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        2022 (8) TMI 1605 - HC - Indian Laws

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        Article 227 review of interlocutory arbitral orders is exceptional; ordinary challenge lies under Section 34 after the award. Article 227 supervision is not ordinarily available to challenge interlocutory arbitral orders because the Arbitration and Conciliation Act, 1996 confines ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                          Article 227 review of interlocutory arbitral orders is exceptional; ordinary challenge lies under Section 34 after the award.

                          Article 227 supervision is not ordinarily available to challenge interlocutory arbitral orders because the Arbitration and Conciliation Act, 1996 confines court interference to the limited appeal regime under Section 37 and, for other orders, to a challenge under Section 34 after the final award. Applying the restraint principles in SBP and Bhaven Construction, High Courts may interfere only in rare and exceptional cases, such as where a party would otherwise be left remediless or where clear bad faith is shown. On that reasoning, the impugned arbitral order fell outside Section 37 and could be questioned, if at all, only at the Section 34 stage; the writ petition was dismissed as not maintainable.




                          Issues: Whether a writ petition under Article 227 of the Constitution of India was maintainable to challenge an interlocutory order passed by the arbitral tribunal.

                          Analysis: The statutory scheme of the Arbitration and Conciliation Act, 1996 confines interference with arbitral proceedings. Orders of the arbitral tribunal are appealable only in the limited situations contemplated by Section 37, while other interlocutory orders may be questioned in a challenge to the final award under Section 34. The decisions in SBP and Bhaven Construction require High Courts to exercise restraint in arbitral matters and permit interference only in rare and exceptional situations, such as where a party would otherwise be left remediless or where clear bad faith is shown. The impugned arbitral order did not fall within Section 37 and could be assailed, if at all, at the Section 34 stage.

                          Conclusion: The writ petition was not maintainable under Article 227 and was dismissed.


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                          ActsIncome Tax
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