Chapter 9

APPEALS

I.APPEALABLE ORDERS

What are the appealable orders under section 37 of the Arbitration and Conciliation Act, 1996?

Section 37(1) of the Arbitration and Conciliation Act, 1996 provides that an appeal shall lie from the following orders
(and from no others) to the Court authorised by law to hear appeals from original decrees of the court passing the
order, namely:-

(a) granting or refusing to grant any interim measure under section 9;

(b) setting aside or refusing to set aside an arbitral award under section 34.

What is the remedy available to a party to an arbitration proceeding where the arbitral tribunal has refused to
grant an interim measure under section 17 of the Arbitration and Conciliation Act, 1996?

Section 37(2) of the Act provides that an appeal shall also lie to a court from an order granting of the arbitral
tribunal-

(a) accepting the plea referred to in section 16(2) that the arbitral tribunal does not have jurisdiction, or the
plea referred to in section 16(3) that the arbitral tribunal is exceeding the scope of its authority; or

(b) granting or refusing to grant an interim measure under section 17. Sub-section (3) of section 37 provides
that no second appeal shall lie from an order passed in appeal under the provisions of section 37, but nothing
in this section shall affect or take away any right to appeal to the Supreme Court.

Under the provisions of section 37(1) of the Act, an appeal shall lie against the order of a court (a) granting or
refusing to grant any interim measure under section 9; and (b) setting aside or refusing to set aside an arbitral
award under the provisions of section 34 to the court authorised by law to hear appeals from original decrees of the
court passing the order. It is to be noted that an appeal under section 37 against the order of a court lies only in
the abovementioned two cases and in no other. Under the provisions of section 37(2), an appeal shall lie to a court
from the orders of an arbitral tribunal-(a) accepting the plea that the arbitral tribunal does not have jurisdiction or
that the arbitral tribunal is exceeding the scope of its authority; or (b) granting or refusing to grant an interim
measure under section 17. In Pandey and Co. Builders Pvt. Ltd. v. State of Bihar, MANU/SC/8643/2006 : AIR 2007 SC
465, it was held that the forum of appellate court must be determined with reference to the definition of court in
section 2(1)(e) of the Act. If a High Court does not exercise the original civil jurisdiction, it would not be a 'court'
within the meaning of section 2(1)(e) of the Act. In Jabalpur Cable Network Pvt. Ltd. v. ESPN Software India Pvt.
Ltd., AIR 1999 AP 271, it was held that an order passed by the court under section 9 refusing to grant ex parte
injunction under section 9 would be appealable since it is a formal expression of an adjudication. In Harbhajan Singh
Kaur v. Unimode Finance (P) Ltd., 1998 (2) RAJ 389 (Cal), it was held that section 37 (1)(a) which provides for an
appeal against an order of the court granting or refusing to grant any measure under section 9 does not reflect the
projection of a truncated portion of section 9, but it tends to cover section 9 in its entirety. There is no doubt that
section 9(ii)(c) is very much within the ambit of section 9 and if section 9 is not capable of being split up or
fragmented or if it is to be viewed as a comprehassive genus, then any species of orders coming under section 9
becomes appealable.

Section 34 of the Act lays down certain grounds on which an arbitral award can be set aside by the court. Under the
provisions of section 37(1)(b), an appeal lies against an order of the court setting aside or refusing to set aside an
arbitral award under section 34. In U.P. Co-operative Sugar Factories Federation Ltd. v. P.S. Misra, 2003 (2) Arb LR
102 (All), it was held that an order refusing to set aside an award would be appealable, even when the objection
was not entertained on the ground of want of jurisdiction. In Makeshwar Misra v. Laliteshwar Prasad Singh,

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 MANU/BH/0127/1967 : AIR 1967 Pat 407 (FB), it was held that an appeal will lie against an order of the court which
has the effect of setting aside the award though factually it does not order to set aside the award. In State of Bihar
v. Khetan Bros., AIR 1985 Pat 74, it was held that if the court treats the award as non est, then such an order does
not amount to setting aside or refusing to set aside an award and, therefore, is not appealable.

