Case Note & Summary
The dispute arose between the parties concerning an arbitration award issued by the learned Arbitrator, which directed the original respondents to pay Rs.12,46,663 to the original claimants. The original respondents challenged the award and the decree made by the trial court by filing a writ petition in the High Court, arguing that the procedure outlined in Clause 56 of the Articles of Agreement was not followed prior to the appointment of the Arbitrator. The High Court accepted this argument and quashed the award, remanding the matter for de novo consideration. The original claimants then appealed to the Supreme Court, contending that the High Court should not have entertained the writ petition without the respondents first availing themselves of the statutory remedy of appeal under the Arbitration Act, 1940. The Supreme Court agreed, stating that the High Court's intervention was unwarranted given the availability of an alternative remedy. The court quashed the High Court's order, allowing the respondents to pursue their legal remedies under the Arbitration Act, while ensuring that any amounts already paid would be subject to the outcome of future proceedings. The appeal was allowed, and no costs were awarded.
Headnote
A) Arbitration Law - Writ Jurisdiction - High Court's Authority - Arbitration Act, 1940, Section Not Mentioned - The High Court improperly entertained a writ petition against an arbitration award without the appellant exhausting the statutory remedy of appeal available under the Arbitration Act. The court held that the High Court should not have set aside the award in a writ petition and quashed the High Court's order (Paras 2-4).
Issue of Consideration
Whether the High Court erred in entertaining a writ petition under Articles 226 and 227 of the Constitution of India against an arbitration award without availing the statutory remedy of appeal under the Arbitration Act, 1940.
Final Decision
The Supreme Court allowed the appeal, quashed the High Court's order, and reserved liberty for the respondent to pursue further legal recourse under the Arbitration Act, 1940.
Law Points
- Writ jurisdiction
- Arbitration Act
- 1940
- statutory remedy
- appeal against award
- de novo consideration
