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2015 DIGILAW 475 (KAR)

Associated Constructions v. Dolomite Berhad - A. L. S. Limited (JV)

2015-04-25

B.V.NAGARATHNA, SUBHRO KAMAL MUKHERJEE

body2015
ORDER : B.V. Nagarathna, J. 1. Petitioner has assailed the order of learned sole Arbitrator dated 09.03.2015, a copy of which is produced as Annexure 'A' to the writ petition. 2. We have heard learned counsel for the parties. 3. At the outset, learned senior counsel appearing for the respondent raised a preliminary objection with regard to the maintainability of the writ petition and contended that having regard to the dictum of the Hon'ble Supreme Court in SBP & Co., v. Patel Engineering Ltd. and Another (2005) 8 SCC 618 ) (SBP & Co.), which has been followed by a Division Bench of this Court in W.P. No. 37175/2013 (Mr. K. Satish Kumar v. M/s. Rohan Associates) disposed on 23.01.2014, this writ petition would not be maintainable. 4. Per contra, learned counsel for the petitioner endeavoured to submit that the observations of the Hon'ble Supreme Court in SBP & Co. referred to supra were in the nature of obiter dicta and that those observations would not be binding on this Court. She also contended that those observations were made in a proceeding under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') and not with regard to any challenge being made to an order of the learned Arbitrator therein and therefore, sought to distinguish the decision of the Hon'ble Supreme Court. She also contended that in view of her submission, the order passed by the Division Bench on 23.01.2014 would not apply to the present case as the Division Bench has followed the dictum in SBP & Co. 5. We have considered these submissions in light of the material on record and perused the impugned order, which is passed in an arbitration proceeding by learned sole arbitrator rejecting the application filed by the petitioner herein. 6. In SBP and Co., Hon'ble Supreme Court has categorically held that the High Court in exercise of its jurisdiction under Article 226 or 227 of the Constitution is not permitted to intervene in matters arising from arbitral proceedings, particularly, when the orders of the Arbitral Tribunal are interim in nature. 6. In SBP and Co., Hon'ble Supreme Court has categorically held that the High Court in exercise of its jurisdiction under Article 226 or 227 of the Constitution is not permitted to intervene in matters arising from arbitral proceedings, particularly, when the orders of the Arbitral Tribunal are interim in nature. From the aforesaid observations, it follows that if it is a case of interim award or a final award passed by an Arbitrator, then the aggrieved party has alternative remedy of approaching the appropriate Civil Court under Section 34 or the High Court under Section 37 of the Act as the case may be, but when an order passed by learned Arbitrator is not in the nature of interim award, although no remedy is prescribed under the Act, that would not imply that the extraordinary original jurisdiction of the High Court under Article 226 or 227 of the Constitution could be invoked. In this regard what has been stated by the Hon'ble Supreme Court at paragraph Nos. 45 and 47, is quoted as under: "45. 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. We see no warrant for such an approach. Section 37 makes certain orders of the Arbitral Tribunal appeal able. 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, a 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. The Arbitral Tribunal is, after all, a 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. Such an intervention by the High Courts is not permissible." XXX XXX XXX "47. We, therefore, sum up our conclusions as follows: (i) to (v) ....... (vi) Once the matter reaches the Arbitral Tribunal or the sole arbitrator, the High Court would not interfere with the 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." 7. In view of the above, we are of the considered view that the writ petition is not maintainable. 8. That apart, in W.P. No. 37175/2013 disposed by this Court on 23.01.2014, the Division bench of this Court (of which, one of us was a member) followed the dictum of the Hon'ble Supreme Court in SBP and Co., and held that the writ petition was not maintainable. In that order, the contention of the learned counsel for the petitioner raised in this matter as to the binding nature of the obiter dicta of Supreme Court on other Court in India including High Court has been considered and it has been held that any observations of the Hon'ble Supreme Court, which are in the nature of obiter dicta, are also binding on the High Court. It is needless to observe that this is because of Article 141 of the Constitution. Therefore, following the aforesaid orders, we hold that the writ petition is not maintainable and is dismissed. 9. It is needless to observe that this is because of Article 141 of the Constitution. Therefore, following the aforesaid orders, we hold that the writ petition is not maintainable and is dismissed. 9. The dismissal of this writ petition would, however, not come in the way of the petitioner raising a challenge to the impugned order in a proceeding that may be instituted by the petitioner under the provisions of the Act in the event, that such a contention could be raised in that proceeding. 10. We pass no order as to costs. 11. In view of the dismissal of the writ petition. I.A.I./2015 for vacating stay would not survive for consideration and same stands dismissed.