Judicial Intervention Under Article 227 Of Constitution Should Be Limited To Exceptional Cases In Arbitration Matters: Delhi High Court
The Delhi High Court emphasized that judicial intervention under Article 227 of the Indian Constitution in arbitration matters should be reserved for exceptional cases.
This ruling came in response to a petition filed, challenging an order issued by a Sole Arbitrator on September 24, 2024. In that order, the arbitrator had dismissed petitioner’s request to submit additional documents, stating that he had failed to provide sufficient justification for not presenting them earlier. The arbitrator noted that the documents were already in the petitioner’s possession but had not been submitted before.
A Bench of Justice Manoj Jain highlighted that the arbitration proceedings had progressed significantly, with issues being framed on October 16, 2023, and both parties having already presented their evidence. The proceedings were close to conclusion, and during the hearing, the petitioner acknowledged that the documents in question were in their possession; however, he argued that the need to submit them only arose following cross-examination.
Advocate Shubham Verma appeared for the Petitioner.
Referring to a prior judgment in Kelvin Air Conditioning And Ventilation System Private Limited vs. Triumph Reality Private Limited (2024), the Court reiterated that an arbitral tribunal is subject to petitions under Articles 226 and 227. It clarified that the non-obstante clause in Section 5 of the Arbitration and Conciliation Act does not apply to Article 227, which is a constitutional provision. For interference under Articles 226 and 227, exceptional circumstances must be present.
The Court stated that although interference is permissible, it would only occur if the order was fundamentally flawed or patently lacking jurisdiction. Interference is warranted only if the order is glaringly perverse, making it obvious to the High Court.
Furthermore, the Court cited another case, IDFC First Bank Limited vs. Hitachi MGRM Net Limited (2023), which underscored that while remedies under Articles 226 and 227 are available against orders from the Arbitral Tribunal, such challenges should not be entertained lightly. The Court must exercise extreme caution in these matters.
In conclusion, the Court determined that the order in question did not reveal any significant flaws or illegalities. Thus, it found that this case did not meet the threshold for exceptional circumstances necessary for exercising jurisdiction under Article 227. Consequently, the petition was dismissed.
Cause Title: Dr. Rajan Jaiswal v. M/s SRL Limited, [2024:DHC:8020]
