Writ Petition Can't Be Entertained Against Every Interlocutory Order Issued By Arbitral Tribunal: Delhi High Court

The bench held that a writ petition cannot be entertained against every interlocutory order related to case management. Such orders fall within the Arbitral Tribunal's discretion and authority which includes decisions on matters like summoning witnesses and producing documents.

Brief Facts:

In the arbitration proceedings conducted under the auspices of the Delhi International Arbitration Centre (DIAC), Hindustan Alloys Pvt. Ltd. (Petitioner) filed a statement of claim before the Arbitrator. Initially, Maa Sheetla Ventures Limited (Respondent) was proceeded against ex-parte and issues were framed on December 20, 2023. However, this ex-parte order was later set aside by the Arbitrator which allowed the Respondent to file its statement of defense.

During the proceedings, the Petitioner submitted an application under Section 19 read with Section 27 of the Arbitration and Conciliation Act, 1996, and Rules 25.3 and 25.4(c) of the DIAC Rules, 2023. The Application sought the reopening of the Petitioner's evidence and the summoning of additional witnesses. Alternatively, the Petitioner requested directions for the Respondent to produce relevant documents from its custody or for court assistance in obtaining evidence. The Arbitral Tribunal, after considering the application, denied the request through an order.

The Petitioner challenged this order in the High Court through a writ petition filed under Articles 226 and 227 of the Constitution of India. The Petitioner argued that since there was no alternative remedy available under the Arbitration Act to contest such an order, the writ petition should be entertained.

Observations by the High Court:

The High Court noted the general principle that while writ petitions under Articles 226 and 227 of the Constitution can be filed against orders from quasi-judicial bodies like Arbitral Tribunals, the scope of judicial review in such cases is notably limited. This limitation is rooted in the principle that the Court's interference should be cautious and only in exceptional cases.

The High Court referred to its decision in Easy Trip Planners Ltd. v. One97 Communications Ltd where it declined to interfere with an Arbitral Tribunal's decision on an interlocutory application concerning the submission of additional documents. This decision was guided by the Supreme Court's observations in Bhaven Construction v. Executive Engineer Sardar Sarovar Narmada Nigam Ltd. which set out the narrow parameters for judicial review under Article 226. The Supreme Court held that while the High Court's power to issue writs is a fundamental feature of the Constitution, it does not imply that every petition must be entertained without regard to the availability of alternative remedies.

The High Court held that Article 226 does not provide a remedy for every grievance. Instead, writ jurisdiction should be exercised sparingly especially when an effective statutory remedy is available. It held that this approach ensures that judicial review does not undermine the arbitration process or other statutory mechanisms designed to resolve disputes.

The High Court noted that Respondent 1 failed to demonstrate exceptional circumstances or bad faith that would justify the invocation of Article 227. Despite the broad scope of Article 227, the High Court held that it was premature to intervene in the arbitral process.

Consequently, the petition was dismissed.

Case Title: Hindustan Alloys Pvt. Ltd. Vs Maa Sheetla Ventures Limited

Case Number: W.P.(C) 10561/2024, CM APPL. 43391-43392/2024

Advocate for the Petitioner: Mr. Hitesh Bhardwaj, Advocate

Advocate for the Respondent: Mr. Ishan Dewan, Mr. V. Siddharth, Ms. Gunjan Arora, Mr. Akshay Gupta, Ms. Ayushi Mishra, Advocates.

Date of Judgment: 31.07.2024

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