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2022 (8) TMI 1605
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.... under Section 16^1 of the 1996 Act, sought rejection of the counter-claim filed by Respondent 1. Respondent 1, in its application under Order I Rule 10 of the CPC, sought impleadment of M/s. Questel SAS as Respondent 2 in the arbitral proceedings. The impugned order rejects the petitioner's request for dismissal of the counter-claim of Respondent 1 and allows Respondent 1's request for impleadment of M/s. Questel SAS as Respondent 2 in the counter-claim in the arbitral proceedings. 3. Inasmuch as the present petition is, in my considered opinion, not maintainable under Article 227 of the Constitution of India, it is not necessary to enter into the merits of the impugned order. 4. On the issue of whether interlocutory orders passed in arbitral proceedings are amenable to challenge under Articles 226 and 227 of the Constitution of India, a Bench of seven Hon'ble Judges of the Supreme Court has held thus, in SBP & Co v. Patel Engineering Ltd. [(2005) 8 SCC 618] "45. It is seen that some High Courts have proceeded on the basis that any order passed by an arbitral tribunal during arbitration, would be capable of being challenged under Article 226 or 227 of the Constituti....
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....r Section 37(2)(a), whereas in the second, the appeal would lie under Section 37(2)(b). Interlocutory orders passed in arbitral proceedings are otherwise immune from challenge under the 1996 Act. 6. Para 45 of SBP clarifies that, where the interlocutory order does not fall within one of the aforesaid two instances envisaged by Section 37(2), a party aggrieved by an interlocutory order passed in arbitral proceedings has to wait till the arbitral proceedings conclude, whereafter the party, in the event that it is aggrieved by the award that is ultimately passed, could include, in its challenge to the said award, its grievances against the interlocutory order which was passed during the course of the arbitral proceedings. In that sense of the matter, SBP does not regard the party, aggrieved by the interlocutory order to be remediless, as the party has a remedy, albeit against the final award by the learned arbitrator. 7. Mr. Anukul Raj, learned Counsel for the petitioner, sought to distinguish SBP by referring to para 44 of the report, which read thus: "44. Once we arrive at the conclusion that the proceeding before the Chief Justice while entertaining an application un....
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....enability, to writ proceedings under Articles 226 and 227 of the Constitution of India, of interlocutory orders passed by arbitral tribunals, once again arose for consideration before a Bench of three Hon'ble Judges of the Supreme Court in Bhaven Construction v. Executive Engineer, Sardar Sarovar Narmada Nigam Ltd [(2022) 1 SCC 75] As in the present case, the challenge before the High Court, in Bhaven Construction5 was to an order passed by the learned arbitrator under Section 16 of the 1996 Act. Sardar Sarovar Narmada Nigam Ltd (SSNNL) preferred an application before the learned arbitrator, in that case, under Section 16 of the 1996 Act, questioning the jurisdiction of the learned arbitrator to arbitrate on the dispute. The learned arbitrator rejected the application on 20th October 2001. Writ proceedings, challenging the said order were initiated by SSNNL under Articles 226 and 227 of the Constitution of India before the High Court of Gujarat vide Special Civil Application 400/2002. The writ petition was dismissed by a learned Single Judge, against which SSNNL preferred the Letters Patent Appeal which was allowed by the Division Bench of the High Court vide order dated 17th Septe....
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....ay that each and every petition filed under Article 226 of the Constitution must be entertained by the High Court as a matter of course ignoring the fact that the aggrieved person has an effective alternative remedy. Rather, it is settled law that when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation." (emphasis supplied) It is therefore, prudent for a Judge to not exercise discretion to allow judicial interference beyond the procedure established under the enactment. This power needs to be exercised in exceptional rarity, wherein one party is left remediless under the statute or a clear "bad faith" shown by one of the parties. This high standard set by this Court is in terms of the legislative intention to make the arbitration fair and efficient. 19. In this context we may observe M/s. Deep Industries Limited v. Oil and Natural Gas Corporation Limited. [(2019) SCC Online SC 1602], wherein interplay of Section 5 of the Arbitration Act and Article 227 of the Constitution was analyzed as under: (SCC p. 714, paras 16-17) "16. Most significant of all is the ....
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.... Dr Peter Binder in International Commercial Arbitration and Conciliation in UNCITRAL Model Law Jurisdictions, 2nd Edn., observed: "An application for setting aside an award can only be made during the three months following the date on which the party making the application has received the award. Only if a party has made a request for correction or interpretation of the award under Article 33 does the time-limit of three months begin after the tribunal has disposed of the request. This exception from the three-month time-limit was subject to criticism in the working group due to fears that it could be used as a delaying tactics. However, although "an unbreakable time-limit for applications for setting aside" was sought as being desirable for the sake of "certainty and expediency" the prevailing view was that the words ought to be retained "since they presented the reasonable consequence of Article 33." According to this "unbreakability" of time-limit and true to the "certainty and expediency" of the arbitral awards, any grounds for setting aside the award that emerge after the three-month time-limit has expired cannot be raised. 37. Extending Section 17....
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....227 of the Constitution of India, nonetheless, the power vested in them by the said provision is discretionary in nature and "needs to be exercised in exceptional rarity, wherein one party is left remediless under the statute or a clear "bad faith" shown by one of the parties." Thus, save and except for cases where there are allegations of bad faith, interlocutory arbitral orders against which the party would have no other remedy, alone would form subject matter of challenge under Articles 226 and 227 of the Constitution of India. 12. I have had occasioned to opine on this aspect recently in Easy Trip Planners Ltd. v. One 97 Communications Ltd. [2021 SCC OnLine Del 2186] I venture, with humility, to reproduce paras 14 to 19 of the report in the said case, thus: "14. The afore-extracted passages from Bhaven Construction do not, in any manner, in my view, militate against what is stated in paras 45 and 46 of SBP. 15. Bhaven Construction envisages the availability of a remedy under Articles 226 and 227 of the Constitution of India in rare and exceptional cases, which, essentially, are delimited to two exigencies; the first, where the order suffers from ―bad ....
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....learned Counsel for the petitioner, very fairly did not seek to contend that the impugned order was immune from challenge at the Section 34 stage. He, however, did cogitate on the issue of whether, if such an interpretation is to be accepted, any interlocutory arbitral order would at all exist, which could be challenged under Article 227 of the Constitution of India. 15. That, however, is a deliberation, which could be left for another day. This Court is bound by the law enunciated in SBP and Bhaven Construction Following the said decisions and reserving the right of the petitioner to raise all grievances, raised in this petition, at the appropriate stage, this petition is dismissed as not maintainable. All miscellaneous applications are also disposed of. Footnotes 1 16. Competence of arbitral tribunal to rule on its jurisdiction.-(1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose,- a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and ....