Jai Ambay Filling Station, Amritsar Road, Moga v. Indian Oil Corporation Ltd & Anr.

Mr.Ashish Kapoor , Advocate for the respondents MAHESH GROVER, J The petitioner is aggrieved by the order dated 12.3.2010 which was passed in the arbitration proceedings by the Arbitrator. Learned counsel for the petitioner states that the revision is the correct remedy for redressal of his grievance. He further states that if an application does not fall within the ambit of Section 37 of the Arbitration Act which provides for certain appealable orders than in the absence of any other remedy, petition under Article 227 of the Constitution of India is the only answer. The contention has been opposed by the learned counsel for the respondent who has relied upon judgment of Hon'ble Supreme Court titled as M/s S.B.P.& Co. versus M/s Patel Engineering Ltd. & Anr. 2005(8) SCC 618. I have heard learned counsel for the parties and have perused the material on record and I am of the considered opinion that the revision petition is mis-conceived. In para nos. 44 to 46 of the M/s S.B.P.& Co.'s CR No.2846 of 2010 (O&M) 2 case (supra), Hon'ble Supreme Court has observed as under:- “44. 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 Constitution of India. We see no warrant for such an approach Section 37 makes certain orders of the arbitral tribunal appealable. Under Section 34, the aggrieved party has an avenue for ventilating his grievances against the award including any in-between orders that might have been passed by the arbitral tribunal acting under Section 16 of the Act. The party aggrieved by any order of the arbitral tribunal, unless has a right of appeal under Section 37 of the Act, has to wait until the award is passed by the Tribunal. This appears to be the scheme of the Act. The arbitral tribunal is after all, the creature of a contract between the parties, the arbitration agreement, even though, if the occasion arises, the Chief Justice may constitute it based on the contract between the parties. But that would not alter the status of the arbitral tribunal. It will still be a forum chosen by the parties by agreement. We, therefore, disapprove of the stand adopted by some of the High Courts that any order passed by the arbitral tribunal is capable of being corrected by the High Court under Article 226 or 227 of the Constitution of India. Such an intervention by the High Courts is not permissible.

45. The object of minimizing judicial intervention while the matter is in the process of being CR No.2846 of 2010 (O&M) 3 arbitrated upon, will certainly be defeated if the High Court could be approached under Article 227 of the Constitution of India or under Article 226 of the Constitution of India against every order made by the arbitral tribunal. Therefore, it is necessary to indicate that once the arbitration has commenced in the arbitral tribunal, parties have to wait until the award is pronounced unless, of course, a right of appeal, is available to them under Section 37 of the Act even at an earlier stage.

46. We, therefore, sum up our conclusion as follows: i) The power exercised by the Chief Justice of the High Court or the Chief Justice of India under Section 11(6) of the Act is not an administrative power. It is a judicial power. ii) The power under Section 11(6) of the Act, in its entirety, could be delegated by the Chief Justice of the High Court only to another judge of that court and by the Chief Julstice of India to another judge of the Supreme Court. iii)In case of designation of a judge of the High Court or of the Supreme Court, the power that is exercised by the designated, judge would be that of the Chief Justice as conferred by the statute. iv)The Chief Justice or the designated judge will have the right to decide the preliminary aspects as indicated in the earlier part of this judgment. These will be, his own jurisdiction, to entertain the request, the existence of a valid arbitration agreement, the existence or otherwise of a live claim, the existence of the condition for the exercise of his power and CR No.2846 of 2010 (O&M) 4 on the qualifications of the arbitrator or arbitrators. The Chief Justice or the judge designated would be entitled to seek the opinion of an institution in the matter of nominating an arbitrator qualified in terms of Section 11 (8) of the Act if the need arises but the order appointing the arbitrator could only be that of the Chief Justice or the judge designate. v) Designation of a district judge as the authority under Section 11(6) of the Act by the Chief Justice of the High Court is not warranted on the scheme of the Act. vi)Once the matter reaches the arbitral tribunal or the sole arbitrator, the High Court would not interfere with orders passed by the arbitrator or the arbitral tribunal during the course of the arbitration proceedings and the parties could approach the court only in terms of Section 37 of the Act or in terms of Section 34 of the Act. vii)Since an order passed by the Chief Justice of the High Court or by the designated judge of that court is a judicial order, an appeal will lie against that order only under Article 136 of the Constitution of India to the Supreme Court. viii)There can be no appeal against an order of the Chief Justice of India or a judge of the Supreme Court designated by him while entertaining an application under Section 11 (6) of the Act. ix)In a case where an arbitral tribunal has been constituted by the parties without having recourse to Section 11 (6) of the Act, the arbitral tribunal will have the jurisdiction to decide CR No.2846 of 2010 (O&M) 5 all matters as contemplated by Section 16 of the Act. x) Since all were guided by the decision of this Court in Konkan Railway Corpn. Ltd. & anr. v. Rani Construction Pvt. Ltd. [(2002)2 SCC 388] (supra) and orders under Section 11(6) of the Act have been made based on the position adopted in that decision, we clarify that appointments of arbitrators or arbitral tribunal thus far made, are to be treated as valid, all objections being left to be decided under Section 16 of the Act. As and from this date, the position as adopted in this judgment will govern even pending applications under Section 11(6) of the Act. xi)Where District Judges had been designated by the Chief Justice of the High Court under Section 11(6) of the Act, the appointment orders thus far made by them will be treated as valid; but applications if any pending before them as on this date will stand transferred, to be dealt with by the Chief Justice of the concerned High Court or a Judge of that court designated by the Chief Justice. xii)The decision in Konkan Railway Corpn. Ltd. & anr. vs. Rani Construction Pvt. Ltd.[(2002)2 SCC 388] (supra) is overruled.” This Court is, thus, of the opinion that the revision petition is without any substance and the same is hereby dismissed. August 03 , 2010 (Mahesh Grover) Judge