When would an order of an Arbitral Tribunal amount to an interim award? Delhi HC answers

In a judgment passed on Monday, the Delhi High Court highlighted the principles to be borne in mind in deciding whether an order passed by an arbitral tribunal would qualify as an interim award within the meaning of Section 2(1)(c) of the Arbitration Act, 1996. .Pertinently, Justice Sanjeev Narula observed,.“The Arbitral Tribunal while passing such procedural order may determine certain valuable rights of the parties. However, it does not mean that such determination renders an order to be an award within the meaning of Section 2 (1) (c) of the Act. The determination of a valuable right in any legal proceedings would not necessarily result in an immediate actionable right. .In order to ascertain whether an order is an interim award or partial award, the two most important factors that would weigh upon the Court are the concept of “finality” and “issue”. If the nature of the order is “final” in a sense that it conclusively decides an issue in the arbitration proceedings, the order would qualify to be an interim award.“.The Court made the observation file dismissing a petition challenging an Arbitral Tribunal’s order rejecting an application by ONGC Petro Additions Ltd (OPAL) to file additional documents. The Arbitral Tribunal had been constituted to settle disputes between OPAL and Tecnimont, stemming from a 2011 contract..Case background.In May this year, the tribunal rejected an application filed by OPAL to file certain additional documents beyond the deadline set by the tribunal. This was challenged by OPAL before the Delhi High Court while invoking Section 34 of the Arbitration and Conciliation Act, 1996..Appearing for OPAL, Senior Advocate AM Singhvi argued that the application was rejected only because it was inconvenient. He submitted that the order rejecting the same extinguished a valuable right of OPAL and was therefore an interim award amenable to challenge before the High Court..However, Tecnimont challenged the maintainability of the petition on the ground that the rejection of an application to file additional documents would not constitute an interim award in order to be the subject of challenge under Section 34..Appearing for Tecnimont, Senior Advocate Ritin Rai argued that the order in question was only a procedural order and not an interim award as far as the Arbitration Act was concerned..To buttress his case, Rai placed reliance on the Delhi High Court decision in Rhiti Sports Management Pvt Ltd v. Power Play Sports & Events, in which it was observed,. “… for an order to qualify as an arbitral award either as final or interim, it must settle a matter at which the parties are at issue….To put it in the negative, any procedural order or an order that does not finally settle a matter at which the parties are at issue, would not qualify to be termed as “arbitral award”.”.Order rejecting application to file additional documents not an Interim Award.Justice Narula concurred with the view forwarded on behalf of Tecnimont and opined that the law laid down in Rhiti Sports Management squarely applied in the instant case. As noted in the judgment,.“In the present case, the impugned order does not decide or finally dispose of any issue…the Court has to be mindful of the fact that the order impugned in the present petition is nothing but a procedural order. The Arbitral Tribunal while passing such procedural order may determine certain valuable rights of the parties. However, it does not mean that such determination renders an order to be an award within the meaning of Section 2 (1) (c) of the Act….…The impugned order only rejects OPaL’s application for placing additional documents on record. It does not decide an issue or the subject matter of adjudication between the parties. The arbitral tribunal has only decided the question as to whether the Petitioner would be permitted to file additional documents at a later stage. The order impugned though conclusively determines the application, however, it cannot be said that the subject matter of arbitration and the rights of the parties in respect thereof have been finally determined.“.Further, he also noted,.“One cannot ignore the fact there is no provision under the Act that permits OPaL to challenge a procedural order passed by the Arbitral Tribunal. For an order to qualify as an “award”, the test of finality is undoubtedly essential, but that does not mean that any final view of the Arbitral Tribunal would come within the ambit of an ‘award.’“.In view of this position, the Court concluded that OPAL’s petition was not maintainable..Courts cannot assume the role of legislator.Before parting with the matter, Justice Narula also addressed submissions put forward by Singhvi, who argued that the Court should adopt a progressive attitude while interpreting the law when there is no direct law on an issue..The Court, however, responded that it should be more circumspect in ensuring that it does not step into the domain of the legislature when there is no law enabling its intervention. Justice Narula observed,.“The argument is outwardly attractive and enchanting but, I feel that there are no milestones that the Court has to accomplish….…I cannot create an opening, if the door is tightly shut. If the law permits an entry, only then the Court can decide the extent for opening the door. The Courts may advance development of law, but that cannot be achieved by assuming the role of a legislator. Such move should be well guarded and well considered. It is critical that Courts do not go beyond the legislative intent. .The Courts would also not remove the deficiencies, if such are shown to exist in a legislation. It is for the legislature to make amends. Heavy weight of the claims does not allow the Court to lift the bar or bend it to suit a particular view.“.He went on to point out that even though courts have a supervisory role to play when it comes to arbitration in India, their jurisdiction should be confined to the mandate outlined in the Arbitration Act..In any case, the Court found that even on merits, the Arbitral Tribunal’s rejection of OPAL’s application could not be faulted. The Court found that there was inordinate delay on the part of OPAL in filing the application and that the same was filed without any explanation for the delay. As noted in the judgment,.With these observations, the Court dismissed the application. However, it was made clear that the Court’s views in this judgment should not have any bearing on the merits of the case before the Arbitral Tribunal. .[Read the Judgment]