to fruition for many years.
At the same time, we
cannot forget that Article 227 is a constitutional provision which remains
untouched by the non-obstante Clause of Section 5 of the Act. In these
circumstances, what is important to note is that though petitions can be filed
Under Article 227 against judgments allowing or dismissing first appeals Under
Section 37 of the Act, yet the High Court would be extremely circumspect in
interfering with the same, taking into account the statutory policy as
adumbrated by us herein above so that interference is restricted to orders that
are passed which are patently lacking in inherent jurisdiction."
Again in L. Chandra Kumar v. Union of India, it has been observed that, "92.
It has also been contended before us that even in dealing with cases which are
properly before the Tribunals, the manner in which justice is dispensed by them
leaves much to be desired. Moreover, the remedy provided in the parent statutes,
by way of an appeal by special leave under Article 136 of the Constitution, is
too costly and inaccessible for it to be real and effective. Furthermore, the
result of providing such a remedy is that the docket of the Supreme Court is
crowded with decisions of Tribunals that are challenged on relatively trivial
grounds and it is forced to perform the role of a First Appellate Court.
We have already emphasised the necessity for ensuring that the High Courts
are able to exercise judicial superintendence over the decisions of Tribunals
under Article 227 of the Constitution. In R.K. Jain's case
, after taking note of
these facts, it was suggested that the possibility of an appeal from the
Tribunals on questions of law to a Division Bench of a High Court within whose
territorial jurisdiction the Tribunal falls, be pursued.
It appears that no follow-up action has been taken pursuant to the suggestion.
Such a measure would have improved matters considerably. Having regard to both
the afore-stated contentions, we hold that all decisions of Tribunals, whether
created pursuant to Article 323A or Article 323B of the Constitution, will be
subject to the High Court's writ jurisdiction under Articles 226/227 of the
Constitution, before a Division Bench of the High Court within whose territorial
jurisdiction the particular Tribunal falls."
A perusal of the above judgments shows that it is a clear and well-settled
principle of law pertaining to writ jurisdiction over orders of arbitral
tribunals. However, the dispute still continues to come up before the courts for
adjudication which takes the time of the Courts which needs to be stopped.
- 2022 (1) SCC 75.
- 2020 (4) GLH 1.
- 2005 (8) SCC 618.
- (2013) SCC OnLine Del 4490.
- (2008) SCC OnLine Gau 333.
- (2007) SCC OnLine Bom 655.
- (2010) SCC OnLine Bom 1256.
- (2019) SCC OnLine 1602.
- (1997) 3 SCC 261.