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Lack of prompt recourse under Arbitration Act not a foundation to appeal an arbitral ruling made on miscellaneous application before High Court: Himachal Pradesh High Court.

Arbitration and Conciliation Act, 1996 (short “1996 Act”) does not give a mechanism to contest an arbitral award, which is contrary to “Indian public policy”, upheld by the High Court of Himachal Pradesh through the learned Judge JUSTICE SATYEN VAIDYA, in the case of V. Kare Biotech v. Hemant Aggarwal (Civil Misc. Petition Main (Original) No. 130 of 2022).

Brief facts of the case:

“The phrase ‘Indian public policy’ encompasses several elements. It is a very different statement to suggest that the petitioners have no immediate recourse than to claim that they have no recourse at all.”

After noting that a party to arbitration procedures has recourse to contest the award rendered in such proceedings under Section 34 of the 1996 Act, the Court made this comment. The application filed by the petitioners pursuant to Order 11, Rules 1 & 2 read with Section 151 of the Code of Civil Procedure (for short “CPC”) seeking a response from the respondents, who are claimants before the Arbitrator, to the interrogatories formulated on behalf of the non-claimants/petitioner was dismissed. The reasons for dismissal were first, that the application was not maintainable prior to the submission of a written statement, and second, that the application was premature as the relevancy of the interrogatories could not be determined without the petitioners’ written statement. In response to this, an immediate petition was filed.

JUDGEMNET:

The court noted that Section 5 of the Arbitration and Conciliation Act of 1996 (for short the 1996 Act) begins with a non obstante clause, explicitly barring judicial participation in subjects controlled by Portion-I of the 1996 Act unless specifically allowed for in such part. The legislative aim is quite obvious. By including provisions such as Section 5 of the 1996 Act and making it a full code, arbitral procedures were not only retained autonomous but also free of any needless delays. Consequently, even though Section 5 of the 1996 Act cannot impede the functions of constitutional courts, such powers may not be easily available.

The court refrained from ruling on the merits of the impugned judgement because it was not maintainable and found that “while the arbitrator had the trappings of a tribunal, the impugned judgement could not be challenged under Article 227 of the Indian Constitution.”

JUDGEMENT REVIEWED BY – HARILAKSHMI

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