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Petition Under Article 227 Not Maintainable if Passed By The Arbitrator Against An Interim Order and If It Can Be Challenged U/S 34 Of The A&C Act: Delhi High Court

Delhi high Court ordered that Petition Under Article 227 is Not Maintainable Against An Interim Order Passed By The Arbitrator If It Can Be Challenged U/S 34 Of The A&C Act. This was seen in the case of SIDDHAST INTELLECTUAL PROPERTY INNOVATIONS PVT. LTD. v. CONTROLLER GENERAL OF PATENTS, DESIGNS AND TRADEMARKS AND ANR (CM(M) 812/2022 & CM APPL. 35671/2022, CM APPL.35672/2022, CM APPL.35673/2022). And the case was presided over by the single judge bench of HON’BLE MR. JUSTICE C.HARI SHANKAR.

Facts of the case-

During a Arbitration between Siddhast Intellectual Property Innovations Pvt. Ltd. (Siddhast) and Controller General of Patents, Designs & Trademarks hereafter (CGPDT), the defence CGPDT filed its Statement of Counter-claims against Respondent No. 1 – Siddhast along with an application under Order 1 Rule 10 CPC to implead a French company Questel SAS as Respondent No. 2 in its Counter-Claims only on the basis of a “Consortium Agreement” between Siddhast and Questel SAS though there was no written agreement between Questel SAS and CGPDT.

The learned arbitrator allowed the application against which Ld. Counsel for the petitioner had argued that provisions of Order 1 Rule 10 CPC were not applicable in arbitral proceedings and Questel SAS could not be impleaded for being non-signatory to the agreement between the petitioner and CGPDT. It was further argued that by impleading a multinational company, nature of the present domestic arbitration would convert into international arbitration; hence, the sole Arbitrator who had been appointed by the High Court of Delhi u/s 11 of the A&C Act shall forfeit his mandate as only Supreme Court of India can appoint the arbitrator(s) in an international arbitration.

Judgement –

The High Court did not appreciate the limitations under Articles 226 and 227 of the Constitution and reasoned that the Appellant had undertaken to appoint an arbitrator unilaterally, thereby rendering the Respondent No. 1 remediless. However, a plain reading of the arbitration agreement points to the fact that the Appellant herein had actually acted in accordance with the procedure laid down without any mala fides. For the same High court relied on the judgement of the Supreme Court in SBP & Co v. Patel Engineering Ltd. And Bhaven Construction v. Executive Engineer, Sardar Sarovar Narmada Nigam Ltd.

High Court further observed that Ld. Counsel for the Petitioner did cogitate on the issue of whether, if such an interpretation was to be accepted, any interlocutory arbitral order would at all exist, which could be challenged under Article 227 of the Constitution of India. However, the High Court opined that it was a deliberation which could be left for another day.

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Judgement Reviewed by Utkarsh Sahu

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