Interference by Writ Courts in orders passed under Section 37 of Arbitration and Conciliation Act, 1996

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The Arbitration and Conciliation Act, 1996 (“Act”) provides, in Section 37(1)[1] and 37 (2)[2], for an ‘appeal’ from Court's and  Arbitral Tribunal’s order on interim/provisional measures (“interim order”) i.e., Section 8, 9 and Section 17. It also provides for appeal from the Court's order setting aside or refusing to set aside an Arbitral Award Under Section 34 as well as from an order of the Arbitral Tribunal accepting the plea under Section 16(2) and (3) of the Act that the arbitral tribunal does not have the jurisdiction or is exceeding the scope of its authority. It, however, does not stipulate the standard of review that the court must apply while reviewing an interim order. Without any prescribed legislative standard, courts have two alternatives available: test interim and other orders on the same grounds as those applicable for annulment of awards, laid down in Section 34 of the Act; or treat Section 37 proceedings as an appeal and assess the legality of orders on merits.
As per the position prevailing under the Arbitration Act in Section 37 (3)[3] , no second appeal against the said order is permissible in law and only a special leave petition under Article 136 of the Constitution of India would lie there. In this context, the present article seeks to examine the possibility of the invocation of writ jurisdiction before the concerned High Court against the orders passed under Section 37 of the Act.
Before answering the above said question, we are required to answer one pertinent, as to whether a writ petition would be directly maintainable against any order passed by an arbitral tribunal, as Section 37 provides for only specific cases. The answer to this would not be in the affirmative as held by the Supreme Court, in the case of SBP and Co. Vs Patel Engineering Ltd.[4], relevant extract is reproduced as under:
"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 approach. 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, has to wait until the award is passed by the Tribunal. This appears to be the scheme of the Act. The arbitral tribunal is after all, the creature of a contract between the parties, the arbitration agreement, even though if the occasion arises, the Chief Justice may constitute it based on the contract between the parties. But that would not alter the status of the arbitral tribunal. 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."
The Apex Court in the above said case was clearly of the view that, interference by High Court at any stage of the Arbitration proceedings would be uncalled for, since the statute provides remedies by way of Section 34 and Section 37 of the Act. Furthermore, these remedies being co-extensive being each other cover a wide range of cases.

ARE WRIT PETITIONS AGAINST ORDERS PASSED UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT, 1996 MAINTAINABLE?
The availability of a writ remedy against an order of a Court deciding the appeal under section 37 of the Act would open up the possibility of judicial interference at an initial stage of the proceedings and the consequent likely delays which can result there from, thus subverting the very essence of speedy adjudication which is the fundamental motivating factor of the 1996 Act and the subsequent amendments thereto.
The Supreme Court in the case of Deep Industries Limited v Oil and Natural Gas Corporation Limited and Anr [5]clarified the above cited issue of maintainability of writ petitions against orders passed by the relevant jurisdictional court under Section 37 of the Act.
Brief facts of the case were that  the respondent-Oil and Natural Gas Corporation Limited (for short “ONGC”) awarded a contract to the appellant for supply of one Mobile Air Compressor for a period of five years. Since disputes had arisen between the parties, the appellant invoked the arbitration clause contained in the contract , pursuant to which a claim petition was filed by the appellant before the learned Arbitrator in which the termination of the contract/show cause notice was challenged and damages claimed. Meanwhile, a Section 17 application was also moved by the appellants . Applications were then moved by the appellant to amend both the petition as well as the Section 17 application .
A Section 16 application was filed by the Respondents on the ground that since the arbitration notice was confined only to termination of the agreement, blacklisting would be outside the Arbitrator’s ken. This Section 16 application was dismissed The Section 17 application was decided in favour of the Appellant and the order of blacklisting was stayed by the arbitral tribunal.
Against this order of the arbitral tribunal, the Respondent filed an appeal under Section 37 of the Act. The appeal filed by the Respondent was rejected by the Court. The Respondent thereafter filed a writ petition before the High Court under Article 227 of the Constitution of India. The Appellant raised objections to the maintainability of the writ petition on the basis that no jurisdictional issue was raised by the Respondent
The High Court however without deciding the preliminary issue regarding maintainability of the writ petition, held that the issue of banning i.e. blacklisting was outside the scope of the contract. Further the High Court was also of the view that the notice invoking arbitration was only regarding termination of the contract and not regarding blacklisting of the Appellant. The High Court held that no stay on blacklisting could be granted by the arbitral tribunal while deciding the Section 17 application filed by the Appellant as the Appellant could be later compensated by damages
It was argued by the Appellant that since the Act is a self-contained code and no further appeal is provided for against an order passed under Section 37, the writ petition would not be maintainable under Article 227 of the Constitution. On the other hand, the Respondent argued that this was a case where the Arbitral Tribunal patently lacked jurisdiction to consider the issue of blacklisting and in such circumstances, the writ jurisdiction under Article 227 could be invoked. It was further argued on behalf of the Respondent that even otherwise, as damages could be granted subsequently, no interim relief should have been granted under Section 17 of the Act.