What is the remedy available to an aggrieved party when-

(a) The arbitral tribunal rejects a plea that it does not have jurisdiction to deal with the subject-matter of
arbitration or that it is exceeding the scope of its jurisdiction?

(b) The arbitral tribunal accepts the plea that it does not have jurisdiction to deal with the subject matter of
arbitration?

Under section 16(1) of the Act, an arbitral tribunal has jurisdiction to rule on its own jurisdiction in any objection with
respect to the existence or validity of the arbitration agreement. A plea as to lack of jurisdiction of the arbitral
tribunal shall be raised not later than the submission of the statement of defence [section 16(2)]. A plea that the
arbitral tribunal is exceeding the scope of its authority shall be raised an soon as the matter alleged to be beyond
the scope of its authority is raised during the arbitral proceedings [section 16 (3)]. However, the arbitral tribunal
may admit in both the above cases a later plea, it if considers the delay to be justified [section 16(4)]. In State of
Orissa v. Surendranath Kanungo, MANU/OR/0334/2003 : AIR 2004 Ori 153, it was held that the arbitral tribunal
himself in exercise of power conferred on him by or under section 16 can decide the question whether or not the
arbitration clause in question was scored out at time of agreement between the parties and as such, whether or not
he has jurisdiction to decide the matter or adjudicate the dispute. The arbitral tribunal shall decide on a plea referred
to in section 16(2) and section 16(3) and if it rejects the plea, it will continue with the arbitral proceedings and make
an arbitral award [section 16 (5)]. Where an arbitral tribunal makes an award rejecting a plea that the tribunal does
not have jurisdiction or that it is exceeding the scope of its authority, the remedy available to the aggrieved party is
by way of an application under section 34 for setting aside the award. But if the arbitral tribunal decides to accept
the plea that it has no jurisdiction, than, such an order is appealable under section 37(2) of the Act [The
Pharmaceutical Products of India Ltd. v. Tata Finance Ltd., 2003 (Supp) Arb LR 98 (Bom)].

In Karnataka State Road Transport Corporation v. M. Keshava Raju, 2004 (1) Arb LR 507 (Kant) (DB), the appellant
acquiesced in the jurisdiction of the arbitral tribunal without any demur or protest and participated in the arbitral
proceedings till the award was made, and raised the plea that the arbitral tribunal did not have jurisdiction for the
first time only in the memorandum of appeal under section 37(2)(a) before the appellate court. It was held that such
a plea cannot be entertained because the appellant did not raise the plea as to lack of jurisdiction of the arbitral
tribunal either directly or by necessary implication before the arbitral tribunal or the court under section 34.

Section 17(1) provides that unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a
party, order a party to take any interim measure of protection as the arbitral tribunal may consider necessary in
respect of the subject-matter of the dispute. Under section 17(2), the arbitral tribunal may require a party to
provide appropriate security in connection with a measure ordered under section 17(1). An appeal shall lie to a court
under section 37(2)(b) against an order of the arbitral tribunal granting or refusing to grant an interim measure under
section 17.

Proper approach of the Appellate Court while Setting Aside an Award

What should be the proper approach of the appellate court while setting aside an arbitral award?

In Union of India v. Kalinga Construction Co. (P) Ltd., MANU/SC/0007/1970 : AIR 1971 SC 1646, it was held that it is
not open to the appellate court to sit in appeal over the conclusion of the arbitrator in proceedings for setting aside
the award. In U.P. Co-operative Federation Ltd. v. Sunder Bros., MANU/SC/0002/1966 : AIR 1967 SC 249, it was
held that it is well-established that where the first court has exercised the discretion vested in it, the appellate

