High Court Dismisses Arbitration Appeals by Appellant Against Arbitral Awards in Favor of Respondents -- Construction Dispute Upholds Agency Relationship and Arbitration Jurisdiction Under Arbitration and Conciliation Act, 1996

Nature of Litigation: Arbitration appeals challenging orders of the District Court, Pune, which disposed of challenges to arbitral awards under Section 34 of the Arbitration and Conciliation Act, 1996

Remedy Sought

Tilam Sangh sought to set aside the arbitral awards and the District Court's orders, arguing lack of jurisdiction and impermissible modification of the awards

Filing Reason

Tilam Sangh filed appeals under Section 37 of the Arbitration and Conciliation Act, 1996, contending that the arbitral tribunal had no jurisdiction due to absence of privity of contract with Shirke

Previous Decisions

Arbitral tribunal passed awards against Tilam Sangh and NHEC -- District Court upheld the awards but held NHEC was an agent, making Tilam Sangh solely liable -- Special Leave Petition to Supreme Court was disposed of, allowing Tilam Sangh to raise jurisdictional grounds in Section 34 challenge

Issues

Whether the arbitral tribunal had jurisdiction over Tilam Sangh despite lack of direct privity of contract with Shirke Whether the District Court's decision to exonerate NHEC while upholding the award against Tilam Sangh constituted an impermissible modification of the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996

Submissions/Arguments

Tilam Sangh argued no privity of contract existed with Shirke, making the arbitral award without jurisdiction -- Tilam Sangh contended that the District Court modified the award by deleting NHEC's liability, which is impermissible under Section 34 Shirke argued that NHEC acted as Tilam Sangh's agent, creating privity through the arbitration clause -- Shirke submitted that the District Court correctly interpreted the award under Section 34 without modifying it NHEC argued it was merely an agent of Tilam Sangh and should not be held liable

Ratio Decidendi

An arbitration clause can bind a principal through an agent if the agent acts within the scope of authority, establishing privity of contract for jurisdictional purposes -- Under Section 34 of the Arbitration and Conciliation Act, 1996, a court cannot modify an arbitral award but can interpret and apply it based on legal principles such as agency -- Participation in arbitration under protest does not negate jurisdiction if privity is established through agency relationships

Judgment Excerpts

The appeals are filed under Section 37 of the Arbitration and Conciliation Act, 1996 challenging orders passed by the Learned District Court Pune Tilam Sangh claimed that the arbitral award was entirely without jurisdiction due to lack of privity of contract The District Court upheld the Arbitral Award but ruled that NHEC was merely an agent and that Tilam Sangh would be responsible

Procedural History

On November 6, 1987, Tilam Sangh executed PMC Contract with NHEC -- On September 28, 1989, NHEC executed Agreement with Shirke -- Work completed on October 31, 1993 -- Shirke filed Civil Suit in 1995, referred to arbitration -- Arbitral award passed on June 2, 2003 -- Tilam Sangh and NHEC filed Section 34 challenges -- District Court decided on July 18, 2013 -- Tilam Sangh filed appeals under Section 37 on 2013 -- High Court reserved judgment on March 11, 2025 and pronounced on November 3, 2025