VIEW OF THE APEX COURT
The Supreme Court was of the view that the Act is a self- contained code for speedy disposal  of matters covered by it, therefore, if petitions under Article 226 / 227 of the Constitution are entertained against the orders passed in appeals under Section 37, the entire arbitral process would be tendered fruitless. The Apex Court reiterated 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."
The Apex Court was of the view that the reserve and exceptional power of judicial intervention under Article 227 is not to be exercised just for grant of relief in individual cases but should be directed for promotion of public confidence in the administration of justice in the larger public interest. The Supreme Court was however of the view that though petitions can be filed under Article 227 against orders passed in appeal under Section 37 of the Act, the High Court should be extremely circumspect in interfering with the same.
The Supreme Court also drew a distinction between the concept of 'serious dispute as to jurisdiction' and that of 'inherent lack of jurisdiction' of the arbitral tribunal while considering the interim application under Section 17. The Supreme Court concluded that since Article 227 is a constitutional provision, it will not be hit by the non obstante clause contained in Section 5 of the Act. Whilst petitions under Article 227 would be maintainable against order granting or rejecting reliefs under Section 37, only those orders should be interfered with which are patently lacking in inherent jurisdiction.

CONCLUSION
Before concluding here, we would like to state the aforesaid legal position as set out by the Apex Court in Deep Industries Case, relied upon the very important judgement of Nivedita Sharma Vs. Cellular Operators Association of India[1]. Notable conclusion in that case as summarised as under:
Ø    There cannot be any dispute that the power of the High Courts to issue directions, orders or writs including writs in the nature of habeas corpus, certiorari, mandamus, quo warranto and prohibition under Article 226 of the Constitution is a basic feature of the Constitution and cannot be curtailed by parliamentary.
Ø    However, it is one thing to say that in exercise of the power vested in it under Article 226 of the Constitution, the High Court can entertain a writ petition against any order passed by or action taken by the State and/or its agency/instrumentality or any public authority or order passed by a quasi-judicial body/authority, and it is an altogether different thing to say that each and every petition filed under Article 226 of the Constitution must be entertained by the High Court as a matter of course ignoring the fact that the aggrieved person has an effective alternative remedy
Ø     Rather, it is settled law that when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation.
Thus, a conjoint read of Nivedita Sharmas Case and the judgement in the case of Deep Industries[2], would bring us at an irresistible conclusion, that writ petition against, orders passed under Section 37 of Arbitration and Conciliation Act, would only be maintainable when there is inherent lack of jurisdiction of the Arbitral Tribunal. The necessary corollary which then flows is:
Ø   Apex Court has limited writ interference only to those matter falling within Section 16 of Arbitration and Conciliation Act, 1996.
Ø    Section 16, clause (2) and (3) talk about, the competence of Arbitral Tribunal to decide on its jurisdiction on those cases, where the tribunal patently lacks jurisdiction or where the tribunal exceeds its jurisdiction.
Ø   Though an appeal against clause (2) and (3) of Section 16, lies under Section 37 of A&C Act, 1996, still a second window, in terms of a writ interference in provided by the Apex Court, to review the order passed under an appeal under Section 37 of the Act.

 Aditya Jain is an Advocate on Record at Supreme Court of India and Partner at J&G Advocates
Neha Gyamlani is an Advocate at Supreme Court of India/Rajasthan High Court and Partner at J&G Advocates
[1] 37. Appealable orders.- (1) An appeal shall lie from the following orders (and from no others) to the Court authorized by law to hear appeals from original decrees of the Court passing the order, namely:-(a) refusing to refer the parties to arbitration under section 8;(b) granting or refusing to grant any measure under section 9;(c) setting aside or refusing to set aside an arbitral award under section 34.
[2]37(2) An appeal shall also lie to a Court from an order granting of the arbitral tribunal.-(a) accepting the plea referred in sub-section (2) or sub-section (3) of section 16; or (b) granting or refusing to grant an interim measure under section 17.
[3]37 (3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court
[4] (2005) 8 SCC 618
[5] (Civil Appeal 9106 of 2019 decided on 28 November 2019)
[6] (2011) 14 SC 337
[7] Supra

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