Gujarat High Court
Gujarat High Court
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Orders passed in pending Arbitration proceedings cannot be challenged in High Court under Articles 226/227 of the Constitution: Gujarat HC

Such orders passed by Artibral Tribunals cannot be challenged under Articles 226 and 227 of the Constitution of India as the Arbitration Act,1996 is a special act and a self­-contained code, the High Court held.

Meera Emmanuel

The Gujarat High Court recently reiterated that orders passed by the Arbitration Tribunal during the pendency of arbitration proceedings cannot be challenged before the High Court under Articles 226 and 227 of the Constitution of India (GTPL Hathway Ltd. v. Strategic Markering Pvt. Ltd).

As stated in the judgment,

“… 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 self­-contained code dealing with arbitration.”
Gujarat High Court

In the instant case, the primary question before Justice Bhargav D Karia was: Whether the any order passed during pendency of arbitration proceedings under the Arbitration Act­ 1996 can be challenged by certiorari under Articles 226 and 227 of the Constitution of India or not?

The petitioners through Advocates Sunit Shah and Yatin Soni argued that such orders are amenable to the High Court’s jurisdiction under Articles 226 and 227, as the Arbitration Act only provided for an alternative to mechanism of adjudication of disputes under the Code of Civil Procedure (CPC), 1908.

On the other hand, Advocate Shivang Shukla contended for the respondent that judicial intervention is restricted in Arbitration matters, particularly given Section 5 and 16 of the Act. It was submitted that any remedy available to the petitioner lay in Section 34 of the Act. It was, therefore, contended that the petitioner's challenge to the arbitral order in question could not be moved before the High Court under Articles 226 and 227 of the Constitution.

The High Court, in turn, examined various provisions of the Arbitration Act, 1996, to concede that this Act provided for a "complete procedure as an alternative to the normal procedure for adjudication of disputes before the Civil Courts under the CPC.

Relying on a host of case laws by the Supreme Court and various High Courts, Justice Karia proceeded to rule in the respondent’s favour, concluding that,

“.. the order passed by the Arbitration Tribunal during the course of Arbitration cannot be challenged by the petitioner under Articles 226 and/or 227 of the Constitution of India.”
Gujarat High Court

This was more so in view of the Supreme Court’s ruling in M/s. S.B.P. and Co. v. M/s. Patel Engineering Ltd. and Anr. Having ruled against such intervention by the High Court.

Moreover, the Bench made particular note that the Supreme Court in M/s. Deep Industries Limited v. Oil and Natural Gas Corporation has also noted that the object of the “self-contained” Arbitration Act was to minimise judicial intervention.

The petition was thus dismissed, allowing the preliminary objection to its maintainability and without going into the merits of the dispute.

“… it would be open for both the sides to raise all the contentions on merits before the appropriate forum”, the Court clarified.

Read the Judgment:

GTPL Hathway Ltd. v. Strategic Markering Pvt. Ltd.pdf
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