Writ maintainability in arbitration challenge: two-tier arbitral procedure not barred, and appellate award left undisturbed.

A writ petition under Articles 226 and 227 was found not maintainable to challenge an appellate award under the Permanent Machinery of Arbitrators, because the dispute did not directly impeach the arbitration mechanism itself. The Delhi HC noted that judicial recourse in arbitration matters is limited by Section 5 of the Arbitration and Conciliation Act, 1996, and that a two-tier arbitral procedure is not prohibited by that Act. It further observed that the parties had voluntarily accepted the contractual dispute-resolution framework, and that the Section 28 argument under the Indian Contract Act, 1872 did not change the maintainability analysis. The appellate award was therefore left undisturbed.

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Issues: Whether a writ petition was maintainable under Articles 226 and 227 of the Constitution of India to challenge an appellate award rendered under the Permanent Machinery of Arbitrators and whether the two-tier arbitral procedure was impermissible.

Analysis: The arbitration arrangement under the Permanent Machinery of Arbitrators was held not to exclude judicial recourse altogether, but the challenge in the petition was not to the arbitration mechanism itself. The Court noted that recourse to courts in arbitration matters is limited by Section 5 of the Arbitration and Conciliation Act, 1996, and that a two-tier arbitration procedure is not prohibited by that Act. It was further observed that parties had voluntarily accepted the contractual dispute-resolution mechanism and that the validity of the two-tier structure did not have to be decided in the absence of a direct challenge to it. The argument based on Section 28 of the Indian Contract Act, 1872 did not alter the result on maintainability.

Conclusion: The writ petition was not maintainable on the facts of the case and the appellate award was not interfered with.

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