Jammu & Kashmir High Court – Srinagar Bench
J&K State Power Dev. Corpn vs Jaguar Overseas Pvt. Ltd on 30 December, 2024
Author: Sanjay Dhar
Bench: Sanjay Dhar
Item No.10, 11
Regular List
IN THE HIGH COURT OF JAMMU & KASHMIR AND
LADAKH AT SRINAGAR
WP(C) No.3055/2024
WP(C) No.3057/2024
WP(C) No.3050/2024
J&K STATE POWER DEV. CORPN. ...APPELLANT(S)
Through: Mr. M. A. Chashoo, Advocate.
Vs.
JAGUAR OVERSEAS PVT. LTD. ...RESPONDENT(S)
Through: None.
CORAM: HON’BLE MR. JUSTICE SANJAY DHAR, JUDGE
(ORDER)(ORAL)
30.12.2024
1) By this common, above numbered three writ petitions
raising similar issues are proposed to be disposed of.
2) It appears that three arbitration petitions under Section 11
of the Arbitration Act came to be filed by respondent No.3 before
this Court seeking reference of disputes between the parties to
the arbitration. The disputes pertain to contracts awarded by the
petitioner to the respondent for designing, engineering,
manufacture, fabrication, testing along with testing at
manufacture’s work site, supply of the material/equipment
including transportation to site destination, insurance, storage at
site and activities comprising route survey/site selection,
erection, testing and commissioning of works for rural
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electrification infrastructure and household electrification.
Separate work orders were issued in favour of the respondent in
respect of three Districts, namely, Pulwama, Baramulla and
Anantnag. Arbitration Petition No.12 of 2022 arose out of
contract in respect of Pulwama District, Arbitration Petition
No.13 of 2022 in respect of Baramulla District whereas
Arbitration Petition No.14 of 2022 arose out of contract in
respect of Anantnag District. All these arbitration petitions came
to be disposed of by Hon’ble the Chief Justice vide order dated
19.10.2023. In terms of the said order, Hon’ble Mr. Justice Bansi
Lal Bhat (former Judge of this Court) was appointed as the
Arbitrator to resolve the disputes between the parties. It was
further provided in the order that the objection of the petitioner
herein relating to issue of limitation shall be decided by the
Arbitrator first and only after giving a decision on the said issue,
the Arbitrator will proceed in the matter in accordance with law.
3) Vide the impugned order dated 30.10.2024 passed in all
the three arbitration cases pertaining to aforesaid three Districts,
the learned Arbitrator has decided the issue of limitation in
favour of the respondent and besides this, the learned Arbitrator
has declined the application of the petitioner for recalling the
order of forfeiture of defence as also for change of venue to
Srinagar. Writ petition bearing WP(C) No.3050/2024 pertains
to the arbitration proceedings relating to District Pulwama,
WP(C) 3055/2024 pertains to arbitration proceedings relating to
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District Anantnag whereas WP(C) No.3057/2024 pertains to
arbitration proceedings relating to District Baramulla. Identical
orders have been passed by the learned Arbitrator in all the three
petitions on 30.10.2024, which are impugned in these writ
petitions.
4) Learned counsel for the petitioner has contended that the
learned Arbitrator has erred in declining the application of the
petitioner for recalling of order of forfeiture of defence, inasmuch
as the petitioner was obliged to file its defence only after the issue
of limitation was decided by the learned Arbitrator. It has also
been contended that in the impugned order the learned
Arbitrator has observed that status of the petitioner is that of an
inactive player and it can only watch the proceedings. The
learned counsel has also contended that as per the terms of the
arbitration clause, the venue of arbitration had to be Srinagar but
the learned Arbitrator is conducting the arbitration proceedings
from Jammu which is contrary to the terms of the agreement.
5) I have heard learned counsel for the petitioner and perused
record of the case.
6) So far as the jurisdiction of this Court under Article 226
and 227 of the Constitution of India to interfere with the interim
orders passed an Arbitrator is concerned, the same is extremely
limited. The Supreme Court in the case of M/S Deep
Industries Ltd. vs Oil and Natural Gas Corporation Ltd,
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(2020) 15 SCC 706, has held that Arbitration Act is a special
Act and a self- contained Code dealing with arbitration. It has
been observed by the Supreme Court in the said case that the
legislative policy qua the general revisional jurisdiction that is
contained in the amendments made to Section 115 C.P.C. should
also be kept in mind when High Courts dispose of petitions filed
under Article 227. While holding so, the Supreme Court has
relied upon the ratio laid down in the case of SBP & Co. vs.
Patel Engineering Ltd. & Another, (2005) 8 SCC 618,
particularly paras 45 and 46 of the said judgment upon which,
reliance has been placed by the Supreme Court, are reproduced
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 appealable. Under
Section 34, the aggrieved party has an avenue for
ventilating its 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. We,
therefore, disapprove of the stand adopted by
some of the High Courts that any order passed by
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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.
46. The object of minimising judicial intervention
while the matter is in the process of being
arbitrated upon, will certainly be defeated if the
High Court could be approached under Article 227
or under Article 226 of the Constitution 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.
7) From the foregoing analysis of law on the subject, it is clear
that the Supreme Court has disapproved 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 and 227 of the Constitution. It is also clear that
intervention by the High Court at a stage when the proceedings
are still going on before the Arbitral Tribunal is not permissible
in law. Once the arbitration proceedings have commenced, the
aggrieved party has to await the award of the Arbitral Tribunal
which it has a right to challenge under Section 34 of the
Arbitration and Conciliation Act.
8) Applying the aforesaid ratio to the present cases, the scope
of interference in the impugned orders passed by the learned
Arbitrator is very minimal. If at all the learned Arbitrator has
committed an illegality while passing any interim order during
arbitral proceedings, it will form a ground for challenging the
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award which ultimately the learned Arbitrator may pass. But at
this stage, this Court cannot interfere in the proceedings pending
before the learned Arbitrator as the same would amount to
defeating the object of Arbitration and Conciliation Act which is
a self-contained Code.
9) For the foregoing reasons, without going into the merits of
the contentions raised by the petitioner, the present petitions are
held to be not maintainable and are dismissed accordingly,
leaving it open to the petitioner to urge these contentions at the
time of challenging the final award that may be passed by the
learned Arbitrator.
(SANJAY DHAR)
JUDGE
Srinagar
30.12.2024
“Bhat Altaf-Secy”
Whether the order is speaking: Yes/No
Whether the order is reportable: Yes/No
Mohammad Altaf Bhat
I attest to the accuracy and
authenticity of this document
31.12.2024 14:59