Remedy To Aggrieved Party Is Challenging Award Under A&C Act; Intervention By HCs Under Article 227 Impermissible: Kerala High Court
The Kerala High Court dismissed an Original Petition filed against the Order of the Principal Sub Court, Ernakulam with respect to the arbitration proceedings.
The Kerala High Court held that the remedy available to the party aggrieved is to challenge the award in accordance with Sections 34 and 37 of the Arbitration and Conciliation Act, 1996 (A&C Act) and intervention by the High Courts under Article 227 of the Constitution is impermissible.
The Court held thus in an Original Petition filed against the Order passed by the Principal Sub Court, Ernakulam with respect to the arbitration proceedings.
A Single Bench of Justice Basant Balaji observed, “… 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, a right of appeal is available to them under Section 37 of the Act even at an earlier stage. Thus, it can safely be concluded that the remedy available to the party aggrieved, is to challenge the award in accordance with Sections 34 or 37 of the Act and intervention by the High Courts under Article 227 of the Constitution of India, is not permissible.”
Advocate K. Babu Thomas represented the Petitioner while Advocate Aju Mathew represented the Respondents.
Brief Facts
The Petitioner and Respondents entered into a contract for the construction of a Multidisciplinary Research Laboratory and Animal House at Medical College, Thiruvananthapuram, valued at Rs. 23,90,36,760/-. The contract stipulated an 18-month completion period ending in June 2015. However, the project was not completed until May 2018. Resultantly, the Petitioner initiated arbitration proceedings, claiming that the Respondents’ delays were the sole cause of the extended project timeline. The Respondents’ default on admitted payment obligations necessitated the filing of a Writ Petition before the High Court, which directed the Respondents to settle the admitted sums within 3 months. Their failure to comply with the said Ordre resulted in contempt proceedings. Due to the disputes between the parties, the Petitioner demanded payment of Rs. 7,11,41,406/- towards unpaid value of works carried out.
A Dispute Redressal Committee of 3 members was constituted by the Respondents and the Petitioner’s demand was denied. Thereafter, the Petitioner sent a panel of 3 Engineers for his nomination to be appointed as the Sole Arbitrator to which the Respondent intimated his disagreement and insisted the selection from one among the proposed retired Judge of the High Court. Hence, Justice M. Ramachandran, a retired Judge was nominated. The Sole Arbitral Tribunal concluded the proceedings and issued an award in favour of the Petitioner. This was challenged before the Commercial Court and the Respondents filed an Amendment Application which was allowed. Hence, the Petitioner approached the High Court.
Reasoning
The High Court in the above context of the case, noted, “… 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 of the Constitution against every order made by the Arbitral Tribunal.”
The Court reiterated that the High Court should decline to entertain the Petition under Article 227 of the Constitution on the ground of availability of an alternative remedy of Appeal.
“… when the statute provides for statutory appeal, the said remedy is to be availed by the litigating parties and it shall not be bypassed by availing the remedy under Article 227 of the Constitution”, it further reiterated.
Accordingly, the High Court dismissed the Petition.
Cause Title- M.I. Mohammed v. M/s. Hill Life Care Ltd. & Ors. (Neutral Citation: 2025:KER:26487)
Appearance:
Petitioner: Advocates K. Babu Thomas, Marykutty Babu, and Drisya Dileep.
Respondents: Advocates Aju Mathew, Nikhilesh Krishnan, and Abu Mathew.
