2020 (9) TMI 1276 - SC - Indian Laws

Supreme Court emphasizes adherence to statutory provisions in challenging arbitral decisions

The Supreme Court dismissed the special leave petition challenging a judgment primarily due to a delay in filing the petition after the conclusion of ... Maintainability of petition - the impugned order passed by the Arbitral Tribunal on 08.01.2017 was challenged only 2½ years late and the petitioner filed the writ petition at the last minute after the arguments had concluded before the Arbitral Tribunal - writ petition has been dismissed, filed under Article 227 directly against a section 16 application without following the drill of section 16 of the Arbitration Act - patent lack of inherent jurisdiction to interfere with deposit orders - HELD THAT:- A foray to the writ Court from a section 16 application being dismissed by the Arbitrator SLP (C) No. 8482/2020 can only be if the order passed is so perverse that the only possible conclusion is that there is a patent lack in inherent jurisdiction. A patent lack of inherent jurisdiction requires no argument whatsoever - it must be the perversity of the order that must stare one in the face. Unfortunately, parties are using this expression which is in our judgment in Deep Industries Ltd. [2019 (11) TMI 1632 - SUPREME COURT], to go to the 227 Court in matters which do not suffer from a patent lack of inherent jurisdiction. This is one of them. Instead of dismissing the writ petition on the ground stated, the High Court would have done well to have referred to our judgment in Deep Industries Ltd. and dismiss the 227 petition on the ground that there is no such perversity in the order which leads to a patent lack of inherent jurisdiction. The High Court ought to have discouraged similar litigation by imposing heavy costs. The High Court did not choose to do either of these two things. In any case, now that Shri Vishwanathan has argued this matter and it is clear that this is not a case which falls under the extremely exceptional category, we dismiss this special leave petition with costs of Rs.50, 000/- to be paid to the Supreme Court Legal Services Committee within two weeks - Application disposed off. Issues:Challenge to impugned judgment based on delay in filing, application under Article 227 against section 16 application, interpretation of inherent jurisdiction, misuse of legal expressions, dismissal of special leave petition.Analysis:The Supreme Court considered a case where the impugned judgment was challenged primarily on the grounds of delay in filing the petition. The Court noted that the writ petition was filed after the conclusion of arguments before the Arbitral Tribunal, which led to its dismissal. The petitioner filed the writ petition directly under Article 227 against a section 16 application without following the procedure outlined in the Arbitration Act. The Court emphasized the importance of adhering to the statutory provisions and procedures while challenging arbitral decisions.In the arguments presented by the petitioner's counsel, reference was made to a previous judgment in Deep Industries Ltd. v. Oil and Natural Gas Corporation Ltd. The counsel highlighted paragraph 16 of the judgment, emphasizing the need for circumspection when interfering with orders under Article 227, particularly in cases involving appeals under Section 37 of the Arbitration Act. The counsel contended that the arbitration clause in the Joint Venture Agreement did not refer to a third party, indicating a lack of inherent jurisdiction in the case.The Court clarified that a petition to the writ Court from a section 16 application dismissal by the Arbitrator could only be justified if the order was so perverse that it unequivocally demonstrated a patent lack of inherent jurisdiction. The Court cautioned against misusing legal expressions from previous judgments to seek intervention in cases that did not meet the exceptional criteria of patent lack of inherent jurisdiction. In this instance, the Court found that the case did not fall under the category warranting interference based on inherent jurisdiction.Consequently, the Court dismissed the special leave petition, emphasizing the absence of perversity in the order that would indicate a patent lack of inherent jurisdiction. The Court expressed disappointment in the failure of the High Court to reference the relevant judgment and discourage similar litigation by imposing heavy costs. As a result, the Court ordered the petitioner to pay costs to the Supreme Court Legal Services Committee and disposed of any pending applications related to the case.