Appeal under Arbitration and Conciliation Act,1996

Table of Contents :

  1. Abstract
  2. What does “ Appealable Order ” means?
  3. Who can Appeal?
  4. Jurisdiction of Courts regarding ‘ Appeal ’.
  5. Conclusion

Abstract

Arbitration and Conciliation is the blooming section of Law. Companies, Corporate Houses, Businesses are mostly opting for ‘ Out of Court Settlement ’ known as Arbitration, Mediation, Conciliation.

The act has its own set of rules and provisions to be followed and an act was introduced by the Central Government, named as Arbitration and Conciliation Act, 1996.

One of the avowed objective of the Arbitration and Conciliation Act, 1996 (“the Arbitration Act, 1996”) is the speedy resolution of the disputes[1]. For achieving this objective of expeditious resolution of arbitral disputes, Parliament has twice amended the Arbitration Act, 1996 in 2016 and 2019 and brought in provisions which prescribe : an outer time-limit for the conclusion of the arbitral proceedings[2], commencement of arbitral proceedings within 90 days from the date of the interim order passed by the court[3], limited judicial inquiry and role at the stage of appointment of arbitrator[4] among others.

What does “ Appealable Order ” means?

If a single document contains both an order granting a motion for summary judgment and a judgment, it is an appealable order. An order granting or denying a request for an injunction, or granting or denying a request to dissolve an injunction.

In furtherance of this avowed objective, Section 34(3) of the Arbitration Act, 1996 provides that an application for setting aside an arbitral award must be made within 3 months from the receipt of the arbitral award. The proviso of the said Section 34(3) confers a limited discretion on the Court to allow such application within a further period of 30 days if the applicant has been prevented from filing such application within 3 month period due to “sufficient cause”.

An appeal can be filed under Section 37 of the Arbitration Act, 1996 in case the court sets aside or refuses to set aside the arbitral award under Section 34. Unlike, the time period of 3 months plus 30 days provided under Section 34, no time period has been prescribed under the Arbitration Act, 1996 for filing an appeal under Section 37. Since Limitation Act, 1963 is applicable to arbitrations and court proceedings by virtue of Section 43 of the Arbitration Act, 1996, appeals under Section 37 have to be filed within 90 days or 30 days according to Articles 116 and 117 of the Limitation Act, 1963, depending upon whether the appeal is from any other court to a High Court or an intra-High Court appeal, respectively. Section 13(1-A) of the Commercial Courts Act, 2015, further prescribes a limitation period of 60 days for appeals that are preferred under Section 37 of the Arbitration Act[5].

Notably, the Supreme Court in Union of India v. Varindera Constructions Ltd.[6] (“Varindera Constructions”) and N.V. International v. State of Assam7 (“N.V. International”) had held that an appeal under Section 37 cannot be filed after 120 days from the decision of the court under Section 34 and no condonation of delay is permissible beyond this 120 day period.

While almost all of the High Courts had followed[7] the decision in N.V. International[8], as they were bound to under Article 141 of the Constitution of India, however, the Jabalpur Bench of the Madhya Pradesh High Court in M.P. Poorv Kshetra Vidyut Vitran Co. Ltd. v. Swastik Wires[9] (“Swastik Wires”) took a contrary approach.

Who can Appeal?

In general, parties who are not satisfied with the result of court or tribunal can appeal. However, a new precedent arising out of arbitration proceedings is that, can a third party appeal to the order of an arbitrator?

On september 11, 2018, the BOMBAY HIGH COURT passed a gradual judgement. In the case of Prabhat Steel Traders Pvt. Ltd. v. Excel Metal Processors Pvt. Ltd.[10], the high court held that a third party can appeal to the order u/s 37 of the Act, if they are affected by such order directly or indirectly passed by the tribunal under section 17 of the Act. 

So, according to this landmark judgement, a third party can also appeal under section 37, if affected under section 17 of the Act.

Jurisdiction of Courts Regarding Appeal

Matters under the Same section (37 of A&C Act) can be dealt with High Courts of any state subject to the provision of jurisdiction of such court. In accordance to the seal and venue of Arbitral Proceeding, the court of such state having the place of arbitration holds the jurisdiction to try such arbitral matter.

Further it can always be contested to the Apex Court as well.

Conclusion

With a proper study of scope of Arbitration in India and the involvement of Courts in its process, we can conclude that although the law-makers have tried to make Arbitration process simple and straightforward, so that a layman can also grasp the basics of the procedure, it is yet necessary to make changes time to time so that the main objective of the arbitration, that is, dispute resolution doesn’t fail. Moreover, the involvement of the courts must be kept to the basic minimum, so that the Courts don’t create hindrance to the arbitration process.


[1] Ssangyong Engg. & Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131, paras 31 & 77.

[2] Arbitration and Conciliation Act, 1996, Ss. 29-A & 29-B.

[3] Id, S. 9.

[4] Id, S. 11.

[5] Appeals under Section 37 are governed by section 13 of the Commercial Courts Act, 2015 where the subject-matter of arbitration is a “commercial dispute” as defined therein of a value not less than three lakh rupees.

[6] (2020) 2 SCC 111.

[7] A detailed examination of the decision in N.V. International, (2020) 2 SCC 109, is undertaken herein since Varindera Constructions, (2020) 2 SCC 111, has been cited in toto therein. N.V. International, (2020) 2 SCC 109, has been followed by the Delhi High Court in PCDA (R&D) v. Sirius Global Ltd., 2020 SCC OnLine Del 1705; NHAI v. Bhubaneswar Expressway (P) Ltd., 2020 SCC OnLine Del 1704; Union of India v. B.S. Aggarwal, 2020 SCC OnLine Del 1706; Kerala High Court in Varghese v. Collector, 2020 SCC OnLine Ker 9796; Joy v. Collector, 2020 SCC OnLine Ker 9795; Bombay High Court in Malavika Chits India (P) Ltd. v. Dinesh Jaya Poojary, 2020 SCC OnLine Bom 5838; Union of India v. Shreem Electric Ltd., 2020 SCC OnLine Bom 5837 and Jharkhand High Court in Union of India v. Lakshman Singh, 2020 SCC OnLine Jhar 106; Union of India v. Phulwanti Devi, 2020 SCC OnLine Jhar 81

[8] (2020) 2 SCC 109.

[9] 2020 SCC OnLine MP 3003.

[10] https://indiankanoon.org/doc/188191011/

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