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 court should be slow to interfere with the exercise of that discretion. In dealing with the matter raised before it at
the appellate stage, the appellate court would normally not be justified in interfering with the exercise of the
discretion under appeal solely on the ground that if it had considered the matter at the trial stage it may have come
to a contrary conclusion. If the discretion has been exercised by the trial Court reasonably and in a judicial manner,
the fact that the appellate Court would have taken a different view may not justify interference with the trial Court's
exercise of discretion. As is often said, it is ordinarily not open to the appellate court to substitute its own exercise
of discretion for that of the trial judge. But if it appears to the appellate court that in exercising its discretion, the
trial Court has acted unreasonably or capriciously or has ignored relevant facts than it would certainly be open to
the appellate court to interfere with the trial Court's exercise of discretion. In Food Corporation of India v. Thakar
Shipping Co., MANU/SC/0001/1974 : AIR 1975 SC 469, it was held that unless the discretionary powers vested in the
trial Court is found to be used arbitrarily or perversely, the appellate court will not interfere with the discretionary
order passed by the trial Court.

No Second Appeal lies from an Order passed in Appeal under Section 37

Discuss whether a second appeal lies from an order passed in appeal under section 37?

Section 37(3) provides that no second appeal shall lie from an order passed in appeal under section 37, but nothing
in this section shall effect or take away any right to appeal to the Supreme Court.

Discuss whether an order passed in appeal under section 37 is revisable? Support your answer with appropriate
case law

It is to be noted that expression 'second appeal' used in this section means a further appeal from an order passed in
appeal under this section and not an appeal under section 100 of the Code of Civil Procedure, 1908. In Nirma Ltd. v.
Lurgi Lent Jes Energietichnik GmbH, MANU/SC/0650/2002 : AIR 2002 SC 3695, following the decision in Shyam Sunder
Agarwal and Co. v. Union of India, MANU/SC/0350/1996 : AIR 1996 SC 1321, a two-judge Bench of the Supreme
Court held that merely because a second appeal against the appellate order is barred by the provisions of section
37(3) of this Act, the remedy of revision under section 115 of the Code of Civil Procedure does not cease to be
available to the petitioner. In I.T.I. Ltd. v. Siemens Public Communications Network Ltd., MANU/SC/0502/2002 :
(2002) 5 SCC 510, it was held although no second appeal lies against an appellate order passed by a court under
section 37, a revision of such an order lies under section 115 of the Code of Civil Procedure 1908. An appeal can be
preferred to the Supreme Court against an appellate order passed under section 37 of the Act. If the appellate court
is a High Court, an application can be made for a certificate under Article 133 of the Constitution and if the
certificate is granted by the High Court, an appeal can be preferred to the Supreme Court. But if the High Court
refuses to grant such a certificate, an appeal can be preferred to Supreme Court, under Article 136 of the
Constitution, as a special leave to appeal. No writ petition lies against an arbitral award. In Moideem Kutty v.
Divisional Forest Officer, Nilambur, 1988 (2) Arb LR 37, it was held that as an arbitrator being a private forum agreed
upon by the parties, no writ lies against him or his award. The only remedy is what has been provided in the
Arbitration Act.

None Appealable of Order under section 37

The order was made returning the application for interim injunction to be presented before proper court also no
procedure had been prescribed for return of application nor C.P.C. was applicable in strict sense, as was held, to
arbitration proceedings. And since court has returned application or said order was not appealable under section 37
of the Act. (D.T.M. Construction (India) Ltd. (M/s) v. Capt. P.K. Srivastava, MANU/OR/0027/2010 : AIR 2011 Ori 61).

Period of Limitation for Preparing an Appeal under Section 37

What is the period of limitation for preferring an appeal under section 37 of the Arbitration and Conciliation Act,
1996?

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 Section 37 does not lay down any specific period of time within which an appeal must be preferred on the grounds
mentioned in it. However, section 43(I) of the Act provides that the Limitation Act, 1963 shall apply to arbitration as
it applies to proceedings in court. Thus, by virtue of section 43(1), the period of limitation for preferring an appeal
under section 37 is regulated by Article 116 of the Limitation Act, 1963. Under Article 116 of the Limitation Act, 1963
an appeal to a High Court from any decree or order has to be filed within 90 days from the date of the decree or
order whereas an appeal to any other court from any decree or order has to be filed within 30 days from the date of
the decree or order appealed against.

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