Case Note & Summary
The case involves an appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996, challenging an order passed by the Sole Arbitrator in Arbitration Case No.1/2018 on Issue No.2 dated 30.06.2018. The background is that the respondents had filed a petition under Section 11 of the Act for appointment of an arbitrator, and the High Court appointed an arbitrator on 06.09.2017. The respondents then initiated arbitration proceedings seeking dissolution of the partnership firm M/s K. Ramachandra Nayak and Sons, accounts enquiry, settlement, and distribution of assets. The arbitrator framed issues, and Issue No.2 pertained to the maintainability of the arbitration claim. The arbitrator passed an order on that issue, which the appellants sought to challenge in this appeal. The court's office raised an objection regarding maintainability of the appeal under Section 37(1). After hearing both sides, the court examined the scope of Section 37(1), which lists appealable orders: orders granting or refusing interim measures under Section 9, orders setting aside or refusing to set aside an arbitral award under Section 34, and orders under Section 16(2) or (3) regarding jurisdiction. The court noted that the impugned order was not an award under Section 34, nor an order under Section 9 or Section 16. It was merely an order on a preliminary issue of maintainability, which does not fall within the enumerated categories. The court held that such an order is not appealable under Section 37(1). Consequently, the appeal was dismissed as not maintainable, with no order as to costs.
Headnote
A) Arbitration Law - Appealability - Section 37(1) Arbitration and Conciliation Act, 1996 - Maintainability of Appeal - The court considered whether an order passed by the Arbitrator on Issue No.2 (preliminary issue regarding maintainability of the claim) is appealable under Section 37(1) of the Act. The court held that only orders specifically enumerated under Section 37(1) are appealable, which include orders under Section 9, Section 34, and Section 16(2) or (3). An order on a preliminary issue of maintainability does not fall within these categories and is not an award. Therefore, the appeal is not maintainable. (Paras 1-8) B) Arbitration Law - Preliminary Issue - Section 16 Arbitration and Conciliation Act, 1996 - Jurisdiction - The court noted that Section 16 of the Act allows the arbitral tribunal to rule on its own jurisdiction, including objections regarding the existence or validity of the arbitration agreement. However, an order rejecting such an objection under Section 16(2) or (3) is appealable under Section 37(1)(a). In this case, the order on Issue No.2 was not a ruling on jurisdiction under Section 16 but on maintainability of the claim, which is not appealable. (Paras 5-7)
Issue of Consideration
Whether an appeal under Section 37(1) of the Arbitration and Conciliation Act, 1996 is maintainable against an order passed by the Arbitrator on Issue No.2 regarding maintainability of the arbitration claim?
Final Decision
The appeal is dismissed as not maintainable. No order as to costs.
Law Points
- Appealable orders under Section 37(1) of Arbitration and Conciliation Act
- 1996 are limited to orders granting or refusing interim measures under Section 9
- setting aside or refusing to set aside arbitral award under Section 34
- and orders under Section 16(2) or (3) regarding jurisdiction. An order on a preliminary issue of maintainability of the claim itself is not an appealable order under Section 37(1).
