SUPREME COURT DECIDED UPON APPEALABLE ORDERS UNDER THE ARBITRATION ACT 1996

The #SupremeCourt has in a recent case of Chintels India Ltd vs Bhayana Builders Pvt Ltd passed a Judgment dated 11-02-2021 on whether an #order refusing to #condone the #delay in filing an #Application under Section 34 of the #Arbitration and Conciliation Act 1996 (the Act) is an #appealable order under Section 37 (1) (c) of the Act?

In this case, the Appellant had filed an Application under Section 34 of the Act before the Delhi High Court seeking setting aside of an Arbitral Award dated 03-05-2019 and also seeking condonation of delay in filing the said Application.  But the High Court dismissed the Application for Condonation of Delay and consequently dismissed the Section 34 Application itself, vide Judgment dated 04-06-2020. Aggrieved, the Appellant filed an Appeal before the Apex Court.

Issue: Whether Delhi High Court’s Order refusing to condone the delay in filing Section 34 Application is an appealable order under Section 37 (1) (c) of the Act?

The relevant provisions of the Act are reproduced below:

Section 34: Application for setting aside arbitral award

(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal:

Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.

Section 37: Appealable orders

(1) Notwithstanding anything contained in any other law for the time being in force, an appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:—

(c) setting aside or refusing to set aside an arbitral award under section 34

The Supreme Court made the following observations:

1- That the High Court has not dealt the Section 34 Application on merits before dismissing the Application being barred by time.

2- That there is only a limited right of appeal given under Section 37 of the Act.

3- But an order refusing to condone the delay in filing Section 34 application has the effect of refusing to set aside the arbitral award. Hence, such an order is appealable under Section 37 (1) (c) of the Act.

Therefore, the Apex Court held that the Appeal under Section 37 (1) (c) of the Act is maintainable against the Order refusing to condone the delay in filing the Application under Section 34 of the Act and thus, remitted the matter to the High Court Division Bench to decide whether the High Court Single Bench Order is correct or not.

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer